Keeping Up With Change
Rotek and Roshcon, a South African-based energy industry support services company wholly owned by Eskom SOC Limited, knows that efficiency and quality are both a must. There are no compromises when dealing with the main power supplier for South Africa.
Rotek and Roshcon are a wholly owned subsidiary of Eskom SOC Limited and have been involved with the energy giant since the foundations of the group started working with Eskom in 1906. The group works with Eskom in South Africa to ensure all goods and services are quickly and efficiently handled and managed, and play a large role assisting with Eskom’s dynamic strategic direction.
The services provided by Rotek and Roshcon span five different divisions. These are construction services, bulk material services, logistics services, turbo-gen services, and transformer and switchgear services. All of these divisions have developed over years of partnerships and amalgamations that have led to the Rotek and Roshcon that flourishes today.
Out of these divisions, the logistics area has fared extremely well, especially in the past 10 years, by focusing on constant improvement to keep up with the ever-changing industry.
In the logistics industry every company has to be quick on its feet. Whether this means replacing a vehicle in the middle of a contract, or reassessing the computer systems, companies have to be ready at any time to make a change in order to stay efficient and to ensure they fulfill their contracts on time and as per expectations. It is this exact quality that has pushed the success of Rotek and Roshcon logistics division.
Everything started with a six trucks and the idea to start a commercial logistics support company in 1990 called Rotran. From those six trucks the company grew to the point it is at today, owning 153 vehicles with an additional 200 vehicles operated through subcontractors.
In 1996, Logistics Services secured its first major Eskom-related contract. In the early days, only 40 per cent of Logistics Services’ business was with Eskom contracts, despite the power giant being the 100 per cent shareholder.
This all changed in 2003 when Rotek and Roshcon significantly scaled down its external work and now does about 95 per cent of its business with Eskom. Just one example of how fast change can come in the industry.
“Even though we are 100 per cent owned, we have to show that we bring the value,” explains Gerhard Marais, product group manager in Rotek and Roshcon’s logistics division. He adds that they are technically a legally separate company and still have to compete for these contracts.
After that the company worked hard to gain the ability to move large (over 250 tonnes) loads as well continue to gain long term contracts. The next major change, however, came from a positive problem.
“The workload was outpacing us,” says Marais. So, Logistics Services started hiring in subcontractors. Today, almost 85 per cent of Logistics’ subcontractors are primarily black, and black women owned businesses, an aspect Marais is quite proud of.
As the industry grew and Eskom’s logistical needs expanded, Logistics Services continued to evolve its business as well, proving its ability to stay on top of industry changes. In 2002 the company had a problem with profits due to maintenance costs, so it cut 25 per cent of the fleet and removed all of the older vehicles. It also installed a new software application to help manage the projects and raise efficiency. After that the change in profits was immense, from a loss of R800 thousand in 2001 to a profit of R32 million in just five years.
Simply focusing on the right things, like cost management, excellence in execution, long-term contracts and utilising its resources, helped the logistics arm grow exponentially, says Marais.
The most recent change was in 2011 with the decision to move the handling of coal and ash to the bulk materials division of Rotek and Roshcon, which has proved to be an efficient decision ever since.
One of division’s biggest projects right now, says Marais, is a big push to switch to an electronic scheduling system and simultaneously working to integrate that with Eskom’s system.
The problem is that every load has to be booked in and booked out at destinations. This may not seem like a big deal, but it grows when you realise Logistics Services makes over 6,000 deliveries per month for Eskom. That translates to between 700,000 and 800,000 line items per month.
The goal of the project is to implement a system that uses software and handheld devices on trucks to electronically handle scheduling and cargo management. This system would link directly to the operating systems at Logistics Services as well as the systems with any clients. Once implemented, the company will be saving days of work by reducing backlogged paperwork and optimising the entire process.
Marais says the company is also currently focusing on evolving the infrastructure the company has put in place. “We’re looking to do a significant investment with our equipment,” says Marais. Logistics Services has worked hard to earn the ability to handle extremely large loads, and contracts in the 60 to 130 tonne categories are often considered critical that need to get to their locations quicker. “That’s a major one for us,” he adds.
At the end of the day, Rotek and Roshcon, and especially Logistics Services, know its employees are its greatest asset. With the hardworking drivers there wouldn’t be a business, and the company treats them as such.
“We treat our drivers on the same basis you would treat an airline pilot. Our whole recruitment and training process is based on that same principle,” explains Marais.
The drivers go through significant training that will, in future, include the use of simulators to help prepare them for any situation that might be encountered on the road. The company also has a large network with ground-level information regarding any recent hijackings and robberies to plan out the safest routes possible. It would rather send drivers through a long route then put a guard on a truck and send a driver into a possibly dangerous situation. Safety is paramount.
When talking about the company’s competitive edge, Marais mentions the employees first.
“I think the first one is our people. The core of drivers we’ve got. We’ve had them for a long time. They know the infrastructure, they know the network and they know the product they’re working.”
Rotek and Roshcon’s final competitive edge is simple, but vital. Transparency. The company works hard to be transparent and ethical. That means no cut corners, shortcuts, or easy ways out. The company does everything by the book because that is the example it wants to send to everyone. As an extension to this edge, it wants to use technology to accomplish this, to stay on the forefront of innovations in the industry.
Plans for the future at Rotek and Roshcon are in line with its philosophy from the past: constant improvement and evolving to meet the needs of its client.
Marais says he wants to continue refining the process through which the division gets product from the supply chain in Europe to South Africa. The way to do this is by applying product knowledge to the process. Beyond that the future is about refinements to things like bonded warehouses, waste handling and fleet management.
Rotek and Roshcon is a key service partner to Eskom and integral to maintaining the stability of South Africa’s power infrastructure. The company pulls on decades of product knowledge to ensure these goals are met and the depth of expertise in the logistics division is just one example of the overall excellence present within the group.