The economic consequences of Brexit (Vol 2)

[jjlynn27]

Digga said:

jjlynn27 said:

Murph7355 said:

fblm said:

jjlynn27 said:

Digga said:

Not that I think strong sterling, for cheap imports is any sort of panacea, any more than weak sterling favouring exports, but it is interesting how Remainers latched onto the drop in sterling as some sort of evidence of crisis.

Crisis averted, or never there in the first place? https://uk.reuters.com/article/uk-britain-markets-...

Say what now?

GBPEUR 1.4

GBPEUR 1.13

One figure is just before the referendum, one is now.

1.1-1.20 was the range for much, if not most, of the last decade

Ssssssssssh. JJ's trying to make a point.

It was an answer to the quoted post that somehow last few days are the reversal of a trend since the referendum. It's not.

Now that we've covered that, I think there might be a post by sidick one of the other threads that you didn't agree with yet.

Sorry just, but you walked into that; recent change in GBP is no more con be ted to Brexit than the previous drop. That was the point. It is merely some coincidental factor that commentators latched onto.

I don't think that I walked into anything.



Not sure that I understand ' recent change in GBP is no more con be ted to Brexit than the previous drop', but I don't think that drop on 24th was 'coincidental'.

[jjlynn27]

Murph7355 said:

jjlynn27 said:

It was an answer to the quoted post that somehow last few days are the reversal of a trend since the referendum. It's not.

Now that we've covered that, I think there might be a post by sidick one of the other threads that you didn't agree with yet.

Not really. You were suggesting that 1.40 is where it was, presumably where you think it should be at, what we should be comparing against and, one also assumes, what should be regarded as "good". Otherwise why mention 1.40 at all?

You are doing a lot of assumptions and presumptions. Don't. If something is not clear to you, ask, and I'll explain. The 1.40 was where GBP was before the referendum on the expectation that we'll stay. Leave vote led to a drop and continued decline.

Murph7355 said:

You were advised that the long running average was actually far less than that. Indeed forget the last few days...has the GBP:EUR exchange rate been closer to the long running average this last 12mths or the 1.40 figure you picked out?

Irrelevant for the point being made. Completely and utterly irrelevant.

Murph7355 said:

Ref sidicks' posts, it just seems this way to you. Don't let it get you down. If you post something I agree with I'll do the same to you

It doesn't seem that way to me. Empirical evidence is there. It doesn't get me down at all. I find the whole 'Omg I so totally agree with you' and 'explaining ' other's post mildly embarrassing and entertaining in equal measure.

[confused_buyer]

jjlynn27 said:

It doesn't seem that way to me. Empirical evidence is there. It doesn't get me down at all. I find the whole 'Omg I so totally agree with you' and 'explaining ' other's post mildly embarrassing and entertaining in equal measure.

If we're talking about the Euro the £ was around 1.3 for most of 2016 prior to the referendum. There were some bizarre spikes in either direction in the week(s) up to the vote but these were not sustainable in either direction. It was at 1.4 in 2015 during the Euro Greek issues but not 2016.

It is clearly lower at the moment but as stated the long term average is about €1.21/£ so whilst it is low, it isn't exactly off the chart and not exceptional in the long term context.

[jjlynn27]

confused_buyer said:

If we're talking about the Euro the £ was around 1.3 for most of 2016 prior to the referendum. There were some bizarre spikes in either direction in the week(s) up to the vote but these were not sustainable in either direction. It was at 1.4 in 2015 during the Euro Greek issues but not 2016.

I wouldn't call them bizarre. It was, IIRC, market reaction to which way the vote was likely to go.

confused_buyer said:

It is clearly lower at the moment but as stated the long-term average is about €1.21/£ so whilst it is low, it isn't exactly off the chart and not exceptional in the long-term context.

I never said that it was 'off the charts', it was a reply to Digga's post, as I disagree with the assertion made in that post.

[Mrr T]

Murph7355 said:

Garvin said:

Never in the history of JIT manufacturing has so much utter tripe been stated by so few.

