FEATURE SUPPLY CHAIN SOLUTIONS
KEEPING PACE WITH E-COMMERCE A
The shift toward online purchasing has had a knock-on effect on the materials handling industry. Tristan Watkins of BNP Paribas Leasing Solutions explains how businesses can adapt
s the online shopping revolution continues to rise less stock is held in
store and more is spread along various points of the supply chain. In response, warehousing and logistics centre businesses have grown by 24% with turnover hitting £11.8 billion in 2015. Warehousing and logistics companies will need to adapt to keep up and respond to customer demand as quickly as possible.
ECONOMIC ADJUSTMENTS The upswing in e-commerce, advancements in automation and the recent vote to leave the EU mean that it’s more important than ever that the materials handling and logistics sector has access to relevant financing solutions to support changing work practices. New business opportunities are already
presenting themselves: home delivery fleets have grown and self-employment has increased. In the logistics sector for example, last year’s traffic growth for light goods vehicles was up by 12% from 2014. Vans now generate around 15% of road traffic and their presence on urban roads continues to rise. The fast turnover of warehouse stock
also calls for investment in equipment such as forklift trucks to manage the volume of goods in and out. When the seasonal clear-out is over you may find yourself with a fleet of fork trucks sitting
idle. Rather than buying the extra trucks you need outright you can lease them over a three-year period. This provides greater affordability and more budget control as you can pay more in peak periods and less when business is quiet. Most leasing agreements include regular
asset maintenance. A well-oiled fleet guarantees end-users minimal to no downtime which helps increase their profits and productivity. Essentially, everyone’s a winner.
INNOVATIVE TECHNOLOGY New technologies can provide an important competitive advantage for warehousing and logistics companies. Driverless lift trucks for example, can
move loads around warehouses and onto road transport using ever more advanced software and sensor-based guidance systems. Real-time inventory updates can be done with computers mounted onto lift trucks and hand-held or wearable mobile devices. These tools interact directly with stock-picking or asset tracking software and feed data through the system quickly and efficiently. Microchipped tags can improve goods
handling and tracking by transmitting product information through radio waves. This eliminates the potential for error associated with manually scanning traditional barcodes.
GREATER TRANSPARENCY In the world of e-commerce customers expect to be able to determine online the availability of an item, how long it will take to deliver and track its journey to them. Using technology to manage stocks and logistics is now seen as essential to providing good customer service. Adopting new technologies is vital for
this industry to stay competitive and agile enough to adapt to fast-changing market dynamics. However, it can be expensive. Many firms are thus choosing to lease the solutions they need rather than buy them outright. This enables them to have the most-up-to-date and relevant IT systems and machinery but without the costly upfront capital expenditure. There is little doubt that e-commerce is
a capital-intensive business, demanding more sophisticated equipment and services to meet the rising demand of online shoppers. Leasing rather than owning allows businesses to upgrade their software or services as the technology improves or their needs change. It’s a cost-effective solution that enables new or established warehousing and logistics companies to stay up-to-date with ever- changing market demands.
BNP Paribas T: 0345 226 7367
www.leasingsolutions.bnpparibas.co.uk
OVER 30% OF FIRMS USING EDI MISSING VALUE OF VALUE ADDED NETWORK
Over 30% of companies that use EDI do not use a VAN (value added network) provider and are therefore failing to reap the benefits from outsourcing the management of EDI. This was a finding of a survey of companies conducted recently by Data Interchange. It found that 30% of respondents had multiple direct connections to VAN providers while almost 40% of companies had a single, direct connection. “Outsourcing management of the EDI process to a VAN frees a company to
concentrate on its core competence,” says head of UK sales Colin Fisher. “IT departments can become bogged down by managing EDI in-house, on- boarding new partners or disconnecting others while trying to keep pace with
technology changes and updates which can mean companies get left with outdated systems. This survey indicates there is a hefty proportion of companies that can benefit from outsourcing.” The number of businesses with multiple direct connections revealed
through the survey indicates a shift to a more competitive market. “The landscape is becoming far more complex,” continues Fisher. “It is
changing from the historical structure of each Tier 1 company supplying one OEM only with subsequent constraints down the supply chain. Suppliers are now supplying multiple customers through complex supply chain networks rather than direct chains. This is best managed by a specialised EDI partner. “Companies may be using multiple VANs because their customers
suggested they should but this is not a requirement and may not be the most beneficial route for the supplier. Data Interchange has interconnects already in place to deal with multiple preferred VANs so traffic can be consolidated and economies of scale realised.” Surprisingly for 2016, the survey found that when businesses were not
using their EDI capability they turn to emails and customer web portals in the main closely followed by fax. “Over time a company’s processes and supporting technology can become
sclerotic and often the comfort of familiarity can mask underlying issues,” concludes Fisher. “Our job at Data Interchange is to show the ROI that can be achieved by supporting companies to review their processes.”
Data Interchange T: 0)1733 371 311 S MARCH/APRIL 2017 | MATERIALS HANDLING & LOGISTICS 12
www.datainterchange.com / MATERIALSHANDLINGLOGISTICS
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