2020 was one of the hardest years on record for businesses – and that’s not about to change in 2021. But it’s not all doom and gloom. While the challenges last year posed difficulties that nobody had planned for, this year they’re more a known quantity.
Most of the challenges business face this year will be dealing with the fall out of COVID-19 and Brexit. Both will restrict the way organisations operate and in different ways. But with a clear understanding of what each scenario involves, risks can be planned for and mitigated – leaving you in a position to thrive rather than just survive.
So what can we expect from 2021?
Brexit
Brexit is one of three main challenges to UK businesses in 2021, especially those that are heavily reliant on their supply chain to make their end product or provide their service. The lack of clarity over a trade deal with the EU has made it hard for businesses to prepare for life after Brexit, and led to uncertainty over prices, availability and supplier’s ability to meet demands.
What we do know is that most companies will have their supply chains disrupted to a certain extent. Whether that is through restricted movement of goods between EU countries and the UK or through increased tariffs on imports will depend on the type of trade deal the Government secures with the EU– or if it secures a trade deal at all.
There are also concerns that trade restrictions will lead to stockpiling and in turn increased prices. Although experts don’t expect that to be an issue in the medium to long-term, the short-term impact of stockpiling would be an unwelcome pressure in light of COVID-19. The majority of business have struggled throughout the pandemic and will be looking to make a strong and smooth start to 2021.
COVID-19
The Coronavirus pandemic was the Back Swan event of the modern era. Nobody saw it coming and few were prepared for the impact it would have on their business. And, while the news of a vaccine offers hope of a return to work and business, the world is not expected to return to normal until early 2022.
The UK was the first country to order the vaccine en masse. Its immunisation programme rolls out over eight stages, and prioritises key workers, the vulnerable and the elderly. Once people in those categories are vaccinated, essential workers and those over 50 years old are next.
What that means is that a large proportion of the UK workforce won’t receive the vaccine until later in 2021, if at all. As such, restrictions to control and mitigate the spread of the virus – such as social distancing and wearing facemasks – are going to remain in place for much of the year.
On a practical level, that means that normal business operations won’t resume any time soon. Organisations will continue to operate through remote working and skeleton teams on site. Many of the supply chain challenges that existed this year – such as bottlenecking, lead times, scarcity and price hikes – will remain as the entire supply network continues to work under restrictions.
Budget / pressure cost cutting
Tight financial margins will be a theme of 2021. The industries that COVID-19 hit hardest will be especially cautious. Those operating in hospitality and entertainment suffered heavy losses throughout 2020. Retail, leisure and manufacturing industries were also damaged. Expect a collective tightening of the purse strings. The spectre of Brexit looms large in that respect too.
Supply chains will absorb some of the cost-cutting. Companies will consolidate their networks and focus on top tier suppliers. Many will move to local or near sourcing models to mitigate the risk caused by Brexit and COVID-19.
Remaining competitive will be a goal for some companies. For others, staying operational will be a priority. Maintaining the quality of output and service is essential in both scenarios. To do so requires well-managed spend. To that end, the focus on goods and third party services will be a balance between cost and quality.
How I-Tel can help
As the UK’s leading indirect procurement specialist, we can help you meet the challenges this year poses. Our expertise and data-led approach takes the sting out of saving money, managing your supply chain and mitigating risk. In fact, because we run the entire purchase-to-pay cycle, you need only deal with us – giving you much needed efficiency and peace of mind.
So how can we help you in 2021?
Fly past COVID & Brexit disruptions
Disruption to your supply chain is one of the biggest risk your company faces in 2021. We can help you mitigate that risk by combining your supply network with ours to give you access to more than 300 global suppliers and hundreds of thousands of products. Our industry disrupting technology monitors the supply market, keeping an eye on prices and availability – meaning you’ll always be able to get the products you need in the right quantities.
Our warehousing and logistics service also offers you tremendous flexibility.
With your own dedicated stock location to utilise you can hold goods from any supplier (including us), at one central point. We’ll manage and distribute the stock for you, and provide detailed tracking & analysis on usage. You can also mitigate risk by monitoring current stock levels, analysing the market and forecasting potential supply shortages.
Improve efficiency
Think about the number of suppliers you deal with and the amount of purchase orders, invoices, returns and late deliveries you manage on a monthly basis. Our bespoke service manages those processes, streamlining your procurement through efficiencies and automation. We reduce your buying process to a single order & invoice, a single point of supply and a single contract.
That’s vitally important this year because it frees your teams to concentrate on delivering strategy and on creating value for the business. In a climate that is going to be ultra tight and ultra competitive the extra quality you gain – whether that’s in service delivery or customer relationships – will be the difference between your business surviving and thriving.
Keep your costs down and your business liquid
We’re not going to beat about the bush: we save our clients money. On average we save them 15% in the first month. In the following month you can expect a further 10% through system efficiencies, automation and consolidation. You will also see a significant reduction and saving in time and administration. We do this by analysing your spend data, identifying areas for consolidation, where cash leaks are occurring and where suppliers are costing you time and money. And we continue to monitor your spend so that it’s always optimal. The result is a cost-effective supply chain and cash in the bank – which is going to be vital this year.
For more information on how I-Tel can help you in 2021, please give us a call on 029 2049 2111
