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Tag: supply chain

Traceable Sporting Goods Collection

Posted on by David Priestman

Sourcemap, a global provider of supply chain transparency and traceability software, today announced that Amer Sports – the parent company of premier athletic apparel and equipment brands such as Arc’teryx, Wilson, Salomon and others – has signed on to track and trace critical commodities such as cotton and viscose, also called rayon.

Amer Sports will leverage Sourcemap’s full-suite supply chain transparency solution to collect transaction certificates for certified materials and independently verify the company’s and its subsidiaries’ entire chain of custody, from raw material to finished product, across its supply chain spanning five continents.

Two common raw materials for everyday and activewear across the apparel industry, cotton and viscose traverse through a number of intermediary stops, from the forest or farm at which it is sourced to retailer shelves. Between ginners, traders, fabric mills, sewers and other middlemen, thoroughly checking and controlling how and where these materials move is typically a costly and technically difficult challenge. In the U.S., legislation like the Uyghur Forced Labour Prevention Act has forced importers to irrefutably prove how their cotton and viscose are sourced or risk legal and financial repercussions, but fewer than 20 percent of apparel companies surveyed by KPMG reported having full visibility into their supply chains.

The parent company of established consumer brands such as Arc’teryx, Salomon, Peak Performance, Atomic, Wilson, Armada, ENVE Composites, Louisville Slugger, DeMarini and Sports Tracker, Amer provides everything from household hardgoods such as sports equipment to high-performance outdoor apparel. With such complex supply chains, Amer relies on real-time commodity mapping to ensure material compliance.

“Customer satisfaction is one of our main priorities, and we achieve this when we create total transparency and compliance with local and international mandates within our complete supply chain,” said Pascal Covatta, VP of Global Sourcing at Amer Sports. “Sourcemap is the integral partner enabling us to answer these customer needs and compliance expectations for our end-to-end supply chain transparency.”

Pioneered by Sourcemap, the supplier discovery process connects direct and indirect suppliers, sites, shipping lanes and transactions for an up-to-date graph of entire global operations. On average, Sourcemap customers discover more than 10,000 suppliers during the process; since signing on as a customer, Amer already has undergone Sourcemap’s supplier discovery program for one of its essential commodities: cotton, identifying upstream suppliers from farms to mills to factories within its supply chain.

Ahead of its peers, Sourcemap offers a certification workflow, a customizable solution that ensures brand protection and credibility along every tier of the supply chain. Thoroughly collecting an audit trail of evidence for future reporting, Sourcemap’s certification workflows are multi-brand, multi-certification and multi-commodity, ensuring every component of the value chain is verified. By utilizing Sourcemap’s certification workflow, Amer is able to manage its intricate supply chains with end-to-end visibility into the entire value chain, an essential undertaking to remain compliant and competitive.

“We will continue to see forward-thinking brands like Amer with complex supply chains that span nearly every corner of the world move beyond legacy mapping systems,” said Sourcemap CEO and founder Leo Bonanni (pictured). “As global companies continue to build resilient supply chains, traceability and transparency move even closer toward the centre of successful business planning. Sourcemap is key to helping companies across all sectors stay one step ahead.”

Governments grapple with Supply Chain Disruption

Posted on by David Priestman

Today, BSI, the business improvement and standards company and leading global provider of supply chain intelligence, unveiled its annual Supply Chain Risk Insights Report which indicates that organizations that manage supply chain disruption effectively in 2023 will be best equipped to weather the financial challenges ahead.

In terms of major trends within the supply chain environment, the report observed that thefts from hijacking have fallen as a proportion of cargo theft from 24.4% to 17.0%. These are now second to theft from facilities, which now account for more than a quarter of total thefts, having increased from 24.2% to 26.0%. Food and beverages remain the most commonly stolen commodity and the report highlighted that this has increased considerably in 2022, increasing share by 2.8%. The proportion of automotive and fuel thefts is also rising, whereas the proportion of electronics, agriculture and construction theft has fallen. While hijacking has also fallen as a proportion of cargo theft, BSI observed that this continues to exert a real impact on global supply chains – with food, pharmaceuticals and construction materials most effected.

