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Logistics Conference 2021: Supply Chain Resilience Part 2

This year’s SHD Logistics Conference celebrates the resilience that the logistics industry has shown over the last twelve months. On Tuesday, experts from across the logistics sphere shared their knowledge on the topic of supply chain agility.

James Osborn, who recently started his own logistics advisory service after a long career serving the UK’s biggest supermarkets, discussed the retail landscape and gave tips on strategic investments. Osborn noted that although a third of people are more worried about their personal finances than ever before, 2020 saw 160% more online purchases than in previous years.

The grocery sector saw a 4.5% uplift in 2020, in no small part due to the effects of the pandemic, and Osborn predicts a further boost when the economy reopens later in the year. He mentioned that there will likely be a sustained shift in the online channel as many families who switched to online grocery shopping in 2020 will stick with it. By the end of 2025, there will likely be 15% growth in the UK grocery market.

Osborn remarked that the fashion industry was one of the most severely hit sectors by the pandemic. With high street shops closed and consumers staying home, the value of the fashion market plummeted by 26%. He expected a recovery to 95% of the pre-pandemic levels by the end of 2022, and the industry should be in growth again by 2025. Although many people will be returning to the high street once lockdowns end, much like the grocery sector, a significant portion of consumers will choose e-commerce channels.

Two themes that Osborn highlighted in the last mile logistics sphere were loyalty and cost. In fashion, 30% of customers change brands each year, explaining the saying that there is ‘no such thing as loyalty’ in the fashion market. Osborn suggested two key methods of boosting brand loyalty and adding value: delivery schemes and reward schemes. In terms of cost, customers expect more in speed, cost and environmental impact. Key areas of investment are packaging technology, packaging automation, and real-time tracking of stock.

Taking a holistic look at the supply chain as a whole, the first topic that Osborn noted is customers beginning to evaluate what kind of speed they need at any given time. Many retailers have been caught out by the fixed nature of the speed of their supply chain – offering express shipping, for example, can be vital in retaining customers. Osborn’s second topic was resilience: many logistics businesses have invested in automation during the last year to solve some of the problems caused by coronavirus, however it is imperative that technology solutions are suitably equipped to be resilient in the future. Osborn recommended investing in software that focuses on risk management and forecasting for optimal results. He recommended reading his free guide to investing in logistics, available online here.

Locus robotics provided an excellent example of how to integrate automated systems into the warehouse. Locus provides nimble robots that deliver greater capacity and productivity for the warehouse. Their multi-bot solution works by using an intelligent clustering algorithm that constantly reviews orders from the WMS to maximise productivity. It dynamically calculates the most efficient path through the warehouse and instructs the warehouse associate to select the appropriate pick container. It proceeds to the first pick where the assocate will meet the bot, the both then displays pick information on a display, allowing the associate to select the required product and scan it with an integrated scanner and place it in the appropriate bin. The bot then proceeds to its next task – associates do not follow the robots, the robots come to them. This brings true task interleaving as it becomes easier for warehouse associates to switch between picking and put-away. The bots constantly analyse order pool, associate proximity and flow management, which can lead to shorter cycle times and greater productivity to better meet SLAs. The robots charge themselves automatically and can work around the clock, leading to 129% ROI.

Denis Niezgoda, Vice President Europe of Locus Robotics, celebrated the robotics industry becoming increasingly collaborative in nature. He explained that robotics can be used as a method of coping with the labour shortage, even though we are still in the very early stages of capturing the opportunities and potentials of automation. Niezgoda recommended re-utilising and repurposing human labour for more complex environments that require the dexterity and intelligence that robotics cannot apply today.

When asked by an audience member where he saw robotics leading in 20 years’ time, Niezgoda acknowledged that looking so far into the future is very difficult to predict, but dangerous not to try and do so. He said that over the next few years we can expect costs to continue to decrease whereas waiting times are likely to increase. The value proposition will become stronger from an applicability perspective, and the quantity & complexity of use cases will expand as technology develops. Niezgoda highlighted sensory technology as a key area of development and predicted that automation will eventually step outside of the four walls of the warehouse to penetrate more complex and regulated environments.

Huw Jenkins, COO at Leidos, also celebrated collaboration as a method of boosting supply chain resilience. He reminded attendees of the ‘ask’ phase at the beginning of the pandemic in February and March 2020, which was largely made up of modest requests for additional PPE. Leidos’ main focus during this time was maintaining readiness, despite the rapidly escalating challenges of sourcing PPE and ventilators for the Nightingale hospitals.

In terms of commodity support services, the first sign of disruption came when the Chinese government took control of their factories and left Jenkins and his team looking for alternative suppliers based in Europe. There was a critical need to establish effective communication with customers and manage their expectations regarding the various shortages. Agile customer engagement was developed by using multiple channels and forums to enable clear communication between all parties. building this level of trust early on allowed Leidos to collaborate efficiently with businesses at every point on the supply chain.

Leidos facilitated the storage, distribution & freight workforce shift to 24/7 operations in just twelve days to cope with the flurry of activity. Achievements that Jenkins shared include sourcing 115,000 ventilators despite the national and global shortage, establishing a unique stock control system for uncodified PPE items, and procuring 46,000 packs of vitamin D (equivalent to around seven million tablets). He stressed that a collaborative response was key to their success, with all parties involved leaning in to support the national effort.

You can stream the SHD Logistics Conference on demand for free by registering here.

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