Supply Chain June 11 small linked reduced

Supply Chain Today June 2011 1

2 Supply Chain Today June 2011


June 2011

Contents

Proprietor and Publisher:PROMECH PUBLISHINGTel: (011) 781-1401Fax: (011) 781-1403E-mail:[email protected] Website: www.promech.co.zaManaging Editor:Susan Custers

Editor:Dave TootillAdvertising Sales:Lelanie DiamondDTP: Zinobia Docrat and Yolanda Flowerday

Printed by:Typo Colour PrintingTel: (011) 402-3468

The monthly circulation is 4 025 CopyrightAll rights reserved. No editorial matter published in Supply Chain Today may be reproduced in any form or language without written permission of the publishers. While every effort is made to ensure accurate reproduction, the editor, authors, publish-ers and their employees or agents shall not be responsible or in any way liable for any errors, omissions or inaccuracies in the publication, whether arising from negligence or otherwise or for any consequences arising therefrom. The inclusion or exclusion of any product does not mean that the publisher or editorial board advocates or rejects its use either generally or in any particular field or fields.

Cover Story4 High Speed Scanning

Barcoding, Labelling, Scanning & RFID7 Thermal Thinking

Warehouse Design9 Focal Points

Focus on Pharmaceutical11 Distribution Capability Trebled

Sapics15 Top Speakers

Market Forum — Unit19 Market Forum

Changing Landscape23 Fat and Lazy Supply Chains

Walmart’s Entry into SA25 Facing Facts27 Wake-Up Call

Green Logistics29 Hampering Economic Growth

Software31 Social Media

Sustainability33 An Integrated Report

Pulp and Paper35 Paper Chase

Market Forum — Supply37 Market Forum

Endorsing BodiesAfritag (div of Smart Card Society)CGCSA (Consumer Goods Council of SA)CILTSA (Chartered Institute of Logistics & Transport: SA)SAEPA (SA Express Parcel Association) SAPICS (The Association for Operations Management of Southern Africa) also mailed to: CSCMP (Council of Supply Chain Management Professionals)

Featured on the cover:

Luke Dunstan, Bartrans, Tel. 011 552 8245, Fax. 011 397 8526,

Email. [email protected].

Website. www.bartrans.co.za

mailto:[email protected]

http://www.promech.co.za


http://www.bartrans.co.za

www.cgcsa.co.za

www.ciltsa.org.za

www.saepa.org.za

www.sapics.co.za

cscmp.org


COVER STORY

High Speed Scanning

Fortunately for end users, specialist compa-nies such as Bartrans have made it their business to keep on top of developments. “Supply Chain Today” recently spoke to

Luke Dunstan, Bartrans’ Director, to learn more about products available to the market.

“Our latest offering is the Dolphin 99EX,” he tells us. “It truly is revolutionary in its design and liter-ally offers the latest and greatest of everything. Comparing it with other products on the market would be a bit like watching a match between a children’s football team and Manchester United,” he chuckles.

The world of scanning is moving at such a high-speed that it’s almost impossible to keep up with the advances.

everything they could ask from a scanner. The company presented an almost impossible list of requirements and Honeywell addressed every one,” he says.

The 99EX is equipped with high-speed wireless technology to enable real-time voice and data communication. It allows on-the-fly switching among cellular carriers to deliver continual coverage, regardless of network carrier. It also incorporates GPS technology for faster data acquisition and better tracking on the road. “In addition it boasts a battery life of 16 and a half hours, which is unheard of in the industry,” says Luke. “This allows long shifts without the need for extra batteries or chargers.”

IR raysHe goes on to explain that its advanced imaging technology gives enhanced capability to read high density linear barcodes, 2D barcodes and barcodes on unusual surfaces. It can be used in a range of environments, including direct sunlight, dark areas and fluorescent lighting. “The ability to scan in direct sunlight is very relevant to us, since we get high levels of IR radiation in South Africa,” he advises.

The Dolphin 99EX is ideal for anyone in the logistics, security or access control business

“In addition it boasts a battery life of 16 and a half hours, which is unheard of in the industry,”

Impossible wish listThe new device from Honeywell was developed to meet the most demanding needs, with the company conducting extensive research to pro-duce a scanner that Luke describes as a Rolls Royce. “When Honeywell set their benchmark for this product, they approached a global transport giant and asked them to provide a wish list of


COVER STORY

The scanner incorporates GPS technology for faster data aquisition on the road.

Durability is a primary concern on the road and the Dolphin 99EX is IP67 rated to survive rough handling. “It’s virtually indestructible,” Luke smiles. The device can withstand multiple drops onto concrete from as high as six feet and is resistant to damage from water or dust.

Remote accessAn extra feature that provides improved manage-ment comes in the form of Honeywell’s Remote MasterMind (REM), which allows all devices within a network to be managed from a single remote location. Functionality includes everything from asset tracking and software upgrades to remote diagnostics and issue resolution. “It’s a useful way to offer remote support, which is an often underestimated requirement of sophisticated equipment,” Luke emphasises.

Other handy functions include energy saving op-tions, such as LED switch-off when the unit is turned face down, and the ability for the screen to

rotate to face the user. “An operator can present a job for onscreen sign-off without even having to hand over the device,” he continues.

“An operator can present a job for onscreen sign-off without even having to hand over the device,”

L11-42 Bug Ad 180x65.indd 1 2010/09/21 1:10 PM

“It really is the ultimate product for anyone in the logistics, security or access control business,” Luke adds. Having said this, he assures us that Honeywell is not about to rest on its laurels in terms of development and design. “We’re anticipating the release of three new Enterprise Digital Assistants by the third quarter of this year, providing entry-level to flagship models with all the bells and whistles,” he says in closing. Clearly something to look forward to.

Luke Dunstan, Bartrans, Tel. 011 552 8245, Fax. 011. 397 8526, Email. [email protected]. Website. www.bartrans.co.za


http://www.bartrans.co.za


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Thermal Thinking

“We’ve just launched a new thermal transfer coder,” says Pyrotec’s Brandon Pearce, tells “Supply Chain Today”. “The SmartDa-

teX40 is an update of the old SD3i and C. It requires little to no maintenance and is the first thermal coder to have a warranty on its thermal printhead. The printer itself features an 18 month warranty. It’s similar to the SmartDate 5 and also has both colour touchscreen and mono monitor.”

The SmartDate brand has made a mark for its efficiency and accuracy, removing the element of

human error and providing optimum productivity within high volume applications. Users also ap-preciate the fact that the printer is able to produce consistently high print quality at extreme speeds.

Sustainable codingAimed at FMCG and packaging applications, the motivation behind the new model is Pyrotec’s increased focus on sustainability and carbon footprint reduction. It requires fewer parts and is easily changed from a left hand to a right hand version, meaning that units are not limited to

specific users. Its primary advantage, however, is evident in its efficient ribbon use.

“The printer uses less ribbon, which is not only cost effective but results in less wastage,” Brandon explains. “It uses 1100m ribbon rolls instead of the standard 600m, resulting in fewer ribbon changeovers and less downtime.” Another improvement is the inclusion of a smart chip. “The smart chip collects usage statistics, providing a useful management tool to optimise efficiency.”

The printer is used with Markem-Imaje’s new CoLOS 5.0 software, which was released at the same time. “New features include WYSIWYG functionality and built-in ribbon-save options, further enhancing the cost-efficiency of the model,” he tells us.

Not one to take chances with new technology, Pyrotec has conducted some very positive market research.

With new legislation demanding the inclusion of date/time stamps and best-before dates to labelling, more companies

will be switching to label technology that offer these options. Thermal transfer offers this functionality and many suppliers are focusing on this technology in anticipation of increasing

demand.

Brandon Pearce

Printer uses less ribbon, which is not only cost effective but results in less wastage

Label technology of the future

proscan advert CS40 repro.FH11 Tue Nov 30 18:28:16 2010 Page 1

Composite


BARCODING, LABELLING, SCANNING & RFID


“We recently received our demo units and have targeted the technology at the major snack producers, where thermal transfer has already had an impact. The improved option has already won their approval and we anticipate similar reactions from other manufacturers,” he adds.

Further upgrades

Has applications in pharmaceuticals, agrichemicals, automotive and paint industries

BARCODING, LABELLING, SCANNING & RFID

The company will also be launching its new Continuous Ink Jet (CIJ) model 9232 this year for the FMCG and food and beverage markets where non-contact Ink jet printing is required. “This model can be used with food grade inks,” Brandon tells us. “In addition to food, it also has applications in pharmaceuticals, agrichemi-cals, automotive and paint industries.”

“We’re confident in our new products, however,” he assures us. “The advantage of little maintenance intervention and reduced operational costs give them a firm advantage over competitive ranges. I have little doubt that they will make a strong name for themselves in a short space of time.”

