It is possible to deliver supply chain savings for retailers that don't hit the bottom lines of suppliers, says Perry Watts
It's a telling time for our industry as some of the UK's biggest retailers take steps to maintain footfall in stores and encourage consumer spending by introducing cut-price lines and cheaper groceries.
This process puts strains on all parts of the supply chain from sourcing, manufacture and processing through to storage and distribution. Rather than just short-term measures, which could risk supply and have lasting implications for their supply chain, retailers need to be focused on long-term solutions to deliver financial benefits now and in the future. Now, more than ever, companies should look at supply chains from end to end to examine how they can be made more efficient and react better to an upturn.
From a logistics perspective there are ways that, in partnership with both retailer and supplier, companies can make significant savings on a win-win basis - from simple steps such as ensuring trucks are at full capacity across a distribution network to wholesale outsourcing of operational functions, allowing a business to focus on its core competencies. As part of the supply chain audit and transformation, transport optimisation should be a key focus as this is one of the major costs on a company's balance sheet.
To date, change has usually concentrated on retailers' individual networks. The challenge now is for businesses to work together to drive down empty running, improve fuel efficiency and minimise vehicle assets and associated capex.
Collaborating with non-competing companies' networks or using backhaul opportunities can help to drive costs down for retailers within broader supply chains. Inventory optimisation will also become increasingly important and speeding up flow from supplier to store again relies on better partnerships.
In our experience, by working together with our retail customers to maximise efficiencies across the supply chain at every stage, from sourcing and warehousing through to distribution, it is possible to create solutions that do not necessarily have a negative impact on suppliers' bottom lines and still deliver the savings retailers need.
Perry Watts is CEO of DHL Supply Chain UK and Ireland.
It's a telling time for our industry as some of the UK's biggest retailers take steps to maintain footfall in stores and encourage consumer spending by introducing cut-price lines and cheaper groceries.
This process puts strains on all parts of the supply chain from sourcing, manufacture and processing through to storage and distribution. Rather than just short-term measures, which could risk supply and have lasting implications for their supply chain, retailers need to be focused on long-term solutions to deliver financial benefits now and in the future. Now, more than ever, companies should look at supply chains from end to end to examine how they can be made more efficient and react better to an upturn.
From a logistics perspective there are ways that, in partnership with both retailer and supplier, companies can make significant savings on a win-win basis - from simple steps such as ensuring trucks are at full capacity across a distribution network to wholesale outsourcing of operational functions, allowing a business to focus on its core competencies. As part of the supply chain audit and transformation, transport optimisation should be a key focus as this is one of the major costs on a company's balance sheet.
To date, change has usually concentrated on retailers' individual networks. The challenge now is for businesses to work together to drive down empty running, improve fuel efficiency and minimise vehicle assets and associated capex.
Collaborating with non-competing companies' networks or using backhaul opportunities can help to drive costs down for retailers within broader supply chains. Inventory optimisation will also become increasingly important and speeding up flow from supplier to store again relies on better partnerships.
In our experience, by working together with our retail customers to maximise efficiencies across the supply chain at every stage, from sourcing and warehousing through to distribution, it is possible to create solutions that do not necessarily have a negative impact on suppliers' bottom lines and still deliver the savings retailers need.
Perry Watts is CEO of DHL Supply Chain UK and Ireland.
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