Logistics management at food and drink companies feel there is significant potential for improvement when it comes to making supply chain efficiency gains, according to a new study.
The Food & Drink Supply Chain Health Index survey, a first for the industry and undertaken by Culina Logistics, gained feedback from logistics management at 50 food and drink companies regarding the efficiency performance of their supply chains in the last year and targets and plans for the next 12 months.
The survey revealed that 43.8% of respondents presented a mixed picture in terms of the outcomes of their efficiency drives, saying that some areas of the supply chain were on target/above target but also some areas below target. However, one in five (20.8%) indicated that the outcomes of their efficiency drives over the last year were above target.
With regards to the cost efficiencies gained in the last 12 months the majority (33.3%) reported efficiency gains of between 1-5%, followed by 6-10% (22.2% of respondents) and 11-15% (11.1% of respondents). 15.6% of respondents said their organisations had achieved efficiencies of between 16-25%.
Unsurprisingly, most cost efficiency gains were made in the core supply chain activities, with primary transport coming out on top, with 46.7% of respondents selecting this area, followed by secondary transport and warehousing (both 26.7%).
Waste management was also a top four performing area for 20% of respondents and added value services, such as product reworking and pallet management, achieved best results for one in ten of the respondents.
However, some of the areas that performed best were also seen as underachieving, again suggesting that respondents felt there was more potential for improvement. Warehousing (42.3% of respondents) was seen as the biggest under achiever when it came to driving further efficiencies, followed by secondary transport (30.8%), waste management (26.9%) and pallet management/IT systems (both 19.2%).
Nearly a third of respondents reported that their companies had identified new cost efficiencies for the first time; however the majority (69.8%) are making efficiency improvements in the same areas.
Thomas van Mourik, chief executive of Culina Logistics, said: “The tough economic climate for the last two years and continuing uncertainty has put an ever increasing focus on efficiencies in the supply chain.
“The Food and Drink Supply Chain Health Index provides a barometer for supply chain efficiencies across the food and drink sector, allowing manufacturers to benchmark their own performance. In doing so it explores efficiency performance against targets over the last year and efficiency targets and plans for the next 12 months.”
Source: The Food and Drink Supply Chain Health Index
