Logistics Achiever Awards - Business Special 2013

Business Special 2013

25

years

Logistics News thanks the sponsors of the

2013 Logistics Achiever Awards

25

years

Contents 4 5 6 7 8 15 35

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16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Celebrating 24 years of rewarding excellence Rules of the competition The judging process Score sheet criteria Endorsing associations and judges Social roundup Previous winners

SPONSORS: CHEP

FNB Commercial Bank Improvon Group

LAA FINALISTS:

Automotive Industry Development Centre BAE Land Systems SA / Turnstone Process Management Solutions BAE Land Systems SA / UTi SDi Beckman Coulter Compass Waste Services / CargoWare Dimension Data / Dawn Wing Exxaro / Imperial Logistics Home of Living Brands Joy Global Africa – UTi Africa Merpak Envelopes / Cargo Solutions Nissan South Africa SA Breweries / InSync Sasol Oil Sasol Oil – Resolve Savino del Bene Shell South Africa / Tanker Services Triton Express / Dovetail Business Solutions UTi Pharma Walvis Bay Corridor Group

Publishing Editor:

Dianne Holton Editorial & advertising: Tel: 011-784-7697 Fax: 086-515-5247 E-mail: info@ logisticsnews.co.za P O Box 784621, Sandton 2146, South Africa 97 Sixth Street, Parkmore, Sandton www.logisticsnews. co.za

Deputy Editor

Michael Brandt

Design & DTP:

Kerry Dimmer – Directions Tel: 011-792-1930

Repro and Printing

Paradigm Tel: 011-683-1911 The publisher is not responsible for the opinions expressed by individuals.

© No part of the publication may be copied or reproduced by any mechanical or electronic means without the written permission of the publisher.

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LAA 2013

This year’s Logistics Achiever Awards mark the 25th year of recognising and rewarding logistics and supply chain excellence in Southern Africa.

That the entries have again proved to be of exceptionally high quality highlights the sustainability of the awards project to encourage local supply chain executives to meet world-class standards.

Celebrating 25 years of rewarding world-class excellence This Business Special lists the finalists with a summary of their entry projects. The winners will be announced at a gala event at the Montecasino Ballroom, on 19 September. The prestigious event, attended by 500 industry professionals, is acknowledged as the calendar event of the year in the logistics and supply chain industry.

The LAA Case Study Annual will present award-winning projects in more detail, joining previous LAA annuals as a valuable reference, underlining the added value that the LAA programme brings to the SA logistics and supply chain industry.

The objectives of the Logistics Achiever Awards are: • to recognise professionalism and excellence in the effective application of strategic, tactical and operational logistics and supply chain management principles, concepts and practices in Southern Africa • to encourage all companies and organisations in Southern Africa to review, evaluate and upgrade their current logistics and supply chain management practices • to create a greater awareness and understanding of the value of effective logistics and supply chain management.

Logistics News is pleased to announce this year’s sponsors – CHEP, First National Bank, and the Improvon Group..

Logistics News thanks the panel of judges and supporting bodies for their invaluable input, and for volunteering their personal time to the project.•

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LAA Rules

LAA rules follow world-class trends The competition rules are: • Competing companies are required to submit an official competition entry. Companies may submit as many entries as they see fit, provided that each entry is independent of one another.

• If the company wishing to enter is a supplier of a product or service, the ideal is to have it as a joint entry by the supplier and one of its clients, or alternatively, an entry by the user of the product or service to allow verification of results. The exact nature of the entry relationship must be stated at the outset. The judges may disqualify at their discretion entries with undue, improper or untested promotional claims.

• Companies are required to be interviewed by nominated judges, and make available to them, the site(s) in question, and information/records substantiating the declared improvement in logistics and supply chain management performance. All judges will sign a confidentiality agreement with Logistics News, and can, if required, sign a confidentiality agreement with the individual entry companies, provided such documents are available for signing at the time of their scheduled visit. All potential conflicts of interest will be avoided wherever they are known to exist.

Over the years the rules of the Logistics Achiever Awards have been refined in line with current industry requirements, and with reference to worldwide trends.

• Short-listed entrants are required to attend the prestigious, black-tie Achiever Awards function to be held at the Montecasino Ballroom on 19 September.

• Entries could be categorised at the discretion of the judges to allow meaningful comparison with other entries in the same economic sector, company size or focus area.

• Award winning projects will be presented in a Case Study Annual, subject to editorial review by the entering company.

• The selection of the winners will be at the sole discretion of the judges, and their decision will be final. No correspondence will be entered into. •

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Judging Process

Refined procedure identifies the final entrants The Logistics Achiever Awards judges follow a specific operating process.

Dr Alan Barnard explains how the procedure has been developed and refined over the years, and has proved effective in identifying those entrants who have best met the exacting laid-down criteria in their projects being evaluated.

Step One:

Entrants submit an entry form that includes a brief overview of their project on the Logistics Achiever Award website, which is logged onto the LAA schedule to ensure they are kept informed of all activities relating to the competition.

Step two:

Entrants submit an entry template, detailing the project, on the LAA website. Based on the information supplied, the judges can at this stage assess the suitability of the entry.

Step Three:

• A member of the judging panel contacts the entrant’s representative to arrange a site visit. On this visit, the entrant is expected to elaborate on the entry details, demonstrate what the company or organisation has undertaken with respect to the entry project, addressing the core issues, and answer any questions that the judges may feel are appropriate.

• A visit takes between 2-4 hours depending on the nature of the entry.

• The judges sign a confidentiality agreement with Logistics News regarding all information supplied to them in respect of their judging role in this competition.

• As this is essentially a fact-finding visit, no feedback relating to the entry status in the competition will be provided. Any comments made by the judges will be based on their personal opinions only.

Step Four:

To expose a sufficient number of judges to an entry, the short-listed entrants will be required to present the entry to the full panel of judges in Johannesburg.

