‘Clusters play key role in competitiveness and growth'

In the ongoing quest to reduce logistics costs and make South Africa more competitive, collaboration is critical – and the concept of logistics clusters has emerged as one of the key elements. “The agglomeration process is what it’s all about,” Dr Christian Ketels of the Harvard Business School told FTW ahead of a one-day conference on ‘Company and Country Competitiveness and Economic Growth’ presented by IMPERIAL Logistics in partnership with the Gordon Institute of Business in Johannesburg last week. Ketels, who has led cluster and competitiveness projects in many countries and advised a number of governments and international organisations, described clusters as positive forces driven by companies trying to become more productive and to innovate. “Clusters are about a very different way for companies, governments and academic institutions to collaborate. “We often find in many countries that people in government are looking at what can be done to create jobs – often they get it wrong because they don’t sit in the front line and see how competition works. What clusters do is to create a dialogue on many more technical issues – like what logistics infrastructure and skills we need and what investment we should make. They try to change the policy process in a way that involves companies much more.” Ketels warned however that it was not an easy process. In Europe there are hundreds of successful cluster initiatives – like an aerospace cluster in Hamburg where Lufthansa works with Airbus, the airport, universities and SMEs. “There are sometimes rivals but they have realised that they have to work together to ensure that this location continues to be competitive against the likes of Toulouse and Seattle. “This means that they jointly invest in things that are pre-competitive – like educational programmes. Effectively it’s putting companies in the driving seat and forcing them to collaborate so that they can come back to government to ask for money for things like educational programmes.” The automotive industry is a good example of clustering. “Clusters are ultimately a collaboration to improve the environment in which high productivity is possible.” Supply chain specialist Dr Dinesh Kumar however points out that a key element in successful collaborative and clustering behaviour is the right skills set – and this is an area that needs serious focus. “Clusters are an important area because this is a way companies can engage to improve things. But for the nation as a whole we need to take a broader view. “South Africa not only has to align the competitiveness of companies in the country but also with the rest of Africa.” But when you’re talking competitiveness in supply chain management terms, it’s important to recognise that some things are not competitive, says IMPERIAL Logistics chief integration officer Cobus Rossouw. “One example is distributing products for competing companies,” says Rossouw. “IMPERIAL distributes products for 50-60 consumer goods companies, many of which compete – competition is not about the vehicle, it’s about how much brand equity you have created. “A lot of competitiveness comes down to micro economics. In our case it’s largely around mindset, how we interact with each other and what we expect of each other as value chain partners and cluster partners. “Take the example of what we are doing with GIBS,” says Rossouw. “IMPERIAL is involved in this but it’s critically important that our competitors become involved as well. It’s not about IMPERIAL having an academic partner. It’s about how we build a skills base so that supply chain and logistics is not just about trucks but about the execution – about the science that could provide a service to the consumer at a lower cost and lower risk. If we can get that right, that’s what we should be doing.” CAPTION Dr Christian Ketels … ‘A collaboration to improve the environment.’ Dr Dinesh Kumar … ‘The right skills set is key.’ Cobus Rossouw … ‘Not just about trucks but about the execution.’