|8/17/2017 10:10 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:29 PM||System Account||Innovation in the South African Supply Chain||3/7/2014 1:29 PM||Innovation in the South African Supply Chain|
Today, a high performance supply chain is a strategic asset.
factors increase supply chain complexity, making constant innovation a
necessity, TechPro Personnel tells SmartProcurement.
innovative companies who build strategic, high-performing supply chains
more quickly gain competitive and financial advantages.
Global Supply Chain Survey 2013 found that companies with leading supply
chains achieve 70% higher performance and ‘significantly better
financial results’. ¹
And, as factors like intensified global
competition, shorter product life cycles, discerning customers,
increasing regulation, improvement in technologies and pressure on
natural resources deepen supply chain complexity, innovation has become
pivotal to survival and long-term success
As Tom Nightingale, writing
for Value Unchained said, ‘the historical lesson here is that, with
supply chains, innovation is an important accelerator’. ²
Innovation in South African Supply Chains
Recent research suggests that South African supply chains view innovation as an ‘important accelerator’.
of respondents to Barloworld’s supplychainforesight 2013 Survey believe
that ‘new business models require supply chain innovation’³, while 91%
of respondents to GE’s Global Innovation Barometer 2013 agreed that
innovation is a strategic priority for their company.⁴
Despite this, many feel that they are not yet innovating enough.
2013 found that while 73% of respondents ‘regularly evaluate and modify
supply chain strategy to align with business strategy’, 51% feel that
their Supply Chain and Logistics functions ‘don’t innovate regularly
enough, often due to company culture, lack of skills and fear of
GE’s Innovation Barometer labels this ‘Innovation Vertigo’
- or ‘uneasiness with the pace of change and confusion over the best
Yet, innovation is definitely an intrinsic part
of many South African supply chains, as the winners of the 2013 Green
Supply Chain Awards show.
The awards are a joint initiative between CILTSA, CGCSA and Supply Chain Today magazine.
examples, Unilever won the ‘Best Project’ award for the implementation
of a local programmable lighting control system at its Jozi Park
Distribution Centre that reduced ‘kwh’ volume usage by an average of
43%, with corresponding cost savings.
And, the RTT Group, who
received a ‘Highly Commended’ for their ‘Delivering a Greener Tomorrow’
project, achieved reductions of 57% in energy usage, 61% in waste to
landfill and used 35 million litres less water.⁵
innovation that has drawn attention is SEW Eurodrive, an ACM gearbox
specialist that overcame dependence on a single customer by shifting the
company’s product mix to higher priced products in alternative
industries, increasing turnover by 22% and production volume by 10%.6
Experts agree that the future of supply chain innovation lies in collaboration and people.
supplychainforesight 2013 found that future SCM success lies in ‘Serial
Innovation’ – ‘built on the principles of continuous improvement and
operational excellence’ - and ‘Smart Partnerships’ – ‘strategically
selected partnerships with key players across the supply chain’. Both of
these concepts drive ‘Sustainable Advantage’.³
Innovation Barometer found that the key to innovation lies in
‘Partnership’ – or collaboration – and ‘People’ – or workforce
preparation and talent mobility.⁴
And, while collaboration
between partners in the supply chain is being hailed as the way forward
for innovation, there are barriers to be overcome – most notably,
according to GE, a lack of IP protection, lack of trust and talent
Innovation is pivotal to future SCM success.
Clem Sunter said ‘competition in being original has just undergone a
quantum leap’.⁷ South African companies need to find ways to
continuously make that leap.
Are South African supply chains
innovating sufficiently to stay competitive? What innovative SCM ideas
have you come across? Join our discussion on LinkedIn.
¹: PwC Global Supply Chain Survey 2013
²: Innovations in Supply Chain Management - Past, Present and Future, Tom Nightingale
writing for ‘Value Unchained’, January 2013
³: supplychainforesight, Barloworld Logistics, 2013
⁴: GE Global Innovation Barometer 2013
⁵: Innovation Highlights 2013 Green Supply Chain Awards Winners, CILTSA, August
6: Supply Chain Management Problems at South African Automotive Component
Manufacturers, M.J. Naude & J.A. Badenhorst-Weiss
⁷: From ‘21st Century Megatrends’ published on www.news24.com
|8/17/2017 10:10 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:30 PM||System Account||Going Green in the SA Supply Chain||3/7/2014 1:30 PM||Going Green in the SA Supply Chain|
“Without action, the overall costs of climate change will be equivalent
to losing at least 5% of global GDP each year, now and forever…the
benefits of strong, early action far outweigh the costs of not acting,”
warned British economist Lord Stern of the effects of global warming on the world economy in the 2006 Stern Review on the Economics of Climate Change¹.
most organisations, responding to climate change begins with the supply
chain, the core of every organisation’s environmental footprint, TechPro Personnel tells SmartProcurement.
Green Supply Chain Management (GSCM) – defined by Srivastava as
‘integrating environmental thinking into supply chain management,
including product design, material sourcing and selection, manufacturing
processes, delivery of the final product as well as end-of-life
management of the product after its useful life’² – has been proven to
reduce impact on the environment, while positively affecting business
Yet, while most organisations acknowledge that doing
nothing is no longer an option, many have yet to start implementing
GSCM measures. Deloitte Canada found that 80% of respondents to their
Supply Chain study defined GSCM as a corporate strategic priority – but
75% indicated that measures had either not yet started or had not moved
beyond regulatory compliance³.
