Every supply chain operation begins with good planning, whether the business is in Africa or elsewhere. Without a plan, it can be difficult to coordinate or achieve the desired result from the supply chain operation.
However, supply chain planning in Africa entails unique solutions that may not necessarily be obvious to the rest of the world. In this article, we will be exploring these basics.
What is supply chain planning?
Supply chain planning is the strategy engine of any supply chain operation. It is the process of coordinating and optimizing the supply chain operation through a series of steps that lead to customer satisfaction.
Think about it: would you go to war without planning or, at least, having a battle strategy in place? Yet many businesses in Africa and beyond do these with their supply chain operations.
Supply chain management doesn’t just happen. There are standards and rules in place to guide its operations. The business, industry, or country doesn’t matter. These set rules are all a product of supply chain planning.
Key components of supply chain planning in Africa
Certain components must be present in any supply chain planning system. Many are universal, but some are unique to the African business climate.
1. Demand planning
This is all about the market and the customer. For supply chain planning to be effective, there has to be a system in place to collect and analyze customers’ demands effectively. Your supply chain is only as effective as the demand planning and forecasting system.
In the demand planning process, it is important to ensure quality data and information, whether through market surveys, relying on tech or using past demands. An inaccurate demand forecast results in overstocking or understocking. Neither bodes well for the supply chain.
Demand planning is not just about itemizing the quantity of orders. There are nuances to it. For instance, customers may want more features in the product. An example of this is in the smartphone industry.
2. Inventory management planning
A supply chain operation is only as good as its inventory flow. The supply chain might as well be a useless machine if no inventory exists. After all, that is the entire purpose of the supply chain. Produce and get the product to the customers.
There are two key factors to consider when planning inventory. They are the availability and processing of inventory orders. When these two are in place, the supply chain will typically be on the right track.
Other factors to consider are the nature of the product (this impacts preservation), demand forecasts, and location. When all these are in place, inventory planning and implementation become seamless.
3. Resource planning
Resources are another very important aspect of supply chain planning in Africa. These resources include human, tech, and raw materials (direct or indirect). The management and allocation of these resources will determine the success of the supply chain management.
Resource planning goes beyond mere allocation to the areas of need in the supply chain. It entails the anticipation and coordination of resources that each area will need. It also considers the budget of the supply chain and the available finances.
4. Production planning
This is similar to the manufacturing master plan, which entails a comprehensive outline and framework of the production or manufacturing process. This framework will help the production team figure out and ensure the perfect outcome of the manufacturing process.
The product process is highly volatile, but with the right plan, supply chains across Africa can utilize resources and maximize the entire process for a high throughput rate. To a large extent, the production planning stage is the supply chain’s opening scene.
There are a lot of benefits to be had if it goes well. Production or manufacturing can be chaotic. Getting it under control will be good progress for the supply chain operation.
5. Supplier planning
Suppliers are external but essential stakeholders in any supply chain management. Planning for them will entail sourcing, vetting, onboarding, and categorizing each supplier. It is through supplier planning you can draw up expectations for each supplier.
You may struggle to integrate the suppliers with your supply chain operation without proper planning. In Africa, suppliers typically respond to culture and how the procurement team coordinates the relationship with them.
Allocation of sales or services is also an important factor to consider during supplier planning. You need to know what each supplier will bring, their capacity, and limitations. This will help drive your relationships with them.
6. Sales and operation planning
The sales team depends on the operations sector for effective marketing efforts. There has to be an effective coordination and alignment of objectives between the two if there is any chance of success for both.
The sales team needs to know the capacity of the operation. This way, they do not over-promise the customers or clients and put too much pressure on the supply chain. They are also able to manage each other’s expectations.
Sales and operation planning help create a perfect synergy between the two teams.
Why is supply chain planning important for African organizations?
There is no shortage of reasons to get behind supply chain planning. Let’s explore some of them.
𝟭. 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆 𝗮𝗻𝗱 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀: Planning ensures that the supply chain operations are carried out effectively and efficiently because everyone knows what to do and how to do it. Departments do not have to guess or think about the resources allocated to them; they know what the customers expect from them.
𝟮. 𝗖𝗼𝘀𝘁 𝗿𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻: Waste and errors are costly in any supply chain operation. Supply chain planning helps reduce the cost of operation for African businesses by reducing waste and errors. It also ensures higher throughput, which can be profitable for the organization.
𝟯. 𝗦𝘁𝗿𝗲𝗮𝗺𝗹𝗶𝗻𝗲𝘀 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻: Supply chain management can be a very chaotic process. With very good planning, there is better control, and the operation is streamlined to ensure high productivity.