The manufacturing time of a unit (let's say a car) is governed by its longest lead item or, maybe, items. These are generally only a minority of the total components. All other items can be delivered within this timescale so whilst it is true that the overall lead time for a complete unit may be extended it is simply bks to assume that the total inventory held has to increase. One just adjusts the lead time of the call off for the various non longest lead components to match the throughput. The effect on overall efficiency and throughput is minimal.

In addition that only really holds if manufacturing is at at maximum capacity - generally the call off for components matches the steady state demand which is within the maximum capacity of the final assembly line.

When the demand is within the capacity of the line then any increase in lead time can be accommodated by ordering earlier in the cycle and, if necessary, upping the rate. If the demand exceeds the maximum capacity of the line then, generally, the unit is in great demand and the customer will wait that little bit longer for it.

This makes far, far more logical sense and fits with "good process" in other fields IME.

While I cannot claim to be an expert on JITM I think the statement in bold shows the poster knows even less.

My understanding is the fixed element of the process is the manufacturing facility. This must run at optimum speed and sets the timing on the on the whole supply chain. This is fine if the elements in the delivery times in the supply chain are relatively fixed.

So say production of a unit is 4 hours and on hour 2 you need a component. You then sample statistically (more likely model) the delivery times and you can then calculate how much stock you need to ensure the part is always available. I would assume in JITM this is likely at a 99% confidence level.

Obviously the longer the delivery time the more stock that is caught up in transit. However, the amount of stock needed on site is also dependent on the variations of the delivery time. If the delivery time is relatively consistent, the standard deviation of the data will be low and the amount of stock on site is low. However, if the variation is great the standard deviation is much higher and you need to hold much larger amounts of stock on site.

I assume therefore the car companies are not just concerned about the increase in time for the delivery but also an increase in variability of delivery times as lorry queue to cross the channel.

[Sway]

Mrr T said:

Murph7355 said:

Garvin said:

Never in the history of JIT manufacturing has so much utter tripe been stated by so few.

The manufacturing time of a unit (let's say a car) is governed by its longest lead item or, maybe, items. These are generally only a minority of the total components. All other items can be delivered within this timescale so whilst it is true that the overall lead time for a complete unit may be extended it is simply bks to assume that the total inventory held has to increase. One just adjusts the lead time of the call off for the various non longest lead components to match the throughput. The effect on overall efficiency and throughput is minimal.

In addition that only really holds if manufacturing is at at maximum capacity - generally the call off for components matches the steady state demand which is within the maximum capacity of the final assembly line.

When the demand is within the capacity of the line then any increase in lead time can be accommodated by ordering earlier in the cycle and, if necessary, upping the rate. If the demand exceeds the maximum capacity of the line then, generally, the unit is in great demand and the customer will wait that little bit longer for it.

This makes far, far more logical sense and fits with "good process" in other fields IME.

While I cannot claim to be an expert on JITM I think the statement in bold shows the poster knows even less.

My understanding is the fixed element of the process is the manufacturing facility. This must run at optimum speed and sets the timing on the on the whole supply chain. This is fine if the elements in the delivery times in the supply chain are relatively fixed.

So say production of a unit is 4 hours and on hour 2 you need a component. You then sample statistically (more likely model) the delivery times and you can then calculate how much stock you need to ensure the part is always available. I would assume in JITM this is likely at a 99% confidence level.

Obviously the longer the delivery time the more stock that is caught up in transit. However, the amount of stock needed on site is also dependent on the variations of the delivery time. If the delivery time is relatively consistent, the standard deviation of the data will be low and the amount of stock on site is low. However, if the variation is great the standard deviation is much higher and you need to hold much larger amounts of stock on site.

I assume therefore the car companies are not just concerned about the increase in time for the delivery but also an increase in variability of delivery times as lorry queue to cross the channel.

The variability in supply lead times does drive a significant level of the inventory needed - in mixed production lines the variability within the product is also key (and often a greater driver than the supply lead time variability).

However,within this specific context, the addition of on average a day to clear customs makes an exceptionally low impact on the supply lead time variability. Especially when considering that today there are variances in channel crossing lead times outside of customs constraints.

