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Supply chains at IMHX Connect

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Day four of IMHX Connect event was all about supply chains; what we can learn from them and how they've changed. Speakers also covered warehouse efficiency and the property market.

Gwynne Richards, Director at Apprise Consulting, highlighted the lack of warehouse space available. He recommended operators consider ‘lean warehousing’ to combat the floorspace shortage: begin by getting rid of the junk, and then create a system that allows a place for everything. The first step to warehouse optimisation is sorting: Richards recommended dividing all items in your warehouse into three categories: retain, return, get rid. This can be a difficult step, given that lost product may represent lost cost.  

Inefficient racking methods can cost you valuable space: Richards encouraged adding additional beams to racking and using the right sized pallet for the right sized location. Different levels of beam allow for different pallet sizes. These changes can be introduced into an operation relatively quickly, and medium-term you could look into the introduction of a mezzanine floor, particularly above the dock doors if the ceiling height allows.  

James Turpin reflected on the lessons of 2020. The plan he had for the year was an extension of the work of 2019: driving value, maintaining high standards of stocked products, and expanding technology transformations – though the pandemic changed everything. NHS Supply Chain implemented covid management process two weeks before the government officially began social distancing measures and, over the course of the year, saw an increase of 25% in overall demand. 

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The vaccine logistics operation planning began in May 2020. There were many unknowns, including where the vaccines would be shipped to and the temperature at which the vaccine would need to be stored. Turpin celebrated that NHS Supply Chain has distributed over 100 million doses of the vaccine since December 2020, including to all UK territories, and donated vaccines overseas to countries in need. 

Challenging supply chain leaders to innovate, Professor Richard Wilding identified that organisations need to learn to manage both predictability and exploration effectively. Businesses tend to focus on the ‘hard-wiring’ (e.g. technology, processes and structure) and ignore the ‘soft wiring’: people. Individual teams may have different data, challenges and goals, however they all involve people in relationships influencing each other.  

Leadership is people aiming to create, said Wilding, focusing on shared alignment, direction, and commitment. The most common source of leadership failure is that those in positions of authority treat adaptive challenges like technical problems. He criticised the command & control style of leadership in the supply chain, as it can only work well within a defined hierarchy or it can risk stifling innovation in complex organisations.  

The former chief executive of UKWA, Peter Ward, discussed the fragility of the supply chain and how best to manage it. He mentioned that ships, containers and stock have been in the wrong place at the wrong time since the first lockdown in March 2020, and that this has caused many logisticians to rethink how they manage the balance of flow and capacity. 

Ward identified many structural changes to supply chains, including additional capacity for stock and therefore more warehousing space, and emphasised that making these changes this can no longer be considered a linear process. The consumer drives the change in the global supply chain ecosystem, and with customer expectations shifting so much in the last year, logistics providers need to raise their game: basic distribution services have become complex inventory management systems, and the warehouse could often be better described as an ‘order factory’.  

Customers want a partner in innovation, according to Ward: logisticians must share the customer’s vision for growth by delivering a range of value-added services and creating a competitive edge for the both the customer and their partner 3PL. Automation can no longer be considered the preserve of large players, as subscription-based technology solutions have become more readily available and there are many low-cost digital solutions using off the shelf applications.  

Matthew Kennedy encouraged attendees to use CFTS for Thorough Examinations. CFTS, a joint venture between BITA and FLTA, is HSE recognised and has a strict quality assurance procedural code setting out guidance for membership. CFTS guarantees that the whole equipment will be inspected without time constraints: both for LOLER items (chains, forks, mask and carriage) and PUWER items (brakes, steering, overhead guards and lights). 

CFTS competent persons must have at least five years’ experience as a service engineer and must attend an approved training course every five years to keep abreast of any changes to legislation or guidance. They are authorised to only carry out inspections on equipment that they are familiar with, to ensure the highest degree of accuracy. Kennedy stressed that there are 2,000 trained and experienced competent persons working under the scheme, and over 500 members throughout the UK and Ireland. 

Asking attendees to rethink fulfilment operations, John Baker, Business Development Manager UK for Locus Robotics, showcased how robotics can adapt to existing facilities and serve as a proven foundation for adaptable automation in new distribution centres. 95% of warehouses are not automated, which can lead to many issues: low productivity, high operating costs, and long response times to name a few. The Locus multi-bot solution, where robots come to picking staff, can boost retention while also boasting low operating expenses and a set-up process of just four weeks. 

Using any WMS, Locus can optimise the workflow of your operations. The Locus system will begin by optimising orders from the WMS, then directing the induction of containers. The LocusBot then optimises its path to the next task, where warehouse associates can select an item and place it into the relevant tote. At the end of the mission, the robot takes its totes to the packing station. All in all, the picking process requires no sortation and multiple robots can work in the same aisle, increasing output substantially. 

Kevin Mofid, Head of Industrial and Logistics Research at Savills, gave the audience a presentation about the state of the UK logistics property market. He acknowledged that the skyrocketing demand for warehouses has meant that availability has plummeted. The current vacancy rate, 4.37%, is its lowest recorded level. It is a landlord’s market: lease lengths are rising and incentive packages are falling. 

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H1 2021 has set a new record for new leases signed on warehouses, with a quarter of all take-up being from Amazon. Mofid highlighted that most of the vacant stock lies in the west of the UK, including Wales, but noted that the vast majority of warehouses are Grade B and C, which could be considered obsolete due to not being able to accommodate modern occupier requirements. He warned that a low supply of materials caused by Brexit could impact future development, and therefore vacancy and rents.  

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