As 'B-Day' looms, supply chains will provide your Brexit lifeline
6 Feb 2019
With the clock ticking on the Brexit endgame, HSO's Sam Rothwell, recommends manufacturers need to hone in on their supply chains more than ever...
Manufacturers across the process industries understand the need to plan for uncertainty and find ways of maximising efficiency in the way they run their operations. That understanding should stand them in good stead as they look ahead to the challenges that 2019 will bring, especially in light of the UK’s pending departure from the EU.
Inevitably, the area of biggest concern for manufacturers is around their supply chain. Many are either planning to, or already stockpiling, to enable business as near to usual as possible. In line with this, the latest snapshot survey from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS), indicates that increasing concerns about Brexit disruption resulted in more businesses building up stocks in December 2018.
According to Duncan Brock, CIPS group director at the Chartered Institute of Procurement & Supply: “Preparation and mitigation were the key activities in the manufacturing sector this month resulting in a small improvement in overall activity. Businesses stockpiled raw materials and finished goods at near survey-record rates in readiness for possible Brexit-related supply chain disruptions.”
Stockpiling is, however, getting harder as available warehouse space diminishes. Food & Drink Federation chief executive Ian Wright, reported to MPs recently that UK warehouses for frozen and chilled food are "for all practical purposes booked out”.
Taking back control?
Some manufacturers see the current political situation as an area of risk over which they have minimal control. So, beyond stockpiling, what can manufacturers do to reduce the risk posed by political uncertainty to their operations?
For some, especially those in less regulated or globally-integrated industries, the long-term answer might be to bring their supply chain closer to home.
It is critical that manufacturers focus, above all, on best meeting short-term needs. That will certainly require enhanced supply chain visibility
That said, in the current environment, it is critical that manufacturers focus, above all, on best meeting short-term needs. That will certainly require enhanced supply chain visibility, especially regarding the location of product components and finished goods.
As they can’t directly influence the supply chain situation at a macro level, manufacturers must instead concentrate on ensuring information flows quickly from the supply chain to manufacturing decision-makers so that they can make fast and accurate ‘flex-plans’ and best optimise operations to deal with challenges arising.
Technology will be crucial in delivering this enhanced visibility and operational flexibility. In line with this, we may see some manufacturers redesigning the supply chain architecture, a process likely to include the implementation and integration of a range of new technologies from data analytics to the Internet of Things to enterprise resource planning (ERP).
We are also seeing supplier collaboration portals rise up the agenda. These provide a single shared view of data, enabling manufacturers to collaborate more closely with supply chain partners and resolve problems faster. Together with ERP and general business software, they will be especially important in keeping that crucial conduit of information flowing across the supply chain and providing enhanced supply chain visibility to key supply chain players.