Brandon Pearce, Pyrotec, Tel. 0217879600,Fax. 0217879790. Email. [email protected],Website. www.pyrotec.co.za

All the contents of these boxes can be labelled efficiently and effectively by the SmartDateX40

Don’t miss these August Features!

•Warehouse Management Systems and Inventory

Control •Outsourcing (3PL/4PL) •Focus on greening the

supply chain

Contact Lelanie Diamond on Tel ( 011) 781-1401,

Fax: (011) 781-1403, E-mail: [email protected] to book your ad space


http://www.pyrotec.co.za

www.universal-storage.co.za


Focal Points

WAREHOUSE DESIGN

Improvon won the SAPOA Industrial Green Building Award for its ABB Development in Longmeadow

While many energy efficiency experts will view the supply chain in its entirety when applying green ethics to the

process, other companies specialise on specific areas. The Improvon Group’s core focus is warehousing and the company was winner of the SAPOA Industrial Green Building Award for

its ABB Development in Longmeadow, Gauteng.

Grant Lewington, Improvon

G rant Lewington, Business Development Executive at the company, explaines the process of developing an energy efficient warehouse to “Supply Chain Today”.

“In terms of greening the supply chain, we tend to focus on the property development aspect,” he begins. “From here, other specialists will get involved in refining issues such as vehicles, route optimisation, fuel efficiency and so on.”

The right siteHe emphasises the importance of correct choice of site from the outset since this will get the con-struction process off to a smoother start. Apart from ensuring that the facility is situated in an area appropriate to principal business activities, choosing a property zoned for industrial use avoids the potential setbacks that may come from having to re-zone the site.

“Warehouses situated on the ‘urban edge’ may end up on agricultural land, for instance, which can be problematic if it turns out that the in-tended site is environmentally sensitive,” Grant warns. This point raises the issue of the ongo-ing debate between commercial developers and environmentalists, who vehemently resist the threat of urban creep.

“It’s a matter of weighing up the value of the

land for commercial use against its value for the environment, which is a very tricky matter.” With multinationals becoming increasingly demanding in terms of their impact on the environment, de-velopers are having to adapt their modus operandi to accommodate their needs.

Green constructionHaving settled on the right location, the construc-tion phase may begin. This too requires attention. “It’s important that the correct procedures are followed to ensure that the building will not harm

Can be problematic if it turns out that the intended site is environmentally sensitive


use in the building. These systems are also reli-ant on effective insulation, so this aspect must be correctly applied throughout,” Grant adds.

Other forms of heating come in the forms of solar panels, as well as heat exchanges coupled to air-conditioning. The whole system is integrated in a complex network that requires careful planning.

Treatment of effluent also contributes to green efficiency, with grey water being treated on-site before being used to irrigate landscaping or flush toilets, for example. Landscaping, too, can have a useful place in the overall operation. “Indig-enous plants can be used to retain water and limit run-off,” he tells us.

the surrounding area,” Grant explains. “Material selection is crucial and some clients even want carbon footprint data of the suppliers we use, including their transport to site.”

The design phase incor-porates a number of ele-ments which need to be tailored to the needs of the developer and tenant. “We have to design from the ground up,” he elaborates. “We consider the insula-tion of the premises from the floors to the walls and ceilings. This creates a building envelop which is more efficient from a heating and cooling perspective, which has a cost-saving advantage.

An installation that consumes thousands of square metres of space has the potential for dramatic savings in terms of energy consumption

In a facility of 20 000m², 20% may be used for offices, which means you could be looking at 4 000m² of office area. The cost implications are enormous.

Light heartedPower consumption in a large facility can be sig-nificant and lighting has a big role to play. Grant advises the correct choice of luminaries, with proximity lighting in appropriate areas. “Light-ing and airconditioning which switches off when rooms are not in use can add up to substantial savings,” he says. “In a facility of 20 000m², 20% may be used for offices, which means you could be looking at 4 000m² of office area. The cost implications are enormous.”

On the topic of cost, he admits that these systems come at a price. “The problem in a period such as this when we’re experiencing an economic downturn, is that many companies are looking at ways to cut costs. While energy efficient systems will pay themselves off in the long-term, they are more expensive initially. And their importance to society as a whole is undeniable; it’s a matter of being able to see the big picture,” he smiles.

Grant Lewington, Improvon, Tel. 011 409 9308, Email. [email protected], www.improvon.co.za

Up to 20% of the warehouse facility may be used for offices

WAREHOUSE DESIGN

“We also look at the type of glass used, choosing grades that limit sunlight and UV ingress and further optimising energy use by reducing the amount of airconditioning required to maintain specified temperatures.”

AdvancesGrant adds that technological advances are seeing the development of equipment which is becoming less power-hungry – freezers, for instance, are notorious energy guzzlers, as are airconditioning units. “Aircon is now able to re-use the hot air from ventilation systems to heat water for other


http://www.improvon.co.za


FOCUS ON PHARMACEUTICAL

The warehouse and distribution centre, which will triple UTi Pharma’s distribution capability, will be completed in October 2013. UTi Pharma associate company,

Chronic Medicine Dispensary (CMD), a courier pharmacy and market leader in the “Direct-to-Patient” delivery of chronic and specialised therapies, will also be located in the facility.

Distribution Capability Trebled

Construction has begun on a new R530-m, 28 000m2 state-of-the-art warehouse and distribution centre in Meadowview, Johannesburg for UTi Pharma, a South African direct pharmaceutical distributor.

The design of the “green” facility, with Intaprop as developer, includes a number of energy saving elements, improves productivity and optimises the use of space.

In line with UTi’s thinkgreen corporate phi-losophy, sustainability elements include daylight harvesting in the administration building; energy

saving lighting; harvesting of rain-water for tote washing, truck washing and irrigation; solar panels for heating water; and energy saving airconditioning systems for the warehouse and administration offices. Reusable delivery totes will replace current cardboard packaging.

Productivity improvements include the doubling of the picking capacity and quadrupling the bulk storage bins – but with a smaller land footprint. Space has been optimised by using an Automatic Storage and Retrieval System (ASRS), to reduce the building footprint by a third, compared with

conventional bulk racking designs (VNA and wide aisle). In addition, the picking carousels, which can store +/- 23,000 totes, make use of a smaller foot-print than conventional flow racks. The warehouse will have a bulk location capacity of 38 400 pallet locations – nearly four times larger than the 9 000m2 currently available at Linbro Park, Johannesburg.

The warehouse will have a bulk location capacity of 38 400 pallet locations – nearly four times larger than the 9 000m2 currently available at Linbro Park, Johannesburg.


More about MeadowviewAutomatic Storage and Retrieval System (ASRS):

• Approximately 38 400 pallet bay locations

• 10 x automated cranes

Fine Pick Carousels:

• Approximately 23 000 tote locations

• 7 x “goods-to-man” picking systems

Warehouse facts:The warehouse consists of the following areas: UTi Pharma and Picking Systems


Receiving Area: 4 220 sqm, height at 8m clear to eaves including returns area

• There are 14 dock leveler doors for the offloading of products onto the receiving floors to cater for super link commercial traffic

• This area will be fitted with:

i. Computer equipment at the doors with “Delta” software to facilitate product receipts

ii. A decant receiving station that will be used to receive small quantities of product to be stored in the fine pick carousel system

iii. Pallet scales at every three doors to weigh pallets on receipt

iv. Pallet squaring devices to ensure precise stacking of cartons onto the pallets

v. MHE will be operational in this area to assist in the offloading of vehicles

vi. Pallet conveyor systems with in-line scanners and scales to ensure accuracy and transport of the processed pallet to the bulk storage area. The pallet conveyors are under the control of the SSI Schäfer Peem warehouse control system

vii. This area will be airconditioned

Product Returns/Debriefing Area: • This area will be used for the return of products and totes from the market.

• A conveyor system will transport the processed returns (which have been QA approved for sale) to the Decant receiving station. These products will then be linked to totes which will be stored in the fine pick carousel system

• This area will be airconditioned.

