It’s time to help UK logistics climb the competitiveness leagues.
The recently released 2012 Logistics Performance Index reveals that the UK Logistics Sector has slipped to 10th position from its 8th place in 2010. Singapore tops the index, followed by Hong Kong/China, Finland, Germany, Netherlands, Denmark, Belgium, Japan and US. Logistics companies in the UK need to respond to this drop in position by getting involved in the infrastructure that Skills for Logistics is helping to create to improve skills and training in our sector.
Based on a worldwide survey of global freight forwarders and express carriers, the Logistics Performance Index is a benchmarking tool developed by the World Bank that measures performance along the logistics supply chain within a country.
Allowing for comparisons across 155 countries, the index can help countries identify challenges and opportunities and improve their logistics performance. The UK’s overall ranking has decreased due to decreases in all six indicators. As a comparison, Finland, which is the top performer in the same income group as the UK, has climbed from its 15th place in 2007 to 3rd spot in 2012. Finland’s overall LPI score has increased due to improved performance across all measures bar tracking and tracing and timeliness.
In addition to the World Bank’s study, there is the World Economic Forum where the UK is placed 13th, in terms of logistics competitiveness globally. In this index there are six elements that they use to summarise how effective a country’s logistics infrastructure is – five out of the six of those are directly dependent on the skills levels of the logistics workforce. So it is things like proportion of on-time in-full deliveries, ease of carrying out expedited activities… the list goes on. And this is where the UK falls down, because the UK is 25th in the world in terms of the amount of staff training that is done by logistics companies.
These league tables emphasise the need to improve skills to improve UK logistics performance. Through up-skilling the sector can climb the leagues and sharpen its edge in an increasingly competitive and broader global market.
Globalisation and the movement behind the sourcing of goods from the BRIC countries are having a very considerable impact on the length and controllability of supply chains. And I think that gives UK PLC a potential opportunity to attract foreign direct investment through our logistics capabilities.
Europe will continue to be an important market. If you have got production facilities in Brazil, Russia, India, and China, then you have very long supply chains into Europe. Any organisation that is running a supply chain of that length is going to need either an assembly plant in Europe or will need an onward distribution point. So to me, the competitors for UK PLC are not the BRIC countries, our competitors are Belgium, France, Germany and, in particular, The Netherlands, as they are well placed to have a single point of distribution to cover Europe. This is the Premier league in which the UK will be competing on its logistics capabilities. The quality threshold among the top countries in these league tables is very high. To compete, the UK Logistics Sector needs to match other countries’ commitment to up-skilling. At Skills for Logistics we are embarking on a process of looking at the skills sets needed for the future – looking at the national occupational standards for supply chain operations and management.
This involves establishing an infrastructure comprising nine occupational craft skills groups that form the Logistics Sector. Each group will be chaired by the relevant trade association or professional institute and will identify the precise occupations within that skill group and then identify the competencies for each individual job. To ensure these groups accurately reflect employer demand, it is vital that they are made up of real operators with “on-the-ground” experience. We would therefore urge employers from these groups to become members also.
Eventually there will be a set of standard, generic competences across all of the logistics functions that are determined by real operators, endorsed by the relevant Trade Association or Professional Institute and will be accredited by SfL as the industry gold standard, which companies can then sign up to.
This will have a dramatic influence on performance. From simply improving first time pick rates and order accuracy, to more efficient driving, right up to more agile management; greater skills in the sector will contribute to predictable, reliable supply chains, which are essential to good logistics performance that will help the UK back up the international logistics competitive league tables.