The value of specialised warehousing services is on the rise.
Time to cement your relationship with a trusted logistics partner.
The current manufacturing climate – with the ongoing political and economic conditions – is making demand less predictable and forecasting harder. For OEMs this is placing a premium on the ability to to create a safety buffer of inventory for changing circumstances.
A consequence of continued Brexit uncertainty, and a systemic lack of new storage capacity being built, has resulted in an unprecedented squeeze on warehousing and specialised logistics space.
A squeeze in space
With under seven percent and dropping spare capacity (less than 10% is the rate at which warehousing prices typically start rising significantly), and many warehouses ‘operationally full’, every business needs to have risk management plans in place to store component supplies and inventory to cushion themselves from supply disruption factors.
In the South East itself, the UKWA highlights less than 3.8% warehouse capacity is available. The costs are rocketing with some customers reporting 60% price increases. Lambert Smith Hampton’s latest report forecasts logistics warehousing space requirements exceeding supply by 2020. There is a high demand for expertly provisioned, and skilfully serviced facilities.
A shortage in skills
Added to this problematic mix is an increased scarcity of trained workers to operate facilities smoothly, in particular expanded 3PL functions for broader RH&D (receipt, handling and dispatch) needs. OEMs are moving with speed toward further outsourced logistics functions as digital technology and realtime data enables better connectedness between them and supply partners. Providers with proven experience in the sector are sought after.
“With less than 3.8% warehouse capacity available in the South East, and costs rocketing by 60%+, there is a high demand for expertly provisioned, and skilfully serviced warehousing facilities.”
Regrettably only 9% of the current logistics sector workforce is under 25, with 45% being over 45 years old. A Talent in Logistics white paper highlights that the UK Logistics sector is facing a skills shortage, and alongside this needs to deal with problems including recruitment and diversity within the industry. The sector is perceived to be too male-dominated and traditional, with under-representation of women and workers from BAME backgrounds. Less than half the current logistics workforce is unqualified or qualified below level 2 skills (pre-A-level). In this climate, finding logistics partners who can provide seasoned staff with a proven skillset is indispensable.
Factors to consider to weather the warehouse space storm:
Can you find modern, secure space with a service provision you can rely on? Do they have the technologies and skills in place for efficient on-site processing?
- Skilled personnel.
Is the facility staffed by experienced people with the skills needed to provide stocking efficiency and reliability? Handling, packing and picking of stock needs to be fit-for-purpose. Lost stock is useless stock.
Work with a provider that is flexible to your production and space requirements, and can come up with a plan to help utilise inventory space and production line facilities efficiently.
Consider logistics partners who can service your location most effectively, and integrate with your delivery requirements. What service history metrics and level of performance can they demonstrate?
The current climate provides further impetus within the sector to revamp manufacturing services and production provision. Manufacturers that use the opportunity to revitalise business functions and strengthen supplier partnerships will be ideally placed when the choppy waters clear and blue skies reappear.
Acorn Industrial Components have 40+ years of supply chain logistics experience. With professionally-managed warehouse locations in the South East, we provide inventory management, planning and storage, alongside a broad selection of complementary supply chain services. Our specialist kitting and warehousing facilities are ISO-certified, expertly managed and run by skilled staff.
▶ Article cross-posted to LinkedIn.
Lloyds Loading List.
Lambert Smith Hampton.
Lambert Smith Hampton, Industrial & Logistics Market Annual Report.
UKWA, United Kingdom Warehousing Association.
Talent in Logistics, Attracting Young Talent Into Logistics.
UKCES, Understanding skills and performance challenges in the logistics sector.