Rodney Steel, Chief Executive of the BCMPA, the Association for Contract Manufacturing, Packing, Fulfilment & Logistics, reflects on how its members have adapted to overcome the challenges of 2020, and by doing so, made themselves better prepared for the future.
“2020 has undoubtedly been a year that has demonstrated the art of the possible,” said Wayne Chapman, Managing Director of fulfilment specialist, Staci UK.
It is a statement with which the BCMPA fully concurs as it speaks for our entire membership in this most challenging of years.
Contract manufacturers, packers, fulfilment and logistics companies have had to deal with more change in one year than the past five put together. What started out as another 12 months of opportunity, tempered only by concerns around the progress of Brexit, were soon transformed by the Covid-19 pandemic into a time like no other, with all traditional business practices turned on their head.
“We started 2020 with a focus on continuing the double-digit annual growth we had seen over the past 10-years, increasing both our investment in the business and in our people to support this,” said Charles Linney, Director of Linney, which provides everything from creative design to fulfilment and support through its managed e-commerce services.
“Covid-19, however, was truly something else. As companies worldwide reacted to the situation, we saw a complete change in demand and our business had to react overnight to deal with this.”
At first, the speed and scale of the crisis made it very difficult for businesses to respond, as the future was so unpredictable.
“We initially furloughed a number of staff on our contract packing side,” said Paul Price, Managing Director at Lemonpath, the full-service logistics provider which specialises in contract packing. “However, the following week we saw a major client need a significant number of PPE packs, and had to pull out all the stops to deliver these.”
This is one area where the contract sector did have an advantage, since adaptability and flexibility are vital parts of the fast-response service that is a key requirement for companies seeking outsourcing help.
“Our biggest challenge has been operational, but despite this we’re pleased to have delivered a ‘business as usual’ service while providing Covid security and also dealing with the cost impact of achieving this,” explained Chapman.
From the very start of the pandemic, ensuring the safety of employees and operating within all the latest Government guidelines were fundamental for members. Safety measures such as hand sanitiser stations, deep cleaning and all necessary PPE equipment, along with staggered shift changeovers and social distancing were all vital in creating a safe working environment.
This investment enabled BCMPA members to continue operations, including reacting to the huge surge towards online sales and deliveries made direct to consumer (DTC), which were being driven by the pandemic.
The increase in online shopping had already been identified as a significant trend for 2020, but the impact on demand caused by Covid-19 was immense. While this undoubtedly generated major commercial opportunities for brand owners, it also brought the risk that they might not be able to cope with such large volume growth, which could in turn, damage their reputation among consumers. Outsourcing therefore provided a valuable solution to mitigate this risk.
“The pandemic saw consumers across the board change their behaviour, accelerating a shift to online that was already under way,” confirmed Linney.
“As a result, this has driven even greater demand for the provision of outsourced logistics and e-fulfilment services from providers such as us.”
“We saw demand for our logistics, warehousing and e-commerce services go through the roof,” agreed Price. “Off the back of this, we have been running at Black Friday and Cyber Monday peak work levels since April, and have had to work closely with our carriers, as well as bringing on additional warehousing space, to meet demand.”
Digitalisation across the supply chain has also been core for many fulfilment and logistics businesses to meet the requirements of online growth. “The demand for visibility from customers, particularly in FMCG, has driven the need for digitalisation right across the supply chain,” stated Chapman. “It is helping to drive efficiencies for businesses, and through standardisation of data – even on a pan-European basis – it can also support the decision-making process.”
If the coronavirus crisis was a totally unexpected event in 2020, the challenge of Brexit was always going to be on the agenda – and with trade negotiations going to the wire, it will continue to be a key issue well into 2021, whatever the final outcome. Nevertheless, the experiences and learnings from this year will be critical in helping the industry to deal with the situation.
“Across the business, we have been working closely with our supply chain to ensure we are as well prepared as we can possibly be,” confirmed Linney. Lemonpath is similarly aware of the importance of being able to react quickly to what is as yet unknown: “With the form of the agreement with the EU still to be announced, everyone is still very aware of the potential supply chain issues, and we are therefore having to cover every eventuality to make sure we can deliver the continuity required for clients,” said Price.
In addition, 2021 will see a further continuation in the development and use of technology to drive greater efficiencies across the sector. From automation and tracking of products throughout the supply chain to the possibilities offered by co-bots, technology will free-up employees and enable them to focus on added value tasks.
Alongside these technological developments, the requirement for businesses to be sustainable and minimise their impact on the environment will undoubtedly continue.
This can be clearly seen with the launch of ‘Regenerate’ by Linney, which defines the company’s approach to building a sustainable business, transforming the way it uses and repurposes everything from paper and plastic to hardware, machinery and more.
Lemonpath has also reported a marked increase in the number of clients looking for ‘more sustainable’ packaging – although this request is not always without its challenges. “The drive away from plastic packaging towards cardboard fitments means products often take longer to pack into their boxes, making the process more time consuming and ultimately costly,” said Price. “We have therefore had to find savings elsewhere to ensure we can still deliver value for money for clients.”
Staci UK agrees that this need for sustainability is now central to its work. “From packaging to transportation efficiencies, sustainability is part of our decision making because it is an important factor for FMCG brands when choosing an outsourcing partner,” stated Chapman.
As the BCMPA celebrated its 20th anniversary earlier in this unpredictable year, we observed that outsourcing is of increasing importance to UK business across multiple sectors. The pandemic has undoubtedly crystallised this importance and in dealing with and learning from the exceptional events of 2020, BCMPA members have demonstrated the art of the possible, with the adaptability, flexibility and responsiveness that will set them in good stead to meet the challenges of 2021 and beyond.
Rodney STEEL Has been Chief Executive of the BCMPA since 2003. He previously spent several decades in print and packaging, including running a successful contract filling business in the chemical sector.
