South Africa’s place in the BRICS (Brazil, Russia, India, China, South Africa) trade bloc may soon give way to other emerging countries like Nigeria (hence the ‘brink’ coinage) should South African companies fail to use the supply chain as a competitive advantage in business. This was revealed by Barloworld Logistics’ 2012 supplychainforesights research survey.
“For so long, South Africa has been seen as the trading and logistics gateway into Africa, but countries like Nigeria (which reported a massive GDP growth in the last few years) and other African trade corridors will threaten our position should the supply chain factor be perceived as a constraint to doing business in South Africa,” said Steve Ford, CEO Barloworld Logistics.
“In South Africa, the efforts to deploy the supply chain as an enabler of growth have been hampered by bureaucracy, labour costs, infrastructure shortcomings and competitive challenges. One of the aims of our research this year was to gauge how individual companies and industries are dealing with the economic reality and then to use the supply chain as a way to differentiate themselves from international competitors,” he explained.
Barloworld Logistics found that a major objective of companies in industries like automotive, FMCG/retail and mining, was to increase flexibility, agility and responsiveness. “The current focus on responsiveness marks a welcome shift to more engagement with actual customer demand and market conditions rather than product and manufacturing schedules,” Ford said.
Supply Chain Objectives : constraints and advantages
He explained that a burning issue facing many South African businesses is how to use their supply chains to remain profitable and competitive in a world stricken by economic slowdown, rising unemployment and high levels of debt.
“Our entry into the BRICS emerging market trade bloc allows for significant trade and growth opportunities on the back of the fastest growing economies in the world. It is estimated that by 2014 the BRICS economies will make up about 60% of the global economy. While this is a major opportunity for South African business, it is important that supply chains become more competitive,” Ford explained.
The research indicates that the number one objective in achieving supply chain competitiveness, according to respondents, is increasing service levels to customers.
“This objective must be achieved at the lowest possible cost, as the objective of lowering procurement costs and decreasing lead times tells us. Essentially in a highly competitive environment of variable demand, customer needs must be met in the most cost-efficient way possible.”
Notably, it was revealed that there is a maturing of the ‘collaboration principle’ in the supply chain. “No longer can suppliers be squeezed if the supply chain is to remain competitive – there has to be a more strategic and holistic view that is to the mutual benefit of supply chain players….In fact, in industries where the competitiveness of the supply chain is critical to success, such as in the automotive industry, the information flow objective was supported by every single respondent,” Ford said.
This year’s ninth edition of the research report goes by the title: South Africa Inc: Growth, Competitiveness and the Africa Question. For greater details, please visit www.supplychainforesight.co.za