Mar 02, 2012
South Africa needs to relieve supply-chain constraintsBack
© 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
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other Economy News
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
This Week's Magazine
Lifting, transporting, installing and ballasting solutions provider Ale has expanded its global fleet of trailers and invested in the latest range of widening trailers that can be mechanically widened from 3 m to the desired width for any project. Ale ordered 48 axle...
The market for the BMW 7 Series in South Africa differs quite significantly from the rest of the world. China, the US and the Middle East almost exclusively buy the long-wheel-base version, using the German manufacturer’s luxury high-end sedan as a chaffeur-driven...
January new-vehicle sales fell by 6.9%, to 48 615 units, compared with the same month last year. Statistics released by the Department of Trade and Industry show that the domestic new passenger-car market declined by 6.1%, to 34 936 units, compared with 12 months ago.
Information technology (IT) equipment and infrastructure multinational Dell is providing open infrastructure systems for clients so that they can use any systems, including innovative new systems, that suit their business needs, says Dell Europe, Middle East and...
South Africa’s State-owned defence industrial group, Denel, has set up another international partnership, based in Hong Kong. This new subsidiary is Denel Asia and it is a joint venture (JV) with South African private sector company VR Laser.