Supply chain inefficiencies costing UK businesses more than £1.5bn

Supply chain inefficiencies and miscommunication through “Chinese Whispers” are costing UK businesses over £1.5bn in lost productivity according to analysis of industry data from digital freight forwarder Zencargo.

Resolving this could contribute to reducing the productivity gap that is harming British firms.

Detailed analysis of over 100 shipments from a cross section of UK industries suggests that UK businesses that trade internationally are wasting over three hours on average per individual shipment.

In particular, they found employees are spending time on phone calls and emails to request and funnel data back and forth between their trade partners, the majority of which already exists on partner systems.

Across the UK this results in over 100 million hours of time wasted per annum, or the equivalent of 50,000 employees’ annual working hours, tied up in procurement, managing suppliers and freight related admin.

The study also suggests that Brexit is likely to exacerbate this efficiency problem further as shipments with non-EU countries involve on average 17% more wasted time than shipments with the EU, owing to the increased communications burden around customs documentation.

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The study demonstrates the urgent need for supply chain innovation as a route to solving the productivity puzzle. The adoption of simple technology that helps automate communication can deliver productivity gains now to the tune of £1.5bn per annum.

This represents 5% of the UK Government’s annual target for productivity gains from digitisation (£30bn per year until 2030). Significant long-term transformation is possible through widespread digital adoption across the supply chain.

Alex Hersham, CEO and Co-Founder of Zencargo added: “Technology is the main building block to bridge the productivity gap in the UK. Lack of communication harms productivity in any business, factor in complicated and often outdated supply chains and problems very quickly escalate.

“Now is the time to invest and innovative in technology so we can truly compete on the global stage and at the same time benefit on a productivity level.”