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                  SA supply chains gear up for level 4

                          and demand for winter goods

                     As South Africa enters the second phase of the country’s Covid-19 lockdown – Level 4,
                     which includes some easing of the initial restrictions on business and movement – the
                   supply chain industry faces new challenges, according to SAPICS, The Professional Body
                   for Supply Chain Management. These may impact the availability of winter clothing and
                                                 homeware, SAPICS notes.

                          usinesses         have the ‘retail experience’ while   and supply chain management
                          not supplying     practising social distancing,” he   professionals are well-placed
                          essential goods   states.                            to rise to the ongoing Covid-19
                          have had to                                          challenges. “I have observed the
          “Bfind short-term                 Park says that while most          strengthening of relationships
          storage solutions for their products   businesses are expecting a drop   and the development of a culture
          during the lockdown. Some were    in demand for their products, there   of partnership between service
          able to move their products to    is also the challenge of a shift in   providers and customers who are
          bonded storage facilities to delay   demand for items. “One example   working together to address the
          the payment of VAT and customs    is computer and laptop suppliers,   challenges. Service providers are
          duties, thereby alleviating cash flow   where the demand for laptops has   demonstrating remarkable flexibility
          issues, but many have had to use   increased dramatically with the   in terms of managing debtors’
          any storage they could find.      number of employees now working    books.
          This has been at an additional    from home, while demand for
          cost. The current challenge is to   desktop computers has dropped,   The strengthening of relationships
          efficiently move the stored product   leaving suppliers with excess, aging   is fundamental for service providers
          into their facilities, and in the case   inventory of desktops.”     and their customers and they must
          of retailers move summer stock                                       work together to identify potential
          out of distribution centres, to   Increased air freight costs have and   points of failure in supply chains and
          create space for the storage and   will continue to impact businesses’   to build resilience and redundancy
          processing of winter stock,” says   supply chains. Park expands on   to mitigate further disruption due
          Mungo Park, SAPICS member, past   this issue: “Many customers began   to Covid-19,” he stresses. “This
          president of SAPICS and senior key   moving products by air, which has   will enable them to better manage
          account director at DSV.          been hugely problematic given the   future supply chain disruption.”
                                            constrained air freight volume which
          “Clothing and homeware retailers   has been available. Airlines have   Also encouraging, Park notes,
          face the challenge of having      been using passenger planes as     is how well the supply chain
          summer stock in their stores and   freighters able to carry about 100   profession in South Africa has
          distribution centres and need to   tons of cargo at a time.          responded during this challenging
          receive, process and distribute                                      period.
          winter stock as quickly as possible,”   Some service providers and large
          he stresses.                      businesses have been making use    “Service providers have been
                                            of charters, which is very unusual in   innovative in creating solutions
          Because online shopping has been   the South Africa market. Even so,   for customers. Internal logistics
          constrained, most retailers have a   airfreight rates have increased at   operations are successfully guiding
          backlog of online purchases made,   least five-fold since mid-March and   businesses in the adoption of
          which must now be delivered. Park   are still increasing weekly. Covid-19   different approaches to managing
          says that this will put pressure on   regulations in countries of origin are   supply chain costs. These are
          couriers and distribution centre   further exacerbating the movement   testing times, but supply chain
          operations as the number of       of air freight where shutdowns or   management professionals have
          workers on shifts at the distribution   an increase in customs inspections   risen to the challenges. Some of the
          centres has been reduced to       is inhibiting and delaying the     short-term activities, innovations
          facilitate social distancing. “Online   departure of shipments.”     and interventions have proved so
          shopping is definitely something                                     successful that they will become
          the government should allow and   Looking ahead, Park believes that   standard operating processes going
          support as it allows shoppers to   South Africa’s supply chain industry   forward.”
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