By Franita Bosman, Founder and MD at BD-Nav
· The impact of load-shedding on FMCG operations
· What it costs to keep operations running
· What happens in the dark between electricity supply switchovers?
· How we identify where distribution will provide the best turnover.
We know that the country is currently in a devastating situation due to water shortages, corruption and mostly…load-shedding – leaving us in a very DARK place. Increased expenses for the continuation of refrigeration, operations, livestock feed, irrigation for agriculture, and with inflating prices on fuel are causing companies to break even, not even mentioning profiting. Over the last few months, Shoprite, South Africa’s biggest retail group, recorded spending of R 3.1 million daily on diesel to ensure the continuation of operations (Business Tech, 2023), and we received similar complaints from our Vendor-clients. This is not an uncommon issue as some of our Vendors have disclosed similar expenses on running generators for production to continue. However, irrigation systems take up about double the amount already spent on diesel and causing a large impact on the availability of natural resources.
This is causing a major impact on stock supply, natural resources, production, and business operations, and inflation came at the worst time. Agriculture is suffering a huge loss on sales and having to temporarily discontinue certain products from the shelf. Perishable and Frozen categories in the FMCG market are experiencing an increase in stock waste and returns.
Retailers have also mentioned that they suffer from theft in stores when loadshedding strikes. The few seconds of darkness between switch-over periods to generators is used dishonestly by consumers who shove items into their pockets while nobody can see.
With the above in mind, BD-Nav has launched a strategy to help save Vendor Customers from missed scorecard results and penalties in this target-driven industry. Through the use of factual sales data, BD-Nav is able to identify stores where suppliers will receive the most effective return on sales of stock, avoiding waste, returns and dormant stock for the continuation of their retail business. Vendor-clients use the D-Nav Toolkit to manage their stock distribution and for efficient driving of sales.
Our team encourages suppliers to prioritise stores with the high rate of sale. Stores with high volumes of Waste, Returns, Over and Dormant Stock as a lower priority for stock availability. By doing this, we allow our Vendor Customers to protect and maintain their rate of sale and revenue at high-performing stores rather than supplying to stores with a high risk of penalties and unsellable stock.
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