Adapting procurement of the labour supply chain
By Matthew Sanders, CEO of de Poel, the UK’s largest procurer of temporary labour
Supply chain experts know how complex the line of procurement can become, through dozens of countries and across thousands of hands; it is an everyday struggle to maintain a cost-effective, audited and robust supply chain. We often think of this process along the lines of textiles, machinery and goods – but it’s also incredibly pertinent for labour.
As the UK moves towards a more flexible workforce, organisations are being forced to adapt the way they procure and source staff. At the moment, businesses are understandably reluctant to increase the headcount of permanent workers, so it’s no surprise that temporary job placements across the UK are rising 7% year on year.This is partly due to the effects of the recession and secondly, the increasingly elaborate EU legislation, which is making it much more difficult for businesses to hire permanent staff.
As such, businesses are naturally attracted to having a more flexible workforce, which they can scale up and down depending on their business requirements. Another reason for this shift towards a more contingent workforce is the lack of skilled workers for positions that require technical or specialist knowledge. In fact, a recent survey found that 65 per cent of UK leaders said the UK’s skills gap was hampering business growth. This shortage often leaves companies unable to source workers in traditional ways and instead, companies fill the roles with temporary or contracted workers.
In supply chain terms, this results in larger, more convoluted supply chains where companies are working with hundreds of different agencies across the UK and internationally to meet all their business needs.
To combat this, many organisations find it beneficial to opt for a managed service provider to source all their temporary recruitment needs and thus, keep administration down and processes streamlined. For example, when Carlsberg moved to a single procurer of labour, they reduced their number of invoices from 15,000 to 52 a year and significantly lowered their number of suppliers. In turn, it also gave them better clarity, visibility and control of their supply chain and ultimately helped the company achieve considerate cost savings.
Streamlining the labour supply doesn’t just result in admin and cost benefits; using a robust auditing process gives companies the ability to have more control and clarity of where they source their business needs from. For example, several retailers in the UK and abroad found themselves in hot water recently, after a garment factory in Bangladesh collapsed and killed more than 500 workers. Retailers worldwide scrambled to scrutinise their supply chains and see if they were affected.
By simplifying your supply chain and your preferred suppliers, you gain more control and visibility where it matters most. This includes who works for you as well, in terms of verifying their background, legal status and if needed, driver’s licenses.
A tight and verified supply chain is an absolute necessity in today’s world. The last thing that a business needs is to lose visibility and cost control of its labour supply chain; so planning now and thinking about options like managed service providers will help you prepare and execute your strategies much more efficiently.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.