Italtile benefits from supply chain and transport optimisation

July 24, 2024

Supply chains can be the backbone of an organisation, but if not managed efficiently they can also be an Achilles’ heel, according to James Mason, group IT executive at Italtile Limited.

In a compelling presentation at the 2024 SAPICS Conference, Africa’s leading event for the supply chain profession, Mason shared Italtile’s supply chain journey. He also revealed the remarkable results of a supply chain integration and transport optimisation initiative, undertaken in partnership with supply chain specialist Inhance Supply Chain Solutions. Mason, who co-presented with Inhance director Chad Kilian, revealed that replacing Italtile’s traditional, silo-based transport planning with Inhance’s integrated network planning solution had delivered a turnover increase of more than 80% and transport cost savings of more than 20%.

“Historically, order planning, load building, and transport planning have been treated as separate, independent processes, often approached with a ‘one-size-fits-all’ strategy. However, traditional supply chain models often fall short in addressing the unique complexities of different organisations,” said Kilian. He went on to explain that integrated network distribution planning focuses on dismantling the silos between order planning, replenishment, load building, and primaryand secondary planning. It encompasses the implementation of smart, integrated solutions in multi-drop, less-than-truckload linehaul operations, leading to more efficient and responsive supply chain networks.

Italtile manufactures one out of every two tiles, baths, and toilets purchased in South Africa. The organisation operates in an extremely complex and competitive environment, with seven factories shipping over 2,900 tonnes across the country per day using external transport providers. An integrated supply chain solution was needed for better visibility across the group’s operations.

This solution, implemented in partnership with Inhance, provides business-wide visibility of Italtile’s operations through a logistics control tower that intelligently manages orders – from the point of placement through to delivery at the customer.It can dynamically build, plan, and allocate least-cost transport routes against service level agreements (SLAs), managing the order through to delivery. The real-time yard management solution thereby ensures constant visibility of an order against plan.

“In an environment where we are servicing an ever-increasing and splintered customer network, this solution has empowered our staff with the tools that they need, enabling the business to further increase throughput to the end customer, while reducing our cost to serve,” Mason said.

Not only has logistics efficiency grown revenue, but it has also enhanced customer service, experience, and satisfaction. The group’s turnaround time for trucks has been reduced by 53%, improving delivery lead times, while average weight utilisation has been cut by an incredible 97.3%. Improvements on the production and inventory front include a stock turn boost, as well as improved stock demand forecasting and planning with Italtile’s retail stores. Mason also revealed that there is a reduction in stock-holding and improved stock turns on raw materials.

Environmental, social, and governance (ESG) improvements have been achieved as a result of the supply chain integration. “As an organisation committed to minimising our impact on the environment, we are pleased to have reduced carbon emissions as a result of trip optimisation,” Mason said, noting that manual processes and associated paper use have also been reduced. Furthermore, Italtile has seen its transporter pool grow by 56%, including black-owned small and medium enterprises. Staff have also been upskilled and empowered with the new systems, while transporter satisfaction, security, and sustainability have all been enhanced.

Continuous improvement is a critical aspect of Italtile’s supply chain journey. Working with Inhance, the group plans to add auto allocation, electronic proofs of delivery, and automated invoicing for a truly autonomous supply chain that will benefit Italtile, its customers, transporters, and all stakeholders in its supply chain. Mason urged SAPICS Conference attendees to consider their organisations’ current position on the journey to making the supply chain their competitive advantage.

More than 750 supply chain managers from 30 countries across Africa and around the world attended the 46^th SAPICS Conference this year to explore this increasingly important profession’s current challenges and opportunities, learn, and share knowledge. The 2024 SAPICS Conference was hosted by The Professional Body for Supply Chain Management (SAPICS) in association with the Southern African Association of Freight Forwarders (SAAFF).