65% of Irish businesses have not reviewed their supply chain to gauge the impact of Brexit, according to a quarterly optimism index from accountancy firm BDO.
Carol Lynch, Partner in BDO’s Customs & Internatioanl Trade Services department, says to address this the first thing companies need to do is map out their supply chain.
She says some of the main questions that need to be asked are:
"Whom do I purchase from? Whom do I sell to? How do my goods arrive in the county? How do they leave the country? What borders do they cross through? Do they come through the ports? Do they come through the Northern Ireland land border?"
Ms Lynch gives the example of a company operating in Ireland that’s importing sugar from a supplier in the UK and maybe plastic packages for producing your goods.
"You first of all want know where that sugar is coming from, whom am I buying it from? Are they a manufacturer in the UK? Are they distributing but actually importing from outside the EU? When I import that into Ireland is there a potential risk of a duty cost if the free trade agreement does not go ahead or if those goods don’t qualify as originating?"
She also says companies need to look at whom they are selling to, e.g., in Northern Ireland and how Brexit might impact this with regard to delays and logistics.
Ms Lynch says any companies that find weaknesses in their supply chains in this regard should consider changing to EU suppliers, but "most contracts are agreed a year in advance so that’s not something you’re simply going to do overnight.
"You’re going to have to look at their quality controls, set them up as an approved vendor, organise a change of the contract, organise new contract terms."
She said there is a lot of time that goes into preparing for such changes and timing is a critical issue for firms with less than a year to Brexit.
On business uncertainty around Brexit, Ms Lynch said the UK leaving the EU will "trigger a domino effect" and firms need to get Brexit ready ahead of this.