Mar 02, 2012
South Africa needs to relieve supply-chain constraintsBack
Maputo|Barloworld Logistics|Africa|Egypt|Nigeria|South Africa|Logistics|Transport|Clem Sunter|Kate Stubbs
© Reuse this
In its ninth publication of ‘supplychainforesight’ 2012, Barloworld said that Nigeria was seen as the most likely to overtake South Africa as leading economy and gateway to Africa.
“The research showed clearly a shift in global economic power towards emerging market economies. This shift should present South African businesses with a significant opportunity to capture market share. Companies should be embracing emerging market economies as trading partners and as new markets – and this is especially so of the African continent, where South Africa has for so long been seen as the trading and logistics gateway into Africa.
“That position is now under threat from other African countries like Nigeria, Egypt and other Southern African trade corridors such as the Maputo corridor,” Barloworld Logistics marketing executive Kate Stubbs said.
She noted that there was renewed and intense interest from the developed world to invest and grow businesses in Africa.
“The research highlighted that South African companies need to understand the threats and opportunities present for industry and the national supply chain in other African markets,” Stubbs said.
Respondents comprising top management and business owners across all sectors of the South African economy cited increasing flexibility, agility and responsiveness as the top strategic objective for their businesses, while making better use of the supply chain to gain competitive advantage and expansion into emerging markets were also ranked as critically important strategic objectives.
However, the cost of doing business is the most significant strategic constraint businesses have to deal with in South Africa. Currency volatility and the strength of the rand were also cited as critical constraints to doing business in South Africa, followed in severity by local competition and the macroeconomic uncertainty that currently dominates world markets.
More specifically, respondents indicated that when it came to supply chain management, the cost of transport is the most significant constraint to doing business in the country. South Africa’s economic hub, Gauteng, is located about 600 km from the closest port, making it a transport-intensive economy.
The country is characterised by an imbalance between road and rail costs, while the situation would be exacerbated with the imposition of tolling and carbon tax fees. The research pointed to a critical communication disconnect between the public and private sectors, making it difficult for companies to effectively plan their strategies.
Other factors cited as restraining the supply chain included finding skills and expertise to enhance the supply chain segment, the inefficiency of ports and harbours, labour unrest affecting supply chains and reducing the environmental impact of supply chains.
“These days cost management and partnership are essential to the use of the supply chain as a competitive advantage,” Stubbs said.
“The only one thing businesses could be certain about during the year is that almost all aspects of the business environment are changing,” strategist Clem Sunter said during the research results presentation.
“Africa is a gold mine if one offers the right product,” he said.
The research pointed to a set of action points that South Africa should heed to develop its market competitiveness. This included the need to support and develop industries that will provide the country with an international competitive advantage, align skills development and programmes to the needs of such industries, organise industries more collaboratively, so that more effective lobbying and skills development can be realised and the need for private and public sector collaboration at policy formulation level.
Edited by: David Shepherd© Reuse this Comment Guidelines
Other Transport & Logistics News
Machine moving and abnormal load specialist company Lovemore Bros successfully transported two cumbersome container straddle carriers from the Port of Durban to the city’s former major airport, Durban International Airport on February 11 and 12.
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
This Week's Magazine
The Electronic Systems Laboratory (ESL) of the Department of Electrical and Electronic Engineering at Stellenbosch University is strongly reaffirming its position as one of South Africa’s leading centres for satellite technology and expertise. It is currently...
The world’s lowest-cost diesel-electric locomotive is not made in China, but in Pretoria, at RRL Grindrod Locomotives’ newly upgraded 30 000 m2 plant. The company’s locomotive pricing is “more competitive than any other original-equipment manufacturer (OEM)...
The South African Defence Review 2012, released to the public at the end of last month (despite the year given in its title) recommends the creation of the post of Chief Defence Scientist. This official would be responsible for the management of defence technology...
AltX-listed engineering technology company Ansys has been awarded an R188-million contract by Transnet to supply integrated dashboard display systems to the freight rail utility’s locomotives. Black-owned and controlled Ansys developed the bespoke integrated system...
South Africa’s sole nuclear power station Koeberg, which is located in the Western Cape, breached a major operations milestone on April 4, which marked the thirtieth anniversary of Unit 1 having been connected to the grid. Eskom, which operates the two-unit plant,...