Staying Updated: The Cost of Obsolescence in Logistics

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April 10, 2014

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crushed vehicles

When the Ethics and Anti-Corruption Commission ordered over 2,000 cars seized at the Mombasa port and set for destruction, Kenyans were baffled. The cars being over eight years old seemed a trivial reason to destroy KES.4 billion worth of vehicles that were perfectly road worthy. What most people failed to realize is that vehicles of that age are obsolete according to Kenyan standards that resulted in the banning of such imports. Overlooking the loaded question of how the cars got into the country anyway, despite several layers of government checkpoints, we as supply chain managers must discuss the issue of obsolescence in our industry, specifically the detriment caused to our businesses by such machinery.

The most urgent concern for supply chain managers regarding obsolete equipment is the risk of personal injury to employees and innocent bystanders. Machinery that is old enough to have been replaced in the industry is more likely to malfunction and cause harm to those operating it. Within the warehouse, this includes packaging machinery, forklifts, security systems and the like.

Physical injury also becomes a very real possibility where malfunctions include the leaking of hazardous chemicals, overheating to dangerous temperatures, emission of choking smoke and so forth. For delivery crews, obsolete vehicles put them at the most risk: worn out brakes are major risks for failing, leaving drivers and other road users in harm’s way. Continued use of obsolete machinery also carries the risk of causing damage to other machines which were previously in good order.

mombasa cars

Obsolete equipment also carries the inherent risk of slowing down operations for the supply chain manager. Such machinery, being well past its prime, is not likely to be running at optimum capacity, therefore performing poorly in comparison to later models. An aging conveyor belt system or delivery truck will no doubt be outclassed by a more recent model in carrying out required duties, making the newer gadget the preferred choice. This coupled with the fact that old machinery can break down at any given moment means obsolete machinery is a major hindrance to the timely completion of logistics duties.

Outdated machinery is also a drain on finite resources within the company. Delays caused by malfunctioning vehicles and warehouse equipment transfers into delivery delays, resulting in loss of customer satisfaction and possibly business. In this vein equipment that constantly breaks down will require resources to repair: the time spent tending to such machinery could otherwise have been used to complete the core functions of the logistics firm. Repairs also cost supply managers a significant portion of their budget, as payment must be made for labor as well as spare parts in most cases. These sadly wasted funds can eat into firm profits, and of course could have been better reinvested into the company.

Use of obsolete equipment also puts logistics firms at risk of malicious attacks by unscrupulous characters. Outdated security systems are usually much easier to break into than the updated versions as most updates are usually in response to vulnerability or simply an improvement on what already existed. As for information communications technology, the danger is far more apparent: obsolete systems will be simple for hackers to gain access to, exposing company data and client information to online thieves.

Although the Kenya Bureau of Standards has now allowed some of the cars to be re-exported instead of crushed, the message remains the same: they are not to be allowed on Kenyan roads. While jumping onto every passing trend and random update of equipment is not feasible and ill advised, the importance of staying up to date with industry standards speaks for itself. As the popular Kenyan refrain of moving “from analogue to digital” demonstrates, supply chain managers must be willing to bear the initial cost and discomfort of moving to newer and better things: our businesses depend on it. Do have an up to date weekend, won’t you?


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