Sunday Times Supply Chain - February 2021

SUPPLY CHAIN 2021

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FLEET MANAGEMENT

Management

Using big data analytics to streamline the value chain

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› ENTERPRISE SUPPLIER DEVELOPMENT › MATERIAL HANDLING › WASTE MANAGEMENT › CONSULTANCY

LOGISTICS

How to lower costs and increase productivity

MAXIMISING CUSTOMER VALUE

How technology is making the supply chain more efficient and safer

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OILING THE WHEELS OF SUPPLY CHAINS WITH INNOVATION Leveraging its skills and resources, South African transport and logistics company Unitrans is pioneering innovations in several supply chains with impressive results

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hen supply chains operate seamlessly, customers receive products and services on time, at the right price and the right place.

Operating in a dynamic environment

with increasing demands and constraints has created volatility within supply chains.

Digitisation, enhanced technologies, machine learning and artificial intelligence are disrupting and revolutionising supply chains, creating

LARGEST (MOST COMFY) CHICK TRUCK IN SOUTHERN AFRICA

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here was great excitement at the recent commissioning of the new Unitrans/RCL FOODS chick truck.

The custom-built, best-in-class vehicle was commissioned at the RCL FOODS hatchery in Rustenburg in early October 2020. The new innovative design allows for increased payload capacity, making it the largest truck in Southern Africa for the transportation of day-old chicks. Increased payload capacity means fewer trips are needed, resulting in an environmentally-friendly and more sustainable approach.

The chick trailer was conceptualised, designed and executed by a joint task team comprising Unitrans, its customer, RCL FOODS, and industry specialists (hatchery equipment suppliers). After working together for almost two decades, the relationship between Unitrans and RCL FOODS has evolved from that of supplier-client to a strong, collaborative partnership, which leverages the strengths of both parties.

After significant international research, the joint task team developed a solution that takes into account South Africa’s unique geographic and climate conditions.

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new opportunities and enabling unique solutions. Unitrans South Africa is ensuring the smooth operation of supply chains with its pioneering innovations, two of which are featured below.

The design team. Front row (Left to Right): Willem de Lange; Korf Stoltz; Peter Griesel Back row (Left to Right): Barend Liebenberg; Nico van Wyk; Andries Smith; Ryno van den Berg

ANIMAL WELFARE FIRST The design team’s number one priority was the welfare of the birds. So, they focused on replicating the hatchery environment to ensure that the chicks experience minimum discomfort while in transit. The more stable the environment from hatchery to transit, the less disruption and stress the chicks experience.

The precise control of ventilation and temperature creates the ideal mobile hatchery environment and is perfect for ensuring that chicks arrive at customers in top condition.

INNOVATIVE AND SUSTAINABLE SOLUTION Strategically placed ducts for multidirectional airflow ensure that enough fresh air is circulated to allow the chicks to breathe comfortably for the duration of the trip while ensuring the temperature is carefully controlled at the ideal level. Primary and secondary filters ensure the air is kept clean and clear of fluff. These filters and all other moveable parts are made from stainless steel for enhanced biosecurity. Filters are easily

removed for cleaning and changed after each trip.

The joint design team incorporated a three-layer back-up ventilation system in the truck and the tail lift was designed to tuck under the trailer instead of in front of the doors so that the doors can be opened in case of an emergency. The tail lift also has side ramps allowing for more loading/ unloading options and enabling easier and quicker loading and unloading of the chicks.

WIN-WIN FOR CHICKS AND FARMERS Initial statistics reveal that the care and thought put into the trailer design has paid off and farmers are very pleased with the condition and wellbeing of the chicks on arrival.

Transport plays a crucial role in ensuring that chick quality is maintained. While transport cannot improve the quality of a day-old chick, it can certainly harm it.

Unitrans prides itself on having the expertise, capital and resources to drive vital initiatives of this nature.

THE DESIGN TEAM’S NUMBER ONE PRIORITY WAS THE WELFARE OF THE BIRDS. SO, THEY FOCUSED ON REPLICATING THE HATCHERY ENVIRONMENT.

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COLLABORATION FOR TOP EXPERTISE

The Unitrans Control Tower delivering visibility and value for its customers

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hrough significant investment in technology and skills over the past four years, coupled with innovative approaches to customer challenges, Unitrans is pioneering change and innovation in the logistics and transport industry, delivering solutions and spearheading industry best practice.

Operating 24/7, the Unitrans centralised control tower was established to assist in mitigating the risk of theft and hijacking, monitor the movement of vehicles, ensure load integrity for customers and drive operational efficiencies. It provides a bird’s-eye view of the company’s operations in real-time.

Developed by integrating several best-of-breed, cutting-edge technologies, the control tower allows end-to-end visibility and control in real-time – visibility of the order, the vehicle, drivers and even third-party logistics partners. Alerts are triggered proactively to deal with impending delivery risks.

This enables Unitrans to identify potential issues and correct them before they escalate.

“I sometimes have to stop and remind myself that we built this from the ground up,” says Jacques Greeff, Unitrans’ operational excellence executive. “Our big, bold goal has manifested into a centralised operational control tower that manages approximately 2 000 vehicles across six business units, and close to 30 000 events per week.”

DELIVERING BENEFITS AND VALUE “The control tower has brought about numerous advantages for our clients and other stakeholders,” continues Greeff. “It is a proactive management tool that allows Unitrans to offer its customers live, real-time solutions, enabling safe and reliable supply chain management. It is also scalable and can handle complexity.”

Increased customer satisfaction as a result of improved fleet efficiency, improved risk management and better safety are just some of the benefits customers enjoy.

“Our role as a logistics and transport provider is evolving,” continues Greeff. “It is not just about managing assets, but also about managing information, providing visibility to our customers and delivering value.”

Real Results, Real Solutions The results are impressive. In the 18 months that the centralised control tower has been in operation, there has been a 42 per cent improvement in driver awareness, while distracted driving incidents have improved by 45 per cent. And, the overall number of incidents/ events has also declined steadily.

With all the information available through the control tower, Unitrans can provide better, targeted training to its drivers. Drivers are also coached on repeat alerts.

THE CONTROL TOWER ALLOWS END-TO-END VISIBILITY AND CONTROL IN REAL-TIME – VISIBILITY OF THE ORDER, THE VEHICLE, DRIVERS AND EVEN

THIRD-PARTY LOGISTICS PARTNERS.

Expertise across the supply chain was brought on board for the project. Unitrans partnered with its specialised software providers to capitalise on their expertise. This unique, sustainable approach meant that the relationship was no longer a supplier-customer one, but rather a purposeful, strategic alliance.

Part of the team from the outset, Greeff was deeply involved in the detail of the original concept and the practical roll-out. In Unitrans’ true visionary leadership style, he became the test case and had each of the technologies installed in his vehicle to continuously monitor his driving.

“You need to embody your vision and lead by example,” he says. “The centralised control tower is transparent and open. It is important to make everyone part of the journey – from the operators in the control towers to the drivers and administration team – the entire labour force.”

About commitment, Greeff says: “The moment people realise that they are seen, heard, appreciated and understood, and that everyone contributes to the greater goal, that is the moment that you achieve total buy-in.”

Visionary Leadership Greeff adds: “None of this could have been achieved without the incredible support from our executive team, fundamentally important alignments with functional resource partners, relentless effort and focus from our operational excellence team, and many long hours of dedicated effort from every single member of our control tower.

“There is no doubt that we have one of the strongest execution models in sub-Saharan Africa,” concludes Greeff. “You can have the best technologies, top expertise and building blocks in place, but if your execution model is not right, the true value proposition is lost.”

Unitrans’ drive to push boundaries, break the status quo, and pioneer new solutions is relentless.

It continues to invest in technology and people, focusing on innovation as one of its core values.

Its approach can be summed up in the words of inventor Thomas Edison: “There is a better way to do it. Find it.”

For more information: +27 21 762 0061 www. ni rans.co.za

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F ROM T HE EDI T OR

Change is

constant

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here is little doubt that the supply chain and the management thereof have been significantly impacted by the COVID-19 pandemic, which has taught the industry some tough leadership lessons. At the same time, it has also provided many learning opportunities, hammering home lessons about how better to prepare for unexpected disasters, how to deal with the concomitant financial impact and how technology is critical to changing the way we do things.

It is clear that emergent technologies – from the Internet of Things and edge computing to artificial intelligence, data analytics and blockchain – hold enormous promise when it comes to more efficient and cost-effective supply chain management. The evolution of these technologies, coupled with the lockdowns that hobbled traditional commerce for a lengthy period, has led to a huge increase in the digitalising of supply chain management and a focus on future-proofing it.

The massive surge in ecommerce during 2020 created a dichotomy for those organisations now operating both online and bricks-and-mortar operations. These businesses face numerous challenges, given the requirements that an omnichannel approach places on their supply chains, notably in terms of speed, complexity and efficiency.

Effective logistics is one way to solve this dilemma, and it is something that also goes hand-in-hand with fleet management.

Technology is playing an increasing role here as well, so in this issue of Supply Chain we look into the impact of the technological revolution on fleet management, which encompasses everything from live fleet monitoring to automation. We also consider some of the ways technology can be installed in long-distance trucks, ensuring safer driving habits, better protection for cargoes and more secure routing, thereby avoiding both man-made and natural dangers.

Of course, a critical aspect of the supply chain is the warehouse, and here it is important to know what the latest and safest equipment is, how occupational health and safety are dealt with in this environment, and how using automated systems helps to reduce overhead costs and speed up delivery.

Delivery speed is particularly crucial, as in today’s highly connected world, customer

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expectations for faster product delivery have risen significantly. Thus it is necessary to gain an understanding of how companies can seamlessly combine logistics, warehousing and transport in order to meet these expectations.

Many companies also find it difficult to balance supply and demand due to forecast inaccuracies, evolving trends and changing customer preferences. Overcoming these challenges requires supply chains with efficient inventory and asset management practices, and which are able to respond to market dynamics with high agility and low costs. At the same time, the amount of available structured and unstructured supply chain data continues to grow at an exponential rate, meaning data management is also more important than ever.

And what about waste? Any supply chain will generate various forms of waste, creating a new set of challenges. Physical waste is expensive to deal with, while non-physical waste, such as inventory mismanagement, long lead times and transportation and routing issues, impacts not only costs, but also your reputation and the customer experience.

“Technology holds enormous promise for more efficient, cost-effective supply chain management.”

For large organisations, the supply chain represents an opportunity to assist in the development of small enterprises and suppliers, recruiting, training and involving them in specific aspects of the logistics chain.

Effective enterprise development will have a positive impact on the larger organisation’s B-BBEE credentials too, making it beneficial to both parties.

One thing we can be certain of: in a globalised world, supply chain management is only going to grow in importance, making it a sector worth considering entering as a career. In this issue, we also look at the options available to learners, including university degrees, internships and certification courses, as well as what skills will be most suitable for this sector in the near future.

So what does the future hold for supply chain management? In an industry that has had to evolve rapidly to overcome the challenges created by COVID-19, it is difficult to predict. However, there is no doubt that the changes already wrought by the pandemic, and those still to come as the industry adapts to this new paradigm, are going to make the supply chain arena of the future a very exciting place to be.

Rodney Weidemann

PUBLISHED BY

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Contents

5 LEADERSHIP INSIGHTS

Last year provided many leadership lessons, from how better to prepare for unexpected disasters to dealing with the concomitant financial impact.

14 GLOBAL TRENDS

Among the key trends for 2021 is the application of new technologies to increase the agility, flexibility and customer-centricity of modern supply chains.

20 TRANSPORT

The long-distance trucking game has undergone a technological shift that is making drivers and cargoes safer, and the supply chain more effective.

26 ENTERPRISE SUPPLIER DEVELOPMENT

We take a look at how an enterprise chooses the suppliers it works with, and the impact these SMEs have on the enterprise in terms of their own B-BBEE levels.

56 LOGISTICS 30 FINANCE

Forecast inaccuracies, evolving trends and changing customer preferences highlight the importance of inventory and asset management, while good data management practices are vital for supply chain planning.

35 CONSULTING

Consultants can have a positive impact on an organisation’s supply chain, demonstrating the importance of these individuals, while building resilient supply chains has never been more vital in this era of globalisation.

41 TECHNOLOGY

The rise of new technologies is having a significant impact on this sector. From IoT to AI and blockchain and on to digitising supply chains and implementing omnichannel to improve ecommerce, the benefits are only matched by the speed of evolution, which means you need to future-proof your supply chain.

47 MATERIAL HANDLING

Warehouse work can be tricky and dangerous, which is why specialised material handling equipment is necessary, as is safety training and strong processes governing warehouse operations.

51 FLEET MANAGEMENT Modern fleet management is more crucial to the supply chain than ever, so using solutions from live fleet monitoring to automation, along with big data and analytics, can only help you manage your fleet strategy better.

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More effective logistics management can lower costs and increase productivity, while helping to meet raised expectations and improve the customer experience, as it will help you get the right product to the right place at the right time.

60 FAST SUPPLY CHAIN

Fleet management has been significantly improved with technologies like collision avoidance systems, remote diagnostics, gamification and a variety of critical sensors. At the same time, there are broader megatrends in this arena that are critical to note.

64 GOVERNMENT

Special Economic Zones have been created to assist local businesses, while creating more efficient supply chains. On the other hand, regulatory controls on the supply chain can have a major impact on operational efficiency.

69 SKILLS AND TRAINING

Supply chain management’s importance continues to grow, making it a careerworthy option. While new skills will be required as this industry evolves, these can be learned through various university degrees, certification courses and even internships.

74 WASTE MANAGEMENT

Reducing waste in the supply chain equals reducing costs, and can best be achieved through a policy of reducing, reusing, and recycling, but what about the non-physical waste, such as long lead times, transportation and routing issues, inventory mismanagement, the misuse of internal resources?

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L E A DERSHIP INSIGH T S

2020’s key lessons for leaders Last year brought huge challenges for business, which had to adapt quickly to operating amid a global pandemic.

Caryn Gootkin asks business leaders what they learned from managing these huge challenges

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e learned that cash is king,” says David King, finance director at CGI Creative Graphics International. “The protection and forecasting of cash flow was essential, so weekly forecasts ensured we always had a finger on the pulse of the business.”

Preserving cash flow means controlling expenditure and regularly changing short- and long-term strategies. “Our regular business – manufacturing badging and graphics for the automotive industry – has a long cash-to-cash cycle, so we introduced a cash-generating product to maintain our cash flow,” says King.

David King

The importance of staff loyalty

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In extraordinary times, we rely heavily on our people. “Our sustainability is underpinned by the ability of our people to function, while our biggest risk is staff fear and uncertainty

CGI’s regular customers are clearly defined: original equipment manufacturers. “Offering a new product to a different and far larger base, including old-age homes, hospital groups, and retailers, meant communicating quickly and effectively with potential customers,” explains King. “We developed a web page for our Survisor face shields, and marketed our PPE products through social and other media.”

Lang points out that with ecommerce activity growing, following the various lockdowns, many consumers now prefer purchasing online. “Invest time and money in your online presence across various platforms and security for payment gateways, in order to establish credibility with consumers.”

Communication “It was vital, particularly during hard lockdown, for us to keep our regular customer base – especially export customers – aware of the state of business,” indicates King. “We rely heavily on visiting export customers, so we had to learn to use platforms like Zoom and Teams to communicate regularly with them.”

Customer service King says that, even when producing a new product for a very different customer base, superb customer service is key.

“Excellent customer service is a minimum requirement,” agrees Lang. “With many businesses fighting for survival, delighting your customer is an absolute must.”

Capacity to learn and adapt “Pivot” is the term many businesses would use to describe the production shift King describes. “We were fortunate to be able to pivot our business to manufacturing face shields and related PPE,” he says. “Our 2020 strategy included a focus on Jack Trout’s saying: ‘It’s better to be first than it is to be better,’ but we had no idea how key this would become as we were one of the first to start manufacturing PPE in lockdown, which brought the attention of a whole new customer base.”

The capacity to adapt and learn arises from agility, says Jeremy Lang, regional general manager for Business Partners. “Agility with specific reference to staff, operating models, product or service offering, customer engagement and systems is something that must be reviewed on a regular basis.”

Online presence

Planning ahead about their individual futures in the business,” notes Gavin Williams, group CEO of EBS International. “We found it important to manage staff uncertainty by constantly sharing as much information as we could, as well as confirming our intentions not to reduce salaries or staff headcount.”

Lang says having the right people employed in the right positions is key to the sustainability of your business. “New roles and functions evolve as a result of the changing environment, so the development of new or different skills and staff-retention strategies are also key considerations.”

“Our staff worked through challenging times and showed incredible commitment to helping the company to trade,” says King. “We relied on their skills to adjust our systems, while still adhering to world-class manufacturing standards.”

Regularly reviewing your business strategy allows you to adjust to circumstances as these arise, says King. “It was extremely important for us to plan to phase in our regular business after hard lockdown.”

“Leadership is difficult and complex; in uncertain times, decision-making cannot be delayed,” says Williams, who credits the chess-themed TV series The Queen’s Gambit with reaffirming his “focus on strategic thinking rather than crisis-based responses to unanticipated events”.

Jeremy Lang

“Invest time and money in your online presence across various platforms and security for payment gateways, in order to establish credibility with consumers.”

– Jeremy Lang, regional general manager, Business Partners

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PROFESSIONALISING SUPPLY CHAIN MANAGEMENT

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SAPICS is committed to the professionalisation of supply chain management throughout Africa and focuses on education, knowledge-sharing and networking for industry professionals

Audience enjoying Robin Banks - 2018 Annual Conference

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irtually everything that we use or touch daily has reached us through supply chains. They connect everything and make our societies and economies function. According to SAPICS, the professional body for supply chain management, supply chains and effective supply chain management have the power not just to ensure the smooth flow of goods and services from the point of origin to the point of consumption, but also to save lives and the planet and to ensure brighter futures for individuals, organisations and communities.

Since it was founded in 1966, SAPICS has been building supply chain management excellence in individuals and enterprises through world-class education, training and events, internationallyrecognised certifications, comprehensive resources, and a community of accomplished industry professionals. The annual SAPICS conference, which was established 42 years ago, is the leading education, knowledge-sharing and networking event in Africa for supply chain professionals.

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The organisation is at the forefront of the drive to professionalise the supply chain management profession in Africa. SAPICS president Keabetswe Mpane explains that by professionally designating individuals, SAPICS will increase supply chain management competence, knowledge and skills, and industry professionals will have prescribed values and ethics to uphold.

“The ongoing professional development required to maintain designations will ensure that African supply chain management keeps pace with global best practice so that optimised supply chains can drive the competitiveness and growth of African businesses and economies,” she says.

“Until now, the supply chain field has been unregulated in terms of levels of competence, skills and ethics.”

This year will see SAPICS adding impetus to its drive to advance and standardise supply chain skills and practices across the continent.

Mpane says that the COVID-19 pandemic highlighted the importance of supply chains, including the vital role that they play in the global economy, to everyone.

“The ongoing professional development required to maintain designations will ensure that African supply chain management keeps pace with global best practice.” – Keabetswe Mpane,

president, SAPICS

“The conversations around supply chain are happening far more frequently. From being a profession that was not well known or understood, the role of the supply chain professional is now recognised as a strategic imperative essential for every aspect of a company’s operations and, through the provision of goods and services, as a critical enabler of economic growth. As the workforce is reshaped by this pandemic, the need for supply chain professionals will only continue to grow. We need skilled, ethical, suitably qualified and professionally designated supply chain professionals now more than ever,” she says.

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MAKING SUPPLY CHAIN MANAGEMENT SEXY SAPICS is passionate about encouraging young professionals to consider a career in supply chain management and educating them about the diverse industries into which such a career will take them.

The annual Young Professional and Student Conference showcases supply chain professionals working in supply chain management roles in industries as diverse as cash management to public health.

PARTNERING WITH THE BEST

North West University students at SAPICS Young Professional and Student Conference

THE VALUE OF INTERNATIONAL CERTIFICATION FOR SUPPLY CHAIN SUCCESS

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ith businesses increasingly recognising the importance of the supply chain to the organisation, the demand for suitably qualified and skilled supply chain professionals is growing, says SAPICS, the professional body for supply chain management.

SAPICS president Keabetswe Mpane says that supply chain programmes teaching core skills were once scarce, and many supply chain roles were filled by individuals who were functionally trained in finance, engineering, pharmacy and various other roles. “Today, however, with the supply chain more widely regarded as a revenue driver, the need for supply chain education is increasing.”

Mpane says that supply chain practitioners without the combination of recognised, credible education and sound

practical experience will be left behind as businesses recognise the value of the supply chain and the benefits that supply chain improvements can deliver across other business functions.