Another of the report’s key findings is that unprecedented price inflation, exacerbated by the Russia-Ukraine war, but also an enduring legacy of COVID-19-related shutdowns and the resulting prolonged shortage of key manufacturing components, has awakened governments to the importance of global supply chains to national interests. This has led to the launch of new legislation such as the CHIPS Act and the Bipartisan Infrastructure Law in the US, and increased GPDR regulations across the EU, the combination of which is placing greater accountability on suppliers and purchasers. Government intervention spans efforts to bolster domestic supply chains, reduce carbon emissions, and enhance governance.

Monitoring rapidly changing regulatory agendas is highlighted as one business imperative that decision-makers need to be aware of if organizations are to succeed in the face of the ongoing global disruptions.

The report identifies five additional imperatives that organizations will need to address to enable future growth and provide financial sustainability:
– Leadership: Supply chain continuity requires investment from the top down and what organizations really need right now is strong buy-in from top level leadership
– Digital: Organizations need to urgently address their digital risk, with 73% significantly concerned about the risks posed by the digitization of supply chains, but not one organization having resolved the risk
– Self-knowledge: Organizations need to invest in tools and technology which help them form a comprehensive understanding of their supply chain environment, such as data analysis, IoT, cloud computing, information security and predictive analysis
– A tailored approach: An awareness of the different, unique challenges facing each sector’s supply chain is key
– New technologies: Data, the metaverse, and cybersecurity are segments of technology that will differentiate organizations’ approaches to building strong supply chains

Susan Taylor Martin, Chief Executive of the British Standards Institution (BSI), which compiled the report, said: “2022 saw volatility in global supply chains that many would never have expected in their lifetime. Successive crises, including a global pandemic followed by a war in Europe, have resulted in continued uncertainty on many fronts and have demonstrated to governments the benefit of ensuring a robust global supply chain. Given the turbulence of the last twelve months, 2023 will be an important watershed for many organizations – with those that successfully manage their supply chain risks being more likely to thrive.”

Jim Yarbrough, Global Intelligence Program Manager at BSI, said: “The threats facing global supply chains vary from region to region and are distributed unequally, but in the face of rampant global price inflation, all countries ended 2022 in conditions more precarious than they were at the outset. Without intervention, businesses will see dramatic impacts on their bottom line, meaning that discussing supply chain issues at the C-suite level can help to ensure investments are funnelled to suppliers, building resilience to threats and supporting financial sustainability.”

Supply Chain on-Time, in Full Strategies

Posted on by David Priestman

If you work in logistics, then making sure your supply chain deliveries are on-time, in full will be key to your success, writes Paul Fordon, MD of TEPS.

It’s a key metric that should be placed near the top of the list in terms of importance. Yet despite having such an influential role in the long-term success (or failure) of a business, many companies within the supply chain fail to give this metric the full attention that it deserves.

But, how can you drive efficiency, and accuracy whilst saving time in your supply chain with on-time in full strategies? How can you ensure that you’re succeeding in this area? It all comes down to your on-time in full strategies. On this page, we’ll take a close look at OTIF, its benefits, and how you can improve yours.

What is OTIF?

OTIF stands for on time in full, a key metric used to measure efficiency in supply chain companies. An on-time in full delivery is essentially a successful delivery that arrived “on time” and “in full” (i.e., everything that was supposed to arrive did so). Your OTIF rate is the percentage of your total orders that meet this benchmark. Suppliers, logistics companies, and manufacturers can all use OTIF to measure their performance.

It can be difficult to achieve OTIF, especially for companies who have stock brought into ports or store their goods in warehouses, but there are things you can do to improve your OTIF rate.

