2012, challenges for the logistics industry ?
In this context of globalization, logistic services, and more widely supply chain management, are regarded as key success factors in meeting customers’ time-to-the-market worldwide, while maintaining costs at acceptable levels. 2012 is already announced as a year of challenge for many businesses, due to the tense economic situation, so how will the logistics industry help them to reach their goals?
The logistics industry is going green
According to a 2011 survey from the European Commission, altogether 89% of Europeans see climate change as a serious problem, with 68% considering it a very serious problem (1). These concerns have not gone unnoticed by logistics service providers and air freight forwarding companies. They are adapting themselves to these new requests and thinking about the longer term, for example, by designing environmentally friendly warehouses or training the truck drivers to eco-driving principles.
In warehousing & distribution, energy costs are reduced in a number of simple ways such as using motion sensors to only illuminate areas in use and charging forklift trucks in off-peak hours when energy costs are lower. Some companies are looking at introducing solar panels on the warehouse roof and intelligent electrical systems to take advantage of off-peak power. Another example, did you know that LED lighting in a warehouse can decrease the light-related energy consumption up to 80% versus traditional light bulb (2)? The saving can be count in thousands of Euros for a single warehouse, without thinking of the positive impact to its carbon footprint.
Choosing the perfect logistics location
The location where you’ll set up your warehousing & distribution center will be a real key decision factor, as we see fuel prices steadily increasing (oil Brent barrel price is back to $100) and directly impacting distribution costs. Nevertheless, many other factors have to be considered, such as a skilled workforce, tax benefits and investment friendliness and quality of infrastructure.
How close to the market do you need to be? Which country offers you the best situation tax-wise? How to make sure you can deliver all your European customers within 24 hours? Selecting a best-in-class logistics provider is one of the surest way to help solving the time-to-market equation, as being the first one present on the market is often a matter of success or failure for fast-paced companies. It’s of no use to design a perfect and innovative product if the competition can do the same and meet the market first. That’s why the time-to-market concept needs to be backed by an efficient logistics partner strategically established close to the target market. In many cases, the integration between logistics service and trading companies is pushed ahead and results, for example, in sharing a common IT platform, to ensure real-time data transmission.
Last but not least, we have to consider advanced logistics as a key success factor for 2012. What is it about ? Advanced logistics can be defined as a set of added-value operations performed before the products leave the warehouse distribution center for customer delivery. In all cases, it is about product customization (customer-specific labeling for example), in other cases about bundling two different products (for a promotional sales for instance).
Advanced logistics can make the difference in 2012, not only by fulfilling your customers need, but by bringing added value and therefore a competitive advantage against the competition (repackaging, assembly operations, late differentiation etc). The marketplace is changing, the chain has to be more agile and responsive. The time of the one-distribution-channel is over and logistics companies have now to reply to multi-channel-distributions schemes (traditional, e-business, small retail). Therefore, the selection of a logistics service provider or an air freight forwarding company is a crucial decision towards meeting your business time-to-the-market.
To conclude, we can see many trends getting stronger in 2012, green logistics being a key one. Why? Because customers require companies to meet the environmental standards of the more and more demanding consumer. This brings us to the how. By the mean of innovation in energy saving devices, by analyzing and reducing waste production and by teaming up with logistics service providers who are fully conscious of what going green means and act in consequence. Fortunately, we must not forget that the logistics industry is quickly adapting to those new challenges, to offer their customers with best-in-class solutions. Partnering with them will definitely be a key enabler to drive performance up.
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