The logistics sector will thrive if it harnesses technology and embraces sustainability, explains Matt Philp, Managing Director, QED.
Disruptions to the supply chain continue to have an impact on UK businesses. Port congestions, capacity shortages, increasing freight and fuel costs, the ongoing effects of the COVID-19 pandemic and the Russian invasion of Ukraine are just some of the circumstances which can, and will, affect international trade and economies for the foreseeable future.
The unprecedented pressures on global supply chains created by the pandemic are predicted to continue with the emergence of new variants in 2022. For example, China’s strict COVID-19 strategy and tight border restrictions will create supply issues for UK business importing products from key manufacturers, with specific cities such as Guangdong, Shenzhen and Hong Kong being hit the hardest.
International shipping costs are likely to remain high this year and we can already see increases in fuel costs as a result of the situation in Ukraine. These price increases will have a massive impact on shipping and transport from a financial perspective, something which impacts the entire supply chain.
Looking at other challenges, we also saw the arrival of the full post-Brexit customs checks which introduced further friction and added costs, with many businesses reporting a worrying lack of preparedness. This said, throughout the rest of the UK, delivery volumes are as high as ever. To boost efficiency across supply chain operations, reduce logistical costs and keep customers satisfied with on time delivery however, businesses must revaluate their operations and embrace growing trends in supply chains and logistics.
Localising the supply chain
Fulfilment, especially in retail, has become even more localised as organisations continue to leverage multiple locations to fulfil orders and reduce time to delivery. Due to the highly competitive retail market, on demand delivery is quickly turning into a differentiator.
Same-day delivery was something that was once unheard of. Today, it is becoming more than just an add-on and it is now expected by many consumers. This doesn’t affect every business though. For example, in the distribution industry, next day delivery is the norm – but if items are in stock and the company is local, collection is also available.
Harnessing the power of technology
Supply chain management technology is changing rapidly as processes become more automated. As such technology requires investment, it is crucial that – whatever solution it is that a business may select – they integrate with their existing supply chain systems and increase efficiency.
There is no reason for us to run the supply chain in the dark anymore. Supply chain managers must also use available technology to forecast inventory and delivery to know what to expect, and how to deal with it, before a rush begins. Supply chain technology gives us the opportunity to increase the visibility of data to never-before-seen levels.
With the current shipping issues and stock shortages, forecasting and ordering stock well in advance is a must to ensure that customers have the products they need to complete jobs on time. In doing so, you at least have advance warning of any upcoming problems in the supply chain and you can speak to people and make them aware of delays.
Focusing on driver retention
Without drivers, goods simply cannot get from one place to another and supply chains break down.
In order to remain ahead of the curve and keep their supply chains running, companies must adopt the trend of tackling the driver shortage and investing in driver retention.
Reducing the carbon footprint
It is common knowledge that supply chains are the biggest producers of carbon emissions; it is reported that they are responsible for over 50% of industry carbon emissions. Environmental issues and sustainability are very high on the business agenda and customer expectations and regulatory requirements force us to look at this issue seriously.
Many businesses are looking at more environmental practices and are switching to electric delivery vans or fleet and hybrid vehicles; some are relocating distribution centres to minimise distances travelled. QED has invested and made big changes in this area, with a reported 99.97% of all packaging now being recyclable. In addition to this we have recently signed up to off-set our carbon footprint and we are now a carbon neutral business. It was easier and more cost effective than we imagined and we’d recommend other businesses look into this.
Ensuring green practices across your business and the supply chain will not only help the environment, but it will help you stand out in the market – it is a win-win! The main goal for supply chains in the future is to increase resilience in the face of the unexpected.
While global and local supply chains are still going through some challenges in the aftermath of the pandemic, Brexit and more, the trends show that many businesses have made massive changes in their supply chains to ensure that their operations continue running smoothly.
For those responsible for logistics and supply chains, it is more critical than ever for us to monitor news and trends, and partner with the right companies who are willing to support us, to remain ahead of ongoing and future issues.
For more information, visit: qedgroup.co.uk
This article was originally published in the April edition of Security Journal UK. To read your FREE digital edition, click here.