Another aspect is what needs to be held where. MINI is an example of broadly speaking an integration plant, with tier 1 suppliers actually performing a large percentage of the assembly process tasks. Companies like MINI, JLR and Nissan are sufficiently sized that th revenues are attractive to those tier 1s - sufficient that they are willing to hold the inventory outwith the MINI plant, and guarantee supply to very tight lead times with financial penalties if not achieved.

[SilverSixer]

John145 said:

cookie118 said:

Murph7355 said:

The article read far more as a vested interest party using/trying to use leverage rather than there being genuine, material issues..

I would read it differently-yes they've been deliberately shown but the main source of the article seems to be internal memos, not public statements.

I am kind of amused though that at every juncture the resident Brexiteers can just tell that there's no real risk. The CEO's etc don't know anything about their businesses or it's just companies trying to use their leverage.

Is there anything in that the Brexiteers would consider worrying? If not that's a bit worrying in itself!

TBH I was worried about the idea of an EU army but was reassured when our glorious remainer leaders said this would never happen.

One thing for me is power creep and the lack of acknowledgement by one side of the argument to this.

What worries me about Brexit? That it won't happen. We're either fully in or fully out and this half way house we've had for the past decade is farcical and expensive. So for me, we're fully out and I can appreciate there are those who are fully in. To be fully in is to end the monarchy, the HoL, the HoC, the Supreme Court and accept complete dominion of the EU.

Because the Dutch, Swedish and Spanish monarchies have been abolished and those countries are under the complete jurisdiction and dominion of the EU, aren't they.

Your fears are not real. Mind you, I'd be more than happy with a reformed UK within the EU which had abolished the monarchy and introduced at least an element of elected Peers in the HoL, perhaps in combination with non-political/religious professional appointments.

Do feel free to post links to the updated plans for the EU army, its planned creation date along with the plans for the abolition of the individual national armies, and accession of, say, Turkey to the organisation.

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

[Garvin]

Mrr T said:

Murph7355 said:

Garvin said:

Never in the history of JIT manufacturing has so much utter tripe been stated by so few.

The manufacturing time of a unit (let's say a car) is governed by its longest lead item or, maybe, items. These are generally only a minority of the total components. All other items can be delivered within this timescale so whilst it is true that the overall lead time for a complete unit may be extended it is simply bks to assume that the total inventory held has to increase. One just adjusts the lead time of the call off for the various non longest lead components to match the throughput. The effect on overall efficiency and throughput is minimal.

In addition that only really holds if manufacturing is at at maximum capacity - generally the call off for components matches the steady state demand which is within the maximum capacity of the final assembly line.

When the demand is within the capacity of the line then any increase in lead time can be accommodated by ordering earlier in the cycle and, if necessary, upping the rate. If the demand exceeds the maximum capacity of the line then, generally, the unit is in great demand and the customer will wait that little bit longer for it.

This makes far, far more logical sense and fits with "good process" in other fields IME.

While I cannot claim to be an expert on JITM I think the statement in bold shows the poster knows even less.

My understanding is the fixed element of the process is the manufacturing facility. This must run at optimum speed and sets the timing on the on the whole supply chain. This is fine if the elements in the delivery times in the supply chain are relatively fixed.

So say production of a unit is 4 hours and on hour 2 you need a component. You then sample statistically (more likely model) the delivery times and you can then calculate how much stock you need to ensure the part is always available. I would assume in JITM this is likely at a 99% confidence level.

Obviously the longer the delivery time the more stock that is caught up in transit. However, the amount of stock needed on site is also dependent on the variations of the delivery time. If the delivery time is relatively consistent, the standard deviation of the data will be low and the amount of stock on site is low. However, if the variation is great the standard deviation is much higher and you need to hold much larger amounts of stock on site.

I assume therefore the car companies are not just concerned about the increase in time for the delivery but also an increase in variability of delivery times as lorry queue to cross the channel.

You are completely correct in not being an expert in JITM as you are confusing the production line cycle time (which can be speeded up or slowed down if required*) with the time from order to delivery (the overall manufacturing time) and by doing so demonstrate your complete lack of knowledge of the topic.

