It’s an exciting time to be in distribution in South Africa, with not only a changing environment and complex challenges, but challenges that present opportunities for companies to improve their competitive advantage.
Disruptive changes are taking place across the globe, for example, customer’s expectations for service are vastly different than a few years ago. Customers want their orders same-day, or next-day while being serviced at the lowest possible cost. Companies are venturing into new sales channels, providing interesting challenges to operations. There are changing service requirements at store level, with stores looking for shelf ready merchandise that moves seamlessly from dock to shelf.
Disruptive changes are also occurring in technology, with mobile phones changing the way people buy. Mechanisation and automation are changing how operations are processing orders. The fundamentals haven’t changed - it’s still about getting the right product to the right place at the right time and at the right cost, however every aspect within that has changed.
These changes all add up to greater complexity, and the pressure to perform has never been greater.
Complexity Creates an Opportunity
Complexity and performance pressures are opening up doors for opportunities as getting your product to your customers and stores quicker, and more accurately, can be a competitive differentiator. Companies who harness all that complexity, can build real competitive advantage.
Distribution has never received as much respect as it is getting today. People are realizing that distribution operations matter. Distribution topics are making it to Board level discussions and financial analysts are looking at a company’s supply chain and distribution capabilities as they determine its value.
Companies are seeing real results. One client’s project to speed up their fulfillment cycle also resulted in the biggest cost cutting initiative in the company’s history. With the right approach, improved service doesn’t have to mean higher cost. Another client’s project to improve throughput through their facility to handle their greatest peak period ever was achieved through simple operational process changes that resulted in a 30-40% increase in productivity. This in turn resulted in increased throughput through the facility, with minimal investment.
Distribution Transformation takes a Unique Approach
Transformation isn’t easy. Supply chains are so broad that it’s sometimes hard to know the best levers to pull to create change and positive impact – however, we continue to have success with the following model:
1. Start with a Holistic View (across organizational silos/channels; common KPIs; alignment of expectations across the organization)
2. Build a Strong Business Case (clear definitions, accountability, stakeholder buy-in- including top-management support is critical)
· Ensure project team members have clear accountability, empowerment, and ownership of their responsibilities.
· Expectations of the capabilities or results (i.e., Business Case) are aligned across the organization.
· Have the right voices, views, and lenses. Ensure cross functional participation and end user involvement (i.e., stakeholder involvement).
3. Take an integrated approach
· Look across all the components - people, processes, systems, and assets.
· Manage all phases as one project - from strategy and design to implementation and support – to ensure long-term success.
· Make sure you have expertise across all aspects – strategy, design, engineering, implementation, etc.
Contributed by Marc Austin, Managing Director Fortna EMEA (Pty) Ltd
