Nurturing the workforce was a key factor in winning a Supply Chain Excellence Award, Lucy Barks, head of contract manufacturing at Innocent Drinks, told delegates when she opened the second day of the Supply Chain Conference at the Grand Connaught Rooms in Central London.
After about 15 years of not really innovating its supply chain, she said, Innocent decided to completely restructure its supply chain. She pointed out that the key is to nurture the skilled workforce you have – a decision that led to the winning of the Supply Chain Operations category at last year’s Supply Chain Excellence Awards.
During a project, which took place between 2014 and ran right up until last year, the business decided that instead of simply adding new people to the supply chain each time the company grew, or when things got more complicated, it would restructure the skilled team members it already had.
“We decided we couldn’t simply stop and reconfigure the supply chain, because that would result in decline,” she said. “So we had to take a terrifying step, and restructured.”
To achieve this the company made sure it was clear what each person was accountable for. “We got a blank piece of paper and asked, what is our supply chain?” she said. “We started again.”
Over 18 months 35 existing team members got new roles. “If they hadn’t understood why we made the changes, it would have never have worked,” she said. “If you don’t have the will to run it, it won’t work.”
The company also found that because market share was almost 50 per cent UK, and 50 per cent EU, it needed to manufacture outside of the UK.
“We changed both operational and personal,” she said. “We made a move from a 100 per cent UK based model to a more balanced model.”
They also created a team that only looks after the European operation. By opening up operations in Europe, the company is on track to reducing road miles by five million by 2020.
Nicky McGroarty, head of supply chain at Telefónica, discussed the company’s big change of IT capabilities with a big migration of warehouses. After evaluating seven suppliers, Telefónica decided to replace its 3PL partner of ten years, DHL, with Brightstar to run its new warehouse.
McGroarty said that the business still continues to plan ahead and test, and the stock movement of two million units still needs to happen. She added that the work that the business is doing at the moment will enable Telefónica to change more easily in future – making the operation much more agile in the next few years.
Duncan Buchanan, policy director at the RHA, spoke about the challenges created by the “complete demonisation of diesel”.
He said that soon the whole of London will charge money for everything but Euro 6 lorries, and said that £182 million per year from 2022 generated by the ULEZ charges would be picked up by the supply chain.
The pace of change regarding the banning of diesel vans or lorries is already having an impact on the industry. “A vehicle that is bought in 2018, like a commercial haulage Euro 6 will be around for 12 years – and it won’t be with one user,” he said. “That’s important.”
He pointed out that the clean air rules will force out Euro 5 vehicles that have only been used six years. “It’s a huge problem for our members – we are failing to phase correctly. People need to get the economic value of 12 years – we’re already seeing the collapse in value of Euro 5 – these things are making it harder for transition.”
How do we deal with it? He said that a range of solutions need to be adopted – because as a haulage operator, you might specialise in one area, while another operator has a completely different perspective.
The benefits of supply chain collaboration are becoming increasingly apparent, Professor Alan Waller, chairman of ELUPEG, told delegates.
He argued that it will take horizontal collaboration to tackle some key problems. For example, there is a huge amount of empty running by vehicles in Europe. A World Economic Forum report from 2009 found that 24 per cent of freight vehicles in the EU are running empty. Not only that, average loading of the rest is 57 per cent.
While individual elements of European supply chains are very efficient, overall there is a lot of inefficiency, he pointed out. But increasingly, businesses like Unilever and Mondelez have been working on collaboration, including participation from outside organisations. And major logistics service providers, such as DHL, are also embracing collaboration.
But one project in particular is starting to show impressive results. Cool Running is a London-based pilot project run by NexTrust, a partner organisation of ELUPEG which has the objective to increase efficiency and sustainability in logistics by developing interconnected trusted collaborative networks along the entire supply chain.
In the Cool Running project, said Waller, NexTrust has been trialling a sustainable commercial delivery arrangement for chilled products and fresh produce in the centre of London.
