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Supply chains need to be agile in the wake of Brexit

Retailers need to have agile and flexible supply chains amid the uncertainty surrounding Brexit, supply chain directors have said.

kieran donovan mountain warehouse

kieran donovan mountain warehouse

Speaking at the Drapers Operations Forum today Kieran Donovan, head of supply chain at Mountain Warehouse, said the business is reviewing its options in case of a ”hard Brexit”.

“We’re thinking about what will happen in the future,” he said. “We have a strong European business – how will we structure that if there is a hard Brexit and there isn’t a trade agreement in place?

“We’re evaluating whether we need a separate distribution centre in Europe to fulfil web orders from Europe. We have to be responsive and agile. I don’t think we’ll get much clarity after the election, so we could be waiting a while for confirmation on what’s going to happen.”

Donovan said the biggest tangible impact of Brexit so far had been a squeeze on margins.

Caroline Allerton, supply chain director at Cotton Traders, agreed that margins were beginning to be affected, but also said shoppers were spending less on clothing as a result of the referendum.

“In the last eight months, we have seen shoppers spending less on product and spending on leisure instead. Our customers who are 65-years plus are ‘making do’.

“To mitigate costs, we’re focusing on working with suppliers to ensure we don’t lose quality, and our core suppliers are very helpful and supportive. We haven’t moved our supply chain in terms of changing suppliers, but we’re moving regions with our current suppliers. It takes a long time to develop relationships.”

 

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