• Highbay warehouse: 6 367 sqm, height is 27.55m, storage locations total 38 400

• Consists of 10 aisles of high density pallet racking, each containing an automatic crane for storage and retrieval

• This area will be used for the bulk storage of phar-maceutical products

UTI Pharma

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• Each aisle has an “out of aisle” pick station (with four pick gates) which will be used for the case picking of product (only when released from quarantine status). Each station will be fitted with computer equipment to print the dispatch labels. The picker will only be able to pick from one gate at a time and the quantity of case pick will be indicated by a “pick-by-light”

• For Schedule 6 products, access will be limited to a pharmacist with the appropriate login

• Conveyor systems will transport the processed cartons to the distribution sorter system

• Pick mezzanine floor: 7 077sqm, height is 11m to eaves


• This area will be used for the single unit picking operation

• Consists of 11 double height and 2 single height storage and retrieval carousels with approximately 23 000 storage/pick locations

• There are seven “goods-to-man” pick to tote stations. One of the stations has been enclosed by fence with restricted access for Schedule 6 product picking by a pharmacist

• Conveyor systems will transport the storage totes between the carousels and the pickers

• Conveyor systems will also transport the shipping totes either for decanting into cartons, plastic bags or directly to dispatch

• This area is air conditioned

Decanting stations for replenishment:

• Replenishment orders picked from the high bay warehouse will be transported via a conveyor system to the decanting stations

• Here, replenishment staff will unpack products from the original case and pack into storage totes

• When complete the storage tote will be taken via conveyor systems to be stored in the carousels

• For S6 product replenishment, a separately fenced decant station is available with restricted access control for pharmacists

• Dispatch: Area: 7 077sqm, ceiling height:6m

• All parcels picked and packed in the ware-house are transported via conveyors to the dispatch cross belt sorter that has the capacity to sort 7 000 parcels / hour.

• The sorter will divert the parcels onto chutes which are linked to route codes.

• The distribution team will then stage the parcels per route for loading onto vehicles to be dispatched for delivery.

Chronic Medicine Dispensary (CMD) Area: approximately 2 500sqm, height is 11m to eaves.

CMD area will consist of:

• Conveyor systems will transport each tote to various pick zones to complete the order

• A coldroom and freezer to store coldchain products

• A validation/manifesting area where the products are verified and labelled

• A consolidation area to consolidate various patient parcels to be delivered to a single drop point

• Conveyor system to dispatch to merge with the sorter.

Rob Botha, UTi Pharma, Tel 011 458 2564, www.utipharma.co.za

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SAPICS

The programme is made up of an abundance of varied and fascinating topics presented by local and international speakers of sig-nificant reputation. A few of the speakers

and workshop facilitators are highlighted below. However – there are dozens more eminent speak-ers profiled on the SAPICS website.

Speakers in the SpotlightNew Competitive Frontiers for South African Business

Prof Nick Binedell, Director, Gordon Institute of Business Science, South Africa

The opportunities and challenges facing indi-vidual business lead-ers, the challenge for companies to develop an effective strategy and the environment in which they operate are currently undergo-ing a very significant strategic change. This talk will explore at the personal, organization-

al and country level, many of the dynamics that are reshaping the landscape of business which has direct implications for the business strategy and those who lead it. The shift of economic growth from the North West to the South East, the rise of the internet economy, competitiveness of dynamic companies and countries, and the challenge to business about its relevance, the pressure of the sustainable development agenda, are all powerful forces reshaping the landscape of the world we work and live in. The session will give an overview of these change processes and

their relevance to South Africa.

Corruption the Bane of Africa

Professor Pat-rick Lumumba, Director/Chief Executive, Ke-nya Anti-Cor-ruption Com-mission, Kenya

Top SpeakersThroughout the year, SAPICS educates hundreds of supply chain and operations management professionals. Their efforts culminate at their showpiece event – the SAPICS Annual Conference and Exhibition where the

emphasis is on knowledge exchange

This paper explores the origins of corruption in Africa, examines its causes and effects and proposes practical solutions that can be considered to re-energize the fight against corruption, improve gov-ernance, renew growth and set the continent on the path of sustainable development.

I m p l e m e n t i n g a n Effective ABC System : Lessons Learnt

Karen Pretorius, CSCP, Finance Projects Man-ager, DHL Supply Chain, South Africa

DHL Supply Chain SA struggled for more than 6 years to implement an ABC system of which the results were accepted, and used, across the business. Ownership and sponsorship was seated in the wrong business units or functional departments and there was no operational buy in. On the 3rd attempt with senior sponsorship, dedicated business leadership and operational involvement, the system and its outcomes have been widely accepted. DHL now has a dedicated team of ABC practitioners and business decisions are validated through the use of modelling and analysis. Sponsorship, owner-ship, resistance to change, project management, product selection, implementation and rollout will be covered during the presentation.

Lean Management: Measuring, Accounting, Improving and Decision-Making

Brian Maskell, President, BMA inc, USA

Lean is a different way of managing your business. Just as new methods are needed in production, supply chain, planning and engineering, new lean methods are also needed in your mea-surements, account-ing, and decision-making systems. In this presentation we will look at the key changes required to develop a truly lean management system to drive improvement and prosper your company

futuregrowth

A hardy seed from the dandelion takes to the air to find new ground to develop and grow. The SAPICS Conference will continue to develop the potential of our vibrant supply chain community, and accelerate its growth in 2011 and beyond.

today

33rd Annual Conference & Exhibition

The SAPICS Annual Conference is the Leading Event in Africa for Supply Chain and Operations Management Professionals.

T: +27 (0)11 023 6701 or [email protected]

26 - 28 June 2011Sun City

With theparticipation of:

Platinum Sponsors:

Principal Sponsor:

Gold Sponsors:

Silver Sponsors:


http://www.sapics.org.za

www.sapics.org.za


SAPICS

Communications – Your number one forecasting tool

Ed White, CPIM, CIRM, Supply Chain Specialist, Bayer Canada, Canada

Do you know what the demand for your product is going to be? Probably not and given normal forecast accuracy, cer-tainly not very far out into the future. There are a number of tools available to improve a forecast; S&OP, Analyt-ics, enough programs to sink a super-computer. But what is the most important thing you can

add to your forecasting toolbox? The ability to com-municate; clearly, concisely and understandably. In this session we will share thoughts on what is meant by communication skills, how to improve your skills and why this is critically important.

Interactive Workshops in the Spotlight

The Beer Game – A Supply Chain Simulation

Michael Ford, CFPIM,CSCP, TQM Works Consulting, USA

The Beer Game is a simple yet realistic simula-tor of the sup-ply chain and is still used today as a teaching tool for industrial dynamics. It has been played all over the world by thousands of people ranging from high school students to chief executive offi-cers and govern-ment officials. Each participant

plays a role in the production and distribution of a product. Their objective is to manage inventory to achieve optimal customer service at each of the supply chain nodes, which turns out to be a chal-lenging task. Players gain a deeper appreciation of the supplier/customer relationship and they learn how their decisions have an impact on the sup-ply chain as a whole. Michael is an independent business consultant with 22 years experience in retail, distribution, manufacturing and training. His background includes hands-on experience as a warehouseman, shipping clerk, inventory control clerk, planner and buyer. He began consulting in 1998 with a primary focus on APICS certification training. Major projects include MRP implemen-tation, physical inventory, cycle counting, needs analysis and warehouse layout. He has a Bachelor

of Industrial Engineering degree from the University of Buffalo.

Using Excel to Develop an S&OP Pipeline

William Wolfaardt, Senior Production Planner, Sonae Novobord, South Africa

Gerald Manyathi, Production Planner, Sonae Novobord, South Africa

Microsoft Excel is widely used as a tool for business analysis and reporting. The presentation will begin by highlighting the limitations and pitfalls of Excel. Delegates will be provided with raw data including a stock file, order portfolio and an S&OP pipeline template. The stock and order files will be used to demonstrate the use of pivot tables and delegates will be given the opportunity to experiment with these on their own laptops. The stock and order files will be copied into the S&OP Pipeline template and resulting in a combined view of various aspects of the business includ-ing order allocations, production requirements and available capacity. William is currently the Production Planner at Sonae Novobord. William has 9 years experience in various manufacturing planning and controlling positions. He is currently studying towards his CPIM. Gerald has been at Sonae Novobord working in manufacturing operations, sales, customer service and plan-ning roles since 2000. He is currently studying towards his CPIM.

www.fii.co.za

Going green is no longer a choice, it’s a business imperative!

If you would like to attend the workshop and / or the SAPICS Exhibition and Conference, please go to www.upavon.co.zaIf you wish to enter this year’s Green Supply Chain Awards, go to www.ciltsa.co.za

Take the opportunity to learn what top companies are doing to create green and sustainable supply chains at the Green Supply Chain Workshop, a

joint initiative between CILTSA (Chartered Institute of Logistics & Transport), the CGCSA (Consumer Goods Council of SA) and “Supply Chain Today” magazine.