How is GSCM being adopted in South Africa?
are many examples of South African companies effectively ‘greening’ the
supply chain – as the annual Green Supply Chain Awards show.
their fifth year, the Awards are a joint initiative between the
Chartered Institute of Logistics and Transport: South Africa (CILTSA),
the Consumer Goods Council of South Africa (CGCSA) and Supply Chain
The award winners show that South African supply chains are leading the way:
Rainbow Farms (winner of the ‘Best Project: R1-million to R10-million’
category) who converted incandescent lighting in 36 facilities to LED
systems, reducing electricity consumption by 117 000 kWh per month, to
TFD Network Africa (winner of the ‘Best Project over R10-million’
category) who launched ‘Driving the Green Movement’, a project that
addresses energy efficiency, water management, waste management and
carbon emission reduction.
Barloworld Logistics, Ellerine
Holdings and Growthpoint Properties together used green building
technologies to convert a disused foundry into a state-of-the-art
warehouse for green distribution, earning a ‘Highly Commended’ mention.
African products also shine, with ECO₂Fleet (a web-based reporting
service, developed by Standard Bank that measures the carbon footprint
of a vehicle fleet to reduce costs) and to DHL (with their aerodynamic
teardrop trailer that reduces wind resistance at speed) both winners in
the ‘Best Product’ category.
What challenges face companies looking to green their supply chains?
Common challenges face companies looking to implement GSCM, says John Wilkerson, an American Supply Chain Specialist:
Standards: There are many individual standards (the JSE’s SRI Index,
Kyoto Protocol, ISO), but no single global standard that can easily be
• Awareness: A lack of executive-level awareness hampers GSCM implementation.
• Business case development: Limited capital/resources and increasing legislation make the case for GSCM harder to sell.
key challenge, according to Barloworld Logistics’ supplychainforesight
2013 Reportб, is a shortage of Supply Chain skills – or the ‘human link’
in the chain.
The Report found that lack of skills is viewed as one
of the top five constraints to South African supply chains and the
single biggest constraint to competitiveness.
And the benefits?
Apart from reduced environmental impact, the Deloitte³ survey found that other benefits of GSCM include:
• Cost savings: The initial costs of implementation are offset by long-term savings on energy, transport and other costs.
• Competitive advantage: ‘Early adopters’ of GSCM gain the competitive edge.
• Corporate image: Improved internal branding and external recognition.
Product and service innovation: An emphasis on reduction, efficiency
and costs can spill over into other areas of business, stimulating
product and service innovation.
• Deeper customer and supplier relationships: The result from working together towards sustainability.
• Listing on sustainability indices: Like the JSE’s SRI.
sustainability and the business benefits that can be gained from GSCM
make it an imperative – which is important, given that, in a 2013
interview with the World Economic Forum, Lord Stern said: ‘Looking back,
I underestimated the risks.’
Do you believe that GSCM is important? TechPro would like to hear your thoughts... Join their discussion on LinkedIn.
¹: Stern Review on the Economics of Climate Change: HM Treasury, GOV.UK
²: S.K. Srivastava, 2007
³: Deloitte Canada: Green Means Go: Green Supply Chain Management: Opportunity
today, imperative tomorrow.
⁴: Chartered Institute of Logistics and Transport: South Africa (CILTSA), the Consumer
Goods Council of South Africa (CGCSA) and Supply Chain Today magazine, 2012.
⁵: 5 Major Challenges to Green Supply Chain Management, The Examiner, 2010
6: supplychainforesight, Barloworld Logistics, 2013
⁷: The Guardian, 26 January 2013
|8/17/2017 10:10 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:31 PM||System Account||SAs supply chain skills constraint mirrors global concerns||3/7/2014 1:31 PM||SAs supply chain skills constraint mirrors global concerns|
Research indicates that high performance supply chains underpin the
global economy. However, a key constraint to successful supply chain
management is the shortage of suitably qualified SCM staff, which poses a
threat to both competitiveness and economic growth prospects, TechPro Personnel tells SmartProcurement.
2012, highlighting the importance of supply chain management, the World
Economic Forum (WEF) stated that “although often overlooked, the
logistics and supply chain sector underpins the entire global economy”.¹
while Africa remains a negligible player in global trade, accounting
for only 2.8% of world exports and 2.5% of imports between 2000 and
2010², it is set to become the next growth market. Estimates suggest
that sub-Saharan Africa will have more than 1,3-billion consumers by
2030, with spending expected to reach nearly $1-trillion by 2020.³
to unlocking Africa’s potential, though, is overcoming constraints to
supply chain effectiveness, particularly the shortage of suitably
But make no mistake; the skills shortage is a global problem.
64% of Supply Chain executives surveyed for the WEF’s Outlook on the Logistics and Supply Chain Industry 2012 had
“experienced difficulty in recruiting good employees”, with “fewer good
quality candidates”, “low average pay levels” and “low industry profile
in schools” cited as the leading reasons creating this difficulty.¹
35% of 38 000 global respondents to Manpower’s Talent Shortage Survey
2013 reported experiencing difficulty filling jobs owing to a lack of
available talent, with “lack of specific technical competencies (or hard
skills)”, “general lack of experience” and “lack of required
employability (or ‘soft’) skills” listed as the chief factors
contributing to talent shortages.⁴
In South Africa, despite an
unemployment rate of nearly 25%, a shortage of suitably qualified skills
is viewed as one of the key constraints to business growth.
Barloworld’s supplychainforesight 2013 Report ranked ‘Available
Supply Chain Skills’ as the second biggest constraint to achieving
supply chain objectives and the single biggest constraint to
According to the Department of Labour’s 2008
Scarce Skills List, the supply chain skills required include Supply
Chain and Distribution Managers, Logistics Managers, Air and Marine
Transport professionals and Purchasing and Supply Logistics
Administrators, among others.6
‘Soft skills’ increasingly important in the South African supply chain’
2013 Report is not alone in highlighting the lack of ‘employability’ –
or ‘soft skills’ (including communication, decision-making, change
management, problem-solving and strategic thinking) as a factor
contributing to talent shortages.⁴ Recently updated South African
research, conducted by the University of Johannesburg, supports this
An Update of the Supply Chain Skills Gap Survey in South Africa
asked respondents to rank the importance of six skills clusters –
namely General Management, Behavioural/Interpersonal Skills, Logistics
Awareness, Logistics Analytical, Logistics Information Technology and
Environmental Awareness – typically required by Managers in Logistics
and Supply Chain organisations.
