Operators switch to 'just-in-case' stockpiling strategy

The fragility of a just-in-time supply chain strategy was exposed in the last 18 months and operators are pivoting towards a just-in-case set-up to build resilience, according to a new report.

Weightmans’ report into how UK firms have responded to seismic changes brought about by the pandemic, Brexit and climate change legislation found fundamental and long-term changes to the way supply chains operate.

As well as contending with an almost wholesale shift to e-commerce in some retail sectors as the population retreated indoors due to lockdowns, Weightmans said logistics firms and their customers were also forced to address their supply chain strategies.

Stephen Basey-Fisher, MD at Century Logistics, said: “It was surprising to our customers how quickly things could change and how reliant we are on just-in-time working.

“There was a false sense of security that there was more resilience in the system and that has been laid bare in the past 18 months.”

Stephen Carr, group director at Peel Ports, said the weaknesses in the system were not new but they were exposed by challenging market conditions: “The just-in-time logistics model pre-2020 is fine, but has no true resilience,” he said.

The report, which relied on the opinions of 12 industry experts, also said a move towards just in case – which makes stockpiling a priority – has had a knock-on effect on warehousing requirements, with more space now required by operators.

A shift towards e-commerce in the retail sector has also created demand for urban delivery hubs to supplement regional distribution centres.

Lili Oliver, national head of transport and logistics at Weightmans, said: “There is a real sense across our clients of a need for a more resilient industry, with a realisation on the part of the customer of the fragility of the supply chain and a shifting acceptance of the need for tight margins to be shared throughout.”

The report also highlighted how increased automation, smart contracts, AI and big data will become key priorities in the months and years ahead.

The report can be accessed here: https://www.weightmans.com/landing-pages/weightmans-evolve-building-a-resilient-supply-chain/