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Thursday, 16 October 2014

Is outsourcing logistics worth it?

Time was when outsourcing one's logistics operations to a third party logistics (3PL) contractor was thought to be more costly than an efficiently run in-house operation. After all, there is the contractor's profit margin to add to all the usual running costs which did not exist before outsourcing. So why, then, did outsourcing catch on or was even tried in the fist place? In Britain, one key driver was the turbulent record in transport labour relations which left companies a hostage to fortune and so they were only too willing to break that mould by outsourcing. It worked in the sense that labour relations became much calmer. It caught on because most companies using their own in-house logistics solutions were not particularly super efficient in that function partly, perhaps, because they saw it as a side show distraction from their main function of manufacturing products.

Most 3PL contracts are for a minimum of five years and it is possible that costs within the first year could be higher than when the operation was run in-house. But as when choosing or renting new forklifts, the focus of attention should be on the life cycle costs over the five years, not the initial cost, but how does one know what those costs may be four or five years hence and how flexible will the 3PL be to meet wide fluctuations in demand for the clients' products?

The problems of costs and uncertain product demands can be eased at the contract negotiating stage, which admittedly is a highly complex business that demands great care. A key element in success is the degree of trust -- in the form of confidential information -- that customers must extend towards the contractor, which is immense. Without that gesture the contractor will not be able to provide an effective service. Secondly, the partnership should involve pro-active suggestions, agreeing and implementing efficiency savings which are tracked throughout the contract's life and the monetary benefits shared with the client on a fair basis. This is where probing of potential 3PL contractors is critically important. The winner of the contract should have a long-term track record of not only reliability but also be able to prove how good they are at making big savings for their existing clients. It would also be comforting to the client to know if the 3PL has a wide spread of warehouses strategically located nationwide as this would enhance the flexibility it could offer, partly through shared user facilities, which is so important to cope with seasonal fluctuations in demand or long-term changes caused by adverse moves in the economy.

A third caution which every outsourcer must never neglect is the financial stability of the potential 3PL contractor. Size is no guarantee of solidity. Back in the 1980s, the high-flying logistics operator, Rockwood Distribution, collapsed, leaving its clients with embarrassingly empty shop shelves and frantically having to find alternatives. Financial investigations into prospective 3PLs should never be left to just bankers' references. There are various formulae which can predict bankruptcy up to two years ahead, one of which, the Lis formula, named after its creator, Roman Lis of the Manchester Business School, is said to be 90% accurate, and that is close enough for Government work. It takes four key ratios from a company's annual accounts, each of which is multiplied by a certain coefficient and the sum of their products is then compared with a cut off point of 0.037. The more a company's result is above that cut-off point the sounder it is. Below, the amber lights start flashing.

If the choice of 3PL has been wise just what benefits can be expected? A good example among many is how the 60-year old British, family-owned business of Howard Tenens (HT) transformed the logistics of Costa Proud, which supplies its entire ingredients supply chain. During the initial 12 months of a five-year contract HT achieved a smooth implementation of both a new IT system and 3PL provider with no loss of service. Stock was centralised from nine locations to one. Stock availability reached 99.9% and there was a 50% cut in stock holding at partner sites. Delivery refusals fell by half and annual logistics costs by 30%. There were also considerable CO2 savings which is a key attraction to blue chip clients keen to establish their 'green' credentials. HT, in fact, leads the 3PL industry in having 88% of its heavy goods fleet over 18 tonnes with dual fuel capacity. It has invested in re-fuelling stations for both CNG and biomethane which are all open to third parties.

So, to the question is outsourcing worth it? the answer is a resounding yes, provided the partnership is truly pro-active and the choice has not been made on price alone as the dominant factor in an industry where competition has always been intense and so likely to see a 3PL's margins under extreme pressure.
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Monday, 13 October 2014

Britain's food supply chains face grim times over price wars

Missing a favourite food item from one's usual UK supermarket is now more likely than ever to leave shoppers victims of an even harsher squeeze on food suppliers brought on by the intensifying price war between the food discounters and the four dominant supermarket chains. Losing market share to discount arrivistes like Aldi and Lidl, Tesco, with around 28% of the UK food market, are fighting back by squeezing suppliers not only on prices but also by numerous charges, including even for barcode changes and prominent display of products, along with the odious favourite of deliberate late payments that could easily bankrupt small supplier companies. Reportedly, there are almost 60 ways that supermarkets extract money from suppliers.

