Top 10 E-Lessons learned about the supply chain in 2014
Elemica, the leading Supply Chain Operating Network provider for the process industries, discusses lessons learned in 2014 that will deliver value to a company’s supply chain, better positioning businesses to champion their marketplace in 2015. Companies that use these lessons learned to implement evolving practices and gather metrics across supply chain processes will capture new market opportunities and mitigate risk, significantly reduce operating costs, and improve their customer service capabilities.
“2014 was a year of economic growth for many industry sectors, yet there is still room for improvement, especially if a company is on a continuous improvement journey,” said Ed Rusch, Vice President of Corporate Marketing at Elemica. “We’ve put together these ‘E Lessons Learned’ from real customer experiences, industry analyst expertise, and our own involvement with peers to help businesses grow and move forward in the New Year.”
· Ecosystem – Supply Chains are becoming more of an ecosystem rather than disparate parts, enabling accountability, visibility and agility. There is much inter-connectedness and co-dependency between the relatively inflexible physical reality of process manufacturers and their customers.
· Experience – With customer requirements ever changing downstream, process manufacturers are deploying more sophisticated strategies to keep customer service levels high without resorting to piling on the cost in terms of buffering stock.
· Extend – Instead of focusing inward on the company itself, outside-in supply chains put the customer first. This approach manages cross-functional processes that integrate and synchronize product, demand, and supply networks to optimize joint value.
· Expectation – Unmet expectations occur when companies attempt to force trading partners to collectively adopt a single standard. Integration across the varied, distributed, and complex needs of thousands of individual trading partners and their respective enterprises, without requiring any of them to change the way they do business, is a reality today.
· End-to-End – The process industries are moving away from a manufacturing focus to more of a supply chain view linking supply with demand. With end-to-end supply chain visibility, businesses are able to respond more quickly to demand changes, absorb disruption and capture new market opportunities.
· Exponential – The network effect builds when the capability to do more with more makes all the existing participants better off. Rapid on-boarding campaigns facilitate the network effect, and getting a critical mass of partners on-boarded is the first step to establishing meaningful collaboration.
· Engage – Build better relationships with B2B Social. Modern collaboration methods deliver keen insights faster across the dynamic interactions of your supply chain. They can be used to determine supplier and logistics provider key performance indicators or capture customer recommendations for improvement.
Ease – Business Networks enable companies to find common ground with their customers. Buyers are expecting an easy-to-do-business-with experience, and if they have to go the extra mile to buy something from you, expect their business to move elsewhere.
· Expose – Bring risk and variability to the forefront or expect surprises. The goal is to capture intelligence around real-time business issues. With predictive and prescriptive analytics, businesses can identify pending problems and respond proactively.
· Envision – Master Data Management (MDM) creates a single view of the business. Forecast information comes from multiple entities using disparate systems with different formats. MDM creates a mutually harmonic environment, generating clean and actionable information across an enterprise.
The business climate today is rife with missed opportunities. Our challenging global marketplace is compelling companies to elevate supply chain’s leadership role within their respective organizations, and these “E Lessons Learned” are key ingredients in their recipe for success. With the expected, continued growth of the global process industry market, companies will be better poised to exploit new opportunities by focusing their supply chains from the outside-in.
Elemica’s Supply Chain Operating Network ecosystem facilitates the timely and accurate flow of information between trading partners, fostering network-based business intelligence to help them make smarter decisions faster. Exploring evolving enterprise strategies in these 10 Top “E Lessons Learned” is a winning game-plan, enabling companies to scale their networks into revenue-producing value chains with significant results.
Elemica’s Supply Chain Operating Network is designed to give clients greater control over their global supply chains. Capturing transaction data, across all trading partners, and translating it into actionable information is key to driving value out of the supply chain. For more information, visit www.elemica.com.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector