SupplyWorx Vol 15.3

Your Risk Exposure  Review A weakening currency brings challenges in asset valuation

Global?  Going A network is the key to success

 Sideways Is Not a Bad Thing

Linear progression to the top job is not guaranteed

Tracking Africa’s Growth  Fast Look to techno & smart ports Skills Shortage  Africa’s Relying on a three-pronged strategy

 Procuring Equipment From International Markets Review your risk exposure

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Going Harness Global? a network It’s one thing having to establish a reputable and trustworthy brand in the country of origin, but doing so on an international level is a daunting task, even for the most adept business owner.

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uilding sustainable business relationships in an international market often proves to be a tricky task, even for those with access to their own private jet and having the luxury to travel abroad every couple of weeks.

Howard Blake has found ways to navigate these difficulties and has come out on top, having built a powerhouse international network that supports and believes in his business.

A challenging landscape One of the biggest obstacles companies face when taking business international, is holding the attention of those you are trying to build connections with. In a world bombarded with products and solutions that are in direct competition with your own, it is hard to stand out from the crowd. “It is important to anticipate that the person you’re in contact with will do a digital look up on the brand, product and you, as a business owner. This is where honesty and a strong digital presence come into play,” Blake explains.

Unfortunately, in a world where social media

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has the power to make or break a business, a digital persona could mean the difference between a sustainable business relationship and a bad rap. If a business owner’s digital presence is impressively constructed and reaching thought leaders via the right channels, there is a strong possibility that the new contact will have more confidence to invest in the vision.

Business relationships are built on trust. That has always been the case. It is for this reason that owners need to be extremely careful how they market their product or solution while they network. Delivering on promises timeously and effectively will ensure that investors or possible resellers believe in the end goal.

Along with the product that is being offered, credible value is crucial. When approaching new markets, the fact that you are an unknown quantity can be overridden by a credible backing or recommendation. Your offering has to be well trusted on home turf before you can take it abroad. This talks to scalability and the safety of being able to address scale without roll out issues.

Connecting on the right platform Blake has spent years building up his international contact list and nurturing these relationships, in order to establish the Blake Holdings brand on an international level. “We live in a digital age, so it is important to have a digital persona that people can trust and call upon for insight,” Blake explains, “This is

best served on platforms like LinkedIn on a personal level and a web page on a product level.” These digital platforms serve as an avenue to connect the product with the overall vision, and to get that vision in front of the right people.

Heading abroad Everyone needs to start somewhere. For Blake it was cold calling and a few key introductions. Attending international conventions is another great way to connect with possible stakeholders and like-minded people, but this can be tricky when a business is starting out.

Once the brand is established in its home country, business owners can start to investigate the possibility of taking the name to international conferences and conventions. “This is an essential part of your business if you’re hoping to diversify and grow internationally. Something I have been focusing on for the past 10 years,” Blake says. These opportunities are critical benchmarking opportunities to establish the international relevance of an offering and can determine whether or not these efforts are sustainable on an international level.

Ensuring international relevance is the next key step. Taking a business from a small startup in South Africa, to a thriving international metropolis requires forward thinking. Tailoring conversations and input to foreign markets will give a brand a voice, and with that voice comes buy in, trust and brand loyalty.

While social media platforms are an essential tool to stay top-of-mind and relevant, nothing beats a personal interaction between two like-minded business people. Using social media to share thoughts is a step in the right direction, but getting out there and building real human connections is vital to building a successful business, even in a largely digital world.

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ccording to the results from the latest Jack Hammer Executive Report, Finding the Facts: SA’s Future Leaders, 4% of the top executives in SA’s Top 40 companies are under 40 years of age. But in a break from the trend among their older peers, 86% of the leaders in this group are black South Africans, including all of the women in this group.

“So what we are seeing is that a significant portion of the total number of executives under 40 are black South Africans. Therefore, despite the fact that the faces at the very top have remained largely unchanged since our previous research, there is some good news to be found in this pool of talent coming up through the ranks,” says Debbie Goodman-Bhyat, CEO of leading executive search firm Jack Hammer, which releases the annual leadership report.

“Further good news, is that these rising stars are available for selection to companies which are aggressively accelerating their executive appointments, providing a significant opportunity to change the face of the company’s top echelons in future, if this opportunity is properly harnessed right now.”

Goodman-Bhyat says that organisations must become more strategic about transformation. “If the intention is to develop a substantial pool of diverse leaders in the core business space, where they will be positioned for strategically influential roles and potentially the top job, that is where companies must make their appointments.”

However, a further interesting aspect to the latest findings, is the insight that executives working their way to the top should not simply grasp any opportunity for promotion. Instead, a sidewise move rather than an upwards one could often be the best long-term plan.

“Ambitious young leaders have to do proper goal planning, or they may one day find themselves unable to make the jump from the stream in which they find themselves, however senior, to the stream in which they have a chance of becoming CEO,” she says. “They should put in place certain measures which have been shown to dramatically improve their chances of becoming company chiefs down the line.”

