In today’s world of high-tech manufacturing, every process and step remains a critical part of transforming raw material into practical, well designed and perfectly executed products and ensuring they are supplied and delivered to exceed the customer’s expectations.
With the focus on quality and excellence, the one process which is often seen as the glue that binds the different functions, is the Supply Chain Department. At the risk of minimising the emphasis on all the facets that make up this ever-important business function, strategic procurement remains increasingly central to the success of performance within Astrapak.
Albeit that procurement is merely a part of the end-to-end supply chain function, it more often than not is key to Astrapak’s level of ability to retain its competitiveness in the market place.
Nawaaz Kalick, the Group Procurement and Supply Chain Executive, is quick to outline the scope he oversees at the head of this support division within the Group. In a nutshell, it entails the sequence of processes involved in the production and distribution of a commodity. In laymen’s terms this involves co-ordination of the customer service, warehouse and distribution, expediting, and Sales and Operational Planning (S&OP) Teams to ensure that customer demand is being met. As a senior member of the executive the need exists to offer strategic and tactical advice and to provide managers at each production facility with guidance and support. In coming weeks, further information will be shared on each of these Supply Chain undertakings to emphasise their role in Astrapak’s achievements.
One never loses sight of the role that suppliers play in developing a powerful procurement process. The relationship between Astrapak and it’s key suppliers is the foundation for this success. There is however numerous other selection and maintenance criteria that help select and sustain the accomplishment of solid partnerships with all suppliers. These include the supplier’s BBBEE rating, commercial competitiveness, sustainability plans, infrastructure and capacity, quality assurance and their flexibility to innovate. Astrapak places a high level of emphasis on critical suppliers understanding their strategic direction, and to support the Group in attaining their goals.
Formal supply agreements and Service level agreements with suppliers form a tangible part of creating and executing a balance between demand and supply. These also create the platform to manage the performance of both parties and to mitigate risks. A lead on from these agreements is interaction and communication at various levels using a number of channels from electronic platforms to face-to-face meetings. This has greatly enhanced co-ordination between both parties.
While having a wide base of suppliers may appear to offer greater flexibility and higher procurement savings, Astrapak has found that the management efforts required for such a wide supplier base dilutes the benefits and actually adds further complexity in managing the supply chain. As such, they embarked on a strategic review of their supplier base over the last two years. This was not limited to but included the categorisation of major spend areas, and the segmentation of suppliers into strategic, tactical or vendor-type categories. As difficult as it has been, they have reduced their supplier base by 90%. Even though much work is still required in some categories, this has created a powerful procurement base from which they are able to work from.
In no way reducing the importance of their customers and suppliers, Astrapak recognises the expectations of all their shareholders and stakeholders and remains committed to providing them sustainable value. Part of Astrapak’s commitment in Procurement and Supply Chain Management is functioning to strict working capital targets that are imposed on their operating companies. This requires the use of Lean manufacturing principles, which encompasses aspects such as operating on a JIT (just-in-time) ordering basis. Some key suppliers remain part of Astrapak’s working capital programme by providing consignment stock holding, or holding stock against Astrapak’s firm demand forecasts. This allows for product to be called off and delivered within a fraction of normal lead times.
Astrapak remains committed to their goals while never losing sight of the internal and external people and partners who help them achieve the perfection for which they strive.