Pallets with a lot of bottle
12 December 2012
As pallet pool operator LPR launches its distinctive red pallet to the UK drinks sector, md Jane Gorick offers her thoughts on the differences between UK and European supply chains The FMCG supply chain in the UK is
The FMCG supply chain in the UK is probably one of the most analysed in Europe. As a relatively compact country, it is easy to see how the logistics industry has developed as a complex network of interweaving relationships.
Contrast this with mainland Europe where the bigger land mass has led to a more linear supply chain structure. Clusters of expertise have grown up in key European locations and these are connected through recognised trade lanes.
However, in the drinks sector, things can be a little more complex.
Many manufacturers and distributors share production and bottling facilities as well as distribution centres - which means, even in Europe, the supply chain is more of a web. Elements such as reverse logistics also play a part - as bottles are returned to the manufacturer to be refilled in Europe.Of course, this is less of an issue in the UK as we recycle rather than re-use our glass and plastics.
Increasingly, in both Europe and the UK, manufacturers and distributors are looking at how to better work together to deliver financial and environmental benefits through supply chain efficiencies. For example, by working with LPR and TDG and by combining deliveries to smaller customers, Kimberly-Clark and Kellogg's reduced their transport costs in the UK by seven per cent in this channel to market, reduced mileage by 270,000 miles per year and dropped annual diesel consumption and carbon dioxide emissions by 30,000 gallons and 380,000kg respectively.
There is a lot to be learned by contrasting supply chain logistics in the UK with those of mainland Europe. Likewise, the unique requirements of the drinks sector - such as bigger weight to space ratio and complex supply chain - have led to innovative solutions which can be drawn upon to influence the wider FMCG arena.
While the UK is leading the way on delivering efficiencies from collaboration and outsourcing, we can learn a lot from the European intermodal logistics success stories. As a compact country, the UK is still very focused on road transport - an option which is becoming more and more expensive. In contrast, the integration of land (including rail), air and water transportation is far more common in Europe.
Over the coming years, more work will be done on collaboration, outsourcing and alternative technologies to drive financial, environmental and efficiency benefits.