Step Five:

All finalists are required to attend the black-tie Logistics Achiever Awards function. All the award winners are announced at this prestigious event. •

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Score Sheet

Score sheet is judges’ vital tool 1 b usiness results: To what extent has the company as a whole improved as a result of the initiative in terms of short and longterm company financial performance indicators.

: To what level has the implemented logistics 2 sustainability solution proven sustainable in the medium and long term.

3 customer satisfaction: Measures the improvement achieved in customer satisfaction, manifested in logistical improvement, their knowledge of how to capitalise on this improvement, and sustainability. perational improvements: Measures functional performance 4 o improvement on the operational level that resulted in financial benefits and improved competitive capability.

5 strategy, analysis and planning: What was the level of analysis, planning and execution of the implementation and did it form part of an overall business improvement strategy.

6 c ollaboration and integration: What was the level of change initiative involving active co-operation and integration with upstream and downstream partners in the supply chain.

management: How successful was the project in 7 information addressing the need for logistics information management. uality management: At what level did this initiative form part of, 8 q and consider, the need for logistics quality assurance, control and adherence to current quality standards.

9 p eople management: Did this initiative consider the employees involved and impact individual growth (education, creating career advancement opportunities) and improved job security.

10 e nvironmental sensitivity: To what level did management consider the environmental impact of the initiative, including an environmental impact assessment.

11 i mpact on society: To what extent does the entry impact on society in both positive and negative ways.

12 c hange management: Describes the level to which change management was successfully planned and executed as part of the iniative.

13 l eadership and innovation of submission within logistics: Describes the example set by the company to inspire and drive continuous improvement in logistics, and to what extent can the entry be regarded as world class.

14 r elative performance to other entries: Rates the submission to current and past entries, and to what level it contributed new benchmarks for the industry. •

All entries are evaluated on a number of criteria, each with a weighting factor. Points are allocated in each category, and these scores guide the judging panel in its final evaluation of each project.

This is a summary of the requirements.

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LAA 2013 Judges

Judges are nominated by industry associations The judging panel includes nominated representatives of various professional institutes, vocational societies and trade or industry associations involved in logistics and supply chain management in Southern Africa. The organisers reserve the right to invite other representative organisations onto the judging panel, or industry representatives as and when they see fit.

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CGCSA Consumer Goods Council of South Africa CILTSA Chartered Institute of Logistics and Transport SA CIPS Chartered Institute of Purchasing and Supply Southern Africa CSCMP Council of Supply Chain Management Professionals RFA Road Freight Association SAAFF SA Association of Freight Forwarders SAEPA SA Express Parcel Association SAIIE Southern African Institute of Industrial Engineering SAPICS The Association for Operations Management of Southern Africa SCC Supply Chain Council TOCICO Theory of Constraints International Certification Organisation

Business Special 2013

Celebrating 25 years of rewarding excellence in logistics and supply chain excellence. The Logistics Achiever Awards recognise outstanding achievements and innovation that have created market advantage today for a strong, sustainable foundation into the future.

Join the celebration 19 September - Montecasino Ballroom For further information: Dianne Holton 011-784-7697

LAA 2013 Sponsor

CHEP Middle East, Africa

CHEP ‌ endorsing logistics management achievements The excellent successes attained

by Logistics Achiever Awards finalists over the past 25 years have motivated CHEP to once again associate its own business philosophy with the selection programme as a sponsor.

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he South African economy has slowed, evidenced by reduced GDP growth (estimated at 2 percent by the Reserve Bank) and the decline in the exchange rate. Inflation is increasing whilst growth declines. Consumer confidence has dropped leading to much reduced growth and profits from the retail sector. As the South African economy slows manufacturers, retailers and service providers have turned to Africa, which offers strong growth prospects. South African business is responding to this growing economic opportunity and many large companies are looking to expand into Africa.

Expansion into Africa presents huge opportunities. And the obstacles to doing business in Africa are challenging. Factors such as the lack of an effective infrastructure and delays in processing imports owing to port congestion are compounded by poor distribution facilities. The acquisition of properties for factories and stores is complex and time consuming. Power is unreliable and expensive, there are few common standards and communications are poor.

Whilst not unique, all this presents a huge challenge to South African businesses.

In spite of all these difficulties, South African businesses are making substantial progress in Africa enabled by logistics professional services that struggle against the odds to ensure a reliable, cost effective, safe flow of goods to end users. The efficiency of logistics and the extended supply chain are vital to success and provide a key element of competitive advantage. Several Africa specialist logistics providers are flourishing showing that South Africans are entrepreneurial and tough.

MTN and Vodacom have built huge businesses throughout Africa; SAB Miller is well established as is Coca Cola. Unilever has long been one of the largest investors in Africa and is concentrating its efforts to achieve super growth in the region. Procter and Gamble, Nestle and now Tiger Brands have substantial businesses in Africa. Shoprite is by far the largest retailer in Africa with more than 200 stores throughout sub-Saharan Africa. The African stores deliver a high margin and form an increasing part of Shoprite’s profit. Massmart is active with Game

Business Special 2013

opening stores in Nigeria and elsewhere, and Massbuild is beginning to expand its footprint. Pick n Pay is growing in Zambia, Mauritius and Zimbabwe. All these retailers have ongoing ambitious expansion plans in Africa.

The flip side of our retailers moving into Africa is the flood of traders from the rest of Africa who travel to South Africa to purchase very large quantities of locally produced goods for transport to Angola, the DRC and a host of other countries. The main suppliers to this market sector are the huge cash and carry wholesalers such as Devland, Africa and Jumbo to name but a few. This is a business not for the faint hearted but the opportunity is great particularly in the light of the decline in the exchange rate.

What of the industry in South Africa? Much progress has been made in supply chain simplification and efficiency in the unrelenting drive to reduce costs and improve service in an increasingly competitive market. There is a strong focus on sustainability and the flood of investment in distribution facilities and enterprise systems continues unabated. It is pleasing that environmental sustainability is now part of doing business and adds value throughout the supply chain. Much progress has been made in improving supply efficiency resulting in lower costs and better service.

