Ask the expert: Building resilience in supply chains

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Covid and Brexit have brought about a perfect storm for supply chains. Covid has led to seismic changes in shopping behaviour, accelerating online sales by the equivalent of five years. Brexit has added friction into trading with Northern Ireland and mainland Europe and reduced the availability of labour to work in logistics.  Businesses are starting to quantify the costs of all this on the bottom line.

There’s no one-size-fits-all answer, but we’re helping clients to build agility and resilience into their supply chain so they can survive and thrive in the future.

Embracing technology and automation, and building flexibility into supply chains, will be instrumental to the survival and success of the region’s businesses as we emerge from the pandemic. There’s every chance we will be living with the impact of the pandemic in some form for the foreseeable future, which means being adaptable to withstand change.

Technology and automation

A shortage of labour was already driving companies to look at automation in areas such as warehousing. The impact of Brexit has exacerbated this and we’re seeing significant new levels of interest in automating activities.  The advent of Autonomous Mobile Robots (AMRs) is also starting to turn heads.  AMRs are allowing lower-cost investments in automation and this is changing the landscape of business cases that were traditionally intimidating for boards.

But, this isn’t a decision companies should rush into making without thinking through business plans, automation applications, and the right choice of technology. Decisions about technology made now will determine your cost base and ability to adapt in the coming years.  Planning for this in a structured way will dictate how much value you can extract from your technology investment.

Our advice is to create clear, coherent plans for your needs before approaching potential automation providers. The automation market is red hot now, so providers are unlikely to devote sales time to projects that seem flimsy or ill-thought through.

Brexit and EU warehousing

Many of the region’s companies are trying to judge the impact of Brexit on their business. We know from conversations that many companies are actively looking at options to move at least part of their existing logistics operations to the EU to mitigate border disruption and additional costs that the consumer won’t tolerate.

At the moment many businesses are evaluating the impact on trading and costs since 1st January.  As these start to clarify we are talking to more and more companies who are keen to find a new cost equilibrium for servicing the EU.  Minimising delays, customs disruption and increases in tax and duties are at the top of the list of their objectives.

We’re seeing logistics and warehousing companies in the BeNeLux being inundated with requests from British businesses looking to use warehousing to benefit from the suspension of import taxes or, in the case of re-exports, actual tax savings.

Our advice is to start to understand the impact of Brexit on your cost base. Once you have a clear picture of the effect, you can begin to optimise your flows and seek and reduce your end-to-end cost to serve (in other words, the actual cost of servicing your customers).

What going green means for warehouse options

There will be a renewed focus on sustainability as we emerge from the pandemic. Businesses are reengineering warehouses to lower costs and reduce resource in the pursuit of net-zero energy.

For the first time, we’re talking to companies who want to be ‘green’ because they believe it’s the right thing to do, not because it’s a marketing ploy or a symptom of a lower operating cost.  Business leaders are now tolerating higher financial costs to generate lower environmental ones.

Carbon-neutral transport is another emerging trend and represents one of the most significant challenges when looking at new warehousing sites; what infrastructure will you need to support these new vehicles? This could include different loading equipment, onsite energy storage (or even production), vehicle docking, and recharging stations.

Planning to be carbon neutral in 10 years means businesses should be starting now – it always takes longer than people think because there are always so many knock-on impacts to consider.

Our advice is to start planning now. Investigate the sorts of technologies that could transform your business and begin to do small pilots to check their feasibility and payback.

We provide end-to-end supply chain, and logistics support to deliver improvements to warehouses, transport, forecasting and inventory, so clients become more profitable and transform their customers’ experience. We’re proud of our track record, working with some of the UK’s leading and most trusted brands.

This article was first published in Insider Ask the expert: Building resilience in supply chains | Insider Media in May 2021’

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