With Brexit negotiations in full force, British manufacturers are actively planning to maximise the opportunities that lie before us and mitigate the challenges.
Here, Ian Dowd, CMO at SSG Insight, draws on extensive research involving manufacturing executives across the UK to share his thoughts on how the industry can seek to retain a competitive advantage:
- Understand your supply chain exposure: With almost half of suppliers to UK manufacturing companies coming from countries within the EU, it’s no surprise that one in six (17 per cent) of UK-based manufacturers have identified supply chain disruption as being the single biggest factor that will impact their business post-Brexit. It’s imperative that businesses ensure the necessary precautions have been put in place.
- Consider broader opportunities overseas: 81 per cent of British manufacturers expect orders from the continent to reduce following Brexit. In attempts to limit the potential blow this may cause, the clear majority (83 per cent) have confirmed that they are now actively forging new relationships with ‘rest of the world’ territories.
- Standards, legislation and trade barriers: The impact of changes to EU subsidies, research and development grants and other financial incentives may be harmful to smaller manufacturing businesses. Entry barriers are also a major concern amongst manufacturers. One in five expect that trade tariffs on imported and exported goods will impact their business.
- Understand the industry impact: Ahead of the UK leaving the EU and the changes that this will bring, manufacturers have signalled that increased global competition is the biggest challenge that they face today. This may continue to grow as a threat after March 2019, knocking manufacturing off as one of the UK’s top industries.
- Focus on the bigger picture: Brexit and the critical challenges it brings will arguably be one of the most disruptive points in manufacturing history, however it is not the only major change affecting the sector. Industry 4.0 is arguably a bigger turning point – and our research suggests that over a third of manufacturing in Britain will be automated in the next three years. Whilst staying up-to-date with technological advancements can cause major implementation challenges, if used correctly companies can stay ahead of the curve by using AI and automation technology to achieve ambitious global growth plans and compete more successfully at this scale.
- Spend wisely: With the economic climate constantly changing and advanced technology becoming more accessible, the key area for investment post-Brexit is expected to be big data analysis, AI and automation. With budgets under pressure, manufacturers should invest in new technology to sustain a competitive advantage against competitors.
- Know your talent pool: A hard Brexit and new laws surrounding immigration may lead to all industries in Britain suffering from a major skills shortage. More than a third (37 per cent) of decision makers in manufacturing expect recruiting the right talent to be harder after March 2019. Employers should start planning ahead now to ensure that their workforce is digitally trained and can keep up with increased competition – driving the industry forward in this defining digital era.