INTERNATIONAL CERTIFICATION THROUGH SAPICS SAPICS is the South African custodian of a variety of internationally-recognised certifications – the APICS CPIM (Certified in Production and Inventory Management), CSCP (Certified Supply Chain Professional) and CLTD (Certified in Logistics, Transportation and Distribution). These are offered by SAPICS in association with its American affiliate, APICS. A new suite of designations from the Demand Driven Institute in the USA are also highly sought after as well as the ever-popular Certified Professional Forecaster from the Institute of Business Forecasting (IBF).

“Successful supply chain management is essential to compete successfully in today’s competitive global marketplace. Those who are suitably qualified to design, drive and deliver supply chain improvements will be assured of career success and advancement.”

– Keabetswe Mpane, president, SAPICS

SAPICS represents the international Association for Supply Chain Management (ASCM) as its exclusive premier channel partner in sub-Saharan Africa. “This collaboration with ASCM, which has existed for over 50 years, supports our drive to build a vital community of educated supply chain professionals in Africa and beyond,” says SAPICS president Keabetswe Mpane.

The CPIM is considered the premier certification for internal supply chain business operations and more than 74 000 professionals have been certified worldwide. The CLTD programme addresses the burgeoning need for standard benchmarks in the rapidly changing logistics, transportation and distribution industries.

Mpane notes that the benefits of an international qualification include career advancement opportunities, increased marketability and earning potential.

“The 2020 Supply Chain Salary and Career Survey Report recently conducted by the US based Association for Supply Chain Management (ASCM), to which SAPICS is a Premier Elite channel partner, revealed that supply chain professionals who held at least one APICS certification reported a 21 per cent higher median salary than those without a certification and 18 per cent higher than those with other certifications.

“Successful supply chain management is essential to compete successfully in today’s competitive global marketplace. Those who are suitably qualified to design, drive and deliver supply chain improvements will be assured of career success and advancement. SAPICS’s quality international education programmes are offered throughout Africa via a growing network of authorised education providers or on a self-study basis. Remote assistance from qualified instructors is available more easily with reliable internet in many countries, making these international certifications even more accessible,” she concludes. ›

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Networking at 2019 Spring Conference

SAVING LIVES AND DRIVING ECONOMIC GROWTH

Healthcare is one of the sectors in which SAPICS, the professional body for supply chain management, is playing a critical role

STRONGER TOGETHER SAPICS is a coalition member of People that Deliver, a global initiative that aims to improve health outcomes by promoting sustainable workforce excellence in health supply chain management.

“We are proud to be helping to save lives by contributing to the global drive to develop and professionalise public health supply chains to improve access to critical medicines,” says SAPICS president Keabetswe Mpane. “More than half the world’s population lacks access

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SAPICS is a coalition member of People that Deliver, a global initiative that aims to improve health outcomes by promoting sustainable workforce excellence in health supply chain management. to the most basic health services, and in many developing countries, people are dying because of inefficient supply chains.”

The partnership between SAPICS and the International Association of Public Health Logisticians (IAPHL) was established to promote professionalism and community in South African public health supply chains with the objective of improving the availability of healthcare supplies and lifesaving medicines, including the COVID-19 vaccine.

“The health commodity supply chain, particularly in the public sector in Africa, has traditionally been managed and operated by healthcare professionals with an intuitive understanding of supply chain operations, but often without the relevant supply chain training or relevant qualifications,” Mpane

explains. “There is a need to increase the capabilities and skills of the existing supply chain resources while creating awareness and an environment that will attract appropriately skilled supply chain professionals.

“It is also imperative to ensure that effective collaboration takes place between private and public healthcare and other involved role players. In this way, we can improve health outcomes in South Africa and across the continent,” Mpane says.

“The increasing complexity of the public health supply chain, together with the burgeoning demand for health commodities, is driving the need for a more transparent, equitable, efficient and responsive supply chain,” she concludes.

For more information: +27 (0) 11 023 6701 info@sapics.org.za www.sapics.org

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he robust, reliable supply chains that are critical for positive health outcomes require a skilled, knowledgeable and connected supply chain workforce.

This is where SAPICS and its various partnerships are making a real difference.

Through collaboration and partnerships across a diverse range of industries and with an ever-expanding community that includes a multitude of associates across Africa and around the globe, SAPICS is helping to unite the global supply chain community. This delivers value for SAPICS’ members, drives economic growth and is helping SAPICS to realise its vision of creating a better world through supply chain management.

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GL OBA L T REND S

Kavitha Prag

Trends in supply

chain management The pandemic is driving increased application of new technologies to increase the agility, flexibility and customer-centricity of modern supply chains, writes Rodney Weidemann

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he COVID-19 pandemic has laid bare many of the long-standing vulnerabilities and risks lurking in organisations’ supply chains. In some cases, it has caused companies to take a hard look at their processes and business models. In others, it has opened up new opportunities for innovation, growth and competitive advantage in the post-pandemic world.

Most notably, perhaps, it has demonstrated the power of interconnected digital supply networks to enable enterprises to anticipate and respond to unexpected changes, and minimise their impacts.

Kavitha Prag, director of supply chain and network operations at Deloitte Africa, suggests that supply chains are evolving from the traditional linear model into interconnected dynamic networks. “We are seeing three key shifts in the supply chain that enable this,” says Prag. “The

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first is a move toward a more customer-centric supply chain, which meets evolving customer values and product and service requirements, and uses this as a competitive advantage.

“The second is getting closer to and building trusted, connected supply networks that offer visibility across multiple tiers of the chain, something that includes a shift towards more sustainable and ethical sourcing.

“Lastly, there is a much greater focus on designing supply chains that are optimised for cost, service, and resilience.”

Cost and efficiency, explains Prag, have long been drivers for supply chain design. However, in a post-pandemic world, the key shift is to include flexibility and agility, as these grow resilience in the supply chain.

Key themes in 2021 According to Samantha Naidoo, logistics industry value advisor at SAP Africa, there are four key themes or trends that are expected to come to the fore in 2021. The first of these is agility, which is all about

anticipating and fulfilling customer demand by digitally transforming the supply chain, with a view to greater customer-centricity, visibility, productivity and sustainability. “Increased agility will help to eliminate silos across design, planning, manufacturing and operations, ensuring a better response to any unforeseen disruption.”

Naidoo says the second trend is that of productivity. “This is mostly about reinventing production using intelligent assets and processes that dynamically adapt to production priorities and deliver customisation at scale.

“The third theme is connectivity. Truly effective connectivity gives your business global scope and reach, which in turn amplifies scale. Meanwhile, network-wide orchestration will redefine collaboration, even as integrated intelligence delivers predictability. Looking internally, you will be able to connect the entire company – orchestrating sales, service and logistics with production – to transform how you work genuinely.”

Lastly, sustainability will be critical moving forward, adds Prag. This means designing products that are recyclable and environmentally sustainable, reducing emissions and sourcing materials ethically, and manufacturing with minimal waste or environmental impact.

“In addition, supply chain managers will seek to deliver using logistics processes that optimise loads to reduce both mileage and carbon footprint, operate assets and equipment in an energy-efficient manner that is safe for the environment and workforce, and network to enable collaboration within the supply chain, in order to support a circular economy and overall sustainable business models.”

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GL OBA L T REND S

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Big changes coming Rheinhardt Schulze, PwC associate director and connected supply chain lead, suggests that looking just beyond these current trends, additional changes can be expected.

For one thing, he indicates that we will see an increasing acceleration of the shift from on-premise-type retail to online digital platforms. “You could say this is being ‘forced’ and sped up by the necessity brought on by the pandemic. In the near future, customers will increasingly want to be able to view in one channel, order in another and return via another still, all while still experiencing a single and consistent brand.

“Even as they adopt this multichannel approach, they will hold you to ransom with the knowledge that your competitor is just a click away,” continues Schulze. “Therefore, the supply chain’s role in enabling an effective omnichannel shift is paramount.”

Schulze adds that furthermore, the term “supply chain” is itself due for review, as these systems become increasingly connected and autonomous. We will instead see a move to terms like “supply ecosystems” and “supply networks”, he suggests, as these better represent the current state. “Remember that the traditional linear supply chain is evolving into a collaborative ecosystem of internal and external stakeholders, technology, functions and goals, all centred around trust and customer experience, and enabled by a connected digital thread.

“Finally, we should note that the role of disruptive technologies like artificial intelligence (AI), blockchain and Internet of Things has changed from that of differentiators to prerequisites for survival.”

Schulze notes that with crises like COVID-19 posing unprecedented variables, permutations, scenarios and what-if questions that need to be answered in a much shorter time, limited human capabilities are no longer enough. “Technologies like AI will empower businesses to start at a better base to apply intelligence, with the capability to move towards a ‘self-learning supply chain’ that will not only predict, but also prescribe and self-learn behaviour. This is where the future is heading.”

Where next for local businesses?

Deloitte’s Prag points out that the pandemic has contributed to the replacement of brick-andmortar by ecommerce. Large and small businesses were quick to enhance or launch online shopping services during lockdown, with some even pushing the deliverytime boundary. “This has

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now set the bar from a customer expectation perspective and has forced competitors to follow the trend. Of course, while the focus has been on the front end, many of their core supply chain networks remain older, clunky and more traditional. This creates bottlenecks, so businesses will now also have to focus on the end-to-end supply chain.”

Jonathan Tullett, senior research manager of IT services for IDC sub-Saharan Africa, adds that local companies are still part of global supply chains. It is thus inevitable that our large organisations – particularly in manufacturing, resources, and healthcare – will be exposed to supply chain optimisation from abroad. In fact, many of them are already on that path to some degree.

“Some of this is also manifesting in other areas, such as within retail banking, where it’s about core banking and financial service delivery, rather than supply chain,” says Tullett.

“However, outside of the top enterprises, the country as a whole is noticeably behind.

It varies greatly of course, since we’re talking about a large, diverse market, but if we look at the growth of spend in key technologies in South Africa compared to more advanced markets, most sectors are two to three years behind, with some as much as five years.”

In technology terms, suggests Tullett, that is a long way behind,

Deloitte Africa’s Kavitha Prag posits that the key to automated, predictive and prescriptive operations lies in the interconnectivity of digital tools, physical infrastructure and their underlying data streams. “Tools such as the Internet of Things (IoT), cloud computing and 5G make it possible to create new sources of data from the physical attributes of a supply chain, and to interpret, curate and visualise that data in meaningful ways, to make better business decisions.

“For example, AI, machine learning and robotics can augment and enhance the human workforce to improve efficiency, productivity and safety in factories, warehouses, call centres and even in transit. Finally, data lakes or control towers can bring cross-functional tools and processes together and apply advanced applications, ensuring that digital supply networks are optimised to thrive – and trusted to continue to operate and adjust amid unexpected disruptions.”

although the good news is that many of these technologies and practices can be put in place and return results within just a few months.

“The bad news, and the real challenge ahead, is that the business culture has to change for true transformation to occur, and this is usually the hardest part. You can leapfrog technology, but you simply cannot leapfrog maturity – that is something that has to evolve naturally. Therefore, my advice to end-user organisations is to ensure that you provide just as much focus on your digital maturity as you do on the technology,” he concludes.

“Customers will increasingly want to be able to view in one channel, order in another and return via another still, all while still experiencing a single and consistent brand.”

– Rheinhardt Schulze, associate director, PwC

Rheinhardt Schulze

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T R A NSP OR T

Better trucking through technology

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ong-distance freight transport has been a key aspect of the supply chain for decades, but it’s witnessed many technological changes and has truly come into its own over the past 20 years. In the modern world of the Fourth Industrial Revolution, connectivity is king, with computers, machines, sensors, systems and a myriad of devices all connecting to the internet, data hubs and cloud platforms – what is today referred to as the Internet of Things (IoT).

With the ability to gather vast volumes of information in this way, the use of artificial intelligence (AI) enhances the ability to process this data and enables organisations to apply it in productive, human-centric ways that provide a vast amount of additional safety and visibility with respect to long-distance driving.

Research conducted by Arrive Alive suggests that driver tiredness causes more than 20 per cent of long-distance accidents.

Therefore, the implementation of smart devices such as camera systems, sensors and advanced driving solutions can significantly aid in driving down the number of accidents, ensuring the wellness of drivers and safety of all road users, and, of course, the integrity of the supply chain.

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In the past two decades, the long-distance trucking game has undergone a technological shift that is making drivers and cargoes safer, and the supply chain more effective.

Rodney Weidemann investigates

Leveraging technology Maretha Gerber, head of Mercedes-Benz Trucks South Africa at Daimler, points out that technology is a key factor today in improving both road safety and the security of the supply chain. “On one hand, there is the aspect of ensuring the vehicle is in optimum condition, through the implementation of preventative maintenance. On the other, driver safety is vital as well.

“At Mercedes-Benz Trucks, we focus on driver safety and behaviour through the addition of advanced technology into our trucks, including vehicle monitoring systems like Fleetboard, which is now a serial standard on all Actros and selected Arocs models.”

Gerber explains that Fleetboard has numerous facilities, including the ability to maintain trip records, enable driver and vehicle performance analysis, and ensure service records, as well as providing mapping, reporting and rapid tracking services. “In addition to this solution, we also look at product innovations that will enhance vehicle performance and driver comfort. These include elements such as the

Mirrorcam, which has replaced conventional mirrors and provides more visibility and efficiency, along with the Predictive Powertrain Control. The latter is a function fitted to the vehicle that proactively selects the correct gear and optimises the performance of the truck based on the topography of the road, thus providing a smoother drive and improved fuel consumption overall.”

Assisting drivers Clay Colegate, business development executive at DriveRisk, adds that an advanced driver assistance system (ADAS) lies at the forefront of ensuring the overall safety and alertness of drivers. “Long-distance driving poses many cognitive challenges to a driver, specifically fatigue, lack of alertness and inattention. With ADAS technologies as a co-driver providing insights and pre-warnings, drivers can not only make better and more informed decisions, but also react to and avoid potential accidents and incidents.”

Technologies that form part of the ADAS sphere are predominantly camera and sensor based, explains Colegate. “Externally, they monitor the oncoming environment and alert a driver to potential risks, providing enough time for reaction to an impending collision with a vehicle, pedestrian or object in the road.

“Internally, monitoring the wilful and habitual behaviours of a driver not only highlights the areas of concern in their driving behaviour, but

Maretha Gerber, head of Mercedes-Benz Trucks South Africa

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T R A NSP OR T

Mercedes-Benz Actros

Francois Stols

“Cargo security and asset tracking are becoming more important, with companies utilising AI and IoT in this regard.” – Francois Stols, CTO, TELEMATICS AND COVID-19 Vehicle telematics have improved in leaps and bounds in recent years, and today offer fleet managers significant value. Perhaps the most obvious and pertinent benefit can be seen in the partnership between Netstar and Putco, which have been working closely together with the goal of materially improving passenger safety, by enhancing COVID-19 compliance.

This was achieved through a network of onboard cameras situated within the buses operated by Putco. Netstar telematics and fleet intelligence monitoring have enabled Putco to check, via this technology, that passengers and staff are following all hygiene and lockdown protocols during the pandemic.

also alerts the driver to behaviours that may need instant rectification whilst driving, such as fatigue, distracted driving and inattention.

Rather than taking a reactive approach, these technologies proactively monitor behavioural risk at the source.”

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Improving security Security within a fleet is another critical aspect, continues Colegate. This encompasses the security of the asset, of the cargo, of the employee and, most importantly, of the data.

These factors can be monitored in tandem.

“The link to storage and the actual storage of the data on servers need to be closely monitored for security breaches or suspicious activity,” says Colegate. “At a minimum, invehicle technology suppliers should have a sound security policy, based on ISO 27001

specifications. Furthermore, they should ensure that their back-end infrastructure, data centres and production databases are encrypted and monitored 24/7.”

Francois Stols, CTO at Altron Netstar, suggests that since the majority of these long-distance trucks carry high-value cargoes, physical safety and security are also critical. He explains that many of these vehicles are, for example, able to detect signal jamming, particularly GSM jamming, which could indicate hijackers in a specific area.

“In 2021, a key focus area will be cargo security,” says Stols. “Cargo security and asset tracking are becoming more important, with companies utilising AI and IoT in this regard. Usually there is a tracking unit on both the trailer and the horse, so if there is an unexpected separation of the two, for example, it will immediately sound an alarm.”

Stols points out that with route monitoring functionality, it is easy to set parameters relating to where a driver is or is not allowed to stop. This application also enables the control centre to determine the average time it should take to get from one point to the next. That way, if the vehicle is delayed for any reason, an alarm can also be sounded.

“Finally, there is an increasing move to bring in data from third-party providers that will enhance the security model further,” adds Stols. “This could be as simple as obtaining data from the weather services to warn drivers ahead of time of adverse conditions. At the same time, it can be used to alert them to instances of things like civil unrest, ensuring they can safely avoid that particular area.”

A bright future “Five years ago,” continues Stols, “Netstar, a subsidiary of Altron, was storing in the region of 20 million data points a day, but today that has increased to more than 300 million per

Altron Netstar

day and is growing exponentially. With all this data available, along with the ability to better leverage AI and more advanced analytics capabilities, it has become possible to build truly effective predictive models, something that will play a huge role in the industry moving forward.”

Daimler’s Gerber adds that something that is also beginning to have an impact elsewhere in the world, and will likely reach SA once the right levels of connectivity are achieved, is the use of autonomous vehicles. “This should significantly reduce wear-and-tear, accidents and many other issues that are part and parcel of having human drivers. From a Daimler point of view, apart from optimising the current technologies we use, we are also actively working together with our HQ on the electrification of our trucks, which we see as the future of trucking.”

The safety of long-distance driving will no doubt continue to be at the forefront of technological development, and the increasing implementation of modern technologies like AI will only help logistics organisations in managing both the risks of, and the growing need to, move goods and people safely.

Gerber says the shift in focus from mechanical to technological advancements has required all original equipment manufacturers to provide more tech-savvy trucks and operations to improve safety and support customers. “The growing focus on digitalisation, uptime and driver assistance has further improved the industry. In the end, the ongoing implementation of the latest technologies has contributed significantly to a shift in an industry that requires increased road efficiency – delivering greater safety, maximised use and lower total cost.”

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EN T ERPRISE SUPPL IER DE V EL OPMEN T

Increasing diversity in the supply chain Supplier and enterprise development is a vital issue, ensuring that large enterprises pay it forward by growing the skills and abilities of SMEs. Rodney Weidemann takes a deeper look

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upplier development – as defined by the Chartered Institute of Procurement & Supply (CIPS) – is the process of working with certain suppliers on a one-to-one basis to improve their performance and capabilities, for the benefit of both buyer and supplier. It can take the form of a one-off project or an ongoing activity that may take some years to come to fruition.

The major driving forces for the development of suppliers are the competitive pressures of the marketplace, and it is through the decisions of many individual purchasing

departments that these forces act. As marketplaces go from local to national to global, the strength of these competitive forces dramatically increases. CIPS therefore believes that the widest possible professional tendering process is a tried-and-tested vehicle for deriving the benefits and value of this market process.

Of course, in South Africa, this approach to supplier development is further tempered by the need to meet Broad-based Black Economic Empowerment (B-BBEE) requirements. This is because preferential procurement is a key aspect of the overall scorecard and the ultimate level the enterprise will obtain.

The principle of supplier development in terms of the B-BBEE codes is for the large enterprise to obtain a better overall B-BBEE score, while at the same time offering opportunities for, and the upskilling of, smaller suppliers in the chain that may otherwise never have had such chances for improvement and growth.

Vusi Fele

“Collaboration is key in today’s digital world: it enables our suppliers to understand things more easily and quickly, and has generally made the world more efficient and transparent.” – Vusi Fele, chief procurement officer, Absa Group 26

THREE WAYS TO DEVELOP YOUR SUPPLY CHAIN SUSTAINABLY 1. Create meaningful opportunities Small businesses frequently lament their lack of access to credible domestic and international markets.

Large corporations, especially those that spend billions annually procuring products and services, can use their procurement budgets to give SMMEs the boost they need. Opening up opportunities for these businesses to access prominent supply and delivery chains is one of the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development.

2. Transfer knowledge Skills development and capacity building are fundamental to ongoing business success. Business development support, including assessments, training, mentoring, advice and information, is also critical in enabling SMMEs to become stronger organisations of the future. When SMMEs interact with large corporates, they are compelled to make changes to increase efficiencies. Being part of corporate supply chains also improves access to information, driving technical proficiency and industry innovation.

