Brexit and its Implications on the Supply Chain

eu flag

How will Brexit affect the manufacturing industry?

  1. There will be a reduction of jobs in supply chain management. Any jobs related to manufacturing, planning, sourcing, and logistics will be reduced. This includes high-skill, high-pay jobs in the manufacturing sector.
  2. Investment will decline. Companies that were looking to award contracts to UK-based manufacturers will look elsewhere.
  3. Red tape. Contracts that followed EU guidelines will be null and void. Instead, lawmakers will have to look at pre-1973 documents (before the UK became a part of the European community) to rebuild trade channels.
  4. There will be an impact on physical supply chain flows. Some of Europe’s largest port and freight hubs are in the UK. Trade will come to a halt as new policies are considered.
  5. Uncertainty will create new barriers. No one knows how the UK will fare in the next few years. Analysts predict a short-term recession as the country adjusts to its new independence.

The decision to leave poses a negative impact on the global economy. US companies will find it harder to sell goods and services in the UK.

Some of the biggest manufacturing companies in the UK include Airbus, Nestle, and Nissan. Airbus UK has the largest manufacturing facility by workforce size. President, Paul Khan, believes Brexit will cause Airbus UK to reviews its investments in the country but everything is uncertain for the time being.

Following the unexpected result, the UK is mostly at a standstill with no one quite sure of what the next step is. One thing is for sure. The EU will be compelled to take a tough stance on the UK so other countries are discouraged from leaving as well.

Luxe Electronics is an electronic component distributor based in Amesbury, Massachusetts. We are very much invested in the supply chain of electronic components and are looking to see how Brexit will impact the industry.

We are able to supply a number of product lines but we specialize in the following: Xilinx and Altera. Click to save at least 20% off your next electronic component purchase.

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Sources used:

APICS

Forbes

Engineering.com

The Guardian

 

 

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