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Stuart O'Brien

‘Only one in seven’ organisations are able to scale digital supply chain initiatives

A new study from Capgemini has identified a ‘clear gap’ between expectations of what supply chain digitisation can deliver, and the reality of what companies are currently achieving.

While exactly half of the organisations surveyed consider supply chain digitisation to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage (86%).

The Capgemini Research Institute surveyed supply chain executives from 1001 organisations across Consumer Products, Retail and Manufacturing industries about their existing digital supply chain initiatives.

Eighty percent reported revenue of more than US$1 billion in FY 2017 and the survey was conducted from April to May 2018.

Key findings from the report include:-

  • Organisations are struggling to move their digital supply chain projects beyond the testing stage: While exactly half of the organizations surveyed consider supply chain digitization to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage (86%)
  • Most organizations have spread their investments too thinly and are struggling to scale pilot initiatives: The organizations surveyed have an average of 29 digital supply chain projects at the ideation, proof-of-concept or pilot stage. Just 14% have succeeded in scaling even one of their initiatives to multi-site or full-scale deployment. However, for those that have achieved scale, 94% report that these efforts have led directly to an uplift in revenue.
  • Supply chain projects that lack strategic focus are less likely to be successful: The evidence from those who have moved to implementation suggests that companies are taking on too much, and not focusing enough on strategic priorities. The organizations who successfully scaled initiatives had an average of 6 projects at proof-of-concept stage while those who failed to scale averaged 11 projects.

Simon Mardle, Retail Supply Chain Principal at Capgemini, said: “Our research shows that the UK is starting to realise the value in investing in supply chain digitisation, with 58% of our UK respondents identifying this as one of their top three organisational priorities.

“It is positive to see momentum building in the UK as its understanding of the business values of these type of digital initiatives grows as traditionally, the region has tended to be more risk-averse than its global counterparts when implementing digital initiatives.

“However, in order to convert these significant supply chain opportunities into reality, UK organisations must ensure that their digital projects are bound by strategic focus rather than implementation for implementations sake.”

GUEST BLOG: Enforcing packaging standards delivers ethical and financial value

Switched on brands are becoming ever more aware of the importance of packaging when it comes to consumer experience. Far too few, however, have yet to address the extraordinary packaging inefficiencies that exist throughout the supply chain.

Where is the consistency in packaging types -both material and size – that can not only enforce sustainability and ethical standards but also enable cost saving optimisation of pallets, containers and warehouse space?

David Griffiths, Product Marketing Manager, Adjuno, outlines the value of enforcing robust packaging standards across the global supply chain…

Packing, Shipping and Storing Air

Minimalist packaging may be the new black when it comes to consumer facing goods, but across the supply chain the situation is far from slick. When some retailers are handling thousands of different packaging types from suppliers globally, the implications on cost, sustainability and efficiency are very significant.

Given the risk of product damage associated with packaging that is too small, many suppliers will err on the large side – but the costs of this approach, both direct and indirect, are considerable. In addition to wasting money on unnecessary material, what about the wasted space? With multiple sizes used, pallets are not optimised, nor are containers; while oversized packaging also impacts the number of items that can be stored in the warehouse or distribution centre (DC), or in-store. Packing, shipping and storing air is an expensive business. Add in the cost of ethically disposing of damaged or unusable packaging, and reconsidering this area should be about far more than the consumer facing experience.

Plugging the Leak

With the rising pressure on costs and growing stakeholder expectations regarding ethical business practice, retailers need to take control and plug the financial leaks across the supply chain associated with packaging inefficiency. And that means defining and, critically, enforcing very clear packaging standards on suppliers.

Just consider the supply chain implications of reducing packaging types from thousands, even hundreds, to just a dozen – from the material consistency that transforms recycling and waste disposal activity to the optimisation of shipping and storage. And the financial returns that can be achieved by creating packaging standards across the world are significant – from a typical 5% to 10% reduction in the amount of packaging material being used to an improvement in container utilisation of 5% – 15%. The return on investment is compelling – and quick.

Enforcing Control

The starting point must be a robust review of requirements: what are the packaging requirements of the product? What are the space restrictions in the DC? What can containers handle? And what are the feasible packaging types that can be enforced? The challenge, however, is not simply to create these standards but to ensure they are enforced globally. Going through the exercise of rationalising packaging is great but fail to robustly enforce the standards and suppliers will rapidly revert back to using all various shapes and sizes.

