1 in 5 Australian organisations rates their supply chain as innovative

One in five Australian organisations views their supply chains as innovative, despite 69.5 per cent admitting it is in their strategy, according to apicsAU’s latest Supply Chain Innovation Report.
While the majority reported that innovation feature in their company strategy, 20 per cent of respondents perceive their organisations as innovators, and 25% see their company as laggards. Most respondents reported that they see their company as early adopters.
The annual report, conducted in collaboration with CHAINalytics, surveyed over 200 respondents in senior management positions in Australian organisations across a wide range of industries. Topics include influencers, drivers, technologies, collaborations and return on investments with respect to innovation across the supply chain.
The report also found that companies self-identifying as supply-chain innovators are pre-emptive in preparing and improving their supply chains and quick to test, adopt or dispose of any new technology. They support their innovation by both collaborating with and ‘listening to’ extended supply-chain stakeholders – from the supplier’s supplier to the customer’s customer – not just their first-level suppliers or customers.
The top three influencers driving supply chain innovation in the industries surveyed included customer demand/behaviour, competitive forces and corporate responsibility, while the bottom three influencers included regulatory environment, last-mile delivery and omni-channel.
“More than ever before, the supply-chain professional is under pressure to deliver customer satisfaction whilst simultaneously increasing efficiencies in the supply chain,” said Dr Pieter Nagel, CEO, apicsAU. “To amplify this complexity further, supply-chain professionals must adapt, guard, and future-proof their organisations’ supply chains against disruptions.
“It is my hope that this report helps members identify some characteristics they can apply towards becoming an innovator, paving the way for their organisational success.”

Aussie logistics sector lacking skilled supply chain/inventory managers

According to Hays’ latest Quarterly Report, covering January to March 2017, supply chain/inventory managers with tertiary qualifications and fast-moving consumer goods (FMCG) experience are in high demand in Australia.
According to the report, while there is not a lack of candidates for logistics roles, strong candidates with in-demand skills are in short supply.
There is also high demand for inventory controllers, supply chain coordinators, production managers and warehouse operators.
The Report found that the trend to employ tertiary-educated candidates is continuing, viewed by employers – it suggested – as more adaptable to market conditions and aware of new technology.
According to Hays, the last quarter of 2016 was very active, thanks to the transportation of goods in the lead-up to Christmas. “Following this,” it said. “We expect to see good levels of vacancy activity this quarter, with both temporary and permanent roles on offer.
“The manufacturing sector has improved, with operational logistics roles available. These include warehouse and transport roles as opposed to supply chain roles.
“With organisations continuing to outsource logistics, vacancy activity in 3PL companies will be strong.
“When they recruit, employers look for candidates with relevant systems knowledge. SAP is one of the most in demand systems.

Job trends in logistics: Hays Quarterly Hotspots.

Reach stack drivers, storemen/women and forklift drivers are just three of the roles employers are looking to fill as candidate movement and the preference for people with solid experience in previous roles impacts hiring decisions, says recruiting experts Hays Logistics.

According to the recruiter’s latest Hays Quarterly Hotspots list of skills in demand, staff movement is creating vacancies as people decide to change employers.

“The movement of candidates onto the jobs market to explore their options and change employers is fuelling an active jobs market,” says Tim James, senior regional director of Hays Logistics.

“The majority of vacancy activity is the result of replacing departing staff rather than the creation of new roles. Employers will act fast if an employee leaves a business critical role.

“This movement of candidates between jobs is a trend not reflected in the unemployment rate, but it is a good sign of candidates’ confidence that they can improve their prospects by looking for a new job.

“As a result overall vacancy activity is expected to increase this quarter. Many employers also tell us they are keen to secure candidates who can start early in the new calendar year.

“But employers prefer candidates with a solid history of tenure with their previous employers. Candidates who have changed employers often aren’t viewed as favourably as those who have been loyal for several years.

