● Introduction

● Pick n Pay Holdings: Established in 1967, leading South African retail

company.
● Operates supermarkets, hypermarkets, and convenience stores
nationwide.
● Known for customer service and corporate social responsibility.
● Efficient logistics system ensures timely delivery of goods.
● Company Overview
● Three brands: Pick n Pay, Boxer, and TM Supermarkets.
● Over 2000 stores serving diverse customer segments.
● Recent launch of Project Red for middle-income market.
● Company Strategies
● Ekuseni strategic plan introduced in 2022 for accelerated growth.
● Focus on online sales, store expansion, and operational efficiency.
● Capital investment and cost reduction initiatives in place.
● Online Business Expansion
● Prioritising digital innovation for online food and grocery retail.
● Collaboration with Takealot Group to enhance online shopping
experience.
● Ekuseni plan positions Pick n Pay for future profitability.
● Strengths and Weaknesses
● Strong brand image and loyal customer base.
● Areas for improvement: customer offering clarity, pricing perception,
and in-store experience consistency.
● Addressing profitability concerns and enhancing operational efficiency
is crucial.
● Environment and Sustainability
● Ambitious targets for waste reduction, recycling, and carbon
emissions.
● Smart supply chain initiatives and partnerships with local suppliers.
● Commitment to environmental stewardship and community
development.
● Market
● The formal food and grocery retail market in South Africa is valued at
around R595 billion.
● Projected to reach R820 billion by 2025, growing at an annual rate of
7.0%.
● Over 60% of growth is expected from less affluent segments where
Pick n Pay aims to expand.
● 1% increase in market share in this segment could yield R5 billion in
future sales.
● Financial Performance
● Sales increased by 5.2%, with an estimated loss of R2.7 billion due to
store closures and liquor sales restrictions.
● Turnover in 2022: R97.9 billion.
● Gross profit margin decreased to 18.8% due to civil unrest and higher
supply chain expenses.
● Supply chain costs controlled, with like-for-like cost growth kept lower
than sales growth.
● Inventory increased by 15.1%, strategic stock purchase of R900 million
made at FY22 end.
● ROCE at 39.1%, higher than weighted average cost of capital at 9.9%.
● Distribution
● Majority of inventory is distributed through a centralised system,
reducing costs and optimising resources.
● Centralization led to 15% reduction in stockholding and 10% decrease
in distribution costs.
● Utilisation of technology, including SAP system and RFID tags, for
efficient distribution.
● Distribution centres equipped with solar and water-saving systems.
● Supply Chain
● Significant cost savings achieved, with plans to continue under Project
Future.
● New Eastport distribution centre to open in Gauteng, targeting 12%
decrease in cost-per-case.
● Pick n Pay and Boxer investing in distribution centres to enhance
operational efficiency.
● Pick n Pay focusing on centralising the supply chain, supporting
customer value projects.
● Suppliers and Supplier Development
● Commitment to support small suppliers through fair pricing, efficient
administration, and mentorship.
● Pay Fast system ensures quick payments to suppliers, within 24 hours
of invoice approval.
 ● Supplier risk management in place, with regular food safety audits by
third-party auditors.
● Launch of "The Mentorship app" to connect small suppliers with
experts within the company.
● Digital Platform
● Integrated SAP system and advanced point-of-sale technology
streamline operations.
● Smart Shopper loyalty program and digital app offer personalised
discounts.
● Leading online grocery retailer in South Africa with a modern and
flexible IT platform.
● Valuable customer insights gathered through IT platform for
omni-channel expansion.

LOGISTICS AUDIT REPORT FORMAT

1. Executive Summary
● Summary of key findings
● Highlights of recommendations
● Overview of the significance of the audit
2. Introduction
● Background information on the company
● Purpose and objectives of the logistics audit
● Scope and methodology
3. Business Context and Strategy
● Overview of the company's industry and market position
● Alignment of logistics operations with business strategy
● Key challenges and opportunities in the logistics landscape
4. Logistics Performance Analysis
● Key performance indicators (KPIs) and metrics used for assessment
● Analysis of data on transportation, warehousing, inventory
management, and distribution
● Identification of trends, patterns, and areas for improvement
5. Risk Assessment and Mitigation
● Identification of potential risks and challenges in logistics operations
● Assessment of the impact of risks on business continuity and
performance
● Recommendations for risk mitigation strategies and contingency plans
6. Compliance and Regulatory Review
● Review of compliance with relevant regulations and industry standards
● Identification of non-compliance issues and areas for improvement
● Recommendations for ensuring adherence to regulations
7. Technology and Innovation Assessment
● Evaluation of technology solutions used in logistics operations
● Assessment of the effectiveness and efficiency of existing technology
● Recommendations for leveraging technology and innovation to improve
logistics performance
8. Supplier and Vendor Management
● Evaluation of relationships with suppliers and vendors
● Assessment of procurement practices, contract management, and
performance measurement
● Recommendations for optimising supplier relationships and enhancing
collaboration across the supply chain
9. Customer Satisfaction and Service Quality
● Assessment of customer satisfaction levels related to logistics
services
● Analysis of factors affecting service quality and customer experience
● Recommendations for improving service quality and meeting customer
expectations
10. Environmental and Sustainability Considerations
● Review of environmental impact and sustainability practices in
logistics operations
● Assessment of current sustainability initiatives and performance
● Recommendations for improving environmental sustainability and
aligning logistics operations with corporate sustainability goals
11. Conclusion
● Summary of key findings and recommendations
● Importance of addressing identified issues for improving overall
logistics performance
12. Recommendations
● Actionable recommendations for addressing key findings and
improving logistics operations
● Prioritisation of recommendations based on potential impact and
feasibility of implementation
13. Appendices
● Supporting data, charts, graphs, and tables
● Additional information on methodology, sources, and references