Outsourced solutions provider Programmed Process Outsourcing (PPO) moved more than 600 000 stock items to a new warehouse facility for a client in September while maintaining full sales capacity for the client.

The e-commerce client had grown its stock to such an extent that a second warehouse was required to accommodate the additional stock items.

PPO successfully moved the stock and maintained the intake of stock and the dispatching of orders over the 20-day period, says PPO MD Willie du Preez.

Although some minor teething problems were encountered, the solution implemented has so far proven more than effective at the client’s warehouse.

“All the required technologies, resources and staff supervisory rolls transitioned smoothly,” he adds.

The client insisted that certain deliverables, and achievable key performance indicators were met on a daily basis.

Du Preez points out that PPO’s offerings are not limited to warehouse and stock management – the company successfully streamlined an electrical component manufacturer’s production line and introduced staff efficiencies.

“We implemented more effective work processes on one of the client’s production lines, and improved staff management solutions. There is already interest in engaging further on additional production lines to be enhanced,” he enthuses.

Initially a small family-run business, the client transformed into a national and recognizable brand, identifying the potential to increase its output and client base further by teaming up with PPO to assist them to develop into a larger and more competitive company in the sector.

Waste Not, Want Not

PPO aims to decrease waste in terms of not only wasted materials in a manufacturing process but also time, labour and critical skills, stresses PPO sales GM Tennille Bell.

She says eliminating even 1% of waste equates to a significant increase in productivity and profitability.

Further, the company reduced an e-commerce client’s headcount, operational hours and cost by increasing supply from about 4 900 units a day to about 64 000 units a day over a six-year period.

“We managed to increase the client’s output while halving the staff contingent by maximising their efficiency,” Bell enthuses.

The client achieved a productivity increase of more than 1 300%, while PPO attained compliance in excess of 99% in accordance with the signed service level agreement (SLA) with the client.

What it Means

Bell explains that business process outsourcing (BPO) is a business model whereby an organisation contracts a third-party service provider to perform an essential business function.

“While such processes are essential to the running of the business, they do not form part of the company’s core value proposition.”

South Africa is behind the curve of technology and business trends; however, BPO is a trend that has the potential to fast-track the country’s recovery after Covid-19 and set it firmly on the path to economic growth and keeping up with global trends.

Bell adds that, while there might be some resistance from a labour perspective, BPO does not aim to replace jobs or workers but rather to make businesses more profitable and efficient and, therefore, allowing for job creation through growth and innovation instead.

“Through BPO, companies contract out business functions that are not core to revenue generating activities.”

While there is some concern that contracting out business functions means a loss of control over those functions, clients are assured that such functions become subject to SLAs, which are managed entirely by the BPO provider, with meeting key performance indicators to improve efficiencies the main objective.

Therefore, BPO providers assume accountability for performance in managing the relevant business processes in their entirety.

From a labour and operational perspective, BPO providers assume all the compliance obligations in terms of the National Labour Relations Act, as well as responsibility for union engagement and employment equity.