Strategies for Achieving Supply Chain Agility in Africa

Considering the recent political instability and rising infrastructure deficit plaguing Africa and its businesses, there has never been a better time for supply chain agility.

Agility is one of the necessary pillars for supply chain success. As we saw in the recent pandemic, it is essential if you are going to get your supply chain through an unexpected crisis.

In this article, we review strategies businesses can use to achieve supply chain agility in Africa, why it is important, and the five dimensions of it.

 

What is Supply Chain Agility?

Supply chain agility is the ability of your supply chain to quickly and effectively respond to changes in market conditions, customer demands, or unexpected disruptions while maintaining efficient operations.

The rate of responsiveness can write a different storyline for your supply chain.

For instance, under the same market conditions, a quick response can mean profitability for one supply chain, and a slow response can disrupt another supply chain.

Until recently, supply chains in Africa got away with believing nothing would go wrong or largely discounting risks.

However, with the recent pandemic and coups, which seem to be occurring much more frequently, agility can no longer be overlooked in the supply chain.

 

 

Why is Supply Chain Agility Important in Africa

For all its progress, Africa still has some major challenges to tackle.

In the meantime, these challenges seem to be impacting businesses negatively. This is where supply chain agility plays a role.

Here are five reasons why Supply chains across Africa need Agility.

 

1. Market Volatility

Because Africa is prone to political instability, economic fluctuations, and currency devaluation, its market is very volatile.

This is where supply chain agility shines. it can help businesses adapt to sudden changes, ensuring they stay competitive and customers are satisfied.

 

2. Infrastructure Challenges

African countries face major infrastructure challenges. Although it is getting better, it is nowhere near optimal.

Examples of infrastructure challenges here include poor road networks and power supplies.

With supply chain agility, businesses can navigate these challenges by finding alternative routes, transport modes, or energy sources to keep the supply chain running smoothly.

 

3. Diverse Geography

Africa is a vast and diverse continent, culturally and geographically.

The diversity can sometimes pose logistical challenges from remote rural areas to densely populated cities.

Supply chain agility allows businesses to customize their distribution strategies, ensuring products efficiently reach all corners of the continent.

 

4. Seasonal Demand

Africa is a country rich in agriculture. However, demand in agriculture can be seasonal. The same applies to other industries, such as fashion and academics.

Supply chain agility helps companies adjust production, distribution, and inventory levels to match seasonal variations, preventing overstock or stockouts.

 

5. Global Competition

African businesses often face competition not only locally but also from global players.

Businesses must adapt quickly to changing customer preferences and market trends to compete effectively.

Supply chain agility allows them to introduce new products or adjust existing ones to meet evolving demands.

 

 

Strategies For Achieving Supply Chain Agility in Africa

There are five proven strategies for integrating supply chain agility into your business process. In this section of the article, we review them.

 

1. Supply Chain Visibility

Supply chain visibility is essential to achieving supply chain agility because it gives you a real-time view of your supply chain activities. But that’s not all.

When done well, supply chain visibility can also point to potential factors that can impact your supply chain, whether positively or negatively.

With real-time information, you can analyze and make swift decisions based on available data.

Even if your decision is wrong, because you are getting it real-time data on its impact, you can adjust accordingly.

Getting optimal supply chain visibility can be tricky because it takes a lot of supply chain tools and stakeholders working together cohesively.

However, it is achievable.

To implement supply chain visibility, consider communication and tracking tools such as radios, IOT, AI, and blockchain technology.

You should also evaluate and invest in collaborating with your suppliers because they are important factors in helping you achieve visibility and resilience. More on this later.

 

2. Demand Forecasting

Robust demand planning and forecasting systems give you approximate details on the state of your customer’s demand or inclination toward your product at any given time.

It is quite helpful in a fluctuating market like Africa because it helps you plan your supply chain operations accordingly.

This ensures you aren’t losing money when you are supposed to be making it, whether due to insufficient or too much inventory.

Both impact the supply chain in different ways but are equally devastating.

With robust demand forecasting, you can track minor issues like seasonal changes or major issues, such as unforeseen crises like political instability.

Investing in demand planning and forecasting systems can be capital-intensive and often quite complicated, depending on your industry, but it is well worth it.

Check out our demand planning and forecasting systems article for more insight into it, including how to set it up.

 

3. Warehouse Optimization

Inventory, or your supply chain’s product, is a big aspect of your business. In fact, it is the point of your supply chain, and your warehouse is where it is housed before and after production.

This makes the warehouse a critical factor in achieving supply chain agility.

There are several reasons why.

1. You don’t want a slow and inefficient warehouse that delays order fulfilment, resulting in customer dissatisfaction.

2. You don’t want your warehouse too far from the action, whether it is the customers or production facilities. Too much distance can cause delays and downtimes in your supply chain.

3. You don’t want a high holding cost from damages, storage, security, or insurance. This means streamlining the warehouse to make the most of resources without costing the supply chain a lot.

Optimizing your warehouse includes reviewing inventory management models, implementing warehouse automation, and slotting.

 

4. Supplier Relationship

Your suppliers are essential in achieving supply chain excellence. It doesn’t matter whether you are in the goods or service industry.

Building a solid relationship with suppliers is essential, as is managing and implementing the right strategy to get the most out of them.

For instance, invest in collaborative opportunities that provide more opportunities with your suppliers. This will make them more inclined and motivated to be effective in your supply chain.

