Unfortunately, sustainable supply chains in Africa have garnered very little attention.
However, it is still an essential component of business operations around the globe. One reason for its poor acceptance is the lack of promotion, even though there are many opportunities for sustainable development. Another is because many businesses perceive it as too expensive and not worth the initial capital. This article reviews some of the benefits and challenges of promoting sustainable supply chains in Africa.
What are the Benefits of Promoting Sustainable Supply Chains in Africa?
Sustainable supply chains have been tried with great success across the globe. Fortunately, they have also achieved some level of success in Africa.
Here are some of the benefits of applying them.
1. Cost Reduction of The Supply Chain
Businesses and supply chain managers constantly look for ways to guarantee profits and tend to look to the supply chain to help.
Most supply chain managers worldwide live to reduce the cost of their supply chains. This is also true in Africa. Implementing or investing in this strategy requires some capital. However, despite the initial cost, it helps businesses and supply chains save significant amounts in the long run. Although the initial capital (cash and human resources) required in setting up a sustainable supply chain can be quite a lot, it is one of those investments that pays for itself in the long term.
Sustainable supply chains can cut costs by implementing strategies that increase efficiency and reduce waste.
These strategies include adopting lean principles, optimizing supply chain operations, diversifying people and ideas, investing in technology, and transitioning to renewable energies. They generally help keep costs low, and help businesses on the continent become more efficient.
2. Risk Mitigation of The Supply Chain
By embracing sustainable supply chains, business owners and supply chain managers can reduce their supply chains’ exposure to risk, which could very well lead to disruptions.
Climate change, environmental pollution, and human rights violations, which have plagued many communities on the continent, are examples of such supply chain risks. Although these risks are terrible to our environmental and social well-being, human lives are also at stake. Companies like Shell and Mobil have been forced to pay heavy fines for environmental pollution.
Failing to avoid these risks usually has profound impacts on the supply chains, such as negative brand reputation, supply chain disruptions, and financial losses.
3. Increased Innovation Within the Supply Chain
Technology is one of the chief drivers of innovation and a key component of any sustainable supply chain.
This means that pushing for sustainable supply chains across Africa can drive innovation by encouraging companies to adopt tech-driven solutions. With these solutions, supply chain managers can improve efficiency and throughput while developing new products or services. They can also increase competitiveness and improve business outcomes.
4. Growth Opportunities for Businesses and Supply Chains
Sustainable supply chains are a global issue, and international organizations across the world take it seriously.
They are interested in companies with supply chain sustainability frameworks. Partnering with such companies allows them to stick to their sustainability commitments. For African companies, this means an opportunity to work with big businesses and corporations to expand their clientele.
Challenges of Promoting Sustainable Supply Chains in Africa
While supply chain sustainability is becoming increasingly important globally, promoting and enforcing it in Africa has several challenges.
1. Lack of Transparency in Supply Chains
One of the major challenges in achieving a sustainable supply chain on the continent is the lack of transparency in supply chains.
Many African companies struggle to track and trace their supply chains effectively, making it difficult to identify environmental and social risks and opportunities. The lack of transparency in the supply chain processes makes it challenging to implement or communicate good sustainable strategies for the supply chain.
2. Limited Capital Available to Businesses or the Supply Chain
Implementing sustainable supply chains requires a significant initial investment from businesses.
However, not many businesses have access to the capital needed, especially small and medium-scale businesses. The lack of capital makes it difficult for them to invest even if they want to. They would rather invest their limited resources in their unsustainable supply chain models because it is safe for their business.
3. The Complexity of Supply Chains in the Continent
Supply chains are complex enough because of the various processes intertwined together.
In Africa, poor government policies and Infrastructure have only contributed to the complexity and difficulty. For instance, businesses are forced to build informal relationships with suppliers to stay ahead of the competition and difficult government policies. This sort of relationship often results in a lack of accountability on both ends, resulting in many delays and disruptions. Poor access to different intermodal transportation systems also contributes to logistics challenges. It forces businesses to rely on unsustainable means because it saves them more cost.
These complexities can make it challenging to identify and address environmental and social risks, such as deforestation and labour exploitation.
4. Lack of Collaboration Among all Stakeholders of the Supply Chain
Collaboration is essential for achieving supply chain sustainability, but getting all stakeholders on board can be challenging.Â
In Africa, consumers do not prioritize sustainability because they are unwilling to pay the premium, making it difficult for companies to take it seriously. Governments also shy away from policy and infrastructural responsibilities, so they shy away from enforcing sustainability practices. Business owners want to get rich quickly to escape certain conditions, so there is a lack of interest in parting with the huge capital needed for sustainable supply chains.
When most stakeholders in the supply chains are not buying the idea, promoting a sustainable supply chain can be difficult.
Wrap Up
Achieving supply chain sustainability in Africa is a complex and challenging process that requires significant effort and investment from companies. Despite these challenges, companies that prioritize supply chain sustainability can gain a competitive advantage, a positive brand reputation, and meet growing expectations.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
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