Sensormatic is a brand name synonymous with electronic security systems worldwide. In South Africa, the local Sensormatic company recently announced a complete change in name and identity. Now known as DNA Sensormatic, the company is a part of the DNA Supply Chains Group, listed on the stock exchange last December. The group is positioned as a 'fourth dimension logistics' supplier, promising customers a new ground-breaking proposition in outsourced logistics management. Hi-Tech Security Systems interviewed Richard Pople, CEO of DNA Sensormatic, to find out more about this new economy business, and what customers can expect from DNA Sensormatic in the future.
[Q] What were the business reasons that brought about the creation of the DNA Supply Chains Group?
[A] Outsourcing has been a hot topic within business circles for several years. The trend towards outsourcing has, if anything, been accelerating as businesses are forced to critically reassess their own efficiencies to remain competitive. There are many developments contributing to the increasingly competitive environment South African business faces - improved communications speeding up business processes, companies unable to keep up with the pace of technological change, the breaking down of trade barriers, the need to be globally competitive, and the shortage and cost of skilled resources are a few examples.
The inevitable consequence is that business has to adopt a clearer focus on core competencies and core products, and has to outsource critical support functions to those that can handle them more efficiently.
The logistics industry has historically been associated with military style operations and was recently described as one of the last bastions of business inefficiency. DNA Supply Chains recognised that traditional solutions to supply chain management were lacking, and were often unable to take advantage of new opportunities presented by technology and the changing business environment.
DNA designs, operates and manages logistics solutions for companies that do not wish to tie up unnecessary working capital in their current logistics function. Its point of difference is that it does this working with best-of-breed technology, high intellectual capital and focussed application of expertise.
Without being tied to servicing its own assets as other logistics companies typically are, DNA has the flexibility to be able to adapt to clients' needs and the capability to identify and capitalise on innovative opportunities.
[Q] Logistics management is a fairly broad field. Where does DNA Sensormatic fit in?
[A] In simple terms, logistics is the process of getting the right thing, in the right quantity, to the right place, at the right time and in the right condition. One of the critical factors to the success of logistics management is minimising wastage along the supply chain. The role of DNA Sensormatic is to manage and control this risk of wastage, and at the same time open up new opportunities for companies that create new standards of service and efficiency.
Historically, Sensormatic's approach to this role has been to simply provide customers with a range of electronic security products, backed by technical and maintenance support. However, over time, it has become increasingly apparent that this is insufficient.
Many customers are clearly not deriving full value from their systems, more often than not due to a lack of resource and expertise to properly manage and operate them. As a result, the full scope of the technology solution is not realised and results often fall short of their full potential.
Sensormatic SA has been in business for some ten years now, and over that time, strong relationships have been forged with a number of key customers. Having grown our understanding of these customers' business strategies, a myriad of opportunities to further reduce shrinkage and wastage have been identified. As a result, DNA Sensormatic is already providing many additional services to manage customers' risk of wastage more efficiently. This principle of identifying and fulfilling new opportunities through the building of stronger ties is what will typify DNA Sensormatic's business into the future.
[Q] So what exactly can DNA Sensormatic customers expect?
[A] DNA Sensormatic is rapidly moving towards taking full operational responsibility for outsourcing the management of its customers' supply chain wastage. For example, in the retail environment a chain will shortly be able to hand over their entire shrinkage problem to DNA Sensormatic. Based on a comprehensive understanding of the extent and sources of the shrinkage, DNA Sensormatic will design and implement a detailed plan tailored to that customer's problems and circumstances.
Perhaps more importantly, this is only the start of the process. Using proprietary systems of measurement, feedback, monitoring and control, DNA Sensormatic can take on complete responsibility for the ongoing management, refinement and running of the system to ensure that it delivers optimal results.
The ultimate conclusion of this level of risk control is for revenues to be based on the rewards that accrue, rather than on the traditional basis of systems costs and personnel fees. In the case of the retail environment, this may be a sharing of the increased profit due to the reduction in shrinkage. This risk/reward revenue model is already being discussed with a number of customers.
To achieve all this, a refocusing of company resources is currently underway to deliver more comprehensive solutions. Customer value comes from offering a completely integrated approach - not simply the supply of technology, but the provision of manpower, advice, training, measurement, as well as systems and maintenance controls.
It will soon be common to encounter DNA Sensormatic account managers physically based in and operating out of customers' offices and pulling on a wide range of resources and services to produce the best results for that customer.
[Q] Sensormatic is probably best known within the retail environment. Is DNA Sensormatic now expanding beyond this industry sector?
[A] Certainly, the historic focus of the company has primarily been on the retail environment and a dominant share of this market sector has already been established. However, within retail DNA Sensormatic has already moved further along the supply chain and away from being purely a shop floor solution. Great strides are being made in the development of source-tagging at manufacturer level. And with intelligent tagging (RFID) products soon to be commercially available, customers will shortly have access to a full service of securing, tracking, and tracing inventories throughout the supply chain.
DNA Sensormatic has built up the expertise and resource to be as proficient in a number of other industry sectors. An area well publicised at the moment is urban surveillance. DNA Sensormatic is the brains behind the now well-established and successful Cape Town project, as well as the newly introduced Johannesburg one (see associated article on page xx).
For the first time in South Africa, urban surveillance is working, with crime in Cape Town CBD reduced by some 80%. This success is due not only to the successful design and planning of the system around leading-edge technology, but also to ensuring that it operates correctly and that it is properly resourced.
Specific solutions to improve efficiency and reduce wastage in other industries are also in the pipeline. For example, innovative applications of event alarming are being developed to enhance productivity in manufacturing, an area that offers extensive scope for DNA Sensormatic. The company also has presence in securing property development, reducing wastage on mines and in general industry, and has experience in a wide range of large security installations such as at airports and in medical and educational institutions.
So while retail remains an important area of business for the company, it is safe to say that DNA Sensormatic will soon be making as big an impact in many other industries.
For details contact Richard Pople
MD of DNA Sensormatic
tel: (021) 559 4425/6/7/8
fax: (021) 559 4431
e-mail: [email protected]
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