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The Importance of Responsive Supply Chains - Euro Projects Recruitment Business Leaders Zoom Call 24th August Summary

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Stephen Brown

Euro Projects Recruitment Business Leaders Zoom Call

For Manufacturing, Engineering, Technology, Transportation & Logistics Professionals

HR & Covid Update + the Importance of Responsive Supply Chains

Summary of Key Points: 24th August 2020

Covid-19 & Business Update

Stephen Brown from Euro Projects Recruitment

Welcome to our 21st Business Leaders Zoom Call and welcome back following a two week break.

Offer of Scholarship Support from Cranfield University:

As alumni of Cranfield University I am delighted to pass on an offer of full and part scholarships to help graduates leaving university this year to undertake a post-graduate degree.

Message from Cranfield University:

“In this challenging time, we know how tough the graduate job market has become. You need to stand out from your peers by having the skills and experience employers need as they refocus their businesses for future growth.”

Please share the following link with anyone you feel might benefit from this generous and worthwhile offer of support:

https://www.cranfield.ac.uk/campaigns/uk-ug-campaign-2020?utm_channel=email&utm_source=Alumni&utm_medium=SolusEmail&utm_campaign=SATM_HC_UK_UG_Campaign_Alumni_Email

Economic & Financial Update:

German Economy Recovers:

Last time we met our focus was on the international impacts of Covid-19, since then Germany has released data that export demand, especially to China recovered by 8.9% in June on the previous month with a 54.7% increase in output from the automotive industry, only 20% down on February, the last full pre-Covid impacted month.

HMRC Support for Businesses:

HMRC have sent out letters to businesses offering payment plans for corporation tax to ease difficult cash flow, if you need help in this regard call HMRC: 0300 200 3831.

Furlough & Employment Law Update:

Helen Dyke, Senior Associate Solicitor, Irwin Mitchell LLP

DDI: 0121 214 5242

Mobile: 07435966985

Holiday Travel and Self Isolation:

Some of the main recent UK Government changes have been around international travel and quarantine, which has a knock on to employees returning from destinations requiring self-isolation upon their return. The list is increasing;  Austria, Croatia, Trinidad & Tobago recently added and is under constant review

Link to list of countries requiring no or self-isolation, includes email alert updates and rules on self-isolation:

https://www.gov.uk/guidance/coronavirus-covid-19-travel-corridors#countries-and-territories-with-no-self-isolation-requirement-on-arrival-in-england

Irwin Mitchell blog on dealing with employees returning from Spain:

https://imbusiness.passle.net/post/102gc9s/coronavirus-how-to-deal-with-staff-returning-from-spain

Think about how you communicate your policy regarding self-isolation with staff.

Have you told them what they need to tell you?

If they are asked to quarantine you have to support that.

Remain at home for 14 days, not allowed out to exercise or shop, you must respect that. You can

ask staff to continue to work if they can work from home (if role allows)

If they don’t self-isolate - £1,000 fine

The big issue around pay, there is a debate and unhelpful case law but if they can’t return and can’t work from home they are not entitled to be paid.

  • You can ask them to take further paid holiday so long as done with sufficient notification in advance
  • You should not dismiss on these grounds or you are likely to have a tribunal case.
  • You can re-furlough them upon return, if they qualify.
  • You cannot use furlough for holiday

Furlough:

Two thirds of furloughed employees have reportedly been asked to work in contravention of the CJRS rules.

Lot of people have been working it seems

HMRC have given a new fact sheet – will impose penalties and will publish names of deliberate defrauders:

https://imbusiness.passle.net/post/102gd3p/overclaimed-furlough-grants-if-you-dont-own-up-hmrc-could-name-and-shame-you

https://imbusiness.passle.net/post/102gcz1/whistleblowing-why-are-claims-increasing-and-whats-the-best-way-to-respond

HMRC accept that mistakes will happen and offer an amnesty period to confess any over-claims.

They intend to go after orgs that have deliberately not complied.

It is therefore worthwhile having a  review make sure you have not over-claimed.

