Local manufacturers planning their market strategies often overlook the “vital role” logistics plays in ensuring competitiveness, according to Andre Snyders, sector research analyst at Standard Bank. Speaking to FTW on the side lines of the Manufacturing Indaba held in Johannesburg earlier this month, he reiterated an earlier comment by ex-Minister of Trade and Industry, Alec Erwin, that producers needed a strong logistics strategy to ensure their ongoing survival in an increasingly globally competitive marketplace. “It’s all very well to manage production costs and offer a product that is in high demand, but how do they get their products to the port for global exports or into Africa for regional exports?” he queried. Snyders pointed out that banks, or other institutions, that offered financing for manufacturing developments often took producers’ logistics strategies into account as well. Erwin, now director of specialist consulting firm Ubu, pointed out that South Africa was facing imminent de-industrialisation on the back of ongoing challenges such as the high cost of labour, cheaper imports and a lack of policy support from government. “But, while these certainly need addressing, efficient and cost-effective logistics can go a long way in redressing some of the imbalances,” he said. Solly Letsoalo, managing director of Aveng Manufacturing – which supplies product and services to the mining, construction, water, power and rail sectors – agreed with the sentiments, highlighting that manufacturers should locate their factories in areas where they could have an advantage. “If you supply goods to the mines, ensure you set up in a key mining area or have your factory near a mining logistics corridor. If you export goods overseas, set up a factory near a port. This could significantly cut logistics costs and thus the overall costs of getting a product to market.” Letsoalo added that logistics strategies needed to be flexible and diverse, allowing producers to adapt to market needs – whether for a fast delivery time for an urgent project or a more costeffective, but slower, delivery.
If you supply goods to the mines, ensure you set up in a key mining area or have your factory near a mining logistics corridor. – Solly Letsoalo
