Companies in the dark over logistics costs

13 August 2013

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14 August 2013 | Will Green 

One in seven firms doesn’t know their logistics costs, according to a survey.

The finding comes despite 2013 Trends and Strategies in Logistics and Supply Chain Management showing logistics costs are on the rise, with such costs the equivalent of 8 per cent of revenue in a manufacturing business.

This compares with a figure of 4 per cent of revenue in the electronics industry and 6 per cent in the automotive sector, according to the survey by German think tank BVL International.

The report said: “A concerning result is that as many as 14 per cent of respondents cannot estimate their logistics costs.”

Along with costs, the report highlights the ‘networked economy’, which means firms must “collaborate with partners both vertically and horizontally in their extended supply chain network”; globalisation, which “clearly amplifies other trends and leads to an increase in complexity”; and sustainability.

Increased customer expectations – ranked as the most important trend – talent shortfalls, increased risk and disruption, market volatility and new technology (60 per cent of respondents said they would be investing in ‘big data’ analysis tools in the next five years) were also identified as key areas.

However, the report said: “The new wave of decentralised automated network technologies are in their infancy. Predictions from the last study concerning the use of those technologies have not yet materalised.”

The report says a trend towards outsourcing has “levelled out”, with less than 30 per cent of logistics activities outsourced in the US, compared to 39 per cent in Germany and more than 50 per cent in China.

The report urges firms to emulate top performers through talent management, process standards, technology roadmaps, network partnerships, sustainability and corporate social responsibility. 

The survey involved 1,757 responses from supply chain executives across the globe, including the UK.

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