The pilot aims to consolidate multiple deliveries of these products onto fully electric refrigerated (1 to 5oC) vehicles to reduce congestion and toxic emissions in London.
Currently, chilled products and fresh produce are loaded onto large articulated diesel vehicles (often only partially filled) at Solstor’s depot in Crayford before being delivered to retailers or other food service establishments across London.
In the pilot scenario the orders are consolidated from these under-used large vehicles into a smaller electric vehicle which makes multiple drops on its delivery route around central London.
The pilot has been running since October 2017, and initial results show that there is the potential to remove 30 per cent of commercial delivery vehicles from London’s roads.
In a presentation on supply chain planning, Tony Player, domain principal, supply chain at Anaplan, said that to maximise value it is essential to be connected in every dimension – within the supply chain, across the organisation and out to the wider network.
He pointed out that 70 per cent of companies still use spreadsheets for business critical applications – but spreadsheets commonly have errors in them so time is spent correcting and updating them.
Typically, he said, companies spend 70 per cent of time preparing data and only 30 per cent making decisions.
Anaplan is a connected planning solution that can take the challenges the business face and create a connected plan. Data is in one place and the model can be changed dynamically. The decision making process is streamlined. Less time is spent preparing data and more time spent on the decision making process.
Digitalising the supply chain is a hot topic at the moment. Debi Hamilton, senior supply manager at Arco, explained the impact of an 18 month digital transformation of the business, focusing on the benefits in terms of improving efficiency visibility and transparency in the supply chain.
There can be few operations more critical than the ambulance service – maximising the availability of ambulances and crews is vital. London Ambulance achievement in boosting availability was explained by Justin Wand, deputy director – fleet and logistics in the opening session of the Supply Chain Conference.
London Ambulance won the Supply Chain Strategy and Design Award in the 2017 Supply Chain Excellence Awards with project “Make Ready” that significantly improved the efficiency of the service.
Wand pointed out that London has a resident population of eight million and the ambulance service is the busiest in the world.
Activity grows by six per cent every year, said Wand, but the service was struggling with old infrastructure. “We used our most expensive asset, our staff, to clean and stock the ambulances.”
The patient experience starts with the preparation of the vehicle, he said. “A big focus for me was the hours we were losing.”
To improve the situation, London Ambulance created “Make Ready”, a crew friendly quality assure vehicle and equipment preparation programme.
As well as using specialist teams to prep the vehicles, London Ambulance created a hub and spoke system with hubs aligned to hospital locations. These have also been aligned with maintenance providers.
It means that ambulance staff can now just get in the vehicle at the start of the shift and get on with their jobs.
Wand said that 99 per cent of ambulances that go through the process are now prepped to standard. He also highlighted the increased responsiveness of the system.
He pointed out that at the Grenfell Tower fire last year, London Ambulance had over 100 ambulance deployed, and by following morning all but one had been replenished.
This organisation had tried to do this several times, pointed out conference chairman Richard Hunt, who is a former chairman of the London Ambulance service.
He highlighted the role of Justin Wand, who has a clinical background, in driving through the changes.
FatFace, the fashion retailer, created a customer focused distribution centre based on their e2e supply chain that helped it grow 20+ different channels and to double its turnover. Not surprisingly it won the Warehouse Initiative award last year.
Stephen Webb, DC senior operations manager at Fat Face, highlighted the challenges facing the business notably the strategic growth plan and the rise in e-commerce.
The company undertook lots of market research to understand its customer, their needs and expectations.
Rather than moving to the Midlands, FatFace chose to stay close to its roots on the south coast. It built an 80,000 sq ft building, with space for another 40,000 sq ft. It has three mezzanine floors.
The new building allows faster store replenishment as well as enabling real multi-channel operations, he said.
More stock is now held in the warehouse rather than the store and it responds more flexibly to get the right product to the right place.
This article first appeared in Logistics Manager, May 2018