Adding value through logistics : a value chain analysis of steel product handling in Durban Port.

Abstract

Trade liberalization and globalization have resulted in the free flow of goods, services, capital and people. In this regard ports play a vital role in linking supply chains, as goods flow from the point of inception through the chain up to the customer at the end. This research was conducted to determine and evaluate the role of logistics in the value chain of steel products that pass through Durban Port. The impact of logistics - measured in terms of costreduction, shorter lead times and better customer service - that would contribute to the competitive advantage of businesses was evaluated. Other countries like China and India are also manufacturers of steel products, and it is therefore important for South Africa not to lose international markets due to prices and products that are not internationally competitive. In essence, this paper unpacks the debates surrounding the high prices of steel products from South Africa, and suggests how these prices can be reduced. In this regard the investigation into steel products provided an excellent case study, as steel contributes significantly to the GDP of the country. The study analyses all logistics activities like transportation, warehousing, handling, quality control of goods and a just-in-time management approach. Informal interviews and a case study based on Durban Port highlight the role that logistics activities play in adding value to goods that pass through Durban Port. The implications of the findings are discussed and proposals for redefining the role of logistics in an organization are offered.