Whilst the Chancellor’s Spring Statement focussed on welfare benefits, it is last Autumn’s Budget that is really focussing the minds of those with significant labour costs. The imminent changes to NIC contributions, particularly for employers of part time staff, present a significant challenge to preserving margins for many businesses.
These costs, combined with the proposed employment rights bill potentially reducing the appetite for hiring, mean that achieving labour savings is now critical for many employers.
For many, these changes could mean that calculations of labour vs automation benefits, that have remained in the balance since the post Brexit labour exodus, may have finally tilted in favour of making changes to operational practices and headcount reduction.
These calculations have shifted on both sides of the equation. Whilst labour costs have risen, the availability of tactical automation, rather than capital intensive infrastructure has also reduced the costs of adopting technological solutions.
For example, rather than investing in a multi £m conveyor and picking system, often modular and mobile robot systems can be leased, and work in tandem with existing practices.
Beyond labour costs there are many other areas that savings can often be found within the supply chain without compromising service. Outsourcing contracts that don’t match the current business profile, stock holding policies that have not moved with changes in demand, or reviewing established and outdated supply chain processes. All these practices can often be demonstrated to offer significant cost savings.
If your business would like help and support to design and implement a logistics strategy that can help you to navigate this “changing world”, then give Davies & Robson a call for an informal discussion.