It has been a bullying practice long exercised by the big retailers and is symptomatic of a laissez-faire attitude of the Competition and Marketing Authority which took over responsibility from the Monopolies and Mergers Commission. In the past, any merger that would have meant control of 25% or more of the market would trigger a referral to competition authorities, yet Tesco currently has around 28% of the UK market, admittedly acquired through organic growth rather than by takeovers, but it nevertheless shows the unhealthy status quo where just four market leaders, Tesco, Asda, Sainsbury and Morrison control 76% of the British market. Such dominant control by a few retailers is also typical in mainland Europe.

For far too long the big four have exercised unhealthy control over Britain's food basket, leading to lack of competition and what at times must have seemed like a cosy cartel where price differences for identical products were derisory and special offers limited to only a handful of products for a very short period. Treating their customers as though they were addle-headed, supermarkets would uniformly push through steep price rises by significantly cutting the product weight but still maintaining the previous prices and the packaging size so as to disguise any real price rises.

In the past, the big four have sometimes acted in the shoppers' interests by resisting suppliers' price increases, ostensibly caused by commodity price rises, a practice that might have encouraged suppliers to introduce efficiencies. But it is clear that only if larger suppliers routinely stand against retailer demands for price cuts and charges will they succeed (albeit at the expense of smaller suppliers too weak to stand up for themselves) but at a risk of losing business through product delisting. Premier Foods reportedly lost £10 million in three months when Tesco delisted its Hovis, Mr Kipling and Oxo products three years ago. Tesco also, reported the Sunday Times, suspended 75 Princes' products, including baked beans and Cross & Blackwell soups. In denying their customers their favourite foods Tesco is insouciantly breaking the first law of marketing -- give the consumers what the consumers wants and not what Tesco thinks is best for them.

This is where consumer power, helped by social networks, can change the unhealthy status quo between oppressed food suppliers and the big four retailers. When shoppers cannot find their favourite foods at their usual supermarket they should put them under notice that they risk irretrievably losing their business to competitors. Better still, if they have not already done so, they should switch to the discounters like Aldi and Lidl who have no pressing interest in squeezing their suppliers and where prices are permanently lower than the big four by around 30%. This is important in one other sense. The big four will fight back and the only way to do so in a shopping environment that has seen a paradigm shift where price is king is by sharp, prolonged price cuts. That could hurt the discounters but they have one impressive weapon in their armoury that their rivals lack -- a smart logistics/business model. This model took Jack Cohen's (Tesco's founder) slogan of 'Pile them high and sell them cheap' one step further -- and sell them fast. The discounters' no frills shop displays and small car parks not only mean lower start up costs but crucially their limited 1,600 or so SKUs (stock keeping units) compared with the big four's 40,000 SKUs, are concentrated heavily on fast movers whereas much of the big four's stocks are slow movers, and money tied up in stock puts money to sleep, to the extent it could dwarf all other warehouse costs combined. It is a model that the big four may have to emulate to survive in reasonable shape and already there are signs of such a move. Sainsbury, for example, are joining forces with the Danish discounter, Netto, the first of the Continental discounters to set up in Britain some 20 or so years ago. Others are looking to cut back on their big store developments and concentrate instead on much smaller convenience stores.

The old Chinese curse of "May you live through interesting times" is about to fall on Britain's food retailing, but the risk is collateral damage to food supply chains, where pressures may lead to worse scandals over false food labelling, less consumer choice, and even human trafficking, oppression and slavery in the supply chains.
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Thursday, 18 September 2014

Forklift training could save billions of pounds

It is well known that adequate forklift training brings quick returns through lower accident and damage costs to racking, trucks, stored goods and less business disruption/losses but how many operators know that good training can prevent sting-in-the-tail cost shocks when long-term contract hire agreements end? In Britain the issue is particularly important because contract hire accounts for about 65-70% of all trucks supplied.

The disturbing fact remains that despite stringent safety legislation and all efforts by truck makers to improve their truck safety and ergonomics, accidents remain woefully high along with ignorance among supervisors tasked with the job of enforcing best safety practice. According to one of Britain's leading forklift training outfits, Mentor, more than half of managers they meet have never driven a forklift or received any kind of truck training and up to 90% are woefully ignorant of their legal responsibilities for safe truck operation and the consequences of an accident that results in prosecution. Little wonder, then, that there is still much room for safety improvement.

