Price trumps reliability in logistics hierarchy

South Africa can no longer
afford the silo approach that
has been the driving factor of
logistics in the country.
Speaking during a
presentation of the 10th State
of Logistics survey in Cape
Town recently, Professor
Jan Havenga, director at
the Centre for Supply Chain
Management at Stellenbosch
University, said collaboration
was the key going forward.
“We have to make a very
definitive move away from the
silos we have been operating
in. If we don’t logistics costs
will just continue to escalate,”
he said. “The sustainable
approach is to create riskaverse
supply chains that may
not be the least costly to set
up right now, but have by far
the most long-term gains.
Without doubt we have some
major improvements to make
on various fronts but we have
to change from the ‘supply
side mentality’ we have on
logistics.”
He said this was not
necessarily easy or quick to
accomplish.
“We are busy with a study at
the university that will allow us
to develop a model to provide
a forecast on containers and
so we have been studying the
movement of containers in the
country extensively. From how
they are moved to why and
where they are moved has been
closely scrutinised – as well as
where they are unpacked and
how this decision is made,” he
said. “And so far our research
has shown us that the biggest
determining factor is price.
What does it cost to move
my goods from A to B is still
the most important element
with the second issue being
reliability.”
Havenga said research had
shown that logistics in South
Africa was for the most part
not inefficient, but with little
collaboration across the supply
chain, costs were high.