What Brexit means for after-sales service
With the UK formally leaving the European Union (EU) over the course of the next year, there’s a lot of uncertainty around the future of trade and cross-border relationships.
In the manufacturing sector specifically, the UK is heavily reliant on its relationship with the EU for exports. Brexit is impacting British manufacturers in many ways, and much of the future hinges on the trade agreements that will be put in place.
Below are a few of the impacts Brexit could have on UK manufacturing, and strategies to help companies successfully navigate the coming months and years.
Prepare for supply chain uncertainties
Brexit will undoubtedly have a huge impact on the manufacturing supply chain, both in the UK and more broadly in Europe. In a survey conducted late last year by the Chartered Institute of Procurement and Supply, it was found that 63 per cent of EU27 supply chain managers who work with UK suppliers said they expect to move some of their supply chain out of Britain. Not only this, but one fifth of UK companies involved in supply chain have struggled to secure contracts past March 2019 because of Brexit.
Splitting existing supply chains on both sides is likely to raise costs and reduce efficiency in the manufacturing industry. British companies therefore need to prepare for this by optimising their end-to-end supply chain, especially their service parts supply chain, which can help them dramatically increase both margins and revenue.
Fortunately, smart cloud solutions exist today to help manufacturers track parts, eliminate excess and obsolete parts and forecast when new parts are needed. These practices are critical for meeting customers’ increasing service expectations and maintaining an edge over both direct competitors and third-party parts providers. Beyond keeping products in the right place at the right time, inventory management technology also reduces carrying costs – which are estimated at around 25 per cent of the value of inventory that’s on the shelf.
Blue sky thinking? Adopting the cloud
Switching over to a cloud infrastructure also means that manufacturers can keep their data and operations under one roof. This allows them to streamline workflows across an entire organisation and use real-time business intelligence, overcoming challenges that Brexit might throw up.
Cloud computing for the supply chain is expanding, and it’s projected to be worth $4.4 billion by 2019. A cloud-based system that integrates ERP, pricing and other after-sales service processes, for example, allows manufacturers to make the best decisions for their business by linking all of the company’s available information together with minimal downtime. This stands to benefit all aspects of business, from customer satisfaction to production.
Overcome automotive angst
An industry which will be particularly impacted by Brexit is automotive manufacturing. Each car can contain around 30,000 individual parts – each of which may require input from four different suppliers across Europe. With Brexit complicating the cross-border supply chain, it could be much harder to assemble these automobiles in Britain. For example, 60 per cent of Mini and Rolls Royce parts are imported from the EU to be assembled in Britain. If no deal is struck with the EU, tariff rates could make the production of cars in the UK much more expensive.
To combat this, car manufacturers must look at ways to increase margins and revenue in other ways. While many executives are keenly aware that pricing is a very powerful revenue and profit lever, they often overlook the opportunities associated with optimising the prices of service parts inventories, which can frequently be measured in tens or hundreds of thousands of pounds!
Dynamic pricing offers a data-driven approach. It uses customer value-based algorithms, IoT data and competitor monitoring services to optimise your pricing and therefore increase margins. For example, after adopting a dynamic pricing structure in 2013, Amazon saw a 27 per cent sales increase. The company has beenpushing the boundaries of dynamic pricing ever since. With service parts optimisation software, British manufacturers can synchronise pricing at a global level, and easily and automatically adjust it if necessary, helping them stay competitive.
Despite current struggles, manufacturers shouldn’t hang their heads. Instead, they should pay attention to market shifts and realise the profits that can be gained by embracing and maximising the potential in the after-sales service space. It is now the time for British manufacturers to beat the status quo and respond to the challenges of Brexit by allocating spending to increase efficiency and benefits.
By Gill Devine, VP sales EMEA, Syncron.
Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.