There are, of course, many causes of forklift accidents, which in Britain is the largest, single combined cause of major and over 3-day injuries regarding workplace transport. Disturbingly, many are related to a company's perception of a trade-off between safe practice and the need to meet delivery schedules, compounded by fear-fuelled, staff reluctance over whistle blowing. Even among blue chip companies there is a resignation that accidents are part of doing business. One such British company, for example, routinely forks out £3 million a year for pallet racking damage. Others often tolerate high loading bay door damage caused by truck collisions, typically running in to the high thousands of pounds every year.

A clue to the sting-in-the-tail costs at hire contract expiry is the lax attitude to good housekeeping practices. Poorly maintained and cleaned floors riddled with potholes and crumbling joints raise truck maintenance costs, and in very narrow aisle (VNA) operations even incur racking damage costs, in particular. Poor lighting also features significantly in the accident toll. Such costs are normally budgeted for but the sting-in-the-tail costs are not. When a truck is returned to its supplier at the end of a hire contract a detailed inspection will normally be carried out. Provided a truck needs no more than a lick of paint and a normal service to make it suitable for onward hire there should be no contract termination costs. The one exception could be the exceeding of hours used clause in the hire contract. This issue can be avoided if care is taken to define 'hours of usage' and extra agreed cost for such excess at the beginning of contract negotiations.

It is estimated that these contract expiry costs of this nature are equal to 5% of the total hire cost for a 5-year contract, though not all forklift suppliers levy them. In one sense it is easy to see why. A nick in a driver's seat would mean a new seat costing at least £400. A damaged overhead guard could run into thousands. There is doubtless an element of cost padding in these charges, too, partly because truck suppliers are anxious to encourage customers to renew their hire contracts and for this they will promise to forgo these remedial costs entirely if the client renews the contract. Succumbing to this thinly disguised form of blackmail by renewing on these terms could be a far costlier mistake because it may be possible to get a much better deal with a different truck supplier, especially if switching from counterbalance and reach trucks to articulated forklifts.

A back-of-the-envelope exercise, based on a UK national truck population of 350,000, with 65% under hire, shows if that 5% sting-in-tail cost could be entirely avoided the annual UK savings would run into hundreds of millions of pounds. Add in the many millions more from accidental damage, injuries and business disruption/losses then the need and urgency for a robust truck training regime is blindingly obvious. Perhaps just one example will suffice to convince the doubters and chancers. One UK retail company paid Mentor £50,000 for a training scheme. The result was savings of £130,000 every year. Blindingly obvious or not, there seems to be too many purblind safety enforcers.
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Tuesday, 16 September 2014

Can Mediterranean's tragic migrant harvest be stemmed?


Scarcely a day passes in the Mediterranean's calm season without illegal migrants landing on Italy's shores, having trekked from far-flung African countries and, latterly, the Middle East, exacerbated  by the political upheavals in that much vexed region. This human tide has now reached crisis levels on several fronts, including the tragic loss of life at sea and the implications throughout Europe for harmonious development and relations.

The latest migrant tragedy occurred on September 15th when more than 160 African illegal migrants bound for Italy perished when their overloaded vessel capsized off Libya's coast, but details are emerging of a far greater tragedy a few days earlier where the death toll could be 500. According to a few survivors the indications are that it was mass murder at the hands of traffickers who wanted to move some migrants to a smaller boat while at sea. Incensed by the migrants' refusal to comply, the traffickers deliberately rammed and sunk the overcrowded vessel.

                                                 Broken heart

One of the hundreds of migrants who drowned was a young Egyptian boy who had hoped to earn enough money in Europe to pay for his father's heart operation, said one Palestinian survivor, who watched the boy finally slip beneath the waves from a life buoy, overcome by exposure and hypothermia. Now his father will have two broken hearts. If confirmed, this will mean total migrant fatalities at sea will have reached about 3,000 so far this year, up from 1,500 in 2011. The total tally since 1988 is over 20,000 adults and children, according to Fortress Europe, which tracks the Mediterranean fatalities.

