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Management

Supply Chain Changes

SCN Africa

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They say the most adaptable survive. Businesses and people who have been adaptable through COVID-19 and who continue to be adaptable will survive.

Supply chains will need to become more efficient and resilient in the future.

These are some changes that managers can prepare for:

The chain will be short

Up to the onset of Covid-19, businesses used manufacturers, who helped their bottom line with lowest labour and lowest manufacturing costs. This is largely why so many businesses used manufacturers in China.

These manufacturers were overseas and not locally based meaning that product and information had to cross over through borders.

When Covid-19 hit, all borders were closed, causing a total interruption in the flow of goods.

As a result, there is now a move towards having suppliers within close proximity to the business, so that meeting demand with supply, is done in real time, with far less risk.

Move away from supplier consolidation to supplier de-consolidation

Businesses would only use specific suppliers based on their reputation and efficiency. The supplier database used was consolidated. When these suppliers couldn’t supply, during Covid-19, businesses had to scramble to find alternative suppliers or suffer huge losses.

Post Covid-19 there will have been a move towards the de-consolidation of suppliers. More suppliers will be added to the database in the case of emergencies like the pandemic.

They will be automated supply chains

For supply chains to operate efficiently and effectively, they need to be automated. This is divided into factory and non-factory.

Factories need to be automated so that production processes can be optimised in ways that minimise waste and maximise yield.

Non-factory automation, and the collection of data from it, can similarly increase cost-effectiveness, efficiency and productivity. This would include information about procurement, inventory management, warehousing and transportation.

What about people?

The goal of automation is not to replace people, but to make them more effective in their jobs.

Digitisation is worthless unless data is democratised in ways that empower teams, at all levels of the organisation, to use it.

To that end companies are training their staff in new ways of working.

Covid-19 has pushed companies to implement emergency changes to their supply chain. Companies that have adapted quickly have and will survive. A new chapter is opening for more regional, resilient supply chain models.

Logistics

New DHL Global Forwarding Investment Into Johannesburg Facility

Bernita Marais

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While it is much to early to fully grasp the economic impact of the current Covid-19 pandemic DHL has invested R127-million in a new 13 000 m2 facility.  Twice the size of its current set-up and located next to the OR Tambo International Airport aimed at cementing its position within South Africa.

This new facility will consist of a 10 000 m2 warehouse that enables DHL Forwarding consolidation on all customer warehousing requirements. It will also boast will an exclusive and specialized cold chain facility that consists of three adjustable temperature-controlled refrigerators geared to handle life science and healthcare products in and out of South Africa.

The warehouse is also able to support other value-added services including cross-docking, storage for air, ocean, and road freight services, as well as a platform for breakbulk cargo.  The customised built on the world-class specification with the location only a short distance from the airport and arterial thoroughfares and upcoming industrial parks, will make this new facility a complete game changer for DHL within the country.

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Logistics

When Times are Tough, Focus on the Core (Competencies).

SCN Africa

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The economic crisis unleashed by the outbreak of COVID-19 has hurt economies around the world. When times are tough, shedding non-core business processes is one of the most prudent and effective ways to cut costs while improving performance.

Know your Core from your Context  

There is more pressure than ever for companies to provide superior customer service. In his book, ‘Dealing with Darwin’, Geoffrey Moore argued for the distinction between Core and Context, an approach that separates the few activities a company does that create true differentiation in customers’ eyes (Core), from everything else that a company needs to do to stay in business (Context). A focus on core competencies increases the sustainable competitive advantage of a company by creating value for customers.

The core competency of any business is the strategic, competitive advantage it holds over its competitors. This can include equipment, processes or intellectual property, as well as know-how or specific abilities that a company performs especially well. It’s about establishing what you are really good at doing and then concentrating on that.

The importance of innovation

One of the key competencies of service organisations is innovation. Outsourcing business tasks like supply chain management to a third-party logistics (3PL) provider frees up employees’ time, creating an environment in which ideas are more easily able to flow and be further developed into innovations. This in turn drives improvement of the business model and the delivery of better products or services.

Access to infrastructure and expertise

Working with a 3PL provider gives your business access to experts who not only understand your supply chain, but also have insight into a range of logistics problems and how to solve them.

Leading 3PL providers offer state-of-the-art warehousing, the latest technology systems, increased speed to customer and improved flexibility and visibility across the supply chain, enabling your business to meet customer demands more effectively.

The research proves it

In the Gartner 2019 Logistics Outsourcing Strategy Survey, approximately 70% of respondents stated that functional, end-to-end (E2E) supply chain and overall business objectives have been met or exceeded with the help of supply chain outsourcing counterparts.

References

https://www.gartner.com/en/documents/3969683/logistics-outsourcing-survey-and-analysis-a-deeper-look-

https://www.supplychaindigital.com/logistics/top-5-benefits-third-party-logistics

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Management

Five Key Strategies for a Resilient and Agile Supply Chain

Helen Colam

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The first wave of the coronavirus hit everyone unexpectedly. While some businesses were awake and had planned for such an event, others were caught sleeping. With China, the global centre of manufacturing shutting down, companies were left in a state of crisis. Even though logistics worldwide had previously seemed to be robust and well-established, the global lockdowns have exposed the real state of it.

We are now in the midst of the second wave and businesses need to adjust in order to overcome this crisis effectively.

It is not only about the ability to produce goods it is also about the ability to meet the demand for them. Consumer buying behaviour changed over the pandemic period. The needs and wants of people changed and there was an increase in demand for products, that up until that point, had not been considered popular.

For companies to survive these new realities they had to optimise their response by adopting new supply chain resilience and agility capabilities.

The five most effective strategies are:

Stop the delay of information along the supply chain

Communication between the parties in the supply chain is paramount to meeting demand timeously. Any change in the process of supply needs to be reacted to as quickly as possible to eliminate any losses.

Companies needed to adopt a real-time communication system sooner rather than later. An effective system is a hotline or a what-app group. All members of the supply chain need to be on board with the system for it to work.

All routine processes or down-to-earth tasks should be automated

Customers will continue to want to pay low prices or feel like they are getting value for money for products and services. As a result, businesses will need to ensure they operate efficiently and frugally when it comes to using capital and when it comes to manufacturing capacity.

It is important to automate routine processes and free up the time of professionals, in the supply chain, so that they are able to address more important problems like developing a new sales strategy and customer relationship management.

Down-to-earth tasks can be managed by machinery and software. By adopting machinery and software, to manage these routine tasks, you improve the agility of the supply chain and lower the costs of the business’ logistics.

The supply chain operates more efficiently and cost-effectively. Products/services will have maximum added value and consumers will view them as worth the price they pay.

Data should be visible immediately / in real-time for all suppliers along the supply chain

All data along the supply chain should be visible immediately. There should be no delay in the passing on of data and information. This eliminates wasting the time of staff and delaying processes.

It assists with meeting demand timeously, effectively and cost-efficiently.

A database of all interactions that gives access to relevant, up-to-date information about the current processes and status of different shipments, in real-time, is a powerful tool on the way to combatting post-pandemic supply chain disruptions.

Unity of the Workflow

One platform should be used by everyone so that no data is lost. It is imperative to eliminate the possibility of errors for the system to be successful.

Help desk and training

All staff or professionals along the supply chain should have access to training on the system. Training videos and a help desk should be available for immediate assistance should anything not be functioning properly.

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