Tuesday 25th Oct 2016 - Logistics Manager

Exclusive survey highlights pressure on supply chain costs

Supply chain leaders are facing intense pressure to control costs at the same time as managing business growth, an exclusive survey by Logistics Manager reveals.

The Supply Chain Challenges Survey covers senior supply chain professionals in retail and manufacturing, and is designed to highlight the critical challenges facing companies in the year ahead.

Almost three quarters picked controlling costs as a critical issue for them in the coming year. And when asked to say what their single biggest challenge is for the year ahead 42 per cent pointed to cost control.

External costs, notably fuel, have been rising so it is not surprising that the survey found that 63 per cent of industry professionals expect to face higher supply chain costs next year.

However, the survey also shows that growth is firmly on the agenda for many supply chain professionals over the coming year. Managing growing business volumes is a critical issue for 46 per cent of senior supply chain professionals and an important issue for another 45 per cent.

55 per cent report that activity is higher now than a year ago, although a significant minority, 23 per cent, say it is lower. Looking forward into next year, 67 per cent say they expect activity to rise while only seven per cent expect it to fall.

Those figures are reflected in investment plans – 41 per cent expect to increase investment in their supply chain over the coming year, while less than ten per cent expect to see a fall in investment.

Table: Top five supply chain challenges


Critical (%)

Important (%)

Controlling costs



Increasing profitability



Managing risk & boosting resilience



Managing growing business volumes



Sustainability and the environment









Supply chain is a barometer for the whole of industry and our survey gives an indication of how companies view their business prospects.

Companies have weathered a tough recession in which managing cash in the supply chain has been critical to their survival, but now they must accommodate growth without allowing costs to run out of control.

The survey highlights the fine line that supply chain professionals must walk between minimising costs and ensuring that goods get to where they are needed.
Moving from recession to growth can be a hazardous process. Increasing capacity to meet demand means costs will rise and it is all too easy to find that costs have risen faster than sales.”

Our survey also reveals the growing impact that environmental concerns are having on supply chains. 17 per cent of supply chain leaders describe sustainability and the environment as a critical issue for them while 68 per cent describe it as an important issue.”

The Logistics Manager Supply Chain Challenges Survey
The quarterly survey is conducted online among readers of Logistics Manager magazine. The current survey was carried out in late February and early March. It reflects the views of 171 senior UK-based supply chain and logistics professionals at retailers, manufacturers and distributors.

You can discuss the survey at the Supply Chain Standard Linked In group.