The New Era of Supply Chain

We are living in interesting times, political unrest around the world, Lack of natural resources and a growing demand for better and faster service at a reduced cost. The so called technological era that allows the world to be in the palm of your hand and work to continue at a rapid pace 24/7 making all environments more competitive to achieve global succession.

So what does all this mean for the Supply Chain Industry???

To start with sourcing strategies have changed from looking nationally to an international playground where customers can pick, choose and refuse. Cost is only one factor that is considered as part of strategic sourcing. Other factors will look at consistency, quality, lead times, market leaders, inventory holding etc. the customer will look at all avenues to have a succession plan to achieve these factors and at the same time service their customers with the best quality at the right price.

We have seen over the years how changes to the supply chain have made companies leaner and continuously evolving to reduce the number of touch points in the supply chain. Wholesalers virtually no longer exist and have either closed or transformed into chain stores with more frequent deliveries direct to stores. In light of this business’s needs to evolve over time to remain competitive and keep up with industry trend.

Although online buying (e-commerce) is at its infancy in South Africa this is now starting to change how all dynamics of business operates. This is no exception to Supply Chain, and I envisage that we going to start seeing a shift change in this area where stock holding warehouses will no longer exist, orders made in realtime to reduce stock holding and production more flexible to the market.  We have already seen a need to do dynamic forecasting which basically needs to be adjusted every month based on customer demand shifts.

Transport sector will change to more door to door delivery or collections depots at central spots for the working class. As vehicles become more solar generated the cost factor of transport will hopefully reduce which should see cost saving to the e-commerce sector. Overall though the infrastructure in South Africa needs to be altered with more goods via rail as over 90% of all goods is moved on road which adds to a huge strain to all sectors of the economy and cost of goods.

The general consensus in business is to try and stay ahead of the pack at all times, allow your business to evolve with the times and ensure your strategy is aligned to these changes. Think about where you see your business in 10 years’ time and factor in all the changes you can see or envisage and create plans on how you plan on getting there. The production, warehousing, transport and chain stores need to be geared up for the change and invest in areas that will yield benefits not only now but in the future.

Yours in Supply Chain

Sandesh Singh

Trainer and consultant