Leading logistics consultancy, Davies & Robson is urging companies to act fast to take advantage of the opportunities offered by the recession as business confidence begins to return.
With signs of growth in the UK economy, the window of opportunity in which companies can create significant competitive advantage from the current situation could be over in a matter of months, according to Davies & Robson Chairman, Brian Templar.
Property is now readily available and lease terms are considerably more flexible and asset prices are low, although this is likely to change if sterling remains weak.
Services are also more competitively priced and suppliers are more willing to accept more flexible pricing terms. Perhaps most importantly, good people are freely available, says Templar.
However, shaken to the core by the speed and severity of the downturn, many companies will continue to avoid any discretionary spending in order to conserve cash.
Templar continues, Whilst this is understandable to some extent, the reality is that it is now that the fate of many companies is being decided. Severe recessions are a sure way of challenging the status quo, as the quick and nimble prepare to take advantage of the upturn, outmanoeuvring the slow and over cautious.
Those companies that act quickly will gain competitive advantage because, although the recovery will take time, the real window of opportunity could well be over in a matter of months.
In supply chain terms, this means:
Taking the time to ensure that the required infrastructure is suited to realistic levels of planned activity
Addressing inefficiencies that were not a priority when high levels of economic activity covered underlying problems
Acting quickly to restructure property requirements in order to take advantage of favourable terms
Reviewing third party logistics contracts to ensure they meet future needs. This includes not only benchmarking service and cost, but also the viability of contractors and looking for opportunities to introduce variable costing
Ensuring that when the upturn comes, necessary changes to the supply chain are already in place
Templar concludes: Companies need to plan now for how they want to emerge from the recession. The success stories of the next five years will be those that are able to take advantage of the new reality and make the necessary changes despite the current uncertainty.