Benefits of OTIF Strategies

Most companies within the supply chain will benefit from adopting strategies that improve their OTIF percentage. Why? Because there are so many benefits to doing so. The advantages include the following:

• Reducing Costs – A problem with OTIF is usually a result of a shipping problem. By identifying what those problems are, businesses can make changes that help to optimise their shipping process and reduce the need for expensive, expedited shipping services.

• Happier Customers – Customers rightly grow frustrated when they experience problems with their orders. By improving your OTIF percentage, you’ll give your customer satisfaction rates a nudge in the right direction.

• Improve the Company’s, Bottom Line – Late and missed deliveries can be hugely problematic and expensive for companies. At best, the company will need to pay for expedited shipping to fulfil an order. At worst, they may receive a hefty fine or lose a customer altogether. Investing in your OTIF will reduce unnecessary expenses and help to solidify long-term success.

How to calculate OTIF

Understanding your OTIF rate is key to measuring your company’s performance. There’s a simple formula you can use to calculate your rate. First, figure out the total number of deliveries that were made on time and in full. That means the orders that arrived when they were supposed to and contained everything that was supposed to be in the order (i.e., there was nothing missing, and the customer got everything they asked for).

Next, divide that number by the total number of deliveries you made. For example, let’s say you made 820 deliveries on time and in full. Your total deliveries were 950. The formula would be: 820/950 x 100 = 86%. You’ll never get a 100% OTIF rate, but you should aim to be as close to 100% as possible. A score of 85 – 90% is classed as very good.

How to improve OTIF

Even if you have a high OTIF rate, you may want to look at improving the score. There’s no downside to making as many on-time and in-full deliveries as possible. Some handy methods for improving OTIF include:

• Use Smart Warehouse Management Systems – You’ll have problems fulfilling an order if you don’t have items in stock. A smart warehouse management system will allow you to understand what inventory you have in your warehouse at any one time.

• Utilise Real-Time Visibility – Real-time visibility allows companies to keep up to date with the status of an order. By keeping tabs on the location of your shipment in real-time, you’ll be able to identify potential problems that could result in delays. You can also keep your customer up to date.

• Work with Experienced Companies – You’ll depend on other companies to deliver your goods on time and in full. Working with an experienced haulage, storage, and distribution provider will help to reduce the likelihood of issues that could cause a delay or other problems with your shipment.

Ultimately, it’s worth investing in your OTIF rate because of its importance to your business.

Less than Container Load Investment

Posted on by David Priestman

Venture capitalists Northstar, and Allcargo Group, a less than container load (LCL) consolidator and India’s leading logistics provider, have entered into a strategic partnership to jointly explore investments in the supply chain technology space.

A partnership of complementary skillsets

The two companies will leverage each other’s complementary sector expertise to maximise opportunities within this growing market sector. Allcargo has recently embarked upon a new digital investment strategy in order to further strengthen its position as a truly digital multinational logistics organisation with unparalleled service delivery capabilities. As part of this, its subsidiary ECU Worldwide, a leading international cargo and air freight logistics company, launched digital platform ECU360 in 2018 in order to offer shippers and freight forwarders key features including quick quotes, instant bookings for door-to-door deliveries in over 50 markets, and advanced track and trace. ECU360 already captures 60 percent of all bookings worldwide.

Meanwhile, Northstar.vc, established in 2019, is an experienced LogTech investor, with a strong track record supporting management teams at leading supply chain technology firms, such as Project44, Beacon, and Trackonomy Systems, with capital and strategic value-add.

Earlier this year, Northstar.vc and Allcargo made their maiden co-investment in Stord, the leading US cloud supply chain provider that enables companies to intelligently orchestrate, scale, and optimise all aspects of their supply chains – including warehousing, freight and fulfilment – from a single connected platform. Stord is already a market leader, partnering with brands like BODYARMOR, Dollar General, Native, Thrasio, and more. This investment was part of Stord’s Series D round, bringing Stord’s total funding to $325M, as Stord continues to help brands combat ongoing supply chain challenges.

