Manufacturing paralysis in wake of Brexit delay

24th May 2019
Source: InfinityQS
Posted By : Alex Lynn
Manufacturing paralysis in wake of Brexit delay

Manufacturers in the UK saw order books slump in May, while recent Brexit preparations took stocks of finished goods to a decade high, according to research from the Confederation for British Industry (CBI). Here, Jason Chester, InfinityQS, offers his insights into this perceived paralysis in the industry.

Commenting on the news Jason Chester, from InfinityQS said: “The findings from the CBI are unsurprising as many organisations remain paralysed in the wake of Brexit chaos. It appears most organisations are playing a game of sit tight, wait and see. The narrative, we know something is going to hit us, but we don’t know when, how big it will be, or how much it will hurt, rings very true for business leaders and understandably, that is why we’re seeing stockpiling become the new norm.

“This has meant investment in new initiatives, including capital investment in new plant, machinery and facilities, entry into new markets and product sectors, growth, expansion and M&A; industrial digital transformation; and everything else in between seems to have perpetually stalled.

“Standing paralysed and staring in to the headlights of the impeding impact, or burying heads in the sand and hoping the threat will simply go away are neither wise, nor practical. Of course, going ahead with a major new capital investment project aimed at servicing the European market, for example, might also not be a wise move at this stage. Instead, of remaining stagnant, organisations should by using this period to prioritise operational improvement initiatives.

“Operational improvements can be considered around three core pillars: cost, value and risk, and all three are very applicable in navigating and preparing for the post-Brexit uncertainty. 

“From a cost perspective, driving greater efficiency and productivity and minimising the cost base of operations will enable businesses to be more competitive, even if we are impacted by export trade tariffs or currency volatility. Likewise, maximising the value of our operations – from the quality of the products and services that are provided, to responsiveness to demand and emerging trends – will help business remain relevant and competitive in a post-Brexit market. 

“Finally, mitigating risk or the ability to absorb risk from operational to strategic levels – such as dealing with workforce availability, supply and demand chain volatility – will help to insulate the business in an increasingly commercially volatile world market (an issue that transcends just the Brexit scenario).

“At the heart of most of these operational improvement initiatives lies digital transformation. We are seeing that across all sectors, such as Industry 4.0 in manufacturing, for example. It is these initiatives that should be reprioritised and not delayed any further.

“Prior to the referendum on Brexit in 2016, many business leader’s apathy towards digital transformation largely centred around the notion of ‘if it isn’t broke don’t fix it’. Now potentially it is broke, so we need to focus on fixing it, and quickly. What is for certain is business leaders cannot determine the outcome of Brexit, but they can determine their organisations’ outcome from Brexit.”


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