“We’ve also seen the recruitment process lengthen as employers become more thorough when assessing candidates. They often want to make sure their candidate of choice has a broad skill set so that they gain the most value from new hires.”

According to Hays Logistics, another trend impacting the recruitment sector t is companies recruiting on a temporary-to-permanent basis in order to trial a candidate in the role.  

“Many employers prefer temporary assignments to not just cover workload peaks, but to trial a candidate to ensure they are a good fit, both in terms of skills and with the business’ culture, before offering them a permanent job,” James said.  

“Fixed-term contracts meanwhile are also popular as they help control costs. Those candidates prepared to commit to contracts running through until Easter are highly desirable.”

According to the Hays Quarterly Hotspots  list, demand exists for the following skilled professionals in Australia’s logistics market:

  • Reach Stack Drivers – There are not a lot of people who hold the required licenses, so supply is failing to meet demand.
  •  Storemen/women – Candidates with mining experience are sought for stores roles in remote locations. Hays also noted the need for candidates with prior Government stores experience given the specific and specialised stock and systems in this sector.
  • Forklift Drivers – Reliable candidates are sought at entry level because employers consider them good value.
  • Supply Chain Coordinators – The need for temporary supply chain coordinators to manage logistic vendors such as freight forwarders, 3PL's and domestic transport is continuing. In addition, summer is a peak time for manufacturing. From September through to January an ongoing need for supply chain professionals to help with the ordering, planning and movement of stock will be required.
  • Inventory professionals – There is also demand for inventory professionals, especially inventory managers. There is also seeing a shortage of quality distribution centre (DC) managers and warehouse managers for the storage of stock.

Interest rate and fuel price concerns continue to increase

Inflationary pressure persists and interest rate and petrol price concerns continue to increase according to figures from the latest Dun & Bradstreet (D&B) Business Expectations survey.

Sixty two per cent of firms anticipate that their selling prices will be higher in the coming quarter than the corresponding quarter in 2007, indicating that inflationary pressure is continuing to impact businesses. Just three per cent of executives expect their prices to be lower.

Executive concerns regarding interest rates have increased significantly since the previous survey, up thirteen per cent. Thirty nine per cent of executives now rank interest rates as the most important influence on operations in the coming quarter. Retail executives continue to demonstrate the highest level of concern, with forty five per cent ranking interest rates as the most significant influence on operations.

Fuel price concerns have also increased reaching their highest level in six months. Thirty one per cent of executives now rank the cost of fuel as the most important influence on operations.

Meanwhile recent movements in petrol prices have had a negative impact on seventy eight per cent of businesses, a rise of 15 points since December.

According to Christine Christian, Dun & Bradstreet’s CEO, evidence of inflationary pressure and the increase in interest rate and fuel price concerns is to be expected.

“The Reserve Bank’s most recent increase in the official cash rate has pushed interest rates to their highest level in more than a decade and the major banks are moving quickly to pass this cost to businesses. The sharp increase in executive concerns regarding interest rates is a reflection of this activity,” said Ms Christian.

“Fuel price concerns are also valid. The cost of fuel continues to be high and is expected to remain this way for some time.

“Inflationary pressure, interest rates and fuel prices are expected to persist throughout 2008. This means executives need to ensure they are monitoring and managing all aspects of the business that can be controlled.”

The tightening credit market continues to be a concern for executives. Despite a decrease of three per cent since the previous survey, executive concerns remain high. Currently sixty per cent of executives expect credit market conditions to have a detrimental impact on operations – this is up on the fifty seven per cent that recorded concern in October and November.

The outlook for growth in profits and sales has declined again from high December quarter expectations. Thirty three per cent of executives expect an increase in profits and thirty six per cent expect an increase in sales. Despite the decline in expectations since the December quarter, sales growth expectations are up twelve points on those for the June quarter of 2007.

At thirty two, the net retailers’ sales expectations index is especially strong, being eighteen points above the all firms index of fourteen.

Expectations for capital investment have strengthened with the overall net index now at four per cent. Durables manufacturers are showing quite strong growth in capital investment with an index of eleven per cent.