3. Provide financial support – where you can As a bank, not only has Absa designed innovative financing solutions for small businesses, but also offers SMME suppliers in the bank’s supply chain cash flow finance at favourable interest rates, with no collateral required. In fact, in 2019 alone, Absa made available about R234-million in funding specifically for the benefit of SMMEs in South Africa that supply the organisation with goods and services. Businesses in other sectors can look at streamlining payment processes to ensure suppliers get paid on time, provide complimentary testimonials and reviews to help with new leads or simply recommend suppliers to others in the industry.

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EN T ERPRISE SUPPL IER DE V EL OPMEN T Supply chain risks Vusi Fele, chief procurement officer for Absa Group, suggests that technology today can be viewed as both a bane and a blessing for society. If you start looking at the technologies of the Fourth Industrial Revolution, it is clear they offer many advantages to society, he explains, but cautions that there are always risks if technology is not governed correctly or ethically – then it can become a danger or a threat.

“An obvious benefit in the logistics space is the fast pace and traceability it offers to the entire supply chain management value chain, ensuring that different parties can connect and share information at speed,” says Fele.

“Of course, there are also cyber-risks, which sit top of mind for procurement officers,” Fele continues. “It is important to manage these risks and put controls in place to protect the value chain. Thus, it is essential to ensure that any supplier partners work with the standardised solutions available to the industry. Not only is this more secure, but all involved then also understand the relevant processes and protocols involved in using these effectively.”

Fele adds that supplier control obligations define the standards Absa uses to secure the value chain. “To ensure the integrity of the chain, we also have a team that provides training to supplier and enterprise development candidates, to ensure they understand these standards, as well as to identify gaps within the value chain.”

Security through visibility According to Andre du Plooy, executive consultant at SYMBIOSYS IT, far from increasing the risks to the supply chain, technology reduces them by virtue of the visibility and transparency it provides to the entire value chain. “Think about it: a vehicle transporting goods that has a tracker unit fitted enables the organisation, and even the customer, to track the truck’s route, to provide security around the cargo and to identify unplanned stops. Sensors can even be used to detect weight fluctuations on the vehicle, proving whether or not anything has ‘fallen off the back’. Remember that with digital, you have an audit trail that cannot be altered, so you can clearly manage your risks better.

“Not only does the smart use of technology enable you to control the logistics environment more effectively, but it also opens the door to additional supplier development, as you can bring in an SME to provide the servicing required to keep the technology in top shape,” he adds.

greater risks, but if you help them to manage these better, you should end up with a true win-win scenario.”

Identifying, recruiting and developing SMEs The phrase “due diligence” tends to be reserved for mergers and acquisitions, but it is equally important to undertake the same process with the SMEs you are choosing to do business with, says du Plooy. “Due diligence enables you to understand your SMEs’ abilities and capabilities clearly. After all, if you are going to spend the money to bring these entities on board, it is probably worth spending a little more in order to be thorough and to ensure they are the right fit for your organisation.” ›

ENTERPRISE SUPPLIER DEVELOPMENT AND B-BBEE Andre du Plooy

Risk management Of course, while going digital improves security and the audit trail, and ultimately allows you to undertake forecasting and predictions, it is still important to weigh up the cost of introducing these mechanisms against the potential losses they will offset, says Du Plooy.

“Risk management in the context of enterprise and supplier development is a critical portfolio for any enterprise. Remember that smaller businesses don’t always understand their risks and – especially in a tough economic climate – may be tempted to take on more than they can actually deliver.

“Therefore, part of the education process required to develop them involves educating SMEs around the risks they may face and how these may impact your own organisation.

Practising effective development thus means managing the risks in conjunction with them.”

He advises that you make it clear from the outset exactly what your requirements are, so you can effectively evaluate their risk exposure level.

“On the other hand, a good development strategy is a balancing act,” states du Plooy, “since they may have the right talent, but lack some of the required skills. Having the right levels of enthusiasm and commitment is important, and it may be worth your while to take the time and trouble required to mentor and train them properly. Leaving them to their own devices may expose your supply chain to

“Not only does the smart use of technology enable you to control the logistics environment more effectively, but it also opens the door to additional supplier development.” – Andre du Plooy, executive consultant, SYMBIOSYS IT

According to the government’s Broad-based Black Economic Empowerment (B-BBEE) Act, aimed at advancing economic transformation in South Africa, enterprise supplier development comprises four key programmes: • Preferential procurement is a national policy that encourages government departments and agencies to buy goods and services from previously disadvantaged individuals or businesses.

• Supplier diversity is the proactive business process of sourcing products and services from previously underused suppliers, thereby helping to sustain – and progressively transform – a company’s supply chain.

• Supplier development involves working with certain suppliers on a one-to-one basis to improve their performance and for the ultimate benefit of the buyer organisation.

This leads to improvements in the total added value from the supplier in question – both in terms of the buyer’s B-BBEE rating, as well as improving the supplier’s product or service offering, business processes and performance, not to mention lead times and delivery.

• Enterprise development is a strategy for promoting economic growth and reducing poverty by building SMMEs and competitive markets that are stronger and more inclusive. The ultimate objective here is to assist or accelerate the development, sustainability and ultimately financial independence of the beneficiary.

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EN T ERPRISE SUPPL IER DE V EL OPMEN T THE ABSA BUSINESS DAY SUPPLIER DEVELOPMENT AWARDS

There is another way to undertake the development process, du Plooy explains, which is by spinning certain employees out of the existing company and helping them to launch their own business, one that provides a service to your supply chain. “This has some positives: such an approach will mean you have a business with a ready-made understanding of, and insight into, your business. On the other hand, the former employee will likely know your profit margins and may try to squeeze more money out of you. There is also the concern that they may know people more senior within the organisation than the person managing their contribution to the business. This could lead to instances of them going over their manager’s head, thus potentially compromising your supply chain.”

Fele points out that Absa has a clear procurement policy that uses internally developed standards based on previous engagements with third-party suppliers. “We have recently announced a supplier code of ethics, to ensure we are all on the same page. In addition, we offer training, to ensure suppliers understand and can work within these same standards. This is key, as it is imperative that anyone working with our group properly understands the why, what and how of our processes.

“We regularly scout the market for potential new SMEs to act as suppliers, as this helps ensure we secure future sources of supply.

We also implement intervention programmes to help them grow and innovate in the longer term.”

Transformation, of course, is a critical aspect of supplier development. Fele says Absa works closely with those already in their supply

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chain that may not meet all their own internal transformation demands. This involves not only advice, but also exposing them to networks where there are organisations that do meet these targets. In this way, they are afforded the opportunity to partner and thus meet the relevant transformation requirements.

“When selecting new suppliers, we start by identifying the need we need them to fulfil,” says Fele. “We then go to the market looking for a business that can meet this need, but one that at the same time is B-BBEE-compliant.

Of course, first and foremost, they need to be able to meet the requirement we need fulfilled, then they must be able to deliver consistently and efficiently – so their technical and skills competencies are absolutely vital.”

Providing support Fele indicates that once brought on board by Absa, businesses are provided with support through a programme designed to identify gaps in their knowledge and to assist them in integrating with the enterprise’s systems.

“We enable them to grow with us through the provision of our internal business coaches, whose goal is to provide the knowledge required for the supplier to bridge any gaps.

There is another aim to this: we want to ensure ultimately that they are capable of being more broadly successful in the market, so they aren’t dependent on us for their business survival.”

According to CIPS, a fundamental prerequisite for supplier development is for organisations to analyse, evaluate and appreciate their own corporate objectives and business needs. The supplier development projects undertaken must be in support of the enterprise’s own purchasing and supply management (P&SM) strategy. Supplier

Source: Absa Business Day Supplier Development Awards

development requires key technical P&SM skills, as well as contract management and project management skills. It also demands excellent interpersonal skills, such as empathy, to develop stronger communication between the buying organisation and the supplier.

Asked about the future of supplier and enterprise development, Fele is adamant that Absa will continue investing resources and funds in developing SMEs, both from an infrastructural and business fundamentals point of view.

“I believe the reason we are so successful is that our programmes are linked to our business deliverables. Furthermore, as a leader in the market, we not only support supplier development, but also invest in supporting new suppliers and encouraging small organisations to collaborate with us in various ways.

“Collaboration is key in today’s digital world: it enables our suppliers to understand things more easily and quickly, and has generally made the world more efficient and transparent. This, in turn, makes it easier for Absa to ensure we always have future channels of supply at hand, because we can more easily, successfully and consistently develop new potential suppliers,” he concludes.

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“We regularly scout the market for potential new SMEs to act as suppliers, as this helps ensure we secure future sources of supply. We also implement intervention programmes to help them grow and innovate in the longer term.” – Vusi Fele, chief procurement officer, Absa Group

The Absa Business Day Supplier Development Awards recognises and celebrates businesses committed to building thriving, inclusive and transformed supply chains. In 2020 the focus was on how to rescue and rebuild after a global pandemic. The overall 2020 winner was announced as the SPAR Group Ltd, which is a warehousing and distribution business listed on the JSE in the Food and Drug Retailers sector.

The group owns several country licences for the SPAR retail brand, which is used by a network of independent retailers who trade under the brand.

With buy-in from a CEO level, management and a dedicated in-house team, the SPAR Group Ltd demonstrated visible commitment to deliver their supplier development transformation goals and targets, supporting their vision to be the first-choice brand in the communities they serve. SPAR’s purposedriven strategy addressed real South African challenges such as food security, nutrition, job creation and transformation. The SPAR Rural Hub model (a collaboration between small-scale farmers, suppliers, communities and SPAR stores) creates opportunities and shared value, and positively contributes to societal change, which enables SPAR to remain true to their purpose: to inspire people to do and be more.

SPAR’s programme and results boast a total programme value of R 11 323 000 and procurement spend of R 4.6-million with small suppliers.

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F IN A NCE

Asset management that gives you the edge Balancing supply and demand can be difficult. This is primarily due to forecast inaccuracies, evolving trends, and changing customer preferences, says Simon Foulds

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vercoming the challenges that make balancing supply and demand difficult requires supply chains with efficient inventory and asset management practices, ones that can respond to market dynamics with high agility and low costs.

“When you look at the balance sheet for any manufacturing or distribution company, generally the largest asset is inventory,” says Ken Titmuss, who provides consulting and education in operations and supply chain management. “This tells us that we need our best educated, trained and empowered people planning and controlling this asset.”

Titmuss points out that inventory in the supply chain is only of any value when it is flowing down the supply chain. “When it stands still it gathers dust and costs. Managing that consistent flow is of critical importance. If we have the right inventory in the right place at all times, this is of huge value to the supply chain and ultimately the consumer with regards to availability on the shelf.”

Emuel Schoeman

He also states that for companies to be successful in their supply chains today, they must abandon the old ways and adopt a new approach to operate successfully in a world of increasing volatility, uncertainty, complexity and ambiguity.

Driving forces Adapting also involves researching, understanding, and implementing the new Demand Driven methodology from the Demand Driven Institute, says Titmuss.

Now is the time to move away from driving the supply chain with inaccurate forecasts towards actual demand consumption, which is virtually 100 per cent accurate.

“Demand Driven methodology is not exactly new, having been pioneered by some early adopters in the first decade of this century and perfected with software developers by many companies during the last 10 years,” says Titmuss. “There are currently hundreds of companies on six continents that have successfully adopted this methodology with tremendous – and in some cases, previously unattainable – results.”

Titmuss believes companies need to examine their current, probably outdated systems and inventory replenishment methodologies seriously, and determine what is beginning to be regarded as best practice. “This decade is going to be the period of mass implementation of Demand Driven best practice,” he adds.

Better liquidity for SMEs Another critical issue, especially for small and medium enterprises (SMEs) is the lag in time between when goods are delivered and when payment is made.

Emuel Schoeman, co-founder and MD of Addendum Supply Chain Finance, says: “COVID-19 and the resulting lockdown have put immense financial pressure on many South African businesses, especially SMEs. Many companies are struggling to access traditional forms of working capital or other forms of borrowing. The need for cheap, readily accessible liquidity is now greater than ever.

“More and more clients are realising the benefits of supporting their suppliers financially through a supply chain finance programme, in the process helping to shield critical suppliers from the financial effects of the pandemic. In 2021, we will continue to support our bank partners throughout Africa and roll out these programmes to as many suppliers as we can.”

Schoeman believes the solution is not to force companies to pay suppliers faster, since most companies operate in an extremely competitive global environment where they are forced to preserve capital themselves.

“The solution is to implement supply chain finance programmes for all large, creditworthy companies, at no cost to them. Each of these programmes is a critical entry point for thousands of suppliers to access cheap working capital without incurring any new debt – all done at the click of a button.”

The financial sustainability of supply chains is critical to the longevity of any business, adds Schoeman. “And for SMEs in these trying times, they do not have to apply to any bank for new facilities. They simply leverage the client’s unutilised funding lines.”

“More and more clients are realising the benefits of supporting their suppliers financially through a supply chain finance programme.” – Emuel Schoeman, co-founder and MD, Addendum Supply Chain Finance

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F IN A NCE

Seeing the wood for the trees Modern business operations deal with an exponentially growing quantity of data, and nowhere is this more evident than in the supply chain, making good data management essential. By Anthony Sharpe

IMAGES: KAROLINA KOMMENDERA, ISTOCK.COM/DILOK KLAISATAPORN, ISTOCK.COM/FIZKES, SUPPLIED

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OVID-19 has been a major wake-up call for supply chain organisations to get a handle on data management and interpretation. The pandemic has accelerated the digital transformation journeys of Hamilton Ratshefola many organisations, says IBM South Africa general country manager Hamilton Ratshefola. “There is a growing need to enable new markets and grow new revenue streams. To achieve this, companies need to harness real-time, actionable insights and apply predictive analytics. Poor data management in this environment leads to companies with digital operations that are poorly applied to supply chain processes such as asset, inventory and fleet management.”

Right from the start It’s all well and good understanding that data needs to be harnessed, but in order for it to add value to a business, it has to be accurate and up to date, says Ratshefola. “The integrity and trustworthiness of a company’s data should be never be disputed. For a business to achieve this, best practices have to be built into the foundation of their systems, processes and applications. The focus for decision makers must be on connecting all those systems to exchange data easily and securely – across formats and protocols.”

This is where the idea of master data management (MDM) comes in. MDM involves business and IT cooperating to create a central repository of data that is accurate, consistent and accessible. “MDM empowers a business to gain crucial insights for the digital transformation and business reinvention journeys most have started,” explains Ratshefola. “Considering the increasing complexities of nearly every business, it is critical that data management solutions are accurate, flexible, can mimic practically any business process and maintain data governance at all times.”

Ratshefola adds that resilience must also be a priority, with a data management process that incorporates structural risk and flexibility.

“This can be done through analytics, artificial intelligence (AI) and visualisation tools that allow executives to model and then build flexibility and optionality into structural supply chains. This will help deal with geopolitical, climate change and cyber-security risks, as well as natural disasters.”

Making sense of it all Of course, while it’s clearly important that organisations adopt data management into their fundamental supply chain strategies, it can be difficult to find the resources to interpret all the data they generate. This is where reliable partners come in.

“It is critical that data management solutions are accurate, flexible, can mimic practically any business process and maintain data governance at all times.” – Hamilton Ratshefola, general country manager, IBM South Africa

“There are a million things you can track, but clients don’t necessarily have the time, energy or the need for all this data,” says Johan Raubenheimer, director of fleet management provider Landmark Tracking.

“It’s essential that service providers sit down with clients in order to understand their specific short-, medium- and long-term needs, and write the rules of that business into the system in order to create exceptions. If you don’t work with exceptions, you’ll never be able to sift through all the data.”

Graham Wren, general manager of business development at logistics group SG Freight, says their service provider accepts data on the group’s behalf from their 350 vehicles, and helps summarise it to develop reports, depending on the type of operation. “Each contract differs – when we start one, we’ll have certain outcomes and reports. As these evolve, we’ll request development work to create a new report or statistic that may not have been relevant before.

“We’re not in the telematics game; we’re in the fleet management game,” adds Wren.

“For a relatively small figure, we can glean a huge amount of insight, as opposed to just receiving the thousands of lines of data generated every hour.”

Manufacturing, logistics and transport companies are also recognising the value of AI-based solutions in mitigating and preventing supply chain disruptions and improving efficiencies, adds Ratshefola. “It’s long been possible to gain insights from structured data – the sort that easily fits into database tables – but before AI entered the picture, gaining insights from unstructured data was generally done by a human. AI can help uncover valuable insights that could help companies improve the efficiency of their processes, things they could not have uncovered manually.”

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CONSULT ING CREATING A CONTINUOUS SUPPLY CHAIN

Outside help More companies are turning to outside expertise to help manage their supply chains. Here’s when consulting makes sense – and cents, writes Delia du Toit

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n an industry as vast as supply chain management, it’s incredibly difficult to keep your finger on the pulse of every process.

And though technology makes the job easier, exponential developments can also be hard to keep track of. This is when outside consultants can provide valuable insights.

This saves supply chain companies fortunes they otherwise might have spent on incorrect software or unnecessary upgrades. More crucially, adds Bergh, they get a boutique package that addresses their specific needs; this is one of the main reasons consultants are becoming an essential cog in the supply chain wheel.

Ahead of the curve

Technology has become indispensable in almost every step of the industry, but its rapid evolution can also lead to numerous difficulties.

“Most supply chain companies today don’t just focus on one aspect of the chain any more,” says Bergh. “We’re seeing transport What does consulting entail? companies buying warehouses, The supply chain is immense, manufacturers buying fleets and yet intricate, and involves many so on. For each aspect, different processes from manufacturing to technologies exist, and some storage and distribution. Renko companies add these technologies Bergh, COO of Forte Supply on as they expand, leading to Chain Consulting, calls it the several different systems that can’t “cradle to grave of goods”. interact effectively.”

As such, consultants in this Renko Bergh At such a point, some companies field need to be just as diverse, opt to overhaul all their systems, able to specialise in a certain buying massive management packages niche of the supply chain or advise on the from overseas. “That’s one of the biggest entire process. Forte, says Bergh, specialises in software, partnering with best-of-breed software problems we see in the industry,” says Bergh.

“These international packages look amazing developers across the supply chain. on paper, but often don’t have local support Like most consultants, Bergh saw a need or relevance. Supply chain management also in the industry and set out to bridge it. “As an looks very different in South Africa employee at a transport company, I was tasked and Botswana to that in the US or Brazil, with finding us software to manage certain for example.” processes. I realised that there’s a disconnect Bergh says smaller, localised packages between software developers and the industry. can incorporate local complexities and Developers are incredibly creative, but don’t regulations because they don’t have to always understand the industry’s needs, while cater to several territories. “Upgrading those who use the software don’t always small packages and integrating them is also understand the options available to them or much less expensive than overhauling an how to use the programs to their full potential. entire system.”

“Forte partners with relevant software developers, and distributes and implements these products, along with first-line support services,” Bergh elaborates. “Essentially, we are the link between both parties, where there COO, Forte Supply Chain Consulting often is none.”

1) Create new connections, enable collaboration to drive agility, velocity, and resilience across supply-chain ecosystems.

2) Manage and synchronise demand and supply beyond the four walls of an enterprise. Supply chain officers can leverage demand sensing, machine learning, and artificial intelligence to mitigate the impact of variability across their ecosystem or value chain.

3) Create a seamless digital network. By better leveraging continued investment to improve strategic fulfilment and orchestration, companies can map out a way to synchronise all outbound fulfilment activities, from order to delivery, including warehouse operations.

4) Create “what-if” scenarios via advanced visualisation for intelligent sense and response, supported by the product, transport, trade, and finance flows, with built-in alerts. Key to this effort are messages and issue resolutions on the network platform, supporting a “single source of truth”.

5) Take advantage of advances in AI and machine learning, place this technology in a central role within any given enterprise, where it can anticipate, predict, and automate a response mechanism across the supply chain.

Source: www.supplychainbrain.com

A consultant who specialises in such systems can advise clients on smaller, best-of-breed packages and integration systems, and provide training and support to get the best out of those systems.

“Consultants make it their business to understand all the latest software trends and technologies, so clients don’t have to,” says Bergh.

“Moreover, a consultant can take a step back from the detail that often overwhelms those already in the thick of the problems within a company, and provide a blueprint for the future. That blueprint will always remain even as technologies change, making upgrades and advances much less intimidating.”

The irony of technology, Bergh adds, is that no matter how much it changes, humans remain the one constant in the equation. “Even as the industry gets digitalised, there’s still a human dependency.

That’s especially true in South Africa, though it does necessitate some upskilling and reskilling.

Technology isn’t as daunting as we often perceive it to be. It’s merely a tool to make life easier – if you know how to use it.”

“A consultant can take a step back from the detail that often overwhelms those already in the thick of the problems within a company.” – Renko Bergh, S U P P LY C H A I N M A N A G E M E N T

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Resilience is the answer

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s international ports and airports shut down during the pandemic and workers fell ill, the importance of resilient global supply chains became more apparent than ever before. The question is: how can supply chain managers prepare for such unpredictable challenges?