Significant market opportunity for supply chain technology

The COVID-19 pandemic has exposed the fragmentation and rigidity of traditional supply chains, and disruptions continue to impact the global economy. There is a clear need for technology that can solve the problem: according to a recent McKinsey report, 90% of supply chain executives expect to overhaul their supply chain planning IT within the next five years. With an estimated revenue of $20.24 billion in 2022, supply chain management (SCM) is the fastest growing market in the Gartner enterprise application software segment and is expected to reach a value of $35.65 billion by 2026.

Amir Karimpour, Managing Partner at Northstar.vc said: “It is an honour to partner with the global leader in LCL and India’s largest logistics provider, Allcargo Group. Together, we are doubling down on our core investment thesis and capitalising on the current volatility and challenges of global supply chains. We look forward to jointly executing our pipeline of LogTech investments, empowering businesses to widen margins and boost operational efficiencies.”

Vaishnav Shetty, Chief Digital Officer at Allcargo Group, said: “We are delighted to formalise our strategic partnership with Northstar.vc through our co-investment in Stord. We look forward to leveraging Northstar.vc’s network as we accelerate our internal digitisation efforts to align our cultural mindset with the expectations of our global clients.”

Allcargo Logistics Limited, part of The Allcargo Group, is a global leader in multimodal logistics solutions. Allcargo Belgium NV., Operating ECU Worldwide network, is a global market leader in ocean freight consolidation. Allcargo is the market leader in Container Freight Station business in India and is among the leaders in express logistics through subsidiary Gati Ltd., besides having strong presence in Contract Logistics and other businesses. Allcargo is recognised for digitising logistics industry, setting highest quality standards, operational excellence, and customer-centricity across all businesses. The company is recognised as a great place to work.

 

Globalisation: Manufacturing Moves Closer to Home

Posted on by David Priestman

New research has revealed the emergence of major shifts in globalisation, as companies rush to move manufacturing closer to home to protect against supply chain disruptions while increasingly protectionist policies are breaking the world into trade blocs.

The latest Trade in Transition study, commissioned by DP World and led by Economist Impact, captured the perspectives of company leaders as they navigate the latest disruptions to global trade – from the conflict in Ukraine to inflation and extended covid-lockdown policies in some markets.

Its key finding is that 96% of companies confirmed they are making changes to their supply chains due to geopolitical events.

The change has been swift. In the space of just a year, the number of companies shifting their manufacturing and suppliers– either to their home markets or nearby – has doubled compared to 2021. This is driven mainly by efforts to reduce costs and the risk of disruption. But the shifts are not even. While 27% of companies said they were decreasing the length of their supply chains due to geopolitical events such as the war in Ukraine, another 33% plan to expand into more stable and transparent markets.

Inflation threat

The persistent threat of inflation was cited by 30% of the executives as having the most significant negative impact on trade over the next two years. Inflationary pressures are seen in input costs — from supply shortages – and transport, through high energy costs and shipping capacity constraints. In a scenario of monetary tightening, companies across Europe, North America and Asia-Pacific anticipate exports to be 1% lower than under a business-as-usual situation due to decreasing production and demand.

If inflationary pressures continue, exports in the Middle East and South America are expected to be hardest hit, declining by 3.52% and 2.74% respectively. Only Africa is expected to see its exports rise by 0.26%.

A fragmenting world

The fragmentation of the world into trade blocs was also cited by 10% of respondents as limiting the growth of international trade. Beyond the war in Ukraine, US-China tensions and cyber warfare are preventing the efficient functioning of economies worldwide. This is leading to increasingly protectionist policies such as the US Infrastructure Bill and the CHIPS and Science Act, which aim to incentivise and prioritise US and North American manufacturing. Similar protectionist policies are popping up all over the world, leading to further fragmentation of the global trade system.

Businesses are finding ways to respond and grow. Altering supply chains either through diversification, regionalisation, or reshoring to build resilience is one response.

