We are now a month into 2020, and the supply chain industry is facing a tremendous amount of uncertainty in the face of Brexit being finalized and the spread of the coronavirus. However, on the other side of the world, global leaders feel hopeful in light of the newly revised North American Free Trade Agreement being signed into law. In this month’s news roundup, we’ll explore these three hot topics and provide insight into how they may affect the supply chain and logistics industry as a whole.
Brexit’s Potential Supply Chain Impact
After a long waiting period, January 31st marked the U.K’s legal exit from the EU and the official beginning of Brexit. The U.K. has until the end of the year to renegotiate trade deals with both EU member states and other global partners. While these deals are under renegotiation, the U.K. will remain subject to existing EU regulations.
The newest Brexit deadline potentially means another year of uncertainty — and, for supply chain professionals, another year to fine-tune preparations for a potentially unstable post-Brexit world. In order to prepare, supply chain organizations must embrace elasticity and flexibility — looking for ways to align manufacturing and logistics operations to meet demand while accounting for potential delays and increased tariffs. For companies with digitized supply chains, the extra time should allow for greater data analysis and optimization.
The USMCA Paves the Way for Supply Chain Digitization
The end of January also marked the United States-Mexico-Canada agreement becoming law. Many supply chain experts predict this new law will make cross-border shipping more streamlined and facilitate data sharing and the acceptance of electronic documents between these countries.
Given these new realities, supply chain organizations have an even greater incentive to digitize their operations and ensure their data is compiled into one central platform. A digitized supply chain will help to better connect trading partners, allowing them to easily share information and gain visibility into each other’s operations.
Coronavirus Has Potential to Greatly Disrupt the Supply Chain
With the outbreak of the coronavirus and uncertainty of when it will be contained, supply chain leaders are planning ahead. A recent Gartner article shared that some impacts on the supply chain could be material shortages, travel restrictions, limited capacity and less consumer demand. Experts are still unsure of the full impact the coronavirus will have and recommend instituting monitoring and response programs to track updates in real-time.
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