Logistics survey proves globalisation equals profitability

RESULTS OF a recent supply chain survey provide empirical evidence that South African companies that respond to the challenges of globalisation by making the right moves to cope with global complexity in their supply chains and ensure they have the right skills and capabilities on board to do so, are up to six times more profitable than their competitors and peers. The 2008 edition of supplychainforesight, an annual survey commissioned by supply chain major Barloworld Logistics, has been suggesting for several years that globalisation is the key challenge facing large SA businesses as they seek to remain competitive. There was a record level of participation in this year's survey with over 400 senior executives in some of South Africa’s largest companies responding to the questionnaire – almost double the participation of last year’s study. The companies that come out on top – the so-called ‘complexity masters’ – represent 7% of those surveyed. The majority of these companies – 7 5% – rate themselves as both complex and capable and more successful than their competitors. As would be expected, both their sourcing and selling activities show a good spread of global markets, especially sales into the major trade areas of Western Europe, the Middle East and South-East Asia, as well as the rest of Africa. In contrast, those companies which have gone global but without the benefit of the increased and more specialised supply chain capabilities this requires, are putting their businesses at risk, the study finds. From a national perspective, the survey believes the lesson for SA as a country is clear. We have the benefit of the relative efficiencies and capabilities of our supply chain infrastructure compared to our peers in developing economies – this is clear from our rank of 24th in the world for trade logistics performance in a recent World Bank report. But there also needs to be a coherent strategic approach to dealing with the complexities of global competition in many different key industries, one which must incorporate constructive collaboration between government and private enterprise.