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Supply chain under scrutiny following Brexit

Brexit repercussions for the UK manufacturing industry [Brexit is a portmanteau of ‘Britain’ and ‘exit’, referring to the UK’s referendum to withdraw from the European Union] will be questioned by many over the next few weeks and months. What we do know is that the integration across a supply chain is king. Research conducted by Durham and others demonstrates how a closely integrated supply chain, where there is an easy exchange of ideas and information, is likely to perform better. Supply chains know this and over the years there have been several efforts to bring manufacturers closer together.

However, the key point here is that to make this happen there needs to be a degree of standardization in legislation, systems, policies, and even engineering methods. Over the last few years this has largely been facilitated by several European bodies. Many have been guided by the EU, whereas others have been industry-led. The result has been some highly integrated and efficient supply chains, which have benefited many of us.

The good news here is that given the high degree of integration of many of them they are relatively difficult to change in the short term. The bad news, however, is that in the medium and longer term there would be a higher incentive to do so. In a competitive environment where small changes can have significant impact on performance and relationships, switching between supply chains and countries may become an increasingly popular choice.

Dr Christos Tsinopoulos is senior lecturer in operations & project management at Durham University Business School in the UK. He teaches courses on operations and project management at the MBA, executive education, and MSc classes. His research examines various aspects of innovation and supply chain integration in manufacturing and service industries.

 

27 June 2016

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