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Consultancy sees potential in helping “struggling” firms cope with EU exit

Senior manager advice on improvement Brexit manufacturing circle logo Manufacturing after Brexit

The UK’s decision in June 2016 by a narrow popular vote to leave the European Union, 53 years after joining, ushered in a period of seismic change. To its supporters, Brexit offered the chance to forge a stronger economy, unfettered by excessive regulations.

Opponents pointed to the benefits of EU membership (not least free trade with the rest of Europe) the removal of which could be damaging. Like much of the rest of the country, representatives of the key sector of manufacturing were split. Six years on, what has resulted?

To find out we have pieced together insights from 54 people running manufacturing businesses throughout the UK who we asked about their Brexit experience so far.

Consultancy sees potential in helping “struggling” firms cope with EU exit

Brexit has led to unexpected growth opportunities for the Kaizen Institute – helping the consultancy’s UK manufacturing clients unravel some of the worst effects of the change.

Rui Tenreiro, senior partner and UK director at Kaizen Institute, one of the world’s biggest manufacturing consultancies, said the difficulties many UK manufacturers had experienced since the UK’s vote in 2016 to leave the European Union had boosted his business’s own growth plans.

“In this environment, perhaps paradoxically, we’ve done well. Some clients like to call us in precisely because they are struggling. In these situations we can help them improve efficiency and quality.”

Tenreiro said that for most UK manufacturers “the disadvantages [from Brexit] outweigh the positives”. He added: “Our [UK] customers have encountered a range of supply chain problems and extra paperwork. The ending of free movement for EU citizens makes it harder for companies to find employees.”

His comments followed the publication by Made Here Now of a survey of manufacturers, which revealed a widespread view that Brexit has dealt a big blow to UK industry. Two-thirds of the 54 manufacturers in the poll said Brexit has had a negative impact on their operations, with only 6 per cent viewing it as positive. For 28%, Brexit’s overall effect on their business was neutral.

Engineering team meeting on factory floor
Many manufacturers are struggling but can be helped to improve through Japanese-style management techniques, says Kaizen Institute

Brexit challenges had given Kaizen Institute a platform to encourage UK clients “to improve their business [from both a] growth and operational perspective”, said Tenreiro. As a result the institute – a Made Here Now sponsor since 2020 - had increased its UK revenues and doubled its UK consultants in the past two years. Kaizen Institute has a global team of 300 consultants, just 20 of them in the UK. It works in 60 countries with an approach based around Japanese-style “continuous improvement” and lean production, as well as putting employees at the centre of efforts to design new working practices.

However, despite Tenreiro’s desire to boost revenues, working with businesses that are struggling “is not what we’d choose”.

Kaiam electronics scotland electro connectors using optoelectronics for google servers
A mix of new equipment and ideas is often required to boost competitive performance

“We’ve found that when customers implement new ideas, they get better results when they do it from a place of strength rather than weakness. In our client base we have some big success stories. Our aim always is to work with these businesses long-term to turn a good position into a better one."

Tenreiro – a citizen of Portugal where he lives – says Brexit has harmed his employer’s own ability to recruit. "The restrictions on where EU nationals can live has been negative for Kaizen’s own recruitment efforts, as we seek to build our UK presence. Many people from the EU like the idea of living and working in the UK. Their plan often would be to stay a few years and then move on [to other parts of Europe]. They can’t do this so easily now. We’ve found this hinders our ability to find the individuals we need.

"For myself, due to visa issues, I’m not allowed to work properly in the UK. I can manage the business with short visits and train the team, but I cannot deliver continuous workshops as before. It’s another disruption that doesn’t help.”

Kaizen Institute does not divulge revenues but says its billings from UK customers expanded 50 per cent between 2020 and 2021 and are on course to rise by a similar amount this year. Of its UK clients, 80 per cent are in manufacturing. Among its customers in the UK are chocolate producer and retailer Hotel Chocolat; Becton Dickinson, which makes medical equipment; steelmaker Celsa; McBride, which manufactures cleaning products; and Bucher Municipal, a maker of municipal street cleaning vehicles.

Rob wilkins of croft filterseef
A brighter future may be ahead, despite Brexit-induced challenges, according to Kaizen's UK head. Photo by Rob Wilkins/Croft Filters

Irrespective of the Brexit impact, Tenreiro sees opportunities for Kaizen in the UK. “I think the country has many manufacturers with a good potential to grow and which can be helped by the sort of practical consulting services we offer.”

The institute is based in Switzerland and is owned by Masaaki Imai – the Japanese production expert who founded it in 1985 – and his family. Kaizen Institute entered the British market in 1991.

These stories are part of a series on Manufacturing after Brexit. Read more below

Manufacturing after Brexit series