Compliance is key – and that means ensuring a retailer has excellent visibility of the supplier’s packaging plans. The easiest approach is to automatically accept orders packed using the authorised sizes and materials. If a supplier cannot access approved packaging for some justifiable reason, retailers can also offer a short list of acceptable sizes – while also ensuring the substitution is automatically communicated. The big win is to have immediate visibility when a supplier proposes the use of unauthorised packaging – enabling a retailer to accept or reject an order based on the potential financial (and ethical) implications of failing to follow the defined standards.

It’s not just retailers that need visibility. In order to inspire suppliers to stick to the rules, they need to be easy to find as well as adhere to. Suppliers need to have excellent visibility of the retailers requirements in order to quickly locate the right type of packaging and keep the process running as efficiently as possible.

Conclusion

This is a massive mindset shift – and one that will be increasingly considered not just at the time of each shipment but during supplier assessment. In a world where packaging is fast becoming a key component of sustainable and ethical business, a supplier’s commitment to the use of standardised packaging must become a fundamental component of the decision making process.

Minimalist packaging is indeed the new black – from supplier all the way through to consumer.

Drone deliveries? Not until 2022 at least

The impact of drone technology within the supply chain has been well documented – as far back as 2013 the word ‘Octocopter’ was being banded about willy-nilly by Amazon executives.

In recent months the focus has shifted from consumer drone delivery towards drone use in the warehouse space, delivery of healthcare materials and agricultural applications.

However, it seems that we’re still some time away for drone technology to actually be realised according to a report by the Wall Street Journal, predicting completion of a regulatory timeline could take until 2022. 

The Federal Aviation Administration (FAA) has admitted to being behind earlier schedules regarding the rules for commercial drone used, and this delay is a concern for industries who consider drone technology beneficial for future growth.

Rules, including flying over small crowds, past the line of sight and drone identification and technical challenges such as lack of consensus over air traffic management best practices need to be approved, all of which could take considerable time.

Back in May this year the FAA announced its Integration Pilot Program, which included 10 state, local and tribal governments as participants in a scheme designed to collect data to develop the best rules of use for drone technology.

“Over the next two and a half years, the selectees will collect drone data involving night operations, flights over people and beyond the pilot’s line of sight, package delivery, detect-and-avoid technologies and the reliability and security of data links between pilot and aircraft,” a spokesperson the FAA said.

Total Supply Chain Summit 2019 – Everything you need to know

The Total Supply Chain Summit returns in 2019 after a super successful autumn event.

20 & 21 May 2019 – Heythrop Park, Oxfordshire

Join for FREE as a VIP guest – simply register your place here to:-

  • Connect with innovative and budget-saving suppliers based on your own requirements and upcoming projects – no hard sell and no time wasted guaranteed
  • Learn via a series of seminar sessions hosted throughout the two days
  • Network with events professionals and venue bookers who share your challenges

PLUS!

Overnight accommodation, all meals and refreshments, plus an invitation to our gala dinner with entertainment is included with your ticket.

This is a unique event which will underpin your strategy for 2019 and beyond. But don’t just take our word for it! Here’s what just a few of our 2018 delegates had to say about the Total Supply Chain Summit…

“It provides an excellent opportunity to gain insights on current technologies and prospects of supply chain, as well as significant opportunity to network with others facing similar business challenges”– JP Boden & Co

“Very well organised and informative” – Temperley London

“Really well organised and a great opportunity to network” – Innocent Drinks

“Very informative and of great benefit for further business relationships” – Sopra Steria

“I found the whole event insightful, and it has provided a sound starting point for potential future supplier relationships” – The Book People

“This event has connected my organisation to potential suppliers that I would never had considered” – Nottingham University Hospitals NHS Trust

To secure your FREE ticket, register today!

To find out more about attending as a delegate, contact Jamie Higgs on 01992 374058 / j.higgs@forumevents.co.uk.

Alternatively, if you’re an industry supplier and would like to showcase your products and services at the event, contact Nick Stannard on 01992 374092 / n.stannard@forumevents.co.uk.

SAVE THE DATE: Fleet Services Management Summit 2019

The Fleet Services Management Summit will return to Whittlebury Hall in Northampton on November 11th & 12th 2019 – make sure you secure your place!

More than 60 delegates and a host of leading industry suppliers attended the event earlier this month to talk through projects, objectives and challenges in a series of one-to-one business meetings and interactive seminars.

Attending delegates included representatives from the Aggreko, Amey Arcese UK LTD, Babcock International Group, Biffa Municipal Ltd, British Heart Foundation, Central England Co-Operative Limited, Derbyshire Constabulary, Dorest & Wiltshire Fire and Rescue Service, East Riding of Yorkshire Council, Enfield Council, G4S UK & Ireland, Hampshire Transport Management, Manchester United Football Club, NHS – Greater Glasgow & Clyde, Royal Mail, The Salvation Army, Travis Perkins plc, Virgin Media, Warburtons and more.

