‘Logistics is fast becoming a cost-saving strategy’

“In the wake of the global economic downturn, logistics as a cost-saving strategy has become more pertinent over the past three years,” says Jasen Smallbone, country sales manager, UPS South Africa.. High-tech companies, for example, redesign and update product offerings every few months to keep up with rapid technological advances and shifting market demand. They need dynamic supply chains to adapt to the ever-changing product landscape. Smallbone says that during the economic crisis, many companies in the hi-tech industry were looking to take advantage of every available solution to respond to listless demand, excess inventory and under-utilised capacity. Similarly, companies in the South African airline industry face numerous external challenges – such as rising fuel prices – that contribute to the fragility of profits. In an industry characterised by thin margins, it’s all the more important to maintain a reliable and efficient supply chain, said Smallbone. “Airlines can only make revenue when they sell tickets and are taking to the skies. Delays in part shipments for repairs and maintenance can put further pressure on margins. Aircraft owners and managers have turned to robust logistics solutions to maximise efficiency, minimise delays, and reduce costs.” For these industries, speed and reliability of deliveries are critical for success, but accurate inventory levels, shipment visibility, and flexibility are just as necessary. “As such, companies in the South African aerospace and hi-tech arenas have invested heavily in the visibility of their respective supply chains in order to become more alert and responsive to marketplace changes,” he said. At UPS, the company’s web-based application Quantum View Manage®, for example, enables shippers to view shipment information for multiple accounts without a tracking number, so they can see when a package is processed, where it is in transit, and when it arrives. “It offers complete visibility into inbound, outbound, thirdparty, and import shipments, saving companies time and improving efficiency,” said Smallbone. He says UPS has helped South African hi-tech firms expand to new markets and capitalise on new growth opportunities through smart logistics. “For the airlines, UPS’s reliable network helps keep planes in the sky and protects profit margins. For both these industries, supply chains have the power to drastically lower costs, decrease cycle times in bringing new products to market, increase customer satisfaction, and better manage uncertainty through increased flexibility.”