One-in-five manufacturers voice logistics cost concerns

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One in five manufacturers are concerned about the rising cost of logistics, with one in three concerned about the cost of raw materials in the supply chain in a post-Covid-19 economy.

According to a survey commissioned by IT service provider Delaware 33% of mid-market manufacturers said that the rising costs of raw materials and components was their main economic challenge in the next three years, while 22% singled out the rising costs of shipping goods.

The report also found that only 9% of mid-sized manufacturers managed assets within their supply chain in a fully automated way, while a third (33%) said their supply chain was primarily automated with some manual processes.

When it came to the adoption of technology more than a third of respondents (35%) were currently using Internet of Things technologies, with 29% using robotics-based automation and 27% using blockchain.

Richard Seel, Managing Director (UK & US) at delaware. “In our survey, more than a quarter (28%) reference that ‘labour costs have risen’ as an impact of company-implemented or regulatory driven sustainability requirements on their supply chain. In addition, 38% of respondents identified that rising cost prices will be one of the biggest impacts of Brexit on the supply chain.

“Added to this, spending cuts and much tighter cost management will be an inevitable and pragmatic response to the virus outbreak as manufacturers look at ways in which they can improve the bottom line.”

Seel said that the pandemic would have a far-reaching, long-term impact on the manufacturing sector, so he believed that manufacturers would also need to look at how digital transformation and the use of the latest advanced technologies can keep costs under control over the longer term.

“Implementing innovative technologies is increasingly seen as a way to reduce costs by businesses today and that is going to be crucial in the pandemic recovery. Just under a third (31%) of our sample referenced that the perception is that these technologies will improve productivity, while 24% said the perception is that they will reduce costs.

“The potential of innovation to drive operational efficiencies is clearly there but it is important that manufacturers make the right technology choice as the economy continues the process of recovering from the virus,” he said.

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