LOGISTICS FEBRUARY 2019
KNOWN
UNKNOWNS
With time running out until the UK leaves
the EU, manufacturing supply chains are
coming under scrutiny. What should
companies be doing to prepare?
BY CHRIS BECK
Former US Secretary of Defence Donald
Rumsfeld famously once told reporters
that “there are know knowns; there are
things we know that we know. There are
known unknowns. That is to say there are
things that we now know we don’t know.
But there are also unknown unknowns. There are
things we do not know we don’t know.”
This may be largely gibberish, but it just about
sums up the way many manufacturers are feeling
about the impact of Brexit. As I write, we are two
months from leaving the EU, and nobody is any
the wiser about the impact it will have on the
UK’s supply chains.
Headlines are dominated by stories of
manufacturers stockpiling products, logistics
fi rms ‘stress testing’ the capabilities of the UK’s
major ports and potential shortages of life-saving
drugs like insulin. This, says Dr Jonathan Owens,
senior lecturer in operations management
at Salford University, is being fuelled by
a chronic lack of information coming
from government. “The uncertainty is
causing headaches for everyone, not just
manufacturers,” he says. “We just don’t
know what is going to happen come 29
March. We know – or at least hope – we
won’t drop into the abyss, and Europe have
said there will be a transition period of
zero tariff s or permits, but as far as the UK
is concerned, we have very little certainty.”
A mass exodus?
This uncertainty has
already seen some of UK
manufacturing’s biggest names
threaten to cut back their
operations, or even pull out
of the UK altogether. In mid-
January, Honda warned that it
will have to stop production
at its Swindon plant for six
days due to the disruption
Brexit could cause to its supply
chain, and the chief executives
of Airbus and Siemens have
both warned that a hard Brexit
could be disastrous. “Please
don’t listen to the Brexiteers’
madness, which asserts that
because we have huge plants
here, we will not move and we
will always be here,” said Airbus’
Tom Enders. “They are wrong.”
However, counters Owens,
things may not come to that.
“Honda have been very honest
and said that even if they
wanted to, they wouldn’t look to
move manufacturing out of the
UK,” he says. “Not only would
it mean building a whole new
factory somewhere in Europe,
but it would also involve hiring
staff , training them up and
building a new supply chain.”
Whether or not companies
like Airbus end up leaving
the UK, the upheaval
surrounding Brexit will be
huge. Manufacturing supply
chains span many nations, and
any delays could spell disaster.
John Perry, managing director
of supply chain consultancy,
SCALA, says that manufacturers
could face a steep learning
curve in terms of new rules –
and a mountain of paperwork.
“It’s safe to assume that we
won’t enjoy a frictionless trade
agreement, and there will be an
Government
needs to provide
clarity, says Dr
Owens of Salford
University
Oakozhan /stock.adobe.com
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