The workshop forms part of the prestigious annual Sapics Conference and Exhibition (26 - 29 June)

Confirmed guest speakers are: Barloworld, Improvon, Trenstar, Scania & Gautrain

Cost: R650-00 + VAT / person

Zinobia DocratTel: (011) 781-1401 / 074 164 7974Email: [email protected]

Catherine LarkinTel: (011) 789-7327 / 787-9127 / 083 300 0331

Email: [email protected]

0861 CGC 000 (0861 242 000) 0866 749 929

www.cgcsa.co.za

Green Supply Chain Workshop

1.30 - 4.30, 26 June 2011, Sun City

www.promech.co.za


Unprecedented levelPerfectly suited for applications as diverse as field service, postal and courier delivery, ticketing and event management as well as transportation and security, Psion’s EP10 has already achieved significant early success. The company has received an unprecedented level of pre-orders for the EP10 amounting to more than 7 000 units to be delivered over the next 12 months. These early sales include a 3 500 unit order from Varlink, a UK distributor, and a 1 000 unit order from Warok, a German distributor

as well as significant pre-orders in the US, France and Benelux. In total, the value of pre-orders for the EP10 amounts to almost £5 million.

The EP10 has also achieved positive market reaction following extensive pre-launch testing by partners and customers. In total, the EP10 has undergone almost 100 000 hours of testing in the labs and in the field.

Driven by the latest enterprise Texas Instruments AM3715 Sitara ARM proces-sor, the EP10 is the fastest device in its category. It boasts a large 3.7 inch high resolution LCD display with integrated touch screen, as well as support for the latest mobile communication standards including CDMA (EV-DO rev A) or GSM (UMTS 3.8G HSPA+), GPS, Wi-Fi and Bluetooth. Incorporated into the device is a 2D omni-directional imager and an

additional 3.2 megapixel autofocus camera with dual LED flash.

To ensure that the EP10 is a future-proof investment, it offers the industry’s fullest array of interactive sensors in the industry: gyroscope, light sensor, GPS, magnetometer (digital compass), accelerometer and proximity sensor. These sensors can be further customised through both software and hardware development kits available to partners.

Michelle Hollis, Psion, [email protected]

Significant buyIt comes as no surprise that Cargo Carriers procured a large number of Mercedes-Benz trucks in 2010 as the logistics provider and Mercedes have a long-standing relationship

of over 55 years. Not to mention the fact that Cargo Carriers has been posting some impres-sive growth figures in recent years. The good news for Mercedes is that this growth does not appear to be slowing down.

The technology in Mercedes’ trucks aligns perfectly with Cargo Carriers’ high standards of Safety, Health, Environment and Quality (SHEQ). As the company operates in volatile and hazard-ous industries such as gas, fuel, and chemicals, safety is always a top priority. Thus high SHEQ standards call for the superior technology which Mercedes-Benz provides. Technologies such as anti-lock braking systems, acceleration skid control, disc brakes, electronically controlled braking systems, lane assistance, roll control, proximity control, and others, play an important role in preventing disaster.

Goscor Rental Company GM Greg Venter and sales manager Barbara McCarthy - the company has increased its forklift fleet by more than 20% since the beginning of 2011.

Market Forum

Division expandedGoscor Rental Company (GRC), a division of diversified industrial group, Goscor, has significantly expanded its forklift division to cater for the strong growth of the group’s activity in this sector. Greg Venter GRC GM says that since the beginning of January 2011, the company has increased its forklift fleet by more than 20%.

“We are not only expanding, but are in the process of replacing our older fleet with new equipment and we’re confident that we will be able to continue to offer our customers the highest level of service in this buoyant market,” says Greg.

Recently the giant Imperial group bought a controlling share in the Goscor group and its added muscle has helped GRC to expand its business. “Now that we’re part of the Imperial group we have access to a host of new businesses that require our services. We have also been able to improve our business systems, which has helped us to be even more efficient and professional,” adds Greg.

Greg Venter, Goscor, Tel 0861 467 267, [email protected], www.goscor.co.za



http://www.goscor.co.za


Market Forum

Jointless flat floors Twintec, a producer of jointless steel fibre reinforced concrete (SFRC) flooring with offices in 19 countries, produces in excess of 6 million m2 industrial concrete floor slabs each year.

In association with Shoprite, WSP & ILS, Twintec held an open day at their latest project in Brackenfell, Cape Town. Invited guests at-tended the half-day event which began with lunch and was followed by presentations from Gary Benatar of Cape Town based Industrial Logistics Solutions and Tom Menary of the Twintec Group. Their presentations covered the importance of floor slab design and con-struction and in particular how jointless floor slabs drastically reduce ongoing maintenance costs for the building operator.

The Shoprite project is a 42,000m2 SFRC jointless floor slab with up to 2,000m2 of concrete laid per day. Guests were able to view the production process first hand as well as inspecting the completed areas of floor slab laid to FM2 Special tolerance.

Twintec entered the South African market in 2010 and has now established a permanent base in Cape Town to respond directly to the needs of clients, warehouse operators, 3PL companies as well as designers, developers and contractors.

Twintec, Tel 021 914 7752, www.twintec.co.za

Large-area vacuum gripperOfficial distributor of J. Schmalz GMBH vacuum com-ponents in South Africa, Tectra Automation, a member of the Hytec Group of Companies, is bringing Schmalz’s range of large-area vacuum grippers to the local mar-ket. This modular gripping system allows for individual handling solutions for efficient, process-safe palletising, depalletising, sorting and picking.

Schmalz’s large-area vacuum gripping systems, with maximum flexibility for automated handling processes

“We were delighted to hear from Mercedes-Benz that we were one of their larger buyers of 2010.” says Mur-ray Bolton, Joint CEO of Cargo Carriers, “This is really a testament to the growth we have experienced as a com-pany over the last year and our choice of vehicle will pay dividends in terms of lower maintenance costs, reliability and safety. Holding us in good stead with the growth we are to experience in the coming year.”

Cargo Carriers’ recent growth has allowed the company to renew and expand its fleet despite many industries, and many competitors, being deeply affected by the recession. Building on its understanding of the sugar industry, Cargo Carriers plans to expand its agricultural vertical to that of tomato harvesting in the Eastern Cape with plans involving local communities in this project.

Murray Bolton, Cargo Carriers, Tel 011 485-8700, Email [email protected]

Highly customised, application-specific large-area vacuum gripping systems can be created thanks to the modular design with standardised components, consisting of a main body, valve and replaceable suction pads.

Schmalz’s vacuum gripping systems are universally suitable for handling stable and unstable packages, cardboard boxes, intermediate layers, packages covered in film, outer packaging, trays and other such items. The gripping systems can operate with full or partial coverage, which means everything, from individual cardboard boxes to several packages or containers at a time, can be gripped and transported.

Multiple large-area vacuum grippers can be put together to create a large format vacuum gripping system, allowing the system to be matched perfectly to the goods to be handled in relation to the size and weight of the packaged goods or the surface, stability and consistency of the packaging.

Erika Bennion, Tectra Automation, Tel 011 971 9400, [email protected]



http://www.twintec.co.za


Market ForumHigh speed supply chainsiData Distribution, distributors of automated identifica-tion and mobile technologies for the reseller market, has launched the new Falcon X3 mobile computer, with powerful features that tackle robust applications in the supply chain.

The new Falcon X3 from Datalogic provides real time data capture and communication, assuring accurate inventories

and maximising productivity. Available with either laser scanner or 2D imager, it can be configured to match the needs of specific applications, and features a superior good-read feedback for barcode scanning accuracy.

Packaged with Windows CE or Windows Mobile 6.5, the Falcon X3 integrates seamlessly with WMS and ERP man-agement systems, while providing maximum connectivity and coverage.

The new Falcon X3 also delivers strong per-formance with Power³ architecture, which leverages a dual processor architecture and proprietary features. The pistol grip version offers an arched handle and ergonomic trigger, making high frequency barcode scanning operations comfortable throughout the day.

The numeric and alphanumeric keyboards are set up placing high use keys at the operator's fingertips, with a universal numeric phone-key layout. The crisp QVGA display and backlit keyboard make it easy to work in dark indoor or extremely bright outdoor environments. The Falcon X3 is built rugged, resisting numerous drops from 1.8 m, while IP64 level sealing protects the unit from dust and liquids.

Heinrich von Solms, iData , Tel 011 397 3779, Email [email protected]

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Tel: +27 11 821 5500

www.imperiallogistics.co.za

The grass is greener on the other side, as IMPERIAL Logistics

moves business and industry through green innovation,

inspiration and foresight.

FAST MOVING, , GOING GREENFORWARD THINKING

IMPERIAL Logistics is leading the green evolution in end-to-end logistics andsupply chain management. By applying environmentally friendly routes tomarket, we pioneer practical green processes and technologies, with resultsthat are innovative, cost effective and efficiency enhancing.

For us, sustainability is an important part of being a responsible corporatecitizen. From Africa, Europe, the Far East and USA to India, we implementaward winning initiatives that reduce both our customers' and our carbonfootprint. We set the best practice benchmark in sustainability, optimisingbusiness-case driven logistics services - from tranportation solutions, towarehousing and distribution.