When suppliers in Africa have something to look forward to other than the regular bill, they tend to be more amenable.

For critical activities in your supply chain, such as production, which requires a lot of energy, you should invest in multiple suppliers to ensure flexibility.

The truth is many times, suppliers fail due to their shortcomings, but there are also situations where suppliers fail due to uncontrollable circumstances.

Having a supplier on standby gives you the flexibility and swiftness to tackle that potential disruption, keeping your supply chain running smoothly.

 

5. Technology

Technology is what brings your supply chain together. In the modern economy and business climate, you will be hard-pressed to find a supply chain solution that doesn’t involve technology.

From supply chain visibility to demand forecasting, warehouse optimization, and supplier relationships, technology allows you to achieve optimal value from them.

Technology solutions that can help you achieve supply chain agility include: Route optimization software, ERP solutions, Robotics, demand forecasting software, and vendor management platforms.

African businesses and their supply chains tend to shy away from investing in technology but in 2023, tech is taking over the supply chain, which means you can do very little without it.

The supply chain technology has great ROI in capital, efficiency, transparency, and flexibility.

 

 

Categories of Supply Chain Agility

Structural Agility:

Your supply chain must recognize and address supply chain volatility that impacts medium- to long-term objectives if you want it to be structurally agile.

In a structurally agile supply chain, you should be able to decide whether to construct flexible assets or additional capacity internally or to contract these tasks out to other parties based on the level of volatility expected.

The supply chain can, therefore, increase production in response to market demands or modify production utilisation to reflect the newest product trends.

 

Operational Agility:

Your supply chain must be able to quickly make decisions that modify the utilization of assets to meet actual and unforeseen variations in demand if you want to expect it to be operationally agile.

These decisions will frequently take the form of adjustments to manufacturing cycle lengths, manufacturing lot sizes, and production and order lead times.

Operational agility allows your supply chain to react to short-term demand and supply volatility.

 

 

Dimensions of Supply Chain Agility in Africa

There are generally five pillars or dimensions of Supply Chain Agility.

 

Awareness

Supply chain agility begins with awareness, which involves a deep understanding of the internal and external factors that impact your supply chain.

Internally, this means knowing your supply chain’s strengths, weaknesses, and capabilities.

Externally, it involves monitoring market trends, customer demands, and potential disruptions.

Awareness enables you to identify potential risks and opportunities proactively, with which you can make informed decisions.

 

Accessibility

Accessibility in supply chain agility refers to the ease of accessing relevant data, resources, and information.

It entails having systems that provide you with real-time visibility into the supply chain’s performance, from sourcing to delivery.

Accessible data and information enable you to make rapid decisions based on accurate, up-to-date information.

To enhance accessibility, consider investing in digital tools and platforms that offer real-time tracking, analytics, and collaboration capabilities.

Decisiveness

Decisiveness is a core element of supply chain agility. It is the ability to make quick, well-informed decisions in response to changing circumstances.

Decisiveness can save or break down your supply chain.

Good supply chain leaders can evaluate multiple options, prioritize them, and promptly commit to a course of action.

To maximize agility in your supply chain, support the decision-making process with clear decision-making frameworks and communication channels.

 

Swift

Supply chain agility centres on speed and responsiveness. These involve reacting rapidly to changes, whether in market demand shifts, supply chain disruptions, or competitive pressures.

Streamlined processes, efficient communication, and minimal lead times characterize swift supply chains.

They leverage technology and automation to accelerate order processing, production, and delivery.

A swift supply chain can respond quickly to unforeseen challenges, such as natural disasters or supply shortages, by rerouting resources and adapting operations.

Swiftness ensures your supply chains remain competitive in fast-paced markets, enabling organizations to capitalize on emerging opportunities and swiftly address threats.

 

Adaptability

Adaptability is a fundamental dimension of supply chain agility, focusing on the capacity to adjust to changing circumstances and requirements.

An adaptable supply chain can pivot its strategies, processes, and resources to align with evolving market dynamics without shutting down.

Adaptability involves flexibility in product design, production methods, sourcing options, and distribution channels.

It means being open to change and continuously seeking improvement.

 

 

FAQs on Supply Chain Agility in Africa

Q1: How can governments and African leaders enhance the adaptability of supply chains in Africa?

Governments can contribute by investing in infrastructure growth, enhancing trade facilitation, and fostering a business-friendly climate.

Promoting education and training initiatives is another way policymakers can help the workforce become more skilled.

 

Q2: What are a few typical obstacles to supply chain agility in Africa?

Common issues include poor infrastructure, erratic transit systems, unstable political environments, and restricted access to financing.

It will take partnerships between governments and businesses to find creative ways to overcome these obstacles.

 

Q3: How can businesses assess the performance of their supply chain agility?

Businesses may gauge the agility of their supply chains by evaluating key performance indicators (KPIs), including lead time, inventory turnover, on-time delivery, and customer satisfaction.

These measurements aid in evaluating how well agility techniques are working.

 

 

Conclusion

It is crucial to achieve supply chain agility in Africa. It is especially important given the specific opportunities and problems the continent faces.

We have covered key strategies supply chains across the continent may apply to increase customer satisfaction, reduce risks, and adjust quickly and efficiently to changing situations.

In addition, embracing the pillars of supply chain agility emphasized in the article can help African supply chains thrive in an ever-changing market environment.