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Supply chains: new rules of the game

Sep 27th 2012, 08:53

Supply chains: new rules of the game

Greater investment in centralised distribution means that food retailers now have more ownership and control over the supply chain process, setting new rules for an industry that has almost entirely been dominated by outsourced service providers.

Key challenges, like, reducing back door delays, eliminating time wastage, maximising economies of scale and reducing carbon footprint, among others, still remain obstacles for retailers in maximising supply efficiencies and achieving an important ROI, which is to deliver fresh, quality products to consumers on-demand.

Essentially “the principal of centralised distribution should ensure a leaner route to market in the form of cheaper distribution,” comments Imperial Logistics.

In the current environment, streamlining processes to improve margins is critical to remain competitive.

But, where does it leave transport and logistics operators who previously rendered these services? Does it give them new opportunities to generate business? Can retailers pull all these specialist skills in-house or do they still need outsourced logistics experts?

Imperial Logistics suggests that retailers and supply chain professionals engage with one another as partners, working together to optimise the process, reduce costs and achieve centralised distribution.

Supply chain professionals have developed infrastructure and skills that can be effectively utilised on either a long or short term basis. These could include additional capacity to cope with new store openings, services to help align a retailer’s green practises, technology consulting services and many others that can add significant value if retailers and service providers collaborate.

It appears that retailers could be most efficient by maintaining a balance between outsourced services and in-house infrastructure and skills. It’s up to each retailer to determine what that mix should be.

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