The global survey of 3,000 company executives found that companies in North America and Europe are most likely to outsource more than half of their services within their region. This is followed by 40% of companies in South America, 36% in the Middle East, 32% in Asia-Pacific and 18% in Africa, outsourcing within their regions.

The widespread and increasing adoption of technology is another way to build resilience into the supply chain. Some 35% of respondents said they were currently implementing Internet of Things (IoT) solutions to facilitate the tracking and monitoring of cargo, while another 32% of companies are adopting digital platforms to enable direct business with customers or suppliers.

Speaking at the launch of the report at the World Economic Forum in Davos today, DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem said:

“The report is tangible evidence of how globalisation is changing as companies are forced to adapt to new challenges. By bringing production closer to the final customer, firms can reduce the number of touch points involved in the supply chain and build greater resilience into the flow of cargo around the world. But the trade environment is always changing. The next challenge that will alter these trends is an economic slowdown looming over regional markets. Agility, real-time visibility and end-to-end supply chain capabilities will be critical to ensuring companies can continue to find new efficiencies in an increasingly challenging environment.”

John Ferguson, Practice Lead for New Globalisation at Economist Impact, added:

“The shift to regionalisation and reshoring has been sharp, but unsurprising given the triple threat of higher costs, increased risks and government incentives or requirements to do so. Furthermore, businesses in previous decades have only had to focus on the economic aspects of trade, being price, quality and delivery. Now they have to account for other non-economic factors such as resilience and sustainability. All of which is having a drastic shift in supply chains, which we are witnessing both in the survey results and global trade patterns shifts”.

Supply Chain Industry Fears for 2023

Posted on by David Priestman

Container xChange has released a Container LogTech predictions report for 2023, which highlights important global trends that the shipping and supply chain industry will witness in 2023. The report draws attention to some of the most pertinent issues that industry will witness this year thereby helping professionals to prepare better for navigation.

“The overall outlook for the year 2023 remains gloomy. Europe is hit hard with an all-time high inflation; China struggles to cope with the virus and the US continues to witness hinterland transportation challenges and labour unrest. Most of these challenges will stay in 2023. Consumer confidence will pick up, but it really depends on whether we witness more disruptions in the coming times.” said Christian Roeloffs, cofounder and CEO, Container xChange, an online container logistics platform.

Most of the experts surveyed foresee that inflation and recession will have a greater impact this year and will be the biggest driver of disruptions.

‘‘Due to inflation increasing, there’ll be more unrest in the labour market which will certainly lead to more strikes, specifically in Europe, the UK and North America. And as we have seen before, strikes result in slow operations within the port which can exacerbate supply issues.’’ said Aamir S. Mir, Chief Operating Officer (COO), Caspian Container Company SA as part of the interviews.

Talking of rates, the report further predicts that the Long-term shipping contract rates will see an uptick in 2023, though gradually. This slow increase applies to all modes of transport. With negotiations going on to bring contract rates in line with spot rates, a reset is expected. On the other hand, until there is a balance reached between supply and demand, forwarders will favour short-term contracts until the rates stabilize. “Freight forwarders will employ a ‘wait and see’ approach before making any long-term air cargo capacity commitments particularly.” the report claims.

Trucking rates for both dry and reefer cargos will continue to drop in 2023. Freight tonnage will continue to contract as market conditions and volumes return to pre-pandemic numbers.
The unresolved worker strikes of 2022 will spill over in 2023. Furthermore, the chances of new strikes coming up are high due to inflation-related rise in prices putting pressure on workers’ disposable incomes. Labor dissatisfaction might grow in European and North American economies. In that case, it will cause disruptions in global supply chains.

‘‘Two, almost three exceptional years for carriers are definitely coming to an end. They will have to adapt back to lower margins due to a different supply and demand balance. Many customers, forced into high-cost contracts during the up-cycle, will come for revenge in the down cycle. And regulatory pressures, following excessive profits might appear on top of that, be it through bodies like FMC, EU or China’s MOC, as they each reviewing alliance exemptions, new taxation regulations, or precedence cases from several complaints raised by shippers at different institutions.’’ said Ruben Huber, Founder and Director, OceanX.