I repeat, never in the history of JIT manufacturing has so much utter tripe been stated by so few.

*Yes it would be nice to run at optimum speed (maximum capacity) all the time but this is not always desirable as, if the demand isn't there, you will end up building a huge amount of finished goods with nowhere for them to go.

[Tuna]

Garvin said:

I repeat, never in the history of JIT manufacturing has so much utter tripe been stated by so few.

But it's just got to be a problem, otherwise //ajd, Mr T and co. can't make their political points.

[Tuna]

jjlynn27 said:

I don't think that I walked into anything.



Not sure that I understand ' recent change in GBP is no more con be ted to Brexit than the previous drop', but I don't think that drop on 24th was 'coincidental'.

Step 1. Make the claim that GBP dropped from 1.4 Euros after the vote
Step 2. Post a graph showing that it was 1.32 at maximum, and actually averaging less than 1.28

Good job you didn't write that on the side of a bus eh?

[jjlynn27]

Tuna said:

jjlynn27 said:

I don't think that I walked into anything.



Not sure that I understand ' recent change in GBP is no more con be ted to Brexit than the previous drop', but I don't think that drop on 24th was 'coincidental'.

Step 1. Make the claim that GBP dropped from 1.4 Euros after the vote
Step 2. Post a graph showing that it was 1.32 at maximum, and actually averaging less than 1.28

Good job you didn't write that on the side of a bus eh?

Thanks for that. My bad. Had to check where I've got 1.4 from. Turns out that I mistyped the year.

https://www.poundsterlinglive.com/best-exchange-ra...

while the correct values are obviously on;

https://www.poundsterlinglive.com/best-exchange-ra...

The point, nevertheless, stands.

[Mrr T]

Sway said:

Mrr T said:

Murph7355 said:

Garvin said:

Never in the history of JIT manufacturing has so much utter tripe been stated by so few.

The manufacturing time of a unit (let's say a car) is governed by its longest lead item or, maybe, items. These are generally only a minority of the total components. All other items can be delivered within this timescale so whilst it is true that the overall lead time for a complete unit may be extended it is simply bks to assume that the total inventory held has to increase. One just adjusts the lead time of the call off for the various non longest lead components to match the throughput. The effect on overall efficiency and throughput is minimal.

In addition that only really holds if manufacturing is at at maximum capacity - generally the call off for components matches the steady state demand which is within the maximum capacity of the final assembly line.

When the demand is within the capacity of the line then any increase in lead time can be accommodated by ordering earlier in the cycle and, if necessary, upping the rate. If the demand exceeds the maximum capacity of the line then, generally, the unit is in great demand and the customer will wait that little bit longer for it.

This makes far, far more logical sense and fits with "good process" in other fields IME.

While I cannot claim to be an expert on JITM I think the statement in bold shows the poster knows even less.

My understanding is the fixed element of the process is the manufacturing facility. This must run at optimum speed and sets the timing on the on the whole supply chain. This is fine if the elements in the delivery times in the supply chain are relatively fixed.

So say production of a unit is 4 hours and on hour 2 you need a component. You then sample statistically (more likely model) the delivery times and you can then calculate how much stock you need to ensure the part is always available. I would assume in JITM this is likely at a 99% confidence level.

Obviously the longer the delivery time the more stock that is caught up in transit. However, the amount of stock needed on site is also dependent on the variations of the delivery time. If the delivery time is relatively consistent, the standard deviation of the data will be low and the amount of stock on site is low. However, if the variation is great the standard deviation is much higher and you need to hold much larger amounts of stock on site.

I assume therefore the car companies are not just concerned about the increase in time for the delivery but also an increase in variability of delivery times as lorry queue to cross the channel.

The variability in supply lead times does drive a significant level of the inventory needed - in mixed production lines the variability within the product is also key (and often a greater driver than the supply lead time variability).

However,within this specific context, the addition of on average a day to clear customs makes an exceptionally low impact on the supply lead time variability. Especially when considering that today there are variances in channel crossing lead times outside of customs constraints.

