Outsourcing certainty

FROM THE very first outbreak of the pandemic more than two years ago, brands and retailers have enjoyed the benefits and efficiencies of developing strong relationships with their supply chain partners in the contract packing, storage, ecommerce/fulfilment, and logistics sector. Their ability to adapt swiftly and effectively to the new demands of such testing times has proved invaluable.

This increased interest in outsourcing continues for many BCMPA members, who are reporting sustained growth in demand for their extended services, ranging from niche, value added services to final-end delivery to consumers. 

But more recently, European war, raging inflation, and out-of-control energy pricing have all added further challenges, to create yet another unprecedentedly difficult time for commerce, both at home and abroad. 

New challenges

As 2023 approaches, the historical lessons learned, and the powerful collaborative relationships developed, have strengthened the position of the UK’s contract manufacturing and packing industry, firmly establishing it as a cornerstone of the supply chain jigsaw.

One of the key advantages in recent years in the protection of retailer and brand reputation, has been the ability of third-party logistics partners to identify and secure new, robust local supply chains, eliminating the risk of delays or unavailability from overseas sources. 

However, these successes have imposed huge stresses on the availability of ‘on-shore’ warehousing capacity on a national scale; even as long ago as two years ago, a report produced by McKinsey & Company highlighted that the share of output moving across the world’s borders had fallen from 28.1 percent in 2007 to 22.5 percent in 2017, a trend which seems certain to continue.

The events of the last 3 years have accelerated this trend exponentially, especially in the UK, with the current demand for onshore stockholding beginning to outstrip the availability of warehousing required to accommodate it. Undeterred, many BCMPA members have, as is so often the case, ‘grasped the nettle’ and addressed this issue in the simplest way possible, by extending their own warehousing capacity. 

Exemplifying this self-reliant approach, Neil Humphrey, Sales Director at Bradford based BCMPA member Mailway comments; “UK storage space has increasingly become a problem, with capacity outstripping availability, so we built our own! Our new Low Moor warehousing site in Bradford (completed this year) has helped cope with just such issues and is a welcome addition to our close collaborations with our other Bradford based storage and haulage partners.”

People

Of course, extended capabilities and capacity can require a larger workforce, and once more, many of the BCMPA’s 200+ members are engaged in developing innovative ways of both securing new workers and future-proofing the talent pool for the sector.

An example of this agility is being initiated by Clipper Logistics plc. Paxton Carroll, Clipper’s Operations Director, explains; “The labour market continues to present huge challenges, but our commitment to future leaders and talent within our supply chain has seen us create a partnership with Sheffield Hallam University through our Clipper Apprenticeship Degree. Students work towards a BA(Hons) in Professional Supply Chain leadership. The first cohort graduated in 2021, and a further 60 are on the course at present. Together with a number of our initiatives, Clipper has helped more than 1,000 people secure work within our company.” 

Gavin Williams, GXO UK & Ireland’s Managing Director, notes the increased move towards the augmentation of a physical labour force with automation; “Given labour supply issues faced in our sector and across the board, investment in tech is more crucial than ever, particularly in terms of modular innovations like robots, co-bots, and wearables. Essentially, these smaller tech units enable us to automate certain tasks, allowing our customers to be swifter and more agile.”

Digitalisation

Further, as the new, highly agile e-commerce fulfilment landscape develops, the need for efficient, streamlined digitalisation is coming to the fore. This is affecting how BCMPA members are managing their internal Enterprise Resource Planning (ERP) software systems. Smooth running internal ERP systems promote profitability, efficiency, and accuracy internally. In addition, such software enables the exciting new world of personalisation and individualisation for clients.

Best partner

With the strong and ever more entrenched growth in demand for expert, collaboration between manufacturers and contract manufacturing and packing outsourcers, it is becoming increasingly important to ensure that these partnerships are researched and selected to suit all parties. 

Use of the BCMPA website’s invaluable search function is growing weekly, with customers, brand and manufacturers seeking strong partners among members, to fulfil their exact requirements. From clients looking for a beauty cream manufacturer, to point of sale kitting, gift packing or the ecommerce fulfilment side of their project, the 200-strong BCMPA membership provides a rich reservoir of skills for 3rd party outsourcing.

Keeping it green

In the turmoil caused by the melee of recent challenges, it might be all too easy for BCMPA members to suspend a meaningful drive towards carbon neutrality and sustainability. However, for both commercial and environmental reasons, members’ commitments to these targets remain undiminished. 

As Carroll notes, “There is now a clear reputational imperative from brands and retailers for third-party suppliers to become ever more sustainable. Effective planning around carbon management, and reduction in energy consumption and greenhouse gases from warehouse facilities will be a focus, as will reducing water usage and an increase in recycling materials. The exploration of alternative fuel and green vehicles, as well as reviewing business travel to minimise emissions will remain a key focus in 2023 for Clipper.”

The future

It seems unlikely that 2023 will deliver any less testing trading conditions than those of the last few years; supply chain fragility, raw material and labour shortages, energy costs and further developments in the geo-political struggles regarding Ukraine, and rampant inflation, will all play their part in setting new challenges for the third-party outsourcing sector. 

But, as always, with the expertise, innovation and forensic planning and adaptability for which our industry has become renowned, they are undoubtedly challenges that can once again be met.