‘Behavioural/Interpersonal Skills’ ranked fourth overall. However, when
Managers were asked to rank the top ten skills regarded as critical for
the recruitment of Supply Chain employees, the list comprised mostly
Five specific Behavioural/Interpersonal skills areas
– ‘Business Ethics’, ‘Team Work’, ‘Problem-Solving’, ‘Ability to Think
Outside the Box’ and ‘Communication Skills’ – ranked in the top ten
ahead of skills in the General Management and Logistics Awareness
clusters, clearly indicating the increasing importance of soft skills to
the Supply Chain.⁷
Is the Supply Chain skills shortage
impacting your organisation’s competitiveness and ability to deliver?
Are ‘soft skills’ an important factor when you are recruiting? How would
you rate the Skills Clusters from the UJ Survey? Join TechPro
Personnel’s discussion on LinkedIn.
¹: ‘Dealing With the
Skills Challenge in Logistics’ from the ‘Outlook on the Logistics and
Supply Chain Industry 2012’, World Economic Forum, 2012
²: ‘Economic Development in Africa Report 2013, UNCTAD, 2013
³: ‘The Dynamic African Consumer Market: Exploring Growth Opportunities in Sub-
Saharan Africa’, Accenture, 2011
⁴: Talent Shortage Survey 2013, Manpower Group, 2013
⁵: supplychainforesight, Barloworld Logistics, 2013
6: ‘Skills Requirements in the Supply Chain Industry in South Africa’, Institute of
Transport and Logistics Studies (Africa), University of Johannesburg
⁷: ‘An Update of the Supply Chain Skills Gap Survey in South Africa’, Institute of
Transport and Logistics Studies (Africa), University of Johannesburg
|8/17/2017 10:10 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:31 PM||System Account||Supply chain collaboration and partnership is the way forward||3/7/2014 1:32 PM||Supply chain collaboration and partnership is the way forward|
relationships between supply chain partners have ranged from remote to
adversarial, with organisations focused primarily on pushing costs up-
or downstream, at the expense of their relationships. However,
increasingly supply chain collaboration is ‘no longer seen as losing
control, but gaining intelligence, capabilities and resources’.¹
by Monczka, Trent and Handfield as, “the process by which partners
adopt a high level of purposeful co-operation to maintain a trading
relationship over time, where both parties have the power to shape its
nature and future direction… and mechanisms for managing conflict are
built into the relationship”², collaboration between supply chain
partners is the smart way forward, Tech-Pro Personnel tells SmartProcurement.
well, benefits accrue to all partners in the collaboration, including
increased revenue/margins; more efficient supply chain processes;
reduced costs and duplication; innovation; transparency across all
levels of the supply chain and the opportunity to mitigate against the
risk of unplanned disruptions.
Is collaboration occurring in the supply chain?
While supply chain professionals agree that collaboration is the future of supply chain management, challenges do exist.
this year, 60% of respondents to MIT/PwC’s Supply Chain and Risk
Management survey cited “Alignment between Partners in the Supply Chain”
as the most important of seven enablers of supply chain maturity.³
a survey by Deloitte/ASQ found that “organisations that engaged with
suppliers at any tier were 38% more likely to achieve or surpass their
Yet, research by North Carolina State University
found that over 50% of supplier development initiatives are considered
failures; reasons given include:5
• Lack of trust, hampering information sharing and transparency.
• Lack of commitment across all levels in partner organisations.
• Insufficient allocation of resources – people and technology.
• Misaligned culture and infrastructure, creating misunderstanding and increasing costs.
• Misaligned goals and expectations.
• Unequally accrued benefits.
• Lack of effective, mutual performance measurement metrics.
• Lack of a formal agreement governing the relationship.
Despite these challenges, supply chain collaboration is taking root, with 68% of respondents to GE’s Global Innovation Barometer indicating that they had either developed/improved products or created new business models through collaboration.
Success factors for supply chain collaboration
is accelerating in the South African supply chain, with revenue from
collaborative innovation growing 38% in the past year.
Many South African organisations – and their global suppliers - have benefitted from collaborative efforts:
South Africa, together with its spare-part component partners, has
gained unprecedented visibility throughout the logistics chain using an
integrated, information-sharing approach, developed by Imperial’s
Tran-Send Container Logistics, to view real time data. In the process
Toyota has boosted logistics planning and customer service.
the intention of improving supplier relationships and maintaining
standards throughout the supply chain, Woolworths recently joined the
Sedex Information Exchange, a global collaborative platform for sharing
ethical supply chain data that reduces risk, protects reputations and
A research partnership between the Council
for Scientific and Industrial Research (CSIR) and Nestle South Africa,
aimed at deriving mutual benefit from scientific research, will see
Nestle fund research projects, share scientific expertise and explore
ways to translate academic research into beneficial commercial products,
while giving the CSIR access to international nutraceutical technology.
All new products developed by this venture will be manufactured in
Research suggests that success factors for supply chain collaboration include:6
• Choose partners carefully, based on capability, strategic goals and value potential, rather than size or spend.
Relationships should be governed by a formal, documented agreement
that details responsibilities, sets congruent goals and determines a
win-win benefit-sharing model.
• Collaborate in areas of strength for maximum benefit.