Our green skills are implemented from the inside, out. We operate using anadvanced oil management system that extends oil changes to six months,resulting in 83% less oil going off site. We use bio-degradable fuels, andpursue product and water recycling.

In partnership with Mercedes-Benz South Africa we recently announced theintroduction of the country's first Euro V vehicles. Furthermore, our fleetpreference is for vehicles that generate fuel savings and reduce carbonemissions, such as Daimler Chrysler's “Energy for the Future” initiativeproducts. To this end, we have reduced the amount of diesel used byIMPERIAL Logistics by procuring state-of-the-art truck engines, testing theimpact of additives to diesel and implementing advanced fuel managementsystems.

When it comes to our service offerings, we go for green by shorteningdistances travelled through the redesign of distribution networks andconsolidation of shipments. By leveraging mode changes, we use rail insteadof road for rail centric consignments. In fact, we regularly redesign productswith service providers to reduce energy consumption and waste.

The ultimate logistics challenge is to find ways in which 'green' can increaserevenues, reduce costs and nurture the environment. Everyday, our peoplerise up to tackle this challenge, delivering results for future generations.

IMPERIAL Logistics. Fast Moving, Forward Thinking.

Forward thinking is thinking

http://www.imperiallogistics.co.za

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Martin Bailey

T hus when your supply chain resembles an bulimic model in a size 10 dress (preferably with ADHD) you are well on the way to ensuring that your systems are

optimised and you will be running a perfectly efficient network – that has zero fat.

However there are real enemies of our lean systems. Enter the infamous buyer. He sprouts philosophies such as volume discounts, stock cover, safety stock, opportunity buys and horrible concepts that lead to bloated stocks. We thus may end up with an obese supply chain filled with stock, with its arteries clogged and high blood pressure, ready to collapse.

as fuel and electricity prices increased, inflation matched these increases, and our cost inputs (in percentage terms) remained reasonably constant. But things are changing. Energy costs are now rising at a far higher rate than inflation.

Transport is a continuing growing portion of the supply chain –

and is likely to become a lot more expensive. A cost of $200 barrel oil is no lon-

ger a possibility – it is now only a few short years (months?) away.

Coupled to a general goods railway network in South Africa that is largely collapsed and is unlikely to be resuscitated in the foreseeable

future and increased toll roads as a way for government to pay its way – our prime driv-

ers in the supply chain are rapidly changing.

Well built size 12We are going to have to think about our rapid response philosophies. Perhaps just in time deliveries of small quantities and make to order (as dictated by demand) will need to

be adjusted – to couple to a need to ensure trucks are full and our transport costs are

optimised. Our constraints in the supply chain are thus changing and we are going to have to adapt accordingly.

Nobody is proposing that we will ever need a fat supply chain, but perhaps we are going

to have to temper our philosophies. That size 10 model may have to become a well built size 12, as we adjust our thinking. That cross dock facility in Bloemfontein

with no stock, may have to hold a few days stock so we can reduce our transport costs.

Those goods we send overnight, because we believe that’s what our customer wants, may

now have an extra 24 hours lead time. Those goods, beautifully packaged, may no longer be

Fat and Lazy Supply Chains

Since I started in this business (and that’s a long time ago), we have been inundated with a missionary zeal by gurus who have “discovered” that lean supply chains are the way of the future. The idea is your supply chain must be lean and agile – without an ounce of fat. Do things Just in Time. Do it fast and react perfectly to customer demand. If you adopt their version of Toyota’s famous manufacturing system (TMS) you

will quickly create the ultimate supply chain.

Hold a few days stock so we can reduce our transport costs

All is wellThe other driving force over the last 30 years in the industry has been an imperative to centralise. Bigger is better, and with a move of world’s population to the cit-ies, our supply chains have centralised themselves to few hubs, where we can drive down inventories, increase control and reduce overheads.

Our size 10 model thus now lives with lots of other models in a modern apartment in the centre of the city where she can eat sushi and sip her imported mineral water, knowing that all is well and life is good.

Reality checkWhat about some reality? In the past,

CHANGING LANDSCAPE


in the perfect box and customers may have to adjust their expectations. Our way of doing

business is thus going to have to adjust to a world of dwindling energy resources.

Whole new set of rulesCertainly the thinking that drives our supply chains is going to change and the gurus who shape our thinking are going to need a whole new set of rules. I guess “well built” supply chains will never be as attractive as “lean” supply chains. “Right speed” systems are never going so sound as good as “agile” systems. And (with apologies to the Cheetahs) who in his right mind wants to decentralise to Bloemfontein.

Many will argue that “lean” is not simply a pro-cess – it is a whole business philosophy. There is no argument that that it is the right business philosophy for our supply chains, but we also need to temper it with our resource constraints.

What we do need to ensure is that we keep enough flexibility in our networks to ensure that as the inputs change, we can adapt. Adapt to a changing world where scarce energy resources may dominate our thinking, rather than a pure focus on being lean and agile.

Martin Bailey, Industrial Logistic Systems, Tel 011 883-0407, Email [email protected]

CHANGING LANDSCAPE

Gurus who shape our thinking are going to need a whole new set of rules

l Energy-free gravity principle

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FactsI

n response, the market, far from adopting a wait-and-see policy, is already adopting a more aggressive supply chain strategy according to the research findings.

Walmart is the largest company by turnover in the world at FY2010, and does 25% of its total business outside of the USA. It now regards its international operations as its primary growth area in the near term. Their primary operational principle is Every Day Low Prices – in the belief that soon the retail space will have transparency on pricing. The winner in this scenario is the low price leader, and their business uses scale and aggregation of buying power to press home the price advantage. Key to lowering price is squeezing out costs, which is done largely through cutting-edge supply chain management principles.

Walmart’s in-stock policy is unparalleled, and they are supply chain management experts across the board. This is offered to suppliers as an incentive to take their brands global if they partner with Walmart – but with the proviso that delivery, at levels of efficiency and cost not common in the South African market, is non-negotiable.

Facing Facts

WALMART’S ENTRY INTO SA

Customer demand in keyThe FMCG grouping sees waste and inefficiency in their supply chain as their chief near-term industry challenge, while for the retailers it is focused on optimising the distribution network, along with efficient planning and forecasting, a must for an industry where customer demand is the key. Retailers are also worried about changes in labour legislation, however, which could hamper the appointment of the large amount of casual and contractual labour employed in the sector.

The challenge of ‘transforming supplier relation-ships into true collaboration’ has also dropped down in importance, which, coupled with the objective of streamlining the supplier base, could mean a tougher line on interaction with the FMCG sector. This could perhaps be a response to the entry of Walmart into the market.

The ability to take advantage of opportunities in Africa is an important challenge for the sub-sector, since most of the major retail chains are looking to expand their market share through at least the sub-Saharan African region. The chal-lenge is undoubtedly a logistical one related to physical infrastructure, which Walmart will also have to come to terms with.

James Sey, Tel 082 330 3763, Email [email protected], www.barloworld-logistics.com

“...at levels of efficiency and cost not common in the South African market...”

Plea to collaborateFor the FMCG sub-sector, supplying largely to retailers as their customers, there is a marked tendency to focus on customer service across the board as an industry objective – the increased focus on increasing service levels to customers is the top near-term objective for the industry. The customer service element is matched by a strategic objective to improve communication with their customers. This indicates a reaching out to retailers and a plea to collaborate better.

The top near-term industry objectives for retailers reflect similar commitments to customer service, but are different in emphasis. While improving service to customers is still on top, it is less well supported than by the FMCG sector.

A rather more ominous sign for the prospects of positive collaboration between FMCG and retail is an objective to ‘streamline the supplier base’. The positive view of this, however, may be that such rationalisation will result in more efficient and more stable longer term supply contracts with retailers.

The supplychainforesight survey, conducted annually by Barloworld Logistics, reveals the likely strategic response to the imminent arrival of global retail giant Walmart into the

South African market.


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T00264 Cargo (A4) Rep 6/2/11 8:56 AM Page 1

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Walmart’s mission is to save peo-ple money and the group’s ability to source products in-t e r na t i ona l l y c oup l ed w i t h

its bulk buying power will ensure a highly- competitive pricing structure for Massmart. For local retailers, pressure to become more price competitive will place additional strain both on gross margins, which are already relatively low, and traditional sourcing models.

One-size-fits-all approachAdam says now, more than ever, retailers need to integrate their financial and physical supply chain onto a single platform so they can better manage the order management, forex manage-ment, logistics and product costing in order to manage these risks.

Wake-Up Call

WALMART’S ENTRY INTO SA

With Walmart now poised to enter our market, local retailers will be forced to relook their traditional financing models and supply chain processes. This is the view of Adam Orlin, CEO of Blue Strata, an

innovative imports solutions and finance provider.

