When we plan to buy something we expect to receive the right product at a convenient place, at a time that suits us, and according to our price and quality expectations. Companies that can offer this powerful combination time and time again have seen great success in both revenue and customer service feedback. What most people don’t know is what the process of managing this seemingly impossible feat is called. “Supply chain management” is the term that is used to describe the complex systems that come together to match consumer demand and product supply. One of the techniques that can ensure optimum supply chain performance is Sales and Operations Planning (S&OP). S&OP has cemented supply chain’s position as a cross functional broker of critical information to the broader organisation. The mission is simple; provide pre-emptive insight to reconcile unconstrained demand with constrained supply. This is where S&OP offers its audience unique and relevant perspectives to information that matters to them. “It’s all about collaboration,” explains Elizbe Rohde, Supply Chain Manager at Yum! Restaurants International, one of the largest restaurant companies in the world. Rohde, in her address to delegates at the 37th annual SAPICS conference for supply chain professionals, uses fast food chain KFC as a case to validate the benefits of formalised S&OP; a collaborative process where multiple stakeholders from various departments agree on both a demand and a supply plan. Taming the Giant A Yum! Brands Company, KFC employed the help of South Africa-based supply chain planning specialists, Barnton, to support KFC in further formalising its S&OP process and implementing an advanced planning tool. Understandably, this fast expanding network of over 800 restaurants across South Africa demanded a formalised S&OP process and system that enabled the company to be more pro-active and flexible by increasing visibility of actual vs. forecasted demand, manage stock availability and allowing them to optimally reconcile constrained supply to volatile demand. There are certain basic hallmarks that advocate a company’s need for formalised S&OP explains Rohde: “A reactive, uncoordinated, ad-hoc and manual approach to balancing supply and demand becomes obsolete while maintaining aspirations of being a market leader and driving towards best practice.” When introducing the process In applying S&OP, companies will be able to maintain optimal stock availability, whilst balancing service level and cost constraints. This unlocks improved supply chain control with pre-emptive forward visibility. Rohde emphasises the importance of having a clear vision and creating a journey map to transition to over time. “Get buy-in from the top down, with strong leadership involvement from the outset. Ensure business as usual during the implementation process through hands-on training with real data and work closely with a cross functional team to understand the business needs and match the proposed solution to the actual functional requirements,” she advises. “Live the process prior to implementing a system, as a system merely supports a process. Importantly, choose the right demand and supply planning partner – one with flexibility to tailor processes and systems to your specific functional needs, and with relevant experience to guide the journey,” Rohde concludes. ENDS _______________________________________________________________________________________________________ MEDIA CONTACT: Cathlen Fourie, 012 644 2833, cathlen@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPICS please visit: Website: www.sapics.org.za Twitter: @SAPICS01 LinkedIn: SAPICS group Facebook: OperationsManagement ABOUT SAPICS – your supply chain network SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries. SA is running out of options to lower freight transport costs, and consumers need to help South Africa’s transport sector, despite accounting for 60% of total logistics costs, could be nearing a stalemate. Owners and operators, even at their most efficient, are at the mercy of escalating road tariffs, upped driver fees, rising maintenance costs, and, of course, erratic fuel prices. For transport-hungry South Africa, the well-being of its logistics sector is crucial. “We are running out of options,” cautioned Zane Simpson in his presentation at the 37th annual SAPICS conference of the Logistics Barometer launched in June 2015 by Stellenbosch University (SU). Logistics embraces not only the transportation of goods or people, but the organisation of all links in an immense supply chain – from source to warehousing, inventory, and even security. It is therefore not only transportation methods that need a rethink, but changes to all the links that impact rising costs. A farm nearer the fork Different to Europe, where most agricultural goods are produced within a small kilometer radius of the point of sale, South Africa’s transport distances are extensive, compounded further by inland mineral reserves that must be transported to seaports. Inland Gauteng especially has a high demand for goods, requiring long-distance carriage. Based on the current rate of demand growth, freight is likely to triple over the next three decades from the current 781 million tons moved annually. “Imagine three times the number of trucks on our road network and the impact this would have on road infrastructure, traffic and delivery times. If we don’t change, a system shock is inevitable,” explained Simpson. “What we can still change is behaviour on the demand side. Consumers are spoilt for choice,” says Simpson. “By demanding less variety, consumers will inevitably reduce the amount of transport needed, saving money, resulting in less road congestion, and ultimately benefiting our environment. The logistics industry too must be transparent about these benefits.” Consider all options “There has to be a change in the way goods flow between points; whether it be driven by technology or by this reduction