Outsourcing expertise has become one of the answers.

Mitigating risks Though no one has a crystal ball to predict the future, a resilient supply chain can better handle the unforeseeable, according to Jolanda Pretorius, CEO of end2end Supply Chain Consulting and Academy, a boutique supply chain advisory and education firm in Johannesburg. “Supply chain managers love predictability and, traditionally, resilient supply chains were built through statistical modelling and forecasting. Unfortunately, today’s global market is volatile, uncertain, complex and ambiguous.

“Initiative, adaptability and innovation are now essential to ensure minimal impact on revenues, costs and customers when problems arise – and the pandemic became a tipping point in this regard,” continues Pretorius. “As business and consumer expectations change, demanding swifter, more efficient service, there is also even less room for error.”

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Securing access to supplies and markets The companies that fared the best this past year didn’t rely on built-in models and forecasts, adds Pretorius, but instead thought of new, creative solutions on-the-fly to face unprecedented circumstances better. Consultants with wide-ranging experience became essential in this problem-solving process.

“Consultants have all-round experience in the industry, and can assist with different scenario modelling and processes for any market environment,” says Pretorius. “Our job is to study the market, regulations and laws at all times, then give organisations customised solutions to service their clients optimally.”

Building better value Outside of the current challenges, consultants are often tasked with plugging financial leaks, lowering costs and streamlining processes to grow the bottom line, all of which are essential to being competitive in today’s global supply chain environment.

Mandisi Khumalo, managing director of Johannesburg-based supply chain consulting company Phambili SCS, explains: “Supply chain managers who are directly involved in the daily processes of a Jolanda company can miss critical Pretorius cost drivers and wastage.

Companies with single supply sources often found themselves in dire straits in 2020. Secondary supply sources have now become vital in the industry, says Pretorius.

“Disruptive as it was, this need also created opportunities. These included establishing local networks and shared resource pools for raw materials, and diversifying geographically.

This demonstrates that the traditional view of a linear supply chain is transforming into digital supply networks.”

But the fight is far from over. Inventory strategies must now be reconsidered across the board. Over the past couple of decades, companies have tried to reduce inventory across the supply chain, with safety stock to buffer varying supply and demand. However, most companies will not have sufficient buffers for the magnitude of disruption that will likely still be caused by the pandemic. All companies quickly need to consider how they will refine their inventory strategies.

“Ultimately, we can still expect significant declines in on-time and in-full deliveries,” says Pretorius.

“Companies should consider setting up end-to-end tracking systems to monitor supply flow – at the supplier’s location, in transit, at their own facilities and in transit to their customers – to predict disruptions better and respond accordingly.”

“The traditional view of a linear supply chain is transforming into digital supply networks.” – Jolanda Pretorius, CEO, end2end Supply Chain Consulting and Academy

IMAGES: ISTOCK.COM/ JONATHAN ERASMUS, ISTOCK.COM/A-IMAGE, SUPPLIED

An increasing number of companies are outsourcing expertise to deal with the complexities, constraints and regulations of global supply chains. Delia du Toit asks how these consultants can help

Consultants, who have an unbiased view from outside, can identify and correct such problems, and recommend customised solutions.”

Pretorius says there is no one-size-fits-all Mandisi consultancy, however.

Khumalo Managers need to do their homework to find a consultant that best suits their needs. “Mega firms, for example, have a higher price tag but typically have a wider global reach, are more established in the market and can handle bigger projects. Smaller boutique firms are niche-driven and more adaptable. They tend to source fit-for-purpose skills from a network of experts, rather than their own ranks, and can also offer personal attention.” Either way, she says, managers will get more value by using consultants as and when needed, rather than keeping such expenses on the books.

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s many articles in this magazine can testify, supply chains are under pressure. It’s not a new situation: concepts such as just-in-time manufacturing and globalisation have necessitated increasing levels of supplychain visibility for a while already.

The current fortunes and healthy profit margins of giants such as Apple and Amazon are direct results of their supply chain prowess.

Yet in recent years, the concept has taken on new importance due to disruptions such as the US/China trade war, Brexit and the COVID-19 pandemic.

DIGITALISING supply chains Can digital technologies such as Internet of Things (IoT) sensors, coupled with new software, open the doors to better supply chain management? Yes, according to Mervyn George, SAP Africa’s executive advisor for innovation strategy. IoT technologies are used everywhere on a granular level, helping to monitor specific processes and linking them with others in the chain.

George gives the example of using IoT to monitor the temperature of and around ice cream, from manufacturing through transport and into the store display. “Different stakeholders have been monitoring individual processes like this for long enough to have learned from the insights, and taken steps to optimise the way they handle each stage in this product’s journey to the consumer.”

Bringing it together The crunch for supply chains, thus, is how to adopt digital ecosystems and gain even greater integration.

“When you look at the supply chain in its entirety, the ability to track a product across all stakeholders and across each stage of the supply chain using a central dashboard is not commonplace and is still premature,” suggests George. “This type of digital boardroom can provide immediate access to the relevant detail needed by different stakeholders, but can also be overlaid with context relevant to finance, engineering, procurement or human resources teams – as well as making a relevant subset of information available to the consumer.”

Numerous technologies can enhance supply chain management, including IoT, robots, low-latency 5G networks, additive manufacturing and artificial intelligence.

Turning to tech to improve supply chains Supply chain visibility is more critical than ever these days.

James Francis asks how technology can help “We envisage a rapid move to a world of smart factories, where cyber-physical systems monitor physical processes, communicate with each other and human workers, and make automated decisions,” says Gerhard Hartman, vice president of medium business at Sage Africa & Middle East. “This will allow manufacturers to improve efficiencies and quality, respond faster to a changing market, and deliver more customised products to the end-customer.”

Software in the supply chain The emerging challenge, adds Hartman, is how to have these elements work in concert to improve visibility and processes. Digital software is the fundamental difference between what we can call traditional and modern supply chain visibility. “Most manufacturing and distribution companies started investing in Material Requirements Planning and Enterprise Resource Planning solutions decades ago, to streamline their business processes, including supply chain management.

While these solutions allowed for some level of automation and a degree of integration across business silos, they are being rapidly left behind by the pace of innovation in the digital world.”

Enter the cloud. Cloud software has had an incredible impact on what supply chains can do. Since they are more flexible in cost and deployment, cloud-style supply chain management platforms make it much easier to integrate data across different points in the chain, assess the information in more dimensions, and automate and reinvent processes. They may assist in the ethical sourcing of ingredients or with proactively switching sources in the event of a shortfall.

The critical difference is that modern software can enable such supply chain dynamics with less effort, cost and risk than anything that preceded it, says Hartman.

As edge computing – running cloud-style services on remote sites without persistently connecting to central cloud servers – gains more traction, automated and integrated supply chains will become more of a reality.

“The rise of the cloud is by far the most important advance we have seen in supply chain management solutions over the past decade,” says Hartman. “Cloud computing power on tap has enabled software companies to deliver richer, more powerful business solutions at a more affordable cost, bringing advanced technology to Gerhard even smaller manufacturing Hartman firms.”

“We envisage a rapid move to a world of smart factories, where cyber-physical systems monitor physical processes, communicate with each other and human workers, and make automated decisions.” – Gerhard Hartman, vice president of medium business, Sage Africa & Middle East Mervyn George

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WHAT BUSINESSES ADOPTING AI SHOULD THINK ABOUT •

Supply chain visibility with

AI and blockchain Can artificial intelligence and blockchain solve supply chain challenges? James Francis investigates

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upply chain disruption was a defining feature of 2020. After decades of getting used to responsive procurement, just-in-time delivery and leveraging global reach to get the best value, our complacency around fragile supply chains got shocked into reality last year. But in truth, supply chains have been under pressure for quite some time, says Christian Titze, vice president analyst at Gartner.

“This has always been a challenge, year by year, and has only got worse with supply chains evolving from chains to networks to ecosystems,” explains Titze. “Last year, probably the key problems encountered were upstream visibility, understanding inbound supply chains better, and combining these with risk indicators. But fundamentally, supply chains have long tried to improve operational efficiency, agility and responsiveness, the customer experience, and competitiveness, all while reducing cost.”

2020 underscored the importance of digital technologies in improving matters. Artificial intelligence (AI) and blockchain are the leading candidates to unlock future possibilities in this regard, yet they are very complex choices.

Is the future of supply chains in the hands of these emerging technologies?

Visibility and evolution Supply chain visibility has long been a key

issue, yet its specific nature has changed over the years, says Dominic Regan, Oracle’s senior director for value chain execution across western Europe. “Twenty years ago, supply chain VPs started seeing the impact of things like globalisation. So you are selling to new markets, you are sourcing from new places. People talked about visibility, but I would say primarily it was inventory or order-centric visibility.

“In the intervening years, things such as cargo levels and shipment-centric visibility became more important. And today it’s about knowing where my shipment is at this second.”

The visibility of supply chains has thus evolved tremendously, guided increasingly by customer expectations, more efficiency and getting extra value from that visibility. In such a world, AI can play a pivotal role in automating many supply chain processes, says Titze.

“Advanced analytics, both predictive and prescriptive, as well as AI, including machine learning, help supply chains become more predictive and automated. They assist in many ways, such as data capture or later on for predictions – for example from estimated time to predictive time of arrival for shipments.”

Of course, one shouldn’t categorise AI as a singular technology, but rather a family of different offerings that play varying supply chain roles. The most common use of AI in this sector is to automate different processes, such

“One of the lessons of the pandemic is that we really need to have better visibility of those networks that we run, as well as how they exist in a network of networks.” – Dominic Regan, senior director for value chain execution

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esearch and due diligence, and understanding which solutions and approaches work best for them.

There should be technology-focused ethical frameworks and roadmaps into corporate investment strategies from the start. dentifying value adding and human complementing enefi ts can deliver to specifi c industries, customers and communities.

Taking responsi ility for communicating ethical around the world

Source: Artificial intelligence in business guide 2020, Sage

as continually updating ETAs for customers.

It also has a growing role in marketing and uptake predictions: 35 per cent of Amazon’s sales come from its AI recommendation engine, according to McKinsey & Company.

Every step of the way Blockchain is a different story. Crudely speaking, blockchain helps maintain an infallible ledger of information between different parties – infallible because if one party alters the record, all parties can see and vet the change. Since this approach essentially negates the need for a central authority, blockchain use cases are by their nature disruptive, and therefore adoption has been trickier. But the pandemic’s exposure of fragile multi-tier supply chains has put more focus on blockchain use cases, explains Regan.

“What I think we’ll see as we go forward is that expansion into bringing visibility to those multitier networks. I don’t think we’re there yet. But one of the lessons of the pandemic is that we really need to have better visibility of those networks that we run, as well as how they exist in a network of networks.”

Blockchain is already doing some of this: Volvo uses it to track the cobalt for its battery manufacturing, for example. However, early use cases run alongside traditional supply chain systems and don’t replace them … yet, adds Titze.

In fact, one element overshadows both: cloud systems are what enable these emerging technologies, which could be too expensive for most companies to realise with traditional “on-premise” systems. As long as companies continue adopting cloud platforms, the prospects for managing supply chains with AI and blockchain will continue to grow.

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WHAT ARE THE SUPPLY CHAIN SKILL NEEDS OF THE FUTURE?

Going digital The rise of ecommerce, along with logistics-as-a-service, is blazing the trail for digital supply chains, says James Francis

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he worlds of supply chain and ecommerce will remember 2020 for contrary reasons: the former experienced enormous growth, whereas the visibility and stability of the latter came into question. That in itself seems contradictory, since online retailers and their on-demand business models are particularly reliant on good supply chains.

Digitalisation is one way to square that circle, especially since ecommerce companies are more likely to be digital-native businesses.

They would more naturally lean into and expect the type of digital features that make supply chains more responsive – on paper, at least.

In reality, ecommerce supply chains in South Africa still face many challenges. When broken down into their components, such supply chains are not evenly balanced.

“The logistics companies are already fairly well developed with regards to digital integration between ourselves and them,” says Neil Smith, director of local online retailer Raru. “On the supplier side it is a bit all over the place. But as long as you can get the minimum product information to us, primarily in spreadsheet format, we can work with that.”

Getting everyone on board Suppliers are often the horses being dragged to the digital river, with logistics providers and retailers urging everyone to drink their fill. As such, the major advances in digital supply chains appear to be around logistics.

For example, courier companies that want to participate in digital supply chains need to offer rudimentary digital features, such as API access (a type of software that enables disparate computer systems to collaborate) to their systems.

“We are often approached by courier companies that want to work with us, but they don’t have APIs,” explains Justin Drennan, CEO of warehousing and fulfilment service

company ParcelNinja. “However, they are willing to build these and will ask us what the basics are that they need. You need those APIs to access the right information. If a customer wants to know where their parcel is, they don’t care if it’s the supplier, the courier company, the retailer or us who informs them.”

A coming revolution Logistics appears to be driving supply chain digitalisation. Ecommerce sites deserve some credit for motivating that change, but the impact of digitalisation is much broader.

According to Drennan, many realise they can run their businesses from home, outsourcing distribution and even warehousing to service companies.

In the most extreme implementations, such customers don’t even own warehouses, accessing them as a service. Foreign companies use this model to enter domestic markets with minimal fuss. The approach has grown popular in markets such as the US and Europe, and is now starting to take root in South Africa.

Digital supply chains even extend into townships. Large consumer goods companies use logistics-as-a-service to provide goods to spaza shops, which place their orders on easy-to-use online platforms. This reflects the growing trend of ecommerce revolutionising business-to-business transactions.

Yet not all suppliers are as astute. Many get carried away by the aspirations of retailers, couriers and other parties. Though it would be terrific if suppliers could also integrate their systems with retailers via APIs, at this stage, many stakeholders work around such challenges. “The worst thing that can happen is when a supplier makes a system change

1. Strategic planning and big thinking inclusive of technology development and advancement 2. incorporating the Internet of Things and artificial intelligence.

3. Applied real-time end-to-end supply chain management expertise including collaboration, networking, relationship management, technical expertise and change leadership.

4. Technological expertise and adeptness in areas such as analytics, artificial intelligence, robotics and the Internet of Things, and how to imagine and apply this technology to advance the digital supply chain.

5. Change leadership expertise on a Global, multi-channel, multi-partner basis 6. Control tower leadership and single point of command management skills.

7. Data analytics mentality including the ability to look across lots of data and information to make better, faster, holistic decisions.

8. Risk management expertise including problem solving, an ability to assimilate enormous amounts of information rapidly combined with exceptional decision making.

9. Holistic, global leadership including an ability to work seamlessly within and across companies, cultures, functions and geographies to drive change and action.

10. Business process transformation capability including lean and business process re-engineering.

11. Best practices knowledge both within and across industries, including an ability to translate those learnings into applications in your own company and industry.

Source: supplychaingamechanger.com

without letting us know, which then breaks things on our side,” says Smith. “Fortunately this doesn’t happen too often. Basically, as long as things are stable we are happy.”

Eventually, that will change. Certainly, suppliers that adopt digital will have the edge over their competitors. In the meantime, digital supply chains are emerging out of necessity. Couriers use them to remain competitive. Retailers rely on them to consolidate costs and meet customer expectations, while logistics service companies lead the charge by defining emerging standards and best practices for other players. Digital supply chains are maturing rapidly. The next step is to see how they expand significantly beyond the retail examples being forged in the ecommerce world.

“If a customer wants to know where their parcel is, they don’t care if it’s the supplier, the courier company, the retailer or us who informs them.”

– Justin Drennan, CEO, ParcelNinja

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Future-proofing the

supply chain

Many supply chain managers were caught unprepared for the COVID-19 pandemic. Now they’re seeking ways to modernise and evolve their processes to be ready for the future, writes Dale Hes

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ith supply chains across numerous industry sectors being heavily disrupted by the impacts of the pandemic and its associated lockdowns, it is becoming more essential than ever for businesses to modernise their supply chain management processes – future-proofing themselves for an uncertain future.

In a report on managing supply chain risks and disruption, global professional services company Deloitte aptly described the COVID-19 pandemic as a “black swan” for supply chain management. Initially causing disruptions in China – a country which is of vital importance to global supply chains – the virus has since spread relentlessly, sinking its claws firmly into supply chains worldwide.

In South Africa, the disruption of labour markets, manufacturing capacity and supply chains means that companies have had to pay more attention than ever before to risk management strategies.

Changing with the market According to Marie-Josée Schoemaker, a director of SAPICS, the professional body for supply chain management in South Africa, organisations who neglect to adapt to a pandemic-stricken world will quickly be left behind. “It is essential that the business environment in South Africa recognises that the way of doing business has to evolve with the needs of the market. Organisations that continue along the same path they have always taken will inevitably lose market share and continue to struggle.”

Schoemaker says that organisations have to consider evaluating and redesigning key supply chain management areas like planning, sourcing, manufacturing and delivering. “Organisations need to re-evaluate their operating model across the business

continuously, starting with the strategic intent, goals and values, which should be cascaded to all other areas, including the supply chain.

The first step is to do a ‘health check’ by assessing the business against an existing benchmark, which will give guidance as to what potential transformation is needed.”

Schoemaker further points out that the sudden, unexpected and devastating impact of the pandemic should act as a sobering reminder of the need for adaptability and of digitalising supply chain processes.

Preparing for the future Schoemaker says companies will have to become more agile and able to adjust quickly to changes in the market. “A strategy of endto-end transparency is essential, as this will allow for quick decision-making. There has to be a move away from siloed thinking, where each department has its own key performance indicators. The digitalisation of supply chain processes complements the need for speed, while skilled employees will ensure that exceptions are managed.”

Meanwhile, industry role-players around the world have been coming together to discuss the impacts of the pandemic and how to future-proof supply chain management.

Resilience360, an initiative from global logistics powerhouse DHL, offers a platform that provides a Coronavirus Supply Chain Resource centre, featuring regular updates, special reports and webinars.

In a report titled COVID-19: The Future of Supply Chain, Resilience360 found that just 49 per cent of organisations reported having plans in place to deal with the pandemic, while 70 per cent had their supply and demand affected. The report also found that there has been a discernible increase in the use of technology to help with supply chain planning and strategy.

“Organisations that continue along the same path they have always taken will inevitably lose market share and continue to struggle.”

– Marie-Josée Schoemaker, director, SAPICS 44

FUTURE THINKING According to research findings in the COVID-19: The Future of Supply Chain report by Resilience360, one of the most crucial questions a supply chain professional can ask themselves for a post-COVID-19 world is: “How many and when should we order?”

With global supply chains facing severe disruption and increased demand uncertainty due to COVID-19, the question is arguably more crucial than ever. One in five organisations (19.6 per cent) surveyed in the report plan to have more inventory postCOVID-19. For many respondents, particularly within the public administration or emergency services areas, this means ensuring they have sufficient supplies of PPE and other health and safety equipment. For other organisations, this equates to stockpiling essential products and supplies to ensure they can continue to deliver to their customers in a further case of widespread disruption.

The report adds that some organisations are already thinking about the increased drive to more local sourcing and how it can continue postpandemic. One interview respondent suggested paying local manufacturers a retainer and providing them with the IP and equipment required to rapidly start production if required.

“Many organisations have embraced technology such as AI and supply chain mapping software, while others have been able to use better communication channels to break down information silos within their organisations,” says David Shillingford, chairman of Resilience360. “The new measures will take some time to be embedded, but organisations are looking forward to adopting many of the supply chain innovation strategies in their longterm planning.”

The report found that the issues encountered during COVID-19 have further prompted most organisations to change the way their plans are constructed to be better prepared for future events. Some 53 per cent have reported that they will have a detailed pandemic plan in place going forward.

Finally, several strategies have been highlighted as being crucial for success in this new world, both during and after COVID-19.

These include performing more detailed due diligence on suppliers, diversifying supplier bases, sourcing more goods locally, and using third-party providers in order to prevent the significant costs of building out extensive supplier networks.

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T ECHNOL OGY

T ECHNOL OGY

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he shift towards omnichannel operations is a defining feature of the modern-day retail sector. Of course, the implementation of omnichannel models can also pose challenges to supply chain management processes, adding increased layers of complexity that businesses have to navigate in order to succeed.

Online sales currently only account for around three per cent of South Africa’s total retail operations, but due to the impacts of COVID-19 and increased smartphone penetration, this number is already around double that of last year, according to Mungo Park, DSV’s senior key account director for sub-Saharan Africa and former president of professional supply chain body SAPICS. “By 2024, we can expect that percentage to double again, and online retail may eventually grow to around 20 or 25 per cent of total retail sales,” explains Park. “Comparatively, growth in the bricksand-mortar retail sector is in the small single figures. Online retail is definitely where the growth is, so it makes sense for companies to invest in omnichannel strategies.”