We are also delighted to invite you to Irwin Mitchell’s Webinar on GDPR & Redundancy – 13:30-14:30 9th September 2020.

https://teams.microsoft.com/l/meetup-join/19%3ameeting_NzU0MmU1YWEtMmI1NC00MjM0LWIyNmItNDhjMDEzNDJiNGVm%40thread.v2/0?context=%7b%22Tid%22%3a%2247f91645-977e-4060-965f-c205d3fe7e98%22%2c%22Oid%22%3a%2212010cf5-2b49-4324-bf6c-66b5e36df3c3%22%2c%22IsBroadcastMeeting%22%3atrue%7d

 

The Importance of Responsive Supply Chains

Tim Standen, International Supply Chain Director Kuehne + Nagel

Email: Tim.Standen@kuehne-nagel.com

K+N move 3 million containers per year for over 1000 customers, some ship one container per year some 60,000 but they have all been affected.

Some in aeronautical / automotive / hospitality – down

Wine and spirits and pharma businesses - up

In the middle, some have thrived some struggled. Those businesses with strong e-commerce channels have done well, if a bricks and mortar retailer then will have struggled.

With Covid you cannot treat customers in the same way.

Find out what they are doing and react accordingly

Globally at beginning of year – Chinese New Year all factories closed then didn’t reopen.

Post Chinese New Year – British retailers were desperate to get their products into the UK and wanted to accelerate supply chain.

Then Covid hit us and instead of wanting to accelerate they wanted to decelerate.

Normally supply chain is metronomic – which gets good price but is not very responsive

K+N help by looked at what deceleration options you have:

  1. Origin – factory / port / warehouse – slow it there
  2. Water – ship/fly…slower vessels – roll a container/put it on later vessel
  3. At destination – Use on-port warehouse or lower cost storage ….very dynamic – some big businesses needing to move very fast.

Requirement to go back to intuitive leadership – tricky when decisions have become so data driven

It can be 6 figure sum if a decision is delayed by even a day.

In middle of July when lockdown ended – customers holding product Asia now want to accelerate again.

Now more acceleration – retailers want to recover end of summer sales – focusing on Xmas stocking window:

Air freight or sea/air combinations, very costly and erodes margin but some large retailers who for example don’t have a back to school range need to invest margin into product and getting people back into their shops.

Normally retailer raises thousands of purchase orders – at times it feels like elves / fairies just make deliveries happen, they work on a “fire and forget” principal. It is now found that customers, after they have worked with their supplier factory to slow PO – they still can’t take enough buffer – so actively to look at extra value.

K+N work with customers – which option best….we are a service sector business, (logistics) make sure we are looking after their interests

K+N have options but bringing them together as a standard option was very tricky but worked very well

K+N Finalist for an industry award due to this flex

Suite of options to accelerate / decelerate

Customer places order – origin, vessel, network UK = 86 days lead time

Destination options to slow supply chain…transit times / ports + accelerating options such as air freight, Asia Rail Express – options using trains to get container from china to UK

Air / Rail can quadruple costs but it creates opportunity to be in the market at the right time with the right product.

Now things are a bit more normal, working with customers to make sure they know we still have these options.

Flexibility of a normal 86 day lead time for freight can now be 130 or 49 days….if running big business that flex is huge on customer experience and cash flow

Q&A:

Air and sea freight – normally 10x or 15x multiplier for air freight

Typically £2k to fly a container

If your container value £20k at cost not retail then you are moving at a loss if you do air freight

Deceleration – good to have as an option – lot of customers metronomic and that’s how they run supply chains

Case Study: China factory supplying garden furniture – everyone buys same period – but if you buy before peak curve you can win 15% discount which on a £20k container is £3k saving…decelerate that 3 week into transit, that’s £3k for yourself…but many customers plan everything on fastest sea freight times…but actually if you are smart you can increase order quantity / lower price and different transit price…feed into network at appropriate

Don’t’ forget what we’ve learned during the Pandemic

Use lessons to drive better value into your business