Backdoor delays and inefficiencies at retailers is costing the trucking industry many millions of Rand every year through idle time.

Recent national logistics surveys under the auspices of the CSIR revealed the cost of freight logistics to be close to 15% of GDP. This has been perceived as being too high and prejudicial to the country's long term economic well being. There is, however, a lot that can be done to reduce this cost if retailers, rather than transporters, develop the capabilities to deal with the problems facing the industry writes FleetWatch correspondent Max Braun.

Most of the perceived problems have been laid at road freight's door since it accounts for more than 70% of the huge annual freight logistics bill. However, at the recent presentation of the Barloworld Supply Chain Foresight survey for 2008, hosted by the Consumer Goods Council South Africa (CGCSA) to discuss the FMCG and Retail Industry report and other aspects introduced by the CGCSA, it came as a surprise that competent, independent research reveals that supply chain inefficiencies in the retail industry currently leaves seven billion rand on the table each year.

This huge amount of wasted money by retailers has been identified as a lack of understanding of supply chain complexities and an unwillingness, or inability, to develop the capabilities to deal with the problems. 

The Barloworld Supply Chain Foresight survey reveals a number of factors that give some insight to the nature of these problems. As might be expected, reducing inventory is a unanimous objective and significant desire to improve cooperation and corroboration in retail supply chains. Retailers, it seems, wish to have more agile and flexible supply chains.

Given the history of "back door" delays and inefficiencies and the past lip service paid to fixing the numerous problems at receiving bays, how should we rate the prospects of there being some real commitment to corroboration and cooperation? This is somewhat suspect when the retail industry has the reputation of thinking the supply chain begins at its back door.

Compared to the total sample surveyed by Barloworld, retailers have a low focus on achieving cost reductions especially in respect of inbound transport, warehouse and distribution costs. The focus seems to be on improving customer service and reducing stock-outs.

This driver is employed to drive but spends many hours of his day whiling away his time while waiting to offload at customer premises. It's a waste of time and money.

Understandably there are challenges to improve IT systems. However, when retailers say they wish to create collaborative opportunities with a view to achieving a common supply chain vision, they need to sit down, urgently, with 3PL and 4PL service providers and transporters to eliminate the long overdue problems that are responsible for so much of the seven billion rand that is being wasted every year.

The huge increase in the fuel and other transport related costs, if not properly and urgently addressed, will add even more to this outrageous and avoidable annual cost, not to mention the possibility of a shortage of suitable vehicles to meet their longed for improvements in customer service.

The surveys clearly show the high level of concern for the lack of skills, particularly at the operating levels in both the FMCG and Retail industries. It is time for these industries to create opportunities for appropriate training interventions to be developed and implemented as soon as possible. This is particularly so when it comes to managing the transport aspect of their business.

We should not forget that not everyone in these industries with responsibility for the use of transport and related activities are aware of the huge cost to their businesses and service providers when these resources are not efficiently and consistently managed. When the formidable production of transport commodity (ton/kilometres is an example of transport commodity) is not used, transport efficiency drops to a fraction of its potential.

Major contributors blocking higher levels of transport efficiency include: wasted and lost time, unprofitable loads, unacceptable loading and offloading practice and procedures, cumbersome documentation, poor routing and scheduling of loads and vehicles, unnecessary journeys, under-trained warehouse staff and distribution management and insufficient knowledge and understanding of basic transport costs. 

Thanks to the almost 70% response from CEOs and senior logistics managers, the Barloworld Supply Chain Foresight for 2008 is most worthwhile with meaningful focus on the complexities and challenges facing South African distribution and logistic intensive industries - and how they see the challenges and their capability to deal with the issues.