Archives February 2022

In this episode Tony Hines takes a look at the philosophy behind supply chains in our material world. We also look at the whole area of reverse supply chains with special guest Dr Regina Frei, Associate Professor of Supply Chain Management at Southampton University. We look at how some customers cost us more than others as well as how some suppliers are more costly to deal with than others and we have the usual news round up from round the globe.

The growth of internet retail has caused an increasing problem for the retail sector of processing returns to minimise cost and the impact on their bottom line. According to KPMG returns can reduce profits by 30 per cent.  The average cost of returns is 10 per cent. Manufacturers and retailers are said to spend $100 billion on returns. In the UK alone retail returns are about £7 billion.  A single return costs about £10  but remember this is an average figure. Some returns cost more. When it comes to returning products you are effectively reversing the supply chain process moving goods back from consumers to suppliers. There are many reasons why people need to return goods. It may be damage to products, wrong item delivered, not fit for purpose or simply that the customer changed their mind. It will depend on the returns policy how each business deals with returns. Dr Regina Frei is our special guest who will discuss this with us today. You can also read some of Gina's research by following the links here:

Product returns: a growing problem for business, society and environment in International Journal of Operations and Production Management:
https://www.emerald.com/insight/content/doi/10.1108/IJOPM-02-2020-0083

No such thing as free product returns in The Conversation:
https://theconversation.com/the-hidden-costs-of-online-shopping-for-customers-and-retailers-109694

This is the weekly round up of everything happening in global supply chains.
 
Inflation is still the biggest story everywhere with input costs rising. The pandemic has been blamed for lowering ouput and supply chain disruptions. Governments in Europe and the United States are trying to deflect criticism for consumer price inflation at its highest level for 30 years in the UK at 5.5%  and at 7.5% in the US the highest figure in  40 years. Not since the 1980s has the US seen this level of inflation.

Canada – Ottawa protests disrupting the border crossing between the US and Canada have been brought under control and goods are flowing again.

Microchips, Container Boxes and Labor are all in short supply listen to the Round Up to find out more.

Storm Eunice added to the UK supply chain disruptions this week.

Uncertainty over Russia and Ukraine is adding to inflationary pressures.

Reverse supply chains is the next episode coming your way next week – be sure to listen. 

AIR CARGO

We hear a lot about trucks and ships but we don’t hear much about air freight. In this episode Tony Hines takes a look at the world’s largest airport and the part it plays in cargo movement. About 1.7 million metric tonnes of cargo pass through Heathrow annually. Heathrow Airport is the UK’s largest airport. It has two runways and wants to add a third as it deals with passenger volumes around 80 million people prior to the pandemic annually and it expects to develop capacity to increase that number. The two runways can handle the largest planes. The airport has air bridges for 133 aircraft, 64 outfield stands and 15 cargo stands. About 32% of traffic is cargo and 67% is passenger movement. Heathrow handles more cargo than Felixstowe, Southampton and Liverpool together. It handles 70% of all air cargo in the UK. Heathrow has 84 airlines flying to 203 destinations in 83 countries. It has recently published its strategy to pay supply chain workers more and to improve conditions for people and businesses using the airport as well as reducing its carbon footprint. It is also working to improve air quality for people living nearby.

HOTELS

We don’t often hear hotels and supply chains in the same sentence but hotels depend on supply chains to deliver service to their customers. We take a look at some of the problems they have been coping with to keep supply chains flowing. Apparently costs have risen for some products by 80 per cent.

CYBER CRIME

The recent attacks by criminal groups using ransome attacks to lockdown computer systems have caused serious problems for businesses that are targeted. KP was one of the most recent victims and it has disrupted their supply chains.

NATIONAL APPRENTICESHIP WEEK IN THE UK

A good way to attract new entrants into supply chain careers. Business apprenticeships give entrants an opportunity to earn, learn and get qualified as a supply chain professional.

FORTHCOMING PROGRAMS
Reverse Supply Chains with Guest Dr Regina Frei, 
Resilient Suply Chains in Healthcare with Guest Professor Wendy Phillips, and 
Supply Chain Roles, Careers and Courses.
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RE-ORGANIZING THE SUPPLY CHAIN FOR RESILIENCE –GO LOCAL
Many businesses including retailers have slowly been reconfiguering their supply chains to go local when it comes to geeting their supplies.

INSTITUTE OF SUPPLY MANAGEMENT
I attended a great webinar and was reminded about what supply chains are all about and I share that here.

US INFLATION HITS A FORTY YEAR HIGH AT 7% year on year. A large proportion of this increase is due to rents. Grocery prices and general product price increases due to continuing supply chain disruptions also contribute. In the UK some housebuilders are increasing their prices for new homes by as much as 17%.

UNILEVER one of the biggest brands in food retailing say they will be increasing prices across all product lines in 2022 to improve profitability.

A POULTRY PROBLEM IN THE UK
Dues to a shortage of butchers the processing of pigs has come to a halt and farmers are having to cull their stocks because they can't afford to keep feeding them.

PROBLEMS AT THE CANADIAN BORDER
The Ambassador Bridge remains closed because of protests and this is having serious consequences for the movement of goods across the US-Canadian Border. This type of disruption is becoming more frequent not only in Canda but in Europe too.

This is a short preview of a forthcoming episode. Tony Hines talks to Dr Regina Frei who tells us about her research in this area. Listen to the brief extract from that interview which will be available shortly.