News archive

05/02/2001: Efficient supply chain delivers the ‘goods’ to government bodies

Government authorities have much to gain by bridging the gap between economic and commercial development via supply chain efficiency, according to Logistics Bureau Director Maurice Sinclair.

Sinclair believes that local government, state development bodies, port, airport and rail authorities can create commercially sustainable strategies by taking a big picture approach and focussing on the entire supply chain – of which they are just one small link.

“Traditionally, these organisations have taken a very local approach, where they consolidate their strengths and ‘push’ the benefits of their infrastructure, business inducements and other attractions to their target customers,” said Sinclair.

“If you asked them what their customers’ actual needs were, many would not be able to articulate them. They need to think more globally and consider how their decisions ultimately affect their customers.”

Sinclair said many government bodies were beginning to understand how they could improve their commercial growth by adding value to their supply chains.

“It shouldn’t simply be a decision to use a particular port of entry because it has good shipping links or the organisation wants to push its economic infrastructure. The ‘push’ approach generally results in a market share grab and does nothing for creating sustainable development.

“Sustainable change will result by focussing on how a company makes its decisions about its supply chain. Otherwise the focus on functional development will only ever yield small opportunities.”

Sinclair said major supply chain cost areas included inventory, transport, warehousing and infrastructure. He said value was a result of productivity of resources, perceived benefits to customers and pipeline savings via a reduction in pipeline inventory and speed through the pipeline.

“It’s a matter of examining product and process efficiency. Once there is excellence in both of these areas, there is supply chain value,” said Sinclair.