Introduction to logistics

As the process of distribution became an important activity during the 1800s, logistics emerged as a system. It was introduced to circumvent distribution inefficiencies that were being faced by fighters and war heroes in their quest to fight for freedom during the world war eras. According the Council of Logistics Management (1986) is the process of planning, implementing and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point-of origin to point of consumption for the purpose of conforming to customer requirements. Logistics refers to the coordinated movement of resources from the point of extraction to the point of consumption. It is a simultaneous movement of resources in a coordinated sequence. Logistics has been on the top echelon of organisation success. For decades, it was adopted and embraced in most organisation and development of the logistics system emerged. As it is said, logistics came from the military. The era of the world wars, the way they undertook their distribution and supply of resources to the war front led to the development of the logistics system. Logistics led to the birth of supply chain management which anchors success in most organisations. Supply chain management, a business philosophy which is believed to have the technical fundamentals needed in steering an organisation to a profitable motion. Management in however be protecting the interests of the shareholders, procurement has been a gold baby along the supply chain as it gives, as it equips senior management with the necessary tools to view the different functions of the organisation as one. Supply chain integration, globalisation, lean supply chain systems and so forth. Accent

Green Procurement, the missing link in harnessing a sustainable economy in Zimbabwe

As better methods of production are being embraced globally, sustainability has been adopted and being embraced by big corporate. Some have acquired knowledge about this business philosophy and some have drafted and implemented it as a corporate goal. This business philosophy has grown and a law to enforce green practices have flourished in The European communities. Sustainability it is all concerned with the use of goods and services with less or no environmental and social impact during its life cycle. Green procurement is a process whereby procuring entities procures goods and service with reduced environmental impact throughout their usage period. Sustainability has been the hub for economic growth in European states. In 2012 Ireland adopted its GPP action plan entitled Green Tenders. This set targets for fifty per cent of all procurement in eight product and service groups to be green. In 2014, the Environmental Protection Agency published a comprehensive set of criteria and guidance to help authorities meet this target. The criteria draw upon those set at EU level but take into account the specific purchasing patterns and market structure in Ireland. The guidance also addresses both EU and national environmental legislation. It is believed that Government expenditure on works, goods and services represents around 14% of EU GDP, accounting for roughly EUR 1.8 trillion annually. By using their purchasing power to choose goods, services and works with a reduced environmental impact, they can make an important contribution towards local, regional, national and international sustainability goals. GPP can be a major driver for innovation, providing industry with real incentives for developing green products and services. This is particularly true in sectors where public purchasers represent a large share of the market (e.g. construction, health services, or transport).

In Zimbabwe, the Environmental Management Agency (EMA) plays the role of keeping the environment safe. Lis

Supply Chain perspective September 2018

Procurement, it is believed to be a legally mandated organisational function responsible for committing organisational funds. However, public procurement has to be managed as it lies on the fulcrum of government spending. A sound public procurement policy has to be formulated and embraced to circumvent and encourage due diligence in execution. It is that function that is responsible for the acquisition of all resources in the organisation. A sound procurement function work taking into consideration the five rights of procurement so as to create value. These rights are the right price, right place, right quality, right quantity and right time. Effective and efficient product and service delivery is believed to be on the helm of customer satisfaction. In Zimbabwe, public procurement is governed by the public procurement and disposal of public assets bill. It regulates and controls how public procurement is to be done. During the old era, we relied on State Procurement Board which acts as the data tank for everything that happens within public spending. As business processes emerged from being production oriented to customer orientated, these began to be a competitive strategy on the market. Some organisation became customer centric and some relied on their old culture of believing customers will come for the product. As supply chain efficiencies impacted on our day to day, better living standards, sustainability, value creation and delivery of quality services were the main objectives. As the economy deteriorates, those on the top echelon took advantage every time they got a chance to abuse their office powers over these resources enough to sustain everyone and converted them to their personal benefits.

In every tender floated, there was a fraudulent activity going on behind. In 2011 a tender for the supply and delivery of malaria rapid test kits was withdrawn with participating bidders being refunded their tender fees because it had been corruptly flouted. Public procurement lies on the epicentre of national spending and has to be managed well to have a more controllable nation. High levels of unemployment and high cost of living in Zimbabwe led to an outbreak of Cholera in Glenview area in Harare. A well-wisher, Econet wireless chose to assist our local Board of Harare with $10 million to assist with drug acquisitions and upgrade the standards of living in that area. A cholera outbreak in Glenview areas of Harare left a disgruntlement within the procurement profession. Some practitioners were caught trying to benefit from this transition which was scheduled to benefit the needy. A selfless heart is needed in order to revive and upgrade our standards of living. Due to some pathetic practitioners, instead of helping the need they just thought of extorting money from the donor. This has been a norm in this country as you see some aid falling back due to lack of accountability and responsibility. Due diligence has to be practices by every practitioner in this economy. Due to limited release and unavailability of information pertaining to these invoices and purchase orders, only managed to find out about the disposable glove which was posted on Mr Masiiwa’s blog. Glove which cost $3 but was changed to $65, this shows the existence of a cartel in those who execute public procurement in this local board. Revocation of these individual’s practising licenses is idea as it is one of the first steps in mitigating corruption and moving forward in developing our nation. However these practitioners maybe held responsible but questioning need to be directed to the senior guys of the City council i.e. Finance Director, Chamber Secretary and Town Clerk. These guys are the ones that approve and finalises a purchase of these types. If it was declared petty cash transaction maybe, but how is such an acquisition declared petty cash? We all need to relook into this story in a much wider scale.

