THERE'S A quiet revolution in progress at Micor where the traditional order has been turned on its head as a new era of fourth dimension logistics emerges.
THE CLOSE of the millennium saw the listing of DNA Supply Chain Investments, a merger of SMG Management Services, Sensormatic and the supply chain management interests of Micor.
What, in practical terms, does this mean for Micor, for its customers, and for the industry?
Micor chairman, Mark Kaplan, provided some candid answers to FTW's Joy Orlek last week.
In an industry which has become commoditised, profit zones have eroded and it's become a game of size where gaining critical mass through mergers and acquisitions is the order of the day.
But it's still not profitable, and margins are becoming narrower and narrower despite the high level of skills required.
While logistics is the buzz word and many South African companies are outsourcing the process to third party logistics suppliers, Kaplan believes that outsourcing different parts of the supply chain to different suppliers results in a more inefficient overall system.
What is needed is someone to look at the big picture, to integrate the supply chain and to find a holistic approach that best serves the needs of the business, to create a logistics blueprint for each individual company which will deliver elements like savings on working and fixed capital, converting fixed overheads to variable costs, reducing the risk of theft and shrinkage, eliminating the risk of obsolete stock and reducing the cost of delivery. All of which substantially improves sales performance through the availability of the right stock.
That, in a nutshell, is what fourth party logistics is all about and it's the mission of DNA Supply Chain Investments.
Its heavyweight top order combines supply chain solutions company SMG Management Services headed up by express freight dynamos Steve Conradie and Peter Baker, with Sensormatic, which focuses on retail inventory risk management, and Micor. A key driver in its development has been the new electronic business environment which has created a virtual retail site, wiping the slate clean of any processes that were previously the norm. There is no longer any need for direct physical involvement in any of the links along the chain like warehousing, trucks etc.
The emergence of this new order resulted in major changes at Micor, which has retained the seven business units that fit the profile of its new vision.
For the remainder, the culture of the company was turned on its head and owner-managed business units were created, leaving Micor to pursue its new vision unfettered by peripheral commitments.
The company no longer owns low value-add assets along the supply chain, preferring to source services from the best third party logistics suppliers.
We are therefore never encumbered by out-of-date technology or assets that do not perform or are underutilised.
Ultimately we believe that optimal performance depends on having the freedom to access the best logistical components.
And that's the launch platform for this new animal in the supply chain management arena.
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