With a Brexit deal looming, the economic climate is in the most uncertain period it has been in for a long time. Businesses across the manufacturing sector need to be forward-thinking and ask some searching questions about how to prepare themselves for Brexit, this should include how their supply base will support them through a period of uncertainty.

MSC Industrial Supply services thousands of manufacturing companies and is in a unique unbiased position to comment on the current state of UK Manufacturing

There are many challenges facing manufacturers today and whilst they have existed for some time, they have now become more prevalent due to uncertainty around Brexit. The key ones for 2019 are:

  • Engineering Skills Shortage
  • Creating certainty in uncertain times

This continues to be a problem in the UK, with many school leavers choosing a different career path to engineering, along with an ageing engineering population. Some of our manufacturing customers fill the skills gap with engineers from EU countries. How this will be impacted post Brexit is not fully understood at this time. As a consequence, we have seen many customers look to their supply base to provide engineering support.

Maintaining a healthy cashflow will be critical as we enter the Brexit period and we are seeing many of our customers drive greater efficiencies throughout their business to reduce costs, save time and get to market faster. To stay ahead of the competition some of our customers are innovating and diversifying their operation e.g. breaking into new markets using existing production capabilities. To achieve this they are challenging their suppliers to support them on their journey, in terms of stripping out costs, freeing up time and creating greater stability.

Do you think manufacturers understand the impact Brexit could have on their operations?

To be honest you would need a crystal ball to really understand the impact of Brexit on manufacturing operations. However, there are some solid assumptions that can be made. Firstly, there is a real potential for interrupted supply from EU countries. Therefore, strengthening your supply chain will be critical. Increasing your stock holding could be one option, the alternative is to rely on your suppliers to hold the stock for you and take on the burden of increased inventory costs.

Supplier relationships are more important now than ever. A deep understanding of your key suppliers is crucial, you should understand their purpose and how they actually add value to your business. This is important for the months leading up to and post Brexit and beyond. Having suppliers that are Brexit ready, ones who have thought about it and have placed their customer at the heart of their decision-making process, could mean the difference between success and failure.

Reaching out to your supply base and testing their readiness for Brexit is a sensible approach right now!

Have manufacturers been guilty of focusing all their attention on Brexit in the past few years and ignoring other potential issues?

We are seeing manufacturers do one of two things running up to Brexit. They are either sitting back and waiting to see what happens or they are preparing to deal with the Brexit fallout, whatever that may be.

We are seeing no real evidence that manufacturers are focusing too much attention on Brexit. Worryingly, we are seeing too many small to medium size companies not give it the focus it needs. They are adopting a ‘wait and see’ approach. Many manufacturers we speak to are following the latest events but then struggle to translate this into action. This has also resulted in a slowdown in new activities and new investments being made, which in turn has meant that many manufacturers have become stagnant in recent months due to the uncertainty of the post Brexit landscape

That said, some of the more forward-thinking organisations that we work with have started to put in place robust contingency plans, including an increased reliance on their supply base.

How can MSC support manufacturers in their plans for next year?

We believe strongly that our value proposition is designed perfectly to help manufacturers through this major period of uncertainty and beyond. Our high service level model is designed to free up time and money relating to unplanned purchases of industrial consumables. We hold over 80,000 product lines, available next day, helping our customers reduce the need to hold inventory. We will increase our stock holding over the Brexit period, so our customers will not have to. We have access to thousands of additional products through our extensive supply base. We partner with over 550 key suppliers who also support our customers with their product and technical needs.

We are acutely aware of the engineering skills shortage, which is why we have expanded our dedicated engineering team, some of the best within the industry! We are helping our customers streamline their production processes, saving them time and reducing significant costs. We are helping our customers diversify their operations, providing advice and guidance relating to machine tooling.

Our innovative inventory management vending solution is designed to reduce concerns over line side stock outs. It removes the need for our customers to worry about the management of their engineering consumable items during a time where they should be focused on more critical issues.

We are Brexit ready. We understand manufacturing, it’s our heartland. Our success is driven by the success of our customers. We strive to be part of the solution and not part of the problem!

What should manufacturers be looking to do in the coming months leading up to Brexit?

Based on the best practice that we are seeing across thousands of manufacturers we would advise the following:

Where feasible develop contingency plans for the various potential Brexit outcomes

Review the efficiency of your operation, are you ready for a potential change in approach, are you able to quickly adapt to whatever Brexit brings

If possible, seek opportunities to expand into new markets, spreading the risk. Innovate to stay ahead of the competition.

Work with suppliers that can help you navigate through these uncertain times. Work with suppliers that can make you stronger, suppliers that can free you up to focus on the issues that Brexit will surely bring.