Developing future proof supply chains and cutting costs

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A recent survey carried out by Jones Lang LaSalle, revealed that 71 per cent of supply chain managers believe cutting costs will be the top trend for the next five years.The findings are indicative of the current economic situation and reflect the increasing pressure being put on supply chain managers to reduce costs. Other key trends highlighted in the survey, include speed of change in consumer markets (61 per cent) and growth in internet retail (39 per cent).Supply Chain ChallengesWhen asked to rank the biggest challenges facing supply chains over the next five years, 95 per cent of respondents selected rising energy and transport costs as their main concerns. Changing consumer demand (76 per cent) and transport infrastructure constraints (66 per cent) were ranked second and third.The results illustrate the difficulties facing retailers as they aim to adapt to rapidly evolving customer behaviour. As consumers increasingly turn to online retail outlets and expect cheap delivery options, supply chain managers need to work towards building sustainable delivery strategies. Many of these issues were recently discussed at 4C’s Supply Chain Roundtable 2012.The survey also found that three quarters of respondents  require either new build (33 per cent) or modern (44 per cent) floor space while around 50 per cent of respondents require distribution floorspace over 10,000 sq. m. In addition, half of all respondents will avoid five year plus leases.Survey findings are based upon qualitative analysis of information provided by 50 European 3PLs, retailers, manufacturers and waste to energy respondents.Working TogetherChanging consumer behaviour and a volatile economic climate means supply chains are expected to deliver more for less. The challenges being faced by the industry include, shorter product lifecycles, growing demand for home delivery and the need to balance the latter with keeping expenditure low. The need for cheap but flexible supply chains means 3PLs, retailers and manufacturers will need to collaborate if they are to achieve their objectives.

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