SA transport and logistics to leverage advantages of improved supply chain visibility to reduce costs
For many sub-Saharan countries, South Africa is often considered the ‘gateway’ to the African continent, and is currently in a strong position with regard to international shipping and trade – both into and from Africa. However, there are a number of other ports in Africa which are becoming increasingly competitive, introducing risk for SA transport and logistics providers that rely on international business.
While SA’s infrastructure is good, there is always room for improvement, and as a country we cannot afford to rest on our laurels.
Enhancing South Africa’s competitiveness in the African transport and logistics environment includes:
- Lowering costs of both manufacture and distribution;
- Optimising timescales of both manufacture and distribution;
- Eliminating wastage of resources in both manufacture and distribution;
- Faster data analysis to provide quicker access to business intelligence;
- Faster distribution of business intelligence to enhance decision-making.
If South Africa is able to leverage the advantages of improved supply chain visibility, the overall transport and logistics costs will be reduced, making the country more attractive to international suppliers and increase attraction value for foreign investment.
Enhancing visibility across the supply chain of SA transport and logistics
Two of the greatest challenges within transport and logistics are the tendency toward siloes of information and the tendency toward siloes of functionality within the different areas of the supply chain. This makes end-to-end process integration, optimisation and visibility exceptionally challenging, as information is not available cross-functionally to all parties involved.
For example, the majority of manufactured goods are generally transported multiple times through the logistics supply chain as they move from raw materials to product components, and finally an end product for retail.
However, there is today no simple way of tracking these goods throughout the process – where the goods currently are, how long they will be there, when they can be expected to move on to the next stage and when they will be completed – and especially across multiple processes.
Improving visibility across the supply chain not only lowers cost but also must include multiple transport modes
This makes optimisation of transport processes difficult, as this can often only be arranged after goods are ready. This also affects manufacturing cycles, employee working hours, employee productivity, sales cycles and many more areas of the economy. If this information could be collected and disseminated dynamically, relevant and timely, information could be provided to all parties within the supply chain life cycle, improving and optimising processes, and thereby enhancing productivity and competitiveness.
Improving visibility across the supply chain not only lowers the cost of delivery across multiple iterations through the supply chain, but must also include multiple transport modes – sea, road, rail and air.
By providing seamless visibility across these different modes, planning and scheduling can be dramatically improved – everything from power consumption to staffing can be optimised based on actual needs and requirements, lowering the overall cost of doing business for all stakeholders in the supply chain.
Improved visibility can also help to minimise stock theft in transit, as unscheduled stops will be picked up immediately. By optimising scheduling, traffic congestion can also be alleviated. For example, if a ship is delayed, trucks need not be sent out to the harbour unnecessarily.
Ultimately improving the supply chain requires visibility, optimisation and efficiency, which in turn require the use of intelligent next- generation ICT services and solutions.
Dynamic supply chain logistics planning ensures that transport can become more proactive, rerouting if necessary to avoid delays, predicting scheduling times and deriving intelligence from collected data. This is made possible thanks to the evolution of a number of technologies.
Technology evolution in the SA transport and logistics sector
Improving visibility throughout the supply chain and introducing intelligent technologies such as telematics, mobile, in-memory computing, big data and cloud technology, as part of smart logistics solutions, are essential steps.
Telematics systems are used to collect a wide variety of data that can enhance intelligence about the end-to-end logistics supply chain. Big Data and business intelligence technologies allow this data to be combined, aggregated, modeled and queried in order to develop business intelligence (BI). In-memory computing technologies allow the intelligence to be derived at markedly faster speeds – sometimes a thousand times faster than traditional disk-based BI systems.
Cloud technologies allow for flexible scaling up and down of the underlying technology infrastructure (as and when required) that supports particularly the Big Data systems, lowering overall cost of ownership of technology infrastructure.
Finally, mobile technologies allow for this information to be delivered in near real-time to the relevant users anywhere, on the device of their choice and made available to all relevant stakeholders so that it can be integrated into manufacturing, retail and all other areas of the supply chain, allowing for optimisation and improved planning, scheduling and efficiency. This in turn enables decision-makers to become more proactive, using meaningful insight to drive improved logistics processes.
Enabling South Africa to become more competitive around its products and services in the global transport and logistics marketplace requires significant improvement to visibility of the supply chain utilising next-generation ICT services. These services can help to improve supply chain foresight, limit the physical impacts of late deliveries, damage, shortages and accidents, and reduce the financial impact of excessive costs and wasted scarce resources.
They can also increase information visibility by eliminating system failures and creating information availability, and improve collaboration through increased communications and technology utilisation. Delivered using Cloud, Mobility, Big Data and smart technologies, these next-generation ICT services are key to unlocking South Africa’s potential as a world-leading source, destination and enabler for goods, services, transport and logistics.
By Tony Willis