M A G A Z I N EM A G A Z I N ETel: +27 12 492 1001Email: contact@resolvesp.com

M A G A Z I N E

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The first quarter of the current financial year is behind us, and the previous year was concluded with a satisfactory financial performance overall. Most subsidiaries and business units in the group achieved their financial targets, with some exceeding even the wildest expectations of all stakeholders! There was also a dose of reality where we had to close or scale down some areas of the business. Even though we do not only measure success in financial terms, a financially healthy business leads to a sustainable association for all stakeholders – us as employees, our customers and our shareholders.

In a recent conversation with one of our colleagues, it was refreshing to experience how strongly he believes that our business is about people. We reflected on the impact that any changes have on the people and the business. Jointly we should strive to replace discom-fort and uncertainty with stretch and opportunity. With the benefit of perfect hindsight, we acknowledge that we made some mistakes during the big and bold consolidation that we embarked on two and a half years ago. Some of the outcomes have been a stark reminder that it is a slippery slope towards losing talent, if our people are not operating in their sweet spots.

Fortunately, it is humbling that the good news overshadows some disappointments: Our business is healthy. The past year has seen a step change in profitability and we

have cleaned up the balance sheet substantially. This sets us up for an interesting and exciting future.

We continue to look for suitable acquisitions that complement our business and/or fill the gaps in our strategy.

We have concluded an exciting cooperation agreement with Zakusa that enables real and proper economic transformation, which holds commercial upside for all parties. It is refreshing to work with an emerging black-owned enterprise with a passion for supply chain.

Resolve Immix recently concluded the acquisition of Axnosis. Jointly, they now offer the most comprehensive range of Microsoft Dynamics solutions in sub-Saharan Africa and they are the largest Microsoft Dynamics AX partner in Southern Africa.

Our sales plans are the clearest they have ever been. The potential organic growth on top of the healthy base we have is exciting. I look forward to witnessing the momentum that will be derived from the new sales, business development and strategic solutions focus.

We are well into a leadership development programme with the theme “Care and Growth” that will run for the rest of the financial year. This is a substantial investment in the leaders of our group and will better enable us to implement the notion that financial performance will follow human performance.

The Resolve marketing team, assisted by our Imperial Logistics colleagues, are making great progress in establishing our brand, a critical enabler for the journey that lies ahead of us.

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Our commitment to excellence has paid off with several awards being won by our teams recently. Not only did we feature in no less than half of the Logistics Achiever Awards this year, but one of them was a Platinum award won by our subsidiary company InSync for the excellent work they have done with VW. Resolve Capacity also won an innovation award at the SA Innovation Awards for Clinic-in-a-Box, and our young graduates took first place in the local leg of the SAPICS supply chain contest, The Fresh Connection. Marius Jooste from our Managed Services division was also acknowledged for Continuous Improvement and Innovation during the Imperial Logistics Customer Care Champions program.

How much is enough?On a personal note, I had the privilege to complete a “ride” of a lifetime earlier this year called joBerg2C (a select few refer to it as a “race”). We covered 923 km from Heidelberg to Scottburgh over 9 days on a mountain bike. My partner and I were fortunate to avoid mechanical, severe physical and (even) mental failure and arrived with mixed emotions on the beach in Scottburgh early in May. This substantial commitment outside work helped me realise that the search for balance is a continuum. Find whatever works for you, but avoid the extremes for extended periods. Neither hard work only, nor hard play only, is sustainable. The worst, in my opinion, is not doing either of the two….

You will recall that I caution against over-committing yourselves financially at every opportunity. A central theme that was introduced by the sponsors of joBerg2C (Old Mutual) was “How much is enough?” They reveal that it is better to first focus on what will make us truly happy, and then work out how much money we need to support that, rather than the other way around. Wealth means different things to different people. To some, it is simply being financially secure or living a rich and rewarding life. To others, it means having all the material trappings of success that the modern world offers, or the status involved in being able to call oneself a millionaire.