The employment indicator remains in positive territory after one quarter in the negative. Eleven per cent of executives now expect to have more staff in the quarter ahead than they did a year ago, while nine per cent expect to decrease staff numbers.

According to Dr Duncan Ironmonger, Dun & Bradstreet’s economic consultant, the Australian economy should continue to do well in 2008.

“The Australian economy should continue to benefit from stronger commodity prices and growth in major Asian economies. As well, business executives are expecting better growth in sales in first half in 2008 than the first half of 2007,” said Dr Ironmonger.

“Despite these positives, the rising cost of funds is a major problem for businesses and the Reserve Bank has signalled that it is likely to make a further increase in official interest rates in 2008 if inflation does not abate.”

The D&B index for expected sales is down four points to 14, with 36% of executives expecting an increase in sales and 22% expecting a decrease. The profits index is down eight points to zero, with 33% of executives expecting profits to rise and 33% expecting a fall.

Employment expectations are down one point to an index of two, with 11% of executives expecting an increase in staff and 9% expecting a reduction. Capital investment expectations are up three points to an index of four, with 9% of executives expecting an increase and 5% expecting to cut spending. Inventories expectations are down one point to an index of one.

The selling prices index is up six points to an index of 59, with 62% of firms expecting to raise prices and 3% expecting to decrease them.

In summary:

Outlook for June quarter 2008:

– Expectations for selling prices have increased, with 62 per cent of firms anticipating their prices will be higher in the June quarter than a year earlier.

– The outlook for capital investment is stronger with the overall index now at 4 per cent.

– Expectations for sales and profits growth have fallen, 36 and 33 per cent of executives respectively expect increases in these indexes.

– The outlook for employment growth is slightly weaker but remains in positive territory.

Interest rates:

– Thirty nine per cent of executives expect interest rates to be the most important influence on their business in the quarter ahead, an increase of 13% per cent since the previous survey.

Tightening credit market:

– Executive concerns regarding the credit market remain high, with 60 per cent expecting a tightening market will have a negative impact on operations.

Petrol prices:

– Thirty one per cent of executives expect fuel prices to be the most significant influence on operations in the coming quarter, up 4 per cent since the previous survey.

– Recent movements in petrol prices have had a negative impact on 78 per cent of businesses, with 20 per cent a significant impact.

Actual for December quarter 2007:

– Growth in sales was the highest since the March quarter 2004.

– Employment growth was the best in three years.

– Profits growth was flat after one positive quarter.

– Capital investment growth was positive.

– Selling price rises were four points below expectations.

Supply chain report calls for government help

The Freight and Logistics Council of NSW (FALCONSW) has released the long awaited report into "Innovation in the NSW Freight Logistics Industry".

This first phase of work outlines a series of actions that could be taken by (the NSW) government to stimulate innovation and efficiency within the NSW Freight Logistics Industry in both the short and long term.

Beyond the conventional barriers to innovation that affect all organisationssuch as cost, market related issues and skill shortages, the report has found a range of factors that act as particular barriers to innovation within the NSW freight logistics industry.

These were grouped into a three major categories:

– Limited ‘co-opetition’– fragmented and complex supply chains, and unsophisticated end users can often act as a barrier to improving efficiency (e.g. small transport operators and retailers that have basic business processes).

– Limited interfacing – transport operations are often seen as providing a competitive advantage which can prevent firms in different markets working together (e.g., combining transport operations/resources to reduce costs).

– Significant number of transactions along chain, limited utilisation of technology and availability of relevant data can also be an issue.

– Domination of incumbent organisations – high barriers to entry for new players and long term contractual arrangements (e.g. in the provision of infrastructure) can also prevent innovation.

The report found that "three particular supply chains within the NSW, export coal, domestic grocery and export grain supply chains, demonstrated innovative approaches to overcoming these barriers. Other chains appear to be lagging in their efforts to take advantage of the drive for innovation within their chain primarily due to a larger number of barriers present. Consequently these chains are unable to leverage cooperation or clustering into effective solutions."

