Even in the earliest history of the logistics industry, traders operating across diverse geographies, cultures and economies knew they had to work together to expand their reach. Today, that spirit of collaboration hasn’t changed, but the technology that ties the global supply chain together certainly has.
When a company wants to increase its profit, two strategies have remained generally in use throughout time: squeeze the customer to pay more, or squeeze the supplier to reduce their prices. But for both, the result is the same: merely taking money out of their pockets and putting it into yours. Unfortunately, neither of these add any real value to anyone. In fact, value is lost when customers are forced to reduce the amount they can buy and suppliers must downgrade the quality of their product to cover costs. This isn’t collaboration; it’s just bad business.
True collaboration unlocks true value for everyone—your suppliers, your customers, and your own business. Running a single platform solution that’s integrated with all your partners’ systems empowers you to manage logistics from a central database across multiple users, functions, offices, countries and languages.
For the last 10 years, I’ve personally been involved in helping companies collaborate using technology in one of the most diverse regions of the globe. There are major institutional voids in Africa—ranging from electricity supply to Internet connectivity—and collaboration is the key to overcoming such gaps. I have seen this work in many instances, and innovative uses of technology often play a major role in bridging these gaps.
The South African Example
With emerging consumer markets flooding goods into the continent, and unprecedented volumes of resources flowing out, Sub-Saharan Africa is the place to be. According to the World Bank, the region is on a GDP growth outlook that is approaching levels that are surpassing expectations in the developed world.
Logistics operations in South Africa are in a great position to take advantage of the massive growth opportunities this represents. There’s a chance for everyone to benefit by sharing skills, goods and knowledge. And today’s technology makes this collaboration faster, more efficient and more immune to the stresses of international logistics by sharing it all within a single-database system.
Elements of South Africa’s economy and society can be defined by both the first world and developing world. On one side, we South Africans have embraced the technologies and practices of the West, while on the other we’re also aware of the challenges, institutional gaps and relevant cultures that surround us. Armed with regional knowledge and cutting edge software, logistics operators and their clients can more easily overcome the undeniable challenges as they take part in Africa’s economic renaissance.
Unlocking Value, Increasing Productivity
Let’s say an order is placed in South Africa. The raw materials are procured in Brazil and sent for production in China. All of it’s shipped by an international shipping line or two, with both international and local African agents being involved. From beginning to end, all deadlines are met and everything moves easily. All documents, messages and milestones are delivered on time with no delays and no issues.
By now, you want to know how this whole supply chain example proceeded so smoothly. It’s simple: we collaborate, and we share information at every step.
Until now, all the data required to get the freight where it needed to go had to be re-keyed at every point and communicated manually via phone calls, faxes, or e-mails. But technology allows us to start unlocking and retaining value in the transaction. The key to this entire collaborative process is found in having to capture the information only once.
With automation and integration within each supply chain member’s own operations and between the different organizations, the result can be reduced errors, saved time, and execution with minimal effort. Imagine a manufacturer’s ERP system to manage stock notices that vital materials are running low. It can automatically send the supplier a message, which in turn triggers actions for the exporting and importing agents. This not only increases accuracy, it also reduces transactional costs between organizations.
By automating and integrating we can work to create a high-velocity, low-touch supply chain where every member collaborates more effectively and efficiently. When providers work together, their shared technology frees up staff across all borders to be more accurate, more productive and ultimately more successful.
Nachi Mendelow is general manager of business development, Africa, with WiseTech Global, a developer of cloud-based software solutions for the international and domestic logistics industries. He is based in Johannesburg, South Africa.