In a move set to improve South African companies` ability to manage their supply chains more efficiently and improve export and import performance, e-business service provider B2BAfrica, a subsidiary of Transnet, has announced the successful pilot and implementation of the first multi-modal eLogistics solution.
Says CEO, Nobusi Shikwane: "This solution will ultimately provide an integrated eLogistics system knitting together players in the manufacturing, mining, and retail sectors with their logistics service providers."
Effective supply chain management in SA is a national strategic issue as the cost of logistics in SA and the broader SADC remains high in comparison with global standards. In SA, logistics cost approximately 18% of GDP, as compared to 10% in the EU and US. Analysis of the logistics domain points to lack of service predictability, and inability to pre-determine demand from freight owners for advanced planning of logistics services- all related to the absence of shared planning and execution systems.
This leads to excess inventory and increased working capital requirements for both freight owners and logistics service providers. The majority of the freight owners are also geographically concentrated, requiring transport from dense industrial locations to local and global destinations - often causing bottlenecks at ports. Relatively dense `corridors` feed these destinations.
Issues such as these, combined with increased pressure for capacity and service performance from logistics companies, highlight the need for closer collaboration at a national level between freight owners, logistics service providers and even trade and industry around creating supply chain competitiveness. Collaboration on supply chain initiatives at a national level seeks to improve the performance of the entire supply chain, not just shift margins between members - it creates understanding of the total cost of all components of the supply chain.
B2BAfrica has developed a robust eLogistics solution, using inter alia I2`s logistics software, FreighMatrix (FMx), which provides a digitally enabled integrated logistics platform for supply chain partners, with the ability to interface with operating systems of service providers. FMx provides information sharing on a common platform allowing visibility in the total supply chain.
Explained by B2BAfrica executive manager, eLogistics, Dheenan Naidoo: "The solution provides tools that help logistics managers and service providers plan, manage, monitor and optimise cargo movements along the time and space continuum. It covers all inbound and outbound logistics activities, and is a concerted effort to move products from source to market as efficiently and cost-effectively as possible."
The initial phase of the eLogistics project focuses on creating a "single wired interface" for Transnet`s logistics businesses, initiating logistics process flow between these business units, and allowing them to interact with customers` supply chains electronically.
"It was logical to involve Transnet because its business activities touch 60% of all freight moved within and across SA`s borders, and span the full spectrum of transport modes, covering air, rail, road and ports," explained Dheenan. "The solution will have immediate critical mass through the incorporation of Transnet, Spoornet, The National Port Authority, FreightDynamics, Petronet and SAA Cargo. We have also been working closely with the Department of Trade and Industry (DTI), Customs and Excise, SARB and the Ministry of Transport," he noted.
Dheenan said globally, benchmark studies have revealed that industries can experience a 10% to 23% cost reduction in supply chain logistics, based on value realised through similar systems as those being implemented by B2BAfrica. "Without the proper logistics systems in place, SA will find it difficult to compete effectively in the international markets, and drive down the cost of transportation and logistics in southern Africa."
He added: "Using Internet as pervasive and scaleable infrastructure, and wrapping integration technology around the core eLogistics applications, help freight owners to collaborate with trading partners and their service providers on an `any-to-any` basis, enabling them to draw information more timeously and accurately. It also takes the manual aspect away in terms of telephoning and faxing."
The B2BAfrica eLogistics solution gives companies the ability to integrate their ERP processes and systems directly with their logistics execution environment. A manufacturer who has received an overseas order can, at the point of commencement of manufacturing, place an order for rail transport, based on the manufacturing completion date. This triggers the necessary logistics procedures to ensure timeous delivery. Each delivery service provider, whether road, rail, sea or air transportation, receives a true demand signal.
"The `glass pipe` concept enables all players to see the signal instantaneously and have the opportunity to act on it timeously," he said.
"It is a fully dynamic environment that will set off a contingency plans should a certain transport mode not be available. Portnet, for example, will know exactly when a particular container is due by rail or road, and will have the necessary forewarning to plan for contingencies," he added. "Because it is Internet-enabled, it can be accessed from anywhere in the world."
Lead Logistics Company, Viamax Logistics, assisted by B2BAfrica as the technology enabler, has become the first customer that has successfully implemented a multi-modal eLogistics solution as the backbone of its container management service for its major customers.
In January 2002 B2BAfrica, Viamax Logistics and B2BAfrica established a project team for the implementation of the first multi-modal FMX solution in the world. The project started with analysis of the current supply chain, followed by design of the optimised solution and configuring the solution for one of Viamax Logistics` main customers. The supply chain chosen is seen as one of the most complex in the logistics industry and it includes a railing of containers from the manufacturing plant to Durban, harbour transshipment activities at the port and a sea leg to get to the final destination country.
Nicky Hariparsad, CEO of Viamax, added that the main benefits FMX brings to Viamax Logistics, as from the "go-live" during July 2002, are the following:
* Visibility of container movement;
* Ability to prepare operational documentation: quick and easy;
* Access to all users regardless of location;
* Availability of the same strategic and common information to all role players;
* Process improvement to ensure efficiency; and
* Improved customer service.
Viamax is also using the eLogistics platform as its logistics command centre to manage the movement of maize on behalf of the United Nations World Food Programme to Zimbabwe. One of the conditions the UN set to award the contract was for appropriate logistics technology to be in place before shipment execution through SA could occur.
Dheenan said it is crucial that maize reaches Zimbabwe timeously. Delays could have devastating effects for the people who are entirely dependent on these shipments to survive. Through the use of the B2BAfrica eLogistics software, Viamax manages the maize from source to the appropriate South African port, then via rail and road haulage to the final destination. In the event of a delay, or specific port or delivery mode not being available, Viamax is able to use the software to select alternative routes or transport modes, thereby avoiding delays. The software also offers suggestions for the most cost-effective solution.
"The eLogistics platform has therefore already had a spin off in terms of economic and social responsibility," explained Dheenan.
"In terms of implementation, the digital Logistics platform is therefore tried, tested and up and running. Transnet will be integrated completely into the system through frequent switch-on of projects covering bulk mining with fixed origin and destination points, consolidated maize solutions with dynamic origin and destination points, etc. Our next stage is to `wire` in the rest of the logistics community, and link to other trading and governmental organisations such as SARS, customs and the SARB."
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