There are a handful of people among the over 62-million South Africans who ever give any thought as to how the products they buy reach the shelves and yet behind each purchase – whether it be a simply chocolate bar or a trolley full of goodies – there lies a huge effort to keep the shelves stocked, all of which fall under the general banner of retail logistics supply chains. In this article, Solly Engelbrecht, National Logistics Executive at The SPAR Group in South Africa, gives some insight into the logistic challenges faced by the retail sector emphasizing the importance of continuous improvement, innovation and adaptation in the evolving landscape of retail logistics supply chains. There so much more to keeping the wheels rolling and the shelves stocked than meets the eye. Over to Solly….
In the movie, Any Given Sunday, Al Pacino, gave a motivational speech on driving forward towards success. He stated that: “The inches we need (for success) are everywhere around us.” Logistics is all about the small inches that result in a continuous forward drive towards success.
Retail logistics supply chains continue to evolve rapidly. At The SPAR Group, with six distribution centres (DCs) nationwide and a fair size fleet, keeping pace with these changes (and focusing on the inches) will be integral to success. The key going forward will be building on our strengths while navigating the various challenges on the South African landscape – disruptions through protests, attacks on drivers, failing infrastructure, load shedding and port chaos.
It is imperative that major retailers, like The SPAR Group, on which people depend, ensure stock levels are healthy, demand is matched, and the supply chain is working like clockwork no matter how challenging the environment outside. Driving excellence, reliability and efficiency is key for success – but we will need to keep innovating to stay ahead to get the “inches”.
From a safety perspective, we are very fortunate with only a few trucks lost to crime in the past three years. We are also moving forward with technology, harnessing data insights and benefiting from tracking and other high-tech solutions to ensure trucks are rerouted away from high-risk areas to ensure our drivers remain safe.
Meanwhile, technology is driving efficiency on other fronts – two of our DCs are offering paperless deliveries to our retailers and this year and we intend to extend this solution.
Solar a powerful solution
The rollout of solar is a powerful solution in the fight for cheaper, reliable, and renewable energy. Due to the 24/7 nature of our operations and the need for refrigeration in our Perishables warehouses, we will be adding to our solar capacity at three of our DC’s this year.
While initially we spent capex on Solar Plants, we are now using PPA’s (Power Purchase Agreements) to avoid major capital outlays through partnerships. While this rollout depends on available roof space, it is a win-win for all involved. In addition, we are looking at the possibility of wheeling power into our DCs and possibility of other power generation options.
At all our DCs, we have seen a more managed increase in our electricity costs due to the solar solutions. We will still need to rely on Eskom to take care of night-time cooling and power needs for now, though our planning does include reducing this reliance over the long term.
Going forward, the focus on efficiencies across the entire retail supply chain – from trucks and the cold chain to people, production, and supply – will only intensify and require new thinking and new approaches to all parts of our business.
It would be remiss to not say that we have faced significant challenges with the rollout of a new SAP IT system. But I am pleased to say that things are beginning to settle and we are starting to see improvements. I have no doubt we will win back the loyalty of our retailers affected by the initial problems.
Six key areas
The six key areas we are looking at building on in the logistics space are as follows:
- Operational excellence,
- Financial stability,
- Customer service,
- Governance and compliance,
- Building a SPAR performance, culture, and
- Innovation in support of the overall SPAR Strategy towards 2028.
We will be driving very specific innovation projects. At the end of the day, it is people who are running machines and people must execute the decisions that will create the results that matter.
This is why we are focused on developing logistics technical skills and leadership levels across our business. Our recent syndicated project management programme, which entailed eight groups and involved 70 people, is a great example of innovation in action. It has delivered excellent results and is now moving on to the implementation phase across our DCs. I expect to see some powerful solutions coming to the fore as the best ideas from within our company are tested and implemented.
Ultimately, we are redeveloping our logistics strategy to drive an agile, reliable, sustainable supply chain network to ensure retailer success. As the market becomes even more sophisticated and complex, we will ensure we keep our eyes wide open.
Editor’s Footnote: South Africa can be hugely thankful for companies like the SPAR Group which see to our daily needs through totally dedicated efforts to achieve efficiencies across the entire retail supply chain to the benefit of all South Africans. When one compares the ‘deliveries’ of the private sector to ‘deliveries’ of Government SOE’s, it’s like chalk and cheese. FleetWatch salutes all who operate in this arena and, of course, especially to the trucking link in the supply chains. We salute and luvya all.
