Supply infrastructure still holding back South Africa

CIPS 7 March 2011

Supply infrastructure still holding back South Africa

Less than half of South African firms believe they have sufficient internal supply chain and logistics skills.

A survey of 300 executives shows that 70 per cent believe that a lack of general business skills is hampering South Africa economically against its competitors, while only 48 per cent of those surveyed said their business has the necessary logistics and supply chain skills.

In addition, 72 per cent also said there is a skills crisis in inventory management within parts of companies based in South Africa.

To alleviate the skills problem, uncovered in the research by Frost & Sullivan, 44 per cent of organisations said they had trainee or management development programmes for procurement and sourcing.

While companies focus on developing skills, there is frustration at the lack of progress in South Africa’s supply chain infrastructure.

The report, commissioned by supply chain firm Barloworld said: “While there is general disenchantment, and even anger, among the private sector about their powerlessness to do anything to improve the quality of the country’s infrastructure, they are nevertheless willing – and urgently wish to – engage with government to find solutions.”

While the study cites significant improvement in infrastructure in comparative emerging economies such as China, Brazil and Russia, South Africa has only shown marginal improvement in this regard.

Respondents wanted to see additional rail capacity for the movement of goods and public-private cooperation in the rail sector at a strategic and decision-making level in South Africa.

“The key question that emerges from our research this year is, how do we respond to the emerging market challenge on a global scale?” the report said.

“While it is unlikely that the global economy will see the levels of growth and demand that characterised the boom of five years ago, as an important emerging economy ourselves we have to be able to respond to the growth and competitiveness challenge posed by other emerging markets. We cannot let our skills and infrastructure challenges drag us down in those efforts."

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