UKWA CEO Peter Ward chairs successful 3PL conference
UKWA CEO Peter Ward, who chaired Day One of the 3PL Conference this week, reports that business leaders were in bullish mood following the shock Brexit result and were rolling up sleeves ready to meet new challenges for the industry as they emerged.
“As it became clear that the politicians on both sides of the divide had no real plan for a post Brexit world in the event of Leave winning the day – and neither did many companies,” he said. “While it’s pretty difficult to plan when the future continues to be unclear, delegates at 3PL conference were unanimous in their view that a ‘Business as Usual’ approach was essential to calm the panic being stoked by a media frenzy around the foreseen and unforeseen consequences of the vote. Our message is one of confidence in the resilience and resourcefulness of our industry; while we remain unsure of what post Brexit will bring, business leaders are ready to meet the challenges ahead and UKWA will be playing its part in lobbying the government hard to ensure that the concerns of the industry are heard, understood and addressed.”
State of the industry
Malory Davies of Logistics Manager opened the conference with an overview of the Top 50 companies, pointing out the mixed picture with a trend of increasing consolidation, growth in home delivery and lower margins for freight forwarders. Peter Ward highlighted the apparent contradiction in companies seeking to become ever larger through acquisition in an environment where agility and flexibility have become key to meeting rapidly changing consumer demand.
The new consumer
Ricky Wilson, Head of Operations for M&S said that Click & Collect had become a larger part of the business than Home Delivery, accordingly M&S were configuring in-store fulfilment and collection areas. Neil Ashworth CEO of CollectPlus confirmed the consumer appetite for online ordering and collection in-store – or at any convenient location such as local post offices, fuel stations or shops. He said the business now had 6000 locations nationwide.
Helen Beioley, Operations Director for Clipper Logistics outlined the company’s ‘Boomerang model’ for returns. She said a robust returns process was a necessity for successful retailers, but represented a real ‘headache’, creating an opportunity for logistics partners to provide added value services, whether preparing goods for resale or recycling.
Darren Taylor, Logistics Director at City Sprint outlined the challenges of final mile delivery before he and Helen were joined by Head of Multi-channel Development for the Post Office, Michelle de Pasquale for a lively panel discussion.
The debate ranged from modern disrupters in the form of technology shaking up the marketplace to the need for more collaboration in urban areas. “Delegates agreed that there were too many ‘white van men’ delivering to addresses within close promixmity; more consolidation centres are required to make such services more efficient and more cost-effective, easing congestion and reducing emissions,” Peter Ward explains.
Room for smaller operators
In the final session, Adam Shuter, Managing Director of Exact Logistics, spoke about a deconsolidation project for German road hauliers delivering into the UK marketplace and underlined the role for smaller operators in the sector; while Mike Wallis, a Director of Keswick Enterprises explained how the 3PL industry formed around the growth of retail and the emergence of supermarkets in the Seventies and told delegates about his work developing the logistics industry in other areas including Ukraine.
Summing up, Peter Ward said the 3PL conference had provided a timely opportunity for industry leaders to gather, consider and discuss key industry issues and challenges, and to develop a shared strategy for moving forward. “The event was well-attended, with excellent contribution from high profile individuals and companies.
"The fact that it followed hard on the heels of the Brexit vote, gave the conference added impact and relevance.”
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”