Strategic importance of logistics in the Fourth Industrial Revolution
By Jefta Gaoab
The Fourth Industrial Revolution will characterise the years ahead. We already feel the effects this revolution will have on businesses locally and globally. The revolution is all about systems that integrate computation, networking and physical processes. These include a myriad of technologies that span themes such as mobile devices, the Internet of Things, artificial intelligence, robotics, cyber security and 3D printing.
This revolution will bring benefits and challenges for businesses and societies at large. It is very distinct from any prior revolution, given how fast it is penetrating the infrastructure of businesses and central governments.
But how important is the function of logistics and supply chain management in any business establishment? How does it impact the performance of an organisation? Our economies and business environments vary depending on the nature of the business, what industry one operates in, but the function of logistics and supply chain management and execution thereof remains the same regardless of the industry. There are many different definitions about logistics and supply chain management.
For the purposes of this narrative and for the readers that might not be familiar with the two concepts: Logistics is essentially a planning orientated framework that seeks to create a single plan for the flow of products and information through a business, whereas supply chain management builds upon this framework and seeks to achieve linkage and coordination between the processes of other entities in the pipeline suppliers’ customers and organisation itself (Christopher 2005). Supply chain management is a wider concept than logistics. Logistics and supply chain management are inextricably linked.
Supply chain also deals with purchasing, procurement and tendering. In Namibian context the role of logistics and supply chain management is totally misconstrued and is misplaced to a large extent. Traditionally or in ancient times logistics and supply chain management function resorted under the wings of finance in many business establishments, an arrangement which seemed to work then. We are however living in unprecedented times and it is required of organisations and their leaders to constantly scan and monitor theiroperating environments and immediately effect required changes to conform to the changing environments for them not to be left behind.
THE FOUR AREAS
Johari’s Window speaks about four areas: Transparent area- this area comprises of information known to self and unknown to others, a “transparent” part of personality. Blind area- this area concentrates on how others perceive these aspects in you, but you are unaware of them yourself. Hidden area: this area speaks of information that you are aware of in yourself of which you choose not to reveal to others. Potential area: this area speaks of information unknown to self and unknown to others and which warrants a need to develop. We should take leaf from Johari’s Window and transform ourselves as leaders and the organisations we lead.
The function of logistics and supply chain management should be a stand-alone strategic function that must be headed by a knowledgeable and qualified person in that regard. Logistics and supply chain function should be detached from finance business units and should not be confused with supply chain function. The fact that finance business unit head pays for the services on behalf of the organisations does not automatically make them knowledgeable in supply chain. Logistics and supply chain is much more than paying for services rendered. It is a far more complex function. Logistics and supply chain management requires a strategic representation at the strategic executive management level.
Many a times we find that the strategic executive of finance represents the supply chain function which basically renders disservice to the entire supply chain as they do not comprehend the intricacies of the function in its entirety. A supply chain expert must be representing his/her business unit at the strategic executive management level and this function should not be operated on a gut feel or by non-supply chain experts, period. However, in downtown, lokasies or informal settlements you will hear people talking about “I am into supply” referring to being or operating in the space of logistics and supply chain management. This underscores the importance of the latter function. This is equally important and can be likened to black market which is often not recognised and recorded but gives significant input and meaning to the economy of any given country.
SERVE WITHOUT FEAR
By extension towards Fourth Industrial Revolution, the functionality of the Central Procurement Board of Namibia must be strengthened and capacitated to without fear or favour serve and be true to its intended purpose for establishment. Regarding the internal structure of staff members in execution of functions and performance by bid evaluation and procurement committee members of different state-owned enterprises, there seems to be inconsistencies in interpreting, applying and execution of public procurement act and its functions which could be detrimental or have adverse effect on the image and reputations of the organisations they represent.
Proper and continuous training must be given to bid evaluation committee and procurement committee members and they must be hold accountable for inconsistencies, misinterpreting and deliberately manipulating a different outcomecontrary to procurement act and procurement regulations. Once they are made aware and hold to account for irresponsible decisions that would warrant seriousconsequences because of manipulated outcome than they will become more serious in executing their roles as committee members. There should be a zero margin of deliberate errors. There also seems to be “grey areas” in the Public Procurement Act which need to be addressed forthwith.
If only the suppliers, bidders or tenderers fully comprehend the procurement act and procurement regulations, know what is required of them in terms of performance of their roles and their rights then we stand to have an efficient supply chain that will add value through the entire supply chain processes.
Jefta Gaoab is a holder of a bachelor of logistics honors degree and a master’s degree in Logistics and Supply Chain Management. He writes in his personal capacity.