Supply chains are becoming more complex and a higher degree of coordination is, therefore, required to manufacture or produce products and get them to market.
One of the largest contributors towards this scenario is customer expectations, including a need to drive down costs.
This has led to a revolution in the global logistics and supply chain-management services industries as leading service providers respond to these requirements.
A case in point is the evolution of Johannesburg Stock Exchange-listed Cargo Carriers into a sophisticated logistics service provider that has harnessed the power of digital technologies and deployed a comprehensive industrial skills set to provide cutting-edge supply chain-management solutions to its many customers.
These capabilities are housed in its Supply-chain Services operations, which comprise three specialist divisions, namely CargoSolutions, CargoWare and Trading, and they complement the company’s extensive road transport logistics offering to specialist industrial segments of the economy.
Cargo Solutions provides a bespoke consulting service in supply-chain management and execution systems, as well as logistics-planning solutions that provide customers with a distinct competitive edge by lowering total cost of ownership, as well as improving operational efficiency and effectiveness.
The growing demand for this customer-led demand planning is mirrored by the myriad of South African companies that are now using these services.
They include participants in the highly- competitive clothing, leather and footwear industries and, in 2017, CargoSolutions also concluded a substantial three-year contract with a leading South African personal protective equipment manufacturer.
Moreover, the operation has become the first point of contact for manufacturers of fast-moving consumer goods and printed items.
These companies prefer outsourcing their critical logistics functions to a specialist that can add significant value at competitive rates, and this is a growing trend in the country, especially in this challenging economic climate.
Importantly, by partnering a specialist in the field, they are now able to focus on their core business, while freeing up the extensive resources that would have otherwise been required to operate an intelligent warehousing facility.
They also have access to constant innovation that pushes the boundaries of conventional logistics and supply-chain management practices to further enhance customer satisfaction and reduce logistics costs.
While the share of logistics costs of overall revenue can be as low as four percent and six percent in some manufacturing industries, they have been increasing steadily, and some companies in other sub sectors report that they can even be greater than eight percent on average.
Meanwhile, specialist warehousing and distribution division, CargoWare, continues to expand its capability to offer a range of third-party logistics services from warehouses in Cape Town and Johannesburg.
It will also be opening another operation in the country in the short term and the roll- out of its world-class warehouse-management system is on track for completion as early as the first-half of 2019.
This large investment into state-of-the-art supply-chain and warehouse logistics systems commenced two years ago and, importantly, also incorporates advanced automation technologies to adequately cater to large-volume industries and the swift movement of stock-keeping items.
The Trading operation uses an extensive network of accredited transporters to move loads efficiently on an ad hoc or contract basis, while its skilled and experienced teams have deployed hi-tech systems to oversee and monitor the successful completion of assignments on behalf of importers and exporters.
This operation has also extended its offering to include full import capabilities and brokerage services, while businesses in various specialist industrial segments on the continent, including mining, agriculture and chemicals, also rely extensively on Trading’s skills and capabilities.
Cargo Carriers anticipates the demand for these solutions to grow considerably over the short term, bearing in mind the host of other factors that have contributed towards the increasingly multifaceted nature of supply chain.
Among these are increasingly networked operating environments where companies no long function as independent players which, at best, used to manage interfaces to direct suppliers and customers.
Instead, they now collaborate with partners vertically and horizontally in an extended supply chain network with integrated processes and systems.
Manufacturing and production footprints are also expanding, and a high a level of skills and extensive capabilities are required to co-ordinate incoming and outgoing materials, especially in developing countries where transportation infrastructure remains largely under-developed.
International skills shortages at both operational, as well as the planning and controlling levels and increasing market turbulence on both the supply and demand fronts are also major contributing to the extraordinary rate of changes in supply chains.
While Cargo Carriers has made major strides in establishing the benchmark in supply chain-management solutions, the company concurs that there is still a long journey to travel, bearing in mind the advances made by its counterparts in developed economies.
They service manufacturers that are now undergoing their Fourth Industrial Revolution, a digital era of inter-connectivity that has greatly improved efficiencies and productivity levels in plants and factories.
This is, in turn, has driven demand for faster deliveries of products within specific timeframes and that can also be ordered from anywhere in the world.
Prominent international logistics and supply-chain management specialists are also expected to start investing in big data analysis tools to increase planning and control outcomes in a new wave of decentralised automated network technologies.
Meanwhile, the trials on drones and autonomous vehicles point to the future of logistics and supply-chain management in these developed economies.
South African policymakers and decision makers have noted the need for South Africa to also harness the power of “Industry 4.0” to boost the global competitiveness of its manufacturing sector and, in so doing, creating secure employment prospects and growing vibrant black industrialists.
This strategy will be driven by a Digital Industrial Revolution Commission that will be established by government, and also include the insights of prominent private-sector participants.
Similar to developed economies, this strategy will have far-reaching implications on traditional supply-chain and logistics models.
Cargo Carriers is committed to continuing to drive innovation in the transport logistics to service South African manufacturers.
Worryingly, the industry been struggling to remain competitive and declined by as much as 6,4% in the first quarter of this year, highlighting the need for a robust strategy to stimulate this vital cog of the country’s economy!