Translating strategic corporate objectives into logistics decisions: The case of Empire Kongo distribution centre.

Ayanda Xulu has been working as a middle level manager and supervisor at the organisation Bana Ya Mboka for the last six months. Her responsibilities have enabled her to partake in different logistical decisions within the various managerial levels. Bana Ya Mboka operates a distribution centre (DC) called Empire Kongo, strategically positioned in the middle of two major cities in the Democratic Republic of Congo. The DC allows the organisation to achieve economies of scale, because the more the organisation produces, the less it costs. Therefore, the organisation has achieved production economies by saving on last mile logistics by making goods available closer to the consumer, as well as store finished goods. This allows the organisation to keep a steady flow of supply to retailers and wholesalers, and once stock is finished it can quickly be replenished. The DC assists by servicing the needs of Bana ya Mboka effectively by providing storage to certain items, parts and machinery used in their production plants to produce goods. During a meeting, the Logistics Director Ms. Khumalo mentioned the DC is planning on expanding its operations and re-designing its space to allow people to function effectively and efficiently and reach out to a larger number of customers. She insisted that logistics strategies and decisions on customer service (demands), network design (road, rail., & water), channel strategies (insource/outsource) ,inventory management, warehousing and/ or cross docking, transportation, procurement, support systems, loading and scheduling, policies and procedures as well as materials handling and equipment and freight forwarding ought to be developed and implemented at different levels within the organisation. Ms. Khumalo instructed Ayanda to take charge of translating strategic decisions and concepts into structural, functional, and operational decisions and activities, as well as reporting on various challenges faced within the Empire Kongo DC. The DC has been facing different challenges over the past years, the following points highlight different problems:

Issues on failing to fully utilise the space available. It was reported that the forklifts used cannot reach certain shelves, however the onus is on the company to fully utilise the available space Bigger aisles in the DC are required, and need to be clearly demarcated to allow for manoeuvrability of the forklift and easy picking There is excessive manual handling of products in the DC, which can be time-consuming thereby resulting in excessive labour costs The equipment used is often antiquated, in need of repair, and fails to follow strict maintenance schedules Forklifts drivers, order pickers, checkers, packers, and cleaners have complained that they are working excessive hours, they are under paid, and understaffed. They find the DC has unsafe and gruelling work conditions Empire Kongo has been failing to access timely and accurate information in order to effectively operate. The communication channel between Bana Ya Mboka, manufacturers, and retailers has been reported as ineffective The logistics system in place fails to supply timely information on order status, order tracking, back-order status, order configuration, product substitution, product shortages and product specifications. Furthermore, staff have expressed that top management do not listen to them, they do not take their complaints seriously and always fail to communicate effectively with the rest of the team.

It has been ascertained that effective warehouse management can assist an organisation in the effective flow of goods in the supply chain and requires careful location planning and design. Source: Case study adapted from Zamba Ya Afrika conglomerate strategic plan 2022: Available at : www.zamba@afrika.co.za

Question 1

According to the case study, Ms. Khumalo instructs Ayanda to take charge of translating key decisions and concepts into decisions and activities. Discuss the different managerial levels of logistical decisions that Bana Ya Mboka would need to consider. Support your answer with relevant examples from the case study.

Question 2

As mentioned in the above case study, Empire Kongos DC has been facing various challenges across the years. Using relevant literature, describe any five (5) common warehousing problems being faced by Empire Kongos DC, and identify possible solutions for each of these warehousing problems.