Put your supply chain under the spotlight.
Supply chain planners are approaching a crunch point with just 15 months until the UK is due to leave the Single Market and with no replacement deal yet outlined. KPMG's Andrew Underwood and Brian Connell highlight eight areas to shine a light on in the months ahead.
Brexit threatens to rip up the rules on how supply chains operate across Europe. Tailbacks at border posts are only the most visible example of how global logistics networks linking farms and factories to customers might have to change after the UK leaves the European Union in 15 months' time.
One UK business is opening up its Brexit planning for everyone to see.
The Operations team are working through FG Group's application for 'trusted trader' status to help beat the queues at customs. Becoming Authorised Economic Operator (AEO) used to take around 6 months but now it's more like a year. They are also checking with their third party logistics providers (3PLs) on both sides of the Channel about their warehouse capacity to stockpile extra inventory, and which Continental ports might best handle a more disrupted border.
Negotiations have begun with one of their Italian suppliers on a five-year deal to buy rubber hosing. The weak pound has already raised its cost by 14% percent since the EU referendum - an increase FG has had to swallow. Now the stumbling block is who would pay customs if a free trade deal isn't done. They have contacted their lawyers.
FG Group are talking to a number of smaller UK suppliers with a view to domesticating the supply chain to avoid tariffs, delays and border bureaucracy. They are talking to Dreyfus Materials - an industrial glass manufacturer in North Shields - about taking some supply on a trial basis. If it goes well, CEO Maria Clark and the team would consider acquiring the company. This is one of several UK acquisitions FG are considering to become more vertically integrated.
Brexit debate in the boardroom is intensifying between the Brexit 'bears' - who advocate a full capital spending programme to make FG more resilient - and the 'bulls' - who think a political deal can be done at the stroke of a pen, negating the need for costly investments. The immediate spending decision is whether to press the green light on developing their proposed facility in Hamburg, having completed the feasibility study last month. FG asked KPMG to draw up a no deal scenario plan and perform a deep dive into the implications for their business, including a monthly intelligence briefing. Maria hopes that might lead to a more informed discussion among board members.
With less than 500 days to go to March 2019, what should businesses be doing now to make themselves Brexit-proof?
As customers, we've never had it so good. Fresh, perfectly ripe, peaches in December? A jacket chosen online today to wear tomorrow and even, in some cases, later today? We're spoilt for choice. From the 'changing room at home' and click and collect, to season-agnostic product ranges, extended Black Friday discounts and free returns - the customer's wish is now the retailer's command.
The latest Brexit insights from across the KPMG network
This report assesses some of the potential causes of poor productivity performance and examines how different UK regions fare in each of these areas.
Come back to see what you need to do with just 12 months to go.
Vice Chair and Head of Brexit
Partner and Brexit People & Immigration Lead
Partner and Head of People & Change
Partner and Brexit Tax & Location Lead
Partner and Brexit Supply Chain & Procurement Lead
Director and Brexit Customs & Indirect Tax Lead
Director, Public Policy
You may not be familiar with the name but if you have travelled by train, plane, road vehicle or ship, a FutureGauge product will probably have played some part: we manufacture and distribute precision-engineered components for the transportation sector.
Headquartered in the Midlands and focusing most of our manufacturing there, 65% of our sales come from continental Europe. Two-thirds of our suppliers are UK-based with the remainder split between Europe and SE Asia. We employ 8,000 people in 18 countries - almost 7,000 of them in the UK - and last year recorded sales of £500 milllion.
We believe in investing in the communities in which we are located, including building next-generation skills through apprenticeships. Twenty five percent of our workforce is made up of EU nationals, employed in both skilled and unskilled positions.
We believe that Brexit represents both a significant challenge, but also an opportunity for us.
How do we navigate Brexit and build a new future?