To secure a complimentary delegate place at the 2019 Fleet Services Management Summit, call Katie Bullot on 01992 374049 or email k.bullot@forumevents.co.uk.

To attend as a supplier, call Chris Cannon on 01992 374096 or email c.cannon@forumevents.co.uk.

For more information, visit www.fleetservicesmanagementsummit.co.uk.

New container shipping association established

A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express plan to establish a new container shipping association.

The move is intended to ‘pave the way for digitalisation, standardisation and interoperability in the container shipping industry’.

In addition, IT executives from A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express are discussing the creation of common information technology standards which will be openly available and free of charge for all stakeholders of the wider container shipping industry.

“It’s in the customers’ and all stakeholders’ best interest, if container shipping companies operate with a common set of information technology standards”, said André Simha, CIO of MSC and spokesperson of the group.

“We are striving for less red tape and better transparency. The timing is right, as emerging technologiescreate new customer friendly opportunities. Together, we gain traction in delivering technological breakthroughs and services to our customers compared to working in our own closed silos.”

The shipping industry already has multiple organisations and associations, but the new group’s members say they’ve identified a need for a neutral and non-profit body for ocean carriers that is driven by delivering benefits for the industry and its stakeholders.

The new association claims it has no intent of developing or operating any digital platform, but aims to ensure interoperability through standardisation. Similarly, the association will not discuss any commercial or operational matters.

‘Vibrant’ British blockchain sector to benefit UK business

The most in-depth market research report to date mapping the UK’s distributed ledger technologies (DLT) landscape has revealed the potential of this nascent technology to disrupt industries across the country.

New research from Digital Catapult, an advanced digital innovation centre, discovered an ecosystem active across a wide range of sectors, with British companies at different stages of development and numerous industry-spanning applications to help lower costs, enable more efficient public services and improve supply chain traceability.

The report asserts that the UK became globally recognised as a leader in DLT in 2015, but that since then rapid changes have seen the UK’s early lead potentially slip behind China, Singapore, Malta and the USA, countries which have been more agile in their approach to DLT pioneers.

The new research report, ‘Blockchain in Action: State of the UK Market’, surveyed over 260 UK DLT companies, gathering concrete data on the breadth of the ecosystem. It highlights the opportunities from adopting blockchain and other DLT, as well as identifying the major challenges which must be addressed if the UK is to benefit from this high-potential technology.

Key findings include:

  • The UK’s DLT ecosystem can be divided into four major categories: distributed ledger developers (13%), dApp developers (35%), service providers (37%), and centralised systems (15%).
  • DLT is not confined to the financial services sector – the companies we spoke to are active across a wide range of sectors from manufacturing to the creative industries
  • 38% of the companies interviewed feel that their technology could be applied to all vertical markets, not just FinTech
  • 74% of DLT companies have products ready to demonstrate and are already generating revenue
  • 80% had used personal funds to start their companies, and are often led by mature business leaders using their own money to found the company.
  • 41% had raised a traditional seed round of investment
  • 25% were not currently seeking investment
  • 74% of companies expressed regulatory uncertainty as their most pressing challenge, with the irreconcilability of GDPR with permissionless, public blockchain development and a lack of clarity around ICO regulation quoted as key concerns.
  • Over half (54%) of companies have struggled to open a UK bank account with several resorting to opening multiple accounts around the world
  • Almost half (45%) of companies consulted required additional specialist legal advice to bring their companies to fruition. Many are concerned that lawyers do not understand the intricacies of the technology and believe they have received poor advice around ICOs and intellectual property protection.

The report was launched alongside DLT Field Labs, a new initiative from Digital Catapult that brings together technology businesses, industry partners and researchers to deploy and test the latest distributed ledger technology in real world (and close to real world) environments.

It says DLT companies are grappling with an unclear and fragmented regulatory landscape, amid damaging preconceptions about the viability of their sector and lack of authoritative legal advice. As such, the first DLT Field Labs will look at barriers in the construction industry that blockchain and other DLT solutions could help to overcome.

Jeremy Silver, CEO, Digital Catapult, said: “Digital Catapult is taking an active step to improve understanding of DLT in multiple sectors for the wider benefit of the UK economy. To do that, and encourage further adoption of this technology, we must dispel the myths, cut through the hype, and educate organisations outside of the financial services sector to the varied applications of DLT and how we can help them to de-risk innovation.”

