1. Improving Competitiveness of Companies in South Africa through Logistics and Supply Chain Management
Session 1D, 15:30 to 16:00, 10 July 2017
Gerard de Villiers Pr Eng
Logistics Specialist

2. Contents State of logistics in South Africa Public sector perspectives
Setting the scene
Firm level logistics performance
Defining logistics and supply chain management
The supply chain of the future
Importance of logistics
Conclusion
Transport mode comparison
Inland intermodal terminals
Improving Competitiveness through Logistics and Supply Chain Management

3. 1. Setting the Scene

4. 1
"Supply chains compete, not products, commodities or companies" (Martin Christopher 2016)
Mar-keting Mix
Place
Promo-tion
Product
Price
Process
People
Improving Competitiveness through Logistics and Supply Chain Management
Setting the Scene (1/1)

5. 2. Defining Logistics and Supply Chain Management

6. Defining Logistics and Supply Chain Management (1/1)2
Logistics Functions/Elements:
Transport
Warehousing
Inventory
Procurement
Customer service
Information systems
Order management
Materials handling
Packaging
Reverse logistics
Freight forwarding
Customs clearing
Supply Chain Management:
"Integration of all logistics functions/elements"
Improving Competitiveness through Logistics and Supply Chain Management
Defining Logistics and Supply Chain Management (1/1)

7. 3. Importance of Logistics

8. Importance of Logistics (1/2)3
Cost of Logistics in 2014 in % of the Gross Domestic Product (GDP)
(Logistics Barometer 2016)
Improving Competitiveness through Logistics and Supply Chain Management
Importance of Logistics (1/2)

9. Importance of Logistics (2/2)3
Supply Chain
Factors and
Business
Performance
"Last Mile"
(supplychainforesight
2016)
Improving Competitiveness through Logistics and Supply Chain Management
Importance of Logistics (2/2)

10. 4. Transport Mode Comparison

11. Transport Mode Comparison (1/3)4
Transport Modes
Primary modes:
Road (trucks/road trains)
Rail (trains)
Sea (vessels)
Air (aircrafts)
Pipelines
Secondary modes:
Conveyors
Canals/inland waterways
Drones (rotating and fixed wings)
Improving Competitiveness through Logistics and Supply Chain Management
Transport Mode Comparison (1/3)

12. Transport Mode Comparison (2/3)4
Transport Mode Comparison
Economic characteristics
Service characteristics
Functionality
Road-friendly
Rail-friendly
Compete vs complement
Durban - Gauteng: ≈ 600km
Improving Competitiveness through Logistics and Supply Chain Management
Transport Mode Comparison (2/3)

13. Transport Mode Comparison (3/3)4
Container
versus
Tautliner
Improving Competitiveness through Logistics and Supply Chain Management
Transport Mode Comparison (3/3)

14. 5. Inland Intermodal Terminals

15. Inland Intermodal Terminals (1/3)5
Inland Intermodal Terminals
Developed to integrate various individual components in adding logistics value at a facility that acts as an intermediary in the supply chain.
Improving Competitiveness through Logistics and Supply Chain Management
Inland Intermodal Terminals (1/3)

16. Inland Intermodal Terminals (2/3)5
Improving Competitiveness through Logistics and Supply Chain Management
Inland Intermodal Terminals (2/3)

17. Inland Intermodal Terminals (3/3)5
Improving Competitiveness through Logistics and Supply Chain Management
Inland Intermodal Terminals (3/3)

18. 6. State of Logistics in South Africa

19. State of Logistics in South Africa (1/4)6
Logistics
Performance
Index (LPI)
(World Bank 2016)
Improving Competitiveness through Logistics and Supply Chain Management
State of Logistics in South Africa (1/4)

20. State of Logistics in South Africa (2/4)6
Top 3 Supply Chain and Logistics Objectives (supplychainforesight 2014)
Lowering procurement costs and reducing order lead times
Improving the flow of business intelligence
Integration of technology
Improving visibility in the supply chain
Aligning with key players in the supply chain
Warehousing and distribution optimisation
Optimising inbound and outbound transportation
Improving inventory deployment across supply chains
Outsourcing functions for cost and service improvement
Improving service levels to customers
Improving Competitiveness through Logistics and Supply Chain Management
State of Logistics in South Africa (2/4)