At CHEP we are encouraged by the resilience and resourcefulness of the South African logistics industry in the face of negative factors.

Such an environment requires continuous improvement, innovation and perseverance. Collaboration amongst partners in the supply chain becomes even more critical as does the availability of skilled people.

CHEP believes that the Logistics Achiever Awards provide an outstanding platform to share and celebrate success and to help raise the standards of the industry. As such CHEP is proud to be the lead sponsor of the LAA. We congratulate all participants and applaud them for their willingness to share their learnings. We pledge ourselves to continue to support logistics excellence within South Africa and to help to support our logistics pioneers as they move into Africa.

Jurie Welman President, CHEP Middle East and Africa

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LAA 2013 Sponsor

FNB Commercial Bank

This is the first anniversary of the formation of a Supply Chain niche at FNB Commercial Bank, but already this new business unit has become a centre of excellence for the benefit of the supply chain industry.

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FNB forms collaborative partnership in logistics industry

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o reinforce FNB’s commitment to the industry, and its vital role in the efficiency of the South African and indeed the subSahara African economy, we have decided to sponsor Logistics Achiever Awards to cement both our relationship with key governing associations in the industry and with leading companies that mirror our own values.

As the most innovative bank on the globe, we believe we have a great deal to offer logistics operators in providing innovative solutions to their financing needs across entire supply chains. However, FNB is bringing not just products to the table but our own unique business intelligence.

We see a considerable synergy between financial services and the supply chain industries. It is an industry that adds great value to our economy but as a highly competitive industry is simultaneously vulnerable to the vicissitudes of global financial liquidity, which can have an enormous impact on foreign currencies and availability of trade finance. In short, our two industries need to work as partners for the ultimate benefit of both parties and the broader economy.

It is precisely for the purpose of developing this partnership that we formed a dedicated focus area. We understand that globally all economies strive to break down barriers to global trade in the form of customs modernisation, and there will be considerable challenges.

FNB Commercial is here to partner with the industry in better understanding and addressing these challenges.

FNB does not claim to be a supply chain expert, but we can and do claim to understand the financing needs of a rapidly expanding industry. We are here to assist with financial solutions that embrace your entire value chain.

With an annual growth for this industry expected each year (depending on external factors such as the global economy, fuel and other costs) we are as excited as you are to be a part of this industry.

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We see an enormous amount of innovation in this industry – something we believe it should do much more to publicise, and we are willing to assist in this endeavour – and we are in the process of developing linkages so as to share ideas and innovations in both directions. Financial services have revolutionised many global industries from mobile telephony to retail, and in turn ourselves been transformed, and believe we can do the same in the supply chain industry.

FNB understands the local and international markets that businesses within the supply chain are exposed to and believe we can add value to their existing operations and assist them to break into new markets through our solutions-driven financial product offerings.

Remember, without reliable and competitive funding mechanisms in place you are simply not part of your clients’ supply chain.

Erik Boshoff Supply Chain Niche, FNB Commercial Bank Business Special 2013

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LAA 2013 Sponsor

Improvon Group

Improvon again sponsors LAA Enviro Award Leading South African industrial and commercial property investment company, Improvon, is proud to announce its sponsorship of the Enviro Award at the annual Logistics Achiever Awards for the third consecutive year in support of South Africa’s logistics and supply chain management industry.

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s business and industry is increasingly called on to reduce their impact on the environment, the Enviro Award has particular significance within the logistics and supply chain management sector as it recognises organisations that have not only minimised environmental impact within their supply chains but have successfully complied with both local and international regulations and green practices throughout their supply chain.

Improvon has long taken an industry lead in terms of its philosophy towards sustainability. The company has proactively implemented a number of initiatives to reduce both its own carbon footprint, as well as those of the buildings it manages at a time when most property investment companies are looking to cut costs. For instance, a building’s orientation is carefully considered to ensure that the interior benefits from maximum light without overheating; new developments are correctly insulated to reduce thermal transfer through walls, floors and ceilings; and many other approaches. According to Stefano Contardo, development executive at Improvon, the company considers a number of issues to ensure each building it develops is as energy and water efficient as possible. Improvon’s head office recently embarked on a further drive to reduce its own carbon footprint and has introduced a number of measures and projects to reduce its own ratings. “Going green needs to be a priority for all businesses,” maintains Contardo, “which is why we believe in supporting the LAA’s Enviro Award. Not only are these awards hugely prestigious, but we hope to encourage other companies to reduce their carbon footprint and in so doing safeguard our planet for future generations.”

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LAA 2013 Finalist

Automotive Industry Development Centre

LPG as an alternative Climate change is arguably the biggest threat to nature and humanity.

Global warming will have catastrophic effects, yet despite compelling scientific evidence, governments and businesses have responded with painful slowness. The AIDC is taking some action in Gauteng.

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limate change not only impacts the environment but business as well. Why target road vehicles? Greenhouses gases, such as carbon dioxide, trap heat in the atmosphere, and vehicle emissions are one of the biggest contributors to the problem. SA has 7,5-million registered vehicles, of which 3,3-million operate in Gauteng. Gauteng is 1,4 percent of SA’s land area, yet is home to 44 percent of the national vehicle population. The taxi industry segment represents the largest carbon footprint, being the most frequent road users, constantly on the move covering an estimated 100 000 km/year. The automotive industry worldwide has been investigating various alternate fuels that produce less, minimal or no harmful greenhouse gases.

One such alternative is Liquefied Petroleum Gas (LPG), which offers many benefits. It is already well-established in many areas and has been used in ignition engines since the 1940s.

Today more than 13-million vehicles operate on LPG. The AIDC has introduced a programme to convert taxis to LPG-powered engines. It is estimated that each vehicle could benefit by about R20 000/year in running costs, which would be passed on to passengers in those vehicles. Government funding covers the conversion kit and installation, and compensates for losses while the vehicle is off the road for about 24 hours for the conversion.

