Even though the card payment market in South Africa is growing significantly, cash is still king for the majority of South Africans.
According to a survey by FinScope released in 2007, 91% of groceries, 80% of clothing and 21% of large appliances and furniture are still bought cash. The impact of these figures on the recycling and circulation of cash in SA are enormous.
Cash transactions are estimated to reach 172 billion transactions in 2009, with an annual growth rate of 3%. Furthermore, 98% of the banked community of SA use the bank mainly for cash withdrawals, with the majority relying on cash from ATMs.
It is for this reason that the cash centre industry in SA has come under enormous pressure to process and redistribute cash quicker and more effectively. This is in line with international trends where renewed focus is placed on cash handling and redistribution in an attempt to reduce the overall cost for the processing of cash.
The cash centres play an integral part in the cash centre supply chain and is (in most cases) responsible for the processing of cash, storage, recycling to SARB and redistribution to ATMs and in some cases to branches.
Fourier has been involved in numerous projects within the cash handling environment, optimising processes and flow as well as implementing projects to better the distribution to ATMs and decrease the cost of cash holdings. One such project was the recent implementation of improved processes within the processing department of the cash centre where cash is received in a variety of containers, prepped and counted and stored in a treasury area from where it can be redistributed. The focus of the project was to increase efficiency and throughput without reducing the quality or initiating differences in the actual cash, compared to the clients deposit slip (due to miscounts, etc). The project included sites in various provinces and was completed with great success.
Following a previous capital decision support project, during which simulation was used to plan the possible future expansion and growth of the cash centres, another recent project required Fourier to generate quick wins while incurring minimal capital expenditure.
A total of seven initiatives were identified, ranging from process optimisation to people and machine balancing and physical layout, as well as performance management and overtime reduction. The aim was to optimise the cash centre and reduce the cost for processing cash by focusing on overtime reduction and throughput.
The initiatives identified were developed into implantation plans and piloted at one of the cash centres. The results were excellent and without spending capital, the cash centre could operate at approximately 13% higher throughput rate at a lower cost than previously. This was mainly because of a better flow of work and better utilisation of machinery (using the right machine for the right task at the right time).
In addition to focusing on the optimisation of handling and processing of cash, Fourier has also been involved in reviewing the entire cash supply chain to optimise deliveries to ATMs, branches and regional cash centres.
By incorporating supply chain principles proven and developed in other industries, tailored to meet the cash environment, significant benefits can be realised with successful implementation. "Optimisation of procedures and production across the supply chain is imperative in today's challenging economy, Fourier's offering of engineers can make huge differences for companies in optimisation of time and eventually profits," concludes Marketing Manager Jakes van der Mescht. For further information, contact Fourier at www.fourier.co.za or phone (012) 667 3232.
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