Smart energy, smarter business

A broader look at energy use in South Africa’s manufacturing sector and related supply chains – which saps a quarter of global energy annually – could lift businesses away from fiscal watershed.

Even though new levies and rising tariffs peck at what little fat remains of business resources, cost-cutting options related to energy use are far from exhausted. Producing energy efficient buildings and operations, and replicating the supply chain structures, holds enormous potential.

Ralton Moses, Divisional Director of Operations at UTi Pharma and speaker at the upcoming SAPICS Conference for supply chain professionals, explains that while warehousing has remained largely static with operations being somewhat consistent in South Africa over the last two decades, the associated costs are a different story altogether now.

“For most major corporates, the socially responsible aspect of going green can no longer stand in isolation or be ignored and/or avoided; it needs to be aligned with the profitability strategy of the organisation in order to provide the required benefits to all stakeholders,” warns Moses.

“Organisations should address the impact of carbon on their supply chain, as a significant percentage of a product’s value is derived from it. When a consumer purchases a product they are also buying the supply chain that delivers that particular service,” says Moses.

“Increased labour costs also add inflationary pressure to operations and continually forces companies operating warehouses to reduce their carbon footprint in order to not only take care of our planet, but also to cut costs,” says Moses. “Organisations can significantly reduce their running costs through technology that measures and mitigates carbon dioxide.”

In building their new state of the art green facility in Meadowview Gauteng, UTi Pharma managed to consolidate eight of its nine operations into one. The healthcare distribution giant delivers around half of South Africa’s temperature-sensitive pharmaceutical products in the private market and had to incur significant expenditure on energy to monitor, control and regulate the temperatures of its storage and distribution facilities.

The new facility’s has an annual energy demand of 60% of that of the preceding facility.

Turning the lights off during weekends is no longer enough; an energy conscious strategy should incorporate everything from motion sensors and zoning systems for lighting, to grey water harvesting techniques and thermal storage systems.

A key point identified by Moses as a less cost intensive solution is that businesses should select the most accessible, well-connected facility possible, one that’s optimally located in terms of the organisation’s demand and supply base. Transportation contributes more to a company’s energy footprint than warehousing, which means the choice of venue has a significant impact.

Ralton Moses will describe in more detail the UTi Pharma hub’s green credentials and process followed at the 38th Annual SAPICS Conference and Exhibition for supply chain professionals, to be held at Sun City, 12-14 June 2016. For more information, or to register, visit