The report further covers the growing expectation of 3PL (third party logistics) market to solidify in 2023. Reportedly, it’s projected to reach $1,789.74 billion by 2027. Another key trend on the list is around the digital transformation of the industry. In the years to come, the adoption of digital technologies in shipping will focus on vessel schedules, intuitive booking interfaces, instant slot booking, and capacity confirmations. In this regard, the industry’s major concern will be on having systems interact directly via automating the Data-Analysis-Decision-Action cycle.

China Zero Covid: Supply Chain Impact

Posted on by David Priestman

What supply chain impact will there be from China’s ending of Covid restrictions? Jochen Freese, Chief Commercial Officer, Forto, comments:

“While it is undeniable that the supply chain will be affected if Covid rates continue to grow in China, it is important to remember that the current period – between Christmas and the Chinese New Year – is a quiet time for Asia-Europe trade. Covid is hitting China at a time of low demand which means that even if companies lack workers, they can still fulfill orders.

“I also believe that it might not turn out as bad as everyone is predicting. Despite the high incidence rate in China and the seasonal factors mentioned, Forto has moved more volumes from Asia to Europe in December 2022 and January 2023 than we did for the same period a year before. We moved 17% more volume from China and 50% more from Vietnam.

“However, there is no doubt that now is the time for companies to diversify their supply chain. They can do so by adding production sites within or outside of China, as Apple has done, or try out different trade lanes or transport modes so as to avoid the negative effect of possible port closures. We have had customers, for example, adding rail to their usual sea freight and realizing the advantages of fast, reliable and reasonably priced transport.”

Forto is the first European digital freight forwarder specializing on the Asia-Europe trade lane. Forto has 5 offices in Greater China (Hong Kong, Ningbo, Shanghai, Shenzhen, Tianjin), 2 offices in Vietnam (Hanoi, Ho Chi Minh) and one office in Singapore. Forto employs more than 150 people in Asia and around 800 people globally.

ISO certification for Customs4trade

Posted on by David Priestman

In a bid to continuously monitor and maximise security for customers and employees, Customs4Trade (C4T) has received ISO 27001:2017 and ISO 9001:2015 certification, the internationally recognised standard for security and compliance, specifying requirements for an organisation’s quality management system (QMS) and information security management system (ISMS).

Receiving the ISO certifications demonstrates that C4T has invested in its people, processes, technology, and quality.

ISO standards

“We are extremely proud of this achievement and committed to maintaining the highest available security standards to protect our customers and employees. Being accredited with the ISO 27001 and ISO 9001 certification is a vital step in this process and further validates our commitment to good governance and information security and quality, and we look forward to continuing to serve our clients and employees with the highest security and quality standards,” says Rupert Spiegelberg, CEO of Customs4Trade.

ISO 9001 is a national standard that specifies requirements for a quality management system (QMS) to help businesses become more efficient to improve customer satisfaction. ISO 27001 certification for information security and privacy best practices.

read more

UK Attachment Supplier Celebrates ISO Quality Management Status

 

1 in 5 equipped to handle SC disruptions

Posted on by Keith McKinley

New research from Capgemini reveals that three-quarters of organisations have been impacted by closing facilities, supply chain disruptions, employee absence, and remote work in the past three years, and less than 20% of organisations feel equipped to handle the impacts of these changes. Capgemini Research Institute’s report, “How greater intelligence could supercharge supply chains”, explores how organisations across industries can leverage technology to create resilient, sustainable, and intelligent supply chains to navigate these disruptions and adapt in real time.

Greater focus on sustainability, global socio-economic changes, and shifting consumer demands has meant that organisations are facing considerable disruption to their supply chains. In this context, leaders’ most pressing concerns are reducing CO2 emissions across all tiers of the supply chain (95%) and growing e-commerce volumes (90%). Around 92% of organisations surveyed said that the ongoing relocation of the global supply chain will impact them but only 15% are equipped to deal with this.

