‘Logistics industry needs to get involved’

Logistics receives scant
mention in the Industrial
Policy Action Plan (IPAP)
released in February this year.
One of the only mentions
is in the section on plastics
converter plants, where an
identified constraint is “South
Africa's geographic position
and resultant logistics costs”.
The same constraints hold
true for all manufacturers of
new vehicles and components.
With a focus on
boosting local component
manufacturing by both
government and the original
equipment manufacturers,
there is a need for the logistics
industry to be engaged in
the plans.
By focusing on joint
sourcing in five “key” subsectors
such as electronics,
body parts, interiors,
exteriors, chassis and drivetrain,
the Department of
Trade and Industry wants to
“deepen and raise economies
of scale”.
Studies into where the
opportunities lie are expected
to be completed by the first
quarter of next year, with
manufacturing due to start in
the third quarter of 2011.
The plans hold both
opportunities and threats
for the freight industry –
opportunities for internal
supply of raw materials, parts
and components, and threats
from reduced import volumes
if the plans are successful.
There should, however, be
some offset through growing
exports of components.
In order to compete against
the likes of China and India,
government plans to raise the
level of competitiveness of the
the component manufacturers
through “benchmarking, gap
identification and assistance
to close competitiveness gaps
by engineers/advisers and
post intervention assessment”.
Small and emerging third
and fourth tier manufacturers
will be included in the
support structure.
But, without efficient
logistics to get the
components from the factory
gate to the assembly plant, no
amount of technical wizardry
will succeed.