Almost two thirds of companies are planning to invest in their supply chains over the next year, according to the latest YouGovCentaur supply chain survey commissioned by Logistics Manager.
The survey, which was carried out in October, covered more than 500 supply chain professionals and gives an important snapshot of the state of the market. This survey is the first of a quarterly series that will build up to give a view of the changing state of business confidence in the industry.
The dramatic changes in the business environment over the past few months highlight the importance of this survey as a baseline against which future trends can be judged.
The survey shows that 71 per cent have seen business growth over the past year while only 22 per cent reported either a decline or no change. And confidence for the coming year was surprisingly high with 65 per cent expecting to see growth.
But while 62 per cent expect to invest in their supply chains over the coming year, 59 per cent said they have changed their investment plans. Some 43 per cent of those either reduced or postponed investments against 43 per cent planning increases.
In addition, 28 per cent planned to increase the number of supply chain professionals they employ while 16 per cent plan a cut.
It has been a common complaint within the industry that it is difficult to find managers of the right calibre – and in our survey 59 per cent of respondents said it was getting harder while only eight per cent said it was getting easier.
Most recruiters are looking for experience in supply chain and logistics (71 per cent). In terms of formal qualifications, 21 per cent are looking for a degree in logistics while another 11 per cent are seeking to recruit graduates.
The question of career structures in our industry has tended to be a thorny one – the rapid development of supply chain concepts over the past 20 years has meant that many companies have not kept pace and recruited supply chain professionals on a more or less ad-hoc basis.
So it is not really surprising that some 42 per cent of our respondents said that their companies had no career structure for supply chain managers. And 31 per cent said their companies did not provide any training in logistics and supply chain.
So perhaps it is encouraging that 50 per cent of respondents said their companies do have a supply chain career structure while 57 per cent provide logistics training.
Answers to other questions highlight the attitude of companies to supply chain issues. Only 46 per cent of respondents said that in their company the head of supply chain reported directly to the chief executive while 55 per cent said the head of supply chain sat on the executive board.
When asked to rate on a scale of one to ten the importance that their company placed on supply chain, some 37 per cent said “very high” while another 33 per cent rated it two or three.
Clearly these figures provide a useful guide to how companies regard the discipline and it will be instructive to see how these proportions change when we ask these questions again next year.
The green agenda
With oil prices rising dramatically over the summer it is not surprising that most of our respondents said that their business had been affected (79 per cent).
Rising fuel prices, not surprisingly, have their biggest impact on transport costs – notably road and air cargo. But a significant number (32 per cent) said fuel prices had a big impact
on the cost of inventory and about 20 per cent reported a large impact on storage and warehousing costs.
Only 31 per cent said they had been able recover most or all of the rises while 46 per cent said they had only been able to pass on part of the cost and 13 per cent had been forced to absorb all the rises themselves.
So it is not surprising that companies have been looking at ways to mitigate the effects of rising fuel prices. Some 63 per cent said they have been restructuring operations to reduce the need for transport while 50 per cent have been training staff to minimise fuel usage.
Other measures include using more fuel efficient vehicles (45 per cent), and employing more fuel efficient modes of transport (44 per cent).
The growing importance of the green agenda is also reflected in our survey. Some 60 per cent of respondents said their companies were looking at ways of reducing carbon emissions. Perhaps surprisingly, given all the publicity, nearly a quarter (24 per cent) said they are not.
Waste reduction is the most common initiative (84 per cent) followed by reducing packaging (60 per cent). Some 34 per cent are looking at green warehousing initiatives. Electric vehicles have created a significant amount of interest with some 20 per cent saying they were considering them.