BERT’S BRICKS ~ SUPPLY CHAIN
The Value Chain of Bert’s Bricks
Submission date: 12 February 2011
Chicken Run Group Members
“There is nothing more determined than poultry with a plan…”
Van Wieringen, Anton
Group Leader: Willie Schoeman
Graphic illustration of clay brick manufacturing process:
Transport and Stock up
mass is pressured
Stock piling and sun dried
Baltzan & Philips (2010:26) describes the supply chain as a dynamic process which involves the constant flow of information between different parties.
The website supplychaindefinitions.com (Anon, 2011:1) in turn defines the supply chain as the movement of materials as they flow from their source to the end customer. Supply chain includes purchasing, manufacturing, warehousing, transportation, customer service, demand planning, supply planning and supply chain management. It is made up of the people, activities, information and resources involved in moving a product from its supplier to customer.
2. The brick industry in perspective
According to WOW (2010:3) the brick industry in South Africa is in its worst slump in 15 years. The economic downturn and slowdown in the industry has crushed many players, hundreds of retrenchments and placed surviving players with production shutdowns and cut-throat competition with “excessive price cuts” and excess stock. A slight recovery in 2010 went slower than expected. This left many brick factories operating at well below capacity. Consumer spending on building material has dropped tremendously in since 2007 mainly due to: * Residential property owners opting to pay of access debt levels, halt spending on renovations and expansions on private properties, * Financial institutions rethinking their market share strategy, conservatively adding lower risk exposure to their portfolios, * The non-residential market has pulled back on larger projects of expansion as overall demand for newly build apartments, townhouse complexes, estates and office blocks where offset by short term renting option.
3. Key Success Factors
The following Key Success Factors (KSF’s) within the industry were identified: * The industry requires high capital investment as larger number of units makes up the profits, * The factory’s geographical region should be balanced between future market demand and raw material supply requirements * Brick makers are skilled individuals, many operating as a 2nd, 3rd and even a 4th generation business man, keeping to a long term focus of the business, * Operations are labour intensive, training in manufacturing, logistics, safety and ownership are key aspects within the business.
4. Analysis of Value Addition
Miller (2011:1) states that the first thing to be done when dealing with a supply chain is to ensure its efficiency. To be able to effectively measure a supply chain, certain metrics must be identified, defined, and analyzed, leading to an enhancement in the overall efficiency of the business. These metrics must be related to the nature of the business or organization. The results of the measures are what matters most. Miller continues by saying that the measurements obtained will reflect the efficiency of the supply chain, doing the things right. It is best if the measurements show a consistent level of performance in the chain. High consistency is usually indicative of good performance while low...
Bibliography: ANONYMOUS. 2011. Website: http://www.supplychaindefinitions.com/ Date accessed: 6 February 2011
BALTZAN, P. & PHILLIPS, A. 2010. Business Driven Technology. 4th ed. New York: McGraw-Hill.
HUGO, W.M.J., BADENHORST-WEISS, J.A. & VAN BILJON, E.H.B. 2008. Purchasing & Supply Management. 5th Edition. South Africa: Van Schaik Publishers. Pretoria. 376p.
MILLER, SAM. 2011. The Importance of Taking Supply Chain Measures. Website: http://ezinearticles.com/?The-Importance-of-Taking-Supply-Chain-Measures&id=1559979 Date accessed: 6 February 2011.
MOSTERT, P.G. & DU PLESSIS, P.J. 2007. Introduction to Marketing Management. 1st Edition. South Africa: Platinum Press. Potchefstroom. 298p.
STEYN, T.F.J. 2007. Introduction to Business Management. 6th Edition. South Africa: AndCork. Potchefstroom. 164p.
WOW, 2010. The Manufacturing of Clay and Concrete Bricks. www.whoownswhom.co.za Date of Access: 7 Feb. 2011.
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