Africa’s population is 1.4 billion, making it the second-largest continent and market. With numbers like these, it is unsurprising that brands are increasingly trying to penetrate the African market. The penetration of the African market is contingent on the ability of supply chains across the continent, and in this article, we review five ways African supply chains can be optimized to enhance trade and investments.

Introduction

As a consumer-centric population, Africa has emerged as the fastest-growing market in the world today. However, with poor supply chain operations, it is difficult for manufacturers to get optimal value from the market.

Despite its size and other advantages, the market has constantly fallen short of expectations, and a key reason for this is the poor economic policies that have plagued the continent.

In 2020, the pandemic had dire effects on the African economy, affecting cross-border sales and logistics, inevitably leading to soaring prices of consumer goods. A robust supply chain is necessary for any striving economy.

African supply chains’ performance scores are very low for several reasons. Some of them are government policies, infrastructure, lack of skilled labour, and poor supply chain visibility.

As we gradually bid the pandemic farewell and look to the future, governments and Industries must seek ways to boost the supply chain performance across the continent.

Five areas of note in optimizing African Supply Chains

Infrastructure

A supply chain is heavily reliant on a country’s infrastructure. Unsurprisingly, poor infrastructure disrupted supply chains across Africa before and during the pandemic.

Generally, Africa has a very poor infrastructural rating, with just over eight countries scoring above 50% on the Africa infrastructure development index.

Two critical infrastructures are necessary for the optimization supply chain. These are transportation infrastructure and electricity.

A vital component of the supply chain is the delivery of products to consumers. This process is known as transportation.

Generally, there are four primary modes of transportation

• Road
• Rail
• Water
• Air

Poor transportation Infrastructure generally leads to long lead times and disappoints in the delivery of goods.

Take, for example, the Apapa port in Lagos.

The seaport is among the most significant seaports in Africa. However, getting goods out of there can take between 3 to 5 weeks. A logistics nightmare for importers.

The delay cannot be encouraging for manufacturers expecting raw materials to produce goods. Chiefly because it also increases low downtimes for African supply chains.

Electricity is another infrastructural failure in the continent. Did you know that over 600 million people are without access to electricity?

Seeking alternative sources of energy is very expensive. In 2022 the world faces high oil prices because of Russia’s war on Ukraine.

Diesel (Gas) is essential for running generators to power high-capacity machines. The high cost of oil inevitably affects manufacturers. Again leading to increased downtimes in the supply chain.

Optimizing these infrastructures can and would significantly improve the efficiency of African supply chains.

Recently China’s road and belt initiative has seen much improvement in infrastructural development on the continent. However, there is still much to do to improve infrastructure.

 

Sustainability Policies in African Supply Chains

Sustainability is all the rage around the world, and with good reason. Major corporations are adopting sustainable development standards for their supply chain practices. The same can be beneficial for African sourcing strategies.

What does this mean for African Supply Chains?

As significant brands and businesses look to the African market, they look for businesses that closely align with their core values. Sustainable supply chain practices are one of those core values.

These policies begin with the Government, and like infrastructures, the bulk of the solution lies with the Government.

 

Technology Integration into African Supply Chains

The technology works in every aspect of the supply chain process. However, in Africa, the value is underappreciated.

In every arm of the supply chain system today, technology greatly improves the supply chain’s cost-cutting, lead times, and overall efficiency.

Some key areas where technology can be beneficial to African supply chains include:

• Sourcing and vendor management. Technology streamlines vendors and grades their performance using certain matrices embedded in their chosen software. Examples of software for sourcing and vendor management are Keelvar and SAP.
• GPS trackers in the vehicle or truck help logistics managers better plan their product delivery because they can correctly estimate where their vehicles or trucks are.
• Blockchain technology helps distribution and logistics managers effectively plan their distribution routes, ensuring none of their retail stores run out of inventory.
• Data analysis software systems like PDA (Personal data assistance) help supply chain managers forecast demands and market trends effectively.
• Robotics has seen legendary success in the automation of distribution and fulfilment centres, cutting lead times by as much as 80%.

Despite the benefits of technology in the supply chain process and management, it has sadly had disappointing enthusiasm in Africa. Supply chains tend to shy away from them, effectively stagnating their supply chain.

As the continent recovers from the pandemic, the economy will undoubtedly come roaring out the gate, encouraging competition.

Investing in adequate and necessary technology would give businesses and their supply chains an edge.

People Management: Train staff and create a better working culture

Despite its huge young population, Africa’s labour force is hugely informal, causing a shortage in supply chain expertise in the continent. Businesses can overcome this by investing in staff training.

While some businesses are understandably hesitant to invest in training, to decline from training staff would only serve their supply chain negatively.

Like in any other aspect of business (informal or formal), labour is necessary for the supply chain to function. However, skilled labour can effectively upscale business processes.

Work culture is another way to get the best out of staff. When staffs are happy to work at a firm, they tend to be more motivated.

Complaints and issues like tribalism, sexism, harassment, and other forms of discrimination should not be tolerated in any African supply chain.

Model after successful supply chain strategies

An infinite number of supply chain strategies have succeeded or failed.

As African supply chains bid to strengthen their performance over the coming years, studying and implementing successful strategies would benefit supply chain management.

Conclusion

African supply chains show a lot of promise and potential, but it would take the Government and private sectors working together to achieve them.

How would the years following the pandemic turn out?

Do we learn from our mistakes?

Do we innovate?

How we answer these questions will significantly determine the subsequent decades of the African economy and its supply chain.