Does Brexit present the UK Defence sector more challenges or opportunities?
Continuing the Key Sector Advisor series for Value Stream Experts, for the Defence industry, Richard Fisher, Research Fellow in Global Defence Acquisition, Centre for Defence Acquisition at Cranfield University provides his insight and research into the current landscape facing the UK Defence sector with Brexit looming - whilst acknowledging there are unknowns that can and will affect things, business cannot sit still.
So does Brexit seem to be offering more by way of opportunity or an increased challenge, to UK Defence companies? Over to Richard.....
"Two pieces of recent research that I’ve co-authored have been related to how European legislation presents challenges to defence.
Given the topical nature of ‘Brexit’ it’s appropriate that I summarise that research and how it may be considered by organisations working with defence and what challenges, but more importantly opportunities, it presents:
The first paper on the subject is quite specific (Powell-Turner, Antill and Fisher, 2016), with the subject being electrical and electronic components and how defence is largely bound by the Directives on waste electrical and electronic equipment and the restriction on hazardous substances, but does have some exemptions. The argument is that defence can largely manage without needing to use these exemptions, and therefore buy a lot of commercial-off-the-shelf equipment. However, there are some areas where it still needs to use hazardous substances for a specific purpose and where it needs to manage its surplus outside of the requirements for waste. It’s this area where there’s a need for continuous improvement, innovation and even invention.
Making sure that the materials used truly add value, and are the only materials that can add that value, needs to be a key part of how defence embraces lean manufacturing. Even with the exit from the EU, the challenge will remain – either through increased environmental legislation, supply shortage or cost.
The UK has lessened the quantity it imports of those hazardous materials.
There’s an opportunity for further reductions by embracing some of the principals of the circular economy and recognised existing, in-product, sources of those, and other, resources. Decommissioning products and services in a way that saves the important materials and information is a fundamental part of any value chain. It can often provide the building blocks for further developments and streamlined processes.
These specific requirements are an example of how international legislation affects the UK and the defence industry. The hot topic at the moment is clearly the unknown situation moving forward with ‘Brexit’.
The second paper for summary here (Young, Antill and Fisher, 2017 - starting at Page 8 of the Defence Procurement International magazine) is based on that wider context of the defence industry and what the implications are for Brexit, having only recently completed the Strategic Defence and Security Review. As I’ve said, the implications are unknown at the moment but it’s unlikely to become a more complicated legislative environment.
The UK Government recognises that there’s an appetite for simplified, more UK-centric legislation. I hope that the Great Repeal Bill takes on its own lean thinking approach to the legislation transposed and recognises that this will ensure a match-fit economy.
Making sure that your business practices are ‘best-in-class’ is one of the ways of ensuring that industry will be able to smoothly transition into the UK that’s no longer part of the European Union.
Over the months ahead, we will become more informed about what Brexit means for the UK as a whole and the defence industry specifically. Flexibility will be key and agile processes and supply chains will ensure that the industry can react to these challenges as it comes across them".