Western Cape Business News

Send  Share  RSS  Twitter  18 Feb 2009

MANAGEMENT: How To Weather The Storm


Recent Western Cape Business News

The recent study into the supply chain and logistics industry, Supply Chain Intelligence Report (SCIR) 2009, indicates that only 6% of companies in South Africa are managing the current global financial crisis optimally. Incredibly these companies are not just better at dealing with difficult times, but 67% of them are more successful than their peers

SCIR is an annual, independent and international study into the supply chain and logistics practices of emerging economies around the world. Developed and compiled by TerraNova Research, the 1st 2009 report covers the supply chain industry in South Africa.

The study incorporated the Complexity Masters theorem, developed and published by Deloitte in 2003, which holds that companies in the USA and Europe with complex value chains and the capability to properly manage those complex value chains are 73% more profitable than their peers. It was found that these highly successful Complexity Masters constituted only 7% of the total number of companies in their sample. When the theorem was applied to the South African context, 6% of the total number of companies surveyed were 67% more profitable than their peers.

Over the past year the world has experienced several dramatic shocks, including spiking fuel prices, rising food and energy costs, and a global meltdown of financial institutions.  While South Africa is currently contending better than many more “developed” countries with such global market issues, unique local conditions are also contributing to the daily challenges for business in the country.

The study included local factors, such as a massive rate of urban development and migration, political uncertainty and a skills shortage. The hypothesis of the study was therefore based on the notion that both global and local challenges have created the conditions for a ‘Perfect Storm’ which significantly complicates the single greatest challenge for supply chains around the world - that of planning and forecasting.

SCIR 2009 questioned respondents on what current and pending market-changing events are affecting or a likely to affect their businesses and supply chains. While the effects of the Perfect Storm on local companies could easily be predicted, it is the amount of and direction of action from the respondents that is of interest.  

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