170 delegates attending this year’s UK Warehousing Association conference on March 3-4 were told to ‘be curious, be innovative, be disruptors,’ as 25 expert speakers from across the industry considered ‘Next Generation Logistics’, describing the changes ahead and debating exciting new opportunities on offer for 3PLs in a series of interactive panel discussions.
Industry growth set to continue
The conference was opened on a positive note by UKWA CEO Peter Ward, who highlighted the continued growth of the industry. He said that the newly published report, ‘Delivering The Goods 2020’ by the British Property Foundation predicted significant further growth over the coming 20 years, with the doubling of online spending, 43% increase in productivity and a requirement for 21m sq ft of warehousing every year for the next 20 years.
Key speaker Eleanor Winton of Foresightfully set the futuristic scene, outlining likely population growth and demographic changes, as well as noting that high on the risk agenda for next year would be the issues of infection control and climate change. “Failure to adapt and change for the future will mean going out of business,” she warned.
Good news for UK
Good news was in store from speakers Walter Boettcher Director of Research & Forecasting at Colliers International and Logistics Analyst Will Laing of Savills.
Walter said that the ‘mood music’ had changed and that greater tax and regulatory certainty had led to the biggest ‘bounce’ in PMIs since the referendum. ‘Orders are up, hirings are up, the economic outlook is up!” he affirmed, telling delegates that technology, not politics, is the real disruptor.
Will added that online sales is a key demand take up rising sharply,” he said. “We expect this strong market to continue.”
Conference delegates seemed to share the positive outlook, with an overwhelming 81% voting in a live poll that they felt more optimistic about the outlook for their business compared to this time last year, and 78% confirming that they are likely to increase their warehousing footprint within the next 12 months.
Value added services create competitive edge
In a lively session led by Josephine Coombe, Director of Nulogy, panelists including Richard Pinkerton, 3rd Party Operations Manager of Nestlé, Mark Catley, Business Development Director UK & I of XPO Logistics and Ian Walker, Managing Director of 3P Logistics, discussed how value added services could create competitive edge both for 3PLs and their customers.
Richard explained the big change of landscape and increased complexity of serving value channels and premiumization, with each retailer looking for differentiation. He said increasingly retailers leaned on 3PLs to support that complexity, adding value by converting products quickly and cost effectively.
3P Logistics’ Ian Walker claimed that ultra-flexibility was key to serving customers. “7 years ago logistics was a commodity largely bought on price, now we delivery complex services, adding value at the right price,” he said. “For us, every leg of the supply chain is an opportunity to innovate.”
Josephine added that millennials and Gen Z were influencing peaks, with new buying patterns, such as Veganuary. She said that brands are turning to 3PLs for agility and innovation.
‘Future borders’ positive for industry
Providing a brief commentary on Brexit – dubbed by the government, ‘Future Borders’ – progress, Peter Ward observed that overall the impact of additional inspections and supply chain disruptions represented positive news for the industry as companies would hold more inventory close to markets and this would drive demand for more warehousing space. However, he said UKWA would be making the case for the industry that access to low cost, low skilled immigrant labour was essential. His message was “Get ready for January 2021!”
Innovation key to partnerships
Speaking as a panelist on the Logistics Users’ panel discussion, Katherine Parker, Senior Project Manager Logistics for Sainsbury’s-Argos, said that Argos’s Fail Fast ethos chimed with the current pace of change in retailing. She confirmed that working in partnership with 3PLs, cost, agility and ability to adhere to standards were givens, “It’s now about partners able to share our vision and support us in achieving our higher ambitions through innovation,” she said.
Juan Manuel Santiago Mendez, CEO of Mercedes-Benz Parts Logistics UK & SA, added that contracts were being extended to five years to secure reliability, loyalty and responsiveness, while Chris Warn of Pentland Group stated that trust, added value and expertise were key to partnership. “We look to our 3PL suppliers to share best practice, allowing us to focus on our core competencies,” he observed.
“3PLs have the head space to innovate on behalf of their customers,” Moderator of the panel, CEO of Maginus Mark Thornton concluded, “In retail, ideas are driven by consumers, as service suppliers to retailers, we can learn from them.”
The panel also addressed issues around sustainability and recruitment of a new generation of workers, whose expectations and skills are very different from those of the past. It was agreed that CSR is heading up the agenda and that the associated complexities and costs associated were encouraging brands to outsource to 3PLs to deliver sustainable solutions.
Chris Warn said that this was also driving recognition of the importance of logistics, explaining that Pentland Group had created the role of Global Logistics Director and recruited him to bring Logistics to the ‘top table’.
Katherine Parker added that the skills and knowledge within the logistics industry was cutting edge, particularly with regards to technology. “45% of our spend is on logistics,” she said. “Without logistics, we can’t serve our customers, so the importance is clear. For me, our stores are simply another point in the supply chain.”
Climate change, automation and new responsibilities for fulfilment houses
On day two of the conference, climate change, automation and new responsibilities for fulfilment houses were discussed in detail. Delegates heard from Alan Kiff, Head of Consulting at Concept Energy Solutions, who confirmed again that customers are looking for CSR from suppliers, particularly regarding climate change and sustainability. Alan said that legislation was driving change and warned SMEs to be ready as climate change legislation is coming.
In the live poll, 60% of delegates said they did not measure their carbon footprint, neither had they been asked to do so by customers.
Priya Ravidran of PWC and a panel led by Guy Willott of Voiteq concluded that automation is currently the government’s rhetorical solution to the shortage of labour, which Priya said will impact on the warehousing sector at all levels.
Delegates agreed. When asked whether automation is just for the big players, 69% said no, while 79% declared that they would be exploring investment in automation in the coming 12 months despite 67% citing cost as a barrier.
On new responsibilities for fulfilment houses, Howardtherefore be part of your culture.”
Only 57% of delegates had heard of the new Office for Product Safety Standards, the live poll revealed.
Finally, the conference closed on a forward-looking presentation from David Lucas, Managing Director of Change 4 Growth (C4G), who told the audience that “Change is the new normal – forever.” He spoke of the future partnership of humans with technology and said this would be crucial to business success.
“We have seen a huge change to corporate culture, driven by Gen Z – and we must decide as business leaders how to adapt and plan for the future,” he stated. “Digital must be at the core of all organisations, not just as a ‘nice to have’, but as a ‘must have’. Data and systems will be foundational to business and those falling behind now will find it impossible to catch up in the future.”
David called for a relentless focus on customer outcomes, with everyone working together with digital technology, telling delegates, “We are going to have to factor in jobs that we don’t yet know, for technology we don’t yet have.” He concluded that “Real change and a move towards sustainability is not just an event, but a process.”
Commenting on this year’s event, UKWA CEO Peter Ward said, “This has been an exciting conference with inspiring speakers and a highly engaged audience. We have covered critical issues for our industry, providing food for thought as well as practical advice and an insight into what the future may hold. No doubt delegates will feel fully informed and better equipped to prepare their businesses for next generation logistics and a future with huge potential for our great industry.”