21. State of Logistics in South Africa (3/4)6
Long-term View of SA's Logistics Costs - % of GDP (Logistics Barometer 2016)
Improving Competitiveness through Logistics and Supply Chain Management
State of Logistics in South Africa (3/4)

22. State of Logistics in South Africa (4/4)6
Trends in South Africa's Logistics Costs Elements (Logistics Barometer 2016)
Improving Competitiveness through Logistics and Supply Chain Management
State of Logistics in South Africa (4/4)

23. 7. Public Sector Perspective

24. Public Sector Perspective (1/2)7
Transnet (Strategic Thrusts, 2016)
AGILE - Fit and focused in a volatile world
ADMIRED - Trusted, innovative South African brand
DIGITAL - Evolve or die
UNITED - Together we succeed
National Development Plan 2030
Lowering the costs of transport and logistics and investing in remedies to address spatial divides;
Industrial zone developments and trade promotion will rely on competitive logistics;
Creating adequate warehousing and logistics facilities;
Instituting efficient procedures and customs and border posts; and
Corridors of logistics hubs, road, rail, fuel and other infrastructure, is vital to the future of the national economy.
Improving Competitiveness through Logistics and Supply Chain Management
Public Sector Perspective (1/2)

25. Public Sector Perspective (2/2)7
Department of Transport
Draft White Paper on National Rail Policy (June 2017): Indicative Gauge Change Map mm / 1435mm
Cabinet approved the Road Freight Strategy on Wednesday, 24 May 2017
Improving Competitiveness through Logistics and Supply Chain Management
Public Sector Perspective (2/2)

26. 8. Firm Level Logistics Performance

27. Firm Level Logistics Performance (1/3)8
Strategic Profit Model
(Stock and Lambert 2001)
Improving Competitiveness through Logistics and Supply Chain Management
Firm Level Logistics Performance (1/3)

28. Firm Level Logistics Performance (2/3)8
Category
Description
Impact
Income statement
Sales
Sales increase due to better customer service
Cost of goods sold
Lower cost due to new or more efficient manufacturing facilities
Lower cost of purchased materials
Variable expenses
Reduced order management costs
Fewer last minute production changes
Fewer less-than-truck-load (LTL) shipments
Fewer freight claims
Lower freight costs
Insurance
Taxes
Variable storage costs
Inventory risk costs
Fixed expenses
Fewer employees required
Lower third-party warehousing costs
Reduced information system costs
Reduced cost of supervision
Balance sheet
Inventory
Reduced inventory investment
Accounts receivable
Reduce accounts receivable due to more promptly paying customers (lower errors)
Other current assets
Less warehouse space required
Increased investment in modernised production facilities
Improving Competitiveness through Logistics and Supply Chain Management
Firm Level Logistics Performance (2/3)

29. Firm Level Logistics Performance (3/3)8
Improving Competitiveness through Logistics and Supply Chain Management
Firm Level Logistics Performance (3/3)

30. 9. The Supply Chain of the Future

31. The Supply Chain of the Future (1/1)9
The new industrial revolution (Industry 4.0)
1. Rapid manufacturing
2. Advanced robotics
3. Digitisation of supply chains
(Internet of Things / Big Data)
(Martin Christopher 2016)
Improving Competitiveness through Logistics and Supply Chain Management
The Supply Chain of the Future (1/1)

32. 10. Conclusion

33. 10
So, what can logistics and supply chain management do to assist businesses in South Africa to gain, maintain or improve their competitive edge?
Transport
Improve efficiency of rail and develop inland intermodal terminals at centres of gravity
Warehousing
Centralisation at centres of gravity to allow for economies of scale
Inventory
Visibility in the supply chain to assist with reducing inventory carrying costs
Skills
Relevant education and training towards Industry 4.0 and the supply chain of the future
Improving Competitiveness through Logistics and Supply Chain Management
Conclusion (1/1)

34. Questions?
Thank You!