82 per cent of procurement and supply chain leaders are under more pressure than ever to reduce the cost of third party goods and services in the face of Brexit. That’s according to new research announced by procurement advisory firm, Odesma, which also found that despite these pressures, 72 per cent of respondents have not yet considered or do not plan to seek new suppliers in non-EU markets.
Although leaders feel unprecedented pressure, procurement is less and less considered an important part of Brexit preparations, with 73 per cent believing it plays a critical role compared to 92 per cent in 2017.
Commissioned by Cheshire-based Odesma, the annual research aims to establish industry sentiment towards leaving the EU, and highlight the concerns and current issues facing those in the sector.
Reassuringly, the perceived impact of Brexit on procurement and supply chain growth in 2018 seems to be abating, with 45 per cent feeling it is hampering growth compared to 67 per cent in 2017.
However, Brexit is increasingly considered an international rather than European issue, with almost a quarter more in 2018 believing it will disrupt procurement globally (52%) compared to just 29 per cent in 2017 when the firms were first surveyed*.
Worryingly, 64 per cent of respondents admitted they do not have a Brexit risk register and contingency plan in place in procurement, with fewer organisations this year putting plans in place to prepare for Brexit (39% in 2018 down from 54% in 2017).
Nick Ford, Executive Director of Odesma, commented: “Our annual research into Brexit sentiment across the sector indicates a drop in the level of planning being undertaken by procurement and supply chain leaders. This could be attributed to a lack of direction and strategy from government on the outcomes of leaving the EU – arguably, how can organisations plan when the route and end destination is as yet unknown?
“On a positive note, it’s great that organisations are seeing growth less and less affected by the challenges of Brexit. However, despite this optimism, it’s clear that as a sector, we’re feeling the pressure.
“Although only time will tell how leaving the EU will impact the industry, it’s crucial that the role of procurement remains at the forefront of business decision-making and planning when it comes to Brexit, as the establishment of new suppliers, workers and contracts take priority.”
Almost half of respondents agreed that freedom of movement of workers post-Brexit will have the biggest impact on procurement (42%), followed by free movement of goods (24%) and establishments and services (18%).
On a positive note for the UK, 45 per cent of respondents are planning to look within the UK for alternative supply lines in the future.