• Mutual commitment, across all levels, is important.
Intra-company collaboration is critical to success, however,lack of
co-ordination among internal departments can lead to project failure.
Invest in infrastructure and people. Integrated information-sharing
technologies and additional resources are important building blocks for
• Create a transparent, joint performance-measurement system that monitors and evaluates progress.
Engage for the long-term. Most projects only start to bear fruit once
all challenges have been resolved, which can take time.
you been involved in a supply chain collaboration project? We’d like to
hear about your experiences, successes and challenges. Join our
discussion on LinkedIn.
¹: supplychainforesight, Barloworld Logistics, 2013.
²: Purchasing and Supply Chain Management, Monczka, Trent, Handfield, Cincinnati, OH: South Western College Publishing, 1998.
³: ‘Supply Chain and Risk Management’, an MIT and PwC Research Study for the MIT Forum for Supply Chain Innovation 2013.
4: ‘Resilience and Growth through Supply Chain Innovation’, Deloitte, 2013.
‘Implementation Issues: Developing Collaborative Supplier
Partnerships’, Fillard, Frahm, Mercer and Scott, NCSU (North Carolina
State University), 2011.
6: Various sources including MIT/ PwC/ Deloitte/ NCSU/ Booz/ University of Tennessee.
7: GE Global Innovation Barometer 2013.
8: ‘Achieving Supply Chain Visibility through the Toyota System Integration’, Press Release issued by Imperial Logistics, 2013.
‘South African Sustainability Leader, Woolworths, joins Sedex to Drive
Transparency Throughout the Supply Chain’, Press Release issued by
10: ‘Nestle Announces Research Partnership with the CSIR’, Press Release issued by Nestle, 2013.
|9/26/2017 10:04 AM||Susan Rousseau|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:32 PM||System Account||Major supply chain trends in||3/7/2014 1:32 PM|
Major supply chain trends in
|major supply chain trends in|
Major supply chain trends in
recent years, the on-going quest for efficiency and flexibility and the
impact of emerging technologies, innovation and ever-changing customer
demand, has seen the South African supply chain mature from a corporate
function into an enabler of growth and a ‘strategic weapon, providing
value for customers’¹, Tech-Pro Personnel tells SmartProcurement.
the increasing importance of global supply chain management, the World
Economic Forum’s Outlook on the Logistics and Supply Chain Industry 2013
found that “if all countries were to improve their logistics
performance and reduce supply chain barriers to just half the level
observed in the best-performing country in their respective regions,
global GDP could increase by 2.6%”.²
2014 and Beyond
major trends – collaboration, big data, talent scarcity and
sustainability – are set to shape the future of supply chain management
1. Collaboration will take centre stage
recent research, the University of Tennessee listed the shift from
adversarial to collaborative relationships as a “game-changing trend” in
supply chain management.³ Effective collaboration, enabled by
information flow, creates greater upstream and downstream visibility,
reduces costs, improves customer service and stimulates growth.
collaborative relationships allow for more agile, responsive and
flexible supply chains. As more South African supply chains start to
derive real benefit from collaborative relationships, collaboration will
2. Big data and predictive analytics
data’ is a key technology trend impacting supply chain management, with
60% of respondents to a recent BVL International study indicating that
they plan to invest in big data – or business intelligence – analysis
tools within the next five years.⁴
A recent innovation in the BI space is predictive analytics.
by Gartner as “the analysis of structured and unstructured data using
statistics, descriptive and predictive data mining, simulation and
optimization to produce insights that query and reporting tools are
unlikely to discover”, predictive analytics takes business intelligence
to new levels, enabling better forecasting, optimisation and scenario
planning, while driving productivity and growth.⁵
Gartner estimates that companies who manage big data and use predictive
analytics effectively can expect to grow by 20% more than their peers.⁵
3. Talent scarcity will impact competitiveness
scarcity, across all areas of the supply chain, is a key issue
currently facing industry, with 70% of respondents to BVL
International’s 2013 Trends and Strategies in Logistics and Supply Chain Management study reporting a shortage of skilled staff.⁴
study suggests that the most important strategy for dealing with talent
scarcity is education – particularly, specialised training and
qualification programmes offered through co-operation with universities
and research institutions.
Additional strategies for overcoming
this issue include encouraging skills specialisation, particularly in
vital new technology areas; internal talent development and the
marketing of supply chain and logistics management as a career.
4. Increased focus on sustainability
many benefits of sustainability, including reduced environmental
impact, long-term cost savings, heightened competitive advantage,
improved corporate image, product and service innovation and better
customer relationships, make it increasingly important to business
Issues – like effective measurement systems and limited resources – remain.
with more than 55% of the respondents to BVL International’s study
indicating that “green issues are part of their logistics strategy”, it
is likely that sustainability will remain a hot topic in 2014.⁴
your opinion, what trends will dominate supply chain in 2014? Are you
positive about the outlook for 2014? How will supply chains create the
flexibility needed to respond to changing customer demand?
Join our discussion on LinkedIn.
¹: ‘Supply Chain Reaches the C-Level’ from Episode 6 of ‘Supply Chain Pioneers’, Supply Chain Quarterly, Quarter 3 of 2013
²: ‘Outlook on the Logistics and Supply Chain Industry 2013’, World Economic Forum, 2013
³: ‘Game-Changing Trends in Supply Chain’, Supply Chain Management Faculty at the University of Tennessee, 2013
‘Trends and Strategies in Logistics and Supply Chain Management:
Embracing Global Logistics Complexity to Drive Market Advantage’, BVL
⁵: ‘Gartner Taps Predictive Analytics as Next Big Business Intelligence Trend’, EnterpriseAppsToday, April 2012
|8/17/2017 10:10 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||3/7/2014 1:33 PM||System Account||Visibility in the South African Supply Chain||3/7/2014 1:33 PM||Visibility in the South African Supply Chain|
supply chain management becomes increasingly central to business
strategy, so the need for visibility within the supply chain becomes
Greater end-to-end visibility improves revenue
and reduces costs, while allowing for better management of disruption,
complexity, competition and growing customer expectation, Tech-Pro tells
Supply chain visibility (SCV) is a top
priority for many companies, with 63% of respondents to the Aberdeen
Group’s ‘Visibility in the Supply Chain’ Survey citing visibility as a
Yet, definitions of the concept vary.
