The EDA requested a statement from BEAMA on their members’ no-deal Brexit preparedness. Below is the statement from their CEO, Dr Howard Porter.
Contingency Preparation for a No-Deal Brexit – BEAMA Member positions
Although all manufacturers are making no-deal preparations, the ability to do so effectively will vary depending on the type of company and products involved. The level of preparation in the wider eco-system from customers to sub-suppliers is viewed as extremely low. Specific concerns cited include:
- Those companies who can are stockpiling products and components, albeit with warehouse and storage costs at many times normal rates. Those companies with just-in-time delivery systems and have no dedicated storage facilities may be unable to stockpile. Those whose products are made to bespoke customer designs cannot effectively stockpile.
- Hardly any company does not depend for at least some component source on imported supplies, so continuity of production and supply cannot be guaranteed. Costs of contingency measures could add 10-15% to production costs but still not provide absolute assurance.
- If customers are not themselves building up stocks there is a limit on how far cash flow will allow substantial warehousing by manufacturers. Currently for those manufacturers selling into the installation/constructions sectors there are no indications that distributors and wholesalers are increasing orders to mitigate against supply interruptions.
- Complex systems may not be able to be effectively supplied if a single component/element is delayed, regardless of enhanced stocks of the ‘base’ product.
Co-ordination across the supply chain will be essential to create effective resilience. Any assumption that the preparations of companies either above or below in the chain will of themselves avoid interruptions in supply would be reckless. A reliance on broad assurances of preparedness from supply chain partners will be likely to be ineffective as there are limitations to the ability of any one participant to mitigate against all delay risks.
Unless the retail, wholesale and distribution companies have themselves built in stock resilience there is a very high risk that supply to customers will be interrupted. Equally the costs of extensive contingency measures will have an impact.
Also in the Brexit news…
CBI regional no deal analysis – this includes over 40 real-world case studies of companies in every UK region outlining why no deal would be so damaging for local jobs, growth and prosperity
• The CBI’s analysis of the Withdrawal Agreement and Political Declaration – setting out what the details of the agreement mean for business
• CETA the facts: a short overview of why a CETA style deal would not work for the UK economy
• The Brexit deal for regulation
• The Brexit deal for services
New press & media highlights
• Josh Hardie speaking on Sky news regarding slashing import tariffs to zero in a no deal Brexit
• Carolyn Fairbairn speaking on Sky news regarding the long term implications of a no deal for the UK
• No deal Brexit chances are rising – Reuters
• No deal Brexit, threat to 40 trade deals- says CBI – BBC
• Job losses likely in brutal no deal Brexit, Theresa May told – Metro
• It’s now crunch time- CBI on Bank of England’s forecasts – CBI