This year’s theme, following months of unforeseen upheaval and redrawing strategies, was how the green logistics revolution is being aided by modern technologies. Thought leaders from across the supply chain shared their experiences and interpretations.
Louisa Hosegood, Director of Strategy at Bis Henderson consulting, discussed the main factors driving change in the retail logistics sector. Changing household demographics have impacted the retail sphere: multi-generational households are more common, which has increased demand for multi-buy and bulk products. The renting sector is also increasing, which has reflected a higher demand for renting larger household items such as white goods and televisions.
Omni-channel companies have had to focus most of their efforts in their online services rather than brick and mortar shops, due to changing consumer patterns accelerated by the pandemic: Hosegood pointed out that e-commerce was on the rise before covid hit, and highlighted that online retail was not the only channel that had seen an uptick in use. Local shops benefitted from local lockdowns due to customers seeking purchases closer to home. For most retailers, rapid deployment and development of click and collect services, curbside collection and uptake in parcel lockers were key to adapting to the new landscape.
One of the challenges for the retail sector, according to Hosegood, is the shortage of both space and personnel. There are fewer speculative warehousing units being built, meaning companies are more likely to manage the space that they already have rather than seek to expand, for example by investing in multi-level solutions. With social distancing guidelines limiting the number of staff in the warehouse and the labour shortage in the supply chain, unprecedented peaks have been harder to handle.
Customer expectations have been steadily rising for years, but covid has accelerated this trend: faster deliveries and more product range are common demands. There is also the emergence of the conscious consumer, who values the sustainability of their purchase.
Keith Bruce of the CILT agreed, pointing out that one way to solve the labour shortage in the logistics industry is to make the sector more attractive to the youngest people in the jobs market, of whom currently only 8% see the supply chain industry as an appealing prospect for their career. He highlighted that Gen-Z cares more about their carbon footprint than any generation before them.
Gen-Z, those born after 1995, are the generation of change: they want to see their work have a positive impact on the world around them. They value good ethics and social impact over a decent salary or an interesting product. However, Bruce warned against logistics companies falling into the trap of ‘green-washing’: spending more time and resources on marketing an eco-friendly image than on minimising the environmental impact of their operations.
Hosegood went on to discuss using automation as a tool to boost resilience during periods of fluctuation. Over the last few years, the price of automation has dropped, making it more accessible to more and more of the logistics sector. She was careful to highlight that automation isn’t just limited to the warehouse: from intelligent stock algorithms to transport management, it is important to consider the whole picture.
Looking to the future, Hosegood predicted some pragmatic areas for the medium-term, including automation & robotics. This is less about wall-to-wall automation and more about the deployment of ‘islands of automation’, e.g. one particular type of technology for a part of the supply chain process that requires a higher level of accuracy. It's important to find the right balance for manual, mechanised and automated elements of the warehouse. She recognised that robots have come a long way very quickly, given their accuracy and affordability, while asserting that there will always be a manual side to a warehouse. However, with an ageing population likely to be working into their 70s and 80s, it is crucial to consider how robots can take on more physically demanding tasks.
The perfect storm of tough competition and cost pressures allows collaboration to thrive during this difficult period, according to Hosegood. It’s pivotal to remember that we don't have to do everything ourselves; Covid-19 has broken some taboos in talking to each other about strategy. It is key to recognise where your strengths are and how you can work alongside others who can fill in gaps in your experience.