Manufacturing companies are doing all they can to prepare for Brexit, but with the continued uncertainty about what form of exit will take place and what this means for international trade, it is proving difficult to plan effectively. Yet Brexit is no dreaded ‘black swan’ event. There’s still time to ensure immediate readiness, to leverage medium-term opportunities, and to future-proof for unknown horizons.
Smart companies are viewing this time of uncertainty as a time to invest in continuous improvement and business transformation activities, which will ensure their competitiveness no matter what the political or economic future holds.
Here are three ways manufacturers can improve their processes and productivity now:
1. Make your supply chain visible
This will enlighten decisions around many strategic and operational aspects of Brexit-driven change. For instance, the low pound and uncertainty over Brexit’s impact on international trade should encourage UK manufacturers to evaluate their supply chain for opportunities to buy local. For example, if a part is sourced from China, it will add approximately 12 weeks’ lead time to the manufacturing value stream, instead of receiving replacements in a few hours from a local supplier. This increases the amount of inventory required as well as increasing the risk of poor quality.
In this instance, lean can help analyse the value stream for all parts of the supply chain to identify if it is worth finding a local alternative to a particular part, or if the savings found in an offshore supplier are more beneficial. It’s important to remember that one should always look at the total cost and risk — not just the single part cost.
The main advantage of including the cost line is that it clearly shows the build-up of cost across the value stream. When linking that with opportunity for improvement, it can demonstrate the reasoning for selecting an improvement area that will give the biggest ‘bang for your buck’. This, in turn, will then guide the development of the future state and what this could look like.
2. Think bespoke
One of the biggest changes in the manufacturing industry in recent years has been the surge of requests for bespoke products. From consumers to industry clients in the supply chain, organisations are expected to deliver customisations in short order. It’s about the whole customer experience: journey, personalisation and adaptability, rather than volume.
In every process you have customer touchpoints. How well you manage these ‘moments of truth’ with your customers influences their levels of loyalty towards the company. Making customers more loyal should be a major focus because loyal customers spend more and are more likely to recommend your organisation.
3. Keep agile
Whether it’s being able to reshore, export to new markets or deliver a custom order, the watchword of modern manufacturing is agility. (See the blog How supply chain agility can help beat the Brexit blues.) By using continuous improvement strategies, such as lean, to remove waste, remain competitive and deliver quality, organisations will be able to keep their UK operations strong in the face of potential political and economic challenges.
Brexit hasn’t yet begun — and it will challenge all businesses with any involvement in Europe. It also brings other challenges into sharper focus: disruption is everywhere, and turbulence is the new normal. Like a nest of Russian matryoshka dolls, Brexit’s impact upon manufacturers may be just one of a spectrum of issues meshed within one another, each with its own set of hurdles. Holistic, visionary planning has therefore never been more vital than now.
The article Bracing for Brexit: How manufacturers can prepare for disruption and safeguard supply chains addresses some of the crucial issues facing manufacturers, and offers a more detailed framework for action.
|The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.|