Despite being surrounded by delays and uncertainties, Brexit will almost certainly happen in 2020. In the light of the current General Election it is a constant subject of conversation and speculation. But whilst the limelight has been shed on how Brexit may or may not impact the manufacturing industry as a whole, less focus has been placed on how it might impact specific manufacturing processes.
The impact of Brexit on manufacturing will be of vital importance to the UK economy, so it’s essential to get this discussion started. Here we assess what those impacts might be, and how companies can work to mitigate the issues surrounding Brexit before they arise:
Early adoption and innovation
The fourth industrial revolution has already begun to have a significant impact on the British manufacturing industry. Early adopters have stressed the importance of new technological innovations in a post-Brexit world. An obvious example of this is Artificial Intelligence, which has provided key opportunities for businesses to scale up volume to meet demand from outside of the EU. Reaching into these broader markets will be key to industry survival, and AI can help with this by keeping costs low and ensuring that the UK industry remains competitive.
It’s not as simple as just heading out and purchasing technology though: you need to understand the specific business challenges that Brexit will pose to you, and then make the most efficient and financially effective investments that will give your business a competitive edge. New tech and digital transformation could well provide the boost that your business needs.
Lack of Information
One of the main issues of Brexit for manufacturing is the lack of information that is being offered, at least publicly, on precisely what will happen. Customs agreements are likely to change, for example, which could change how easy and convenient it is to import new machinery, or new machine parts, exactly when you need them. Exports will be equally challenged: a huge issue if your company predominantly focuses on overseas trading.
Proactivity can play a role in neutralizing this risk: if you regular place orders for parts, materials, or other elements within your manufacturing supply chain from inside the EU then communicate with your clients, your suppliers, your other contacts. Brexit is unusual, in that it is one of the few business scenarios in which you are not working with hard facts: you are basing your decisions on hunches, speculation, and hypothetic scenarios.
Balancing Output with Your Other Needs
Finally, there are some sectors of UK manufacturing where it is predicted that output will actually increase post-Brexit. If your manufacturing process involves food processing, for example, then gains in output have been predicted. These industries generally experience lower sales in the EU, but import high proportions of UK consumption from the EU: the loss of EU markets to exports has a smaller effect on the sector’s sales than the increased protection they get from raised barriers to imports from the EU.
However as output increases, so will mechanical wear and tear: something that may prove problematic if the machines themselves, and the parts there within, are manufactured in the EU. Then you must consider forward planning to prevent any breaks in the supply chain.
Comments are closed.