The LPG engine offers reduced running costs, a greater range than a petrol-powered vehicle, and a longer life. Extensive tests have been completed and some 600 vehicles are already in operation. Sasol is working closely with the project and has erected some dispensing stations to service for the start-up.

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LAA 2013 Finalist

BAE Land Systems SA / Turnstone Process Management Solutions

Meet customer expectations

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AE Land Systems SA (LSSA) designs and produces mineprotected and armoured vehicles, mechanical transmission systems, weapons training systems and turrets for the SA National Defence Force, SA Police and many global customers. IPS (international product support) provides after market sales of spare parts for the maintenance of vehicles in what can often be life-anddeath operation abroad. In 2011, with IPS’s average performance for spares delivery at 48 percent, major clients began showing dissatisfaction and threatening the withdrawal of their business should delivery performance not improve.

BAE LSSA in collaboration with Turnstone Process Management Solutions started the process of transforming the supply chain to improve delivery performance to achieve the industry standard of 95 percent. The first step was to visualise the value chain and to more clearly understand the key aspects of this chain and the handover points. Visual management and short-interval control was then utilised to deal with bottlenecks in the process and solve problems to achieve the new targets. Change management focused on changing the company’s culture to a collaborative approach aimed at solving the problems. The ERP system process was also aligned to the business process. Initially the outcomes were beyond expectations, quickly achieving an average of 95 percent. However, this was due to much non-standard work that resulted in a drop in performance because non-standard work was not sustainable. A process was initiated to fix the problems one at a time. This saw a dramatic turnaround and

by November 2012 average delivery performance achieved a sustainable 95 percent, resulting in significant rand savings from the process improvement.

In 2011, BAE LSSA’s average spares delivery performance was at 48 percent with dissatisfied major clients threatening to withdraw their support if performance levels did not improve in a highly critical operational environment.

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LAA 2013 Finalist

BAE Land Systems SA/UTi SDi

Kitting up to orders In early 2011, General Dynamic Land Systems – Canada (GDLS-C) was awarded a US Government contract for the upgrade of RG31 vehicles used in the Middle East.

Two delivery orders, namely DO3 and DO4, supported the refurbishment project.

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GDLS-C’s SA partners, BAE Systems, the original equipment manufacturer, would be responsible for the project delivery. The first phase duration would be nine months, the second phase eight months. This included the upgrade of 691 D03 and 425 D04 vehicles representing the refurbishment of 66 vehicles per month. BAE Land Systems SA (LSSA) appointed UTi SDi to collaborate in designing a solution to deliver against this contract. The project moved into a 26 458 m2 bare facility. Startup requirements included meeting onerous LSSA and US military specifications and strict time lines, installation of systems and the provision of the resources and manpower to achieve the first milestone four weeks from start date. Components manufactured at international locations (USA, Canada, France, Sweden and SA) were shipped to the kitting facility via air and road freight.

The kitting process required the picking and sequencing of the parts into crates, according to a unique bill of material, for each individual unit. The crates were containerised and shipped to the vehicle rebuilding facility in the Middle East. Packing had to be in the sequence in which the parts would be removed and installed into the vehicles on location at destination. Quality controls were built into all steps of the picking and packing process to minimise errors and non-conformance. Each of the subsequent milestones was achieved. Delivery of 1 453 containers with the correct kits was achieved within nine months to meet the first phase requirements.

The second phase objectives were also achieved successfully, delivering 889 containers and the upgrade of the remaining 425 vehicles.

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LAA 2013 Finalist

Beckman Coulter

B

Discover supplier engagement

eckman Coulter, a Swiss-based company, was acquired by the Danaher Corporation in the US towards the end of 2011 and occupies the biggest space within the life sciences and diagnostics division of the Danaher Group. As one of the most dominant players in the diagnostics and life science fields, the client base is divided into two divergent groups: the government and NHLS, and the private sector predominantly represented by groups like Ampath, Pathcare, Lancet and others.

The problems that were identified, were a lack of industry best practice, over-spend, non-standardisation, lack of visibility and inefficiency in the entire supply chain, and a general feeling of ‘we did not get what we paid for’. Secondly, the logistics partners and distribution models were not aligned to support the growth strategy and to meet delivery expectations and requirements.

Thirdly, the infrastructure and resources were incorrect and inadequate to support the requirement, and finally a lack of visibility, supplier engagement and collaboration existed. What made this project different is that Beckman Coulter transformed from supplier collaboration to supplier engagement and the company came to understand that the ultimate success would be based on data management and creation of real-time visibility.

From there the focus moved to optimisation, standardisation and integration with the full understanding that logistics is all about discipline. The important lessons that the company learned was that any change could only be executed through the correct strategic partnerships and true supplier engagement. And all of this would not be possible, nor sustainable, without the true understanding that ‘the best team wins’.

Beckman Coulter, a dominant player in the diagnostics and life science fields, faced a number of problems that led to a perception of ‘we did not get what we paid for’. The solution brought about sustainable changes.

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LAA 2013 Finalist

Compass Waste Services / CargoWare

Eliminating the duplication Compass Waste Services was established in 1998 to supply healthcare products and provide professional healthcare risk waste management services to the healthcare community.

The realisation that certain inefficiencies were damaging the company was seen as a wake-up call.

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ompass Waste Services grew steadily from inception, and turnover rose 238 percent in the period 2007 to 2013.

However, all was not well. The business departments operated with a ‘silo’ mentality resulting in massive duplication to achieve the same end result. Problems continually arose in trying to consolidate information for reporting purposes and compiling an overall view of the business performance. Centralised decision making and information systems made the organisation less responsive to customer needs and it was realised this had to be decentralized. Solutions were recognised and implemented: SAP Business 1 was chosen not only as the primary accounting system but also to provide functionality and user-defined options to cater for additional fields stored and updated for use in the other operational systems for sales, logistics and warehousing. The DPS PlanLogiX system supported by CargoWare was introduced.