Strangely enough, they conclude that understanding what makes us happy often leads to greater financial success. This is because we are more likely to be engaged and productive in our work and in managing our money, creating opportunities for success that would not otherwise be available to us. Happiness brings money, rather than the other way around.

In this day and age, we should have the confidence to lead full and authentic lives – but first it’s important to look inwards and develop our own answers to the fundamental question: “How much is enough?” (www.howmuchisenough.com).

Looking AheadAt our recent Business Update, we shared the reality of the first quarter of the new financial year, and highlighted business streams and projects we will be focusing for continued growth. We continue to scan for potential acquisitions that fit and complement our strategy. I am also humbled by the continued and committed support we receive from our parent company Imperial Logistics.

The ongoing challenge that lies ahead for us remains true integration as an organisation, including our subsidiaries. We need to live our “consider it done” mantra every day, and in doing so live up to the Resolve purpose of Making Business Better. The biggest single brand builder is excellent results that delight our customers.

We are excellent at deriving new plans and need to keep up with implementing our strategies and plans. Business has been, and always will be about remaining relevant and fresh, which implies change… We constantly review commercial success, relevance and demand in the market; and the strategic fit and synergies between the service lines and companies in the group.

Currently we maintain a healthy balance between organic and acquisitive growth and believe this strategy will enable us to aggressively grow our technology and process outsourcing businesses.

As dark clouds are gathering on the economic horizon, we have prepared for a bumpy ride. Although we don’t proclaim to have all the answers and will not be isolated from economic headwinds, I am quietly confident about the future. We have the trust and support from our shareholders to explore big, bold and exciting new opportunities. This is not only as a result of our satisfactory financial performance, but largely because of who and what we are. We will continue to focus on growing intellectual property, and providing solutions that showcase our deep, pragmatic supply chain understanding coupled with world-class technology, and grow our process outsourcing business as a result.

We are privileged to live and work in an exciting time with unique challenges. I reiterate that we are jointly and severally responsible for making Resolve an exceptional business!

My best regards,

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2.

When two industry innovators team up, great things are bound to happen. This is exactly what Resolve expects from the recent merger of its subsidiary Resolve Immix – Microsoft software solutions specialists – with Axnosis, leading global software provider in exploration, mining and minerals processing (xMMP), which includes enterprise asset management.

New Microsoft Dynamics AX

Powerhouse for

Combining their rich experience in business consulting, project management and systems integration, the companies will now be able to enhance and strengthen their capabilities across Microsoft Dynamics ERP, Microsoft Dynamics CRM and Microsoft SharePoint solutions.

“Resolve Immix and Axnosis have combined forces to extend our technology offering and deliver Microsoft Dynamics industry-specific software to the marketplace,” says Andre Pearce, Managing Director of Resolve Immix. “Both companies have a solid track record of successful Microsoft Dynamics implementations and we intend to solidify our value proposition by continuing to provide high quality service and results to current and future clients.”

Managing Director of Axnosis Riaan van der Berg says he is excited about the unique opportunities that the merger will create for the company’s combined stakeholders: “We look forward to uniting with all in this new chapter ahead.”

The collective resources of two highly compatible companies with complementary strategic priorities, positions them to provide cost-effective integrated solutions and world-class deployment and support in mining, manufacturing and distribution. The merger will fast-track the combined company’s growth strategy and offer a truly compelling value proposition.

With the backing of Imperial Logistics and Resolve Solution Partners, Resolve Immix will now offer the most comprehensive range of Microsoft Dynamics solutions in sub-Saharan Africa, and is the largest Microsoft Dynamics AX partner in Southern Africa.

Axnosis means “applied knowledge”: “Ax” refers to products (first the old Axapta, and now Microsoft AX); and “nosis” from the Greek word “gnosis”, which means knowledge. Applied knowledge is a powerful tool.

Immix means “To commingle, blend and mix together different elements”

3.

At Resolve, we pride ourselves on offering the right technological solution for each client, and the ERP space is no different.

