Mainstreaming innovation in supply chain strategies was critical to the future success of any business, increasing its flexibility, agility and rate of responsiveness to the accelerating pace of economic change, Barloworld Logistics’ supplychainforesight survey for 2013 shows.
Innovation was ranked by some 88% of respondents – most of whom occupied CEO or C-suite executive positions – as the chief consideration currently facing local business, according to the survey, released on Friday.
Further significant areas of opportunity identified by respondents were the introduction of new products and services, the use of the supply chain to gain competitive advantage, as well as expansion into international and emerging markets.
Interestingly, Southern African Development Community States were voted by 34% of respondents as the favoured investment destination, followed closely by China, India and Brazil.
Barloworld marketing executive Kate Stubbs said the research highlighted the need for a thorough understanding by South African companies of the pace at which the global economy was evolving.
“Innovation is critical for a company’s mere survival, let alone success. The survey demonstrates that typical businesses are either dying a slow death or dynamically innovating – there is no middle ground, as innovation has to become mainstream to any business strategy,” she advised.
The survey identified the drivers of this change as the rise of emerging markets and the consequent shift in the axis of power from West to East, globalisation, urbanisation, increasing sustainability and regulatory requirements and shrinking natural resources.
Stubbs added that logistics and supply chain management were taking centre stage in the drive for growth and risk mitigation and advised companies to forge partnerships in this arena and outsource functions to those with more appropriate skills.
“Interestingly, smart partnerships are driving innovation at lightning speed and can be observed by the manner in which emerging nations are leapfrogging development with advances in technology,” she commented.
This principle was reiterated by 79% of respondents, who strongly believed that, in South Africa, supply chain and logistics innovation had become a prominent tool for achieving competitive advantages, while 70% believed that local supply chains were increasing in effectiveness.
Similarly, 73% of respondents said they regularly evaluated and modified their supply chain strategies to align them with their business strategies.
The banking and finance sector was ranked the most innovative industry by 74% of respondents, followed by the information and communication technology sector, the telecommunications industry and the retail sector.
Interestingly, only 8% felt that the public sector was in any way innovative.
Domestic Features
Further, research around the constraints to achieving business objectives in South Africa identified the cost of doing business as the respondents’ primary concern.
This was followed by currency volatility, macroeconomic uncertainty, a general skills shortage and labour unrest.
However, while the report suggested that volatility of any kind was challenging, it noted that this often created greater opportunities for those best equipped to handle change, which emphasised the need for agility and flexibility in business.
In addition, South Africa’s natural resources, knowledge of, and proximity to, the rest of Africa, as well as its well-developed banking and telecommunications infrastructure, were considered its key competitive advantages.