Proving problematicIn order to better manage costs and stock levels, large retailers are turning to centralised planning models, but trying to integrate large numbers of vendors is proving problematic. “This is where a company like Blue Strata can step in, to help manage timelines and to provide feedback to help manage inventory relative to the sell-through rate, to help avoid potential losses from mark-downs or loss of revenue by having the incorrect supply for demand.”

“And,” says Adam, “if you add the funding component to the value-added services and access to economies of scale, savings can be passed through to customers to improve working capital cycles and reduce the quan-tum of working capital tied up in the import transaction. In turn, by freeing up working capi-tal and increasing stock turn, we are effectively giving clients up to 40% more money to fund expansion and growth and the real ability to compete competitively on price.”

Best of both worldsAdam says the company recently introduced a replenishment model which compares the costs and timelines associated with both a direct ver-sus a local supply model, and then combines the best of both worlds. “In a direct model, the stockholding period is generally limited, which places restrictions on monthly Open to Buy (OTB) positions and limits flexibility. In contrast, in a local timeline, stockholding is generally not an issue but there is a premium to pay for the service.” He adds that by Blue Strata facilitating direct imports as a local supplier, the combina-tion of this off-balance sheet stockholding and increased stockholding period provides importers with the required increase in quantity and variety of stock to trade competitively.

The bottom line is that a fully integrated model like this allows importers to mitigate their risks and release much needed working capital, provid-ing them with the ability to either increase or retain margins relative to maintaining competitive selling prices,” concludes Adam.

Adam Orlin, Blue Strata, Tel 011 245-5600, [email protected], www.bluestrata.co.za

Adam anticipates that far more retailers will start looking at direct imports

Traditionally, dis-para te e lements governed the sup-ply chain: funding came from one source and tended to take a one-size-fits-all approach, whi le managing logistics came from another. The common thread was the importing company’s lack of control.

This approach is out-dated in today’s business world and managing the import process and associated finance component effectively within the overall supply chain cycle is now even more critical in a global market.

Adam anticipates that far more retailers will start looking at direct imports. “One of the challenges of importing goods has traditionally been the retailer ’s lack of warehousing capacity, or the associated cost of stockholding to hold extended stock ranges or large quantities or stock for an extended period. This has driven their prefer-ence for the flexibility of utilising a local holding supplier. But, with increased price competition, retailers are now being forced to rethink their sourcing and funding strategies.”


http://www.bluestrata.co.za


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T he 7th State of Logistics, themed ‘Value creation towards global competitiveness and sustainability’ states that while investment into transportation infrastructure has been

necessary, it has been costly. “A major concern is the effect of the recovery of infrastructural development costs over the next few years,” says Hans Ittmann, Executive Director of CSIR Built Environment.

The survey shows that South Africa’s consistently high total cost of logistics decreased by 1.2% between 2008 and 2009, from 14.7% to 13.5% of gross domestic product (GDP). Within a reces-sionary context this points to an underperforming logistics sector.

“Total logistics costs should have been signifi-cantly lower in 2009 due to the financial crisis and contraction of the economy. It would have been fair to have expected this percentage to have dropped to a level of closer to 12.5%, given the downward changes in the two leading cost driv-ers, namely the sharp drop in the price of diesel and in the interest rate,” says Hans.

“Apart from the logistics costs report released annually by the USA, the State of Logistics survey is the only report that covers the annual logistics costs of a country. Using the reports published over the past seven years, one can track trends of various important logistics factors within the country,” Hans notes.

Total cost of logistics“Total tonnage and ton-km decreased in 2009 by 4% and 3.7%, respectively,” says Dr Jan Havenga of Stellenbosch University. “Less freight was transported in 2009, with a reduction in transport costs of 9.2% – much less than the fall in the price of diesel (28.3%).”

Totalling R22.7-billion, the majority of the country’s externality costs were caused by road transport. At R10.9-billion, accidents comprised the larg-est cost component, followed by the impact of emissions at R5.2-billion and that of congestion at R4.5-billion.

Notably, 23 million tons of greenhouse gasses were emitted due to land freight transport activi-ties. Jan adds, “This amounts to 49% of transport emissions and just under 5% of total emissions for the country. Road freight contributed 20.3 million tons and rail 2.7 million, which translates into R4.6-billion and R0.6-billion in costs to the environment.”

Larger inventories“Transportation costs, which have always been the highest cost element locally, seem to be equally high contributors to logistics costs in most other countries, whereas our administration costs remain comparatively high,” he says.

In 2009, the average inventory requiring financing increased by 15.2%, from R416-billion to R513-billion. Inventories relative to output increased from 17% to 21% between 2007 and 2009.

Jan explains that as the recession deepened, inventories built up due to lower consumption. “This, in turn, led to larger inventory holdings that needed to be financed and also to less ef-ficient transport due to lower volumes and more

Hampering Economic Growth

The State of Logistics survey has become one of the premier references for logistics in South Africa through benchmark-driven research and the CSIR’s long-term partnership with Imperial Logistics and Stellenbosch

University. This year, topics centre on ‘green’ logistics (including ‘extra distance’ measurement); deteriorating road quality and benefit-cost analysis; supply chain risk management; the skills issue; and rural logistics.

One can track trends of various important logistics factors within the country

Presenters at the 7th State of Logistics™ survey launch: David King (scientific editor and events programme director, CSIR Built Environment); Dr Jan Havenga (Stellenbosch University); Hans Ittmann (CSIR Built Environment Executive Direc-tor); and Abrie de Swardt (Imperial Logistics)

GREEN LOGISTICS


empty-hauls. Inventory carrying times increased from 12 to 15 days on a weighted average basis.”

Performance by transportation mode“For the first time since the launch of the survey there has been a decline in transport activity on all typologies, except bulk mining,” Hans points out. “The impact of the recession is evident. There has been a slight reduction in freight tonnage moved; however, the tonnage split between road and rail remained almost the same at 88.7% on road and 11.3% on rail.”

Only profitable rail infrastructure was used, while larger components – notably the branch lines – in more rural areas were not utilised, while simultane-ously becoming increasingly dilapidated. “In terms of rail as a freight transportation mode, we could be dealing with a ‘low cost, low service’ situation compared to a ‘high cost, high service’ one,” he says.

The survey indicates that South Africa is un-derperforming in terms of harbour efficiencies. Referring to a recent study commissioned by the Ports Regulator, it cites that the Durban harbour

GREEN LOGISTICS

Total logistics costs as a percentage of GDP for selected countries

under a variety of performance objectives.”

He says that effective outsourcing can reduce logistics costs by optimising loads, orders and capacity, adding: “Only as good as their weakest link, supply chains should provide one or more of six basic outcomes, namely cost, responsiveness, security, sustainability, resilience and innovation.”

Collaboration and competitivenessThe 7th State of Logistics reiterates the need for closer collaboration between the public and private sectors to deliver economic infrastructure that supports economic growth and job creation, and to tap into the current commodity upcycle.

“Government recognises that logistics and supply chain management are critical for the competi-tiveness of the country. According to the recent New Growth Plan for South Africa, bottlenecks and backlogs in logistics hamper economic growth and raise costs,” says Ittmann.

A move from mediocrity“Supply chain performance will be mediocre unless the organisation, people, skills sets, and culture are world-class. If we settle for such me-diocrity, South African business will be sluggish, generating sub-standard economic growth,” says Ittmann. “Our logistics sector needs to outperform its historic highs,” he adds. As recently stated by Finance Minister, Pravin Gordhan, the coun-try needs to achieve seven percent in economic growth annually, for the next 20 years.

“South Africa is on a potentially exciting growth path. Our new membership to the emerging market leadership, BRICS (Brazil, Russia, India, China and now South Africa) provides a confidence boost to the

Fuel costs for logistics given various scenarios

goal of becoming an entry point for countries and companies looking to do business on the African continent. Cutting our total cost of logistics by ap-plying innovative, pragmatic thinking holds the key to the contribution of logistics to improved global competitiveness for the country,” concludes Ittmann.

The 7th State of Logistics survey is available at:http://www.imperiallogistics.co.za/csirebook.Imperial Logistics – Abrie de Swardt, Tel: 011 821 5500; Email: [email protected]

was found to be the most expensive among 12 international harbours used for benchmarking, and its productivity was rated the lowest overall. In this regard, any comparison with other countries must be done within the specific context, a point stressed throughout the 7th survey.

Value creation through outsourcingThe survey indicates that approximately one third of transport activity in South Africa is outsourced. It states: “The major growth opportunity for road hauliers is not among available outsourced freight, but rather growth in outsourcing, often achieved by total logistics arrangements that can highlight savings on cost of ownership.”

