PODCAST: How supply chain and logistics operations are changing
Industrial and logistics companies are moving forward from the COVID disruption with strategies to keep customers satisfied
The disruption to supply chains that has affected the movement of goods since the start of COVID is likely to continue through to 2023, but everything from the size of warehouses, to people strategies, and even consumer attitudes will look different to how they were.
Companies currently running their warehouses over capacity by installing mezzanine levels or tightening their racking measurements to cope with a shortage of industrial real estate are bracing for a new supply wave.
“The smart occupiers are already planning for 2023 to 2024, and even if they’ve currently got leases until 2027 at least half of them are looking to move early by walking away from their lease tails or subleasing,” says Greg Pike, head of industrial and logistics brokerage in Australia for JLL.
Speaking on JLL’s Perspectives podcast, he adds: “3PLs will be expecting longer-term and more robust commitments out of their customers if they are truly going to partner with them, rather than customers just looking to get the cheapest rate card around the country.”
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Accelerating demand for larger warehouses reflects a shift from a ‘just-in-time to a ‘just-in-case’ operational model, along with more local manufacturing and assembly designed to fulfil orders quickly as retailers’ websites increasingly become their main shopfronts and consumers can place orders at the tap of a phone.
“It’s been really hard for companies to prepare for the emotional impulses of humans who are able to shop online,” says Kyle Rogers, co-founder of uTenant, who was also a guest on the Perspectives podcast. “If companies have too much stock on board there are supply chain and inventory costs they have to take on. If they have too little, they miss out on a sale.
“While the consumer is king, I hope COVID-19 encourages a realignment in their expectations, a realisation that if they want goods delivered to them on time for Christmas, for a birthday or another occasion, there is an onus on them as much as the retailer,” Rogers says.
The current challenges faced by the industrial and logistics, and supply chain industries can be categorised into four ‘Ps’: people, property, pallets and ports, the podcast reveals.
“We’ve always said that to be a good logistic company you need to be agile and flexible. You can't just have a plan A, you must also have a plan B. But in these years of COVID, you need a plan C and D because things just change every day,” says Chris Wang, COO of EWE Group.
As a buffer against worker strikes and resourcing issues within last mile logistics companies, Wang has forged relationships with multiple providers.
“We have a relationship with probably 15 different carriers, which gives us the flexibility to always have a solution for our clients,” he says.
Hear more from Pike, Rogers and Wang about the issues that continue to affect supply chains two years on from the start of the COVID pandemic, and how they are being overcome, in episode 28 of JLL’s Perspectives podcast. Download it here.
Contact Greg PikeHead of industrial and logistics brokerage - Australia, JLL
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