Page 10 - Logistics News Oct Nov 2020
P. 10
Opinion
Supply chains full of woe
By Doug Hunter, doug.hunter@za.syspro.com
Old habits die hard, but good Samaritans still help communities recover while others
chance a sneaky profit – for the shareholders you understand!
SIX MONTHS in a dining room chair, glued to Zoom Some food outlets/restaurants moved through
or a cell phone… and I’m free. Lockdown Level 1 – soup kitchens for the destitute or struggling,
visiting the office, meetings with real people and, through take-away/home delivery options,
for me, taking a break in the bush. After a four-hour adding booze when they could, and now have
game drive and first beer, recollections of lockdown special menus to use what’s available.
are easing.
• Engineering and fabricated metals
Pricing affects supply chains Steel imports stopped from China and may
Costs rose during the pandemic for certain not restart, or will they? China supplied the
industries – those still operating. But some prices second major global virus, so how cheap has
were unreasonably high – some were fair and some supply really been for you, your employees and
reflected unscrupulous suppliers, manufacturers or customers? How long were you closed? How
traders’ customer/business attitude of ‘me-first, not many staff did you put on furlough or retrench?
you’. How many projects stopped? And how many
unnecessary deaths?
Industries differ
• Food Bush drive summary
After a visit to a local Quick Shop, I got home and As consumers or producers, COVID-19 vividly
checked the five basic items that cost almost R400: shows us how one global supply chain disruption
butter spread pre-COVID was R74; into lockdown forces leaders’ rapid innovative adaption, but
it was R96, plus there were other overpriced items. also small actions that reshape channels to shine
I’ve experienced bad owner attitude there before, or damage the brands that are part of them. It’s
so 20 years of buying fuel for two cars and R300- time to look over channel fences to check that
a-bag top-up groceries are over – that’s R60k a customer service and brand value aren’t being
year, or was… I’ve stopped using that outlet. One eroded by ‘partners’.
entity kills one customer’s lifetime value for a whole When it comes to product costing, adapt
supply chain. Do other chain players see this effect from discount per item/bottle. Tie me in with a
from badly timed R20 overpricing? discount per purchase/year – the more the better
My local beverage store took a chance. Instead – and push me to put new stuff in my ‘shopping-
of adding one percent tax increase to a bottle of basket’ that makes you a better margin and me
wine, it added 20 percent. It’s a great business, happy.
great people, but do that to me again and loyalty Then there is bush learning from my host,
may suffer. whose town is near the Kruger Park, where 350
Then at Pick n Pay – the star retailer for my people (and families) had no pay, meaning over
family – there was easy e-commerce ordering, 1,000 people were affected and the supply chain
reliable notified home delivery, always OTIF (on disseminated locally. Then other families with
time in full) and value for money, even considering earnings out of town become sole breadwinners
new DC order picking and other processes, extra for their relatives and friends – those who have
delivery and thermal box costs – thank you. share with those who haven’t, so everyone
survives.
• Hospitality Can’t we do this for industry supply chains?
Those able to reopen have had slow ramp up of Share the pain to survive and then seek the gain
guests, but surely international travel constraints together. Is the ‘China Factor’ pushing you to
provide an opportunity to get South Africans to find alternate supply from different countries as
South African destinations? Think immediate and you add the true costs of ‘low price’? Or will you
long term. Adapt through survival to marginal to source/make locally and advertise this – what will
profit again. That approach just got me out the that do for consumers or engineering brands?
dining room to the bush. Add value/volume and justify price. Let’s do it. •
8 October/November 2020 | Logistics News