• Brexit updates and the IT supply chain

Brexit Query Response Statement

“Following the decision made by the UK to leave the European Union, Tech Data has been closely monitoring the negotiations between the EU and UK Government.  In order to ensure that Tech Data’s European and UK operations are sustainable, we have put into effect a review of our operations which will ensure the best possible outcome as the UK transitions away from its EU membership. There is still a great deal of uncertainty as the Brexit negotiations take place and therefore our plans are intended to allow for a degree of flexibility in the interim period.

We recognise that as Brexit unfolds a number of parties will be concerned, including our customers, European based suppliers and our network of resellers.  We are therefore considering, amongst a number of areas, the potential impact of changes to tariffs and Customs borders, the potential impact on our costs, administrative workload and our employees, but also the effect of increased volatility of exchange rates.  We are also evaluating our current pan-European operations and logistics to determine how best to structure them following Brexit.

We wish to reassure our vendors and customers of our ongoing commitment to continued trade and maintain the service levels and the customer experience, across the UK, EU and with our other markets."

*Subject to any changes in the Brexit status

Exertis Brexit Plan

Exertis is determined to embrace the challenges of ‘Brexit’ and to ensure we are best placed to continue to provide all of our partners with class leading distribution solutions whatever the final outcome. In particular, we aim to achieve the maximum degree of business resilience in the unlikely event of a ‘no-deal’ Brexit. In order to ensure that our business remains sustainable, we have initiated a range of risk mitigation actions designed to deliver the best possible outcome as the UK leaves the European Union.

  • We have conducted an analysis of foreseeable ‘Brexit’ risks, including impacts on the wider economy, increased exchange rate volatility and possible changes to Customs borders and tariffs. 
  • As the technology division of DCC Group, Exertis benefits from access to significant continental European infrastructure and premises, providing a range of logistical options for servicing our partners efficiently, whatever customs and tariff arrangements may be applied after ‘Brexit’.
  • We are working with a number of our professional advisers to 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 Exertis to react rapidly to developments in the EU-UK negotiations, or in the UK and European Parliaments.  Many of the product categories managed by Exertis are in any event subject to 0% duty rates under current WTO rules.
  • Exertis has 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. 
  • We are undertaking a review of our supply chain to mitigate the impact of any major changes following ‘Brexit’ and to identify any refinements to our processes that might prove necessary.   Through dialogue with our key vendor partners and freight forwarders, we are seeking assurances that they are themselves properly prepared for ‘Brexit’.  We are also assessing the desirability of building up inventory levels for any high-risk stock lines in the run up to March 2019.
  • Exertis is not critically dependent on non-UK nationals in its workforce, but steps are being taken nevertheless to mitigate any potential risks stemming from the EU citizenship of any members of our staff, including supporting existing EU workers with UK residency permit applications. 

We are confident that we are doing everything possible to ensure that Exertis continues to offer a first- class service to all our partners after the UK leaves the European Union.

*Subject to any changes in the Brexit status


Lenovo Brexit Plan

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Letter from Lenovo regarding their Brexit plan:

"Dear Partner

As we close out the year, I felt it important to get in touch and share the plans we’re putting into place to ensure that come 29th March 2019, Lenovo is Brexit ready. While we’ve been planning for all eventualities, our focus has been on ensuring we are ready for a “No Deal” scenario.

Our biggest priority is to ensure our supply chains are robust and we limit any impact on our partners and customers. As a result, by 29th March our distribution partners will hold an increased level of inventory of our core Topseller portfolio and we are working with our manufacturing facilities to bring forward shipments of customer orders to avoid any possible delays. While we are planning for potential delays at customs, our logistics partners can import stock into the UK at multiple entry points. They are also looking at alternative routes in order to minimise delays in the event of a customs backlog. Likewise, we are working closely with our distribution partners to minimise any issues importing goods into Ireland due to the customs “backstop”.

We will continue to ensure all products are manufactured to the same technical standards legally required by the UK and EU. To maintain our high standard of aftercare and meet our customers’ same day and next day warranty repair requirements, replacement parts will now be held in the UK to support our service partners.

As we are all only too aware, there are still many moving parts surrounding Brexit, but rest assured Lenovo will be ready to continue to serve both our partners and customers to the highest standards.

Yours faithfully,

Preben Fjeld,  
General Manager, Lenovo UK and Ireland"

You can view the Lenovo official letter here

*Subject to any changes in the Brexit status


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

*Subject to any changes in the Brexit status



 

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