More than just consultantsSAP

One of our strategic ERP service offerings lies with SAP, and we continue to build our capabilities in this area, with a focus that is distinctly different from traditional implementation and consulting.

“Our primary focus is on helping organisations increase the value they get from the use of SAP across their Supply Chains,” says Dean Tebbutt, Chief Technology Officer at Resolve. “Doing this requires more than implementing the latest functionality or module. Rather, it is about helping organisations adopt and apply the right processes and disciplines through the software, helping them advance overall businesses maturity and extract value on a sustainable basis.”

Resolve offers strong SAP functional expertise, combined with strong operational and process execution capabilities. “It marries closely with our business strategy of offering managed services,” he explains. “We work with organisations to transform core processes, while also engaging in continuous improvement and fine-tuning to optimise the way SAP services their business requirements.”

By implication, therefore, the nature of the skill Resolve brings to the table is different. “We are not traditional ERP consultants,” he says. “It is a combination of offering expert Supply Chain advice coupled with senior operational expertise. Our experts are not only SAP certified, but have held senior operations management positions, as super-users, with execution management responsibilities. This allows us to intuitively balance full system capabilities with a practical understanding of good operational discipline and process design. It allows us to rapidly diagnose struggling operations and extract value from SAP implementations by addressing a combination of root cause issues such as skill levels, process discipline, system config or master data.”

Resolve’s growth focus is specifically around the supply chain management modules and capabilities of SAP, with an immediate focus centred on SAP TM (transportation management) and SAP EWM (extended warehouse management).

“It is no longer good enough to only be a SAP product expert,” concludes Tebbutt. “We need to bring strong levels of innovation and thought leadership, as well as seasoned operational expertise, and it is only through a combination of these three things – technical skills, subject matter expertise and operational excellence – that we will be able to live out our value proposition: making business better.”

4.

Earlier this year, our subsidiary responsible for Oracle in the group – Lodestone – rebranded to Resolve Red, an embodiment of its partnership with Resolve, and the move towards integration within the group.

Specialising in enterprise systems, middleware, integration, hosted solution, data collection/mobility tools and database technology, Resolve Red is an Oracle Gold Partner, and prides itself on offering a logical approach in a complex environment. Above all, Resolve Red aims to meet and exceed its customers’ requirements, providing relevant, client engaged and delivery focused practical solutions.

is within the Oracle stack,” says Deirdre Joubert, Managing Director of Resolve Red. “We have a strong skill set within JD Edwards, Oracle Fusion Middleware, Oracle Database and RF Smart. Our strength lies in our ability to apply multidisciplinary expertise and technology to meet specific client and project needs, partnering with our clients every step of the way.

“Our core product focus

”

Air ProductsWhat they do:

Produce gases for the manufacturing and services industry

The challenge:

Old system, out of warranty, no support

The solution: Resolve Red provided them with

a system upgrade using standard functionality, avoiding the need to

unnecessary custom modifications. We introduced Transportation,

Capital Asset Maintenance and Rental Management.

Why does it make their business better?

The new software version has grown with the industries that

use it, meaning that prior bespoke solutions are now incorporated into

standard functionality. The system is web-based for

improved ease-of-use, and mobile-use

compatible.

SA BiomedicalWhat they do:

Source artificial limbs from all over the world

Why does it make

their business better?The system is web-based,

and therefore more available to staff, and brings them in line with

the most current software versions. It is compatible with mobile-use,

and there is a single provider assisting them with services in

a standardised platform.

The challenge:

Old system, with additional challenge of

expensive serialised (bar coded) measured orthopaedic solutions

(hips, shoulders, knees, etc.) that need to be tracked in perpetuity. Their old system struggled with overseas acquisitions as well as storage and

tracking, both prior to and post-insertion.The solution:

Resolve Red removed all duplicate information and redundant detail, re-engineered their

processes and introduced a bar code system so that the receipt, storage, despatch and

control of serialised items would be greatly enhanced.

