The UK has led the way in supply-chain development over the past few decades, but in 2013 and onwards, three additional factors will have a significant and increasing impact on supply chains and the skills needed within them – globalisation, internet shopping and environmental sustainability.
As manufacturing migrates to the economically advancing BRIC countries, supply chains into Europe become extremely long. This globalisation creates a need for consolidation or distribution points to serve Europe, which potentially throws the UK into competition with European neighbours for the foreign direct investment (FDI) to establish and run these centres.
The UK ranks 13th in the World Economic Forum’s global Logistics Competitiveness Index. The higher the ranking, the more attractive we are as a prime location for supply-chain operations. The index has six indicators. Five are affected by skills: competence and quality of logistics services; efficiency of the clearance process; timeliness of shipments in reaching destination; ability to track and trace consignments; and ease of arranging competitively priced shipments.
There is a direct link between improving the skills that make up those indicators and the standing of the UK as a destination for supply-chain operations and the FDI they bring.
Clearly new supply-chain management skills are necessary and they need to be in place fast
Globalisation’s impact is also felt in online retail. Initial data from Christmas 2012 suggests that, in a market with like-for-like growth under 1 per cent, internet shopping rose by nearly 20 per cent.
Logistics skills necessary to support this type of fulfillment cover the whole supply chain, with speed and agility being at a premium as well as customer-facing skills in carrying out and supporting home delivery. As this is often done at the end of very long supply chains, reliability is a critical factor. The message is clear and in the main the UK logistics sector is adjusting to serve the emerging market. But is this enough to lead the charge?
Environmental sustainability kicks in as countries across Europe adopt carbon-reduction policies. With its massive fleets and large sheds, logistics attracts the attention of governments looking to internalise external environmental costs.
This focus will only increase and will bring with it a new need for compliance and evaluation skills, and the project management and negotiation skills necessary to deliver collaboration between logistics companies in order to achieve sustainability.
In yet another global index, the UK has moved from 26th in 2009 to 14th in 2012 in terms of the amount of training given to staff in logistics companies. A great improvement, but that still leaves nine European countries potentially more attractive as destinations for prime supply-chain operations.
Clearly new supply-chain management skills are necessary and they need to be in place fast. However, most of the 2.4 million people working in the sector are logistics foot-soldiers. We need to ensure that they also have the requisite skills and the self-esteem to develop their roles to meet the challenges. The Logistics Guild is a membership organisation that supports people working in these operational logistics roles.
By delivering the goods on the ground as well as ensuring that our supply-chain managers embrace the current and future challenges, we can lead the next revolution as well as the last.
Dr Mick Jackson is chief executive of Skills for Logistics (SfL), the Skills Sector Council (SSC) for the freight logistics and wholesaling sector, which is licensed by government to tackle the skills and productivity needs of employers in the logistics and supply-chain sector.