IMAGES: ISTOCK.COM/A-IMAGE, ISTOCK.COM/JIRAROJ PRADITCHAROENKUL, STOCK.COM/BLUE PLANET, STOCK.COM/ WILLIAM_POTTER STUDIO, STOCK.COM/GORODENKOFF, SUPPLIED

Easy does it Notwithstanding the growth of the online retail sector, many bricks-and-mortar retailers have adopted a slow and cautious approach to implementing omnichannel strategies. Rightly so, says Park, as the shift towards multiple channels can come with a variety of challenges to supply chain management costs, efficiency and customer service. “For traditional bricksand-mortar retailers who have an established footprint, adding an online solution can initially be expensive. From extra packaging expenses, to delivery costs, and the potential charges of having to facilitate the return of unwanted items from online customers, the traditional pricing models that these retailers use have to be tweaked. Businesses sometimes battle with this transition.”

DID YOU KNOW?

South Africa’s online retail sector, though small by the standards of developed international markets, has been growing rapidly in scope and value. Despite enjoying double-digit sales growth for many years, online retail’s share of South Africa’s retail trade was still below 2 per cent in 2019. However, the market grew by approximately 40 per cent during COVID-19 lockdown.

Source: The Online Retail Industry in South Africa 2020, Research and Markets

Providing an omnichannel experience for online retail offers many advantages, but it also means focusing on key building blocks and process improvements, writes Dale Hes

Navigating the channels Park points out that different channels require different technologies to process and ensure that the supply chain runs smoothly. “You need to have a sound technology base in place to manage shipments, and ensure accuracy and speed of delivery. Customers want tracking functionalities that tell them where their delivery is and when they will get it. Product availability and management of stock are crucial, as well as ensuring that the product is the right size and colour.”

Process improvement If businesses do not ensure that these processes run smoothly, the results can be detrimental for both the costs of delivery and customer satisfaction.

“If the online customer receives the wrong product or isn’t satisfied with the product, then businesses need to initiate return processes, which can be expensive and tedious,” Park says.

“Accuracy of delivery is therefore crucial.

“At the same time, businesses need to have a sound reverse logistics structure in place, so that returns can be done as quickly as possible and customer satisfaction can be maintained.

Customers are also increasingly expecting faster deliveries, and a company’s reputation can quickly be harmed by online ratings from customers who have had a bad experience.”

Research from global management consulting organisation McKinsey & Company has found that an online order’s cost per unit can easily be four to five times higher than traditional brickand-mortar replenishment, and 10 times higher than wholesale fulfilment.

However, in its report, Supply chain of the future: Key principles in building an omnichannel distribution network, McKinsey points out that omnichannel can bring immense value, if correctly implemented. “Building out the omnichannel experience can bring huge value for retailers, e-tailers and vertically integrated players with direct-to-consumer businesses; our research has found that customers shopping online tend to buy more, and customers that pick up online orders in store often make additional in-store purchases,” states the report.

McKinsey further suggests that companies looking to build a successful omnichannel supply chain should focus on key building blocks. These include digitisation, customer-centric supply chain models, network capabilities and fast, reliable customer service.

Mungo Park “Enabling a truly end-to-end omnichannel experience requires a new way of supply chain thinking,” says the report. “The supply chain needs to be readjusted based on changing market conditions, and players should pursue an agile approach that enables them to adjust quickly to changing trends, options, and customer expectations.”

“For traditional bricks-and-mortar retailers who have an established footprint, adding an online solution can initially be expensive.” – Mungo Park, senior key account director for

sub-Saharan Africa, DSV

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xxxxxxx xxxxxxx Conveyor units

Safer, more effective warehouses Modern warehouses require specialised equipment to ensure that they remain an efficient, capable and cost-effective part of the supply chain, says Trevor Crighton

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arehouse equipment has to be robust, safe, ergonomically sound – to reduce operator fatigue – and of course fit for purpose,” says Mishen Naidoo, engineering/solutions manager for Manitou Southern Africa. “The description ‘fit for purpose’ encompasses size, in terms of being able to fit down warehouse aisles, ability to turn in narrow spaces, sufficient torque for the application, and classleading load lift and lower speeds to support productivity,” he adds.

While there are many different types of equipment used in warehousing, the basic types are static and mobile equipment, the latter of which is then broken down into motorised and non-motorised. “Manitou’s speciality is motorised, mobile equipment such as forklifts, reach stackers and pallet handlers, as well as compact industrial tractors, order pickers, scissor lifts and articulated working platforms, which are all used in the goods moving and handling process,” says Naidoo.

These machines can be equipped with telematics systems that remotely track usage like productivity and idle time, and identify faults and send alerts in the event of erratic operator behaviour. Naidoo explains that these elements assist the warehouse manager in

machines, but until existing infrastructure can support these properly, diesel will be around.”

Manitou

reducing fuel wastage and accidents, not to mention managing equipment service schedules.

Pick it up, put it down NEPTEK MD Richard Nepgen points out that, alongside the traditional machinery, automatic storage and retrieval systems (ASRS) and conveyor systems play a major role in improving the efficiency of the modern warehouse. “In first-world countries, automatic guided vehicles (AGV) and autonomous mobile robots (AMR) are becoming more common in warehouses.

ASRS are able to utilise space better and put away and pick stock quickly and accurately. Conveyor systems are able to transport totes and boxes over long distances and to the correct locations quickly, with routing instructions supplied via RFID or barcode scanning on the conveyor. AGV and AMR eliminate the need for manpower, free up floor space and speed up the put-away and picking processes.”

According to Naidoo, many local operators prefer a diesel combustion engine as the power source for their mobile warehousing machinery, though this tends to be dictated by industry and location. “The unstable electricity supply across Africa has removed the option of electric machines in some places, but there’s a definite trend in warehouses that specialise in food handling and those with limited ventilation towards electric machines, to reduce harmful emissions. The future certainly lies in electric

How do we shape up?

Naidoo says that the local warehousing mobile equipment market is hampered by lagging diesel emission regulations, compared with the first and emerging third world – mostly due to diesel quality and infrastructure not supporting lower-emission diesel engines.

“With regard to safety systems and operator comfort technology, though, South Africa is on par with the rest of the world, with widespread access to the latest in load control and stability systems in warehouse machinery,” Naidoo says.

Artificial intelligence (AI) is playing a major role in more and more industries – and warehousing and logistics is no exception. “Although there is a long road ahead for full AI to be cost effective, the benefits will be great in areas like reducing Richard Nepgen operator fatigue and accidents, and automated loading,” says Naidoo. “In addition, AI used for inventory control will reduce the timelines for drawing stock and performing stock-takes, and will obviously reduce human error.”

Nepgen concurs: “With the advent of ecommerce and the increased number of different stock keeping units, the picking of single items and the speed at which orders must be fulfilled, packed and dispatched is pushing us into the realm of AI and robotics.

“To do this manually becomes a real challenge with a lot of human error. In South Africa, ecommerce still makes up a very small percentage of the retail industry, but COVID-19 and technological evolution have accelerated the percentage of ecommerce business in the last year, so we might find this kind of technology entering the local market quite significantly in the next five years.”

“The future certainly lies in electric machines, but until existing infrastructure can support these properly, diesel will be around.”

– Mishen Naidoo, engineering/solutions manager, Manitou Southern Africa S U P P LY C H A I N M A N A G E M E N T

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Creating a safe working space

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one are the days when safety procedures were window dressing from senior management – safety today is everyone’s responsibility, says ZacPak MD Willie Nel. “Proper training is vital, as is the need to spend money on quality products that help ensure safe operations.”

With the increase in tall stacks, speedy picking and growing mechanisation come more safety challenges for workers.

However, the incorrect operation of forklifts remains one of the most common safety issues, says John Terblanche, director of operations at health and safety consultancy MAKROSAFE. “The danger posed by forklifts – particularly without adequate stacking and storage principles in place – is huge.

Warehouse workers can easily be struck by falling objects when loads that haven’t been correctly managed according to protocol are being manipulated by forklift. Risks also vary depending on what is stocked and stored in the warehouse: chemicals and volatile substances come with their own unique risks.”

Warehousing safety is regulated by the Occupational Health and Safety Act 85 of 1993. The act contains many different regulations that govern workplace operations, with the onus on employers to maintain a safe working environment without risk to employees.

“Employers are compelled to identify all risks and hazards in the workplace, put control measures in place and educate employees on all these elements before they can safely work there,” says Terblanche. “These regulations are upheld by inspectors from the Department of Labour, but sadly, the penalties currently associated with contravention are minute. New legislation with harsher penalties for noncompliance has been in the works for some time now, but there’s no clarity on when this will be promulgated.”

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Training is crucial There are various types of training required for operating warehousing machinery, including health, safety and first aid.

“Any equipment must be operated by a licensed person to comply with legislation,” explains Terblanche. “For example, a novice forklift operator needs to undergo a five-day course, which is valid for three years.

“There’s also stacking and storage, and ‘working at heights’ training. A key part of the ‘working at heights’ training is understanding how to rescue someone safely who is trapped in, or hanging from, a harness. In addition, all your first-aiders need to be trained, as do your firefighters, and health and safety representatives, not to mention supervisors and management – particularly with regard to the legislation, so they understand the safe and legal operation of their warehouses. The Occupational Health and Safety Act states that the legal responsibility for any incident stops with the MD or CEO of the warehouse’s operating company.”

Safe by design ZacPak’s Nel says that the design of a warehousing space is an important starting point for ensuring safety. “If, for example, you’re going to be operating a warehouse with tall stacks, it’s better that your aisles are narrow, so your machines only go backwards and forwards on inset rails, without the ability to turn left and right. This reduces the risk of falling items. Where people are working at heights, they need to be strapped into harnesses, and this equipment needs to be SABS approved.

“Machines that do heavy lifting need to be operated by people with the appropriate, up-to-date training, while certified load tests need to be regularly carried out to ensure that the load-bearing parts aren’t being put under unnecessary strain,” adds Nel. “Health

SAFETY TRAINING Training programmes should be established and maintained to address: • Knowledge and understanding of the organisation’s safety programmes, rules and procedures, as well as each individual’s specific role and responsibilities.

• Systematic programme of induction and ongoing training for employees and those who may be transferred between divisions, jobs or tasks.

• Training in the handling of risks, hazards and dangers, precautions to be taken and procedures to be followed.

• Training in hazard identification, risk assessment and control.

• Training for all persons who may manage others like employees, contractors and the like.

• Training of top management in their roles and responsibilities.

• Training and awareness programmes for contractors, temporary workers and visitors according to the level of risk which they will be exposed to.

• Training in the correct report procedures • Training in proper incident/ accident investigation.

• Training in the effective monitoring of the quality of the health and safety programme.

Source: labourguide.co.za

and safety even extend to the ergonomic design of scanner cradles, to ensure that the people operating them don’t develop repetitive strain injuries.”

Terblanche points out that the number-one way for companies to ensure the safety of their workers is to enforce their health and safety policy. “If you have a sound policy in place, your risk assessment has been completed and everyone complies with instructions, the chances of operating a safe warehousing space are very good.”

“Employers are compelled to identify all risks and hazards in the workplace, put control measures in place and educate employees on all these elements before they can safely work there.” – John Terblanche, director of operations, MAKROSAFE

IMAGES: NEPTEK, MANITOU, ISTOCK.COM/ ZDRAVKOVIC, SUPPLIED

At the top of the list of challenges for warehouse managers these days is keeping workers safe in a fast-paced working environment. Proper training and equipment are key, writes Trevor Crighton

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Fleet management goes high tech Advances in technology are providing fleet managers with solutions that are more detailed, transparent and immediate, writes Anthony Sharpe

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leet management has evolved significantly as supply chains have become more complex. At the same time, technology has evolved at an evermore blistering pace, with the Fourth Industrial Revolution ushering in a whole new paradigm of communication and monitoring.

Coupled with advances in technologies like telematics and driver assistance systems, this offers a host of potential benefits to fleet managers.

“The fleet management industry has evolved from simple GPS tracking to a method of monitoring and managing fleets utilising GPS tracking alongside advanced vehicle data capture and connected third-party solutions, known as telematics,” says Vishnu Perumalsamy, MD of telematics provider Geotab Africa. “Fleet management hardware is able to provide fleet owners with information on engine diagnostics, driver behaviour monitoring, unnecessary fuel expenses, wear and tear, and preventative maintenance requirements, not to mention routing efficiency, real-time reporting and accident reconstruction data.”

Key to this evolution is the shift in the telematics hardware footprint towards mobile solutions, explains Rickard Andersson, principal analyst at market research firm Berg Insight. “The integration of both ruggedised and consumer-grade smartphones and tablets as in-cab options and complementary access interfaces is a development seen in both low- and high-end fleet management systems. Technological advancements like this enable sophisticated software to be deployed on an increasing variety of standard devices, leading to a general commoditisation of telematics hardware.”

FAST FACT

The number of FM systems in active use is forecasted to grow at a compound annual growth rate (CAGR) of 15.0 per cent from 1.6 million units at the end of 2018 to 3.2 million by 2023.

Source: Fleet Management in South Africa – 4th Edition

Cutting costs One of the key advantages of modern fleet management technology is the potential for greater efficiency and reduced costs. Visual monitoring hardware has been increasingly deployed, says Andersson: “A notable trend over the past years has been increasing integration of cameras in vehicle environments for various purposes. Applications range from simple dash cams and CCTV-type surveillance, to more advanced deployments for vehicle exterior monitoring and driver behaviour management. Some innovative solutions even track eye and head movements for real-time intervention in case of undesirable behaviour.”

Such applications can minimise or prevent driving accidents and traffic violations by improving driver habits using in-vehicle driver coaching, says Perumalsamy. “Fleet management technology assists in curbing poor driving habits – such as unnecessary idling, speeding and fast acceleration – that are often the cause of

“By monitoring driver behaviour, fleet managers can gain valuable insights into fuel consumption, allowing them to identify and act on behaviours that lead to unnecessary spending on fuel.” – Vishnu Perumalsamy, MD, Geotab Africa

excessive fuel consumption, and wear and tear. By monitoring driver behaviour, fleet managers can gain valuable insights into fuel consumption, allowing them to identify and act on behaviours that lead to unnecessary spending on fuel.”

Andersson agrees, saying driver management can support eco-driving schemes aimed at reducing fuel consumption and CO² emissions. “Certain fleet management solutions include applications for monitoring and managing driving behaviour in relation to eco-driving aspirations. A fleet management system implemented in the right way, together with eco-driving training, can save between six and 15 percent of the fuel costs, and at the same time reduce the likelihood of accidents.”

Fuel theft is another huge issue facing fleet companies, says Johann Raubenheimer, director of fleet management provider Landmark Tracking.

“On the plus side, we’re moving from very reactive systems to proactive ones.

You can install a sensor that sends out an immediate SMS if there’s a sudden drop in fuel. This can also be used to measure fuel filled, to see if it’s accurate.”

Raubenheimer says the Vishnu Perumalsamy crucial development here is the immediacy of the alerts.

“You don’t have to wait for your vehicles to get back, then get your fuel slips, do the calculations and finally see you’ve got a problem a month later.”

Smarter maintenance Advanced fleet management solutions and diagnostics also facilitate predictive and preventative maintenance.

“Critical parameters that previously were only accessible in a workshop can now be monitored in real-time while the vehicle is on ›

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the road,” says Andersson, noting however that the level of information detail varies. “Many fleet management solutions only monitor data available via the standardised On-Board Diagnostic-II (OBD-II) interface. Among systems developed for heavy trucks, there is generally support for more comprehensive interfaces, including solutions that can access proprietary data from the vehicle Controller Area Network (CAN) bus. One example is OEM solutions that are installed on a vehicle by the original manufacturer.”

Andersson adds that automotive diagnostics software currently used by workshops is likely to disseminate into fleet management solutions over time.

But does it fit?

Of course, for telematics hardware to collect the rich data that it does, it needs to be properly integrated with vehicle systems. Andersson says OBD-II is one of the most common self-diagnostics interfaces deployed on petrol and diesel vehicles. “While OBD-II is commonly used for light vehicles, other on-board Rickard diagnostics protocols Andersson available include J1708/ J1587 and J1939 for heavy-duty vehicles,” he adds. “Developed by the Society of Automotive Engineers (now SAE International), J1708/J1587 is still widely used, though it is being replaced by J1939, a newer CAN-based alternative.”

Andersson also cites Fleet Management System as an alternative. “Based on SAE J1939, this is a comprehensive standard for retrieving operating data from the in-vehicle electronics in trucks. It is jointly supported by vehicle manufacturers Scania, Volvo, MAN, Mercedes-Benz, DAF Trucks and Iveco. The standard is based on SAE J1939.”

Beyond these under-the-hood integrations, standard data interfaces also enable connection of all kinds of devices and peripherals to a fleet management device,

says Andersson, including serial ports and USB for wired connections, and Bluetooth and Wi-Fi for wireless connections. “Examples of equipment that can be connected to such a device include control units for cranes, cargo space doors or loading platforms; handhelds such as barcode readers or PDAs; peripherals like digital tachographs, printers, document scanners, PNDs or notebook PCs; and sensors for temperature monitoring, among other things. Integration of radiofrequency identification (RFID) technology can furthermore allow for automatic identification of the driver by using an RF transponder, for instance.”

Forensic analysis Technology like this can also enable detailed analysis in the event of an incident.

Perumalsamy gives the example of the GO9 tracking device.

“Once a vehicle collision occurs, the accelerometer within the GO device will detect an ‘accident level event’ and record secondby-second data of the accident at 100Hz frequency. This data is automatically retransmitted to MyGeotab for interpretation.

Latitude, longitude, speed, accelerometer, as well as various other pieces of information are included that are essential to reconstructing the accident event.”

Perumalsamy says MyGeotab, the company’s web-based fleet management software, offers access to a number of different types of data critical to accident reconstruction. “These include the Trips History, Accident and Log Data, Speed Profile, and the Accelerometer and RPM graphs. By reviewing and analysing this data, you can verify the events of the accident.”

“A notable trend over the past years has been increasing integration of cameras in vehicle environments for various purposes.” – Rickard Andersson,

principal analyst, Berg Insight

The state of South Africa According to Andersson, South Africa is a relatively mature telematics market with comparably high penetration from an international perspective. “Far from all deployments are full-scale advanced fleet management solutions, however,” says Andersson. “A notable share of the installed systems on the market is represented by comparably low-end tracking systems, for example light fleet management solutions, including stolen vehicle tracking systems extended with basic fleet management features. Penetration is skewed towards commercial vehicles – including heavy vehicles – and to some extent also large fleets of light commercial vehicles (LCVs), whereas the adoption of fleet management services is lower and less advanced for small LCV fleets and corporate cars.”

Andersson notes that security is still a strong focus in South Africa, and fleet management is tightly linked to security functionality such as cargo protection, fuel theft prevention and stolen vehicle recovery.

Raubenheimer adds that local companies are starting to take investment in fleet management systems seriously. “Up to a year ago, clients would compare on price only, but we’re finding more and more clients saying that if they can cut their fuel bill by 10 per cent, for example, then they’re prepared to pay more upfront. There’s a greater willingness to invest in technology.”

MyGeotab interface

DID YOU KNOW?

You can configure the Geotab telematics device to produce immediate audible feedback in response to excessive driving behaviours such as harsh acceleration, harsh braking, and harsh cornering.

Source: geotab.com

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Fleet command Managing and tracking fleet and asset information, from one end of the supply chain to the other, is essential for improving efficiencies, reducing costs and ensuring fleet-wide compliance. By Anthony Sharpe

of your fleet. “You might have light commercial vehicles, trucks and passenger vehicles with different usage patterns, for example. You may use exactly the same vehicle in different ways, which need to be considered before deciding on a replacement schedule.”

The face of your company Of course, there’s no point maintaining your vehicles if you don’t maintain the people driving them. Training is an essential step in this process.

“The level of training depends on the commodity being moved,” says Graham Wren, general manager of business development at logistics group SG Freight. “Your fuel, chemical and gas operations are extremely focused on risk avoidance, and so have extensive training requirements.

“In terms of general operations, our fleet is operated in accordance with the Road Traffic Management System, a self-regulating system where fleet owners subscribe to certain principles pertaining to driver management, vehicle maintenance, procedures and policies, among others. That guarantees a consistent level of quality.”

