Bold Steps in Optimisation
Optimisation is pursued in many aspects of logistics and supply chain operations and is reflected in the long-standing strategic partnership between automotive battery manufacturer AutoX, and Value Logistics. What this partnership has achieved over 22 years is remarkable and extends far beyond the mere automation of processes. Let’s take a look at what it has taken to navigate paths jointly over the past two decades, and how will it future-proof both companies.
Establishing optimal capacity
In 1997, AutoX (known as Willard Batteries at the time) and Value Logistics reached a critical point when new technologies started to disrupt business, and globalisation began to impact local competitiveness.
AutoX required a reputable and reliable logistics service provider. “We needed to deliver service with excellence to a rapidly growing number of retail outlets and fitment centres across South Africa. Not only for daily delivery but to ensure continued market growth and financial viability in a fast changing and increasingly competitive market,” says Glenn Geldenhuis, CEO of AutoX.
In those years Value Logistics was an established truck rental company that had embarked on a market diversification strategy. It had entered the supply chain industry by providing third-party logistics (3PL) services. “We were looking for a logistics partner with a reputation of being flexible and innovative coupled with the capability of delivering reliable services across an extensive national distribution network. Value Logistics offered exactly that and more,” Geldenhuis says.
Seeing the critical pathways to growth that each had envisioned, the companies entered into a strategic partnership for the national distribution of AutoX products.
Efficiency in last mile innovation
The AutoX supply chain business model was re-engineered to become a full fourth-party logistics (4PL) partnership with services focused on outbound logistics and enhanced service levels immediately.
Steven Gottschalk, CEO of Value Logistics explains that AutoX manages its own warehousing. “Our wheels get moving when products are distributed from the various AutoX warehouse facilities to over 3 000 delivery points in South Africa, Lesotho, Botswana and Swaziland. We perform the last mile delivery service, as we transport AutoX brands including Willard, SABAT and some house brands and also recently VARTA® through a fleet of vehicles that are dedicated and optimised particularly for automotive batteries.”
To ensure effective and cost efficient delivery, the AutoX distribution requirement was integrated into the Value Logistics Dedicated Distribution Division, a strategic decision that enabled the strength of the partnership to operate as a well-oiled machine in order to deliver an effective and proficient outbound logistics solution, particularly the imperative last mile delivery.
Although the total supply chain is important, the last mile is the most difficult part of the supply chain, Gottschalk adds. As long as the warehouse is managed well and production is on track, clients will have stock. Getting product from A to B is relatively easy as schedules can be managed and controlled with relative ease. But last mile involves delivery of small quantities to customers and to their customers too.
Over the finish line every time
Both companies have dedicated, well-trained staff working on the partnership account, ensuring hands-on management of stock receiving at the AutoX warehouse as well as visible, effective and dynamic scheduling (GEO Coding) and routing, which is enabled by online IT and optimisation tools.
Value Logistics, using a dedicated fleet which carry the AutoX product branding, distribute various types of automotive batteries with special requirements in terms of zero harm and OTIF (On Time In Full) distribution to many centres around the country. These goods are heavier and contain hazardous fluids albeit being sealed which required customisation investment from both companies. “We changed everything that was needed to fit with AutoX’s requirements for a total outbound logistics solution,” says Gottschalk.
Routing and scheduling is optimised on a continuous basis, integrating both new AutoX customers whilst allowing for changes in the likes of delivery volumes. The Value Logistics’ dedicated AutoX distribution model involves nominated delivery days for each customer and reverse logistics where needed, with the goal being to consistently keep trucks full and minimizing the number of kilometres travelled.
Not to be discounted
Building a sustainable and financially viable partnership for the future is a journey and requires certain elements to enable each partner to complement the other in business. Securing mutual trust is important and Gottschalk explains how the two businesses get this right: “We work together and together, we work for each other.” Sharing the same culture and organisational values of honesty and integrity, they look after each other’s brand value. This mutual behavioural code is the foundation of over two decades of success.
Both companies are also proactive in prioritising SHEQ which includes environmentally responsible corporate conduct. Gottschalk explains that an important aspect of transporting automotive batteries responsibly is to prepare for and prevent spillage of battery fluids. The dedicated AutoX fleet has been adapted in such a way that any spillage of hazardous fluids is collected in drip trays, preventing spilling on the road or in parking areas. These pragmatic adaptations demonstrate Value Logistics’ capability to innovatively accommodate the business imperatives of AutoX which has a successful track record of environmental care.
One of the cornerstones of this long-standing partnership has been communication and information sharing. When AutoX became the official distributer of the VARTA® range of batteries in 2018, Value Logistics was part of the planning process well in advance and the product was included in the distribution model without any disruption to the supply chain.
Through weekly and monthly meetings, as well as continuous feedback communication from customers and drivers, both company’s employees remain informed of changes and potential issues within the supply chain.
Still bolder supply steps
During the lifespan of their joint venture, Geldenhuis and Gottschalk agree that they have kept pace with unrelenting change. What are the key drivers of success behind their robust relationship?
- Tenacity to see “beyond” and identifying future routes that both parties can travel in tandem;
- Clear understanding of the value that each company offers and an equally clear sight of a mutually-driven strategy, as well as shared expectations; and
- Shared culture and way of working that includes very clear communication and complying with agreed procedures and processes.
“It has taken trust in our vision”, Geldenhuis says. “Trust in our partnership, making bold decisions and taking calculated chances. It also takes knowing that any successful endeavour is an investment and takes time. It’s a journey. In the years ahead we will continue to grow together, always as partners,” concludes Geldenhuis. “What our story shares may sound cliché, but what has been achieved in terms of service excellence is definitely world-class.”