4 minute read 18 Jun 2021
Man looking at the mountains

How businesses should support their post-Brexit trade priorities

Authors
Sally Jones

EY UK Trade Strategy and Brexit Leader

Trade Strategy Partner. Helping companies and governments enhance trade. Mother of three. Astronomer.

Matthew Burton

EY EMEIA Consulting Center Partner and Digital Operations Leader

Supply chain leader with over 20 years experience in industry and consulting. Focused on digital transformation.

4 minute read 18 Jun 2021

We outline emerging issues on UK businesses’ trade agenda for the second half of 2021.

In brief:

  • How do UK businesses’ trade function capabilities and strategies compare to their global peers?
  • What trends are driving new thinking towards value creation in supply chains?
  • Why will improving resilience to trade and supply chain disruption remain critical?

The tumultuous first half of 2021 has been largely characterised by a need for many companies to focus on the immediate operational challenges of a new UK-EU trading relationship. Many organisations have been in a holding pattern as the full scale of Brexit changes become known. Now is the time to switch gear and reassess priorities, to focus on building strategic trade capabilities, to understand where value lies in supply chains, and to boost supply chain resilience.

Strengthening a business’s trade function

One area where UK companies can look for early wins is to ensure that they have a suitable trade strategy in place, supported by the resources needed to operationalise it. According to a recent survey commissioned by EY, 93% of respondents had an international trade strategy in place, 88% had a dedicated trade function, and 68% had trade strategy staff reporting to the c-suite frequently. Businesses that do not have a developed trade strategy function are losing ground to their competition.

Despite the overall positive responses to the survey, UK organisations fall behind the rest of the world when it comes to international trade strategies. Trade strategies and functions are found less frequently compared to their international counterparts. While a majority of UK businesses have the basics in place, there are a number of areas where they can improve, including:

  • Capacity building, in that UK trade functions tend to be smaller than the norm.
  • They are less equipped to manage geopolitical risk.
  • Staff with international trade responsibilities across the business are not joined up.

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Quantifying value creation in supply chains

Brexit aside, all companies are having to adapt to an international trade environment which is changing at an unprecedented pace. Businesses which base their investment decisions and structure their value chains based on past practices risk failing to capitalise on the future. 

Disruptive technologies, the urgent drive towards sustainability, and volatile geopolitical tensions are reshaping how we create and consume products.

These trends also mean supply chains need to be thought of differently. Historically, the primary considerations when investing in a supply were physical. However, the exponential growth of e-commerce, the internet of things, and machine learning mean that the traditional approach to quantifying value is no longer fit for purpose.

Intangible factors – data flows, intellectual property or the availability of service suppliers – have become more than mere secondary factors.

Understanding differences in how and where value will accrue, and planning for a range of future scenarios will be critical for effective business planning. Businesses that fail to plan for these changes are likely to be unable to compete effectively before long.

Boosting resilience to trade and supply chain disruption

Brexit forms just one small part of the disruptive forces impacting the global economy that companies have had to navigate. More than anything, the COVID-19 pandemic has exposed the sheer scale of interdependencies in globally interconnected supply chains. Companies should now look to integrate more resilient practices into their supply chains and help to prepare themselves against future shocks. 

Summary

Attention is shifting from responding to the immediate operational challenges of Brexit towards strategic issues for the remainder of 2021 and beyond. Early consideration of improving trade capabilities and reassessing value creation in supply chains, underpinned by embedding resilience practices, is likely to offer competitive advantage. 

About this article

Authors
Sally Jones

EY UK Trade Strategy and Brexit Leader

Trade Strategy Partner. Helping companies and governments enhance trade. Mother of three. Astronomer.

Matthew Burton

EY EMEIA Consulting Center Partner and Digital Operations Leader

Supply chain leader with over 20 years experience in industry and consulting. Focused on digital transformation.