Saturday, June 22, 2024

Outsourcing Operations: A Blunder for ZAFFICO

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By Musyani Siame

It is disheartening to learn that ZAFFICO intends to outsource its operations in a wrong way and at a wrong time. ZAFFICO has never outsourced any of its business operations since its incorporation in 1982. It has been operating efficiently and profitably. However, circumstances have changed. After 41 years of existence, without a suitable strategy, the corporation is preparing to outsource the operations in all the branches. The reasons why management seeks to outsource operations remain unknown. Even
when there is freedom of information, the corporation retains such information as secret and private.Outsourcing operations entails that ZAFFICO need to engage another company to do the works on its behalf. Companies outsource operations for various reasons, including labor cost reduction, workload reduction managing the cost of production and other factors. Outsourcing operations has proven beneficial depending on the company’s financial state and its primary business. However, in many instances, outsourcing has been ineffective.

Given that ZAFFICO’s management chose to outsource the company operations, this decision has led to more questions than it has provided solutions about the company’s decision-making process. In fact,many stakeholders have been tempted to believe that ZAFFICO’s current management team is ineffective and unfocused. The majority of managerial decisions are of insufficient quality to propel the corporation forward. Additionally, the corporation’s allegedly poor management can be deduced from the fact that senior management is comprised of non-professionals in the field of forestry, leading to irrational choices such as outsourcing, which are costly to the organization.

It is evident and shocking that the decision to outsource operations was taken without any stakeholder consultations. This has contributed to management making such poor judgments most likely in their own interest. Ignoring key stakeholders in important decision making processes is simply an enabler for wrong doings, anxiety and worry in the organization.The company’s shareholders, saw-millers and employee’s views were overlooked when the decision to outsource company operations was made. This is unjust and unhealthy. Stakeholders must be made aware of major decisions the organization intends to undertake so as to prepare for change and the implications thereafter.

Furthermore, the concern is not the 63% shareholding by the IDC, but the 23% shareholding by the employees and the general public, as well as the saw millers and suppliers, as key stakeholders making the entire decision to outsource operations a matter of public interest.I have no doubt that IDC was involved in making this contentious decision but the deserving shareholders were not and the questions is why? Although public shareholders are not permitted to participate in decision making, they have the right and are entitled to be informed of such plans in advance due the potential for negative effects on the company operations and businesses, job security,worker’s mental health, company operations, shareholder’s investments and others in both short and long term.

Surprisingly, the ’outsourcing plan’ is not mentioned in the ZAFFICO 2020 – 2024 strategic management plan. Why and how come it seems to be an emergency decision? Without adhering to the strategic plan.This is a clear indication that the decision is wrong and must not proceed.Moreover, the decision to outsource operations is contrary to the corporation’s core values. Some of the organization’s key principles include teamwork, integrity, motivation and reliability. However, in
terms of essential principles, the decision to outsource operations is completely wrong.

For starters, there is no teamwork since management is disconnected from the employees and other stakeholders by failing to engage them. Secondly, there is no integrity in management since decisions are made without the knowledge of other stakeholders while the negative implications are ignored.ZAFFICO must be treated with the respect it deserves. Thirdly, the news of outsourcing have a negative impact on staff and stakeholder motivation. Workers are demoralized and concerned, saw-millers are
disappointed and shareholders dissatisfied with the decision to outsource operations.It is also worth noting that, there are currently few if not none companies specialized in silvicultural and forest management operations capable of conducing silvicultural operations and forest management for ZAFFICO. Copperbelt Forestry Company and Wood Processing Company put together cannot manage. As a result, all bidders are most likely incompetent and incapable of delivering quality services. As a consequence ZAFFICO will have more challenges on top of dwindled mature stands like forest fires,more damage to young stands and high mortality rate of young stands trees.

Another grave consequence of outsourcing operations is the uncertainty of the future. Workers are concerned about their job security in the future. Uncertainty about the future has potential to birth inefficiency. The decision to outsource operations has left employees in limbo. Many employees are in a condition of acute perplexity, not knowing what the outcomes of the decision will be. This action has the potential to disrupt the mental health of about 345 permanent and contractual workers. It is, in fact
tantamount to mental torture for the employees.

Whether you like it or not, outsourcing of operations will most certainly result in job losses. Field Supervisors, Foremen, Beat Foresters and others are likely to be laid-off as sacrificial lambs in the end of this process. If you fall in this bracket, of employees, brace yourself for an impact. Now, the employees who will be laid-off have families and dependents. This is going to end in disaster.

