Creating a sustainable advantage through serial innovation and smart partnerships allows businesses to diversify and adapt to global market trends making them more competitive.
The dictionary defines sustainable as ‘able to be maintained at a certain rate or level.’ To maintain a sustainable advantage companies need to embed a culture of continuous improvement and operational excellence throughout its supply chain and business functions to remain relevant and ahead of the pack. Creating sustainable advantages is what the game is all about and is the ultimate measure of success.
Sustainable advantages in businesses
Companies need high performing supply chains and strategies that enable them to optimise business practices, adapt to global changes and expand into emerging markets. Seventy-nine per cent of respondents said supply chain and logistics innovation is essential to optimising business performance. This links into one of the top ranking strategic business objectives to use the supply chain as a competitive advantage. Sixty per cent of respondents said integrating logistics activities across all business functions is essential to innovating and optimising a supply chain but only 26% evaluate and modify the supply chain to align with business strategy on a regular basis. By integrating the supply chain across all business levels, overall processes and systems within the business are optimised. The result of this is that the company will be able to respond more effectively and efficiently to market conditions.
Sustainable advantages in industries
Businesses need to converge and innovate within industries in order to compete with international industry standards. A lack of support and incentives for industries to innovate has resulted in many businesses innovating in silos to meet the needs of their business objectives only. No industry or company is an island; both are reliant on a myriad of supply chains to enable companies, industries and countries to achieve a sustainable advantage.
Sustainable advantages as a country
The majority of respondents selected South Africa’s natural resources wealth, knowledge of and proximity to the rest of Africa and its well-developed banking and telecommunications infrastructure as areas of competitive advantage. This positions her well as the gateway for business expansion into Africa.
Growth and expansion into emerging markets will require serial innovation on the part of strategic management and supply chain providers as infrastructure is one of the major challenges in Africa. This provides a great opportunity for local logistics companies to form smart partnerships with organisations and other emerging market countries that are already in Africa or are looking to expand into Africa.
Compared to Africa as a whole, South Africa has a highly sophisticated economy, winning industries, good infrastructure, extensive resources and proven management skills in many sectors backed by advanced technologies. It is these she needs to develop, expand and use to create future growth. In order to leverage and drive these opportunities, businesses, academic institutions and government need to work together to drive innovation at national level.
Potential business opportunities with emerging market countries
Growth and expansion into emerging markets is listed as one of the top five strategic business objectives by respondents to the supplychainforesight 2013 survey. Despite China being South Africa’s largest export and import trading partner, respondents ranked the SADC region as the greatest immediate growth potential.
However, China and India remain attractive markets for trade and future growth as South Africa looks to explore niche-exporting opportunities with these emerging market countries. Further opportunities for South Africa lie in providing emerging market countries with attributes we have and which are readily available to support their expansion into Africa. Rather than viewing these countries as competitors, we should embrace them as partners. By creating a culture of innovation and forming smart partnerships with these countries, South African companies can leverage their core capabilities to create new revenue streams on the African continent.
Fast forward to the future
The technological revolution accelerated globalisation, which in turn created a dynamically changing world that is becoming increasingly challenging, competitive, complex and customised. With the speed of change today, a competitive advantage is short lived. If a company is not planning ahead with its next innovation, it is already behind the curve.
Supply chain excellence is about balancing costs and service levels. Reducing costs remains important, but companies are increasingly using their supply chain to drive business strategy and achieve objectives. As the supply chain is critical to delivering products and services to customers, there is a need to constantly innovate new processes to effectively serve changing consumer demands and market conditions.
Innovation has entered the mainstream as a way to overcome and respond effectively to constant change. It is no longer the elite domain of R&D departments, inventors or entrepreneurs. Innovation is fast becoming the lifeblood of leading organisations, industries and nations. This year’s supplychainforesight survey throws valuable light on the progress South African companies are making and highlights a way forward. Supply chain management and logistics is taking centre stage as it is recognised as an engine for growth and risk mitigation. Forming smart partnerships and outsourcing for the right skills, knowledge and abilities is no longer seen as losing control, but gaining intelligence, capabilities and resources. Interestingly, smart partnerships are driving innovation at lightning speed in emerging nations as they leapfrog development with the advances of technology.
In South Africa, we recognise the need for the country to have a coordinated strategy and plan to build a competitive nation in which we can all thrive. It is an exciting time for supply chain management and for all those who recognise the opportunities it can bring as well as those who have the skills and ability to participate in an environment that is driven by and continues to drive innovation.
“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”
Steve Jobs, 1998 Fortune interview
To download the complete report, please visit http://www.barloworld-logistics.com/site/industry-insight/
