BoxLogic's Matthew Hopkins on the changing supply chain market
Global supply chains have faced immense disruption over the course of 2020 thanks to a number of systemic crises. Matthew Hopkins, a Director a BoxLogic, reflects on a number of trends in the rapidly changing supply chain landscape.
With natural and man-made crises disrupting supply chains more regularly, businesses need to evaluate their operational models, and assumptions that demand will go unhindered as a rule of thumb. According to a report from McKinsey & Company earlier in 2020, the Covid-19 crisis could top $5 trillion in worldwide economic losses, if supply chains spanning the globe fail to adapt to reduce exposure to threats to business survival, such as a further wave of the pandemic.
Another study by Infosys meanwhile found that 57% of companies in logistics reported a reduction in operations of more than 25%, including one-quarter of respondents who lost more than 50%, and 6% who shutdown outright. While the impact of Covid-19 on supply chain specialists cannot be overstated, though, many firms have also used the slowdown in their activity to tap consultants, and overhaul their operations to bounce back stronger.
Having recently celebrated its second anniversary in business, BoxLogic is a boutique management consultancy offering independent, supply chain and logistics advice. Operating globally from its base in Reading, the team focuses on delivering projects in three areas; logistics strategy, logistics design and logistics technology. According to Director Matthew Hopkins, the current period of change has been “very exciting so far,” and with the Covid-19 pandemic returning in force in the autumn, while Brexit looms on the horizon, he is sure it will continue.
Speaking to Total Supply Chain Summit, he explained, “It has been fascinating time for supply chain… You cannot look past Covid-19 as the biggest challenge, managing the supply issues, starting and stopping the supply chain has shown incredible adaptability. There has been plenty of other challenges though including the need for better visibility of how goods are sourced and the ethical integrity of those products… [Then there are] the small matters of Brexit, the demise of the high-street and the increasing adoption of automation on top of that!”
Often supply chain work is overlooked by the public, however, Hopkins believes that the range of issues and the drastic impact they have had on consumers throughout the year, have provided a thorough illustration of how important the logistics function is. He hopes in turn that this will “attract many young people to the industry who are excited about answering these questions.”
Commenting on what he thinks the biggest priority those new-comers will face in the industry over the next year, he argued, “I think there are going to be two priorities. Firstly, keeping the operation going through the pandemic and maintaining social distancing in the workplace... The financial and even reputational impacts of an operation going down because of an outbreak could be significant. Secondly, the supply chain industry still doesn’t know what terms the UK will be trading on after we exit the Brexit transition period and there isn’t a lot of time for the industry to prepare for whatever the future looks like.”
Opportunity
As well as problems to be faced, there are also major opportunities to be seized on by supply chain specialists. Hopkins highlighted ecommerce as one of the biggest new openings in the market, as while it had already been rapidly growing in prominence, the restrictions of lockdown meant certain goods could suddenly only be purchased remotely this year – while public concerns regarding sanitation in a pandemic also saw digital shopping’s popularity spike.
“To have an effective, efficient online fulfilment platform has been integral over the last six months for many businesses to keep trading,” Hopkins went on. “Town centres are quieter than ever and the ONS data shows that the lockdown and social distancing is encouraging an even greater proportion of spend to shift online. Operations that have invested in warehouse technology to reduce the reliance on labour have been well placed to benefit from the pandemic and I think a lot of companies are playing catch up.”
Further to this, technology stands to play a far greater role in a number of supply chain functions moving forward. As the UK faces several economic headwinds, “any technology that takes cost out of an operation quickly is going to do well.” In particular, Hopkins expects this could be good for “anyone offering Robots-as-a-Service (RaaS), which will probably suit Autonomous Mobile Robots (AMRs).” Looking much further forward, meanwhile, he anticipates that technology will be deployed at the customer-end too.
Commenting on what logistical themes might be up for discussion in 2022, Hopkins speculated, “How good or bad drone deliveries work, I imagine. It’s one of those supply chain developments that will really make an impression on the general consumer and probably create a bit of a buzz. It will be interesting to see who is driving the technology; the traditional parcel carriers, who have been growing rapidly over the last decade and developing their infrastructure or the tech companies. Will it be a VHS vs Betamax moment or not?”