In 2011, former Finance Minister of Finance and Economic Development Tendai Biti issued a statement in support of the system requiring training and development in public procurement. Budgets burst due to untrained workforce in these critical departments of the government. As strategic supply chain systems emerged on the global market, effective competent strategies had to be embraced so as to have better supply chain systems in our economy. In May 2017, newer regulations to the public procurement and disposal of asset bill chapter 22:23 were drawn. The new act led to the abolishment of State Procurement Board which was dully considered a failure in implementing and executing public procurement reforms. Tendai Biti during his tenure as Minister of Finance and Economic Development, he pointed out the proper training and development of procurement practitioners as an asset to our economic recovery. He also supported the creation of procurement and Supply Council of Zimbabwe (PSCZ) which was supposed to be held responsible for licensing practitioners in Zimbabwe. Supply chain association of Zimbabwe was established with the same ideology but on a much proactive manner. As business practices changed on a day to day this gave supply chain practitioners a much wide area of jurisdiction.

Supply chain management in Zimbabwe

In today’s business trends, most organisations try to gain a competitive and comparative advantage on the market place. Some are striving for growth and some are striving for survival. In a VUCAH economy, doing business is being costly and less value is created. Supply chain management is considered to be one of those critical issues and is playing a very crucial role in organisational success. A sound supply chain system should have essential elements of visibility, collaboration and resilience. The position of the supply chain function of an organisation is driven by many business processes and it depends with the industry and the organisational hierarchy. Due to intense competition and modernisation, effective supply chain management systems are emerging and embraced by many organisations in trying to ease their business operations. In supply chain management, the leadership component is a very important business process and it is responsible for strategy formulation. If supply chain strategies gets executive buy in, then the implementation becomes a critical and follow ups can be done from top level management hence making it easy to achieve competitive advantage. The satisfaction of customers is determined by the level of value created in that consumption. Professionals and academies tend to confuse the concepts of supply chain management with some other business processes.

When we talk of a supply chain, it is a network of activities and business processes involved in the movement of a commodity from the point of extraction to point of consumption. In short, it is an integrated network of business processes involved in satisfying the needs and wants of customers. These include extractors, processors, transporters, wholesalers, retailers and distributors. Supply chains encompass the companies and the business processes needed to design, make, deliver, and use a product or service. It is a coordinated and sequential movement and steps taken towards fulfilling a need. Therefore supply chain management is a system of planning, leading, organising and controlling business processes that are involved in the movement of a commodity to the point of consumption. It is a management philosophy that involves the management of businesses processes that are in a supply chain. Management of these business processes involves effective marketing systems, effective distribution systems, value creation, sound strategy formulation, goal setting, effective procurement decisions and strategic sourcing. An effective supply chain system adds value to a commodity, and leads to delivering satisfaction efficiently. The elements of a supply chain are procurement, logistics management, operations management and supply management. An example of a supply chain is illustrated below. Supply chain of mealie­-meal.

Farmer→miller→retailer→consumer

The farmer is the origin and the consumer is the end user. Supply chain management comprises of the management component, business processes, networking structure. These are the most commonly used components of supply chain management. The management component formulates goals and traces implementation and enforcement. It sets long term goals and determines what level of integration and management should be applied for each link. The business processes component focuses on embracing the duties of each supply chain member and analysing their relevancy in the supply chain network in order to reduce double handling and eliminating unnecessary costs. It also determines processes that should be linked with each key supply chain member. And the networking structure component determines the duties performed by each supply chain member and determines who the key supply chain members are.

A driver is anything that gives a competitive edge in terms of aggregate performance using which ever scale or method. Drivers to supply chain are those that give supply chain a competitive edge in terms of aggregate performance. These vary with industries the organisation is in but only a slight difference is observed. In most manufacturing industries we tend to see that we have production, distribution, transportation, information and inventory. In some industries they have procurement, information, transportation, inventory and location. Supply chain drivers vary with industries and are economically determined as well. These drivers also determine the position of the supply chain function of an organisation.

Supply chain management drivers are driven by supply chain drivers. These are technology, financial resources, human capital, organisational design, globalisation, lean supply chain methods and supply chain integration.

  1. Globalisation as a supply chain management driver we talk of free trade regulation and embargoes, no borders, foreign investments, off shoring, on shoring, strategic sourcing, connected countries ( Cape to Cairo railway), benchmarking better business processes
  2. Lean supply chain systems we talk of quality management systems, lean production, sustainability, cost reduction (rail to road)
  3. Supply chain integration we talk off customer relationship management and supplier relationship management

I will pick in the current Zimbabwean situation in 2016 to 2017, we have the command agricultural scheme which was initiated in order to revive the grain giant GMB (Grain Marketing Board). The strategic sourcing and supply excellence (S3E) model was embraced and put into practice by this initiative. When we talk of effective supply chain systems, value creation, we talk of goal setting and strategic sourcing. In this case our government decided to create value by outsourcing grain from local farmers across the country. They provided financial and resource supports in order to reduce and mitigate risks. This led to the creation of value within the Zimbabwean economy. Lean processes, cheaper farming methods, cheaper milling processes, nearness to the market, cheaper distribution channels and exceeding customer expectations. The main issue of effective supply chain systems being the creation of value. Delivering satisfaction efficiently and effectively exceeding customer expectation positively.