Post Brexit – Towards Pastures New in the USA?

Challenges in the oil and gas sector over the last few years, including the fall in the price of oil, have significantly affected the UK manufacturing and precision engineering companies that support this industry.

As if this was not enough there is now the threat of a “hard” Brexit. Recently published comments from Professor Patrick Minford, a leading pro-Brexit economist, suggest that while Britain will benefit overall from the exit from the EU, our manufacturing sector will be eliminated.

However, it’s not all bad news. A new bright potential source of business on the horizon is free trade with the USA. Our engineering sector is already well placed to attack this market today.

Positive factors include:

• Good travel links
• A common language
• The exchange rate at historically low levels and likely to stay there
• Acceptable overlap in working hours in the day

Precision engineering companies with spare capacity could direct their efforts to supplying OEMs, oil and oil service companies and even aerospace companies on the US Eastern Seaboard and Canada.

What should manufacturing companies look for?

Parts that need intricate and/or precision work and lots of quality documentation are ideal target products for UK manufacturing companies with their high skill levels, responsive supply chains and now very competitive labour rates.

Air freight as the methodology of delivery is something to consider as part of the sales cost of the typical part. Obviously the more the added value on the part the less a percentage of the final cost is the air freight. Smaller sized products can be shipped quickly and at a relatively low cost.

Approaching new markets

Entering this market should be regarded as a medium term strategy, from the initial steps of identifying markets and customers, to making contact with your target companies and developing relationships taking up to 12-24 months. Today’s technologies have made the world a smaller place and, with the right tools in place, make it significantly easier to open up new sales opportunities.

A modern ERP system with a good CRM system, such as E-Max ERP, is one such essential tool.

The CRM system will help you rationalise your collective efforts, improve the efficiency of targeting this market and keep records of customer interaction and information.

The ability to accurately quote on a job and manage and control costs once an order is won allows precision engineers and manufacturing companies to maintain the profitability of a particular product or customer in this new market where costs could quickly spiral out of control.

Flexible and dynamic scheduling to ensure on time delivery is also essential.

In addition, customer confidence will be increased in knowing their supplier is utilising a state of the art ERP system to maximise their efficiency and minimise costs.

Some good news…

There is no need to wait for a formal free trade pact between the UK and the USA – you can start to tackle this market today. Whilst there is currently much discussion over President Trump’s protectionist stance on trade, there will always be a requirement for high quality specialised parts at a competitive cost.

Forward thinking manufacturers and precision engineers in the UK should now be looking at how market factors in the changing political landscape are opening up new business opportunities and how they can capitalise on these. Look to Germany for inspiration – it exports huge amounts to countries where it has no trade deals, infinitely more than the UK.

For more information on E-Max software solutions, contact the E-Max team on 01325 746 567 or click here to request a free no obligation demo of E-Max ERP.