Putting the best foot forward

Ever-increasing competition from imported, low-cost footwear manufacturing suppliers in especially China, as well as strong competition from local manufacturers, has put severe strain on margins, and the sustainability of the South African footwear industry.

From 1991 to 2006, local footwear production decreased by 57 percent, imports of footwear grew by 731 percent, and employment in the footwear industry decreased by 55 percent. Essentially the footwear industry had been decimated in SA as were the clothing and textile industries.

Bagshaw, under the Lemaitre industrial footwear brand, was manufacturing a high quality shoe, which was competitively priced. The challenge was to increase product availability but with a strong leaning on maintaining manufacturing efficiencies and material efficiencies, to remain well-priced for the SA market.
CargoSolutions was contracted to implement the Theory of Constraints (TOC) based Make-to-Availability solution, whilst simultaneously maintaining optimum inventory levels of raw material, work-in-progress, and finished goods. A preferred option was to use one central warehouse at the Port Elizabeth factory for direct replenishment to customers across SA using a courier service, and maintaining optimum levels of buffer stock for each listed item at the respective distributors.

CargoSolutions implemented the methodology, enabled by the Symphony TOC supply chain software, which is integrated to Bagshaw’s ERP system. This software is developed in Israel and is implemented and supported by CargoSolutions in Africa.
The solution was acknowledged with a Gold LAA 2010 recognition for excellence in logistics for the redesign and implementation of competitive supply chain processes.

Bagshaw uses SMME suppliers to manufacture some of the shoe uppers. This typically entails stitching the various leather and other material panels together to form the upper part of the shoe. Uppers from the SMME suppliers and finished goods stock buffers were determined, and production planning was aligned to replenish finished goods stock buffer penetration, whilst procurement to the SMMEs was aligned to stock buffer penetration of the uppers.
Dynamic buffer management, whereby stock buffer are continuously adjusted up or downwards, based on variation in supply and demand, is used to ensure that stock buffers appropriately reflect sales and production factors.

Ultimately, the MTA solution offers vendor managed inventory (VMI) services to distributors, which promises high availability of stocked product, but at fast turning inventory levels. Due to the fact that reliable data from distributor systems is a prerequisite for the VMI offering, progress with the implementation of this part has proved to be a challenge.

Bagshaw Footwear is a healthy and sustainable business, despite the challenges being faced by this industry sector.
This case shows that SA footwear (as well as clothing and textile) manufacturing companies can compete head-to-head with importers, and preserve employment and local manufacturing opportunities.

Logistics News
1 November 2010

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