What they do: Source artificial limbs from all

over the world

5.When Imperial Dedicated Contracts (IDC) was looking for a partner to help improve their contract offering to their client PFG Building Glass, they looked no further than Resolve’s process outsourcing and Transport Managed Service (TMS) division.

Transporters and Clients Linking

PFG, a division of the PG Group, is the leading manufacturer of float and patterned glass in southern Africa, as well as laminated glass, mirrors and sealant products. The company produces 260 000 tons of high quality float glass and 30 000 tons of high quality patterned glass products a year, and has found in IDC a trucking service to meet its unique needs.

After an initial three-year contract, IDC wanted to help PFG improve its route planning, expediting and technology portal, while implementing continuous improvement initiatives. Resolve provided this TMS expertise, and six months into the new contract, the partnership is already showing results.

On the technology side, Resolve’s TMS portal was introduced, featuring custom development that was moulded towards PFG’s requirements, and focused on bringing all necessary information to one central point. While some work is still required to fully integrate the new technology, the portal is already proving effective.

Route planning, transport control and execution management have already been implemented, with one of the main features being 24-hour coverage of all vehicles in the fleet. This improved visibility also means better customer service – if trucks have been delayed, the matter can be escalated and dealt with faster, using a more proactive approach. The fleet was also reduced by three vehicles, helping to cut costs and eliminate idle time.

As a manufacturing plant, PFG sends glass products to all corners of the country, as well as cross-border into Swaziland, Lesotho, Namibia, Mozambique, Zimbabwe and Botswana. This complex distribution network requires careful planning and optimisation, and Resolve is the link between PFG and IDC in this regard, with IDC executing Resolve’s plan, and Resolve providing a monitoring service for IDC.

Another unique aspect of this three-way partnership is that IDC’s profits are linked to the client’s cost savings. Transporters are not traditionally part of a gainshare model, but this unique partnership means that the transporter is now incentivised to be a part of cost-saving initiatives and solutions that promote increased efficiencies.

Going forward, Resolve will partner with the client to improve its physical asset management, as well as remain focused on continuous improvement in all aspects of the TMS solution. With Resolve staff as part of the Logistics Control Centre on site, partnering with the client’s customer service agents, the next phase of the partnership is set to succeed in truly making PFG’s business better.

for Continuous Improvement

Continuous ImprovementThe project was implemented on time and with no interruption to production and has yielded significant savings in both the assembly and logistics operations through a process of continuous improvement between 2010 and 2015.

Thanks to the project’s success, the procedures and processes are being incorporated into the Volkswagen Group’s Global Manufacturing Template, and the Group is making favourable decisions regarding future models for VWSA.

6.

This year’s Logistics Achievers awards were a highlight for Resolve subsidiary InSync Solutions, netting a coveted platinum award for its work with Volkswagen South Africa (VWSA).When VWSA consolidated the production platforms at its Uitenhage factory from four to two, to prepare for the production of the new Polo range for all right-hand drive countries, it raised new challenges for the supply chain, as the factory now needed to double its previous best output and produce a unit every 2.3 minutes.

The solution needed to recognise the importance of effective logistics to meet the new requirements, which led to the introduction of VW’s New Logistics Concepts, to be implemented in SA for the new Polo, and then in the rest of the world.

InSync Solutions supplied the technology and expertise for the changes required in the supply chain, while Volkswagen AG in Germany supplied those needed for the changes in the assembly process.

Achiever’s Award Platinum Logistics

for InSync

The ChallengeThe most severe demands on the project were timing and a no-business-interruption requirement: The project was started in January 2009. The first prototype solution had to be tested by April 2009, and ready for the introduction of the new Polo line three months later. This had to be done without impacting on operations – no line stoppages were allowed while introducing the new concepts.

