Labour versus automation ignites heated debate

The South African
warehousing
landscape faces some
real challenges –
and with technology on the
increase the debate between
labour and automation is set
to heat up.
According to Carli Venter,
general manager: solution
development, Barloworld
Logistics, the labour versus
automation debate is a
recurring theme.
“The debate of the return on
investment for implementing
a sophisticated automated
system versus labour-intensive
solutions is one that we foresee
will continue for some time –
especially due to the volatility
and sometimes violent protests
occurring more frequently in
the country’s labour force,” she
told FTW. “These challenges
have a vast impact on the
economy as well as the dayto-
day running of warehouse
operations – and ultimately the
supply to the end user of the
stored products.”
Venter said South Africa’s
warehousing landscape was
influenced by a number of
factors – and not only labour
instability.
Rand volatility, rising
energy prices and large
distances between major
ports and cities were ongoing
challenges.
“Increasing operating
costs is also a concern. With
the constant rise in utility
costs – including water and
electricity, rates and taxes – the
cost of running a warehouse
becomes more expensive every
year. This leads companies
to consider the option of
outsourcing their warehouses
and benefiting
from cost
consolidation
and multi
principle
storage,” she
explained.
“At the same
time the cost
of capital to
warehouse
excessive
numbers of
line items for
long periods of
time becomes
restrictive. We
see more and more customers
choosing to rather decrease line
items to focus on category A
fast movers, thereby increasing
their stock turns and freeing up
capital to focus on sales.”
She said outsourcing of
warehouse and distribution
functions
remained a
solution for most
of the supply
chain challenges
businesses faced
today.
“It takes
away the
complexity and
risk of dealing
with fixed
infrastructure
costs, provides
more flexibility,
and allows firms
to focus on
selling their product or service,
creating brand awareness
and increasing market share,”
she said. “From a commercial
perspective, gain share models
offer relief to customers by
reducing their base cost and
allowing for a further up-side
if efficiencies are achieved. In
this way cost reduction is not
just driven from one side but
is seen as a team effort – and
both parties share in the reward
of cost savings. The challenge
still remains for the smaller
customer to make sure that the
cost of warehousing doesn’t
outweigh profit margins.
“Vertical and specifically
horizontal industry
collaboration can be the step
change that both customers
and warehouse providers
are looking for. However,
customers are not always
willing to share space with
competing brands and
logistics providers are perhaps
not yet ready to share space
with their competitors.”
INSERT & CAPTION
Vertical and specifically
horizontal industry
collaboration can be
the step change that
both customers and
warehouse providers
are looking for.
– Carli Venter