Thursday 27th Oct 2016 - Logistics Manager

Food manufacturers target supply chain savings

Nearly two thirds of managers in food and drink companies are looking to generate supply chain cost efficiencies in the next year, according to a study by Culina Logistics.

The Food & Drink Supply Chain Health Index surveyed logistics management at 50 food and drink companies regarding the efficiency performance of their supply chains in the last year and targets and plans for the next 12 months.

The major areas for improvement were primary transport (45.5 per cent of all respondents) followed by secondary transport and warehousing, (43.2 per cent and 38.6 per cent of respondents respectively). Waste management was seen as increasingly important with nearly a fifth of respondents indicating that this would be one of two main focuses over the next 12 months.

Some 43.8 per cent of respondents presented a mixed picture in terms of the outcomes of their efficiency drives over the past year, saying that some areas of the supply chain were on target/above target but also some areas below target. However, one in five (20.8 per cent) indicated that the outcomes of their efficiency drives over the last year were above target.

Most cost efficiency gains were made in the core supply chain activities, with primary transport coming out on top, with 46.7 per cent of respondents selecting this area, followed by secondary transport and warehousing (both 26.7 per cent). Waste management was also a top four performing area for 20 per cent of respondents and added value services, such as product reworking and pallet management, achieved best results for one in ten of the respondents.

Warehousing (42.3 per cent) was seen as the biggest under achiever when it came to driving further efficiencies, followed by secondary transport (30.8 per cent), waste management (26.9 per cent) and pallet management/IT systems (both 19.2 per cent).

Many respondents are in an upbeat mood about the prospects for the year ahead.

Thomas van Mourik, chief executive of Culina Logistics: “The tough economic climate for the last two years and continuing uncertainty has put an ever increasing focus on efficiencies in the supply chain. The Food and Drink Supply Chain Health Index provides a barometer for supply chain efficiencies across the food and drink sector, allowing manufacturers to benchmark their own performance.”