Logistics efficiency in the South African chemical distribution sector.
The chemical raw material distribution sector in South Africa is a very competitive market segment, moving mainly commodity raw materials between their manufacturers and the finished goods manufacturers. With ever more knowledgeable customers demanding service excellence and inventory availability, with short lead times, the distributors need to leverage their logistics efficiencies to set themselves apart by offering unique additional value to their customers. This also improves margins, providing a sustainable competitive edge. The objective of the study was to identify best practices and technology tools to improve logistics efficiencies, information systems to enable these best practices and human resource and training aspects that need to be considered within the South African context. After an initial explorative literature review, the data that was analysed through descriptive and inferential statistics, in support of the objectives, was derived from a phenomenological interview schedule completed by 33 subjects and a structured questionnaire completed by 121 subjects, comprising of elements from suppliers, distributors and customers. The literature review revealed a number of business operations and logistics management concepts and best practice management tools useful for logistics improvements. The need for good information and communication was highlighted, along with the need for appropriately designed, networked business supply chains that meet the customers’ buying behaviours. Furthermore a number of technological tools and information systems to enable the best practices were revealed. It was found that correctly identified core capabilities necessary for success assist in identifying core competencies and skills needed. A number of skills development methods were identified. From research data collected, the constraints and needs discussed and recommendations received, it was confirmed that a number of the best practices, technology tools, information systems, human resource strategies and skills development techniques identified in the literature review and the data are applicable in the chemical raw material distribution sector in South Africa. It is recommended that distributors invest in technology and information systems, focus on supply chain design, demand forecasting, advanced shipping notices, effective management tools and invest in skills development to improve logistics efficiency.