In the long march of everyman mass migration has been a recurring theme and, on the whole, a necessary precursor for benign development. European countries, in particular, have benefited enormously over the centuries from immigration waves that enriched the gene pool and hastened economic development but can it be legitimately claimed today, when circumstances are dramatically different, that further substantial waves are in Europe's best long-term interests and if not what, if anything, can be done to deny the Mediterranean its growing graveyard status?

On the remedial front, Italy's foreign minister, Emma Bonino, is not sanguine for a solution. She reportedly said: "There is no miraculous solution to the migrant exodus issue. If there were we would have found it and put it into action." To give Italy its due the country has borne the brunt of the exodus from North Africa, with scant help from elsewhere for what is a Euro-wide problem, and has tried various attempts at repatriation, having saved more than 100,000 boat people since last October when it launched a humanitarian effort called Mare Nostrum to intercept and rescue the migrants trying to reach the islands of Lampedusa and Sicily, the nearest landfall to North Africa. Italy has been criticised by the human rights body, Council for Europe, for being ill-prepared for a new surge of mixed migration on its coasts, claiming that its system for receiving and processing migrants and asylum seekers was not fit for purpose. All would argue, however, that the best place to deal with the problem would be at the migrant's last point of departure, and today that largely means Libya.

                                             Target the traffickers

Between 2008 and 2010 Libya received 60 million Euro for sending over Italian police to Tripoli to link up with their local counterparts, which also included six patrol boats, vehicles and training. This meant that migrants intercepted at sea by Italian and Libyan patrol boats were immediately landed back in Libya but it turned into a public relations disaster as Libyan security forces began beating vociferous migrants and herded them into containers for transport to one of 20 detention centres scattered around the country before being sent back to their original countries. Given that since Gadaffi's overthrow Libya has sunk into lawlessness, any such cooperation would be impossible under current conditions. However, serious consideration should be given to funding covert operations to infiltrate trafficking gangs operating along the entire North African coast and perhaps elsewhere to alert authorities when illegal operations are about to begin. While it is possible that solo migrants could make it to Europe and thus avoid the ruthless gangs, the vast majority of migrants would prefer to spend thousands of pounds with the traffickers. If their operations could be destroyed, with draconian sentences for the guilty, it could go a significant way to stemming the tide. Such a scheme would have to be funded by all EU nations.

Other possible solutions are of a long-term nature. If the EU wants to reduce the migratory pressure it will have to provide more development aid, debt relief and fair trade that would see non European agricultural produce, in particular, less discriminated against. There are signs, at last, that Africa's economic development is gathering pace from a position where it was long considered an economic basket case held back by ubiquitous corruption at all levels of society, not to mention fratricidal tribal hatreds. Such growing GDP, in theory, should relieve the desire to migrate to Europe but is unlikely to have much impact unless effective population control measures are in place. If a a nation's GDP rises by, say, 5% per year while population growth is higher than that then incomes per capita will fall and so the temptation for families to encourage their children to emigrate to Europe will remain as strong as ever.

                                     A distasteful trade off?

There is a body of opinion that suggest Europe should take in far more immigrants than it does presently because indigenous European populations, particularly in France, Italy, Holland and Germany are declining to a level that will see too few working people burdened with supporting an ageing population. According to one estimate, Europe is expected to lose 28% of its population by 2050. Such purblind beliefs, however, betray faulty elements of Malthusian doctrine. Like many economists his analysis was correct but the assumptions on which it was based were flawed. Malthus could not foresee the impact on food production that improving agricultural techniques would have and the opening up of vast agricultural lands in the New World to support a growing European population. Could it not be equally said that the population 'experts' forecasts will prove equally unsound because science does not stand still. Robots and other forms of automation will dramatically raise productivity and release labour for rechannelling into social care occupations to support a growing, ageing population. The next 50 years will also likely see stupendous medical science breakthroughs that through a combination of eliminating debilitating ailments that come with ageing and the arresting of the ageing process itself will allow workers to work much longer.

Distasteful though it may seem to maintain, if not strengthen border controls against illegal immigrants, most of whom are unskilled, economic migrants, it is a question of a trade off between the lower level of misery from migrants still pushing on Europe's doors and the potential for much greater misery within Europe that most assuredly would arise if immigration controls were relaxed substantially. The signs are already blowing in the wind. Country after country within Europe is moving ominously to the right, fuelled largely by people's concerns over immigration issues that are now clearly showing signs of harming social services and raising social costs. Even legal immigrants now settled in Europe and contributing a net benefit to society express fears over the potential of immigration issues to destabilise their countries' social harmony. If that tragic scenario unfolded would it not dwarf qualms over maintaining robust border controls?
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Saturday, 30 August 2014

Will Alibaba steal the retail prize?

