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the logistics challenge
The Logistics Challenge
By Steve Winwood, Commercial Director, Culina UK Ltd
Steve Winwood is
Commercial Director at Culina
UK Ltd. For more information
call 01630 695 000 or visit
www.culinalogistics.co.uk.
22 FMCG News
The food and drink sector is
continually keeping up with
an ever changing business and
consumer landscape, particularly
as the retailer and consumer
become ever more demanding
- expecting much more from
the manufacturers. Combined
with short lead times, multitemperature
storage, the
constant replenishment of
goods, high levels of traceability
and accuracy status and the
growing need for customised
and shelf ready products, the
sector requires and expects
significant logistics expertise
from its supply chain providers.
Today's economic environment
also brings additional
challenges. As we are now
operating in a value-driven economy
due to the current period of austerity,
all businesses have had to respond
in one way or another. In particular,
the highly competitive grocery sector
is now more than ever striving to
optimise cost efficiencies, with a
particular focus on the supply chain.
This requires logistics providers
to look at new approaches to
supply chain management in
order to survive.
As David Cameron makes
himself at home at Number 10,
policy makers are beavering away
on how to stabilise and bring the
economy to rights. A continued
increase in fuel prices and a probable
hike in VAT are just two other
ways that the sector and supply
chain providers could be affected.
Business leaders, including
Sainsbury’s Chief Executive Justin
King, have been quick to warn the
Government that a VAT rise will
hit the industry with dramatic effects.
Alongside these pressures is a
drive towards sustainable supply
chains as manufacturers and
retailers look to win market share
through demonstrating green
credentials to their customers.
Retailers are recognised as leading
the way on several sustainability
issues, such as reducing packaging
and communicating carbon
footprints to consumers. For
example, Marks and Spencer
launched ‘Plan A’ in January 2007,
setting out 100 commitments to
achieve in five years. Initiatives
such as these create opportunities
for logistics providers as procurement
and supply chain management are
becoming increasingly central to
achieving sustainability ambitions.
Rising to the Challenge
These challenges do offer valuable
opportunities for logistics providers
and, as a result, we are seeing an
increase in demand for shared
user operations. Manufacturers
and retailers are reducing or
getting rid of their own transport
fleets as they do not want to be
tied to the associated costs and
vehicle leases. Those who do not
run their own fleets are reviewing
their existing outsourced logistics
arrangements to ensure they are
maximising cost efficiencies and
getting a value for money service.
The rising demand for shared
user operations does not mean we
can rest on our laurels – far from
it. We are now operating in a
business world where maximising
value-for-money to create cost
efficiencies and heightened
competitiveness has become key.
Here at Culina, we have invested
time and money in several new
services that enhance our customer
proposition. We have embarked
on a joint venture with specialist
food contract packing company
IPS LLP to offer specialist contract
packing services at all of our ten
warehousing sites, removing the
need for goods to be transported