Goodman-Bhyat says the most important factors which can lead to the top appointment are:  Experience and a solid track record.  A post-graduate qualification, particularly with a strong technical, finance or business background.  Experience running a profit and loss centre, within a core area of the organisation.

This last point is the key to it all – the data shows that the likely route to the CEO position comes from roles in core areas of the business, where individuals have proven themselves with accountability for the bottom line.

Secondary or support functions, such as HR, marketing, corporate affairs, legal and governance (and similar corporate services positions), regardless of how strategic the role itself is, will seldom lead all the way to the top, notes Goodman-Bhyat.

“For our under 40s, rising to the top will take time. Whilst on this trajectory, they need to ensure that the time they spend building a track record is well utilised. And that means that efforts should be focused in the right place.

“Interestingly, and very often counter-intuitively, it might be worth your while to take a sideways step, if that step is going to support your growth into the core parts of the business,” she says.

“In other words, don’t rush to move up the corporate ladder, however tempting that may be. Get the experience which will ensure you have the right credentials for top leadership, and don’t automatically accept a promotion. A solid strategy may be just the ticket you need for future promotion.”

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Technol

How

and smart ports can help fast track Africa’s growth

by Gavin Holme, Country Head, Africa, Wipro Technologies and Richard A Butcher Global Head & Director of Ports and Terminals, Wipro Technologies.

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logy New innovations in areas like ports, terminals, related logistics and transport industries, will be crucial for African countries to achieve their economic growth ambitions over the coming years.

They require technology that caters for the ‘just in time’ nature of land-to-sea logistics, helps reduce dwell time and congestion, minimises damage and theft and ensures strong security and protection of national borders.

Faced with stiff competition from other ports and alternative inland options and being a notoriously capital-intensive business, port operators place a heavy emphasis on cost control.

This is a high-stakes game; as the efficiency of a nation’s ports has billowing effects for the country’s entire economy.

Connected devices, analytics, and mobility: a powerful blend Trusted outsourcing partners can demystify much of the complexity around new technology - working with ports to define the best solutions to address specific challenges, showing how technology has transformed other ports’ operations, and ultimately delivering and managing the services. For example, a port operator could pull together real-time information from various players in the ecosystem: truck drivers, hauliers, parking space operators, port road management and vessel tracking systems. By integrating this data into smart analytics platforms, it can inform the scheduling of trucks entering, off-loading, onloading containers, and exiting the port.

This is a high-stakes game; as the efficiency of a nation’s ports has billowing effects for the country’s entire economy.

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o beneficiate and export its commodity assets, countries throughout the continent need efficient transport and logistics environments.

In the area of smart ports in particular, there are opportunities to combine business process reengineering with the introduction of smarter technology across the total facility: such as geolocation/ geofencing, connected objects and devices, cloud-based services, mobility services, and big data analytics.

With technology at the heart of the thinking, it becomes possible for ports to achieve:  Higher productivity levels  Reduced operational costs  Improved levels of security  Higher safety standards  Increased service levels  Improved asset utilisation.

Ever-present challenges With limited ability and the financial implications to expand geographically and political pressure to lessen their environmental impact, ports are continually striving to generate better efficiencies and higher productivity.

In fact, there are endless opportunities available by combining three related technology trends: connected devices, analytics and mobility. Every vehicle, device or asset in the port is connected with wireless technology, beaming information into an analytics platform, which then distributes useful information to any mobile device.

This confluence of technology not only enables smoother operations, but helps port operators to fluidly integrate into external partner environments: such as shippers, carriers, agents / forwarders, trucking and rail companies, customs and government bodies. However, the truly transformative advantages of these new technologies go beyond faster reaction times and optimising logistics schedules. They lay the foundation for the future of predictive analytics, machine-learning and automation.

With embedded sensors on vehicles and assets recording every movement in the port, patterns start to develop and the port’s operations can be automatically adjusted based on past experiences, and expected activity within the port.

Eventually, through machine-learning, a port’s operations can be fully optimised - ensuring an efficient port management capability, and helping importers and exporters to deliver their services as quickly and competitively as possible.

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Mutli-pronged approach to

Africa’s Skill Shortage

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GE has launched a Skills Paper that identifies a three-pronged strategy to develop the skills South Africa needs. These are a stronger education system with closer links to industry, more open and flexible labour markets and a broader talent localisation strategy pursued in partnership with global companies, and the pipeline of skills needed to leverage the technological advances of tomorrow.

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ianca Tulumello, Human Resources Director for GE Africa, says “South Africa has an unprecedented opportunity to boost growth, create jobs and improve social stability, thanks to a burgeoning population. Helping to drive the education agenda in South Africa, and on the rest of the continent, is one of the key priorities for GE.” In 2014, South Africa’s list of the top 100 scarce skills in the country included Electrical Engineer, Civil Engineer, Mechanical Engineer, Quantity Surveyor, Programme or Project Manager, Finance Manager, Physical and Engineering Science Technicians, Industrial and Production Engineers, Electrician, and Chemical Engineer. GE is investing in bringing the best people together in South Africa to help create a better future for the country and the continent. As part of its commitment, the company has committed up to U$5 million to a GE Scholarship program run in partnership with the African Leadership Academy to enable students to attend the Academy.