I strongly urge ZAFFICO management to reconsider its decision of outsourcing operations. It is not a suitable move right now considering its bad cash flow. Before agreeing to outsource operations, there is need to conduct more consultations with all the key stakeholders. The negative consequences of outsourcing are far more catastrophic for now. Perhaps the corporation can try piloting the outsourcing of operation in few selected areas to test the concept. Outsourcing is crucial and can only be managed
with experience which ZAFFICO does not currently have.

I urge the Managing Director to revisit his promises. Previously, the raw decision of outsourcing operations was taken in private without full revelation. There was really no transparency. Earlier, there was a pledge to make contract workers permanent and rectify the contribution benefit scheme of permanent workers. Also to introduce new business models and diversification and value addition to products. These are the critical issues that must be addressed. Most employees must be put on a permanent basis, as opposed to a one-year contract that get renewed for over seven years. People were expectant of decisions in those priority area but to be awakened by advertisement for invitation to bid
for outsourcing operations. This is insincere. The stakeholders are saying! “NO OUTSOURCING OF OPERATION”

For correspondence: [email protected]

15 COMMENTS

  1. Management can’t make such an important decision without the involvement of Government. In fact that decision may have been imposed on them by someone up the ladder. That’s the price parastatals pay when jackals and nincompoops are in charge. Most of the mukula that the PF stole went through ZAFFICO. It’s just a smart repeat by smart criminals. It’s change that wasn’t change

  2. The article is very speculative and lacks specifics. It doesn’t give current operational strategies the company is now employing and in what manner these would be impacted. It gives conclusions before data. Further, cost structure of companies is determined by management, not the general public (stakeholders). Management lays operational plans before the Board at set intervals and gets it’s approval. Then it implements day to day activities. Let’s not mislead the public

  3. I am sratching my head what this article is about nevertheless a company like ZAFFICO should be one of the most profitable companies in the IDC portifolio recording bumper profits every year I mean I can touch on wooden rafters for domestic housing roofing they come from this company and I have not even talked about Mukula trees that were smuggled in the name of this company in the previous regime.

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  4. Investigate the companies that will be awarded that tender. Quite certain someone we know his involved due to financial reasons.

  5. Most of the comments we make here are factual and we don’t usually target anybody. There are serious financial leakages at ZAFFICO. Even the new measures on log sales have just eliminated the smaller players but big fish are still soiling their fingers. That pine plantation at Mushindamo is 6yrs old but looks like it’s just been planted. That pine won’t be harvested at 15yrs because there’s been serious pilferage. Not even the Auditor General can stop theft of public resources. Now that we’ve cutthroat capitalists in charge, they’ll soon find a reason to sell it and use fronts to buy it themselves. If Christ were to return today, few in the New Dawn Government will be available to welcome him

  6. Don’t mind the troll above.

    This government is disappointing considering the risks we Zambians took to bring change. Highly intelligent supporters have been ignored while jobs go to children of opposition leaders. Meanwhile people like my uncle who sacrificed finances for the party and sustained beatings from cadres, is just sat at home.

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  7. “The reasons why management seeks to outsource operations remain unknown. Even
    when there is freedom of information, the corporation retains such information as secret and private.Outsourcing”
    You are asking if a dog is dressed or naked? Different Modus Operandi from the PF but same intentions.

  8. Am not aware of the operations that are being outsourced but i know for a fact that there is no company that would outsource itself completely. We only outsource specific operations that are not worth carrying out ourselves to enable us concentrate on the core business. For me, this article is some what misleading as it is incomplete by not highlighting the outsourced activities.

  9. Deja Vu – this is a company with a lot of potential but they are looking for ways to shortchange the taxpayers.

  10. #Tmbwi
    “We only outsource specific operations that are not worth carrying out ourselves to enable us concentrate on the core business.”
    I’m not too sure about that. Mines contract out drilling and vehicle repairs…if this isn’t core business being outsourced then what is it?

  11. One other thing is that, ZAFFICO is dominated by the Namwanga, Iwa, Lungu, Mambwe and Lambya. If it were a Tonga at the top Mundubile could have by now been screaming as to why Hichilema is protecting his kinsmen. That’s how shallow our governance has become. I don’t know what the future holds for the young ones. Zambia is beyond redemption

  12. Mr Musyani was once an employee of the cooperation on contract.
    So he may know why when he is talking about through his fellow graduates who are on the verge of losing jobs maybe

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