Within every business, the supply chain is vast. Tracking can become complicated, as companies rely on suppliers who might also depend on procuring external resources from third parties. Once one of these components is at risk, all the other parts become vulnerable, leading to possible disruption.
Threatening the communication between supply chains and their traders, Brexit is one of the biggest issues that supply chain managers must be prepared for.
During these uncertain times, businesses, buyers and production teams, would be wise to begin investing in new supply chain strategies and suppliers; just as companies should start to explore new countries, partnerships or materials, and focus their attention on ways to digitise their supply chains.
Challenges that companies may face Post-Brexit include product delivery delays, stockouts, shortages, shipment holds, excess operational costs and margin erosion. As such, some firms have started to consider ‘re-routing their supply chains away from the UK in advance of Brexit’, as both No-Deal and Deal Brexit situations, still unfortunately propose uncertainties.
Car manufacturers and FMCG companies are particularly concerned about the impact of renegotiated customs tariffs and product quotas on existing supply chains and how it impacts the trade volume on any potential new bilateral deals the UK may establish.
Many food-manufacturing firms usually distribute their products in the EU markets from UK manufacturing facilities, and vice versa. To maintain the good terms with their suppliers, supply chain managers, ultimately, must have strong communications infrastructure and software ready, for both, potential exit, scenarios.
Digitisation of supply chain is one initiative which supply chain managers can introduce, to navigate and overcome the uncertainty more efficiently. Digitising the supply chain is crucial as it gives real-time visibility, and this is needed to gain valuable consumer insights that help cultivate the closer customer relationships that are the primary benefit of digitisation.
Today, this supply chain evolution is labelled ‘The Fourth Industrial Revolution’ (Industry 4.0). The technology present in Industry 4.0 provides many of the solutions for supply chain optimisation. Industry 4.0 is characterised by new technologies present in ‘smart factories’ which allow manufacturers to streamline production with internet-connected sensors.
The ‘smart factories’ include artificial intelligence (AI), automation, blockchain, 3D printing automation, internet of things (IoT), servitisation, Enterprise Resource Planning (ERP) and virtual reality (VR). It is crucial for companies to embrace each one of these technologies, as they have their own diverse traits, and when mixed together, they offer companies a competitive, niche, advantage.
Encompassing cloud computing; Industry 4.0 also includes Enterprise Resource Planning software (ERP), which is crucial in providing comprehensive information management for organisations. Financial management, sales cycle, and supply chain management are just a few of the many features that an ERP system can integrate with, which helps businesses to run more efficiently, saving not only time, but money. An ERP system can also provide a customisable dashboard, so supply chain managers can see the desired reports much more easily, helping also into the decision-making process (DMP) surrounding most efficient supply chain processes and effective practices.
Whilst automation can sometimes be perceived as a threat to human labour; evidence suggests that businesses who invest in technology can actually redirect their staff into more skilled tasks. For instance, within a central database, information can be much more easily retrieved, when employees don’t have to manually search across several separate systems.
With these and many other aptitudes, the evolution of digital technologies, and Industry 4.0 within the supply chain, can make the daily operations and long-term planning more efficient; and can help companies manage expectations of the potential outcomes of Brexit much easier. Benefitting as such from technological systems, it is vitally important to continue to improve all component parts of our economy, for which both supply chain and digitisation depend upon, to ensure the UK remains competitive post-Brexit.