Aberdeen Group defines SCV as ‘the awareness of, and control over,
specific information related to product orders and physical shipments,
including transport and logistics activities, and the statuses of events
and milestones that occur prior to and in-transit’¹, while Gartner
prefers the more inclusive ‘E2ESCV’ – or End to End Supply Chain
Visibility, which is aimed at ‘providing controlled access and
transparency to accurate, timely and complete events and data –
transactions, content and relevant supply chain information – within and
across organizations and services operating supply chains.’²
Benefits of Supply Chain Visibility
to CSC’s 9th Annual Global Survey of Supply Chain Progress, supply
chain contribution to revenue increased to 8.5% from 4.0% previously,
making end-to-end visibility in the supply chain a key factor for
In addition to driving revenue, the benefits of SCV include:
Improved communication enhances collaboration between supply chain
partners. This, in turn, enables a more flexible response to real-time
fluctuations in supply, capacity and consumer demand.
• The possibility of achieving true demand-driven planning.
• Cost savings across the supply chain.
• Resilience, particularly better planning for, and response to, supply chain disruption.
• Improved speed across all areas.
• Enhanced customer service.
• Competitive advantage.
Improving Visibility in the Supply Chain
the benefits, 49% of respondents to KPMG’s GMO 2013 are ‘familiar only
with their immediate Tier 1 partners in the supply chain and know very
little about their partners beyond’, while only 9% can assess the impact
of a supply chain disruption within hours.⁴
Research indicates that leaders in supply chain management improve visibility by:⁵
Clearly Defining Expectations: Because visibility means different
things to different stakeholders, clearly defined goals and
expectations, combined with measurable benchmarks, are essential.
• Creating Open Communication between all Partners: Effective collaboration relies on open communication.
Fostering Trusting Relationships: Strong relationships, focused on
shared planning and execution, encourage information sharing.
Investing in Technology: The ability to exploit technology and manage
the resulting data explosion is critical to achieving a competitive
• Identifying ‘Wins’ for Each Partner: Shared success enhances visibility.
South African Success Stories
There are many examples of South African companies improving visibility in the supply chain, with excellent results.
between Imperial Logistics’ Trans-Send Container Logistics and Bidvest
Panalpina for client, Toyota South Africa, has created exceptional
end-to-end visibility in the motor manufacturer’s logistics chain. The
transparency created by access to real time data across all areas has
allowed Toyota South Africa to plan more efficiently and improve
Wallenius Wilhelmsen Logistics (WWL)’s
factory-to-dealer solution for global automaker, BMW, has improved
visibility and predictability in BMW’s outbound supply chain, managing
finished vehicle delivery from 8 factories in Europe, USA and South
Africa. Consolidating under a ‘Lead Logistics Provider’ – WWL – has
created real benefits, including reduction in lead times by 10% to 15%
and lower inventory costs.⁷
Implementing Imperial Logistics’ One
Network technology at Pick and Pay, as part of an overall SCM and
transport management services (TMS) contract, should see the retailer
enjoying the benefits of improved visibility, better alignment of demand
and supply – and estimated savings of 20% on transport costs over the
Improved supply chain visibility offers
many benefits. Is your supply chain looking at ways to improve
visibility? We’d like to hear your thoughts on transparency as a means
of improving demand planning and customer service?
Join our discussion on LinkedIn.
¹: ‘Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service’, Bob Heaney
writing for the Aberdeen Group, May 2013
²: ‘Gartner Quantifies the Benefits of Supply Chain Visibility’, GTNexus, November 2013
³: ‘The Ninth Annual Global Survey of Supply Chain Progress’, CSC, 2012
⁴: ‘Global Manufacturing Outlook – Competitive Advantage: Enhancing Supply Chain
Networks for Efficiency and Innovation’, An Economist Intelligence Unit research
program sponsored by KPMG, 2013
⁵: Various sources including Aberdeen Group/ CSC/ Inbound Logistics/ KPMG
Б: ‘Achieving Supply Chain Visibility through System Integration’, Imperial Logistics,
⁷: ‘A Transparent and Reliable Global Supply Chain: BMW Case Study’, WWL
⁸: ‘Imperial Reduces Costs and Boosts Service for Pick ‘n Pay, Imperial Logistics, 2013
|8/17/2017 11:11 PM||Jaco Wiese||Jaco Wiese||Jaco Wiese||Blog Page Layout||Articles, Press Release||4/23/2014 10:35 AM||Sive Ravuku||ERP in the Supply Chain||4/23/2014 10:38 AM|
ERP in the Supply Chain
|ERP in the Supply Chain|
ERP in the Supply Chain
Recent Gartner research indicates that ERP (Enterprise Resource Planning) systems are showing their age and that, by 2016, it will be 'common practice' to refer to ERP as 'legacy software'.
Increasing supply chain complexity, driven by globalisation, competition, outsourcing and widely distributed partner networks, has created challenges that current ERP systems cannot fully address, Tech-Pro Personnel tells SmartProcurement.
Defined as 'comprehensive transaction management systems that integrate many kinds of information processing abilities and place data into a single database', ERP systems can 'potentially enhance transparency across the supply chain, leading to significant gains in supply chain effectiveness'.
