BEE Partner, South Africa Economy Watch

11. Be prepared to adapt the supply chain

A company’s supply chain should reflect the strategic initiative it takes in its attempts to outmanoeuvre its opposition. Because the supply chain impacts heavily on costs, customer service, asset productivity and revenue, it must play a key role in company efforts at creating an ongoing, seamless transition of responsibilities. This means that customers should perceive a ‘business-as-usual’ focus. Essentially, the supply chain should be assisting the company in searching for competitive advantage, and sustaining it for as long as realistically possible. Whilst a company’s supply chain should start and end with the customer, it must never fail to deliver the right product at the right place at the right time. Failure in this could put a customer organisation at a competitive disadvantage. As market and/or strategic conditions change, companies must be prepared to make changes to their supply network if necessary, in order to be able to manage the changes. Because a supply chain is a strategic tool, it is also faced with changes, whether they are economic, demographic, political, social or even technological. It therefore follows that, if a strategic tool remains unchanged in the face of environmental change, the company runs the risk of becoming uncompetitive. The trick, of course, is to identify the changes before they actually happen and gear up accordingly, for example by relocating one’s facilities, changing suppliers or, where necessary, outsourcing one’s manufacturing.

Adapting one’s supply chain thinking also means being prepared to have more than one supply chain if necessary, depending on the customer segments being served. This will more than likely add to one’s overheads, lower economies of scale in both purchasing _and production, and will probably lead to higher distribution costs. Th_ebenefit is that one gets a better manufacturing and distribution infrastructure for each segment, and that in itself can be a sourc_e of tremendous advantage.

The process of adaptation requires managers to track environmental changes and to fully understand the requirements of the ultimate users. The manager must also be prepared to develop new sources of supply to complement existing ones, but, above all, the supply chain needs to be discussed with involved parties inside the organisation, particularly marketing and product design teams, whose efforts will depend on the efficiency of a supply chain.

12. Be enthusiastic about change

In the global environment, any company that becomes stuck in a rut will more than likely die. The tidal wave of competitive pressure from one’s opposition will swamp a company that does not or cannot change. It is therefore vital for the new breed of manager to metamorphosise their company as required and develop a nimbleness of competitive thinking to avoid becoming a dinosaur. This demands that managers be prepared to change whatever part of their company needs to undergo a metamorphosis. That may be anything from the product range to systems, policies or practices, and has to be considered from a holistic viewpoint. It may also mean that strategic decisions are taken on a more frequent basis, and that any initial strategic plan be redefined as a guideline. The key issue, however, is that whatever change is effected, it must be orientated towards assisting the organisation to put itself into a more advantageous position in the marketplace relative to its competitors. Moreover, that must be accomplished where it matters most — not in company manufacturing plants, offices, warehouses or even product ranges — but in the mind of the customer. Being enthusiastic about change, and implementing change in order to develop a higher degree of customer loyalty, is a principle that the new breed of manager will have to embrace.

This has focused on the need for the development of a new breed of manager to help spearhead South Africa’s quest for business success in the global business arena. It has highlighted a number of principles that South African managers should internalise as part of their own behaviour if they are going to lead their organisations against their international foes, many of whom are used to competing at the highest level for decades. The danger is that these principles are treated as a static guideline for success. The truth of the matter is that they need to be explored in terms of what they mean in each individual case — whether at corporate or departmental level. The challenge for the new breed of manager is to apply them to the particular set of circumstances in which he or she functions.

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Shaping a new breed of South African manager for the global challenge part 11

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