Brexit & Manufacturing: 4 things to consider in an era of change

Posted 25/10/19 11:49

 Brexit and Manufacturing

Whichever way you turn at the minute, the topic on everyone's lips is Brexit. It seems to be putting a halt on a number of things including manufacturing processes and technology investment. Take Jaguar Land Rover, BMW and Toyota as prime examples, all of whom will shut down their production line for a period of time following a no-deal Brexit to mitigate any potential disruption.

There's a lot of speculation around Brexit and manufacturing and just how significantly the result will impact the sector - be it deal or no-deal. But regardless of the outcome, your production line and business can still keep moving. You just need to acknowledge certain factors that may impede this slightly. Be it for the greater good or potential disruption of your business and its processes.

Here are four things to consider when it comes to Brexit and manufacturing:

Digital Transformation & Innovation

When it comes to Brexit and manufacturing, harnessing the power of technology and embracing new digital innovations should be a top priority. For British manufacturers, not only does this help to compete and thrive in an ever evolving industry, it also ensures you keep pace with technological innovation and transform your business processes.

The Fourth Industrial Revolution, or Industry 4.0 as you may more commonly hear it referred to, has already made a significant impact on UK manufacturing processes - bringing greater opportunities to manufacturers with regard to productivity, efficiency and output.

New technologies such as the Internet of Things (IoT), Artificial Intelligence (AI) and automation, are allowing businesses to scale up the volume of manufacturing goods produced in shorter timescales. Adopted as a long term strategy, this will help UK manufacturers to keep up with demand from outside the EU post-Brexit, whilst keeping production costs low, and allowing efficient development of new products and strategies for trade partners and markets globally.

In order to prepare for, and survive Brexit through the adoption of digital transformation and technology innovation, it’s crucial that you understand the business challenges and issues you have or are looking to solve and to make the right technology investment. Not only will this assist you in gaining higher levels of customer satisfaction, it will also help you to produce better quality goods at lower costs and make them available to many more consumers in the global marketplace.

Expansion Opportunities outside the EU

Approximately 81% of manufacturers in the UK expect to see a decline of total orders from the EU as a result of Brexit. And as manufacturing makes up 10% of the UK economy and accounts for almost 50% of UK trade this is naturally concerning for businesses and could potentially have a huge impact on the UK’s economic status.

Whilst not the most ideal scenario, all should not be lost just because the UK may have no trade deal with the EU.

In fact, Brexit could open up a host of opportunities for manufacturers to expand globally into other territories such as Asia, the Middle East, North and South America and Africa. A report cited in The Manufacturer found that 44% of UK manufacturers were already considering these areas as a major focus post-Brexit.

Whatever the outcome, the impact of Brexit in manufacturing should not be seen as a major setback or problem, but more of an opportunity for growth. Arguably not without some initial challenges, but as a long term strategy this offers the UK an opportunity for business expansion into new markets and maximised opportunities to drive growth globally.

When taken into consideration with the adoption of a digital transformation strategy, this could well be the start of something new for UK manufacturers and the economy.

Trade Regulations & Tariffs

In the eventuality that Britain does leave the EU with a no-deal, and the focus shifts towards accessing trade deals with more international territories, the UK will have to trade under the World Trade Organisation (WTO) rules.

WTO regulations will still give the UK access to some EU markets, however many economists suggest that ultimately this may be damaging across a number of industries within the British economy including services, manufacturing and agriculture – regardless of the UKs ability to adjust and adapt to such terms.

There’s also the possibility that supply chains will become more complex as new regulations and requirements come into force such as customs inspections. Not only will this see an increase in delivery time from transporting goods from one country to another, it will also see an increase in the cost of moving goods as a result of tariff or non-tariff barriers to entry.

UK manufacturers must now begin to invest time into evaluating a number of key areas across the business including: the political and macro environment, tax and business incentives, human resource, regulatory body frameworks, infrastructure and any other factors that may become a potential risk.

A review of these processes will need to be taken in order to make the necessary changes needed to ensure deliverables, based on higher or lower volumes and changes in requirements, are met.

Enterprise Resource Management and Planning

The changes in trade regulations, taxes and tariffs imposed on the UK following a no-deal Brexit may require many manufacturers to reorganise their supply chains and processes to steer the business towards achieving cost effective operations and wider efficiency gains.

An evaluation of the effectiveness of your entire supply chain is crucial. Steps should be taken to assess any potential impacts that may arise, as well as looking into your enterprise resource management and enterprise resource planning (ERP) systems to ensure they are able to support the changes and assist in longer term forecasting.

ERP systems will need to be reviewed to determine if any modifications or enhancements are needed to support higher volumes of output and changes in requirements. The back office systems and processes you have in place should be able to effectively manage this across your entire supply chain.

If it doesn’t then you may need to consider an upgrade to a newer, more innovative ERP solution that not only supports the changes required to achieve technological innovation, and support a digital transformation strategy but also helps you to achieve business growth during this era of change.

Final Word

Whatever the outcome of Brexit, and the impact it will have on manufacturing, you’ll still need to have effective technology systems in place to support and enhance your business processes – as such embracing digital transformation and technology innovation is key! Start by looking at your ERP systems and processes already in place. If it’s not fit for purpose or can’t deliver what you need it to, it might be time to consider an ERP upgrade.

An ERP system will help you to establish smarter manufacturing processes and adopt a more proactive approach to helping cement not only your future in international markets, but in your ability to deliver greater volumes at lower costs.

Your technology investment today is paramount for your future success and in delivering customer satisfaction and quality goods. Using this technology can help you to understand and address business challenges, transforming the way your processes work. In the end, you’ll gain better competitive advantage, a global presence and be at the fore of technological innovation.

If you’re concerned about any element of your current ERP infrastructure and would like some free advice and guidance on the next best steps to take, get in touch.

We have a highly skilled and knowledgeable team who are happy to help and discuss any concerns you may have and advise you on the best solution available that best fits your business needs.

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Topics: in2grate, erp, software, manufacturing, technology, manufacturing technology, brexit, digital transformation, industry 4.0, erp systems, sanderson plc, erp extensions, general manufacturing, technology innovation, enterprise resource planning

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