Supply chain and logistics providers prepare for hard brexit

Thursday, August 23, 2018 - 09:20
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One in six (17 per cent) of UK manufacturers have identified supply chain disruption as being the single biggest factor that will impact their business post Brexit.

A new report from Sheffield Hallam University and SSG Insight has found that 83 per cent of British manufacturers are now preparing for a hard Brexit scenario by actively forging new relationships with “Rest of World” (RoW) territories, a move that will place new demands on supply chain networks and logistics providers.

Orders from EU-based countries are expected to take a dramatic decline following Brexit, prompting nearly half (44 per cent) of manufacturing companies to identify Asia as a focus area for the future, as well as the Americas, Africa and the Middle East.

When considering the implications on the supply chain for doing business with RoW territories, cultural and language differences have been raised as a major concern for more than a quarter (28 per cent) of UK manufacturing companies. This figure compares to just six per cent concerned with the actual process and logistics of transporting products via sea or air.

Within global supply chain networks, lack of defined legalities around product standards and specifications have been highlighted as a problem area, with tariff barriers and a lack of trade agreement adding to the complexities.

To help mitigate the issues posed by worldwide transportation and better support ambitious growth plans, manufacturing companies in Britain are actively investing in creating new, agile supply chains through the cloud.

This latest industry snapshot draws on extensive research amongst the UK’s leading manufacturing executives. The report, Harnessing Brexit, Technology and Insight: British Manufacturers, a Competitive Edge in an Age of Uncertainty and Opportunity, is co-authored by Dr Hongwei Zhang and Professor Sameh Saad from Sheffield Hallam University and Jon Moody of SSG Insight. It discusses the optimism and concern around two of the most critical challenges facing modern Britain: Brexit and the relentless rise of technology, particularly in the form of Industry 4.0.

The report reveals that manufacturers are more than twice as likely to point to global competition than Brexit when asked what they consider to be the biggest challenge disrupting industry, closely followed by the Internet of Things and capability to handle data from connected technologies. More than half (59%) of UK manufacturers are intending to invest in smart, connected technology to drive forward international growth.

Dr Zhang, Principal Lecturer at Sheffield Hallam University, said: “British manufacturers have undeniably faced tough economic times in the past, but they are now at a critical juncture. Whilst Brexit-ambiguity is having an unsettling effect on the sector, our research has found that it could prove to be the catalyst for manufacturers and logistics firms to digitally transform and better compete worldwide.“

SSG Insight has earned an impressive reputation for delivering world-class data analysis, helping British manufacturers compete globally by effectively managing their assets to drive better business performance. Jon Moody, Chief Product Officer, said: “The UK is entering a new era and – despite the question marks that hang over tariff rates and regulatory barriers – new market opportunities and agile supply networks are developing across the world. As many manufacturers actively forge relationships with new territories and commit to investing in technology, it’s clear that a confidence is very much emerging from the uncertainties.”

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