Powering up for the “future normal”

Most businesses around the world are different prior (after or following) to the onset of the pandemic. Covid-19 forced them to take a hard look at themselves in order to determine what lessons could be gleaned about the world of supply and demand, and to establish whether they are adaptable and agile enough to sustain the next global upheaval. 

In the instance of Kalideck (Pty) Ltd – one of the leading paper merchants in South Africa – it was forced to pause and evaluate, streamline and ultimately, to innovate. Through looking at itself inwardly, it identified the need to restructure and reorganise the business in order to be more responsive and agile, with a greater focus on the core products that drives our customers’ demands.

The caveat is that South Africa’s GDP is fairly dependent on its attractiveness as an exporter, whilst simultaneously being a consumer of imported goods and services. The knock-on effect of countries adopting lockdown restrictions in an attempt to contain the pandemic, was that it led to unprecedented disruptions to the supply chain of all import countries. As bottlenecks became the norm, space and equipment came at a premium and subsequently drove pricing for freight to levels that forced South African companies to transfer the hiking costs to the market.

The ace up Kalideck’s sleeve is that it has a strong network of local and international suppliers, which were instrumental in collaborating with the company through these challenging times. Additionally, the number of arms to the business also proved to be of critical importance: where some of the traditional arms e.g. commercial printing struggled, other business units e.g. packaging were very strong and experienced substantial growth.

This led to the company’s decision to refocus all of the sectors by removing products that were not doing well and by adding to the business units that were, in terms of resources, human capital as well as products. Since Kalideck doesn’t manufacture any of its products, its primary business activities comprise of the buying and selling. However, as Nick Gillings, Commercial Director at Kalideck explains, ‘We see ourselves as a crucial element in a manufacturer’s promotion of their brands. They innovate and manufacture new products and we are the vehicle to take it to the industry, which we feel is a crucial element in the mix.’

Against a backdrop of the challenges presented by the pandemic, it has been necessary for Kalideck to understand which products are relevant; to determine which products are going to be relevant in the future; and to identify where the opportunities lie. Nick says that the uncertainty was one of the biggest challenges that the company has had to face over the past two years.

He elaborates, ‘It was important for us to understand what was happening around the world, which products were performing well throughout our global supplier network, as well as which would be applicable to the South African context.’

Customer interface and communication is another challenge that most businesses had to face. In Kalideck’s instance, it implemented a different approach to how their field sales team would overcome this challenge, through balancing virtual or telephonic meetings with education such as product knowledge.

‘Our Product Managers are essentially the experts for the respective sectors that they operate in. They in turn educate our people internally on new developments, new products entering the marketplace, as well as what their unique selling points, features and benefits are,’ says Nick. He adds that they are talking to suppliers all time, they go on their respective websites, they attend seminars and they are in conversation with sales personnel in other parts of the world, in order to understand how a product was introduced and what challenges were faced when doing so.

Where previously, suppliers would visit South Africa and meet in person, the “new normal” of virtual meetings hasn’t only allowed for them to have regular contact with Kalideck, but it has also created opportunities – through sending product over in advance and then talking about it online while the team are able to examine it in front of them. Nick says that while it was initially tough to adapt to meeting online, it has changed the way that the company will do things in the future.

The strength of the relationship shared between Kalideck and its suppliers was crucial when the import supply chain caused significant delays. Nick asserts, ‘The strength of a supplier relationship is not just about supplying product for selling; it’s a partnership.’ He says that their suppliers were loyal to them and continued to give allocations of stock, even though they could have easily moved to another market, which could have even been more profitable for them.

Kalideck’s highly efficient purchasing and product management teams enabled it to ramp up suppliers to meet the demand in six cities in South Africa and one in Gaborone, Botswana, by knowing which products needed to be readily available, which were not as well as which products would prove to be strategic stock items. ‘Our large South African footprint enabled us to hold greater stock levels and to transfer product between our regions to meet a demand in a certain area, where stock was depleted,’ Nick adds.

This meant that when South Africa witnessed the rioting and looting that almost brought the country to its knees in June/July last year, its Durban branch was fully operational within four days after the event – in spite of the already constrained supply environment and the office being completely ransacked, with relatively nothing left behind.

On the topic of sustainability, which was accelerated by Covid-19 and is growing in importance in South Africa, Nick says that it should be a commitment and not be used as window dressing. ‘When you talk about the FSC® (Forest Stewardship Council) and ourselves, we have been certified for over twelve years, so it has become a way of life for us. The Green Option – regardless of what the product is – is one of the boxes that our Product Managers has to tick, when determining if a product fits into our core company culture.’

He continues, ‘It is a pleasure to work with our suppliers because of their commitment to bring sustainable products to the marketplace. Sappi and Mondi in our country are both FSC® certified and strive towards sustainability, so for us this comes naturally.’

Nick adds that there is a rise in consumer demand for accredited products because the understanding from a consumer about what the accreditation stands for is building. ‘I think that people are getting better about it, certainly the younger generation. Corporates, brand owners and end users are starting to understand a lot more and are able to identify that they need to be part of the solution.’

On the Point of Sale (POS) and signage side, Kalideck now supplies Displayline Print SAPINO and ImageMax, which are both paper-based, 100% recyclable products with all of the accreditations. This introduction is the result of numerous requests from brand owners, corporates and end users to move away from non-sustainable options such as PVC.

The packaging sector is exploding with new innovations in the primary, secondary and printing aspect of it. One of the biggest sectors is secondary packaging as a sustainable option, which has led to Kalideck partnering with Ranpak Corp., headquartered in the U.S.A., to provide a protective in the box void fill solution. This is the result of recognising that there has been – and will continue to be – a huge jump in e-commerce activity coupled with the need to move away from single-use plastic materials.

The amount of businesses and individuals that are accepting of the changes that have and still are taking place is going to be crucial for the “future normal” of the printing, signage and packaging industries. The pandemic has changed the way that things get done. Consequently, investing in different ways of doing things is something that needs to be considered.

Prior to Covid-19, China was perceived to be a big threat to numerous Print Service Providers (PSPs) in this country, but this has subsided for the moment because the logistics, shipping costs and delays have temporarily removed them as a threat.

The unfortunate Durban floods confirmed once again, that whilst we cannot control the weather, we can control the way we respond to crisis. Transnet must be commended how it responded and reassured its customers on a plan of action to mitigate the impact of damages to the Durban Port. Business agility is crucial to tackling the many challenges we face today. If you are not prepared to respond to challenges and then challenges will remain insurmountable.

‘It is not going to last forever – the threat is always lurking below – which begs the question: How are we going to work with all of the stakeholders to use this as an opportunity to make it a robust industry once again, while also being sustainability conscious?’ Nick concludes.

Article featured in The GAPP Southern Africa Vol 12 Issue 2