The challenge was to find a system that would not only allow for the planning of product delivery via warehousing but also the collection of medical waste from all the hospitals and clinics serviced. The tracking/scanning solution was provided by Reutech to streamline and assist in control and management of inventory in the warehouse and also to assist in the picking process as well as the loading sequence of the vehicles. The introduction of a sophisticated, integrated IT solution across the enterprise has led to far greater performance and reduced cost. These improvements have been achieved over and above an increase in turnover of nearly 40 percent during the project phases, which indicates that the actual performance is significantly higher than the figures indicate.

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LAA 2013 Finalist

Dimension Data / Dawn Wing

AIMing for top service

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Dimension Date

and logistics imension Data, one of SA’s largest IT companies, provides services provider a host of technical services to a wide range of local and Dawn Wing global blue chip companies. Dawn Wing, a division of experienced DPD Laser Express Logistics, provides all the support logistics a number of for Dimension Data across Southern Africa. The service level obstacles in agreements (SLAs) between Dawn Wing, Dimension Data and trying to meet their client base is stringent to ensure network uptime,·refreshed IT stringent service infrastructure, critical maintenance and stockholding, availability of equipment, and deliveries of new IT kit. While both parties level agreements. committed to these SLAs, both experienced similar problems: New, appropriate technology the process of communication on service requests was done drove a major manually; lack of visibility across the supply chain; extended turnaround in debtors days due to lack of supporting documentation; inadequate performance to delivery documentation; multiple 3PL distribution; inadequate result in improved resources availability for 24/7/365 commitments; high workload customer service on warehouse staff; lack of availability of specialised fleet; and and financial inconsistent and poor customer experience. This saw the launch benefits. of a project/system named AIM (Automation In Motion), agreed upon and commenced in August 2012, which provided solutions for all the issues both had experienced. Once live, complete visibility from the sales process through to the delivery of the solution required, was provided to all stakeholders. The KPIs linked to the SLAs, with more accurate work flow management, was incorporated into the build. The process is now fully managed providing access on all KPIs proactively via web access and BI reporting. Both collaboration partners have now managed to extend their service offerings into the Dimension Data stable of companies, with more valued services and actively delivering on all service commitment.

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LAA 2013 Finalist

Exxaro / Imperial Logistics

Transformation tells the tale The Exxaro Inyanda coal depot operation, near Witbank, had been mismanaged by the then service provider.

The new supply chain partnership has created the foundation for positive production against the previous background of poor performance and working condition.

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xxaro is a JSE-listed SA-based mining group, with a diverse and world-class commodity portfolio in coal, mineral sands, base metals and ferroalloys, and growing exposure to iron ore. Exxaro is the second-largest SA coal producer with capacity of 47-million ton per annum and the third-largest global producer of mineral sands. The Inyanda service contract was taken over from the then service provider in August 2009

by Imperial Logistics. The two-stage solution implied immediate change in terms of equipment and facilities, and long-term change of systems and management, resources and protocol.

The challenge required substantial planning as the interests of all partners in terms of investment and returns had to be protected during the transformation stages. The water-logged depot was in a state of almost total disrepair and inadequate in all respects, with an unstable surface and dust contamination being just some of the concerns. Poor coal density resulted in insufficient payload capacity. The vehicle and equipment maintenance was inadequate in the extreme. The property was stabilised by deploying graders and rollers and covering the surface with a run of dump-stone. The entire fleet of transport equipment was replaced. Load cells were installed on all frontend loaders, resulting in actual measured-weight loads. The entire operation has now been transformed, and is more flexible and adaptable to deal with peaks and valleys in volumes.

It has the ability to optimally plan its operations; manage and control costs; realise efficiencies and measure productivity. The success of the supply chain partnership has been instrumental in driving continuous operational and commercial improvement initiatives.

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LAA 2013 Finalist

Home of Living Brands

Moving the big house

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Home of Living iving Brands delivers to in excess Brands consists of 5 900 stores nationally and of 14 divisions internationally. Some business that trade as units are FMCG-related products that independent require delivery cycles very different business units, to traditional back-door deliveries, each requiring and others require the products to its own peculiar be manufactured and packed. There warehousing was also a need to redesign the and distribution control of all PODs successfully to requirements. improve the business’s cash flow. The Organic solution started with an unorthodox growth of the strategy that viewed the DC as being organisation a big house with many rooms, each meant room constituting one division. So additional the DC was divided into different divisions – each with its own warehouse stock controller and scanning operation. A central receiving and despatch area increases efficiency. As space considerations had space needed to be found. become a requirement, a high-density racking system was chosen, reducing the aisle space and creating an additional 4 500 pallet positions with a significantly increased stock-holding capability.

The warehouse has a total of 18 700 pallet positions. Besides the 3PL’s transport services, two BEE transport companies have onsite offices that results in efficient communication and service delivery. Overall average delivery performance is 98 percent. To accommodate the manufacturing of aerials and packaging of electrical accessories, the outsourced packaging supplier is also on site, resulting in lead-time and supply-chain savings. A trackand-trace system is successfully followed to control PODs, with each carton having its own unique, barcoded tracking number that can be continually tracked through the supply chain. The Living Brands Roodekop DC has been successfully transformed from the previous traditional DC facility to a multi-divisional, multi-functional DC that is flexible enough to accommodate the 14 different business units’ needs.

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LAA 2013 Finalist

Joy Global Africa – UTi Africa

Africa under one roof

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The Joy Global One Project, a Joy Global Inc strategy, drives the consolidation of group companies to an integrated business in each global region. One deliverable was the consolidation of several storage locations into a single Distribution Centre for Africa Region.

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oy Global Africa, a Joy Global Inc company, manufactures and services market leading mining equipment for the extraction of coal, other minerals and ores in major mining regions in Africa and throughout the world.

The implementation of the Joy Global One Project required the consolidation of several storage locations into a single DC for Africa Region. Joy Global Africa operated from three locations near Johannesburg.

