With warehousing and logistics becoming increasingly complex and fast moving, resolving operating issues regarding materials handling, data capturing, order fulfilment and software technology has become a business imperative, asserts beverage company Coca-Cola Beverages South Africa (CCBSA).
“As the economic climate becomes increasingly challenging, we have to consider ways of funding market-facing initiatives that will lead to company growth . . . This money has to come from the company, thus it is imperative to reduce logistics costs through productivity,” comments CCBSA MD Velaphi Ratshefola.
He elaborates that stock should no longer be kept in-house for extended periods – the quicker it moves through the system, the more productive the logistics process and the more cost-effective it becomes. The savings from logistics can then be used for market-facing initiatives.
Further, Ratshefola points out that, with warehouses proving to be catalysts for improvement and process trials, particularly the bottling industry, companies need to leverage skills across their supply chains to establish foundations for future success.
Warehouses are integrated into supply chains, which is driving efficiency and related performance metrics within the industry, thus making them key areas of innovation, especially from a technology and systems perspective, says Ratshefola, whose company’s logistics efforts have on a number of occasions been cited by at least two of the country’s Finance Ministers as worthy of emulation by government in its own work.
He points out that, in the past, many warehouse operations operated in silos and as independent areas of operation. However, currently, most operations link, consolidate and integrate warehouses, enterprise resource planning and transportation systems across businesses. Businesses are, therefore, able to promote and drive collaboration across the greater supply chain.
Ratshefola says that, when resource planning and distribution execution are grouped under one structure, the resources can be optimally planned with a full view of what is available, which makes it easier to use the resources.
He illustrates that this is especially the case in peak demand periods, highlighting that CCBSA’s polyethylene terephthalate packs business registered growth of almost 30% in the second quarter of this year. “In the same period, the demand for glass also grew. This additional demand has to be accommodated, with higher stock levels moving through our warehouses on time and according to schedule.”
The current trend towards centralising warehousing systems is improving business process management and maximising efficiencies, Ratshefola notes.
He asserts that advances in technology have resulted in the introduction of devices that help with stock counts, delivery schedules and order taking. Warehouses can track stock, verify location, as well as confirm deliveries from the warehouse to their destination. This has simplified processes for clients and suppliers, as incorrect orders and any stock issues are typically flagged early on.
“The technology introduced at our Midrand warehouse is a case in point. It has reduced errors significantly, increased customer satisfaction and, most importantly, created an enabling environment for our collective supply chain staff,” comments Ratshefola.
He adds that, as a result, service delivery levels between suppliers and customers, including third parties, have also improved.
Meanwhile, introducing new technologies in warehousing can present its own set of unique challenges, says Ratshefola.
“While one can try to anticipate early-implementation challenges, it is inherently difficult to predict them. Adopting best technologies to drive the entire value chain system remains critical and, as technologies constantly evolve, it’s important for companies in the sector to look for areas of improvement in the short and long term.”
He notes that, with the demand that warehouses of the future support and drive multiple channels, often simultaneously, companies risk falling behind if they do not implement solutions that can prepare them for future customer needs and market demands.
“All experiences should be shared and leveraged across integrated supply chains to add value and unlock efficiencies; this is critical for long-term success,” concludes Ratshefola.