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AN ENVIRONMENTAL ANGLE
Page 45
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Ryder's Bruce Arlinghaus believes that the common calculation Total Landed Cost, which takes into account the impact of sourcing decisions, lead times and risk factors should be expanded to account for environmental impact as well.
It says: "We need to be calculating the total environmental cost of products. For instance, offering consumers cars with low price tags, fuel consumption and emissions is only part of the story if we haven't added up the cost of the supply chain and production."
Michael Storey, MD of NYK Logistics Scandinavia, says that there are definite shifts in stock holding and sourcing patterns. "I think JIT is coming under pressure," he says. "A stockless network design does reduce the ability for vehicle optimisation." He adds that more manufacturers are owning the supply chain rather than leaving it to individual suppliers, and manufacturers are holding more inventory,
partly because the greater the distance stock travels, the greater the risk of disruption to the supply chain.
Increasingly manufacturers are shipping full containers to within striking distance of their production facilities and warehousing it there. "JIT becomes inoperable from very low-cost distant countries," he says. Products and parts that need lots of packaging tend to be sourced locally, while labour-intensive parts are brought in from afar.
Professor Peter Hines of the Lean Enterprise Research Centre agrees that more sub-assembly is being handled once products are in the UK a potential value-added service for transport firms to offer. "For instance, wire harnesses get made in North Africa, but the late configuration is done here," he says. "Unfinished goods are typically brought in and left two miles from the production site, mainly to allow shipping of full containers."