Another aspect is what needs to be held where. MINI is an example of broadly speaking an integration plant, with tier 1 suppliers actually performing a large percentage of the assembly process tasks. Companies like MINI, JLR and Nissan are sufficiently sized that th revenues are attractive to those tier 1s - sufficient that they are willing to hold the inventory outwith the MINI plant, and guarantee supply to very tight lead times with financial penalties if not achieved.

As I have stated the increase in time does not have much effect it’s the increase in SD which matters. My assumption is introducing a customs border at the channel, which does not have the infrastructure or people to cope, will not just slow movement but make it very erratic.

Further you seem only to be considering only 2 levels of manufacture. If you look at a modern supply chain for large manufactures it is like a spiders web. With the same item crossing the channel several times during the build process. So it not just stock build up at the production facility but throughout the supply chain.

[Sway]

Mrr T said:

Sway said:

Mrr T said:

Murph7355 said:

Garvin said:

Never in the history of JIT manufacturing has so much utter tripe been stated by so few.

The manufacturing time of a unit (let's say a car) is governed by its longest lead item or, maybe, items. These are generally only a minority of the total components. All other items can be delivered within this timescale so whilst it is true that the overall lead time for a complete unit may be extended it is simply bks to assume that the total inventory held has to increase. One just adjusts the lead time of the call off for the various non longest lead components to match the throughput. The effect on overall efficiency and throughput is minimal.

In addition that only really holds if manufacturing is at at maximum capacity - generally the call off for components matches the steady state demand which is within the maximum capacity of the final assembly line.

When the demand is within the capacity of the line then any increase in lead time can be accommodated by ordering earlier in the cycle and, if necessary, upping the rate. If the demand exceeds the maximum capacity of the line then, generally, the unit is in great demand and the customer will wait that little bit longer for it.

This makes far, far more logical sense and fits with "good process" in other fields IME.

While I cannot claim to be an expert on JITM I think the statement in bold shows the poster knows even less.

My understanding is the fixed element of the process is the manufacturing facility. This must run at optimum speed and sets the timing on the on the whole supply chain. This is fine if the elements in the delivery times in the supply chain are relatively fixed.

So say production of a unit is 4 hours and on hour 2 you need a component. You then sample statistically (more likely model) the delivery times and you can then calculate how much stock you need to ensure the part is always available. I would assume in JITM this is likely at a 99% confidence level.

Obviously the longer the delivery time the more stock that is caught up in transit. However, the amount of stock needed on site is also dependent on the variations of the delivery time. If the delivery time is relatively consistent, the standard deviation of the data will be low and the amount of stock on site is low. However, if the variation is great the standard deviation is much higher and you need to hold much larger amounts of stock on site.

I assume therefore the car companies are not just concerned about the increase in time for the delivery but also an increase in variability of delivery times as lorry queue to cross the channel.

The variability in supply lead times does drive a significant level of the inventory needed - in mixed production lines the variability within the product is also key (and often a greater driver than the supply lead time variability).

However,within this specific context, the addition of on average a day to clear customs makes an exceptionally low impact on the supply lead time variability. Especially when considering that today there are variances in channel crossing lead times outside of customs constraints.

Another aspect is what needs to be held where. MINI is an example of broadly speaking an integration plant, with tier 1 suppliers actually performing a large percentage of the assembly process tasks. Companies like MINI, JLR and Nissan are sufficiently sized that th revenues are attractive to those tier 1s - sufficient that they are willing to hold the inventory outwith the MINI plant, and guarantee supply to very tight lead times with financial penalties if not achieved.

As I have stated the increase in time does not have much effect it’s the increase in SD which matters. My assumption is introducing a customs border at the channel, which does not have the infrastructure or people to cope, will not just slow movement but make it very erratic.

Further you seem only to be considering only 2 levels of manufacture. If you look at a modern supply chain for large manufactures it is like a spiders web. With the same item crossing the channel several times during the build process. So it not just stock build up at the production facility but throughout the supply chain.

If we're talking about lean operations, then that level of transport waste should have already been designed out...

