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Is Bigger Always Better?

September 11, 2021 9:49 AM
By Councillor Dave Busby

baww (Photo by John Cameron on Unsplash)For the supply chain the combination of Brexit and CoVid has generated the perfect storm. The news reports on the shortage of lorry drivers and the resulting shortages in goods. During CoVid, many smaller businesses struggled and had to sell out to larger companies. Councils have exacerbated the situation by approving applications for massive warehouses.

So, what are the consequences of this? Let's take an example of a local hotel chain who prior to CoVid had many contracts with smaller local suppliers - an approach encouraged by councils. With their suppliers now under the control of huge national companies the hotel chain is now in direct competition with much larger, prestigious outlets in the larger cities. Given the pressures on deliveries the suppliers focus on honouring their larger clients leaving our hotel short of laundry, food and drink.

In the 'old' days the hotel could go to their supplier and collect the goods but now these are transported to the large distribution centres before onward delivery. This has added an extra journey into the process - not desirable when there is a shortage of drivers. The hotel has had to resort to shopping locally when deliveries don't materialise but this is frowned upon by the supermarkets who find shelves stripped of certain products.

The alternative - which is happening - is for the hotel to shut for a number of days and to cancel big events where supplies cannot be guaranteed. Weddings, parties and Christmas lunches are all under threat. Housekeeping staff have to work much longer hours as laundry is not delivered until the middle of the afternoon, if at all. The hotel sector does not operate on large margins and short-term problem-solving eats into these margins.

We can expect the situation to get worse before getting better. However, difficulties create opportunities and as a council we need to be aware of this and work much closer with our local companies to ensure the health of the local economy.