Dr Christos Tsinopoulos, Senior Lecturer in Operations & Project Management, Durham University Business School, comments on the future of UK supply chains ahead of official triggering of Article 50:
“The repercussions following the triggering of Article 50 for the UK manufacturing industry will be understood only after the full details of any deal are known. What we do know is that a closely integrated supply chain, where there is an easy exchange of ideas, information and investment is likely to perform better. Because of this, supply chains in several sectors have been leading integration initiatives which have significantly contributed to the competitiveness of the UK manufacturing sector over the last few decades.
“Such initiatives have been facilitated by standardisation across various sectors over the years the UK has been a member of the EU. As a result, the risk of working in partnerships with customers and suppliers across European boundaries has been relatively low.
“As the UK is leaving the EU and the impetus for common regulatory frameworks decreases, there is a risk that in the longer term UK manufacturers will become less attractive partners to do business with.
“The good news however is that UK manufacturers have been very innovative, building significant capabilities in several sectors, which may be difficult to replicate elsewhere. As the negotiations are gathering momentum, and more information is becoming available, small and large manufacturers will be continuously assessing how these hard won capabilities will be affected by the new landscape. During this two year negotiation period every snippet of information will be used to evaluate the shorter and longer term impact.
“The bigger risk, therefore, is that as strategic decisions are being made, e.g. for the development of new products, there will be an increasing appetite to explore how moving operations elsewhere can protect this competitive position.”
