Inefficient supply chains ‘cost UK businesses £1.5bn a year’

The processing of shipments ties up 50,000 jobs in procurement and freight administration – and Brexit could make matters worse, report says

SUPPLY chain inefficiencies and miscommunication are estimated to cost British businesses more than £1.5bn in lost productivity.

Over 100 shipments from a cross-section of UK industries were analysed by digital freight forwarder Zencargo. The results suggest that UK businesses waste an average of three hours per international shipment.

Employees are spending time on phone calls and emails to channel data back and forth between trade partners. Across the UK, this adds up to 100 million hours of wasted time – the equivalent of 50,000 work hours.

Brexit is likely to exacerbate this efficiency problem, the study found. Communication and documentation hitches mean shipments between Britain and non-EU countries waste 17 percent more time than shipments to EU countries.

Supply chain innovation is seen as a route to solving the productivity puzzle. Technology that automates communication can deliver productivity gains of £1.5bn per annum – five percent of the UK Government’s annual target for productivity gains from digitisation (£30bn per year until 2030).

Zencargo says its newly developed dashboard allows supply chain teams to collaborate in real time, book shipments online, track status updates and run analytics. Its purchase-order management streamlines communication around an order.

Tom Hook, supply chain and operations manager at wearable technology firm Catapult, said its supply chain had benefitted from the system, minimising the amount of admin and communication required.

Zencargo CEO Alex Hersham said communication shortfalls – “Chinese Whispers” – and complicated supply chains cause small problems to escalate. “Now … we can truly compete on the global stage and at the same time benefit on a productivity level,” he said.