Planning for Brexit related upheaval

An article in the Wall Street Journal (February 1, 2019) titled “Secret Truck Routes and backup Storage”, describes plans by one UK company, Heller Maschinenfabrik GmbH. The company gets 60% of its components weekly from suppliers across Europe, assembles it product and ships it to Germany. The company has purchased additional storage space, has plans to stockpile components, has plans for a secret transport route to avoid congestion in Dover and plans for additional staff. But all of this is on hold until the potential Brexit scenarios become clearer as they involve additional costs of over 150,000 pounds. Given the inability to pass on these additional costs, is Heller’s decision to stockpile components and remain in the UK the optimal decision or should the company make plans to move its assembly operations ? Should the company postpone any capacity expansion plans in the UK, as is has done in the past, until uncertainties are resolved ? Should Heller create an alternative source for assembly in Germany immediately and thus have other options to supply customers ?

About aviyer2010

This entry was posted in Capacity, congestion, Cost, disruption, logistics, manufacturer, Operations Management and tagged , , , . Bookmark the permalink.

1 Response to Planning for Brexit related upheaval

  1. Kyle Harshbarger says:

    This problem is a good candidate for network optimization. If they make a decision that it is optimal to relocate, I can see needing inventory to wade through a transition. Maybe the stockpiling is being done because they expect to need to relocate, and they don’t want to miss sales during a move.

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