Europe must brace for the impact of Brexit as the transition period ends on 31 December 2020. As soon as the transition period ends, limits on travelling, where to live and work, and trade across borders, among other seemingly adverse consequences, will be in effect.
Businesses, in particular, have to prepare for the impact on supply chains as Brexit will most definitely change many of the dynamics of trade between the EU and the UK. The free movement of goods will soon cease, and rules and restrictions on import and export will begin to apply. Steps such as securing customs clearance for goods will add to the time they spend in transit. Tariffs, taxes, and currency exchange are also expected to affect prices of materials and goods.
As such, UK and EU businesses alike need to make strategic decisions immediately if they have not done so. They must assess whether or not cross-border trade will remain feasible and profitable given these circumstances. They may also have to revisit how they configure and manage their respective supply chains to ensure that these changes will not derail their operations.
Should organizations decide to continue dealing with cross-border trade, they should be able to find solutions in technology. Developments in industrial devices, data and analytics, and connectivity should be able to help supply chains run more efficiently, potentially easing the impact of what is to come.
Increased border friction will most definitely be a concern especially for industries dealing with perishable goods and products with short shelf lives. For these companies, it may be necessary to adopt condition monitoring solutions that would allow them to track each parcel that they ship. For this purpose, electronic devices such as data loggers are now capable of monitoring the ambient conditions to which parcels are subjected such as temperature and humidity data. Location data can also be tracked with just one scan.
This allows companies to find out if their shipments have encountered any issues, if at all. If a shipment gets delayed at port or while in transit, at least the company would readily know if the goods have been subjected to suboptimal conditions that may affect their quality and safety.
Selling ineffective and spoiled products can have serious consequences. To start, such products can be dangerous and deadly to those who may use and consume them. Both the EU and UK have stringent regulations concerning food and drug safety to prevent such instances from happening. Violation of these rules can result in significant fines and other legal consequences. By knowing if the products have likely degraded during transport, companies can readily recall them even before their final destinations.
Businesses can also adopt inventory management systems that enable them to work out their materials and product supply. Stock availability is essential to business continuity but with delays and shortages possible due to Brexit changes, companies must be able to prepare their supply chains. Modern systems now employ artificial intelligence (AI) and machine learning (ML) which can take into consideration the additional lead times and potential delays in computing for the required supply and ideal schedules when orders must be placed with suppliers.
Companies may also look toward smart manufacturing to help soften the blow. 3D printing has improved dramatically over the years, and some manufacturers may explore using the technology to produce parts that they may otherwise import. While 3D printing still falls short of the speed and capacity of conventional manufacturing processes, it may help augment supply should delays or shortages happen.
Some manufacturers may also be affected by a looming skills shortage due to immigration. Adopting smart manufacturing can further improve automation and lessen the dependency of certain tasks on human input. Industrial internet-of-things (IIoT) can also allow for the remote monitoring and control of industrial machinery and systems, allowing workers to accomplish tasks even if they are not physically present or located on-premises.
The end of the transition period is sure to pose challenges for businesses but with careful planning and organization, companies should be able to find a strategy that would best fit their circumstances and enable them to continue doing business post-Brexit. The availability of technology solutions should help them improve their supply chains, or at least, make them better prepared to manage the strain that the new restrictions will bring.