While driver monitoring systems are becoming more and more sophisticated, training should also be about empowering drivers to self-manage, says Wren. “Train drivers proactively so they know how to identify the signs of risk and fatigue, and how

“Remember that your drivers are the face of your business, as they deal with your customers and their customers.” – Sarel Visagie, Mobilitas 54

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to make the right decisions on the road. You only see your drivers for two per cent of their hours; the rest of the time they’re on the road, and there are only so many aspects that telematics can tell you. Remember that your drivers are the face of your business, as they deal with your customers and their customers.”

Visagie adds that it’s crucial that when companies acquire new vehicles, they retrain drivers in how to use those specific vehicles.

The bottom line Reduced costs and improved profits are the watchwords of any fleet manager. But managers need to take careful cognisance of their entire fleet before adopting any potential cost-saving measures. “It all comes back to planning and understanding,” says Visagie.

“Once you understand your key performance indicators, then you can focus on the details.”

The market is always changing, so it’s important to monitor if any sectors of the business are underperforming and potentially take action, notes wren. Being diversified is also an advantage. “We are fortunate in that we are well diversified, which also protects us against situations as seen in 2020, when some business sectors shut down completely as a result of COVID-19.”

As with any business, some contracts will perform better than others, adds Wren. “It’s a case of monitoring all contracts to make sure that they deliver on what they were costed to.

When contracts start underperforming, you either need to improve efficiencies, reduce costs or fleet size, move the fleet to other contracts or exit the sector completely.”

IMAGES: SHUTTERSTOCK.COM/ LEOWOLFERT, SHUTTERSTOCK.COM/ALPHASPIRIT, SUPPLIED

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Fleet management is, needless to say, a complicated business. With so many factors to consider, it can seem a daunting prospect. For this reason, the first and most important step in fleet management is understanding your business purpose, says Sarel Visagie of fleet consulting firm Mobilitas.

“What is your strategy and how do you want to operate?” asks Visagie. “Are you going to outsource your fleet or not? Once you have the answers to these crucial sorts of questions, you can get into the finer details.”

Understanding your purpose is crucial at the outset, says Visagie, because more than 50 per cent of your expenses can sit in the initial capital outlay of buying a vehicle, as South African companies operate primarily on an ownership model, paying vehicles off in instalments. Once you’ve decided you want to own a vehicle, you need to decide what it will be used for, which determines the sort of vehicle you buy.

Maintaining and replacing vehicles is also an onerous but essential part of fleet management. “People tend to hang onto their vehicles too long, especially in difficult times like these,” says Visagie. “But the longer you have a vehicle, the greater the fuel consumption and the higher the maintenance costs.”

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Unitrans control tower

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hile logistics service providers typically provide physical solutions for product distribution, their partners’ roles in providing visibility across nodes in the supply chain are what truly add value, improve efficiency and enhance the supply chain’s ability to respond to change.

“Through partnerships with multiple specialised technology providers, Unitrans has built a centralised control tower that delivers visibility for daily execution management, as well as valuable network insights to support informed decision making,” says Carli Venter, marketplace strategic executive at Unitrans.

Venter suggests that inventory optimisation, incorporating warehousing, forms an integral part of effective supply chain management: “In an ideal world, one would want to move products from the manufacturing process straight to the end user, achieving maximum cost optimisation.

However, due to the variable nature of supply and demand, we need to have strategic stores of inventory to cater for uncertainty and allow for rapid responses to demand changes.”

With that in mind, the biggest area of cost saving in warehousing is to minimise inventory as much as possible, without jeopardising supply chain agility and responsiveness.

Many hands make high prices ZacPak MD Willie Nel says that logistics and packaging costs make up 38-42 per cent of any item’s landed cost, which is largely passed on to the final consumer. “Creating partnerships to reduce the touchpoints is the first step; the old method of reducing logistics costs by pushing them back up the chain is antiquated.”

“Buying and shipping better are the most effective ways of reducing logistics costs,” continues Nel. “The more times someone touches an item in the chain, the more it costs, and people need to understand the value/cost trade-off better.” He explains that understanding what a client actually needs makes a big difference in the service that is provided, which, in turn, has a big impact on costs.

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Adding THE RIGHT TOOLS TO the logistics chain Partnerships are the real key to lowering costs and increasing productivity in the logistics supply chain, explains Trevor Crighton

The right tools for the job Nel feels that it is impossible to operate at speed in a modern warehouse without radio frequency scanning technology, at the very least. “Speed and access to realtime information are key. You have to have a warehouse management system that tracks the cargo from before it arrives, scans it on arrival, records times, captures images of its status, delivers linked damage reports, and emails everything automatically from the floor, without human intervention, in real time.”

Unitrans has been able to improve stock accuracy from 77.8 to 99.99 per cent for a leading manufacturer in South Africa, says Venter, by virtue of deploying a fully automated warehouse management system. “Due to the

high level of stock accuracy, stock takes are now performed twice annually. Shift patterns were also adjusted to allow for 24-hour loading and receiving of stock, which has substantially improved vehicle turnaround times. The use of newly designed, lightweight trailers has allowed payloads to be improved from 32.3 to 37 tonnes per load. The client can now get stock to customers much faster and achieve better fleet utilisation, which has allowed stockholding to reduce from 40 000m2 to 26 0000m2 in just six months.”

The company also implemented an automated silo monitoring and replenishment system, which measures silo tonnages of product stored at a manufacturing plant, and triggers the refilling of the silos when they reach predetermined levels of stock. Venter says that this deployment has improved service level percentages from around 85 to 99.9 per cent for the customer.

These projects have been facilitated by the Unitrans control tower, built on the basis of operational system integration to provide automated experiences across many areas of the supply chain, explains Venter. “The control tower relies on key functional resource partnerships in the videographic and telematic industry, and has automated the briefing and debriefing processes through mobile technologies.”

“Operational excellence is fundamental to the Unitrans way of work,” adds Venter. “We continuously strive to improve productivity, whether that be through process optimisation for improved vehicle turnaround times, through innovative vehicle designs for increased payloads, or through the deployment of best-in-class technologies for supply chain visibility.”

“Creating partnerships to reduce the touchpoints is the first step; the old method of reducing logistics costs by pushing them back up the chain is antiquated.” – Willie Nel, MD, ZacPak

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Customer satisfaction in a connected world Logistic strategies must become innovative, constantly adapting to the rapid-fire changing world around us, writes Simon Foulds

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cKinsey & Company, in its Adapting Customer Experience During Coronavirus report, suggests that maintaining a strong customer experience in a crisis requires rapid research to understand changing dynamics, as well as agile innovation to address them.

Clearly, customer leaders who master this approach will create both value for consumers in high-priority areas, and an environment of increased competition.

“Digital-led experiences will continue to grow in popularity once the coronavirus is quelled, and companies that act quickly and innovate in their delivery model to help consumers navigate the pandemic safely and effectively will establish a strong advantage,” states the report.

Connecting the connected The question to ask, then, is: How are South African companies adapting to ensure customer satisfaction in a connected world?

Vijay Naicker, MD of Impro Logistics, explains: “The age of social media and the internet have reached an advanced stage of their life cycles. As these evolve further and grant more power to the user and consumer, logistics companies must become more competitive and agile to satisfy their customers’ needs. As such, companies need to implement effective and workable IT policies and procedures. Furthermore, companies must ensure that their IT infrastructure is robust, reliable, intelligent, super-fast and – most importantly – offers a secure network.”

Naicker says one of the basic strategies in logistics is location strategy. “This is where a logistics facility is located close to its suppliers and customers. The physical location of a warehouse is important, as it reduces costs and production downtime, as well as inbound and outbound delivery times.”

Linking this with a company’s software system is also critical, points out Naicker, stating that enterprise resource planning systems have evolved to such an extent that a supplier can gain access to the stock on hand of each stock keeping unit on a customer’s premises. They can then replenish the low stocks – all electronically. “The age of raising purchase requisitions is slowly coming to an end,” he says.

Vijay Naicker

“The age of raising purchase requisitions is slowly coming to an end.” – Vijay Naicker, MD, Impro Logistics

The road best travelled Since customer experience is so critical, it is crucial to use the best transportation system, to strengthen performance trade-offs, reduce shipping costs and ensure timely delivery of goods.

“One must find the most economical and reliable transport system to ship a product,” says Naicker. “Most deliveries these days are time-dependent. Consumers want their goods in the shortest possible time and at the lowest possible price.

“The choice of carrier type and related costs are also important. To find the best possible mix between on-time-delivery and cost, companies need to partner with a third-party logistics service provider that best suits their consumers’ needs.”

Customer experience is key The McKinsey report concurs with what Naicker says: “The customer experience has taken on a new definition and dimension in the overwhelming challenge of COVID-19.

Customer leaders who care and innovate

during this crisis, and who anticipate how customers will change their habits, will build stronger relationships – the kind that will endure well beyond the passing of this current crisis.”

In its third Global Customer Experience Excellence report, KPMG International’s Global Customer Centre of Excellence lead Julio Hernandez states: “The shift to digital enables greater value to be created by lowering costs to serve. The migration to these digital relationships poses something of a challenge for organisations – even those with a strong digital presence. Online experiences in the new reality need to be immersive, emotive, and, above all, safe.”

It is thus vital to keep in mind that a dynamic economic environment, a shift in values, and newly expected standards of customer and corporate behaviour are rapidly changing the rules of the game. Looking forward, it is clear that firms will need to know this new customer intimately if they are to succeed in the new, post-pandemic reality.

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L OGIS T IC S

Right product,

right place, right time Combining logistics, warehousing, and transport seamlessly should, in theory, be the ideal scenario for every company, writes Simon Foulds

“More importantly, however, is that it creates total visibility throughout the full logistics cycle of products.”

High-value items usually have higher margins, enabling expedited transport strategies. For high-volume, low-margin consumer goods, says Mountford, having stock in the right location is the fundamental key, as there is very little room for error.

Furthermore, various demand forecasting methods and tools can be used to optimise the stock in key distribution locations.

“Here, warehouse management systems are implemented to improve the speed of locating and accurately picking stock items, especially in large facilities,” says Mountford.

“In conjunction with navigation software, these also assist in getting the driver to the right location on time.”

T

he need to be able to bring together logistics, warehousing and transport in an effective manner is more important than ever in today’s digital world. This is especially true when one considers that modern consumers who order products using mobile devices usually expect to receive their goods within 24-48 hours.

Having a blueprint to enable this, along with the processes required to govern it effectively, will ensure that it can be achieved both timeously and cost-effectively. How can companies put a blueprint like this in place?

“An effective strategy ensures that you have stock in the correct locations, along with the means to relocate them when required, utilising various modes of transport,” explains Peter Mountford, CEO of Super Group.

To achieve this, says Mountford, companies need to integrate the following processes seamlessly, in order to provide visibility of their entire value chain. “Route optimisation tools are key in optimising the distribution plan – ones that work in conjunction with your transport management system, allowing you to

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monitor as well as adhere to the plan. Having these in place will enable you to respond and react quickly should any issues occur.”

Forecasting models Stock and sales forecasting models may be well placed to assist with non-seasonal products but, adds Mountford, for seasonal and short shelf-life merchandise, predictions can be a bit more challenging.

One key aspect in overcoming this difficulty lies in the sharing of information between principals and the third-party logistics companies being utilised. “This results in greater information and knowledge being provided between all parties, something that enables companies to amend forecast models in those instances where, for example, manufacturing delays occur,” says Mountford.

Super Group has developed its in-house systems so that potential errors can be identified before they escalate into serious issues, explains Mountford. This has enabled the company to shift from being a reactive entity to a genuinely proactive logistics solution business.

The integration of multiple systems throughout various platforms is integral to the overall success of any total logistics solution, whether in-house or involving thirdparty logistics. In achieving this, exceptional management tools are crucial.

“At Super Group, we developed the in-house system ‘MyDashboard’, which tracks and highlights all products, thereby providing a good overview across the entire supply chain,” states Mountford. “In addition, thanks to the use of artificial intelligence, once the servicelevel agreements have been developed, automatic triggers highlight all potential problems. This in turn allows management to intervene and make proactive, informed decisions, and to do so timeously. Systems are certainly the key enablers for achieving costeffective and sustainable logistics solutions.”

Processes should be driven around the supply chain operations reference framework, or something similar, adds Mountford. “The most important aspect is that technology should drive the process. After all, when introducing human intervention into, for example, distribution planning, the organisation will discover that this almost always introduces additional costs.”

“An effective strategy ensures that you have stock in the correct locations, along with the means to relocate them when required, utilising various modes of transport.” – Peter Mountford, CEO, Super Group

IMAGES: ISTOCK.COM/ AF_ISTOCKER, CIFOTART/ISTOCK.COM, BLUE PLANET STUDIO/ISTOCK.COM, SUPPLIED

In-house systems

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Change your business perspective

GREATER PRODUCTIVITY,

The Iveco Daily range of vehicles offers a host of features to help supply chain operators mitigate the current challenges facing the sector

LESSER COSTS AND BETTER SECURITY

IMAGES: SUPPLIED

S

ince March 2020 when President Ramaphosa announced the national lockdown, we have witnessed momentous changes in our social and business lives. The pressure to do things differently and more efficiently has never been greater.

For the supply chain sector, some of the challenges include: • ho to increase the productivity of drivers and fleet • a need to reduce fuel and maintenance ills • concerns a out the security of the cargo and the safety of drivers • ensuring the vehicle eet pro ects the right image of professionalism for the business.

The good news? Iveco’s Daily range of panel vans offers a solution to the above challenges.

Load volumes ranging from 9 cubic metres to the class-exclusive 20 cubic metres and mass payload capacity from 1.4 to 4 tonnes mean that you can do the work of three bakkies with one panel van. The Daily panel van comes with a free 5-year/120 000km service plan and a 2-year unlimited km bumper to bumper warranty. Long service intervals of 30 000km also mean that the Daily panel van is available to work for longer periods giving you more capacity to earn. Iveco also offers a range of attractive and competitively priced maintenance contracts resulting in predictable maintenance costs and total peace of mind.

The class-exclusive Hi-Matic 8-speed automatic gearbox is a worthy option to consider for your Daily panel van fleet. With gearshift speeds of 200ms and adaptive shifting logic, the Hi-Matic gearbox can reduce fuel consumption by as much as 10 per cent.

It works through a torque converter so will save you time and money in maintenance costs because there is no clutch wear. The

IVECO AND ITS PARTNERS CAN OFFER AN INNOVATIVE INTELLIGENT LOCKING SOLUTION THAT ALLOWS REAL-TIME CONDITIONAL ACCESS CONTROL TO THE CARGO BODY OF THE VAN. value of the Hi-Matic gearbox is most evident in a fleet. The Hi-Matic gearbox will improve the fuel economy and mechanical control of all the drivers, particularly the poorer drivers in the fleet. The average performance will improve, but more importantly, the variability in performance will be drastically reduced.

The performance of your fleet drivers is like a weak link sport; you gain more by improving the performance of the weaker team members than you do from having a couple of stars.

The Iveco Daily range is fully compatible with telematics to assist you in managing your fleet and drivers. This offering provides factual insight into how the vehicles are driven and forms a sound basis for driver training, retraining and, very importantly, driver incentive and reward programmes. If you can’t measure it, you can’t manage it.

Designed for maximum driver productivity

When linking the capabilities of systems like this, telematics, route optimisation software and the optional infotainment system that supports both Android Auto and Apple CarPlay, the fleet management function can take full advantage of the internet of things and elevate the operation to the next level.

The COVID-19 pandemic has accelerated change and reshaped the business landscape.

It is time to change your business perspective, contact your nearest Iveco dealer and let’s see how we can help you in this brave new world.

PROTECTION AGAINST CARGO THEFT The BSI & TT Club Cargo Theft Report of 2020 reveals that 54 per cent of all cargo theft in the Middle East and Africa region in 2019 occurred in South Africa. This is a sobering and worrying situation. To help mitigate against this, Iveco and its partners can offer an innovative intelligent locking solution that allows real-time conditional access control to the cargo body of the van. This can be linked to geofencing or a limitless number of criteria and provides a full audit trail of the opening of the cargo area.

For more information: 011 243 6065

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FA S T SUPPLY CH A IN

Remote diagnostics

in Innovations

fleet management Like most business executives, fleet managers are constantly trying to grow their profit by increasing revenue and decreasing costs.

Caryn Gootkin looks at innovations that can help

“B

y definition, innovations provide solutions to challenges,” states Elvis Mutseura, product marketing manager at Iveco South Africa. “Some innovations have a significant impact on revenue, others help to control costs, while some have a positive effect on both.”

Justin Manson, sales director at Webfleet Solutions, says: “While there are a number of important innovations being introduced in fleet management technology, the most significant are the use of artificial intelligence (AI) and remote diagnostics.”

Artificial intelligence Mutseura points out that this disruptive addition to a fleet manager’s tools will play an increasing role in optimising profit. “When combined with vehicle telemetry – the collection of information about a vehicle or driver’s performance from sensors within the vehicle – AI can deliver many benefits. These include accurate, predictive maintenance input to increase fleet utilisation by reducing downtime; real-time driver coaching, which has a huge impact on reducing fuel consumption and increases road safety; and real-time routing updates, to avoid traffic congestion and road hazards.”

Manson adds that AI in-camera technology specifically helps to monitor driver fatigue, driver distraction – such as cellphone usage, eating or drinking, or not focusing on the road – and driver identification. “It also guides drivers on safety issues like lane deviation and safe following distance, and warns them about objects on the road, especially at night.”

Mutseura says the application of AI in fleet management is still Elvis in its relative infancy. “But this area will probably see the greatest Mutseura improvements in fleet management efficiency in the years ahead.”

“Routing and scheduling software innovations are delivering quantum leaps in efficiencies, as they allow more work to be accomplished in a shift while reducing fuel and other vehicle operating costs.” – Elvis Mutseura, product marketing manager, Iveco South Africa

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Keeping vehicles on the road is critical to the revenue of a fleet management business, and this clearly depends on proper maintenance.

Remote diagnostics enable fleet and maintenance managers to identify vehicles that are having issues easily, and proactively reroute them to service locations.

“Remote diagnostics are not limited to the mechanical and electronic parts of a vehicle either; they can also, for example, be used to monitor tyre pressure and temperature,” says Manson. “Tyres are a massive expense in commercial fleets. When a tyre gets a puncture, if the system is able to calculate the rate of deflation, the driver will know how far he can drive until it is critical and the provider can also dispatch technicians to assist with the repairs.”

Increasing payload capacity A simple way to increase revenue is to increase the volume of goods transported. “Vehicle manufacturers spend millions of dollars annually in research and development to reduce vehicle tare mass while strengthening key components, so that the vehicle gross mass can be increased,” says Mutseura.

Time- and cost-saving software The old saying “time is money” is very applicable in fleet management, says Mutseura. “Routing and scheduling software innovations are delivering quantum leaps in efficiencies, as they allow more work to be accomplished in a shift while reducing fuel and other vehicle operating costs.”

Furthermore, advanced driver assistance systems, like collision avoidance systems, use visual and audio alerts to improve driver safety, and avoid the disruption and costs that accidents bring.

Anti-theft devices Cargo and fuel theft are certainly major concerns for the road transport sector in South Africa. “Innovations such as anti-siphon devices, intelligent cargo access control, and remote fuel level monitoring with alarms that are triggered by sudden dips in fuel level are all useful in managing and mitigating these risks,” says Mutseura.

Asked which of these and other innovations – such as temperature and tyre pressure sensors, autonomous vehicles and drones – will have the greatest impact on fleet profitability in the future, Mutseura says it ultimately depends on where the business is on its optimisation journey. “As fleet managers address one challenge, so their next big win will be found in a different area. The thing to remember is that although the bottleneck shifts, there will always be additional room for improvement.”

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Fleet

management megatrends Mobile connectivity, machine learning, and the sharing economy have put tools in the fleet manager’s toolbox at a pace never seen before in fleet management.

Simon Foulds reports

IMAGES: ISTOCK.COM/PHONLAMAIPHOTO, SUPPLIED

“T

he impact of each of the current megatrends is creating a much faster supply chain. Mobility, for example, is without doubt entrenched into the current and future supply chain environment,” says Rufus Smith, information technology executive at Unitrans.

“Unitrans has integrated many systems and pushed processing downstream to the immediate point of information usage,” continues Smith. “Previously, companies would hold debriefing meetings with the drivers and management, but nowadays safety, health, environment and quality scoring and trip completion feedback are managed by the end-user – in this case, the driver.”

This not only has material cost savings while impacting the speed of information, Smith says, but is also part of a more extensive shift towards automation and smart data that all businesses will adopt in the coming years.

Though the focus tends to be on the technology, unlocking the value proposition comes with a culture change in people responsibilities, changing roles and quality of information. Businesses across the supply chain will find the culture change the most difficult, suggests Smith, pointing out that management commitment, trust, retraining, and a change to control and governance methods tend to be where most projects of this nature fail.

