Brexit Impacts UK Companies' Supplier Risk Appetite

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This new report is a joint study by Cranfield School of Management, using Dun & Bradstreet data, to investigate the risks and measures UK and EU businesses have taken regarding their supply bases since the Brexit referendum in June 2016.

The UK officially left the EU on 31st January 2020. Between 2016 and now, trade and supply chains have been on the agenda of almost everyone involved, owing to the uncertainty in operating conditions. In this report, we investigate how companies have been reacting to mitigate some of the impact Brexit might have on their transactions with suppliers, answering the following questions:

  • Have there been any changes in the supplier base after key Brexit events?
  • Have buyers based in the UK tended to shift their supplier base to the UK?
  • Have buyers based in the EU shifted their supplier base away from the UK?

Reducing appetite for risk

This research suggests that, so far, the Brexit process has had some impact on the appetite UK-based buying companies have for supplier risk.

  • Perceived dependency on key suppliers increased 13% after Article 50 was signed
  • Foreign exchange risk decreased almost 3% over the Brexit timeline, with a sharp drop a few months after Article 50 was signed - indicating that UK companies may be increasing sourcing within the UK or asking suppliers to transact in GBP
  • The proportion of EU-based suppliers in the supply bases of companies in the UK has reduced by 2.8% since the referendum
  • The proportion of UK-based suppliers in the supply bases of companies in the UK has increased by 2.6%

About the report

Experts from Cranfield’s Centre for Logistics and Supply Chain Management have analysed data supplied by Dun & Bradstreet, drawing conclusions from around 1.3 million anonymous transactions between UK and EU buyers and their suppliers.

The report looks at four key metrics (Supplier Criticality, Supplier Financial Risk, Global Sourcing Risk and Foreign Exchange risk) to assess overall supply chain risk in the UK as a whole, then delves deeper into supplier country preference by looking at proportional transactions between buyers and suppliers in the UK and the rest of the EU.

By analysing trends the report highlights areas for monitoring and consideration in third-party risk management decisions.

The full report is available to download from the link below.

Download the report