“While traditional supply chains offer three primary benefits, namely reduced costs, faster delivery and improved delivery, these advantages are no longer sufficient in the modern business world,” says Marius Swanepoel, CEO of Imperial Logistics. “A new paradigm is emerging where supply chains should also serve as a vehicle for developing and sustaining competitive advantage

http://www.imperiallogistics.co.za/csirebook



SOFTWARE

K eynote speaker, humorous chess grandmaster Garry Kasparov rubbed his

hands throughout his 60 minutes, and said he had never been so cold, not even in Russia. He joked that the standard safety warning about the fire es-capes could provoke a rush to actually find a fire, and also thanked the attendees for not bringing vuvuzelas.

A major theme of the event was “See how going social can drive better business results”, under the slogan “Connect and Collaborate”. We all hear anecdotes about the generation gap regarding social media but we may only just be starting to notice the effect on enterprises. Social Business is one of the fastest growing segments of IBM’s software range.

Social Media

Anyone who braved 2010 World Cup evening matches in Gauteng at zero temperatures, will be able to picture the setting for the IBM Software

Day at Soccer City at the end of May. It coincided with the first cold front of winter, and an SMS at 07h00 warning delegates to “dress warmly” was

an understatement.

Social Business is the process of taking all that is good in social media technology and using it to better your business, for instance breaking down the functional silos. A major global IBM client in the chemicals manufacturing industry significantly reduced research lead times to solve a crop infection problem in China. The client put the word out round its divisions and the answer arrived in record time.

Bad news travels even fasterWhen it comes to the supply chain, basically, the customer is in control. Get a bad review and the fall-out is global, literally! On the business front, you may be interested to know what others are saying about your strategic suppliers.

Good news travels fast but as we all know, bad news travels even faster. It’s now about commu-nities, about understanding that your business practices are there for all to see. The younger generation is not going to stop at casual chatting about boys/girls, cars, books etc – business is going to join the fray, and we’d better be ready.

http://www-05.ibm.com/za/event/software_day/index.html Tel 011 302 9111

Get a bad review and the fall-out is global, literally!

Main clueThe term “collaborate” gives the main clue. It has rung the right chord since Efficient Consumer Response (ECR), and Collaborative Planning, Forecasting and Replenishment (CPFR), yet industry panel discussions still regularly reveal that ‘collaborate’ is lip service and the real world is different.

So we introduce new catch phrases, such as:

• Social Business connects people across boundaries

• Baby boomers were the email generation

• Leadership now is influence, not control

• The new generation wants flexibility, freedom and fun.

http://www-05.ibm.com/za/event/software_day/index.html

Fortunately for us, he never enjoyed one.

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An integrated report gives users an all-round view of the company by including social, environmental and economic performance along with the

company’s financial performance.

The issue companies face, however, is that there are no set standards on integrated reporting. So, it is for this reason that various organisations have come together to form the Integrated Reporting Committee (IRC). The IRC will issue guidelines on good practice in integrated reporting. It will be chaired by Professor Mervyn King.

The founding organisationsThe Association for Savings and Investment SA (ASISA); Business Unity South Africa (BUSA); Institute of Directors SA (IoDSA); JSE Ltd; and The South African Institute of Chartered Accoun-tants (SAICA).

SUSTAINABILITY

An Integrated Report

The over 450 companies listed on the Johannesburg Stock Exchange (JSE) are required to produce an integrated report in place of their annual financial report and sustainability report for all year ends

commencing on or after 1 March 2010 or explain why they are not.

negative impacts of the company’s operations, and its plans to improve the positives and eradicate or ameliorate the negatives in the financial year ahead, are conveyed in the integrated report. It states that integrated reporting means a holistic and integrated representation of the company’s performance in terms of both its finances and sustainability.

Leon Campher, Chief Executive Officer (CEO) of ASISA, says this project is considered a priority initiative given the volumes of annual reports generated by ASISA’s member companies. “We have 153 member companies managing in excess of R2.5-trillion of assets. Integrated reporting will facilitate more holistic and meaningful report-ing of financial results, enabling shareholders and clients to gain a better understanding of a company’s triple bottom line. This initiative also ties in closely with other projects ASISA is cur-rently involved with around socially responsible investing and the governance of companies that our members invest in.”

Holistic viewFreda Evans, JSE Ltd’s Chief Financial Officer, believes that the inclusion of sustainability re-ports in financial statements has greatly enriched financial reporting. “Reporting on the financials alone is no longer sufficient, as all aspects of the business – environmental, social and governance aspects – impact on the company’s bottom line. Integrated reporting gives potential investors and other stakeholders a holistic view of how the company is managing all of these factors and their potential impact of the company’s position.”

Proponents of integrated reporting note that the comprehensive disclosures of integrated reporting will close the gap between a company’s reported performance and the legitimate interests as well as expectations of its stakeholders.

Thando Pato, SAICA, Tel: 011 621 6898, [email protected] or Edward Makwana, SAICA, Tel: 011 621 6713, [email protected]

The King Code of Governance (King III) recom-mends that organisations produce an integrated report. As King III now falls within the listing requirements of the JSE, listed companies will, for all year ends commencing on or after 1 March 2010, have to produce an integrated report or explain why they are not.

“Integrated reporting is the evolution of financial reporting,” says Prof. King. “It’s important to note that integrated reporting is not replacing financial reporting, rather it reflects the evolution of re-porting and the company’s role in society. “South Africa is among the first countries in the world to require integrated reporting of listed companies. This puts us way ahead of the game,” he says.

King III states that sustainability reporting and disclosure should be integrated with the company’s financial reporting. The company’s board should ensure that the positive and

integrated reporting means a holistic and integrated representation of the company’s performance in terms of both its finances and sustainability

Mervyn King




www.ils.co.za


Ronnie bags on designated days for pick up. Mondi Recycling’s Community Pick-Up programmes are focused on kerbsides, townhouses, schools and offices. In addition to branded paper collec-tion vehicles, the company has also developed Paper Bakkies modified with ‘paper cages’ for this purpose.

An owner-driver system streamlines the process further. Sappi also has a well-developed recycling programme, with its War on Waste offering a network of contractors available to negotiate a solution to your recycling needs.

Homeless helpMondi’s programme includes around 177 branches and agents throughout the country that accept deliveries of paper from members of the public, while Sappi’s nationwide network of outsourced collectors includes over 100 baling sites.

If your company’s waste paper ends up in a Pikitup outside the office entrance, it’s likely that your letter will get into the hands of one of the informal workers you may have seen rifling through your rubbish. While many see these people as a public nuisance, they actually have an important func-tion in the recycling process, collecting paper and delivering it to the collection branches, which in turn, send it to recycling plants. In recent articles, Mondi estimates that it provides work for about 2 500 people in the informal sector each year, with Sappi quoting similar figures.

Paper Chase

In South Africa, it is estimated that 1.6 million tons of recovered fibre are available for collection annually

PULP & PAPER

I n spite of attempts to introduce paperless of-fices and contrary to what the ‘techies’ keep telling us, experts predict that the world’s paper consumption will continue to climb,

with 2020’s figures rising 77% over those of 1995. In South Africa, it is estimated that 1.6 million tons of recovered fibre are available for collection annually. We currently only collect about 935 000 tons.

The biggest culprit in the war on wastepaper is actually packaging. While 115 billion sheets of paper are used annually by PC users, packaging accounts for about 41% of all paper consumed. Fortunately recycled material is very suitable for the manufacture of cardboard, so this predicament could be fairly simply remedied. Most corrugated fibreboard boxes have over 25% recycled fibres with some being 100% recycled.

Paper trailBut expecting everyone to use recycled paper is easier said than done when the stuff is not as readily available as it should be. This is troubling, because in order to meet our growing rate of virgin fibre consumption, South Africa will need to increase its for-estry areas by 25 000 hectares a year, instead of the 1 500 currently allocated.

In an ideal world, your office has a paper recycling system. At this point, good paper should be separated from bad, with polystyrene, waxed cartons and cigarette butts being discarded and letters, envelopes, magazines and newspapers col-lected by a recycling agent. Since your letter was probably printed on standard stock paper, it’ll find its way into the ‘good’ bundle.

Designated days These days, most of us have heard of Ronnie Recycler and the more socially aware will dutifully put out

It is estimated that 1.6 million tons of recovered fibre are available for collection annually

You’ve seen those okes on the side of the road, heaving teetering trolleys of paper and cardboard through gutters and potholes; ever

wondered where they go?


PULP & PAPER

Remote possibility that your piece of junkmail may end up as part of the next Playboy centerfold

Albert contends with. Weather can also throw a spanner in the works.

“The paper must not be wet,” he advises. “Some people think they can make more money if the cardboard is heavy with water, or if they put bricks in the parcels. But this does not work because the paper is checked when we deliver it.”

