the logistics challenge


The Logistics Challenge By Steve Winwood, Commercial Director, Culina UK Ltd


Steve Winwood is Commercial Director at Culina UK Ltd. For more information call 01630 695 000 or visit www.culinalogistics.co.uk.


The food and drink sector is continually keeping up with an ever changing business and consumer landscape, particularly as the retailer and consumer become ever more demanding - expecting much more from the manufacturers. Combined with short lead times, multi- temperature storage, the constant replenishment of goods, high levels of traceability and accuracy status and the growing need for customised and shelf ready products, the sector requires and expects significant logistics expertise from its supply chain providers.


T 22 FMCG News


oday's economic environment also brings additional challenges. As we are now operating in a value-driven economy due to the current period of austerity, all businesses have had to respond in one way or another. In particular, the highly competitive grocery sector is now more than ever striving to optimise cost efficiencies, with a particular focus on the supply chain. This requires logistics providers to look at new approaches to supply chain management in order to survive.


As David Cameron makes himself at home at Number 10, policy makers are beavering away on how to stabilise and bring the economy to rights. A continued increase in fuel prices and a probable hike in VAT are just two other ways that the sector and supply chain providers could be affected. Business leaders, including Sainsbury’s Chief Executive Justin King, have been quick to warn the Government that a VAT rise will hit the industry with dramatic effects. Alongside these pressures is a drive towards sustainable supply chains as manufacturers and retailers look to win market share through demonstrating green credentials to their customers. Retailers are recognised as leading the way on several sustainability issues, such as reducing packaging and communicating carbon footprints to consumers. For example, Marks and Spencer launched ‘Plan A’ in January 2007, setting out 100 commitments to achieve in five years. Initiatives such as these create opportunities for logistics providers as procurement and supply chain management are becoming increasingly central to achieving sustainability ambitions.


Rising to the Challenge These challenges do offer valuable opportunities for logistics providers and, as a result, we are seeing an increase in demand for shared user operations. Manufacturers and retailers are reducing or getting rid of their own transport fleets as they do not want to be tied to the associated costs and vehicle leases. Those who do not run their own fleets are reviewing their existing outsourced logistics arrangements to ensure they are maximising cost efficiencies and getting a value for money service. The rising demand for shared user operations does not mean we can rest on our laurels – far from it. We are now operating in a business world where maximising value-for-money to create cost efficiencies and heightened competitiveness has become key. Here at Culina, we have invested time and money in several new services that enhance our customer proposition. We have embarked on a joint venture with specialist food contract packing company IPS LLP to offer specialist contract packing services at all of our ten warehousing sites, removing the need for goods to be transported


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