Leading supply chain professionals attending The Chartered Institute of Logistics and Transport UK’s Annual Logistics Conference heard from former Ford President Sir Nick Scheele that an unexpected result of the Japanese tsunami was Ford could no longer offer a black paint!
At the Conference – Delivering in a world of complexity; Tales of the unexpected – Nick revealed that Ford, once famous for offering ‘any colour you like, as long as it’s black’ could no longer deliver its ‘tuxedo black’ cars as the pigment was produced only by a single producer; which was based near the Fukashima nuclear plant.
Nick discovered that this was truly a tale of the unexpected as – unknown to each other – Chrysler, GM and a number of German car companies also used the pigment in their paints; but as they sourced their paints from different suppliers none were aware that they relied on this sole producer. Nick used it as an example of why manufacturers should share more information and ‘go for transparency’ to ensure that a single third or fourth tier of supplier’s failure could not have such a big impact on their supply chain.
The conference highlighted the importance of logistics in the UK’s economy; and how resourceful supply chain professionals can be in overcoming unexpected problems. Norman Baker MP, Under Secretary for Transport; told the Conference of nearly 200 leading logisticians that the importance of the UK’s freight industry was ‘well understood across Government’. He said that the Co-alition Government was playing its part to solve unexpected problems in our supply chain infrastructure. He revealed that the unexpectedly harsh winter of 2010-11 had cost UK industry £280m a day.
Predicting winter weather was still an inexact science, he said – but the Government had increased stock piles of salt; and improved the resilience of railways by investing in heating of the South East’s third rail system at key sites. He also announced trials of new types of snowploughs. ‘We are boosting resilience and improving transport infrastructure. Your industry is important’ he told delegates.
Sainsbury’s MD of General Merchandise, Clothing and Logistics, Roger Burnley revealed that unpredictable weather has huge impact on demand in his stores. For this month’s Diamond Jubilee Bank Holiday it meant the difference of 3000 fully loaded artic deliveries between flat demand if the temperature was below 20 degrees and peak demand for products such as ice cream, strawberries and bunting if the sun shone and the temperature was 27 degrees or more.
But in an unexpected twist he revealed Sainsbury’s took the brave decision to go ahead with the plan to stock for peak demand – even though the forecast was for poor weather. It was a gamble that automated ordering systems would never take; but it paid off. Sainsbury’s sold their highest ever volume of strawberries and bunting despite the pouring rain!
Conference Chairman Professor Richard Wilding summed up by revealing that major disruption to supply chain can have a 20% impact on a business’s share value, so it is vital that supply chain professionals remain adaptable and creative in reaching solutions to unexpected events.
Also speaking at the conference were Tata Steel’s Supply Chain Director, Jan Steenberg, Richard Hunt CBE, Chairman of London Ambulance Service, and panellists Neil Ashworth, Operations and Development Director, Tesco.com; Andy Kaye, CEO, BiS Henderson; Rob Riddleston, Head of Logistics & Transport, Barclays; and Peter Ward, Cargo Supply Chain Commercial Manager, DP World London Gateway.