Aye, robot The next big shift is in computer-driven automated processes, often referred to as robotic process automation (RPA), where conventional integration is either not possible or too costly. Computers can be trained, in conjunction with some built-in intuitive logic, to undertake repetitive processes usually done by large numbers of clerical staff.

This can be as simple as receiving a daily spreadsheet in an email, to be typed into a website form. Robots, which can work accurately and 24 hours a day, can be set up to watch for this email, pull the spreadsheet, and accurately fill in a form as if it were all done by a person.

“Like mobility, this is as much about the big shift in culture and people responsibilities as it is about the technology,” comments Smith.

“The result is that many processes can be completed more accurately and significantly faster, resulting in cost reductions and added value to the supply chain.”

Digital intelligence Smith says that as the systems become more and more integrated and accurate in their information, the long-desired business intelligence live reporting dashboards become a reality, as they can present coherent views of complex data in a single model, by drawing information from many sources.

“Unitrans is well advanced in this digital transformation, and live dashboards spanning

“Supply chain operators that have not kept up with the digital migration will find it increasingly difficult to compete in the future.”

– Rufus Smith, IT executive, Unitrans

multiple systems in a fully live environment were key to being able to manage operating in the COVID-19 environment rapidly and efficiently, with little interruption,” explains Smith. “Remote working had little impact, as both inputs and outputs were already ingrained in the business processes and required only small adjustments to continue ‘as normal’.”

Smith says Unitrans continues to invest significantly in technology and digitisation.

“Supply chain operators that have not kept up with the digital migration will find it increasingly difficult to compete in the future.”

Information sharing has often been both a desire and also a hindrance in the common platforms in the supply chain environment.

Within the supply chain, the plethora of different systems, data formats – and even, in many cases, manual processes – has held back data sharing and aggregation initiatives, says Smith. “As the cost of technology decreases, sharing methods become more pervasive, the businesses within the sector will move to a more digital streamlined process, and the potential and value proposition will increase. The caveat, of course, will be the desire to participate.”

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A DV ER T ORI A L

GMLS: FROM AFRICA TO THE GLOBE Welcome to our business, your one-stop global trade capacity partner

G

MLS offers global trade compliance solutions by providing our valued customers with superior skills, capacity building and academic training, and hands-on mentoring and consulting.

Our directors and associates are all experts in their fields and have specialised postgraduate academic qualifications combined with years of hands-on experience.

Trade facilitation and trade advocacy is the key to success for business and government alike. What sets GMLS apart is our association and co-operation with all major global authorities in trade, thus bringing our customers the correct capacity at international standards.

RITY HEY RY

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OUR VISION, MISSION AND VALUES GMLS aims to secure the international logistics supply chain by providing superior skills and knowledge transfer to mainly African countries.

Benefits to these countries will include maintaining and increasing their participation in world trade, while they contribute, in turn, to global supply chain security and predictability.

OUR COMPANY SERVICES Our main goal at GMLS is to empower the various players in the global supply chain and customs arena with superior skills and knowledge to give them a competitive edge in the global marketplace.

Our global trade consulting “Avoid litigation, compliance assured”.

We strategically cooperate with various partners such as Chambers of Commerce, Global organisations and the like, to ensure wide scale capacity and delivery of solutions Our Services Include: • supply chain solutions • customs and excise • special economic ones • trade advocacy • contracts of sale • customs modernisation • international payments • ncoterms • customs tax practitioner services • customs rulings and dispute resolutions • Af TA African ontinental ree Trade Area • glo al nstruments and conventions Our global trade training and capacity building “Knowledge is power”.

Our qualifications and courses are based on face-to-face as well as virtual training delivery methods, which integrate interactive components such as videos, podcasts, live training sessions, e-learning modules and much more. All our

The AfCFTA TRADE agreement will create opportunities and benefits for all the nations of the continent. It will enable companies to expand their markets by exporting goods and services across the continent.

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courses and programmes are composed of interactive activities that force the learner to use the knowledge and skills learnt and to perform them in work-based scenarios.

“GMLS qualifications and courses offered”: 1. Importer and Exporter (intermediate and advanced) 2. Certificate International Trade 3. Higher Certificate Freight Forwarding and Customs Compliance 4. National Certificate Supply Chain Management 5. FIATA Diploma in Freight Forwarding 6. FIATA Higher Diploma in Supply Chain Management 7. AfCFTA and Trade agreements 8. Incoterms 2020 9. Contracts of Sale 10. Supply Chain 11. Sales and Marketing 12. Dispute Resolution 13. Customs and Excise 14. Dangerous Goods 15. Customs Modernisation We are the appointed and approved WCO (World Customs Organisation) trainer and distributor in South Africa. All courses from the WCO can be purchased directly via GMLS.

IMAGES: SUPPLIED

Imports, exports and clearing services “We are the solution”.

GMLS, appointed as the approved WCO (World Customs Organisation) trainer and distributor in South Africa, is ideally placed and equipped with the industry knowledge and expertise to facilitate a range of customs clearance requirements. Being home to many industry experts, you can trust GMLS to handle all customs requirements diligently.

We have developed a network in South Africa and internationally that enables us to provide both import and export and transit customs clearing services, at all major ports and airports in South Africa, as well as any services that may be required to and from all foreign ports and airports globally.

GMLS has a bespoke approach to each client and we cater for any and all possible needs. Ensuring that we stay ahead of the legislative and other customs agency amendments is part of our organisational imperative.

• or arding • Transit • mport and xport learing • egistrations • and • trategy and lanning Legal disputes We often find that when legal disputes arise with customs, treasury, tax, among others, it is too late.

Advanced preparation in compliance is key and strategic to the supply chain. This

• • •

A outh African upplier Diversity Council order ei ham er of usiness Nelson andela ay usiness ham ers

GMLS FACILITATES TRADE THROUGHOUT AFRICA

Mark Goodger

requires capacity in all aspects of customs, customs modernisation, global developments, continental developments, and national and regional policy and strategic objectives.

GMLS, however, is highly competent in terms of addressing dispute resolution mechanisms, which, to a great degree, will avoid litigation and expensive legal costs. This will be to the benefit of all who utilise the services. However, the main objective and focus is to eliminate all risks in advance of the global transaction and to ensure that landed costs in the supply chain will be confirmed and predictable under all circumstances.

Services included are customs disputes and rulings, tax disputes and rulings, special economic zone applications and classification, valuation, origin disputes and rulings.

GMLS has associated experts located throughout the world. These include noted former senior ITAC officials, customs officials, experienced advocates, international trade consultants, and business leaders. We have developed advisory experience with several global, regional and national government bodies throughout Africa and specifically in the SADC and West African regions.

We are proud to be affiliated with multilateral institutions such as: • orld ustoms rganisation • ATA nternational ederation of Freight Forwarders • nternational ham er of ommerce • nternational Net or of ustoms University’s (INCU) • ohannes urg ham er of ommerce and ndustry • ur an ham er of ommerce and Industry (DCCI) • rofessional Aviation ervices A and dangerous goods experts) • niversity of a ulu Natal asters and PG Dip) • niversity of ape To n asters • outh African Association of reight Forwarders (SAAFF) • Transport ducation Training Authority (TETA) accredited provider • T uality ouncil for Trades and Occupation

GMLS has been appointed as the Customs consulant service provider for East London pecial conomic one L ith over 1 years experience in customs legislative interpretations, compliance and the like, GMLS has contracts with the zone operators, investors and strategic partners and has ensured that customers have received all benefits. Additionally, the GMLS CEO has been appointed as a consultant in the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA is one of the flagship projects of the African Union’s Agenda 2063. It will help the continent to address challenges of youth unemployment, skills development, industrialisation, women empowerment and infrastructure development. It will also create a single super-market for goods and services, which will strengthen trade and inter-African investment.

The AfCFTA agreement will create opportunities and benefits for all the nations of the continent. It will enable companies to expand their markets by exporting goods and services across the continent.

By facilitating the movement of goods and services among African countries, AfCFTA will create opportunities to accelerate intra-Africa trade, grow local businesses, create jobs, and increase infrastructure development on the continent.”

A MESSAGE FROM MARK GOODGER, Founder and CEO “Never before has trade been impacted as in these current times. The post-COVID-19-era will be a ‘new normal’ with many challenges in re-establishing and developing trade.

“However, one thing is certain, global trade, the conduct thereof, the capacity required, the market share thereof, and the like, will not disappear. In fact, global stakeholders will need even greater compliance, competency and awareness, as clearly there will be an emphasis on the dynamics of change, costs and getting it right, the first time.”

For more information: +27 (0) 44 020 0103 info@gmls.co.za | lee@gmls.co.za www.gmls.co.za

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Automotive Supplier Park ELIDZ

Are the country’s Special Economic Zones making a genuine difference to the supply chain? Gareth Griffiths asks the role players

difference inside the chain

S

outh Africa’s Special Economic Zone (SEZ) programme is an important activity of the Department of Trade, Industry and Competition (DTIC), which began with the establishment of the Coega Industrial Development Zone (IDZ) in 1999. Since then, additional IDZs have been proclaimed at our main seaports.

In 2014, the Special Economic Zones Act was passed by Parliament, allowing the DTIC to promote specifically targeted economic activities to stimulate national economic growth, as well as export in designated zones, offering support measures to attract foreign and domestic investments and technology.

From 2016, all existing IDZs would therefore be converted into SEZs, of which there are 10 in total.

Consequently, a number of Customs Control Areas (CCAs) were established within key SEZs, including Coega, East London IDZ, Dube TradePort and OR Tambo Airport SEZs. Recently, the Saldanha Bay SEZ CCA was also proclaimed. Customs Controlled Area Enterprises (CCAE) are those business premises permanently located within a CCA. Here, business activities requiring registration or licensing with Customs are executed and controlled by Customs directly. This should benefit the supply chain turnaround.

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Broad commitment But are customs clearance times quicker within SEZs, and what additional government support is making a difference to the stakeholders?

DTIC director for special economic zones, Thami Klassen, explains that there are no special customs clearance processes specifically for SEZs. “Only customs rebates are available. SEZ businesses still have to follow customs clearance processes at clearing points and facilities, sometimes leading to unhappiness because of the delays this causes. There are no plans to fast-track these as far as I am aware. In terms of other regulatory controls, each zone operator assists in their own way. There is no overall legislation other than the customs rebates.”

The SEZ Advisory Board annual report of 2019 says it would be difficult, if not impractical, for the DTIC alone to fund the entire SEZ programme – given the number of zones designated, the infrastructure backlog and the scale of the investment pipeline attracted. For effective implementation, all zones require commitment from provinces, municipalities and other critical stakeholders in terms of infrastructure planning and development, within and without the zone.

However, the government has also established

Thami Klassen

the National SEZ Capacity Support Unit at the Development Bank of Southern Africa.

Good value Mark Goodger is the CEO of GMLS, a services company that aims to empower the various players in this supply chain, providing them with superior skills and knowledge to achieve a competitive edge in the global marketplace.

He believes the SEZ programme adds value: “The SEZs enhance efficiency in terms of value offered by duty- and VAT-reduction benefits for operators within the zones.

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“However, there have been many legislative changes that leave investors considering moving to other free zones in other countries, where there is more legislative certainty.

Hence SARS and the DTIC need to provide more certainty in order for such investors to preferentially locate in South Africa.”

Goodger believes his company makes a critical difference. “When you are in a zone that we service, it is clear from the outset what your customs compliances are.” GMLS, he adds, has more than 10 years’ experience with the legislation and is best suited as a trainer for the World Customs Organization, International Chamber of Commerce and other global organisations, ensuring maximum SARS compliance and assisting in avoiding issues around penalties.

“We are World Customs Organization training providers, and teach at various universities and for the various SETAs, including the Transport Education Training Authority. We are also accredited by the International Chamber of Commerce as trainers of Incoterms, which helps international investors who seek to conduct global trade in and from the zone.”

IMAGES: ELIDZ, SBIDZ, SUPPLIED

Sibusiso Ralarala

Looking east Sibusiso Ralarala, head of corporate communications and marketing for the East London Industrial Development Zone (ELIDZ), says that in their overall experience, based on annual surveys and daily engagements with investors/tenants by the ELIDZ sector managers, there has been a notable improvement with regard to turnaround times, efficiencies and interactions with customs clearances.

“This notable improvement is attributed to the partnerships and relations that we have built with our key stakeholders, and continue to fortify with SARS and the East London ports of entry,” says Ralarala. “The DTIC has approved the request of the ELIDZ to establish an on-site ‘One Stop Shop’. This will be geared towards providing ELIDZ investors/tenants with services to fast-track projects and reduce government red tape when establishing a business within the precinct.”

The ELIDZ’s One Stop Shop will house government entities such as SARS (to help with customs and tax); Home Affairs; Department of Labour; Department of Environment, Forestry and Fisheries; Eskom; and the Companies and Intellectual Property Commission – all under one roof.

“To access these services, an investor will make an appointment to meet a government representative and be guided through the process of setting up a business,” explains Ralarala. “The One Stop Shop is meant to provide services such as administrative procedures for issuing business approvals, permits and licences, thereby removing bottlenecks that investors may face in establishing and running a business.”

“The One Stop Shop will be geared towards providing ELIDZ investors/tenants with services to fast-track projects and reduce government red tape when establishing a business within the precinct.” – Sibusiso Ralarala, head of corporate communications and marketing, East London Industrial Development ZONE

Saldanha BAY IDZ under construction

Benedicta Durcan

Ralarala says investors/tenants are satisfied with the current processes aimed at easing doing business within the ELIDZ precinct.

“In addition, more than R4-billion worth of manufacturing inputs for the ELIDZ-based enterprises are sourced from the local economy, which is more than 60 per cent of the total inputs sourced. This alone shows the extent to which the ELIDZ activities impact the region’s indigenous economy.”

The west coast weighs in On the west coast, the Saldanha Bay IDZ (SBIDZ) Licencing Company has a dedicated Ease of Doing Business executive, Benedicta Durcan, who says: “Top of our list was the Customs and Excise efficiency to enable bustling trade between foreign companies, the west coast business community and other South African entities.

“The SBIDZ is designated a CCA in terms of Section 21A of the SARS Customs and Excise Act No 91 of 1964,” explains Durcan. “The designation over the footprint extending from the quayside to the back of port land creates a seamless flow of goods into, within and out of the zone, thus equating to the global definition of a freeport.”

Durcan adds that CCA incentives have the benefits of: • Less onerous procedures for goods that move into, within and out of the zone meant for export destinations; • No upfront 15 per cent VAT payment on parts and equipment coming in for repairs and maintenance; • No import and/or export duties levied on goods imported, value added and reexported from the zone.

“Our satellite InvestSA One Stop Shop is a dedicated desk for SARS to facilitate investor queries as the need arises,” says Durcan. “For many indigenous manufacturers, the customs procedures setup in the zone will open their businesses to the global marine trade by making the Port of Saldanha Bay a port of call of choice for the passing trade. To this end, we have engaged SARS and National Treasury at various levels and departments to ensure consistency and efficiency in our service offering.”

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dramatically, but all we can do is build that into the timelines for eventual delivery.”

Finding answers

a serious problem?

Are regulatory controls over our supply chain hampering South Africa’s capabilities to be productive?

Gareth Griffiths investigates

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he African Continental Free Trade Area (AfCFTA) was founded in 2018 by the African Continental Free Trade Agreement among 54 of the 55 African Union nations, and commenced trading on 1 January 2021. In terms of participating countries, it’s the largest free-trade area in the world since the formation of the World Trade Organization.

Surely then, South Africa – with its sophisticated economy – should be at the forefront of benefiting from this advantageous trade dispensation. Perhaps, but it seems that our economy is being throttled by strictures and bottlenecks.

Very few times has the disruption of the African trade supply chain been so acute as in recent weeks,

with the chaos experienced at South Africa’s land borders before and after the seasonal holidays. In particular, two border posts of critical importance to both private travel and freight – Lebombo and Beitbridge – were brought to a virtual standstill.

From the supply chain perspective, this had a major impact on the carrying of freight across borders, notably at the border with Mozambique, where further unnecessary delays were caused by officials on either side of the border refusing to accept each other’s COVID-19 test results. Currently, passport, freight and other documents have to be presented to officials on both sides of the border. However, it was reported last year that SA Home Affairs was in the process of implementing a “One Stop Border Policy Project” which would see only one process conducted when people move between countries. However, this will only come into action in 2025.

According to the president of the Cape Chamber of Commerce & Industry, Janine Myburgh, “normal situation” border delays are simply part of a process. “However, with the [recent] Beitbridge problem, there seems to be a distinct lack of flexibility in managing Janine the process. I’m sure that Myburgh COVID has slowed things down

“In the experience of the Chamber and its members, regulatory controls need to take into account that any constraint on delivery has a negative impact on the offering by the supplier.” – Janine Myburgh, president, Cape Chamber of Commerce & Industry 66

Creating opportunity Nonetheless, it’s not all doom and gloom.

Kaashifah Beukes is the CEO of the Saldanha Bay Industrial Development Zone, incorporating a customs control area specially set up by government to facilitate exports and imports. “Our zone and its customs-controlled area, including the port of Saldanha Bay, are uniquely positioned to bring benefits to local energy and maritime manufacturers from the continent, and are well-aligned with the goals and strategic vision of the AfCFTA and South Africa’s economic recovery.

“After visiting the Ghana Free Zone Authority and Special Economic Zones to explore synergies, and how to further enhance trade and the customs regime for our coastal zones, we agree that the AfCFTA will create more opportunity for our local South African businesses,” she concludes.

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Regulatory lag:

Myburgh says the solution to such problems lies in more efficient customs and excise officers at borders, and constant revision of the regulations to identify actual and potential bottlenecks. “That means a change in perspective: viewing the exporter and importer as a customer.”

However, good supply chain management is about the effective leveraging of time and space, so as to satisfy customer demand – for example with online shopping. “In the experience of the Chamber and its members, regulatory controls need to take into account that any constraint on delivery has a negative impact on the offering by the supplier,” says Myburgh. “In the private sector, time is money, something that is sometimes lost on the regulators.

“Public health and safety are important factors too. For example, we can’t open our borders to unregulated medicines, but the issue at the moment is the speed of regulatory approval for COVID-19 vaccines. We understand a process needs to be carefully followed, but if rubber stamping is holding up that process, it is a clear example of the Kaashifah severe detrimental effects of Beukes regulatory control.”

Myburgh says delays also increase the end price. “Keeping a refrigerated truck running idle for long periods adds significantly to the costs of supply. Delays that hold up essential spare parts for machinery or ‘just-in-time’ orders have the same effect.”

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supply chain management as a career. “The need for professionals in this field has never been greater,” notes Storpioli. “Companies are therefore searching for qualified professionals who can bring new thinking to the table, to make supply chains more resilient and agile.”

– from a recognised tertiary institution should be the first objective when considering a career in this field. “Supply chains in the age of the Fourth Industrial Revolution are more sophisticated, more technologically enhanced and more complex now than ever before. A degree offers a window into the ‘science’ of supply chain management.”

Many institutions offer supply chain management qualifications, and some, such as IMM, offer both distance learning as well as the opportunity to attend face-to-face sessions with lecturers. “IMM has offered distance tuition for many years, and has developed an approach that provides comprehensive support to students using technology and advanced educational techniques,” says Storpioli. She indicates that IMM lecturers have extensive experience in business and commerce, as well as academic proficiency.

“This adds practical know-how to the theoretical learning experience.”

An integrated process

Opening doors

Supply chain management is more than merely looking after a specific part of the supply chain, such as procurement or logistics, explains Danie Nel, senior lecturer in supply chain management at the University of Pretoria’s Department of Business Management. “Supply chain management is the complete integration of processes and relationships across the entire supply chain to ultimately add value.”

Nel says that while some supply chains floundered during the pandemic, others flourished. “Supply chain management is an integrated process, from farm to fork.

Decisions made in one department will have an impact on another.” Those involved in supply chain careers therefore need to adopt a “big picture” view of the business. Nel adds that different courses will emphasise various aspects of supply chain management, and it is important that potential employees in this field understand what is being learned within the context of the entire supply chain.

A supply chain management qualification will open doors across many career options, Storpioli explains, including as a supply chain analyst, in risk management, supply chain performance optimisation, demand planning, logistics optimisation, strategic sourcing, contract management, international trade, sustainability, compliance and distribution.

Nel agrees, stating that supply chain management is a broad field offering an array of job opportunities including those in the upstream supply chain, where firms deal with suppliers and the sourcing of products, and also downstream, where there are logistics, transportation and other distribution prospects. The University of Pretoria, he points out, offers undergraduate and postgraduate qualifications in supply chain management.

