SECTION 2 IKON, a widget manufacturer, with its plant in Germiston, supplies to customer regions throughout South Africa. Although IKON is the market leader in South Africa, the level of competition in the widget market has increased over the past number of years due to the entrance of international role players into the market. Demand forecasts indicate that the company can expect relatively low growth in all the regions, except for the Eastern Cape where significant growth in sales is expected over the next five years. Research has indicated that poor levels of service may have contributed to a lower expected growth in sales. Areas that were identified include stockouts, lack of information sharing with customers and regional differences in terms of performance standards. To a certain extent these could have been a result of the logistics network which also influenced the lead times. IKON owns some of the facilities, but also leases the DCs. The lease agreements of these facilities terminate in three years and the company needs to decide whether to renew the lease or to find alternative locations. Management believes that the expiry of the lease agreements provides the perfect opportunity for the company to evaluate its distribution costs. The customer distribution is currently performed by an in-house vehicle fleet through a dedicated transport department. The plant to DC supply is performed by a third-party service provider. During a number of management meetings the logistics function was identified as potential area that could lead to cost reductions and service improvements and it was agreed that this was the opportunity to revisit the logistics strategy. Management tasked the logistics manager to research potential logistics strategies, as well as approaches to develop such a strategy. QUESTION 1 [33 MARKS] 1.1 Describe the types of complexities of the logistics and supply chain environments that necessitate a better appreciation of the logistics strategic planning process from IKONs logistics manager. (8) 1.2 Describe an approach that IKON may follow to develop a logistics strategy that allows the company to take cognizance of the complexities mentioned in 1.1 . (25) QUESTION 2 [33 MARKS] Assist the logistics manager in his search for potential logistics strategies by explaining time-, financial- , technological- and relationship based strategies as potential logistics strategies