In the race to win the world's first, truly online marketplace, Chinese e-commerce giant, Alibaba, promises a boon to consumers around the globe who for the first time will be able to buy anything from anywhere in the world in a frictionless, cross border commerce, a development which should depress and standardise prices around the globe. It will mean, for example, that consumers will no longer have to tolerate paying the widely different prices for the same item, such as Apple products. They can effortlessly source from the cheapest, national market and their payments are 100% secure through Alipay. But what will it mean for bricks and mortar shops and what, if any, are the major, long-term risks to the supply chains and meeting consumers' desires?

Alibaba may not be as well known in the West as other e-commerce outfits like Amazon and EBay but all that is about to change as it seeks a US$20 billion IPO on New York's Stock Exchange. In some ways the Chinese parvenu already outranks its western rivals like, for example, in the volume of merchandise sold through its various properties which hit $248 billion in 2013 compared with only abut one half and one third of that from Amazon and EBay respectively. At facilitating 5 billion package deliveries from transactions on its retail web sites it surpassed UPS's 4.3 billion packages and documents. The scope of product offering through Alibaba's tailored sites also leaves it competitors looking highly vulnerable. Apart from all the usual everyday household items like food, clothing and furniture, some of the more bizarre products include an animatronic dinosaur, MRI scanners, rental boyfriends and, for those overawed by political panjandrums, a life-size Vladimir Putin wax figure.

The implications from all this are that once people know just what is effortlessly available out there from anywhere in the world it will likely boost international trade, leave more money in buyers' pockets through cheaper products, which can then be spent on even more goods, but at the same time it sounds the death knell for all those manufacturers and suppliers who are relatively uncompetitive or for whatever reasons do not have the law of comparative costs working in their favour. As reported by this writer 30 years ago it will also hasten the disappearance of high street shops as online shopping takes the retail market by storm. In Britain, for example, forecasts suggest that within five years some 40% of all shops will disappear and many have already done so. In theory, traditional bricks and mortar shops could also face disintermediation by major manufacturers of food, clothing and common household items joining forces to build huge order picking centres to supply buyers' homes directly, thus cutting out all the costs incurred by retailers, but such collaboration would be difficult to achieve if past experience is any guide. Yet if they could overcome their suspicions of shared resources it would the return of pricing control to the manufacturers and end the bullying retailers place on them.

For Alibaba, the key concern will be to get its logistics right, for a lousy delivery regime resulting in many mispicks and returns will not only cost them dearly but risk permanent loss of business from irate customers. To this end, Alibaba is investing heavily in getting the logistics right. The whole issue of online shopping is also already beginning to affect how loading bays are designed and equipped to handle smaller delivery vans for home deliveries. In Britain, van sales are now booming. But what of the longer term risks over which Alibaba has no control?

These risks are both natural and human and perhaps exacerbated by the concentration of manufacturing in China which is Alibaba's most important market. China is highly susceptible to risks from earthquakes, flooding and internal political turmoil which could wreck delivery promises. There is also the global risks to communications from huge solar storms. The most obvious human risk in the Far East is martial in nature. The growing military build-up and frictions in the Far East could lead to trade boycotts, or worse, of the kind already discommoding consumers throughout Europe and Russia over the Ukraine crisis. Such risks, however, have often been part of the business scene but they are unlikely to deter Alibaba from transforming the online retail landscape for the better.

Sunday, 27 July 2014

How logistics undermines big UK retailers


Many moons ago this writer warned in the logistics press how Continental, no-frills, food retailers would give Britain's retail giants nightmares if their business models ever crossed the North Sea. The occasion was my visit to Denmark's food discounter, Netto, but what has changed since then to upset the British retail model that seemingly served the market so well for so long? In summary, three events now favour the Continental model where small is beautiful but also nimble at giving the shoppers what they now favour most of all -- permanently low prices. These are a changing economic climate, the rise of online shopping and the public's attitude to the cynical pricing ploys used by all the big food retailers. But by far the greatest of these is economic pressure brought on by the credit crunch that sees many shoppers putting value for money at the top of their shopping list, without compromising on quality.