With seven storage facilities on the three sites, and the main manufacturing facility on a different site to the main warehouse (its biggest customer), the high levels of storage requirements – 1,2-million items – led to tactical and operational problems, all of which could be addressed with a single Africa DC. In collaboration with UTi Africa, Joy Global Africa devised a solution that differed from the traditional distant and hands-off customer/ supplier relationship. The relationship benefited Joy Global Africa by providing access to UTI’s Africa internal experience; Contract Logistics’ pool of experts; and other Africa supply chain partners. The design was managed in two phases using crossfunctional teams from both companies. Phase 1 focused on an organisational level and Phase 2 focused on the warehouse and distribution requirements for the new DC. The result is a strategically designed DC that will provide Joy Global Africa with a sustainable competitive advantage through increased supply chain service levels. Indirectly, the solution has also resulted in a carbon footprint reduction of 28 percent. The facility is designed to unlock value for its customers through the implementation of world-class business processes, modern technology (equipment and IT systems) and a supporting staff complement.

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LAA 2013 Finalist

Merpak Envelopes / Cargo Solutions

Winning the envelopes war

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ow margins have placed immense pressure on envelope suppliers and stockholding (availability) and on-time deliveries (reliability) have deteriorated badly in the market.

Low margins have also affected profitability. Analysis showed that being a good supplier of plain envelopes (made to stock or MTS – availability) and reliable in the delivery of customised envelopes (made to order or MTO) based on promised due-dates, will certainly be a definite and Decisive Competitive Edge (DCE) in the market. If a supplier could drastically reduce production times to deliver reliably in very short lead times, that would be a further great advantage. Merpak with service provider Cargo Solutions, implemented Theory of Constraints (TOC) principles, and specifically the supply chain solutions, to address the problems. The project consisted of a TOC knowledge transfer phase to the management team of Merpak, and strong and decisive leadership from Merpak to drive the project further, incorporating the deployment of a TOC enabling system. The project lasted some two years, and all organisational functions were involved, including procurement of raw materials, production planning and execution, distribution, and sales.

A re-look at all manufacturing and supply chain management processes has produced some favourable results against a background of a threat due to the new data era. Availability improved to levels approaching 100 percent. Initial high levels of stockholding decreased and overstocking is now well maintained. Customer duedate commitments improved substantially. Production lead times decreased substantially – from 22 to 10 days standard, and then fast deliveries in three days. Market share, profitability, and ROI all improved as a result of the project.

The envelope manufacturing industry is under pressure due to electronic mediums increasingly becoming the standard.

Spare production capacity has resulted in South Africa, and imports are very cheap and easy. This had placed pressure on profitability for Merpak Envelopes.

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LAA 2013 Finalist

Nissan South Africa

Sharpening competitive edge It became clear to Nissan South Africa that the company had to improve its supply chain cost competitiveness to be in a position to effectively compete and tender for global export contracts against other global vehicle manufacturing facilities.

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issan SA had to overcome its geographical disposition and subsequent on-cost of having a landlocked plant, 600 km from the nearest port. The company experienced high abnormal logistics costs including airfreight, road haul and demurrage charges, and frequent production line stoppages due to parts non-availability. Long build schedules and low integration levels with global systems also limited export opportunities and caused higher than ideal inventory levels. Nissan established a multi-faceted strategy culminating in several projects that addressed every area of the supply chain. Structure, systems, design and finally employee mindsets and actions were all changed to deliver an exponential improvement in supply chain management performance, including cost, free cash flow and delivery. Nissan worked collaboratively with key supply chain partners – DHL, Bidvest Panalpina Logistics (BPL) and CHEP – to establish world-class supply chain solutions that ultimately delivered exponential improvements and created new global benchmarks in several areas of the supply chain. Major projects included implementation of a supplier milk-run with service partner DHL collecting and consolidating stock from all local suppliers; of a world-class container yard/logistics hub with partner company BPL; of Nissan’s European ERP system; and of flexible vehicle ordering on local vehicle production. Container operation has completely eliminated demurrage (ageing containers) and consolidated vehicle containerisation, car train operations and component export operations into one central logistics hub. One-way packaging within the local supply was eliminated through a CHEP Automotive returnable packaging solution. Global logistics best practices were put into place and executed. This complex solution succeeded through a finely tuned multi-party execution to give Nissan a new-found competitive edge.

Business Special 2013

LAA 2013 Finalist

SA Breweries / InSync Solutions

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Ensuring successful promotions

he problem SA Breweries was experiencing within its below-the-line (BTL) value chain manifested as promotional campaigns that failed to reap the forecasted benefits. Anecdotal evidence suggested that sales figures should have been higher based on the promotional investment attached. BTL and above-the-line (ATL) ‘messages’ must be aligned, they must hit the market at the same time, and carry a uniform and aligned promise to the target audience. In SAB’s case BTL campaign material often reached the market late, or not at all.

In turn, the misalignment between BTL items and ATL activities was due to operational challenges within the BTL supply chain resulting in late and limited delivery of promotion specific point-of-sale and merchandise items in the market. The SAB team responsible for BTL promotion execution was split across multiple business functions. Conflict of interest often resulted in poor overall promotion execution, which resulted in excess and obsolete inventory. A joint project team from SAB and InSync Solutions, part of Imperial Logistics group company Resolve, was appointed, with its steering committee accounting directly to the SAB marketing director, to examine the challenges and present solutions to the problem. These were addressed in four areas: people, processes, network and technology. The project resulted in immediate and sustainable quantifiable and nonquantifiable outcomes. Some of the improvements resulted from the centralisation and tighter control of the BTL material, which led to greater agility. Better OTIF delivery of the promotional material was being recorded. This led to greater visibility and more successful events management. Lower inventory levels were required and improved inventory accuracy was also recorded.

SA Breweries became aware that some promotions were not having the desired result.

One of the root causes identified was the misalignment between belowthe-line (pointof-sale) items and above-theline activities.

This confused the customer and diluted the overall brand experience.

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LAA 2013 Finalist

Sasol Oil

Forging the value chain

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In 2008, as part of the migration to a supply chain organisation, Sasol Oil centralised its planning function, embedded an integrated planning philosophy into its core business processes and extended business planning to cover its entire value chain.

