Bringing European logistics lessons to the UK

As innovative pallet pool operator LPR launches its distinctive red pallet to the UK drinks sector,
managing director Jane Gorick – who was recently named MAN everywoman in Transport & Logistics director of the year – offers her thoughts on the differences between UK and European supply chains.

The FMCG supply chain in the UK is probably one of the most analysed in Europe. As a relatively compact country, it is easy to see how the logistics industry has developed as a complex network of interweaving relationships. Contrast this with mainland Europe where the bigger land mass has led to a more linear supply chain structure. Clusters of expertise have grown up in key European locations and these are connected through recognised trade lanes.

However, in the drinks sector, where LPR leads the market for pallet solutions in Europe, things can be a little more complex. Many manufacturers and distributors share production and bottling facilities as well as distribution centres – which means, even in Europe, the supply chain is more of a web. Elements such as reverse logistics also play a part – as bottles are returned to the manufacturer to be refilled in Europe. Of course, this is less of an issue in the UK as we recycle rather than re-use our glass and plastics.
Increasingly, in both Europe and the UK, manufacturers and distributors are looking at how to better work together to deliver financial and environmental benefits through supply chain efficiencies. Likewise, the tough market conditions of recent years have led many manufacturers to explore the strategic and carefully-considered outsourcing of ‘non-core’ activities – such as logistics. By focusing on their core activities, FMCG businesses can gain that all-important financial advantage and remain competitive.

The outsourcing of supply chain management has enabled FMCG organisations in the UK and Europe to benefit from initiatives such as reverse logistics (which also supports sustainability by reducing empty running), shared user distribution and LPR’s one-way-trip pallet model which facilitates delivery of both financial and environmental benefits. However, for outsourcing to be a success, the offering must combine the right people, experience cost reduction and provide a better service than the existing option.

A good outsourced partner will keep as abreast of your industry as you will, resulting in considerable added value. There will also be a culture ‘fit’ – in which values and personalities are considered as part of the tender process. Most importantly, working together to set objectives will see each party gain from the expertise of their partner, as well as ensuring the outsourced company acts as part of the team.
There is a lot to be learned by contrasting supply chain logistics in the UK with those of mainland Europe. Likewise, the unique requirements of the drinks sector – such as a bigger weight-to-space ratio and a complex supply chain – have led to innovative solutions which can be drawn upon to influence the wider FMCG arena.

While the UK is leading the way on delivering efficiencies from initiatives such as collaboration and outsourcing, we can learn a lot from the European intermodal logistics success stories. As a compact country, the UK is still very focused on road transport – an option which is becoming more and more expensive. In contrast, the integration of land (including rail), air and water transportation is far more common in Europe. Over the coming years, more work will be done on collaboration, outsourcing and alternative technologies to drive financial, environmental and efficiency benefits within the FMCG supply chain.

www.lpr.eu