One might well ask how is it that the British retail giants like Tesco (world's number 4), Asda, Sainsbury and Morrison with their huge buying power and long experience could not easily see off the much smaller, but nimbler Continental arrivistes like Lidl, Aldi and a re-appearing Netto. The answer can be given in one word --logistics. This is not to say that Britain's retailers are logistics slouches, far from it. Many years ago, for example, Tesco created its own stock forecasting program geared to changes in the daily weather forecasts. This gave them a crucial advantage because a pending heatwave, for example, could send demand for drinks soaring four-fold in a few days, as well as spiking demand for certain kinds of clothing and food. Before such stock forecasting programs, taverns ran out of beer in heat waves, surely a most pitiable site.

What is it, however, that sees the Continental newcomers seizing market share from the big boys that sends shudders up their spines? The obvious reason, of course, is the permanently, much lower prices, typically by up to one third, but how is this achieved? There are common features to all the foreign-owned discounters which cannot be easily and quickly replicated by the big British retailers because of the latter's legacy investments. What this means is that a big British retailer like Tesco would stock up to 40,000 SKUs (stock keeping units) as against up to 1,600 for Lidl or Aldi. Such a huge difference gives the smaller discounters a great logistics advantage. Another common feature for the discounters is their no-frills food displays, with much food simply stacked on pallets and very little individual shelf pricing. Store start up costs, therefore, are much lower, especially as they have much smaller car parks. Not lost on the shoppers is also the knowledge that all prices will be permanently low, which is a potent marketing tool. But where does logistics fit into the equation that so favours the Teutonic invaders?

To return to my Netto Danish experience over 20 years ago, this writer was impressed by their slick storage and handling. Netto then had about 125 shops throughout Denmark but only one NDC (national distribution centre) to supply all their needs. All shops were EPOS*-connected to the NDC so that at the end of each trading day all details of items sold would be electronically sent to the NDC to initiate replenishment picking. A fast sortation conveyor played a key role in despatching all replenished items to all 125 shops before opening the next day. Netto's business model then was to have no more than 600 SKUs, over 90% of which were fast movers. Any fast mover that became slow was quickly dropped and replaced by another, expected fast mover. The effect of all this was that 90% of all stock at the NDC passed through it every 24 hours, thus drastically cutting the high cost of holding inventory, which can dwarf all other warehouse costs combined. Such a high throughput rate also has implications for construction costs of big NDCs since there are no large areas given over to slow movers. Obsolete stock losses would also be smaller.

The business models the big British retailers are now stuck with have been made obsolete because of the shoppers' change in habits. The retailers tried to become all things to all men by selling far more than food and regular household consumables all under one roof so as to enhance customer convenience. That model held good for many years when incomes were steadily rising but when the recession hit six years ago a sea-change in consumer sentiment saw price become king as the convenience factor flew out the window with the remorseless rise of online shopping. Arguably, that business model of relatively high prices, wide product range and convenience is now broken.

Lumbered with the legacy costs of huge stores, the British retailers have obliquely admitted that the Continental upstarts have a better business model for a changed shopping climate. They will not, of course, take matters lying down. Sainsbury, for example, have got into bed with Denmark's Netto to open small shops with permanently low prices. Tesco are pushing ahead with openings of convenience stores but so far their prices remain uncompetitive with Lidl and Aldi. It is also possible that the big retailers will enter an unholy cabal to lower all of their food prices for long enough to drive the invaders back across the North Sea. It would mean taking a hit on their profits but it could be a price worth paying to restore the status quo of comfortably high margins that they have enjoyed for so long at shoppers' expense. Such an event would be a bleak day for consumers who have been held in the grip of just four retailers controlling around 80% of the UK food market for far too long.

*Electronic point of sale
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Tuesday, 22 July 2014

Food supply chain professionals admit 'slavery' complicity

In what is, perhaps, the most damning indictment of food supply chain 'slavery' complicity, the respected British Chartered Institute of Purchasing and Supply's latest survey found that nearly three-quarters of supply chain professionals admitted they had "zero visibility" on the earlier stages of their supply chains. Eleven per cent said this meant it was "likely" slave labour was used at some point in the supply chain. Turning the screw, the Institute's chief executive, David Noble, claimed "Consumers and business leaders have entered into a 'don't ask, don't tell' pact and that they "are content to remain ignorant of the malpractice that could be operating throughout their supply chains." Company leaders were also twice as likely as purchasing managers to say their supply chains are transparent.

