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Expert advice is always welcome –
and when it comes with sackloads of
industry experience, more often than
not it’s pretty valuable, too. In any
industry which needs to be ready to
respond to innovation on a daily basis
if it wants to keep pace, the movers
and shakers want to know what they
need to be ready for next – and in the
world of logistics, they’re not short of
people all too willing to tell them.
That’s particularly true at the start of
the calendar year, as various logistics
industry sages polish off their crystal
balls and consider the year – and
indeed years – ahead. The inbox at
Logistics
Business
regularly rattles
to the arrival of yet another series
of annual tips and predictions from
veterans, consultants and seers. They
make fascinating reading – they are full
of wisdom, chutzpah and plain common
sense, even if their authors don’t all
sing off the same hymn sheet.
And the wonderful thing about this vast
industry of ours – which encompasses
everything from an 18,000 TEU ship
to a tiny address label on a minuscule
cardboard box and all points in
between – is that, whatever part of its
spectrum you inhabit, you are likely
to share similar headaches. And the
interesting point I glean from reading
Small is Beautiful
a series of white papers, news stories
and commentaries is that ‘small’ is
seeming to matter again. Not that it’s
ever gone away, you understand, but
it seems to hover somewhere on the
agenda a little more visibly than it has
in the recent past.
Let me quote some examples. Nick
Miller from supply chain consultancy
Crimson & Co assesses that the
consumer goods supply chain agenda
in the coming calendar year will
be dominated by cost control and
consolidation. There is little to argue
with here – all the available evidence
and projections shows that there will
be minimal year-on-year growth in
consumer goods spending (at least
in the UK and Europe, not forgetting
China) in 2016. In that environment,
manufacturers and providers will look
to batten down the hatches and pare
down costs.
Miller believes that this will lead
to greater economies of scale as
companies merge to further leverage
low cost methods in order to reach
their target audiences competitively.
He cites as examples the merger
between Kraft and Heinz and the
more recent takeover of brewing giant
SABMiller by ABInbev, going on to
argue that supply chain innovation will
As a raft of predictions and forecasts lands in the
Logistics
Business
inbox, editor Paul Hamblin thinks he detects an emerging consensus.
be driven by the need to curb costs and
expenditures. Then comes the really
interesting bit: “Small companies, more
flexible than larger corporations, are able
to react to market developments faster,
changing their strategies to bring fresh
ideas for supply chain excellence.”
The developing world – where most
in the logistics industry agree the next
proper chunk of growth is coming from
– offers a similar lesson, according
to Miller. It is the smaller companies
who boast the significant advantages,
because they are already present, they
have existing market know-how and
a favourable customer base. Because
they are already in such close physical
proximity to these customers, they are
able to react more quickly and flexibly
when the need arises – which is more
and more often. In such circumstances,
Miller believes we will see the larger
companies buy smaller ones in order
to speed their time to market. They will
not spend time and resource building
up their own on-the-ground agencies
because it will be more cost-effective
and it will allow them to tap into existing
expertise.
William Walker of Walker Logistics,
based in Berkshire (UK), has similarly
encouraging news for the smaller fry. “A
smaller 3PL (third party logistics company)
is far more likely to be agile and able to
respond swiftly and more flexibly to a
client’s changing requirements than the
biggest operators,” he asserts. He cites
the case of a US-based producer of a
popular brand of natural personal care
products to illustrate how bigger 3PLs
sometimes lack that killer agility that
clients really need.
Nick Miller: Small companies react faster
Flexible products for flexible times
6
Logistics Business Magazine | February 2016
EMERGING TRENDS