Western Cape Business News

Send  Share  RSS  Twitter  20 May 2009

LOGISTICS: Cape Firms The Nicest Folk


Recent Western Cape Business News

COLLABORATION is considered to be a one of the most important functions both forwards and backwards along the supply chain. This is especially true in overcoming what is considered to be the greatest challenge in the industry – that of planning and forecasting.

A recent study into the supply chain and logistics industry in South Africa, Supply Chain Intelligence Report (SCIR) 2009, has revealed that while companies in South Africa generally operate with low levels of collaboration, companies based in Cape Town appear to collaborate more than companies located elsewhere in South Africa.

Once the TerraNova SCIR 2009 survey was completed individual sectors were analysed as well as different regions. The analysis of the results by region indicated that companies based in Cape Town collaborate more with suppliers and customers than companies based elsewhere in South Africa.

This is particularly true with respect to collaboration with suppliers. Approximately 48% of Cape Town based companies collaborate with suppliers compared with the overall total sample which stands at only 35%. The same finding holds true for collaboration with customers, although only marginally so, as 30% of Cape Town based companies indicate they collaborate with customers compared to 28% of the total sample.

Similarly, the Cape Town based companies indicated a much lower perception in risk in collaboration than companies located elsewhere in South Africa. With respect to suppliers, only 17% of the Cape Town based respondents perceive collaborative relationships to be risky in some form or another, compared to 21% for the total sample. In terms of risk when collaborating with customers, 19% of the Cape Town based companies believe such collaborative relationships are risky, compared to 24% for the total sample.

The Cape Town based companies also indicate that they are collaborating with their competitors far more than companies located in other parts of South Africa. Only 50% of Cape Town based companies are either not, or have no intention of collaborating with their competitors, compared to 65% of the total sample.

It is a well known fact that collaboration improves visibility along the supply chain, thereby allowing the companies in this collaborative supply chain to better anticipate and plan for customer-driven demand, and better serve end-customers - the final link in the supply chain. Ultimately, high levels of collaboration ensure a company is better positioned to improve their competitive advantage and thereby their profitability and customer loyalty.

Collaboration with competitors can improve an industry as a whole. Innovative ideas, products and processes are best drawn from collaborative relationships, improving an industry’s efficiency and effectiveness and importantly, in an increasingly global market place, ensuring an industry achieves competitiveness and establishes itself on an international level.

The 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 2009 edition saw over 200 senior company officials, from a variety of industries and from both a strategic and supply chain perspective, take part in an in-depth survey.

The aim of the South African edition of SCIR was to uncover the approach that the most successful companies in the country have adopted to ensure greater visibility and reactivity in their supply chains, thereby minimising the challenge of planning and forecasting and ensuring greater competitive advantage and profitability.

SCIR 2009 incorporated the Complexity Masters theorem, developed and published by Deloitte in 2003. The theorem holds that companies with complex value chains and the capability to properly manage those complex value chains are 73% more profitable than their peers.

In order to apply the theorem to an emerging economy such as South Africa, TerraNova Research included several additional questions into the survey so as to address complexity and capability issues relevant to local conditions.

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