The SolutionThe scope of the project implemented was a complete logistics DNA change – people, process, system, facility and management model were all affected: A new faster and more ergonomically friendly vehicle assembly line was implemented. Strict rules governed how many steps each operator could take and how far he/she needed to reach for any part. A new flow rack system replaced the previous automated bin storage system to accommodate the 900% increase in bins that needed to be supplied to the line each day. The existing racking system was replaced in a seven-phase integration plan over weekends. A new e-Kanban system logic was developed and introduced by making significant changes to the existing ordering system, which now supports unlimited flexibility in the vehicle production schedule. A cycle-based logistics management process was implemented to ensure smooth flow of materials and reliable just-in-time supply.

50% 5 yearsinreduction

in manpower

7.Resolve featured in yet another Logistics Achievers Award this year, winning gold for simplifying distribution at Imperial Cold Logistics (ICL), which resulted in cost savings of R35-million.

for ColdGold

Formerly The Cold Chain, ICL was facing a host of challenges that were jeopardising the business’ competitiveness. These included poor financial performance, unmaintained facilities, ageing fleet and dated systems, as well as poor visibility of logistics activity and costs, and inefficient logistics operational systems. The rise of the retailer distribution centre posed an additional challenge – this had resulted in a drop size reduction, but there had been no corresponding reduction in The Cold Chain’s own distribution footprint.

The business’ transformation started with a new name and branding, and ICL was born. In partnership with Resolve, ICL analysed the changes needed to turn the company around. The financial reality was that the transformation needed to deliver a near immediate payback, in order to keep the business operational. The company was not in a position to carry the cost of failed initiatives, lost sales, debtors’ write-offs or lost customers, so the pressure was on.

The changes made by Resolve included the consolidation of six distribution sites, which enabled the business to save R35-million annually. Distribution planning and execution management were optimised, resulting in a reduction of 55 delivery vehicles, and the development and empowerment of people was prioritised, with extensive system and operation based training introduced.

Resolve has also established clear and aligned key performance indicators and implemented inventory optimisation and replenishment software, which has significantly reduced working capital.

An integral part of Resolve’s sustainable solution for ICL was the development of an impressive new warehouse – the largest chilled storage facility in Africa. Developed by Resolve Capacity, it boasts 50 000 pallet positions and offers a combination of bulk cold storage and secondary distribution. In addition to enabling client efficiencies, this facility is reducing costs for ICL through optimised activity and the reduction of waste.

Looking ahead, Resolve and Imperial Cold Logistics will continue to drive business improvements, with several investments in infrastructure upgrades planned. New distribution facilities will be established in Cape Town and Durban, and further investment in distribution vehicles is planned over and above the 89 new vehicles already purchased and branded with the new ICL logo.

From being a business in jeopardy, ICL has emerged as a force to be reckoned with in this industry, providing world class warehousing, logistics and distribution services to major chilled and frozen food manufacturers like McCain, Tiger Brands Perishables, Astral Foods and County Fair Foods, among others.

The R160-million

state-of-the-art, 25 500 m2 cold

storage warehouse in Linbro Park, designed and project managed

by Resolve Capacity.

8.Earlier this year, Resolve Capacity won a USAID Mozambique tender to design and build a regional pharmaceutical warehouse in Nampula, Mozambique, with a budget of $7.5-million.

Resolve Capacity has begun the design of the warehouse and surrounding facilities, which comprise a total area of 7 853 m², of which the warehouse and administration area is 3 212 m².

Partnering with the professional services team from Pasqa Africa, Resolve Capacity is also using a local Mozambican company as the main contractor for the project.

“This warehouse will enhance the pharmaceutical distribution network in Mozambique, as well as storage capacity for the distribution of quality medicines,” explains Arno Haigh, Managing Executive at Resolve Capacity. Pallet storage capacity has been maximised through utilising roof voids and cross aisles, and means an impressive storage capacity of over 6 000 pallets in the warehouse.

“Using a local main contractor is part of our effort to keep as much of the funds in-country as possible,” says Haigh. “We are also conscious of our impact on the environment, as well as the challenges of running such facilities in regional areas, and the warehouse has therefore been designed as a green building, reducing both environmental impact and maintenance costs.”

