industry news |
by Tristan Wiggill
DHL presents
emerging markets findings
aBrMOVE attended a round table discussion with DHL recently, at which the findings of the company’s White Paper, “Path to
Growth: Shaping Tech Sector Supply Chains in Emerging Markets” were unpacked.
➲ Doing business in emerging markets poses risks, but high rewards
P
resenting the report to the media in Rosebank, Johannesburg
were Ewan Shannon, technology spokesperson for DHL
Supply Chain and Rob Williams, business unit director for
Automotive and Technology for DHL Supply Chain.
The White Paper, compiled by Lisa Harrington, a president,
associate director and lecturer at various institutions on the subject
of supply chain management, calls for technology companies to reevaluate their supply chain operations in order to capture a slice of
the estimated $30 trillion emerging market pie.
In the paper, explained to us by Shannon, Harrington suggests
that “regionalised global supply chain” models are emerging in
order to meet global shifts in demand. According to Harrington,
regionalised supply chains, shortened product lifecycles and shifting
demographics characterise the challenges and opportunities in the
technology sector in emerging markets.
DHL’s white paper says the pace of change in the technology sector
has created more business uncertainty. Contrary to mature markets,
where demand patterns and technology adoption rates are better
known and better understood, and where the protocols of doing
business are well-defined, the same cannot be said for emerging
markets.
Greater levels of uncertainty are created when the unknowns of
operating in new markets - with varying levels of infrastructure and
unpredictable demand growth - are combined with the pressures of
the sector and expectations for effective service, product innovation,
competitive pricing and personalisation. Companies wishing to do
business in emerging markets lack the levels of familiarity that doing
business in developed markets affords.
DHL’s white paper identified three supply chain practices the
technology sector must adopt if it wants to capitalise on emerging
market opportunities. These include:
Managing risk through a scalable and flexible approach to market
penetration;
| logistics in action
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Prioritising compliance and quality from the start, rather than lowcost quick fixes and lastly, avoiding a “one size fits all” approach.
Emerging markets were once seen as places for sourcing
products, based on low-cost labour. But that paradigm has
changed. Emerging markets are fast becoming engines of demand.
A noteworthy example of this was the decision taken by Apple to
move production from China to Texas.
Shannon said that DHL had an “extensive operation in South Africa”
that employed 4 000 staff and which had 42 warehouses. He said
the company was “playing in every market.”
He described emerging markets as being dynamic and explained
that they were skipping many stages of technological progress.
Shannon added that DHL was partnering with Vodafone on a
number of technology projects, particularly where vehicle tracking
across borders was concerned.
Pilferage was a major problem in Africa, while the ability to provide
reverse logistics and speed and flexibility were of paramount
importance on the continent. He said more focus was being placed
on BRICS countries. He singled out Angola as an attractive country
in which to do business, saying it had a rapidly developing economy
with tremendous natural resources that were yet to be unearthed.
According to Shannon, supply chain companies must fulfil rapidly
growing and highly volatile demand patterns, must learn to
operate in highly complex environments plagued by inadequate
infrastructure that have complicated, divergent legislatory
requirements and needed to hedge their bets regarding inventory
carrying decisions to ensure supply and avoid obsolescence.
Communication with customers was the key to being innovative.
He said that DHL was actively pursuing standardised systems that
could be incorporated worldwide, with various technology templates
available that were adaptable to local conditions. Shannon
concluded by saying a fully integrated, modal system was required
for success in Africa.
july 2014