Yet, while ERP software has delivered 'transactional efficiency'³, many believe that 'monolithic, all-in-one and highly customized'¹ ERP systems will not be able to meet future SCM needs.
Future Supply Chain Management Needs
SCM experts agree that the key issues facing supply chain management over the next decade will be:²
- Increasing collaboration between multiple, disparate parties in the supply chain will require deeper, cross-enterprise integration of systems.
- The need for more flexible IT systems able to handle rapidly changing SCM needs.
- Consumer demand for 'mass customisation' which, while increasing product and service offerings, will simultaneously place downward pressure on lead times and inventory.
- Shifting balance of power and ownership, as standard structures can't be applied across a network of supply chain partners.
Limitations of Current ERP Systems
Research from Insead predicts that 'on-premises' solutions will play 'only a modest role in improving future supply chain effectiveness' and that there is a 'clear risk of ERP actually limiting progress in SCM'.
- On-premise ERP systems are closed applications that were not historically designed to facilitate cross-enterprise collaboration, with the result that data needed for decision-making is frequently out of reach.
- Inflexibility. Extensive customisation has made ERP 'arthritic, slow and unresponsive' to dynamic SCM needs.
- Traditional ERP lacks functionality beyond transaction management and was not designed to offer planning solutions. According to Lora Cecere, 'only 8% of companies are satisfied with the 'what-if' capabilities of their ERP software and only 22% can get cost data in making planning decisions'.
- User expectations have evolved. Generic, 'one-size-fits-all' ERP systems are no longer acceptable to second and third generation ERP buyers, who want to access and arrange information from multiple sources in a manner that suits them.
Despite these limitations, ERP software is set to make a positive contribution to four key issues currently facing SCM, namely standardisation of processes and information, customisation of products and services, globalisation of IT systems and transparency.
Experts suggest that ERP should be considered a 'partial solution to enterprise and cross enterprise integration, working in conjunction with 'best of breed' niche software' – and that the areas to watch include:
- Enterprise Application Integration (EAI): An 'emerging generation of integration software that addresses more effectively the need to integrate both intra and inter-organisational systems which, in doing so, securely incorporates functionality from disparate applications, combining traditional integration methodologies with new EAI technologies to support the efficient incorporation of information systems'.
- SaaS (Software as a Service): A 'software delivery model in which software and associated data are centrally hosted on the cloud, reducing IT support costs'.
Kimberly Knickle, Practice Director at IDC suggests that, with SaaS and mobile computing moving confidently into the supply chain arena, 'cloud-based options provide a more flexible way to beef up supply chain software coffers without having to give up ERPs'.
Capgemini's Ben Pivar believes that the 'ERP of the future will largely be shaped by the customers that are using it'.
Is ERP (Enterprise Resource Planning) software effectively meeting your SCM needs? What role do you think ERP will play in supply chain management over the next decade? We'd like to hear your views – join our discussions on LinkedIn, Twitter or GooglePlus.
¹: 'Gartner: Today's On-Premises ERP Systems Will Soon Get the 'Legacy' Label, Chris
Kanaracus writing for IDG, January 2014
²: 'The Impact of ERP on Supply Chain Management: Exploratory Findings from a
European Delphi Study', Akkermans, H.A; Bogerd, P; Yucesan, E; van Wassenhove,
³: 'Piece Parts', Lora Cecere, February 2014
⁴: 'Supply Chains and ERP Systems: Not Answer for Today's Global Company', Greg
Kefer writing for GT Nexus, February 2014
⁵: 'Supply Chain ERP: The Ins and Outs of ERP', Business Excellence Magazine, August
Б: 'Enterprise Application Integration: An Emerging Technology for Integrating ERP and
Supply Chains', Themistocleous, M; Irani, Z; Love, P.E.D
⁸: 'Supply Chain and Logistics Technology: ERP vs. Best of Breed', Bridget McCrea
writing for Logistics Management Magazine, July 2013
|8/17/2017 11:11 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||4/23/2014 10:41 AM||Sive Ravuku||In Search of the New Holy Grail - Supply Chain Agility||4/23/2014 10:44 AM|
In Search of the New Holy Grail Supply Chain Agility
|In Search of the New Holy Grail Supply Chain Agility|
In Search of the New Holy Grail Supply Chain Agility
Escalating complexity, driven by demand volatility, increased competition, shorter product life cycles, raw material scarcity, globalisation, increased risk awareness and discerning customers, can affect supply chain resilience and performance.
The solution to lies in building agility – 'the ability to move quickly and easily'¹, Tech-Pro Personnel tells SmartProcurement.
There is currently no standard definition for supply chain agility.
Definitions of agility vary from Inderscience's 'ability of the supply chain partner organisations to adapt quickly with rapid changes in business environments'² to Supply Chain Shaman's 'the design of the supply chain to have the same cost, quality and customer service given level of demand and supply volatility'.³
And, PwC's 'agility can be defined as the ability not only to adjust for anticipated change but also to respond effectively to unanticipated change'.⁴
Research indicates that while many organisations view supply chain agility as an important goal, most are far from agile.
Internationally, a survey by Lora Cecere, founder of Supply Chain Insights, found that while 89% of companies rank 'agility' as important, only 33% feel that they have 'the prerequisite agility they feel they need to run the race' – and that there is 'a large gap between importance and current performance'. ³
Similarly, in South Africa, participants in a recent study conducted jointly by Imperial Logistics and Volition Consulting Services ranked 'agility' 29th overall on a list of integrated supply chain management priorities, while 68% of manufacturing role players had 'barely or partially implemented best practice'.⁵
Factors Influencing Supply Chain Agility
Agile supply chains are more responsive to changes in consumer demand, increased competition and continued volatility.
