Global majors can help reduce supply chain costs

UPS bosses offer their perspective KEVIN MAYHEW GLOBAL LOGISTICS providers can help to reduce the cost of supply chains for countries like South Africa by passing on the competitive advantages of their size, according to the president of UPS International, David Abney. Abney and UPS International’s European regional manager, Wolfgang Flick, paid their first visit to the country recently as part of the company’s programme to establish its new structure and identity announced earlier this year. “There are obviously some areas, like labour costs, where we cannot change things but we certainly can help by using our global supply chain management to reduce time in transit and enable clients to reduce inventories through use of technology to determine exact delivery times for instance. “What South Africa has to do is leverage the elements within the continent itself that UPS can offer, as well as take advantage of such agreements as Agoa, to offset any cost disadvantages in reaching global markets,” Abney explained. Expanding on this, Flick, said global capacities and the positive influence of major international logistics players could help offset the adverse effects of elements such as the stronger rand. “When Germany was unified it was the proven practice and credibility of major logistics companies like UPS which helped streamline procedures to reduce customs clearance requirements etc that determine logistics costs. “In the changing Europe, as the borders disappeared, so these best practice elements were absorbed into the final multinational regulations to reduce time delays at the borders,” he explained. He added that global players could introduce freighting schedules which were extraordinary to enable countries such as South Africa to remain competitive by virtue of just in time services offered, even if it was at a slightly premium price.