BREXIT – The Phoney War Is Nearly Over

News | Oliver Burgess, Supply Chain Director

After what can only be described as the longest ‘phoney war’ in history, the Brexit countdown is now well and truly on. Unless something (else!) extraordinary happens in UK politics over the next five months or so, the UK will officially leave the European Union at 11pm on 29th March 2019.

Now, if you’re one of those people who hasn’t given Brexit very much thought as yet because you don’t think it will affect your business, or you’re so bored and disillusioned with the whole thing that you’ve disengaged from the discussion, can I appeal to you to read on because Brexit will undoubtedly affect every single business in this industry to a greater or lesser degree. 

The FT has already predicted that a hard Brexit could trigger disruption rarely seen in peacetime, while a soft Brexit could effectively preserve many aspects of Britain’s current trading relationships and protect manufacturing jobs.

No matter how ‘hard’ or ‘soft’ the final Brexit agreement turns out to be though – and at the time of writing there is still no clear indication of that – the whole process does have the potential to cause major disruption to supply chains.  As things stand, I think every fabricator and installer in the UK should be asking their suppliers to clarify exactly what their Brexit plans are, as well as thinking about their own.

You really don’t want to find yourself facing costly stock shortages or delivery delays because your supplier hasn’t acted quickly enough and put in place the contingency plans necessary to minimise the impact of Brexit; or find yourself unable to fulfil orders because you haven’t built up any kind of stock buffer of your own.

The fact is that vast quantities of materials and components used in the UK window and door market are imported from inside and outside of the EU every day. Mila, for example, imports hardware from our manufacturing partners in the Far East, as well as from suppliers in Norway, Ukraine, Italy and Germany.

At the moment, the UK customs infrastructure is focused around imports from outside the EU because the administration of trade within the EU is so simple, with very few checks and very few demands on the UK customs gate. If there is any change to that though, we can very quickly expect to see the UK customs infrastructure stretched beyond capacity. Theoretically, trade with the rest of the world will be unaffected by Brexit, but if the UK system is suddenly unable to cope with additional paperwork, physical checking of goods and port delays for EU goods, then it will be disrupted anyway.

Even in the weeks leading up to the 29th March, it is likely that our ports will be under intense pressure as importers (and exporters) try to beat the deadline, and that could easily have a significant knock on effect.

For fabricators, the key issue is to talk to suppliers of everything from hardware to profile now, to ensure that they have a plan in place to minimise any disruption. For Mila, the timing of Brexit means that we will already have additional stock on our shelves to cope with the interruption of supply which is caused every year by Chinese New Year, but we are also liaising with our European suppliers to ensure that their post Brexit plans meet the requirements of our customers.

The issues go way beyond just transportation of course; it is also about factory capacity, storage capacity in UK warehouses, quality issues associated with peak manufacturing and of course cash flow and, thanks to our long experience of handling Chinese New Year, Mila already has considerable experience of all that.

For fabricators and installers, it will be all about ensuring continuity for their own businesses. At this stage, my best advice is to start identifying high risk suppliers now and either support them or change them to make sure you minimise the impact that their approach to Brexit can have on you; and to invest in a few weeks of additional stock for yourselves so that you ultimately stay in control of your own Brexit outcome.