Shaping future supply chains with business-fit approach
How the traditional supply chain management structures are being replaced with proactive new models.
While technology has been the much hyped driver of radical change within global supply chains for several years, a new way of thinking about logistics solutions will arguably shape the industry in a profound way in 2018.
In South Africa, with businesses under economic duress, savvy supply chain specialists are taking a proactive approach to logistics management, as opposed to waiting for the problems to come to them. Tyrone Rennie, executive: Business Solutions Development & Marketing at Barloworld Logistics, says smart logistics is becoming more about finding a 'business fit' rather than a solutions fit.
"Looking ahead, it is clear that embracing technology is a given, it is no longer a differentiator. Supply chain organisations would do well to critically analyse fundamental drivers of value before embarking on a digital revolution," notes Rennie. "Instead, the key question when strategising for the future should be 'how can we enable growth for clients, as a long-term partner?' and not simply 'how can we sell the latest tech?'"
In essence, this approach requires logistics providers to build integrated strategies that can unlock new markets and opportunities for clients. Getting the basics of value creation right and overlaying these with relevant solutions, be they traditional or technology-heavy, is what will ultimately separate the winners from the rest. Intrinsically, value creation is not about the latest tech, but more about the systematic application of solutions where, and indeed if, they make sense within the framework of a partnership approach.
"It almost goes beyond simply being proactive," adds Rennie. "The new differentiator will be about building a smart business case for clients, and facilitating their entry into new markets by investing ahead of the curve."
According to Rennie, elements of this approach are already playing out in the local sector, with companies looking to supply chain providers as growth and development partners. Fundamentally, every business leader is looking for more than service delivery; arguably, they are looking for solution providers that not only match the required scope of work, but are a match in terms of values, strategies and future growth goals.
"This model of business is far beyond traditional commercial arrangements. The future of the supply chain partnership lies in the ability to understand a client's strategy and ambition intimately, and leverage existing infrastructure to open opportunities without escalating costs beyond the reach of the consumer," argues Rennie. "In addition, we can launch new solutions to market more quickly, using multi-node channels that are more competitive on price."
At Barloworld Logistics, this deeper understanding of what a modern supply chain partnership is has resulted in a strong emphasis on contracting with clients that are not only commercially sustainable, but truly fit the supply chain specialist's entire ecosystem. Such "business-fit" partnerships foster relationships that drive profitability, longevity and mutual growth in an economic environment that is tough across the board.
"As an organisation, we take responsibility for helping to nurture opportunities and open markets for our clients, firmly believing that our success is deeply intertwined with their success," says Rennie. "It is our business to know their business, and to have the foresight to invest and build astutely to create solutions for challenges they have yet to experience; in this way, adding to our mutual success and pre-empting future trends."