Investing in supply chains now is critical for organisations to be prepared to meet future demands, cites the report. On average over the next three years, organisations plan to increase their investment in supply chain transformation by 17% and expect to double their business outcomes in terms of growth, profitability and sustainability.

Resilience to cope with disruptions

“There are numerous building blocks that need to come together to create a future-ready supply chain network and provide differentiated offerings that customers are looking for. The last few years have highlighted the need for organisations to build agile and resilient supply chains, not only to cope with disruptions but also to help them stay ahead of the curve, especially from a sustainability perspective,” comments Mayank Sharma, Global Supply Chain Lead at Capgemini.

“It is clear that there’s no one-size fits all solution, but organisations that lay the foundation for a data-driven, technology enabled, scalable, and sustainable supply chain are the ones that will reap the most impressive returns in terms of driving improved customer loyalty, creating more business value and meeting sustainability goals.”

The report highlights a need for organisations to design resilient, connected networks with integrated data-driven planning. It suggests that technology will be a critical enabler here, giving organisations access to real-time insights which in turn can enhance the ability to predict change and help them plan for possible future scenarios.

‘Supply chain masters’ – organisations defined as having displayed the ability to successfully balance multiple demands on their supply chain – are already reaping business benefits. The research found that this small cohort of respondents (9.5%) reported a 15% incremental growth in revenues, a 17% reduction in CO2 emissions as well as a 1.8 percentage point higher market share when compared with others.

Focus on sustainability is crucial

Supply chains currently account for over 90% of an organisation’s greenhouse gas emissions. Companies are increasingly reshaping business strategies to prioritise sustainability, with many setting top-line targets to improve the overall environmental impact of their products and services. There is a clear need for supply chains to be at the core of these sustainability initiatives.

The vast majority of organisations surveyed (95%) recognise the need to reduce CO2 emissions across the entire supply chain, but only 13% feel well prepared to handle these changes. Currently, reducing Scope 1 emissions dominates an organisations’ sustainability initiatives (38%), versus scope 2 and 3 emissions which account for 22% and 27% respectively. The report suggests that sustainable practices must be adopted across the value chain with transparent metrics set to measure performance plus real-time tracking systems implemented to monitor performance. Investing in supplier training and education initiatives will help to empower stakeholders to make a real impact and enable an organisation to reach its sustainability goals.

The research found that only one in four have started scaling sustainability initiatives in their supply chains, highlighting opportunity for organisations to improve.

Embrace automation and technology for robust management

As organisations plan to increase investments in supply chain transformation, the report suggests there will be considerable focus on change management and upskilling stakeholders. It will also be important to improve collaboration with ecosystem players (customers, suppliers, peers), as well as invest in automation and robotisation to improve operational efficiency and redeploy resources (such as customer interactions, analysis, dynamic planning and decision-making).

Building a composable, integrated, and customer-centric architecture will enable organisations to respond quickly and mitigate supply or fulfilment risks. This combines a transactional backbone and best-in-class industry solutions for execution, as well as data-sharing and collaborative platforms that breaks down siloes, enabling end-to-end management of the supply chain. Integrating existing, otherwise-siloed supply chain management systems will enable organisations to collate, analyse and react to the huge volume of internal and external data that a network produces.

The research found that supply chain masters stand out from other players by how quickly and accurately they complete this process of aggregating, analysing, and acting upon data. Those who adopt a centralised “control tower” approach, where data is collated in one cohesive and connected dashboard, will help break down silos within the supply chain network to provide end-to-end visibility that enables harmonised management.

£24bn of goods held up by SC issues

Posted on by Keith McKinley

A report from Barclays Corporate Banking reveals that goods with a total value of £23.6bn are awaiting completion in UK manufacturers’ warehouses because of supply chain delays.