𝟰. 𝗥𝗶𝘀𝗸 𝗺𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻: Planning gives the supply chain foresight into the future, allowing it to deal with potential risks beforehand. With supply chain planning, the supply chain is better prepared and more resilient in the face of disruption.
𝟱. 𝗕𝗲𝘁𝘁𝗲𝗿 𝗰𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗶𝗼𝗻: Organizations in Africa that favour supply chain planning tend to have a better grasp of their supply chain operations. They communicate better and are more goal-oriented, facilitating communication between all supply chain stakeholders.
Tips for an effective supply chain planning experience in Africa
The supply chain planning experience can be quite challenging, especially when considering external factors that make it difficult for businesses on the continent. These factors include poor infrastructure, scarce energy resources, poor policies, and inflation.
However, that is not the end for supply chains and businesses on the continent. One way they can tackle this is through adequate and well-thought-out planning. There are some tips that will guide you in planning.
1. Investing in technology
It can simplify the entire process. Tech has been great for supply chain management. It is the reason the modern supply chain has left its predecessor in the dust. African supply chains have all to gain from an investment in technology.
There may be cost limitations, but these supply chains can start small and grow from there.
2. Raw materials segmentation
Raw materials are typically twofold. Many global supply chains might not experience this, but it is true in many African regions. You may classify raw materials are typically direct and indirect. And it is important to consider both when planning.
Indirect resources will entail water, energy resources, and others. On the other hand, direct resources are simply resources that contribute directly to the product.
3. You need a good team
The supply chain is only as good as the team involved. There should be a significant investment in the training of team members to improve their expertise.
This will also pay the supply chain organization because it allows for interesting ideas and innovations in the supply chain planning process.
4. Monitor KPIs
Every supply chain should have a key performance index which says a lot about the success of the supply chain planning. If the KPIs are poor, it is time to go back to the drawing board and figure out how to improve.
FAQs on supply chain planning in Africa
These are some frequently asked questions on supply chain planning for African businesses.
𝗤𝟭. 𝗪𝗵𝗮𝘁 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 𝗮𝗿𝗲 𝘂𝗻𝗶𝗾𝘂𝗲 𝘁𝗼 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗶𝗻 𝗔𝗳𝗿𝗶𝗰𝗮?
Supply chain planning challenges specific to the African context include restricted infrastructure, intricate customs and border procedures, heterogeneous market circumstances, and dependence on several forms of transportation.
These elements necessitate customized planning techniques.
𝗤𝟮. 𝗛𝗼𝘄 𝗰𝗮𝗻 𝗼𝗿𝗴𝗮𝗻𝗶𝘇𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝗔𝗳𝗿𝗶𝗰𝗮 𝗼𝘃𝗲𝗿𝗰𝗼𝗺𝗲 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗼𝗯𝘀𝘁𝗮𝗰𝗹𝗲𝘀 𝗿𝗲𝗹𝗮𝘁𝗲𝗱 𝘁𝗼 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲?
Infrastructure obstacles can be solved by investing in technology, utilizing alternate modes of transportation, and working with regional partners to increase supply chain efficiency.
𝗤𝟯. 𝗛𝗼𝘄 𝗱𝗼𝗲𝘀 𝘁𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝘆 𝗵𝗲𝗹𝗽 𝗔𝗳𝗿𝗶𝗰𝗮’𝘀 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻 𝗺𝗼𝗿𝗲 𝗲𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝘁𝗹𝘆?
Technology makes the supply chain more visible, gives real-time data, and makes collaboration easier. Using technologies like SCM software for planning and IoT for tracking is crucial.
𝗤𝟰. 𝗛𝗼𝘄 𝗰𝗮𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗺𝗼𝗱𝗶𝗳𝘆 𝘁𝗵𝗲𝗶𝗿 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝘁𝗲𝗰𝗵𝗻𝗶𝗾𝘂𝗲𝘀 𝘁𝗼 𝗳𝗶𝘁 𝘁𝗵𝗲 𝘃𝗮𝗿𝗶𝗼𝘂𝘀 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗶𝗻 𝗔𝗳𝗿𝗶𝗰𝗮?
Adopting flexible planning models, comprehension of local market dynamics, and developing strong local relationships by firms facilitates the effective navigation of diverse and dynamic African markets.
Conclusion
For supply chain planning in Africa to have any serious impact, it has to consider the overall goals of the business, and it has to consider the customers as well. Remember, there is no business without customers.
When done well, the supply chain planning process can determine the success of the entire supply chain management program. It is the defining aspect of any supply chain system.
Nigeria, Kenya, Ghana, Togo, Benin, Cameroun, Ivory Coast, Kenya. Tanzania
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
