Head of Value Added Services
Small and medium sized businesses are under growing pressure. Rising costs across labour, energy, transport and packaging are squeezing margins, particularly in food, drink and FMCG supply chains where service levels and compliance requirements remain high. For many SMEs, the challenge is no longer just about cutting costs, but about finding smarter ways to operate without sacrificing quality or reliability.
Unlike larger organisations, SMEs often have less flexibility to absorb ongoing cost increases. Even modest rises can affect cash flow, planning and day to day decision making. At the same time, demand can fluctuate, seasonal peaks still need to be supported and customers expect consistency. This creates an environment where cost pressure feels constant and difficult to escape.
One of the biggest challenges for SMEs is that not all costs are immediately visible. While headline expenses are closely monitored, inefficiencies within the supply chain often go unnoticed. Stock moving between multiple locations, duplicated handling, manual processes and delays caused by poor visibility can quietly drain time and money over long periods.
These issues rarely show up as a single large cost. Instead, they appear as small inefficiencies that build over time. Extra handling increases labour costs. Poor visibility leads to rushed decisions. Rework caused by avoidable errors creates waste and disruption. Together, these problems erode margins and place additional strain on already stretched teams.
As a result, many SMEs are shifting their focus away from short term cost cutting and towards improving efficiency. Simplifying how goods move through the supply chain, reducing unnecessary steps and improving clarity around stock and activity are proving to be more sustainable ways to manage pressure. When operations are easier to understand and control, businesses can respond faster and avoid costly last-minute fixes.
When storage, rework, packing and preparation all happen within the same operation, products move through the supply chain in a more direct and controlled way. There is less internal transport, less repeated handling and fewer points where things can go wrong. This makes the operation easier to manage and helps create more predictable outcomes.
A consolidated approach also improves visibility. With one clear view of stock and activity, teams can plan more effectively and respond to issues sooner. Instead of chasing information across multiple providers, decisions can be made quickly and with greater confidence.
Flexible logistics and value added services are becoming an important part of this approach. Rather than investing in space, equipment or labour that may only be needed at certain times, SMEs can access services such as storage, packing, rework or fulfilment when demand requires it. This helps balance cost with activity, allowing businesses to scale during busy periods without carrying excess overheads when volumes drop.
Crucially, managing costs does not mean lowering standards. In food and drink supply chains, mistakes can be expensive. Incorrect labelling, poor quality control or non compliant packaging can lead to rejected stock, retailer penalties and damaged customer relationships. For SMEs, these outcomes often cost far more than any short term savings.
The real opportunity lies in getting things right first time. By reducing errors, improving accuracy and ensuring products are prepared consistently before they leave the warehouse, businesses can protect both margins and reputation. Efficiency in this context is not about doing less, but about doing things better.
Looking ahead, cost pressures are unlikely to ease. SMEs that continue to perform well will be those that take a closer look at how their supply chains are structured and where complexity can be removed. By focusing on efficiency, flexibility and smarter use of resources, businesses can build more resilient operations that are better equipped to handle rising costs and changing market conditions.
SMEs are being affected by rising costs across labour, energy, transport and packaging. Unlike larger businesses, they often have less buying power and fewer resources to absorb these increases, which makes even small cost changes more impactful on margins and cash flow.
Supply chain efficiency means reducing unnecessary steps, improving visibility and ensuring goods move through the operation in a clear and controlled way. For SMEs, this often involves simplifying processes, reducing repeated handling and avoiding delays that create extra cost.
Inefficiencies such as duplicated handling, manual processes, poor stock visibility and avoidable rework can quietly increase costs over time. While these issues may not appear as large individual expenses, they gradually reduce margins and place extra pressure on teams.
Short term cost cutting can reduce quality, service or compliance, which often leads to bigger problems later. Improving efficiency helps SMEs control costs in a more sustainable way while protecting service levels, customer relationships and long term stability.
Flexible logistics allows SMEs to access storage, packing, rework or fulfilment services when needed rather than investing in permanent space, equipment or labour. This helps businesses scale activity during busy periods without carrying unnecessary overheads when demand is lower.
Yes. By improving accuracy, reducing errors and getting things right first time, SMEs can lower waste and avoid costly issues such as rejected stock or retailer penalties. Efficiency and quality often go hand in hand when processes are well controlled.
Cutting corners can lead to non compliant packaging, incorrect labelling or quality issues. These problems can result in rejected deliveries, damaged customer relationships and reputational harm, which are often far more expensive than the original savings.
SMEs can improve resilience by simplifying supply chain structures, improving visibility and using resources more effectively. Focusing on efficiency, flexibility and consistency helps businesses respond better to changing demand and ongoing cost challenges.