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istorically, the portfolio of work for the planning function in Sasol Oil spanned production planning and high-level supply and demand balancing.

Other facets of planning, as well as business planning cycles were dispersed across functions in the organisation. New and innovative technology needed to be developed to enable this vision. There are four cycles that occur within the integrated planning function. Within the operational planning sub-function are two cycles, namely long-term scheduling and sales and operations planning.

Within the tactical planning sub-function, are two cycles, namely target setting and strategic supply chain planning. Sasol Oil embarked on developing and implementing an integrated planning technology solution to enable the enhanced portfolio of work for the operational planning horizons. A re-design of the business processes within the planning function was conducted to enable this vision and incorporate the integrated planning technology solution. All these process and technology enhancements work together to embed an integrated planning philosophy into the sales and operations planning and long-term scheduling processes. The ultimate aim of integrated planning is to maximise economic value-add to Sasol Oil. The benefits seen to date have been a greater focus on planning accuracy, a greater focus on inventory management with improvement as well as margin improvement through channel and customer optimisation. Anticipated benefits include: margin improvement stemming from an increase in planning accuracy enabled by technology and further collaboration; multi-period optimisation from a global perspective enabled by technology; customer and channel optimisation enabled by technology; and working capital reduction stemming from inventory management of raw materials and products enabled by technology.

Business Special 2013

LAA 2013 Finalist

Sasol Oil – Resolve

Logistics Command Centre

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asol is an international integrated energy and chemical company that employs more than 34 000 people in 38 countries. Sasol Oil (one of various business units in Sasol Group) markets fuels blended at Secunda and refined at the Natref oil refinery at Sasolburg, and operates around 410 Sasol and Exel retail convenience centres across SA. The historical decentralised approach to logistics planning, execution and analysis at various levels demonstrated a number of deficiencies: lack of visibility across functional boundaries; lack of optimisation and appropriate use of technology; lack of standardised, well-designed and repeatable processes; reliability on personal experience for decision making; and duplication of effort. The Functional Excellence initiative had as an objective to implement simple, standard and shared practices that would assist Sasol to achieve its objective of being a world class supply chain organisation and achieve greater efficiency in execution while also improving service delivery. As part of this initiative, the outbound logistics activities would be executed in conjunction with the business units, according to agreed service levels, by a world class, technology-enabled Logistics Command Centre (LCC) that continuously exploits logistical synergies toward increasing related efficiencies while achieving benchmark levels of effectiveness. This intervention developed by Imperial Logistics group company, Resolve, fundamentally changed the nature of the outbound logistics process in the business from decentralised, Excel based to centralised, integrated and technology enabled.

The future holds exciting potential for the operations including: LCC can provide a supporting platform for bolder tactical improvements; rollout to other Sasol business units; incorporation of rail and other modes of transport; and continued drive to improve the outbound logistics performance.

As part of the broader Functional Excellence review of processes in the Sasol group, it became apparent that the business as a whole was not maximising efficiencies in and across business units regarding outbound logistics.

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LAA 2013 Finalist

Savino del Bene

Keeping the tyres rolling The logistics behind delivering in excess of 12-million tyres to the South African market are staggering, particularly if one considers that they are distributed among some 10-million vehicles running on the nearly 400 000 km road network throughout the country.

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avino is involved in the imported tyre segment with 2012 statistics showing 5,5-million units imported, of which Savino handled in excess of 36 000 tonne or 75 percent.

The criteria for success for the imported tyre brands lie in meeting the end-users demands for immediacy. The many key imported brands available today and the rapid proliferation of new ones, demanded an effective integrated logistics and supply chain managed service along with continual up- and downstream optimisation. A real-time visibility of tyre movements from being loaded into containers at origin countries all the way to the fitment centres throughout SA was a key differentiating factor to provide optimum supply chain value. The industry comprises a number of competitors posing difficulties in volume-based supply chain solutions. Savino clustered most of the major tyre industry players, providing an end-to-end supply chain managed solution that included freight forwarding from origin countries, customs clearance, warehousing (free and bonded) and national distribution. Warehousing for these imported tyres amounts to some 65 000 m2 situated near Johannesburg (Jet Park x 2), Cape Town and Durban.

Auditing firms are regularly reviewing the stockholding of their customer’s inventory in the Savino warehouses and the company remains confident that stock accuracy figures are at the top percentile in world benchmark terms. This approach brings with it high efficiencies and cost control that translate into bottom-line benefits for the tyre manufacturers and importers resulting in a competitive advantage in the market place where each point counts. It has also facilitated an outstanding customer service at the retail end of the business.

Business Special 2013

LAA 2013 Finalist

Shell South Africa / Tanker Services

Containing the hazards

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hell SA was concerned by an escalating number of spillages and contaminations occurring at load points and also at customer off-load points. These incidents were the result of several issues, including drivers selecting incorrect delivery lines; customers not issuing product delivery instructions; product left on board and not reported by drivers; and drivers loading into the wrong compartment.

Contamination refers to the mixing of different products, such as petrol and diesel, and occurs when a driver delivers different grades of fuel into the incorrect tanks at the delivery site, or when one grade of fuel is loaded into the wrong trailer compartment. Several interventions were undertaken to reduce the number of spillages, contaminations and accidents, including root cause analysis. Shell then launched a comprehensive programme to identify, correct and monitor future problems. To address driver errors resulting in spillages and contaminations, Tanker Services implemented refresher driver training, introduced colour-coded delivery lines and hoses to assist drivers in selecting the right delivery line, increased job observation and enforced consequence management.

Training was given top priority, and Shell adjusted the driver-totrainer ratio to 25:1, with a focus on remedial training and in-cab evaluations every three months for new drivers and every six months for those with more experience.

Dangerous goods, product handling and defensive driving training courses were implemented, and underscoring drivers are required to attend remedial training.

