• Brexit updates and the IT supply chain

Probrand's mitigation plan to maintain supply of IT products

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With March 2019 rapidly approaching, the impact of the UK electorate’s decision to leave the European Union is now a challenge faced by UK as well as EU businesses. Whilst we eagerly await clarification from the Government on the longer-term plans for the UK’s exit from the EU and although considerable uncertainty remains about the eventual political and legal outcome, based on our understanding today, we believe that the potential risks that Brexit may generate are manageable for our business. We are confident that our business model will be able to adapt and respond to the likely added complexities in the supply of key product lines that may arise.

Probrand has formalised its mitigation plans to tackle the varied outcomes of current Brexit negotiations with a flexible and fluid approach as demanded by the volatility of the political situation and its impact on a globalised IT supply chain. Therefore, our proactive and dynamic procurement team is in daily contact with all key UK distributors and related vendors.  This enables us to share current status as needed and respond quickly to the changing landscape.   

The business is now in a very strong position to maintain supply from its suppliers to customers, within its reasonable control and dictated to by local geo-political situations and repercussions of Brexit in all its forms.

Should the unlikely event of a ‘no-deal’ Brexit occur we have already taken the follows steps to mitigate associated risks to ensure our business, and supply of products to customers, remain sustainable:

  • There is a potential risk that some products or services may be subcontracted by our partner suppliers to European based organisations. We are continually auditing our supply chain from end to end to mitigate any impact following ‘Brexit’, which includes visibility of supply chain partner plans for a hard ‘Brexit’ and ‘no deal’ scenarios
  • We will take a proportioned and segmented risk-based approach to tackle any potential problem areas.  This means identifying key product lines and implementation of specific mitigations plans to reduce impact of lack of supply
  • Probrand benefits from access to significant continental European infrastructure and premises, providing a range of logistical options for servicing our customers effectively and efficiently, whatever customs and tariff arrangements may be applied after ‘Brexit’.
  • We are working with several professional advisers to continually model the impact of various ‘Brexit’ outcomes, including the ‘worst case’ scenario of World Trade Organisation (WTO) tariffs being applied to EU imports and exports promptly after any no-deal Brexit on 29 March 2019.   The model is dynamic, allowing Probrand to react rapidly to developments in the EU-UK negotiations, or in the UK and European Parliaments.  Many of the product categories managed by Probrand are in any event subject to 0% duty rates under current WTO rules.
  • Some of our key distribution partners has have carefully evaluated the benefits of applying for Authorised Economic Operator (AEO) customs status, an internationally recognised quality standard.  Among other benefits, AEO status is anticipated to offer reduced customs checks at UK ports of entry.  The application process is underway, with the intention of being awarded AEO status in advance of 29 March 2019.
  • Key distributor partners have confirmed additional stocks are being ordered in to the UK of key product lines to ensure continual supply with more being readied for shipping.
  • Probrand understands key distributors have plans in place to open European based warehouses to cater for this market also.
  • Continual planning operations for better truck and driver availability
  • Distributors have confirmed there are plans for stock that is currently held in European warehouses to be transitioned to the UK

We are confident that ‘Brexit’ is not going to have a negative effect on Probrand as a reseller and solutions provider and in turn we will be able to support our customers in the same way.

Ian Nethercot

Supply Chain Director



 

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