“The hard skills can be important, and they can be taught,” concludes Nel. “Students need to know what, for example, operations or logistics management entails – these are necessary skills for effective supply chain management. But learners also need to develop and nurture the soft skills that are more people-orientated and cannot be learned as easily. These are probably best gained from experience and being exposed to specific scenarios.”

Studying the supply chain The importance of the supply chain today is not in doubt, but what and where should students seeking to enter the field study? Anél Lewis takes a look

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ever before has the importance of supply chain management been more prevalent. From the provision of personal protective equipment to the distribution of vaccines, COVID-19 has made people around the world take note of the value of supply chains.

It has also highlighted the need for qualified, experienced professionals to manage these supply chains, says Marzia Storpioli, a lecturer in supply chain management at the IMM Graduate School in Pretoria. “The weaknesses in traditional supply chains that have been highlighted by both the pandemic and climate change have revealed new opportunities and new disciplines within the supply chain. Business leaders are increasingly aware of the importance of their supply chains to ensure the business remains relevant to consumers.”

Furthermore, the impacts of supply chains on the environment and Marzia Storpioli the economy have raised awareness within the student population, and there has been renewed interest in

The right qualification Storpioli says a qualification in supply chain management – either a Higher Certificate or a Degree in Supply Chain Management

“The weaknesses in traditional supply chains that have been highlighted by both the pandemic and climate change have revealed new opportunities and new disciplines within the supply chain.” – Marzia Storpioli, lecturer in supply chain management, IMM Graduate School

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Keeping up with change Although university degrees in supply chain management are highly sought after, there remain other, possibly better options, including internships and part-time courses, according to Anél Lewis

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hantal Kading, MD of career consultancy People Shop, says a degree remains the most sought-after qualification when pursuing a career in supply chain management, but almost counterintuitively so, given that the field is evolving at a pace rapid enough to require additional skills not taught at university.

A bachelor’s degree will put you in good stead when seeking employment, and a postgraduate qualification or an MBA will be a “game-changer”. However, Kading says not to underestimate technikon qualifications, which will provide much of the practical knowledge needed in supply chain management. She cautions too that some of the short courses in supply chain management may be too “lightweight” to secure employment.

Nikita Reddy, academic researcher and supply chain management specialist at MANCOSA, recommends part-time courses in supply chain management for those who may be working already. “This will allow one to gain practical work experience while studying. We have seen that learners find the online learning environment a convenient way to fit education into their busy lives.”

Reddy says MANCOSA offers comprehensive supply chain management courses designed to allow graduates to enter the fast-paced world of commercial logistics.

The Higher Certificate in Supply Chain Management is a part-time course that provides basic skills and sound knowledge that will make it easier to enter the job market. There are also the more intensive degree programmes, including the Bachelor of Commerce in Supply Chain Management and the Bachelor of Honours in Supply Chain Management.

Nikita Reddy

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“The key question as a potential employee will be whether or not you can navigate the amount and pace of change taking place in the supply chain management arena.” – Chantal Kading, MD, People Shop Internships

A passion for the job

Kading says that at present, there is unfortunately a shortage of internships available. Many companies offer graduate training programmes, but they are often unable to offer full-time employment thereafter.

Even companies with programmes that do not require a degree or qualification offer no guarantee of employment.

Reddy says that Nestlé, Unilever, Jonsson Workwear, Mr Price and RCL Foods are among the companies that do offer supply chain management internship opportunities. She also suggests looking for career opportunities on sites such as LinkedIn and Puff & Pass.

An internship will not only provide invaluable work experience, but also identify Chantal Kading additional opportunities within the supply chain management field, Reddy adds. By learning while working at a company, an aspirant supply chain manager can network with other professionals in the field and is more likely to transition into various job roles more easily. Another benefit of an internship is, of course, being remunerated while learning.

Although qualifications provide many of the “hard skills” required for supply chain management, learning within a company as an intern will also assist in developing soft skills, such as communication and flexibility, that can give a candidate the edge when applying for a job.

“Of course, the best requirement for a career in supply chain management is to attain the passion and ability to lead, manage, influence and inspire other people,” says Reddy. “All supply chain leaders and managers should possess this, along with the ability to visualise the relevant processes.”

Excellent communication skills are also needed to manage the supply chain process.

Reddy adds that while you don’t have to be an innovator to be an outstanding supply chain leader, you do have to support and drive innovation.

“Flexibility is the soft skill that will help you to do that; it gives you the confidence to present ideas easily and be able to adopt swiftly.”

Kading feels that emotional intelligence, resilience and superlative communication skills are essential, especially if one considers the rapid pace of technological advancement. “With increased automation, interpersonal skills will become even more important. The key question as a potential employee will be whether or not you can navigate the amount and pace of change taking place in the supply chain management arena. Unfortunately, many universities are lagging when it comes to preparing students for a career that is constantly evolving.”

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New skills for a new world

IMAGES: ISTOCK.COM/ PROSTOCK-STUDIO, ISTOCK.COM/MONKEYBUSINESSIMAGES, ISTOCK.COM/ ETIAMMOS, SUPPLIED

Traditional supply chain skills are no longer enough in an evolving world where new technologies and trends arise all the time. By Anél Lewis

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echnology is having a significant impact on supply chain management, says Danie Nel, senior lecturer in supply chain management at the University of Pretoria’s Department of Business Management. “Supply chains in the future will be more visible, and this visibility will be enhanced with digital technologies. The Internet of Things (IoT), artificial intelligence (AI), big data analytics and many other such developments are new trends in the field of how supply chain information will and can be managed and optimised.”

Nel says these technologies will come with their own unique challenges, such as investment costs, and the training needed to successfully implement and use them.

“The vast amount of information that these technologies accumulate will also have to be managed, as firms can easily get lost in an ‘analysis paralysis’ and not know how to utilise the available information to improve their supply chains.”

Leaping ahead South Africa currently has a dearth of skills needed to use technology effectively in supply chain management, says Andrew dos Santos, director at CLX Flow. In fact, even the essential supply chain management skills are lacking.

“The rest of the world is moving forward in supply chain management and we are still trying to fix the basics.”

However, Dos Santos sees this challenge as an opportunity. “There is a big opportunity in South Africa to leapfrog into the future of supply chain without dragging along the legacy problems that other countries and companies have had to deal with. One of the most important skills required to take supply chain management into the technological era is a deeper understanding of statistics, as this enables AI, machine learning and data science.”

AI can help manage by exception, but a supply chain manager needs a good understanding of technology to survive, says Dos Santos. “Gone are the days when you can just train a supply chain manager to understand standard principles like transportation logistics, warehousing and maybe some strategic management. Now they need to be tech and data savvy. It is not enough to be a great Excel wrangler.”

Dos Santos says critical and probabilistic thinking are key skills needed to keep pace with changes in supply chain management.

Supply chain managers should be able to plan for and respond to various scenarios.

Furthermore, they need to understand how to map their supply chains based on their potential risk. When thinking of risks and probabilities, they need to have a holistic view of the supply chain, and how volatility might hit them.

Managing uncertainty Nel suggests the pandemic has shown that risk management programmes can be flawed. “Risk management cannot be performed by merely analysing risk reports, or by a separate and isolated risk department.

Risk management needs to be managed proactively across all processes by all employees in real time.”

Given the uncertainties intrinsic to supply chain management, Dos Santos says that managers need to lead from the front when it comes to volatility and change. “As the manager, you will be managing change both up and down the supply chain and the organisation. You need to understand how to make it palatable to those around you.

Communication skills are therefore absolutely essential.”

Dos Santos says that CLX realised there was a gap in the skills needed when the company was looking to hire more consultants. “I could find data scientists and I could find supply

IT PROFESSIONALS PLAY A PIVOTAL ROLE IN REBUILDING EFFORTS For everything that changed in 2020, one thing that stayed the same, according to insights from the CompTIA IT Industry Outlook 2021 (Rebuilding for the Future) report, was the importance of technology to business success. In fact, the report says that importance grew as organisations had to quickly restructure their operations in order to support a remote workforce and improve flexibility and resilience.

“Heading into 2021, there is no well-defined blueprint for the ongoing rebuilding effort, but it is certain that technology will continue to play a pivotal role. It is no surprise, then, that IT professionals overwhelmingly have a positive outlook for their job prospects.

Nearly 80 per cent of IT pros feel good about their role as a technologist, with 20 per cent having mixed feelings and a very small minority feeling concerned.

This represents a slight drop in sentiment from last year, with most of the shift going from the optimistic end of the scale into mixed feelings. Obviously, the current environment plays a major role – the leading case for pessimism is uncertainty around job security following the COVID pandemic. There are many more reasons for optimism, though.

“As with last year, IT pros see a bright outlook thanks to the high demand for skills, driven by the increasing importance of technology to business strategy. This dynamic has been in play for the past several years, as companies have moved away from a traditional mindset around tactical IT. In some ways, tactical IT will have a resurgence in 2021 as companies continue responding to needs highlighted during the pandemic. However, the longterm trends toward strategic thinking and digital transformation will be the primary forces impacting the technology function.”

chain professionals, but I could not find an intersection of either.” The company has responded by designing courses that offer the sought-after combination of these new skills. “The pandemic has resulted in a huge surge in interest in supply chain management as a career,” says Dos Santos. “Interest in our online courses has been off the charts.”

“One of the most important skills required to take supply chain management into the technological era is a deeper understanding of statistics.”

– Andrew dos Santos, director, CLX Flow

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Reducing waste and optimising waste management Around the world, landfills are filling up. We are essentially running out of space to keep our garbage – a very real problem.

Biénne Huisman investigates

After bailing, cans are remelted and turned back into product.

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here can be no doubt that waste is produced in virtually every industry and sector, and the more waste generated, the more garbage we need to find disposal room for. With landfills around the globe filling up, there has never been a more pertinent time to ask the question: “how much waste is produced in South Africa?”

Ryan van Heerden, regional manager at waste removal company EnviroServ, which provides services across Africa, refers to the South Africa State of Waste Report issued in 2019. This states that about 54 million tonnes of general waste and 66 million tonnes of hazardous waste were generated here in 2017.

Mike Pienaar, sustainability manager at WastePlan, headquartered in Cape Town, points out that in the Western Cape alone, 80 per cent of landfills will reach full capacity within the next 10 years. He adds that the cost for establishing new landfills will increase exponentially as these sites are forced further away from CBDs, leading to added hikes in future disposal prices.

Interestingly, South Africa has a remarkably high plastic recycling rate. A survey by Plastics SA, the umbrella body representing the local plastics industry, noted that 334 727 tonnes of plastic was recycled in South Africa in 2017.

This gives South Africa a plastic recycling rate of 43.7 per cent – significantly higher than

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“In South Africa, recycling needs to be financially viable to succeed, whereas, in Europe it is simply seen as the right thing to do.” –

Anton Hanekom, executive director, Plastics SA Europe’s aggregate recycling rate of 31.1 per cent.

Plastics SA’s executive director, Anton Hanekom, explains that the South African recycling industry is based on mostly economic principles. It’s a business with money to be made, whereas, in many European countries recycling happens for moral reasons. “In South Africa, recycling needs to be financially viable to succeed, whereas, in Europe it is simply seen as the right thing to do,” says Hanekom.

Indeed, waste has sparked major economic spin-offs in South Africa. In 2016, as part of its Chemicals and Waste Phakisa programme, the then Department of Environmental Affairs (now the Department of Environment, Forestry and Fisheries) estimated that the waste economy contributed R24.3-billion to South Africa’s GDP, provided 36 000 formal jobs and supported around 80 000 informal jobs and livelihoods.

Optimising at the warehouse level On the topic of economic spin-offs, moral imperatives aside, streamlining businesses to

reduce supply chain waste at warehouse level just about guarantees that companies will save wads of cash.

Pienaar explains that bad waste management ultimately hits the consumer’s pocket. “It leads to increased costs at numerous points in the overall waste flow path, which results, ultimately, in increased cost to the consumer. This is because these costs are recovered through higher selling prices to maintain profit margins.”

For most companies across sectors, producing waste is inevitable. However, businesses need to understand how and why they are producing waste, and how to best dispose of such waste while complying with waste legislation. If not identified and dealt with, these costs can add up incrementally, spiralling out of control.

According to newly published regulations, extended producer responsibility (EPR) will become mandatory as of May 2021.

“This means businesses will soon be obligated to reduce the environmental impact of their products and packaging,” says Francois Marais, manager of Fibre Circle.

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Bailing for aluminium cans to increase the number that can be transported.

Decanting expired or off-specification beverages so the glass or aluminium can be recycled.

“Not just in their production processes, but also once they’re in the hands of consumers, and beyond. In other words, packaging manufacturers and producers will, ultimately, have to take responsibility for the end-of-life management of their used products.”

He adds that while the return on investment might not appear direct, good recycling practices go beyond reducing the quantity of paper or other recyclables going to landfill – they can also contribute to economic growth and job creation, and reduce social and environmental costs.

“This, in turn, has a positive impact on the circular economy: where waste items are reused or recycled into something new. It ensures those items continue to contribute valuably to society rather than being abandoned to the landfills where they become useless or pollute rivers and oceans.”

The circular economy The idea of the circular economy is a significant departure point with regards to supply chain waste management. In 2013, United Kingdom charity the Ellen MacArthur Foundation, in conjunction with McKinsey & Company, released the report Towards the Circular Economy: Economic and Business Rationale for an Accelerated Transition, in which they first extrapolate on business opportunities within a restorative, circular economic model.

Published in the Journal of Cleaner Production, a 2017 article entitled “The Circular Economy – A new sustainability paradigm?” defines circular economy as an economic system aimed at eliminating waste and the continual use of resources: “Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system, minimising the use of resource inputs and the creation of waste, pollution and carbon emissions,” states the

The idea of the circular economy is a significant departure point with regards to supply chain waste management.

management plan needs to be drawn up and adhered to by staff across all levels. Ultimately, you need to create an internal culture of shared values and an understanding of what the organisation is trying to achieve.”

Making plans research team, led by Martin Geissdoerfer, then at Cambridge University in the United Kingdom.

The circular economy comprises “living, organic systems” that aim to hold products, equipment and infrastructure in use for longer, with waste materials and energy becoming input for additional processes.

This regenerative approach stands in direct contrast to the conventional linear economy, which has a “take, make, dispose” model of production, with waste ending up in landfills.

Marais explains that Fibre Circle has been mandated by the majority of SA paper manufacturers and importers as the recognised producer responsibility organisation (PRO) for the paper and packaging industry.

“This means we are here to drive EPR programmes on the industry’s behalf. Paper, by its very nature, is a renewable resource. It is made from the wood of farmed trees, which are harvested and replenished in sustainable rotations in commercial plantations and sustainably managed forests.

“Paper is also recyclable, enabling its reuse in other paper products while locking up carbon stored in the fibres for longer. Even the byproducts from the paper manufacturing process can be beneficiated, further contributing to the circular economy,” he says.

Van Heerden says EnviroServ has helped thousands of customers to devise waste and cost reduction initiatives in line with circular economy objectives.

“The starting point is to measure and record waste being generated. Thereafter, a waste

In terms of “reduce, reuse and recycle” policies, Van Heerden says businesses should focus foremost on reducing. “Obviously, we support and champion all recycling. However, the first focus should be on reducing waste as this is where the majority of financial and environmental benefits are achieved.

Thereafter, a major effort needs to be put into reuse initiatives, not only within your organisation, but also in other businesses and industries, thus helping to support the circular economy.

“Many industries have also developed their own industrywide waste management plans, so you need to be aware of whether your industry or industries you work with have these plans. This saves you from re-inventing the wheel and you can also benefit from the expertise of your peers. Again, this is where professional waste management companies come in as we have helped to develop many of these waste management plans.”

What processes should be implemented to reduce waste at the warehouse level?

Pienaar says a distinction should be drawn between managing perishable and nonperishable goods.

“Warehouses that manage nonperishable goods should enjoy a very high diversion rate from landfill,” he explains. “Warehouses that manage perishable goods depend on the quality of their procurement process to avoid overstocking or time-expired products; the quality of their logistic infrastructure to ensure minimisation of damage when handled and transported; and the efficiency of their refrigeration processes.”

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While standard practice with waste is to recycle, reuse or dispose of, there are many less tangible types of waste in the value chain that also impact your business, writes Biénne Huisman

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ot all supply chain waste can be recycled or reused, or even disposed of in landfills. Business owners are often shocked by the incremental costs of less tangible waste losses, such as long lead times, transportation and routing issues, inventory mismanagement and company resource abuse.

For example, a driver clocking 20 personal kilometres on a company car every day may seem trivial. However, repeated over time, this can turn into a major annual expense.

Ryan van Heerden, regional manager at waste removal company EnviroServ, points out that it is extremely difficult to quantify business resource abuse, as it varies for different companies and industries. “This is why all businesses need to fully understand and accurately measure all inputs and outputs of their business processes. These costs could be anywhere from thousands to millions of rands, depending on the scale of operations.”

Then there is lead time: the amount of time that passes between the initiation and completion of a process. Customers do not like waiting. If product delivery is slow,

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Staying sustainable Van Heerden says that advanced supply chain management IT systems can aid greatly in reducing lead times. “It’s very simple to just cut lead times; however, you need to do this in a financially viable and sustainable manner, without wasting any resources.

“This will always be the daily challenge of supply chain and logistics companies, as these environments encounter constant change that needs to be expertly managed.

Some efficiencies introduced don’t necessarily cut lead times, so it is always a balancing act of trying to meet as many of your targets as possible. Extremely low lead times generally mean a greater cost and resources not used to their full capacity.”

Furthermore, a recent report by McKinsey & Company, The Future of Retail Supply Chains, contends that given the broad scope of online inventories in a rapidly digitising world – further fuelled by lockdown home-living – consumer expectations for speed and convenience will only increase. The report argues that supply chains need to be revamped to become multichannel, increasing efficiency in catering for both in-store and online demands: “Many of today’s retail supply chains are simply not set up to handle this demand for speed and convenience in a cost-effective way, and are already creaking under the strain of the new multichannel world. Either retailers build a transformative set of supply chain capabilities to compete in this new world, or they will struggle to survive.”

Van Heerden agrees with this contention.

“Consumer demands and expectations are constantly evolving, and traditional supply chains will need to evolve with them. Certain tried-and-tested industry practices will remain for some time. However, there are aspects that businesses will need to update, while also diversifying their service offerings to cater for the constantly changing business landscape.”

Businesses also need to ensure they adopt industry best practices, embracing a plethora

of smart IT tools and systems in corporate cultures of continuous improvement, adds Van Heerden. “There are lots of business intelligence tools on the market that make it very easy to monitor and measure every aspect within your business. No matter how established you are or how efficient you believe your organisation is, there will always be better and smarter ways of doing things.”

BEVERAGE CARTON RECYCLING CAMPAIGN In light of the drive towards the “circular economy” – a system that focuses on reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system – the need to encourage citizens to recycle has never been greater.

To this end, Fibre Circle, the producer responsibility organisation (PRO) for the South African paper and packaging sector, has partnered with Nampak Liquid Cartons, SIG Combibloc and Tetra Pak South Africa to launch the Super Cartons campaign.

Brought to life by three endearing characters – Captain Infinity, Dr Renewable and Super Transformer – the campaign aims to promote the recyclability of beverage cartons and encourage consumers to keep these separate from general refuse.

Beverage cartons are generally used to package liquids such as milk, mahewu/mageu, juice, wine and custard, and, in some cases, cereals, sugar, rice, birdseed and pet food.

“While 68.4 per cent of paper and paper packaging is recovered for recycling in South Africa, beverage cartons make up a very small percentage of this,” says Francois Marais, manager of Fibre Circle.

“We want to raise awareness among South African consumers that beverage cartons of all shapes and sizes can and are being recycled in the country.”

The Super Cartons campaign is being rolled out in selected retail stores in Gauteng and on social media. However, Fibre Circle recognises that consumer education campaigns like this one will not drive a significant increase in beverage carton recycling on their own.

This is why the organisation is calling on brand owners and retailers of beverage cartons to join in, asking them to make their customers and networks aware of these cartons’ recyclability on an ongoing basis.

IMAGES: ENVIROSERV JAMES OATWAY, ISTOCK.COM/TASHATUVANGO

Dealing with the “other” waste

customers may well opt for a quicker response from a competitor – these days often an online vendor – leading to loss of business market share.

American investing and finance education website Investopedia states that reducing lead time can streamline operations and improve productivity, ultimately increasing output and revenue.

Steps to decrease lead times include using domestic suppliers, thus cutting out shipping time; increasing the frequency of orders instead of making bulk orders – buying in bulk may seem cheaper, but in the long run customer dissatisfaction is likely to negate early savings; and lastly, establishing more local distribution centres nearer to consumers.

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