Reagecon Brexit Planning Update

Reagecon is a high-tech manufacturer of chemical and physical standards, with product sales through various channels, in 175 countries. We are also a significant distributor in Ireland of laboratory chemicals, consumables, test kits and apparatus. We operate a highly developed Vendor Managed Inventory (VMI) programme with over 20 global companies, in Ireland, as part of that distribution business model. Because we export and import such a wide array of products, Brexit contingency planning is particularly relevant to us and our valued customers.

The main areas of contingency planning that we have carried out to date include:

Continuity of supply

A. Issues getting goods in from the U.K. which are of UK origin. The problems we see relate to, increased costs due to tariffs or  excise charges and supply chain delays due to inspection processes.
B. Similar issues getting our own manufactured goods into the U.K. including delays and excise charges and duties.

For us the solution to both issues is the same, we set up a company and warehouse in the U.K. We have already established the company as a non-trading entity, Reagecon Analytical and we will set up a warehouse in either Northern Ireland or the UK mainland. This will mean all supply chain issues will be consolidated by our own staff, both for goods inwards and goods outwards, where the origin or final destination, is the UK or Northern Ireland. We have no way yet of predicting how the costs will play out if there are excise duties imposed, nor how such duties will apply to scientific products.

C. Shipping goods to Europe and the wider worldwide markets which go through the U.K.
      D. Receiving goods from worldwide sources which go through the U.K.

In both scenarios (C and D) the solution is the same, we are part owners of a supply chain company called Laboratory Logistics Group (LLG) in Germany. All goods coming into Ireland, from any source except the UK will be consolidated and shipped through the LLG warehouse. We already ship goods directly into Ireland twice every week from LLG. Similarly, we ship goods in the opposite direction weekly, bypassing the UK both instances.

Because we operate a well defined VMI model already, we are very familiar with the warehousing, handling and management of safety stocks, in our own warehouses and our customers warehouses. However, in the interest of prudence, we do urge customers to pre-empt any supply issues for high value/process critical items, by communicating with us, so that we can apply solutions to ensure ongoing continuity.

Source of supply

Because we promote products from several hundred global manufacturers of laboratory products, we have very significant reach and flexibility in terms of maintaining supply chain. This offers us alternative supply options, in the event of supply chain delays or failures.

Product mobility

A large part of our freight (irrespective of geography) is consolidated and managed by our partner company Titan Logistics. Titan subcontract all of the main freight and courier companies to perform the actual movement of goods. Both Reagecon and Titan have significant expertise and relationships in every aspect of freight movement, forwarding and regulatory affairs. We also use our own fleet of delivery vans where appropriate and have multiple relationships with several independent freight companies throughout the world.

Cost implications

We see three potential areas that may affect cost of goods. The first is currency fluctuations between the pound and euro. Currently, we ship goods of roughly equal value into and out of the UK. At the moment this balances currency fluctuations. However, were this to change, we will look at forward and spot buying of both product and currency. The second area relates to potential tariffs. As of now, there is no clarity pertaining to what would be the cost implications of either tariffs or duties. Finally, if there is a hard border between any part of the UK and Ireland, then there will be extra shipping costs as a result of delays in the inspection and clearance of goods. All we can do at the moment is to guarantee all of customers that we will do everything possible to mitigate any upward change in either prices or costs. However, our plans for consolidation, should help to alleviate some of that upward cost pressure.
As of now, we are in a situation which is changing daily. We believe we have prepared to the best of our ability to deal with as many contingencies as possible. Our company has a deserved reputation for flexibility, agility and fast reaction time to different scenarios. Our systems, processes, working practices and supply chain mechanisms can be adjusted quickly and efficiently. However, if you have any concerns, mission critical requirements or would like to offer advice or commentary, we would love to hear from you. Please feel free to contact either me John Barron, john.barron@reagecon.ie or our Commercial Director Michelle Hynes, michelle.hynes@reagecon.ie 

John J Barron
August 2019
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