The authors call for an agenda to be developed for actions that can be taken by government to help increase innovation in this vital sector. They recommend that the following actions be considered as early priorities:

– Gather improved and additional data on the NSW freight logisticsindustryIn particular developing a strategic vision and agenda for next steps and taking steps to establish a freight database for Sydney.

– Focus on integrated infrastructure planningProgressing AusLink projects.

–  IPART recommendations for Port Botany and addressing issues surrounding Sydney Airport.

– Help industry make more informed decisions.

– Development of toolkits, case studies and reviews of new products and technologies to encourage greater take up of industry best practice.

– Establish benchmarking programs for the sectorDevelop indicators and programs to benchmark the sector against other jurisdictions and industries to gauge the relative success of any actions.

The report is available on the FALCONSW website (formerly Air Freight COuncil of NSW) at www.airfreightnsw.com.au under ‘Council Projects’, Innovation Report.

New supply chain report to address the state of the industry in Australia

The Logistics Association of Australia Ltd (LAA) and leading international supply chain and logistics management consultant, Logistics Bureau, have signed a Memorandum of Agreement signalling the commencement of a definitive report on the state of the logistics and supply chain industry in Australia.

LAA President Brad Harrison spoke enthusiastically about this program.  “We are delighted that Logistics Bureau has come on board to research this report which will provide a regular annual update on the state of the industry for all our members.”

Under the agreement, Logistics Bureau will provide research content and analysis on its research findings once a year. The first annual report will comprise an economic update and a market update; define market participants and review Australian industry performance. It is anticipated that second annual report will also include findings on employment and training and regulatory environment.

Commenting on the new Supply Chain Report, Logistics Bureau Group managing director Rob O’Byrne said he welcomed the opportunity of partnering with the LAA on this initiative. 

“Undertaking to deliver this research report reflects our commitment to promoting logistics and supply chain management practices, analysis and benchmarking for the benefit of the industry,” he said.

Based in Sydney and SE Asia, consultant Logistics Bureau provides direction and support in driving improved profitability, improved customer service and increased supply chain flexibility for a wide range of businesses. Logistics Bureau is also a Friend of the LAA and has been instrumental in adding value to the industry through its strong support of a number of the LAA’ s education and research programs.

For more information contact Joene Baker, Executive Manager LAA Ltd, tel: 02 9635 3422, email laamanager@laa.asn.au.

The state of the industry

The Logistics Association of Australia Ltd (LAA) and leading international supply chain and logistics management consultant, Logistics Bureau, have signed a Memorandum of Agreement signalling the commencement of a definitive report on the state of the logistics and supply chain industry in Australia.

LAA President Brad Harrison spoke enthusiastically about this program.  “We are delighted that Logistics Bureau has come on board to research this report, which will provide a regular annual update on the state of the industry for all our members.”

Under the agreement, Logistics Bureau will provide research content and analysis on its research findings once a year. The first annual report will comprise an economic update and a market update; define market participants and review Australian industry performance. It is anticipated that second annual report will also include findings on employment and training and regulatory environment.

Commenting on the new Supply Chain Report, Logistics Bureau Group Managing Director Rob O’Byrne said that he welcomed the opportunity of partnering with the LAA on this initiative. 

“Undertaking to deliver this research report reflects our commitment to promoting logistics and supply chain management practices, analysis and benchmarking for the benefit of the industry,” he said.

Based in Sydney and SE Asia, consultant Logistics Bureau provides direction and support in driving improved profitability, improved customer service and increased supply chain flexibility for a wide range of businesses. Logistics Bureau is also a Friend of the LAA and has been instrumental in adding value to the industry through its strong support of a number of the LAA’ s education and research programs.

Further information: Joene Baker, Executive Manager LAA Ltd, tel:

©2019 All Rights Reserved. MHD Magazine is a registered trademark of Prime Creative Media.