This time last year Logistics Manager’s state of the market survey explored the impact of the EU referendum vote on UK logistics. At that time, businesses were only just getting their heads around the result. Now that we’re 12 months on, has anything changed?
Well, respondents are certainly demonstrating a high level of concern, with 70 per cent of those surveyed agreeing that Brexit is of moderate to high importance to their business. Only 10 per cent said it isn’t important at all.
Participants were also asked to disclose the top three areas of business that their budget covers. 3 out of 5 people said that their businesses’ budget mainly covers staff and personnel. The second most selected choice was transport, with 2 out 5 people including it as their top area of budget expenditure, and just under 2 out 5 businesses allocated a majority of their budget to warehouse equipment.
Logistics Manager also asked participants to rate their company’s performance in various areas such a sustainability, customer service and re-fulfilment. Results showed that 40 per cent of businesses find their customer service and support to be their strongest area. Over half of businesses felt that their sustainability performance was good. Just under 40 per cent felt that their use of social media as a communication tool needed improvement – and a further 12 per cent highlighted this as a problem area.
The area that was next to be identified as poor, after use of social media as a communication tool, was e-fulfilment with 10 per cent of respondents expressing this view.
Survey respondents were presented with a multiple-choice question asking them to identify the main trends that they could see improving operations in the next 6 to 12 months. Over 40 per cent of people agreed that company collaboration or consolidation would improve operations for businesses, and roughly 40 per cent felt that software systems or solutions would be a major helpful trend. Additionally, over 30 per cent said that data capture and demand forecasting would be key trend for companies in the next 6 to 12 months.
How is spending changing?
Logistics Manager asked participants how they expected available funds for spending on new systems or equipment to change over the next 12 months.
Just under half said that they were expecting a 0 to 5 per cent increase, followed by a quarter of people expecting a 5 to 10 per cent increase. Just under 20 per cent of respondents were expecting a 0 to over 20 per cent decrease of available funds. Overall, most businesses are seeing a positive increase of funds for new systems or equipment.
Participants were then asked if they were intending to invest in any additional systems or technology in the next 6 to 12 months. 2 out of 5 said that they were intending to invest in both systems and equipment. Likewise, 1 out of 5 people said they were planning to invest in either just systems or just equipment. In total 3 out of 5 participants intend to invest in additional systems and equipment.
The following question was multiple choice and asked the participants to specify what equipment or systems they were thinking of investing in. Over half of the participants said that they were thinking of investing in materials handling equipment (MHE).
Likewise, around another half said they were thinking of investing in a warehouse management system (WMS). Around 4 out of 10 people expressed an interest in investing in scanners and 3 out of 10 wanted to invest in racking and forklift trucks.
In addition to asking participants about which equipment or systems they were thinking of investing in, Logistics Manager asked what data capture technology was most commonly being used and if respondents were thinking about introducing them into their operations.
The most commonly used data capture technology currently used is labels and barcode technology. 4 out of 5 people said they use labels and barcode technology. Only 1 out of 5 people said that they had plans to use Near Field Devices (NFC) and Intelligent Document Recognition technology (IDR) in the next 6-12 months.
How will Brexit impact companies?
With Brexit being of such high importance to businesses, the survey also looked at how this would affect companies. The results showed that over half of the participants expect an increase in legislative procedures, trade costs and extra expenses such as border control and fuel duties.
Between 35 and 41 per cent said that they expected access to the single market, staffing opportunities, economic stability and currency value to decrease.
Interestingly, around 40 per cent of people do not expect to see a change in the following: yearly company turnover, staffing opportunities, yearly budgeting allocation, competition with other companies and business or company expansion.
Correspondingly, the survey asked participants if they were looking to change or reassess the way their company conducts business due to Brexit. The results were distributed quite evenly between people who were not looking to change how their company conducted business and those who were, followed closely by those who were unsure: 35 per cent said yes, while 34 per cent said no and a further 31 per cent were unsure.
Participants were also asked about how prepared their company is for Brexit. A quarter of respondents said that they are somewhat prepared. Around 2 in 10 said that they always have a risk strategy in place and one tenth noted that their company has been prepared since the Brexit vote went through.
Less than 1 in 10 people said that Brexit does not affect them. Again, around a tenth of people responded saying they were not prepared for Brexit at all.
This year’s survey included more than 250 participants who mainly work in logistics and distribution, supply chain and business development. 80 per cent of respondents were directors or heads, senior managers and managers, and around 40 per cent identified themselves as either 3PL or 4PLs, retail or e-tail companies, and consultancy businesses. Over 80 per cent of respondents’ company headquarters are based in Europe and the UK/Ireland. Likewise, the majority also conduct business there.
This article first appeared in Logistics Manager, January 2018