Abstract
M.Comm.
South Africa is currently in the same position regarding distribution channel
design and operations as the rest of the world during the 1970's and many of our
warehouses still operate in the same manner as those of the 1970's, using outdated
methods and infrastructures. According to Bailey (1996:3), the failures of the
outdated systems were:
90% of the systems functioned ineffectively
- High-tech systems were inflexible ; -
Computers could not cope ; -
Focus was on storage rather than throughput ; - Just-In-Time destroyed many facilities
; - Lack of integration within the supply chain
Some distribution executives and warehouse managers may disagree, but it is
evident that there is uncertainty and frustration associated with the management of
warehousing activities in companies today. During research conducted, a
statement was made by a distribution executive of a leading corporation, who
said: "I am unaware of any corporate function where the manager knows so little
about what he will do tomorrow as the manager of a warehouse."
Traditionally, warehousing has fulfilled a support function to both manufacturing
and marketing by storing the company's raw materials, semi-finished and finished
products. However, the warehousing function also responded to other corporate
needs without receiving the necessary attention and support of management to
improve its organisation and effectiveness.
The challenge of this study will therefore be to design and develop a distribution
channel which will approach the supply chain holistically, from the identification
of the total costs associated with alternative logistical systems right through to
identification of the lowest cost network that meets corporate, marketing and
customer requirements. The objective is to develop a strategy for a throughput
distribution centre close to the market place to shorten the cycle time within the
South African context, which will accommodate the principles of reducing
individual warehousing requirements and transportation costs by transforming the
modus operandi from the conventional "push" way of operating to a "pull"
system. This is commonly known as Quick Response (QR) or Continuous
Replenishment (CR) and will allow the principals to reduce stockholding areas
and simultaneously provide fresh delivery.