Survey says cutting supply chain costs is priority

September 11, 2012

Supply Chain Futures, a specialist in supply chain recruitment, has noted that supply chain managers are prioritising the reduction of supply chain costs and pressuring the “speed of change in consumer markets” over the next five years. The research comes according to a recent European logistics occupier survey by Jones Lang LaSalle, which also suggests that the “re-alignment of distribution networks to manage cost pressures” will also be essential in order to stay competitive.

A huge 71 per cent of survey respondents claimed that cutting supply chain costs is a main focus within the next five years, while 61 per cent identified that “speed of change is consumer markets” was also a top trend, both significantly ahead of growth in internet retail (39%).

According to Jones Lang LaSalle, “respondents [also] ranked rising energy / transport costs (95%), changing consumer demand (76%) and transport infrastructure constraints (66%) as the three biggest challenges over the next five years.”

Alexandra Tornow, Head of EMEA Logistics & Industrial Research at Jones Lang LaSalle comments: “The top three trends and challenges indicated in the survey reflect sensitivity to supply chain risks and a shift towards multi-channel distribution. Cost pressures – further heightened by the Eurozone sovereign debt crisis – are driven by increasing globalization.”

Companies having moved production to low cost destinations in Eastern Europe and Asia today face increased and volatile transport costs as well as the risk of supply chain disruption and delays due to transport constraints.”

The survey also revealed that floor space requirements were also a top French, as more than 75 per cent of respondents require either new build or completely modern floor space.

Tornow added: “…shifting consumer purchasing behaviour is putting retail companies under high pressure to differentiate offerings, manage shorter product lifecycles and improve speed to market, including a growing home delivery segment. This requires the re-alignment of existing distribution networks to successfully service complex, multi-channel operations”.