Factors influencing supply chain agility include:
- Lack of Specific Definition: Research shows that top performing companies clearly define agility as it applies to their organisation.
- Management Commitment: 'Strong executive sponsorship and participation'⁴ is cited by PwC as vital to the building of an agile supply chain as executives provide clear vision, encourage integration and collaboration and support implementation of strategic plans.
- Organisational Integration: Agility is 'largely a function of the ability of disparate functions to co-operate by working as teams with common goals'6 – led by management promoting integration.
- Communication and Collaboration: Collaboration – which is enhanced by effective communication and information sharing – creates interdependence along the supply chain – and supports flexibility and responsiveness.
- Customer Sensitivity and Satisfaction: Agile supply chains embrace technology to better understand customer needs, speeding response times and improving customer satisfaction – or the difference between 'the perception of the value delivered and value offered by the competition'.6
Agility in the South African Supply Chain
There are many examples of South African supply chains creating agility, most notably in the Retail sector.
Truworths, historically the most vertically integrated South African retailer, has improved agility by maintaining control across the supply chain, from design and cut, make, trim to point-of-sale.⁷
The Foschini Group partnered with 6 local manufacturers to produce 'fast fashion' or 'in-season' clothing. The project – which has increased the retailer's market share – reduced lead times and inventory, while enabling a quick response to fashion trends.⁸
In both instances, retailers gained a competitive edge using shorter product lead times and increased availability to improve customer satisfaction and reduce the risk inherent in pre-ordering seasons in advance from overseas suppliers.
In summary, 'by adopting a supply chain which is agile and highly efficient but flexible enough to bring about changes at short notice, significant benefits can be achieved through better utilisation of capital, greater responsiveness to customers' needs, the elimination of wastage of time and materials, and reduction of adverse impacts on the environment.' (The Foschini Group)⁷
Is supply chain agility a strategic goal for your supply chain? What factors do you believe influence the agile supply chain? We'd like to hear your views – join our discussions on LinkedIn, Twitter or GooglePlus.
¹: Oxford English Dictionary
²: 'Supply Chain Agility: Emerging Research Perspectives', Inderscience Publishers, 2011
³: 'Preparing to Run the Race: Supply Chain 2020, Lora Cecere writing for the Supply
Chain Shaman blog, April 2012
⁴: 'Achieving Agility Through the Sales Inventory Operations Planning Process', PwC,
⁵: 'The Strategic Role and Effective Functioning of Supply Chains', TransportWorld Africa,
6: 'Impact of Supply Chains Agility on Customer Satisfaction', Dr Akhilesh Barve from a
paper presented at the 2010 International Conference on E-Business, Management
and Economics IPEDR vol.3 (2011)
⁷: 'Clothing Retailers Supply Chains Adjusting for Fast Response Fashion', Theresa
Heath, Retail Sector Research Analyst, Stanlib
⁸: 'The Investment Case – The Foschini Group Ltd', Patrick Cairns, Moneyweb, January
|8/17/2017 11:11 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||4/23/2014 10:44 AM||Sive Ravuku||Technology in the Supply Chain||4/23/2014 10:47 AM|
Technology in the Supply Chain
|Technology in the Supply Chain|
Technology in the Supply Chain
Technology drives innovation and can mitigate risk in the supply chain.
In recent years, the integration and globalisation of supply chains has improved efficiency, while driving complexity and vulnerability to disruption.
Advances in SCM technology offer a solution, Tech-Pro Personnel tells SmartProcurement.
Technology has revolutionised supply chain management.
From the advent of the PC to the rise of specialised software applications – Enterprise Resource Planning (ERP), Transportation Management Systems (TMS) and Warehouse Management Systems (WMS) – and, more recently, the introduction of cloud-based solutions aimed at providing a 'single view' of the supply chain.
Over time, technology has played a leading role in improving visibility, facilitating collaboration, supporting sustainability and driving innovation in the supply chain.
The rise of 'big data' – defined by Gartner as 'high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision-making'¹ – has ushered in a shift from the 'age of information to the age of foresight'.²
Respondents to Barloworld's supplychainforesight 2013 acknowledged the challenge posed by big data, with 86% ranking 'improving the flow of business intelligence between the business' – or analysing and interpreting information to create real business intelligence and improve decision-making – as a leading supply chain objective.²
Benefits of Supply Chain Management Technology
The benefits offered by supply chain technology have been recognised by business, with 42% of respondents to GE's Global Innovation Barometer 2013 listing mastering technology development as a key factor in successful innovation³, while 87% of Barloworld's survey respondents stated that 'investing in supply chain management and systems enables business success'.²
- Increased Sales and Revenue:
As an example, demand planning software has improved demand forecasting, enabling supply chains to refine product availability, leading to increased sales, reduced costs and higher customer service and satisfaction levels.
- Improved Competitiveness:
Technology can offer competitive advantage.
Walmart uses technology to generate higher profit margins than other discount retailers by decreasing costs and improving efficiency, while lowering prices.
- Lower Costs: Improved transparency both up- and downstream in the supply chain can lead to significant savings in inventory, processing, transport and labour costs.
- Reduced Risk: Software facilitates contingency planning for disruption and can improve adherence to compliance standards, mitigating risk.
While the pitfalls of implementing supply chain software – which include a lack of executive management support, poor requirements definition and interference with forecasting results – can hamper success, the benefits are tangible.
Research indicates that technology will continue to have a significant impact on supply chain management, improving efficiency, reducing complexity, driving innovation and mitigating risk.
Predicted advances include:
- The continuous upgrade of technology.⁴
Key advances in supply chain management software are expected to offer improved capabilities in demand intelligence, integrated planning and execution, partner integration, 'on-demand' supply chains and SOA architecture.
