On the move for big savings

Nov 13 2009 by Kelley Price, Evening Gazette

A NEW £1.27m initiative is giving Teesside firms the opportunity to adopt new technologies to improve their efficiency and make bottom-line savings.

The Logistics 2 project will provide a package of support to more than 250 North-east businesses - mainly small and medium-sized enterprises (SMEs) - over the next two years.

Launched by development agency One North East, it will help them improve business operations such as the acquisition, storage, transportation and delivery of goods, and bring estimated cost savings in excess of £10m.

The project follows Logistics 1, a similar scheme that helped businesses improve their in-house logistics, such as warehouse processes, inventory management, production planning and product delivery.

Sunderland consultants NAC - responsible for delivering both projects - said Logistics 1 safeguarded 300 jobs and helped 71 local companies, five of which were in Teesside, to make combined savings of more than £3.2m.

Beneficiaries included Newton Aycliffe- based MDK Roofing and Cladding Services Ltd, which identified more than £200,000 in savings, and Hartlepool door and window manufacturer John Watson Joinery.

The new project will explore how companies can improve their wider logistics performance through the use of technologies such as Radio Frequency Identification (RFID), which uses electronic tags for storing data and can track the movement of goods.

Peter Shields, sector senior specialist at One North East, said new technologies could help company owners reduce risk to their business.

He said: “This is not about cost-cutting; this is about cost saving and managing inventory on a broader basis. Manufacturers in particular can benefit from this.”

Frank Berkovits, logistics director at NAC, said the scheme could help companies manage their cashflow through tighter stock control.

Under the project, the North-east is set to forge links with the European Centre of Excellence for Automated Identification and Data Capture (AIDC Barnsley), enabling companies to benefit from the latest best practice in RFID and associated technology surrounding inventory and supplier management.

Logistics and technology experts will also deliver awareness events to SMEs, showcasing examples of successful supply chain interventions and best practice from local leaders.

The project has secured £550,000 from the European Regional Development Fund (ERDF) 2007-13 and £722,000 from One North East’s Single Programme funding.

The ERDF programme is bringing more than £300m of investment to the North-east to support innovation, enterprise and business support. It will help create and safeguard 28,000 new jobs, start 3,000 new businesses and increase the region’s productivity by £1.1bn per annum, according to One North East.