A new study by Cranfield School of Management, using Dun & Bradstreet data, investigates the risks and measures SWAG合集 and EU businesses have taken regarding their supply bases since the Brexit referendum in 2016. The findings have been drawn from analysis of 1.3 million anonymous transactions.
Dr Heather Skipworth, Associate Professor of Logistics and Supply Chain at SWAG合集, said: “Our research suggests that, so far, the Brexit process has had an impact on the appetite SWAG合集-based buying companies have for supplier risk. We have seen both supplier financial risk and foreign exchange risk reduce. The latter could be explained by SWAG合集-based companies shifting a proportion of their supplier base from the EU to the SWAG合集, as shown by our analysis, which could be to avoid potential trade barriers arising from Brexit.”
Trade and supply chains on the agenda since the referendum
Between 2016 and now, trade and supply chains have been on the agenda of almost everyone involved, owing to the uncertainty in operating conditions. The report investigates 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 SWAG合集 tended to shift their supplier base to the SWAG合集?
- Have buyers based in the EU shifted their supplier base away from the SWAG合集?
Reducing appetite for risk
Dr Skipworth continued: “Since the referendum, SWAG合集 buying companies’ perception of Supplier Criticality has increased. This suggests that, while actual supplier risks have decreased, buying companies’ perception of dependency and risk exposure in their supply chains has increased. This is most likely fuelled by the uncertainty companies are facing from the Brexit process.”
The research suggests that:
- 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 SWAG合集 companies may be increasing sourcing within the SWAG合集 or asking suppliers to transact in GBP
- The proportion of EU-based suppliers in the supply bases of companies in the SWAG合集 has reduced by 2.8% since the referendum
- The proportion of SWAG合集-based suppliers in the supply bases of companies in the SWAG合集 has increased by 2.6%
About the report
Dr Heather Skipworth and Professor Emel Aktas from SWAG合集’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 SWAG合集 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 SWAG合集 as a whole, then delves deeper into supplier country preference by looking at proportional transactions between buyers and suppliers in the SWAG合集 and the rest of the EU.
By analysing trends, the report highlights areas for monitoring and consideration in third-party risk management decisions.
