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Outsourcing – A Brexit risk mitigation strategy

Theresa May’s Brexit deal has now been rejected twice by MPs and they have voted against leaving the EU without a deal. The latest is a vote in favour of a delay, which doesn’t do much to help manufacturers as they attempt to plan for any scenario.

Theresa May predicts delays of no longer than three months, but she has also warned of lengthier delays if MPs don’t back her deal. Brexit uncertainty rolls on, but PP Control & Automation CEO Tony Hague has an optimistic outlook; in a new video, he talks about the steps that manufacturers are taking to mitigate risk and ensure that they don’t put their growth plans on hold.

“[Manufacturers], in effect, partly sub-contract out risk to companies like us – who will react to demand changes, whether up or down. So, the financial impact on them if we do see a dip in the market is negligible and equally, they can flex up to seize new opportunities – its all about agility.”

Watch the full interview with CEO Tony Hague

Strategic outsourcing and managing risk

An increasing number of OEMs choose strategic outsourcing as part of their overall production and supply chain strategy. This allows them to delegate non-core activities to organisations that specialise in those areas, giving OEMs a sufficient amount of time to focus on core competencies.

Strategic outsourcing isn’t a decision to be taken lightly, and businesses should be encouraged to do their due diligence when selecting an outsourcing partner. They can reduce risk in the first instance by: checking the prospective partner’s financial status and size; visiting and seeing their engineering and production capabilities in action; finding out who the prospective partner is currently working with; and asking yourself this important question – “is this partner what we need both now and in the future?”

At the end of the day, a strategic partnership should be offering you more than just man hours, so close communication is vital, and will help you identify where they can add value. That could be value in the design for manufacture support they offer, support in standardisation or machine connectivity, elimination of unnecessary stock, reduction of Work In Progress (WIP), and so on.

In short, your outsourcing partner should be champions of innovation.

  • Reduce financial risk and exposure in markets where demand can change quickly
  • Create speed and agility to flex up when new opportunities arise
  • Reduce the reliance on costly sub-contract labour which can be both expensive and lead to productivity / quality issues
  • Reduce the likelihood of redundancies during quiet times
  • View more benefits of strategic outsourcing here

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PP work closely with a wide range of technology partners to assist in the engineering, design and development of machinery and processes, offering a technical or commercial benefit over your competitors.

To discuss the potential benefits of strategic outsourcing for your business, please call +44(0)1922 419 109 or enquire using the form below.

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