Due to the high number of spillages, contaminations and accidents on contracts at various operations, Shell SA had to examine the risk to its business. These incidents were among the issues that were arising as a result of drivers’ inexperience.

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LAA 2013 Finalist

Triton Express / Dovetail Business Solutions

Crossing borders into Africa

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Triton Express was formed in 1987 to provide cargo transport between Durban and Johannesburg.

Over the years the business grew and in the process recognised the need to extend its services into neighbouring countries.

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he past decade has seen Africa rise in the global village – evidence of Africa’s progress and growth appears real and sustainable.

Ernst and Young assisted with statistics and identified growth areas, opportunities and restrictions. Triton’s goal became to provide: the best distribution services into neighbouring countries; to provide service levels that exceed customer expectations; and to use the latest technology to maximise productivity. However, it became clear that there were no reliable distribution suppliers in those countries. The solution was to procure local expertise and compatible business partners. Successful medium- to long-term sustainable expansion cross-border is boosted by having resources on the ground that are already successfully entrenched in the markets. Triton acquired businesses in Swaziland and Zimbabwe, while partnerships were established for the Mozambique and Namibia operations. Each operation was project managed by the Triton team and, in collaboration with Dovetail Business Solutions, IT systems were modeled on the SA IT systems at Triton Express. Currently 65 new jobs have been created in six new branches (in SA and in neighbouring states); Triton has invested in a number of new vehicles to service these areas; has been able to expand its service offering to both its current client base and to attract clients in new market verticals including mining; has increased services levels for its Namibian partner from 42 to 97 percent on-time delivery; four of the six cross-border branches have shown profitability in the first 12 months; and this has paved the way for these operations to contribute in the region of 10 percent to overall group turnover.

Business Special 2013

LAA 2013 Finalist

UTi Pharma

Dispensing capacity UTi Pharma was faced with the challenge of existing facilities at capacity, expiring leases in nine facilities, and multiple operations within a region. The business was experiencing growth both from acquiring new customers as well as exponential organic growth and needed a sustainable solution to support the forecasted business growth. Various options for building additional capacity into the current network were evaluated. Retrofitting existing operations, expanding current facility footprints and differing storage media were evaluated. The decision was reached that a new distribution centre, which centralised the various nationally situated warehouses, would best serve the business needs.

Alternatives on material handling equipment were evaluated, with the optimal solution being an automated operation to manage the large number of products that have to be stored and picked. This design was driven through UTi’s two key partners in the project: Fortna and SSI Schaefer. Fortna and SSI Schaefer helped UTi through the challenge of automating its supply chain and accompanied Pharma in the implementation of customertailored dynamic processes. Different warehousing solutions were combined, merged and a highly-efficient but nonetheless economically priced solution found. Positive effects that resulted from the new distribution centre are shorter delivery times, more flexibility, a higher accuracy, reduced operating costs, and the creation of high-quality jobs, for example in the IT department. UTi is now able to respond faster to market demands and developments to fulfil customer requirement.

A process of moving from one established area of operation to a completely new stateof-the-art facility has clearly brought about many new process efficiencies and greater customer satisfaction.

UTi Pharma is a leader in the pharmaceuticals distribution industry, handling 14 000 parcels per day, 4,8-million order lines per year, with 8 000 customers and operating from distribution centres in Gauteng, Linbro Park, Longmeadow, Cape Town, Durban and Port Elizabeth.

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LAA 2013 Finalist

Walvis Bay Corridor Group

Unlocking the corridor Prior to the establishment of the Walvis Bay Corridor Group, there were no established transport links with landlocked countries to the north and east; there was regional isolation and no political and economic integration into the SADC region.

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or SADC countries, all trade came via South Africa and the landlocked countries had no alternative entry/exit point through which to move goods. Businesses had limited knowledge about Namibia and other SADC countries. The Port of Walvis Bay was the youngest regional port and very underutilised with only a third of the capacity being used to move goods. The Walvis Bay Corridor Group (WBCG) was established to engage in business development activities and to resolve all trade facilitation related matters dealing with customs, immigration and transport regulation issues at the designated border sites along the Walvis Bay Corridors – effectively a network of transport routes consisting of the Port of Walvis Bay and the TransKalahari Corridor, the Walvis Bay-Ndola-Lubumbashi Development Corridor (previously known as the TransCaprivi Corridor) and TransCunene Corridor. It offers importers and exporters a chance to avoid the much congested and highly expensive Durban port.

Its organisational strength is its Public Private Partnership setup comprising transport and logistics stakeholders from both the public and private sectors. The partnership allows for the pooling of resources, expertise and authorities from both the regulators and the operators, who together form an integrated transport and logistics service for potential customers. The WBCG is able to engage with the public sector while the private sector can focus on business development.

In view of Namibia’s unique geographic positioning on the West Coast of Africa and proximity to the markets of Europe and the Americas, it makes sense that the Walvis Bay Corridors are positioned as the regional transport hub of choice in the foreseeable future.

Business Special 2013

Previous Winners 1989 Volkswagen South Africa 1990 Unifruco 1991 Meadow Feeds Delmas 1992 Foschini 1993 Mondi Board’s Springs Mill 1994 South African Air Force 1995 Polifin PP 1996 Mondi Forests 1997 Vierhoek Trust 1998 Toyota Automotive Components; The Help Foundation 1999 Robor Tube 2000 National Brands 2001 Supply Chain Solutions/ Pep Stores 2002 Spoornet Orex; Viamax Logistics 2003 Dimension Data/UTi; SPAR Eastern Cape 2004 Kutama Sinthumule Correctional Centre; Sasol Polymers 2005 Kintetsu World Express SA; Cape Epic/Imperial Logistics; Shoprite Checkers/ILS; Buhle Betfu/Cargo Carriers 2006 BMW SA 2007 Illovo Sugar SA/ Barloworld Logistics 2008 Woolworths; Flavourcraft 2009 GMSA/UTi 2010 Nike SA / Barloworld Logistics; UTi Pharma 2011 Maputo Corridor Logistics Initiative 2012 Crickmay & Associates

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