Supply chain service company Barloworld Logistics launched its supply chain foresight 2016 programme in Johannesburg earlier this month, which reviews the change and adaptation of South African businesses over the past year.

The in-depth study explores how companies have fared and analyses key insights discovered along the way.

“As we move into a period of higher market disruption and greater economic and political uncertainty in South Africa, the ability of an organisation to sustain market position through its traditional business model and strategy has become increasingly challenging,” notes Barloworld Logistics CEO Steve Ford.

He adds that, during the study, the company assessed the ways in which local companies are preparing for future uncertainty, which includes pinpointing clear strategies.

The supply chain foresight included an independent Web-based survey to capture the independent views and opinions of South African business leaders and supply chain professionals.

Barloworld Logistics contracted international growth consultancy company Frost & Sullivan to conduct the survey.

More than half of the respondents from this year’s survey hold senior executive or managerial positions, with a slight increase in responses received from CEOs. There was also good representation from different job functions, providing a more holistic view of business strategies and supply chains in South African companies.

“This also indicates the awareness, relevance and importance of supply chains in business today,” says Barloworld Logistics marketing head Kate Stubbs.

Large companies, with turnovers of R1-billion to R5-billion a year, comprised 48% of the sample, with the remaining 52% coming from respondents in small, medium-sized and micro- enterprises (SMMEs).

“It was interesting to note some new job titles and descriptions being listed in the ‘Other’ category again this year,” she says, adding that this is indicative of the changes taking place in the roles, responsibilities and traditional business structures, while reflecting the rise in responses from SMMEs.

Respondents expressed concerns about current factors that they cannot influence, such as global economics, and local political and social uncertainties. These factors have resulted in more of a short-term focus on sustainability and a less optimistic view on driving forward-looking strategies.

The fact that the majority of respondents believe that they would have handled change and the adoption of new strategies differently, as the performance of their businesses did not meet all expectations, “possibly indicates the adverse effects of external factors, unforeseen events, weak strategies or lower-than-required management effort to ensure success”, says Stubbs.

Skills shortages remain a major constraint for business success in the long term. The supply chain foresight suggests that an understanding of the elements required to develop relevant skills should guide education and training accordingly.

Further, respondents indicated current key focus areas of their businesses are managing rising operating costs, pursuing customer-related strategies and addressing ongoing technological developments.

Operating costs are still regarded as one of the most significant constraints for business, which remains in line with previous surveys.

“We believe it is perhaps more prudent to understand the relationship of costs relative to the value they derive,” explains Stubbs, adding that many companies have shown that it is possible to receive greater returns and value despite increasing costs.

“The true determination of the sources of profit and/or profit erosion in a business is clearly a growing need, coupled with the ability to use technology effectively to convert data and information into actionable intelligence.”

The key opportunity expressed by respondents was the growth opportunities outside the country, particularly in regional and neighbouring territories. Over the past few years, respondents ranked expansion into new territories as one of their top five business objectives.

This year, 69% of the respondents said they have plans to enter into new markets, but their expansion plans remain regionally focused, in line with strategies indicated in an Africa-focused supply chain foresight study conducted in 2012.

Meanwhile, only 35% of respondents indicated that they were able to positively respond to future business opportunities. The remaining 65% indicated that they were either partially prepared or unprepared.

“This highlights the uncertainty pervading today’s environment,” says Stubbs, adding that this is to be expected, owing to the ‘age of innovation’ in which businesses currently find themselves. She notes that this raises questions regarding the confidence businesses have in their skills and ability to “implement, manage and successfully bring to fruition the necessary changes identified in the opportunities ahead”.

The study found that two key areas of focus are required by respondents to prepare their companies for the future. The first pertains to customer- or market-related issues of customer strategy, market intelligence and data analytics. The second refers to the importance of skill levels, referred to as staff training and development, with the development of existing employee competences being highlighted as an effective strategy to respond to this persistent challenge.