Although supply chain complexity is not unique to businesses and organizations in Africa, it is still a growing concern for many businesses on the continent. Particularly when you factor in the limitations of the continent.
Modern supply chain management is a network of interconnected processes and stakeholders working together to achieve a common objective.
It is the same around the world, and Africa is no different.
However, because of the competitive nature of the modern business climate and ever-evolving customer demands, supply chains have evolved to a more complex nature just to survive.
In Africa, the problems that lead to complexity are a bit nuanced, so it is normal that the solutions will also be nuanced. In this article, we will explore the causes of supply chain complexity on the continent and the solutions.
Causes of Supply Chain Complexity in Africa
As I mentioned earlier, supply chain complexity on the continent is quite nuanced compared to the rest of the world. Here are some of the causes.
+Evolving Consumer Behaviour
The economy is changing rapidly for the better, which has caused a lot of changes in consumer behaviour and demands. There is also an increase in purchasing power across the continent, which is also a big contributor.
+Low Ease of Doing Business
According to the Wall Street Journal, 11 African countries rank in the bottom 20 of the best countries to do business. That’s a terrible report and showcases the stress businesses and supply chains go through when conducting business on the continent.
+Poor Infrastructure
Poor infrastructure is the underbelly of the African economy. When supply chains have to adopt processes which will help them navigate the infrastructural challenges on the continent, they become increasingly difficult to manage.
+Technology Acceptance
As much as the African economy is evolving and growing, businesses and supply chains are still stuck doing their operations the traditional way. Now, it has worked in the past, but it will only complicate and slow down operations going forward. Technology is the heartbeat of modern supply chain management.
+Security Challenges
As much as the continent’s economy is improving for businesses, insecurity still plagues people and businesses. In the last four years, there have been five successful coups on the continent and a current civil war in Sudan.
All these impact supply chains and their ability to deliver.
Solutions to Supply Chain Complexity in Africa
Because the causes of supply chain complexity on the continent are nuanced, the solutions are also nuanced. Here are some of them.
1. Customer Focus
Customers are the end point of your supply chain, but have you made it the sole purpose of your supply chain? That is a question many supply chains and businesses on the continent need to answer.
Making customers the focus of your supply chain will empower you to direct all operations and processes work for your supply chain.
It impacts how you partner with suppliers, invest in the businesses, inventory levels, and draw up the supply chain policy.
The customers will determine the success of your business, and how you cater to their demands will determine their predisposition towards you.
2. Declutter Inventory
Your inventory SKUs might be the problem behind your supply chain’s complexity.
According to our article on Tesla, maintaining a very low SKU has been one of the secrets to their supply chain success. But they are not the only ones enjoying this success. Apple is another company that enjoys the same success due to low SKUs.
Many businesses in Africa have a presence in different industries, and because of that, they have way too many SKUs.
For example, a typical pharmacy will not only sell drugs but will have a section of the store dedicated as a supermarket, selling toiletries and other household stuff. This creates complexity, especially when they facilitate the entire business with one supply chain.
Many of these Inventories are performing poorly, but they do not do anything about them, which complicates the supply chain unnecessarily.
To get around this, you need to reduce the inventory in your supply chain, especially for poor-performing goods. If these products haven’t done well in the past, chances are they won’t do well going forward.
By decluttering your inventory, you can greatly reduce the cost of your supply chain.
3. Supply Chain Visibility
Chances are your supply chain has many processes and stakeholders working together. Naturally, when these processes and stakeholders are a lot, it will lead to supply chain complexity, not just in Africa.
However, without visibility, it is difficult to identify or track the progress of each process.
When there is a little issue or hiccup in each of these processes, it can negatively impact your supply chain success if it is not attended to.
Supply chain visibility ensures you can track and monitor all your supply chain activities in real time. This empowers you to tackle problems that come up before they become disruptions.
You can read our article on supply chain visibility in Africa for more information on how to implement it in your business.
4. Collaboration
Strategic partnerships and collaboration can do a lot to simplify your supply chain management. However, you must ensure your suppliers share the same values and can help you achieve your goals.
Collaboration ensures you partner with businesses and suppliers that can help you in areas where you are lacking. For example, e-commerce businesses on the continent partner with logistics providers to help them get their goods to their customers.
This allows them to focus on marketing and other operations while taking off the stress of logistics from their business.
When collaborating with suppliers in Africa, always be sure you are getting the necessary value from your suppliers and that they have the ability to offer those values; otherwise, it will only complicate your supply chain.
5. Technology
As mentioned earlier, tech solutions are the heartbeat of modern supply chain management, and it has long gone from a nice add-on to a must-have.
Think about this: your competitors are using it, and they are getting better, faster, and more flexible. They will soon take over your market share because they have the capacity.
With technology, you can automate repetitive processes like order processing, payment, and inventory management.
Technology also allows you to gain real-time insight into your supply chain, which helps ensure visibility and supply chain transparency for all stakeholders, including the customers.
6. Lean Operations
Lean operations help you simplify your supply chain management and decision-making processes by empowering your employees to make those decisions.
By going lean and implementing solutions such as Six Sigma, you can optimize your supply chain operations to eliminate unnecessary activities and processes, naturally leading to simplicity and straightforwardness in your business.
FAQs on Supply Chain Complexity in Africa
Q1: Are there prospects for expansion inside the intricate supplier chains in Africa?
Yes, despite the difficulties, there are many potential for business growth within African supply chains, particularly for those able to adapt, innovate, and make use of local alliances and knowledge.
Q2: How crucial is sustainability in managing the complexity of supply chains in Africa?
In managing supply chain complexity, sustainability is becoming increasingly important. Supply chains can be strengthened by the use of sustainable practices, which can also lower costs, improve reputation, and solve social and environmental issues.
Q3: What are the prospects for supply chain management in Africa in the future?
With ongoing infrastructural improvements, regional integration initiatives, and a developing middle class generating economic prospects, the future of supply chain management in Africa is bright. But difficulties will continue, necessitating creativity and flexibility.
Conclusion
Supply chain complexity in Africa is not all bad, especially when your supply chain is on the right track. Complexity signals that your supply chain is growing, but you want it to grow correctly.
The causes of complexity listed earlier in the article will add unnecessary complications to your supply chain, which makes your business less productive.
Obinabo Tochukwu Tabansi is a supply chain mastro and writer with a decade of experience working in different facets of the supply chain. Today he is living his passion for writing on all things supply chain. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the supply chain complexities on the continent.
