More than two-thirds of retailers and suppliers have said the reduction of road miles is one of the most important ways to cut supply chain costs.
According to research by IGD’s Efficient Consumer Response UK board, 78% of retailers and 71% of suppliers believe it represents either “the biggest” or “a significant opportunity” for cost savings.
The survey was carried out as part of ECR UK’s Reducing Wasted Miles programme, which aims to help food and grocery businesses work collaboratively to deliver more efficient transport and logistics networks. “With intense retail competition, pressure on margins and rising shopper expectations, s Supply chains continue to undergo huge change and levels of uncertainty,” said IGD supply chain insight manager Darren Smillie.
“ECR UK members identified reducing road miles as an area that could help solve a growing number of challenges facing grocery supply chains, from increasing costs and squeezed margins to rising road congestion and a forecast shortage of drivers.
“This initiative is not necessarily about cutting overall road miles, although it should help contribute to this - rather, it’s about reducing wasted miles and aiming for efficiencies across the industry, at the same time as encouraging businesses to identify opportunities for their own growth.”
ECR UK’s findings pinpointed continued pressure on margins as the greatest challenge facing supply chain logistics over the next decade, with 61% of retailers and 46% of suppliers questioned highlighting the issue.
The survey also revealed a big appetite for sharing transport, with 55% of those surveyed considering it one of the top three ways to reduce road miles over the next 10 years
36% of retailers and suppliers said the collaborative design of logistics networks could cut wasted journeys, while 31% cited more intelligent routing and scheduling as a viable option.
The research highlighted five solutions to help businesses develop their transport and logistics strategies.
These include: better collaboration, such as using shared trucks, facilities, data and systems; removing barriers in the supply chain to keep networks agile; tracking live data to optimise orders and routing; using the appropriate vehicle or transport mode for each journey; and streamlining stock with efficient product and packaging design.
“We want these ‘five to drive’ solutions to become the DNA of strategy, helping industry step change its performance,” added Smillie.
“The way forward will consist of a combination of approaches from businesses to help reduce wasted miles. ECR will foster and encourage these co-operative approaches across the supply chain, to deliver the step change the industry needs.”