How is Brexit going to affect Global Procurement?

Nadine Orhiere 04.12.2019

Brexit continues to influence most industries across the UK and procurement has not been immune. It is expected that public sector procurement will be affected the most by regulatory changes caused by Britain’s exit from the European Union.

There are big changes coming for the procurement market

Generally, Procurement and Supply Chain management professionals have always had quite an important and unique sense of control over the impact of the overall supply chain and the ability to develop strong networks for the business. In the words of the Chartered Institute of Procurement & Supply (CIPS), they tend to act as ‘guardians and suppressors of panic within their own organisations. They have a great opportunity to implement not just best practice, but sustaining the future of their business as well’.

Brexit influencing Procurement

The market suggests that public sector procurement will be affected the most by any changes brought about once Brexit regulations are rolled out. This comes down to the simple fact that the way public sector organisations handle procurement and guidelines is governed by European Union rules. After Brexit, this will all change and in turn change how much market access UK businesses will have to procurement markets in the EU. Back in 2018, the UK set up the Government Procurement Agreement (GPA) to combat this, and therefore it may be assumed that there will not be as many changes to public sector procurement as initially thought.

International organisations will feel the effects as well

The changes caused by Brexit are also going to take a big toll on larger international organisations with global procurement functions where a lot of the critical business suppliers are based across wider Europe. A survey carried out by the CIPS suggested that a lot of businesses were set to be turned away from the UK/EU border due to the lack of paperwork. 

As a result of this, we anticipate that there will be an increased demand for experienced Supplier Relationship (SRM) and contract managers. A lot of supplier relationships will need to be thoroughly reassessed to ensure that they are still compliant and aligned to the new changes. If and when the UK does leave the European Union, current guidance is that procurement rules as they stand now will be written into UK law.

Brexit regulations influencing Procurement

Increased hiring is expected to account for the Brexit changes

It could be assumed that for these larger organisations, both private and public, to properly prepare for the Brexit regulatory changes, there would need to be an influx in hiring of Contract Managers, Supplier Relationship Managers and Vendor Managers. These professionals could even be hired on a project basis in order to review agreements and networks an organisation has in place and ensure they remain compliant once the Brexit changes have been implemented.

Organisations such as Morgan Stanley have already run Brexit projects focused on Contract Management, and I am sure we will begin to see many more as the deadline creeps ever closer.

Nadine Orhiere's picture
Consultant | Supply Chain & Procurement Recruitment
norhiere@morganmckinley.com

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