Execulink, the end-to-end logistics company that specialises in optimising inventories, recently released results from its latest success - IscorZinkor in Sishen. The Zinc Corporation of South Africa, Zincor Ltd, is a wholly-owned subsidiary of Iscor, which manufactures zinc slabs for sale on local and export markets.
Since global prices for zinc are set mainly on the London Metals Exchange (LME), Zincor is not in a position to vary its pricing structure on its own accord. Consequently, the elimination of inefficiencies in its own operation is critically important to the company`s profitability.
The Materials Management team at Zincor are committed to optimising the operation`s serious investment in inventory, which is a key driver of the company`s competitiveness in the marketplace.
Petrus Holtzhausen, Materials Manager and a member of the Zincor executive, explains why Zincor called in Execulink to support their effort to regulate inventory expenses and improve availability: "Execulink is a professional company that is fully conversant with the methodology of inventory management. We were also aware of their solid track record with the parent company, Iscor, especially at sites like Thabazimbi.
"Another advantage was Execulink`s familiarity with SAP systems and their provision of a complete interface with our internal software." Zincor runs SAP 3.1I, which is supported by Execulink`s Optimiza software.
"In the course of the project, Execulink staff demonstrated their commitment through a teamwork approach which involved both personal contact and full-time availability," says Holtzhausen.
As with all projects of this magnitude, there were factors to be considered which reach beyond the essential Materials Management function. There were the usual concerns about cleaning up the existing database and setting of policies and targets. The project`s success also depended on full involvement from end-users at the operation level - and the executive team at the management level.
The implementation targeted the high cost of inventory as well as the drop in service resulting from frequent stock-out situations. Its success emphasises the importance of dedicated inventory management in eliminating wasted expenses. It also demonstrates the effectiveness of a proper inventory solution in improving stock availability, supporting the company in a fiercely competitive market.
The system was running eight months after the initial planning. "The first phase was to sort out the interface between the company`s SAP system and Execulink Optimiza, ensuring 100% integrity of the data transferred between the two," says Holtzhausen.
"Once we had verified the database content, the only remaining problem was to ensure that our own IT staff understood how critical it is to have correct data at the right time. All our staff adjusted well to the new system, showing pride and a sense of ownership in the achievement of the initial targets. They were also motivated by the tremendous drop in after-hours call outs which resulted."
The financial results speak for themselves, with Zincor saving over R8 million in inventory costs, while increasing stock availability by 16%. "These figures were achieved by providing a scientific system to manage inventory which offers easily accessed information for management," says Holtzhausen. "But, despite the excellence of the Execulink Optimiza system, there was also the company`s experience and knowledge to rely on. Although harder to measure in accounting terms, a lot of credit goes to Execulink staff for their teamwork and availability."
Zincor expects to continue the relationship with Execulink on a long-term basis, not only as a result of the success achieved with Optimiza, but also because Execulink offers consulting on the latest developments in inventory management. "It is essential for Zincor to have a completely reliable inventory system. But, to ensure our future viability in competitive global markets, it is equally important to keep up-to-date with inventory management technology," says Holtzhausen.
Derek Roux, chairman of Execulink, sums up the company`s approach: "As practitioners, we aim for a roll-up sleeves approach - achieving measurable and sustainable results. Zincor`s management team were committed to making our methodology become part of their business process, and we look forward to continuing their successes in further mine operations."
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