The pharmaceutical warehouse uses the latest water reticulation and water harvesting technology, solar elements, energy-efficient air-conditioning and ventilation, and employs cost-saving lighting efficiencies.

“We are excited about this project,” says Haigh. “We know that in addition to job creation and local business development opportunities during its construction, it will have a significant positive impact on the pharmaceutical distribution network in Mozambique, and more specifically in the Nampula region, once it is completed.”

wins $7.5m Bid for PharmaceuticalWarehouse in Mozambique

Resolve Capacity’s innovative Warehouse-in-a-Box™ solution to Tanzania’s expanding need for a scalable, secure, reliable and sustainable means to store and distribute medicines and healthcare commodities, won silver at this year’s Logistics Achievers Awards.

Warehouse-in-a-Box™ is a unique concept that provides for the rapid installation and commissioning of a pharmaceutical compliant pre-fabricated warehouse, with all the necessary components packed and ready for export in 40 ft containers. The design can deliver between 500 and 10 000 m² of pharmaceutical warehouse space, and long-term scalability is possible through a modular design, which is readily adjustable to accommodate future growth demands.

awards for in-a-box solutions!

Also netting a sought-after award was Clinic-in-a-Box™, which won Resolve Capacity a Corporate Innovation award at the SA Innovation Awards. The awards recognise and showcase innovative companies and individuals who are frontrunners in their fields, and Clinic-in-a-Box™’s innovative turnkey infrastructural concept for the rapid deployment and commissioning of a clinic impressed the judges. These prefabricated structures can be erected within less than a day, and contain all the componentry required to deliver a total solution, packed and ready for delivery in 20 to 40 ft containers.

9.standardisation & visibility for pioneer foods

When Pioneer Foods needed an in-house transport management system (TMS) system implemented, as well as the capabilities required to realise transportation-related improvement opportunities, they called upon Resolve’s Advisory team to assist.

Pioneer Foods consists of a consolidation of various product supply chains, which historically operated in silos, with very little visibility of planning, operational and cost information. Pioneer has recently started to consolidate the individual business units into four main business units – Essential Foods, Groceries, Quantum Foods and Pioneer Foods International Exports. This consolidation is part of a broader “Evolve” project with Pioneer Foods to standardise their business and processes regarding the use of SAP as their ERP system.

Integrating systems and multiple parties impacted by the go-live timeline TMS implementation was part of a complicated SAP shipment costing project Changing the old thinking and mind-sets Standardising business processes across multiple sites that operated independently Establishing a new planning team and ensuring correct skills transfer

The Challenge

Resolve set up a centralised planning team that uses the PLATO (TMS) system to drive key objectives.

How we made their business better The solution provides a structured central approach that enables standardisation across companies (and their multiple depots). It also provides a data warehouse for business intelligence in order to perform operational and trend analysis reporting as a consolidated view across all sites. The TMS implementation provides the platform for further improvement that may include the standardisation of operating procedures, a logistics network analysis or fleet-mix exercises and customer service investigations. Resolve’s Rudi Bezuidenhout spent seven months assisting the Pioneer Foods Logistics Services (PFLS) planning team in Malmesbury. He shared his skills and knowledge gained through experience working in Resolve’s TMS team, and played a vital role in the success of the centralised PFLS team. The centralised team enables knowledge-sharing, quicker response to queries/issues, and better overall visibility of operations.

The Solution

The project’s success was totally dependent on Resolve’s

ability to be a one-stop shop. The collaboration between Resolve’s SCA, TMS, HCD, HSS, DEV and TE ES

business units madeit a success.

“I was thoroughly impressed by the professional, open and helpful manner in which the team conducted themselves. No request was ever too

big or too much effort.”

- Adriaan Odendaal, PFLS Project Manager

“Drives standardisation and visibility of transport activities

across the business.”

- The single biggest improvement that the project enabled

for PFLS

@SAPICS2015

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