Poor IT integration hampers distribution

Poor integration in the logistics sector is severely affecting profitability, according to research from Cap Gemini. The study, The Distribution Industry: Issues and Plans, canvassed the views of 97 mainly IT and finance directors in distribution companies with a turnover in excess of #100m.

The report found that as manufacturers and retailers internationalise their business, they want logistics service providers to manage all their needs through out Europe. To cope with this freight and logistics companies are merging at a rapid rate. Cap Gemini’s research indicates that one in three UK logistics companies are planning to enter into new partnerships or joint ventures over the next three years. But, says the study, nearly 40 percent of respondents reported that their IT systems were at best average and in many cases poor at supporting their fast-growing businesses.

The report blames this on the incompatible IT systems of acquisitions, which lead to trucks running half-empty because of a lack of co-ordination on deliveries.