Tuesday 10th Dec 2019 - Logistics Manager Magazine

Sourcing and procurement: It’s a question of faith…

Yesterday, the people at IMHX issued a headline grabbing press release just the very day before the triennial materials handling trade show at Birmingham’s NEC.

It detailed the top-line findings of a survey it had conducted of logistics and supply chain managers (where, when and how many I couldn’t tell you) but still, the findings were especially interesting if not entirely predictable.

It found that 63 per cent of the sample predicted that British shoppers will panic buy and stockpile food and other goods. I’m actually surprised that the percentage is so low. I know of one household that has Brexit cupboard, full of tinned goods, toilet rolls and sanitary products – not to mention medicines. Next weekend this household is off to buy another freezer, just to stock up.

My instant reaction here is to make light of this panic buying, and the pressure it has put on Waitrose.com deliveries to this particularly middle-class house in recent weeks. But for the supply chain managers at John Lewis and Partners (and any other major retailer) this is entirely serious. The only reason this family is planning to buy a second freezer is not because there are extra mouths to feed, but because of an absence of government policy. Sales of tinned goods must have been up in September, particularly at a macro-level when looking at the buying profile of this household (easily available through a reward card with that retailer), so does procurement plan to increase orders of tinned goods, or will they drop off as we work our way through our seemingly endless supplies should a no-deal Brexit have zero effect on the movement of fresh goods?

This survey found that 58 per cent of logistics and supply chain managers (who are based in the UK I assume???) believe there will be a disruption to the food supply chain leading to increases in prices of certain fresh produce. Maybe buying that freezer is a good idea.

However that particular household is a die-hard ‘Remainer’ household and is fully on board with the warnings that many an expert has issued about the future of trade between the UK and EU after 31st October.

Yet I also know of one die-hard ‘Leave’ household that thinks such warnings are total claptrap (because the people issuing such warnings have “always been that way”) and will not be panic buying as everything will be fine after 1 November.

There is a new power driving supply chains, and sourcing and procurement teams have to deal with it. It’s never really been studied as an economic phenomenon before… it’s a question of faith.

Behavioural economics has never really concerned itself with faith before, there’s always been a science to it. As a logistics and supply chain professional, making your best procurement decisions in the absence of evidence is a very risky business.

Speaking of IMHX, I’ll be there from Tuesday 24th September to Thursday 26th September, so if you want to meet up and buy me a coffee or something stronger then email me on christopher.walton@akabomedia.co.uk

I’ll be writing all about my experiences at the show in this blog next week.