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