The study – ‘Chain reaction’ – focuses on manufacturing businesses with over 10 employees and looks at the impact of supply chain issues. Barclays’ research shows that over seven in 10 (72%) businesses are currently holding items in their warehouses awaiting completion because raw materials, ingredients or component parts have not yet been delivered from suppliers. On average, this ‘unfinished business’ is worth over £1m to each company impacted.

Products in the steel and metals sector are most severely affected, with £9bn worth of goods incomplete – equivalent to almost a fifth (19%) of the sub-sector’s annual turnover. The most affected consumer goods sector is food and drink, with delays in sourcing ingredients causing a £3bn backlog. A high value of plastic products (£2.6bn) and electronics (£2bn) are also awaiting completion.

The trends are reflective of supply chain disruption that has challenged the manufacturing sector since the pandemic and three in five (59%) firms say they are still facing supply issues. This has been exacerbated by the invasion of Ukraine and the aftermath of the UK’s exit from the EU. Customer relationships are now being impacted: two-thirds (65%) of manufacturers say their customers are having to wait longer for products, with 15% describing the hold-ups as ‘significant’. To offset rising costs such as energy and transportation, over half (55%) of manufacturers are planning price increases for their own products, of 37% on average.

Industry is innovating

The industry is innovating to solve these challenges. Most commonly, businesses are increasing their storage capacity (39%) to prepare for the fact raw materials are taking longer to source. Meanwhile, a third (33%) are “near shoring” to move their supply chains closer to home and 32% have “friend shored” to work with suppliers in countries that have a strong trading relationship with the UK. To spread their bets, 37% of manufacturers have increased the number of different suppliers they work with.

To maintain cashflow and liquidity, over two-fifths (42%) of manufacturing firms are optimising their working capital cycles and the same amount are accessing additional bank funding. 38% are seeking a cash injection from private equity and a third (32%) are selling off assets to raise funds.

Such measures are leaving the industry confident in the medium-term. Two-thirds (66%) of companies think supply chain challenges will improve over the next six months and 86% are confident about growth next year.

Businesses have also doubled down on their commitment to sustainability despite supply chain pressures. Almost two-thirds (64%) of manufacturers say carbon reduction has become an even bigger priority in the past six months, despite nearly three quarters (73%) saying their environmental goals have become less attainable.

Goods trapped in warehouses

Amidst the business optimism, however, Barclays’ report also lays bare the threat that rising costs and supply chain disruption could pose long-term if circumstances do not improve. On average, UK manufacturers only expect to be able to sustain their operations for 15 further months if current conditions continue.

Lee Collinson, Head of Manufacturing, Transport and Logistics for Barclays Corporate Banking, said: “The British manufacturing sector has faced a perfect storm of challenges this year, with rising costs, the war in Ukraine, labour shortages and ongoing Covid lockdowns in China hitting supply chains hard. As a result, billions of pounds worth of goods are trapped in warehouses unfinished, and this may hit industry turnover in the early part of next year.

“However, manufacturing firms have done what they do best and engineered new solutions to limit the impact of the issues they face. As a result, many businesses will enter the new year with a degree of cautious optimism and confidence.”

The findings in summary:

  • Goods with a total value of £23.6bn are currently awaiting completion in UK manufacturers’ warehouses as key parts, ingredients and materials are delayed due to supply chain issues
  • £9bn of steel and metals products, £3bn of food and drink, £2.6bn of plastic goods and £2bn of electronics are unfinished because of supply logjams
  • With six in 10 businesses facing supply chain difficulties, manufacturers are investing in more storage space and moving suppliers closer to home to ease challenges
  • 64% of manufacturers have faced rising costs because of the recent weakness of the pound
  • Trade barriers are a concern for almost one in three manufacturers. They are a particular issue for the electronics industry (43%) and the automobile industry (41%)
  • The top interventions that manufacturing firms would like to see from government are industrial energy transformation (37%) and a more aggressive energy price cap for the industry (32%)

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