- Big data and the ongoing rise of predictive analytics.⁴
The explosion of available data will drive the need for better predictive analytics. According to a Bloomberg Businessweek survey, 'companies are using business analytics to a much larger degree to aid decision-making' with those who 'use analytics more extensively believing that it improves performance'.
- Consolidation of fragmented software vendors in pursuit of the 'single view'.⁴
Gartner predicts that the fragmented SCM software market will consolidate into a small number of vendors offering a fully integrated suite of SCM solutions.
- Africa will leapfrog other regions in technology adoption.⁵
Barloworld's research indicates that Africa's unique circumstances and needs will see the region leapfrog others in the deployment of the latest SCM technology.
How has SCM technology improved your supply chain? What technologies do you expect will make an impact going forward? We'd like to hear your views – join our discussions on LinkedIn, Twitter or GooglePlus.
¹: Gartner – Definition from Website
²: supplychainforesight, Barloworld Logistics, 2013
³: GE Global Innovation Barometer 2013
⁴: 'An Executive's Guide to Supply Chain Management Software Systems', ERP.Asia
⁵: 'Supply Chain Management: Critical to Africa's Success', Barloworld
|8/17/2017 11:11 PM||Jaco Wiese|
|Jaco Wiese||Blog Page Layout||Articles||12/9/2014 10:20 AM||Sive Ravuku||The Rise and Rise of Customer Centricity||12/9/2014 10:19 AM|
The Rise and Rise of Customer Centricity
|The Rise and Rise of Customer Centricity|
The Rise and Rise of Customer Centricity
Barloworld’s 2014 supplychainforesight Survey highlights the growing importance of educated, empowered and connected consumers – and how the demand for personalisation is driving complexity and competition in the supply chain, Tech-Pro tells SmartProcurement.
Today, the demands of ‘information-enabled’ consumers fuel a highly competitive global economy. To prosper, supply chains need to identify, understand and respond to the changing needs of individual consumers – or, become more customer-centric in response to ‘customer power and influence’.
Customer centricity is defined by Booz and Company as the ‘re-orientation of a company’s entire operating model around the customer, increasing customer satisfaction and their own profitability in the process’. This involves ‘tailoring business streams – product development, demand generation, production and scheduling, supply chain, customer care – towards delivering the greatest value to the best customers for the least cost’.¹
Benefits of a Customer Centric Supply Chain²
92% of respondents to Barloworld’s supplychainforesight 2014 agreed that ‘customer centricity cannot be achieved without a supply chain strategy focused on delivering customer value’.
Achieving customer-centricity in the supply chain offers many benefits.
The Barloworld Survey found that a better understanding of customer needs and expectations leads to increased responsiveness to these needs which, in turn, generates a competitive advantage – ranked as the leading benefit of customer-centricity.
Other benefits include improved collaboration, visibility and cost management and the ability to manage complexity better.
The Customer-Centric South African Supply Chain²
While 90% of the supplychainforesight 2014 Survey respondents agree that ‘customer-centric companies enjoy better returns than those which are not’, many South African companies are not yet sufficiently customer-centric.
The Survey found that:
• 67% of respondents feel that South African companies are not getting customer-centricity right.
• There is a ‘perception that it is costly and time consuming to perfect customer-centricity’.
• There is a ‘disconnect’ between how South African companies think and what they deliver as 68% of respondents indicated that they believe ‘they engage with customers sufficiently’.
• Only 10% of respondents feel that their own suppliers are ‘customer-centric’.
• Respondents ranked the leading constraints to creating a customer-centric organisation as a ‘lack of appropriate skills’ – highlighting the need to source or develop the right Supply Chain skills and competencies – and ‘out-dated, silo-based corporate cultures’ that lack leadership, alignment, innovation and strategies to deal with change.
Creating Customer-Centric Supply Chains
Booz and Company’s research shows that the key to building a customer-centric supply chain lies in ‘striking the right balance between customer pleasure and company profit’.¹
Achieving this balance requires 6 winning traits:
1. Customer Life-Cycle View:
‘Life-cycle marketing’ – which creates a ‘holistic and continuous view of each customer’s evolving life-cycle needs as he or she moves through transforming life experiences’, sometimes using technology.
2. Solution Mindset:
A shift in mindset from selling ‘off-the-shelf’ products to delivering customised solutions that solve specific client issues, while turning a profit.
3. Advice Bundling:
Customer-centric companies engage in continuous, ‘no-obligation’ dialogue with a customer, starting before purchase and continuing indefinitely, post-sale.
4. Can-Do Customer Interface:
Empowering front-line staff to solve customer problems immediately – without requiring management input or authority – differentiates customer-centric companies.
5. Fit-for-Purpose Business Processes:
Avoid organisational complexity by tailoring business streams so that complicated product offerings are ‘diverted to more customised streams, isolating complexity and minimising costs’.
6. Collective, Cross-Functional Effort:
Unprecedented collaboration across all business functions, supported by cross-functional teams of employees working together to deliver a streamlined client experience.
‘There is only one boss. The customer. And he can fire everybody in the company from the Chairman on down, simply by spending his money somewhere else’.
Sam Walton, Founder of Wal-Mart
Is achieving customer-centricity currently a strategic focus for your supply chain? What strategies do you have in place to achieve ‘customer-centric’ goals? What challenges do you face? Share your thoughts by joining our discussion on LinkedIn.
1: ‘The Customer-Centric Organisation: From Pushing Products to Winning Customers’, Booz and Company, 2004
2: 2014 supplychainforesight, Barloworld
'This article was written by Tech-Pro and first appeared on the SmartProcurement website'