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Maintaining Inventory in a No-Deal Brexit

In 2016, a no-deal Brexit was a worst-case scenario, today it seems like the most likely option. While Teresa May's government continues to attempt to create a deal, it's becoming clear that the UK must brace itself for the worst-case, an exit from the EU in March without any trade deal in place. A lack of a trade deal puts supply chains at risk, with the potential for many of the supply routes to be completed choked off.

The government has already begun urging drugstores and grocery stores to begin stockpiling inventory, in the event of a no-deal Brexit resulting in product shortages. Other businesses are also taking action, filling nearly all available warehouse space in the country with the stockpiled product. Supply chains are hoping that the increased inventory will be enough to meet demand while new supply chains are developed or existing chains are repaired. Without this stockpile, companies may suffer detrimentally from choked-off supply chains.

This stockpiling is easier said than done for many industries though. Consider the automotive industry, where hundreds of parts go into making a single car and there is very little room for mistakes. These industries with complex supply chains and products are at significant risk, as stockpiling inventory is difficult if not impossible but a shortage of parts through the supply chain could be catastrophic.

Companies across the UK are in the process of disaster planning, attempting to reduce the impact of what is expected to be a very difficult transition out of the EU. How industries will fare through a no-deal Brexit is yet to be seen, but it's clear that significant changes to companies operations and businesses practices will have to be implemented.

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