All stakeholders need to work towards improving the quality of the education system at all levels. According to the GE Skills Paper, the youth account for 55% of South Africa’s workingage population. However, this segment of the work force faces additional obstacles to find employment. Youth unemployment remains a pressing issue and, as a result of the 2009 recession‚ the unemployment rate among youth rose from 32‚7% in 2008 to 36‚1% in 2011 and has subsequently remained between 35-37%.

With the South African Government’s National Development Plan seeking to eliminate poverty and reduce inequality by 2030, the country is relying on the public sector, the private sector and partnerships between both to support inclusive growth, which is best achieved with a skilled workforce.

The research conducted by GE shows that, beyond youth skills development and skills development in the transportation sector, the healthcare and energy sectors are key areas in need of a skills boost. For this, and other areas, GE has invested R500 million in a Customer Innovation Centre in South Africa that will be a centre of excellence for innovation and technology transfer as GE localises solutions for the African continent.

Susan Peters, Senior Vice President, Human Resources, said “GE’s commitment to education permeates every part of the business. Globally, GE focusses on bridging the skills gap found in every market. Research, such as the Skills Paper, allows us to identify the most effective way to address the skills shortage across a range of countries, including South Africa. Working together with government, GE can help combat this critical issue.”

One of the strategic objectives of the company is working to transform and empower leaders. GE has an extensive programme to develop employees in South Africa and abroad to ensure that their skills are kept relevant throughout their career. A variety of internship and on-the-job training programmes, such as the Financial Management Programme, the Communications Leadership Development Programme, the Edison Engineering Development Programme, and the Early Career Development Program (ECDP) among many others ensure that employees never stop learning at GE. Improving the state of South African education is a priority for the government, the private sector and the public at large.

GE remains committed to working with government to deliver skills development programmes at all levels that will help build local suppliers and industry.

According to the GE Skills Paper, the youth account for 55% of South Africa’s working-age population. However, this segment of the work force faces additional obstacles to find employment.

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by Michelle Moss

Review Your

Risk Exposure Businesses that procure equipment or supplies from international markets are at risk of significant losses if they have not reviewed the impact of the falling Rand on the insured value of their property and assets. In the last year, the cost to replace machinery or equipment procured in the US and Europe has rallied by more than 40%.

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etween Jan 2015 and Jan 2016, the Rand devalued by 45% against the US Dollar from trading at R11.43 in January 2015 to R16.58 on 26 January 2016. By 22 Feb 2016, the Rand had recovered to R15.31 to the US Dollar, but still represents a massive shortfall compared with one year ago.

“Any manufacturing or retail operation that uses imported plant, machinery or materials will see the replacement cost of such equipment increase substantially if it is purchased in a currency such as Sterling, the Euro or the US Dollar. Assuming a

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claim occurred now against a policy which incepted on 1 July 2015 when the Rand Dollar was around R12.20 to the US Dollar and had to be replaced at the current exchange rate of R15.31, the current Rand value is at least 25% higher than its Rand value at inception. When you factor in inflation, that figure is closer to 35%,” explains David Stratton, Strategic Account Manager at Aon South Africa, risk advisors and insurance brokerage.

“It soon becomes very evident just how important it is to insure properly against such losses, which could see you

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Other policies may be arranged on a Day 1 Average basis, average referring to the insurance term dealing with underinsurance in the event of a claim. In such cases the value at the inception date is not challenged when there are currency fluctuations but can be challenged if it was inadequate in the first place. However, this too can be limited to a specified percentage,” explains David.

It is worthwhile to have a professional valuation carried out on buildings and plant.

In addition to having these assets correctly valued in a baseline valuation, it is also possible for the valuators to calculate the imported content of your insured values, which will enable you to assess the potential impact a currency fluctuation may have.

“In light of the continued volatility of the Rand, it is essential to safeguard your assets and your ability to recover successfully from a significant setback. A serious disaster such as a fire at a warehouse or manufacturing facility could have catastrophic consequences when faced with potentially massive underinsurance due to the depreciation of the Rand. Consult with a professional risk advisor who can assess your specific requirements and the extent of your imported content exposures through a thorough needs analysis, and clarify any shortcomings and exclusions in your cover,” concludes David..

underinsured by as much as 50% in the event of a loss or claim. Many policies will have a clause dealing with Escalation due to Currency Fluctuations, where the insurer will allow for changes in the Rand’s value over the course of the policy period. However, this clause is usually subject to a limit stated in percentage terms, and specified in the policy schedule. Given the Rand’s recent performance this percentage may be insufficient.

In light of the continued volatility of the Rand, it is essential to safeguard your assets and your ability to recover successfully from a significant setback.

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