David Noble did not include in "consumers" the end consumer, i.e. the public who buy their food mainly from big retailers, for they are totally ignorant of each bought product's supply chain pedigree and while they may know the food manufacturer's name from the packaging they would be unaware as to whether or not the manufacturer has subsidiaries operating in countries where food production slavery is rife and the company is part of it. Yet the public has shown its concerns over such issues and even mobilised public opinion to boycott certain companies profiting from 'sweatshops', as they were euphemistically known, operating in emerging countries where regulations of all kinds are lax or routinely ignored. It is a pity that culpable corporations do not share the public's concerns on a meaningful scale.

The stench of the Atlantic slave ships before abolition may have long gone along with the shackles, and all countries have outlawed the institution but slavery's stench remains in more subtle, less public forms but where the shackles of fear are just as binding. The most common form of slavery today is called collateral debt bondage, which involves people who have borrowed money pledging themselves and their family as bonded labourers to the loan sharks or slave holders, which can carry on for generations until the debt is paid.

According to the 2012 International Labour Organisation report on slavery, the world's forced labour total is 20.9 million, with Asia having the most at 11.7 million. Another measurement of global slavery, however, the The Global Slavery Index, puts the total at 29.8 million, half of which are in India. The Index, which ranks 162 countries, puts China, Pakistan and Nigeria along with India as the four countries with the largest number of slaves. But even the most developed of western countries, like America, have tainted hands, where the slave population estimate is 60,000, among them temporary visa holders and domestic servants. In Britain, where a modern slavery bill is before parliament, the figure is put at a more modest 4,426. There may well be an element of double counting and other flaws in the various surveys' methodologies but any amended figures would still be grotesquely alarming.

While Britain is to be commended for proposing a modern slavery law, the only country in Europe to do so, Britain's Home Secretary, Teresa May, warned that its proposed slavery bill could not solve the slavery issue by legislation alone, and its remit would not extend effectively beyond the country's shores. John Manners-Bell, of the consultancy, Transport Intelligence, said that "many manufacturers and retailers believe that when they outsource the production of their goods to remote suppliers, often based in emerging markets where there are fewer regulations, they outsource the moral responsibility for the conditions in which their goods are manufactured."

Such cynical buck passing is unforgivable and food retailers, in particular, have consistently shown that their own feeble attempts to clean up their supply chains have failed miserably. Like the UK police forces, they cannot be trusted to self regulate. For proof of that one need look no further than the horse meat scandal 18 months ago where horse meat was found in many products labelled as beef. Half of the supply chain professionals say that the scandal has not led to the risks being taken more seriously.

David Noble believes that if the slavery bill passing through Britain's parliament is "to have a chance of eliminating slavery from the British supply chain and we are to avoid repetition of the horse meat scandal then we must empower supply chain procurement professionals. " Such action would be better than nothing, one supposes, but to whom would the procurement professionals be answerable? If it is to the boards of companies with dubious links to slavery then the suggestion is touchingly naive. Perhaps more effective would be partly government/business financed, independent watchdogs with the resources to research areas of suspected supply chain slavery and then effectively publishing the results nationwide so that the public would have the ammunition to invoke the ultimate weapon all company boards fear and cannot withstand --- sustained, concerted boycotts. There are many precedents where such consumer action has been efficacious in many industries. Retailer Primark reportedly paid $9 million in compensation to try to salvage its reputation, Samsung Electronics recently said it halted business with a supplier in China over suspected use of child workers and Starbucks, pilloried over its insouciant tax avoidance schemes, caved in temporarily to public condemnation.

Slavery has never gone away because greed has never gone away. It may have changed its tactics and cloaks but so long as greed remains so, too, its handmaiden of corruption will flourish, and it is in emerging countries where corruption is worst. If concerned countries unite to make life much more difficult through naming and shaming, as well as boycotts of miscreant or unconcerned corporations, then the prayers of the oppressed women, children and men may at last be heard and their tears wiped away.
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Google my blog headlines:
Thailand's trawlers of terror shame food supply chains
Slavery shames British food supply chains