in the variety of brands and options on offer to consumers.” In cases where no alternative exists other than to convey goods over long distances, Intermodal transport (moving containers using multiple transport modes) could have a dramatic impact but requires significant investment into rail systems. “The future,” says Simpson, “would have to include a fixed mode of transport.” Simpson and his team proposes that all other conveyance options; alternative technologies, even the unconventional, need be considered. “3D printing items close to source, for example, rather than having to transport from afar would help to reduce transport demand and subsequent costs. Seemingly ridiculous ideas even, such as building a canal between KwaZulu-Natal and Gauteng, long distance conveyor belts, or drones, need to become part of mainstream conversations if we are to reduce logistics costs,” he says. “Overall, instead of trying to reduce transport costs in isolation, we need to work hard at economic growth, which will solve more problems than just increasing logistics costs,” Simpson admits in closing. Simpson will repeat his presentation on the report findings at the SAPICS Cape Town Regional Conference on 25 August 2015. For more information and to register please visit www.sapics.org.za ENDS _______________________________________________________________________________________________________ MEDIA CONTACT: Cathlen Fourie, 012 644 2833, cathlen@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPICS please visit: Website: www.sapics.org.za Twitter: @SAPICS01 LinkedIn: SAPICS group Facebook: OperationsManagement ABOUT SAPICS – your supply chain network SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries. It’s easy to lay all blame on government for the shrinking of South Africa’s once buoyant manufacturing sector. Frequent power outages, tariff hikes and ill-timed legislation have no doubt put local producers under immense pressure, but would all be peachy if these issues were resolved tomorrow? Times have changed and business needs to adapt quickly. “No company can operate today the way it did 40 years ago,” says Dawid Janse van Rensburg, MD of CargoSolutions, a prominent South African supply chain and logistics service provider. “Everything has changed, and some of the largest manufacturers in South Africa need to accept the cliché of ‘adapt or die’.” Addressing delegates at the 37th Annual SAPICS conference for supply chain professionals, Janse van Rensburg tells how it’s high time that business stops blaming utilities, laws, or state of the economy and rather for management to take responsibility for implementing changes that will meet the different needs and pace of today. Smart tech or smart decisions? “Competitive local manufacturing is less about smart technology than about smart decisions – those made by management,” explains Janse van Rensburg. “Local manufacturers need to get over their egos, embrace true leadership. Without this fundamental change, no other changes by government, utilities or of IT systems will have a sustainable effect,” he says. “You need breakthrough intervention; something substantial to motivate South Africa’s purchasers to buy locally manufactured goods.” Local really is lekker South Africa has posted negative trade balances (where exports exceed imports) since 2012 (Trading Economics/SARS). The sporadic spikes in exports, mostly due to surges in the precious metals trade, is offset by imports of fuel and high value added goods. South Africa’s footwear and steel producers specifically have felt the impact lately. Despite the initial lure of low prices, importing can have serious drawbacks. Quality issues, lengthy delays during shipment, and language and payment hurdles, can all affect buyer and consumers. Local purchasers are now seriously considering buying local, and government is supporting, in some instances compelling, companies to source locally manufactured goods. “But,” says Janse van Rensburg, “we desperately need to address service levels as well as stock availability; our ability to compete with these global suppliers.” TOC logic “The Theory of Constraints (TOC) is one way that major change can be identified, managed and implemented,” explains Janse van Rensburg, whose company has implemented TOC supply chain solutions successfully in a wide range of local manufacturing companies for many years. The brainchild of Dr Eliyahu Goldratt, TOC looks to identify the most important limiting factor (the constraint) that stands in the way of achieving a goal and then steadily improving that constraint until it is no longer an issue. To supply competitively here and compete against imports, lead times for example need to be world class, says Janse van Rensburg. “This would generally imply that you should have products manufactured based on demand forecasts (make-to-stock) or by having high levels of stock, but this, again, is a misconception by management. There are IT systems that can optimise both! “The cost of implementing this type of breakthrough change should never be the focus. The cost of NOT changing? Potentially going out of business,” Janse van Rensburg concludes. EVENT NOTICE: To learn more about solutions that can completely transform supply chain and management of projects, visit http://bit.ly/1egbbj9 for information on the Theory of Constraints International Certification Organization (TOCICO) Annual Conference, scheduled to be held 6-9 September 2015 in Cape Town, South Africa. ENDS _______________________________________________________________________________________________________ MEDIA CONTACT: Cathlen Fourie, 012 644 2833, cathlen@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPICS please visit: Website: www.sapics.org.za Twitter: @SAPICS01 LinkedIn: SAPICS group Facebook: OperationsManagement ABOUT SAPICS – your supply chain network SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries. |
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