Good paperStaff at recycling branches sort and discard unsuitable materials, ensuring that the paper arriving at the recycling plant is fit to be re-used. While much of our daily paper waste can be recycled, some items can’t go through the system. Cement bags, clingfilm and anything with foil lining must be removed. Branches that return unsorted paper are paid a bulk rate, which is lower than the sorted rate.

“I always look for good paper,” Albert says with pride. “Newspapers and magazines are best. Or sometimes when people are moving

house, they throw out a lot of boxes. It’s hard to transport my paper when I have a big load, but it’s ok because I know I’ve made more money.”

Profitable businessWith over 36 million tons traded annually, re-covered paper is an international commodity and most countries have access to the resource. The process is relatively simple. At the recycling plant paper is put in a vat, where it is mixed with water and chemicals to turn it into slush. This is cleaned thoroughly to remove staples, thread and grit, which may ruin the new paper. Ink is removed in a machine that uses soap bubbles to lift the ink from the paper.

After three more rinses, the slush is bleached and then cleaned again. It is now ready to move to the recycling plant to a machine that produces newsprint. While the magazine sector has largely not yet embraced the recycling route, a number of local newspapers are printed on paper with at least 25% recycled content.

So, while there’s a remote possibility that your piece of junkmail may end up as part of the next Playboy centerfold, it’s more likely to be reincarnated as tomorrow’s news, or a cardboard box. In any event, it will be serving a far better purpose than when it was advertising the latest marketing gimmick.

Sources: www.environmentalpaper.orgPaper Recycling Association of South Africa www.prasa.co.za, Visit http://www.sappi.com/SappiWeb/About+Sappi/Sappi+Kraft/Sappi+Waste+Paper/ for contact details of Sappi’s recycling network.Visit www.mpsa.co.za for a full list of recyclable papers, as well as contact details of Mondi’s affiliated branches. Alternatively, visit http://www.faithful-to-nature.co.za/Recycling-Index-sp-5.html for a nationwide choice of recycling companies.

SupplementIt is believed that about 12 000 informal trad-ers operate in this sector in South Africa. These workers can earn between R750 and R1 000 per month; for some, this supplements other income streams, while others may even survive on the sum.

“Supply Chain Today” caught up with Albert, a paper collector who operates in the north-western suburbs of Johannesburg to hear his perspective. “It’s hard work, but it’s ok. I am my own boss and I can keep food on the table,” he tells us, smiling broadly.

Harrowing workAlbert plans his route according to the local Pikitup schedule, collecting waste paper put out along with other garbage for collection. It’s a harrowing regimen. “I must start early, usually at about 5 o’ clock, so that I can get the best paper before the trucks or the other guys arrive. Sometimes people put their rubbish out late, so I can’t check it.

“Other times people leave it out the night before, but dogs might get in, or other collectors see it first. It would be good if people would learn to separate their paper.” Competition from other collectors is fierce and prime pick-ups are hotly contested.

“I also speak to some of the men at the super-markets, who tell me when there are boxes to collect.” Here, too, pickings can be slim, with collectors standing in line for available packag-ing material. Long distances, dangerous roads and unfriendly dogs are just some of the hazards

http://www.environmentalpaper.org

http://www.prasa

http://www.sappi.com/SappiWeb/About+Sappi/

http://www.mpsa.co.za

http://www.faithful-to-nature.co.za/


Market Forum

International awardWarehouse automation supplier, Knapp, has won a coveted MM Logistik Award at the recent CeMAT logistics exhibi-tion in Hanover. The Austrian-owned group scooped the award in the software category for its innovative warehouse software module, KiSoft Mobile Warehousing. With more than 1 200 active logistics systems and one new startup every four days, Knapp is the leading European software provider for high-performance logistics solutions.

Knapp’s KiSoft Mobile Warehousing ensures process op-timisation independent of location, with mobile handling of all processes throughout the warehouse. With the

capability for processes such as goods integration and or-der picking to be provided on transport vehicles, this new module opens up a completely new range of possibilities for optimisation across the supply chain, including the possibility of cross-docking on the move. Delivery drivers are equipped with mobile terminals with which to carry out paperless business processing while on the road.

The terminals have all the data required, including master data for goods integration and customer data for delivery information. The intelligent system synchronises the required data on the terminal at every stop in a distribution centre via WLAN, with short-term changes also transmitted to the terminal in between stops.

The terminal also receives updates from headquarters at regular intervals via GPRS. The potential for reduced delivery distances, lower transport costs and environmen-tal benefit is enormous. Product quality gains are also achievable, especially for fresh food deliveries.

Craig Rollason, Knapp, [email protected]

Gerald Hofer (left), KNAPP’s Chief Executive of Customer Relations, accepts the MM Logistik Award for the software category from Ken Fouhy, MM Logistik’s publisher, at CeMAT

Two-tier ERP systems 2011 and 2012 will see the continued growth of cloud-based solutions, says Softworx MD, Jane Thomson. “While most ERP systems still involve on-premises solutions, cloud-based systems are gaining favour, and will continue to do so over the next two years,” she explains. “This is due to the rapid deployment capabilities, constant innovation qualities and subscription pricing of cloud-based offerings.

The fast-paced business environment encountered by global companies today involves the need for decreased costs and increased flexibility. These are some of the factors driving a related emerging trend in the industry, being the implementation of two-tier ERP systems, says Jane.

Two-tier ERP systems allow companies to have one full-featured ERP solution at head office and a second ERP system for company subsidiaries. Other companies might select one ERP solution for their corporate and financial systems and another to deal with their specific plant and manufacturing operations.

“Companies are increasingly finding that running everything on a single ERP solution has proven unmanageable, expensive and inflexible in the fast-paced global world,” says Jane. “Running a single solution leaves you with no downtime windows for preventative maintenance or upgrades and the diverse needs of many companies cannot be met by a single system.” Companies are also finding that upgrading a single global system is both costly and time-consuming, which is not the case with a two-tier ERP system where deploy-ment can be quick, convenient and cost-effective.

Jane Thomson, Softworx, Tel 011 607-8299, Fax 011 607-8428, Email [email protected], www.esoftworx.co.za

End-to-end qualityNow in its sixth edition, Oliver Wight Checklist has set even more demanding standards to provide a comprehen-sive vehicle for companies on their journey to achieving business excellence.

Nampak Flexible, Africa’s leading flexible packaging sup-plier, was recently awarded Capable Integrated Business Planning (IBP) accreditation after a stringent audit by Oliver Wight. IBP can most simply be described as advanced sales and operational planning (S&OP). However, unlike



http://www.esoftworx.co.za


S&OP, IBP brings a truly strategic perspective, integrating diverse processes in the extended supply chain, product and customer portfolios, customer demand and strategic planning, into one seamless management process.

Attached Image: Nampak Flexible’s Grant Page (left) and Monte Maritz (right) receive Flexible’s Capable Integrated Business Planning (IBP) ac-creditation from Oliver Wight Managing Partner Lloyd Snowden (centre)

Yunus Khan has been appointed as the warehouse and logistics manager at concrete manufac-turer, Mapei South Africa Pty (Ltd).

Yunus Khan

Seven years after becoming the youngest harbour master in the world, Rufus Lekala of Transnet National Ports Authority will again make history when he takes up office as the country’s first Chief Harbour Master of colour. His appointment, effective 1 June, also makes him the youngest person in this position worldwide.

Rufus Lekala

Logistics road transport company, Concargo (Pty) has appointed Kaspaas Myburgh as general man-ager of its Refrigeration Division.

Kaspaas has extensive experience having worked with one of the largest temperature controlled fleet specialists in South Africa.

Kaspaas Myburgh

Charles Brewer has been appointed as Managing Director for DHL Sub-Saharan Africa Express.

Charles Brewer

On the moveOn the move

Market Forum

In terms of supply chain management, strategic planning and other areas, Nampak Flexible is far ahead, creating closer partnerships with its major client base and proving, by way of outside accreditation, that they are top class.

“Since Nampak Flexible has undertaken the Oliver Wight process, lead times have reduced significantly, inventory has almost halved, customer service is at a higher level and the whole process of doing business with the company is smoother,” says Grant Page, Nampak Flexible’s Operations & Supply Chain Director. “Integrated business planning has become the way Nampak Flexible does business, its part of our culture, and has produced great communication between people and departments, resulting in end-to-end quality,” says Grant.

Grant Page, Nampak Flexible, Tel 031 791-6333, Fax 031 791-2108, www.nampak.com

Index to AdvertisersApex 13Bartrans Outside Front CoverCargo Carriers 12Cradle 21Fried Pallets 17Goscor 14ILS 34Imperial Logistics 22Interroll 24Linde 5Nkosi’s Haven 32ProScan 6Psion Outside Back CoverSA Industrial Linings 12Sapics 16Scania 28Toyota Inside Front CoverTwintec Inside Back CoverUniversal 8

http://www.nampak.com


On the moveOn the move

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