Sunday, 16 September 2012
Logistics skills training neglect costs billions
Logistics skills training has a poor image in the United Kingdom even though Britain ranks highly in the world league for logistics efficiency so why is an industry worth £74 billion a year employing one in twelve of the workforce regarded almost with disdain and what does it mean for the rest of the world?
In my blog: "Lousy logistics wastes billions" (May 5, 2010) I referred to the waste caused by inappropriate materials handling hardware and software in the supply chain. Globally, the annual waste undeniably runs into billions of pounds and is typified by the wrong type of forklifts for the job, ignorance of slick warehouse management systems (WMS) with good stock forecasting programs and lack of double-deck lorries which could reduce the £25 billion a year losses caused by road congestion. And that is only a just a few of the problems. But nowhere did I mention how the right kind of logistics skills training could transform logistics efficiency even more which is so necessary to slash the waste.
At a London press conference on September 12, the Skills for Logistics (SfL), tasked by the UK Government to tackle the skills and productivity needs of employers in the logistics sector, the issue of training neglect was laid bare. Mike Jacksons, CEO of SfL, remarked that " over years training has been dire but it's improving. Too often you get people making buying decisions that are nothing like as good as they should be." As if to emphasise that, Paul Brooks, director of Unipart Logistics, added: "The operations managers are generally poor procurers of skills development. This gives a clue to why the right logistics hardware and software are not being used as much as they should be.
The logistics industry image is still perceived to be poor and so cited by SfL as one of four barriers to better development. Many, if not most, jobs are only four hours a day, three days a week, "so what we have to offer here is full time jobs," says Mr Jackson. Many jobs also involve night work or work in cold temperatures. At entry level the financial rewards are also unimpressive.
While there should be incentives to encourage promotion within all ranks it seems there is inadequate support to taking on new, logistics-savvy recruits at graduate level. These recruits might be young and 'wet behind the ears' but they are likely, through their holistic logistics training, to effect change within a company more quickly. Any such changes which improve the bottom line would mean more in the pot to share among all logistics employees and so cement their loyalty.
Just how much skills matter can be gauged by one company's experience. Gist is a sizeable UK logistics services provider employing 5,000 on 53 sites in the UK and mainland Europe. By taking logistics skills training to heart it has seen a 6% improvement in fuel consumption, 33% fall in employee accidents and a 35% cut in low grade vehicle damage. There has been a 20% fall in employer liability claims, a 22% rise in productivity, a 26% cut in absenteeism and a 36% fall in labour turnover. These savings far exceed the extra costs for training and given Britain's high position in the global logistics efficiency stakes the scope for savings elsewhere in the world is probably immense. Adequate logistics skills training is a win, win, win situation. It makes the logistics service providers more profitable, it keeps their customers' costs from rising uncomfortably fast and it helps the environment in so many ways.