Further, in that scenario everyone other than the final shipment to customer would be operating under IPR, and so would have pre-cleared customs. There are also many routes by which goods can take to minimise any variations.

Some commodity components may well travel back and forth. Fortunately, as commodities utilised across many manufacturers within the industry and sold by spares providers, they're not going to be an issue, and are often run via kanban - and the costs and risks of inventory holding are significantly reduced.

I am fully aware of modern manufacturing supply chain operations and the complexity within them - I am currently half way through introducing the very things we are talking about here for my current client, taking a third out of the controllable material spend per device, in an industry which has far lower volumes and far greater external variability that that seen in automotive mass production, which is a doddle in comparison...

[anonymous-user]

SilverSixer said:

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

Do you still believe the Osborne treasury report on the impact of leaving the EU is correct?

[SilverSixer]

jsf said:

SilverSixer said:

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

Do you still believe the Osborne treasury report on the impact of leaving the EU is correct?

Who cares? He's history. The real damage to the British economy is now beginning. Slowing growth, inflation, entrenched stagnation of wages, brain drain, loss of unskilled migrant workers, loss of critical NHS staff in huge numbers, weakness of pound discouraging people from living, working and setting up business here, not to mention business failing to invest and planning to jump ship, rising interest rates soon.

But yeah, woo yay brexit. I'm being an unpatriotic moaner talking the country down.

[anonymous-user]

SilverSixer said:

jsf said:

SilverSixer said:

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

Do you still believe the Osborne treasury report on the impact of leaving the EU is correct?

Who cares? He's history.

You care if you wish to discuss project fear.

I take it from your response you don't believe what the treasury report said, based on the fact you wouldn't endorse it?

[SilverSixer]

jsf said:

SilverSixer said:

jsf said:

SilverSixer said:

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

Do you still believe the Osborne treasury report on the impact of leaving the EU is correct?

Who cares? He's history.

You care if you wish to discuss project fear.

I take it from your response you don't believe what the treasury report said, based on the fact you wouldn't endorse it?

Presume what you like old pip. I thought the Treasury was probably a bit over the top but broadly right, and I believe if we go ahead with brexit the way it's being handled currently they're likely to be borne out as broadly accurate in the end. Hope that answers your concerns.

What I'm interested in now is that the country's being dragged down economically and reputationally by this ludicrous project, the remain side warned you of all these consequences, and no-one seems willing to either progress the project like a grown-up or admit it's too hard and stop it - yet. We can but hope.

[anonymous-user]

SilverSixer said:

The real damage to the British economy is now beginning...rising interest rates soon.

Project fear co-conspirator, the BoE, preparing the market for a possible unwind of their pathetic panic cut is not an example of economic damage; it's an admission that they were wrong, or at least premature, to have thrown such an embarrassing monetary policy hissy fit.

[John145]

SilverSixer said:

jsf said:

SilverSixer said:

Vote Leave's Project Fear was the real Project Fear. All the blather about Remain being fear based was merely projection. The economic fallout of brexit is beginning, is real and will be enormously difficult to arrest.

Do you still believe the Osborne treasury report on the impact of leaving the EU is correct?

Who cares? He's history. The real damage to the British economy is now beginning. Slowing growth, inflation, entrenched stagnation of wages, brain drain, loss of unskilled migrant workers, loss of critical NHS staff in huge numbers, weakness of pound discouraging people from living, working and setting up business here, not to mention business failing to invest and planning to jump ship, rising interest rates soon.

But yeah, woo yay brexit. I'm being an unpatriotic moaner talking the country down.

If anything you're being contradictory and if I may a little excitable.

[FN2TypeR]

fblm said:

SilverSixer said:

The real damage to the British economy is now beginning...rising interest rates soon.

Project fear co-conspirator, the BoE, preparing the market for a possible unwind of their pathetic panic cut is not an example of economic damage; it's an admission that they were wrong, or at least premature, to have thrown such an embarrassing monetary policy hissy fit.

Has Mark Carney admitted that he and his panels knee jerk reaction helped fuel the inflation that we are currently seeing out of interest? Or is it all the fault of somebody else?