Law firm Mishcon de Reya has signed up as a lead sponsor for the DLT Field Labs initiative. Dr Alastair Moore, Head of Analytics and Machine Learning, said: “We’re thrilled to support Digital Catapult in its exploration of the practical applications of blockchain and other distributed ledger technologies, not just in the legal profession but throughout any number of industries where there is opportunity for impact. Our hope is that by being a part of the DLT Field Labs we can help to accelerate the use and comprehension of DLT in our industry and, ultimately, provide better advice to enable UK DLT companies to fulfil their potential.”

FMCG retailers ‘not measuring supply chain sustainability KPIs’

New research has found supply chain sustainability is a top priority among FMCG retailers, but many aren’t formally measuring KPIs.

According to research from iPoint BiS, more than three quarters of firms (77%) have a clear plan and vision for supply chain sustainability.

However, 40% do not have formal KPIs and 55% said they only have informal measurement metrics.

Only 8% of firms have met their supply chain sustainability plan because of perceived time and effort.

While 41% of managers believe getting supply chain sustainability right will save money.

1 in 3 see supply chain sustainability as protecting against reputational damage. The same number see it as meeting stakeholder expectations.

The survey questioned 250 US and UK supply chain decision-makers and found that while 77 per cent consider supply chain sustainability a strategic priority with a clear plan and vision, 92 per cent of firms are falling behind on their commitment due to perceived time and effort.

The research looked at supply chain sustainability drivers and unsurprisingly found that cost saving is the number one goal amongst managers when creating a sustainable supply chain with 41 per cent citing it. This was well above 31 per cent looking to reduce environmental impact.

In the USA, managers are much more concerned about protecting against reputational damage, with 40 per cent more managers citing it as a sustainability goal in the USA compared to the UK.

Among the reasons given for barriers to implementing a sustainable strategy, 44 per cent say it’s because of the time and effort required, and 43 per cent say it’s difficult to prove the business case. Firms realise that sustainability is important but are finding it difficult or time-consuming to implement.

Despite increasing regulatory pressure and the acknowledgement that sustainability is a key priority, less than half of businesses have a formal measurement of the environmental impacts of their supply chain and track progress towards their sustainability goals.

Joerg Walden, CEO of the iPoint Group, said: “More than ever before, organisations are facing increased demands for insight into their social and environmental performance. CSR or Environmental Social and Governance (ESG) data is no longer just a compliance or financial issue, it has become a social issue where stakeholders, including the public, take an interest in an organization’s CSR or ESG reports. It’s clear from our research that enterprise understands this, but the evidence points to the fact that there is a long way to go before the benefits of sustainability are realized through proper measurement.”

Oliver Mueller, Co-Founder and CEO of iPoint BiS, added: “We live in an era where data can deliver easily trackable progress and actionable insights for decisions and improvements in real time. EHS and sustainability need solid reporting to make a measurable difference and to prove the business case. More than this, EHS and sustainability can rise above organisational boundaries by providing complete transparency into organisational and supply chain relationships through automation, turning sustainability into a business advantage and easily proving the business case.”

Do you specialise in Freight Forwarding? We want to hear from you!

Each month on Supply Chain Briefing we’ll be shining the spotlight on a different part of the logistics and distribution market – and in December we’ll be focussing on Freight Forwarding.

It’s all part of our ‘Recommended’ editorial feature, designed to help supply chain industry buyers find the best products and services available today.

So, if you’re a supplier of Freight Forwarding solutions and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Stuart O’Brien on stuart.obrien@mimrammedia.com.

Total Supply Chain Summit – Register now for May’s event

Registration is now open for delegate places and supplier stands at the Total Supply Chain Summit, which takes place on May 20th & 21st 2019 – it’s really not that far away.

Here are just some of the attending benefits:-

  • Discover new suppliers who are relevant to your requirements via a series of pre-arranged meetings
  • Learn from industry thought-leaders at our seminar sessions
  • Network with like-minded supply chain, distribution and logistics professionals who share your challenges
  • Enjoy full hospitality, including overnight accommodation, all meals and refreshments, plus an invitation to our gala dinner with entertainment

The Total Supply Chain Summit takes place at Heythrop Park in Oxfordshire.

To secure your FREE ticket, register today!

To find out more about attending as a delegate, contact Jamie Higgs on 01992 374058 / j.higgs@forumevents.co.uk.

Alternatively, if you’re an industry supplier and would like to showcase your products and services at the event, contact Nick Stannard on 01992 374092 / n.stannard@forumevents.co.uk.