As organizations in Africa continue to ramp up their supply chain optimization, integration offers them a seamless approach to consolidating the flow of information across the entire operation.
From sourcing raw materials to production, storage, and delivery, supply chains across the continent can integrate to promote end-to-end visibility of the entire process.
But what is supply chain integration, and how is it relevant?
We will be exploring supply chain integration and how it benefits African supply chains in this article. We will also examine the factors that promote it and the challenges African supply chains might face when implementing it.
What is Supply Chain Integration?
Supply chain integration is a strategy for optimizing supply chain operations that entails the seamless coordination and collaboration of various stakeholders and processes.
With supply chain integration, you are typically leveraging technology to facilitate the flow of information across the supply chain.
When done well, you can solve for efficiency, cost reduction, and an enhancement of the overall performance of the supply chain management process.
With supply chain integration, you want real-time accessibility to your supplier’s ability to provide you with the necessary materials, your ability to produce, and your supply infrastructure.
It is a complex level of supply chain visibility.
But where supply chain visibility considers all operations within the supply chain realm, integration considers all stakeholders and operations that could directly or indirectly impact the supply chain.
Why is Supply Chain Integration Important for Supply Chains Across Africa?
There are benefits to promoting supply chain integration on the continent. Some of them are:
1. Enhanced Visibility
With supply chain integration, organizations and operations can enjoy heightened visibility in real-time. This means all relevant information concerning stakeholders and processes is laid bare and accessible at any point.
With this, supply chains can mitigate risk, even those that seem to be impromptu. For example, pirates on the sea, taking hold of a vessel. The supply chain can also avoid disruption.
2. Better Demand Forecasting
When a supply chain has properly integrated its operations, it typically enjoys a seamless flow of data from suppliers to the supply chain expectancy and market expectations.
With the flow of data, the supply chain is more in tune with its customers and market forecasting, which enhances demand forecasting.
3. Improved Efficiency
Integration of the supply chain streamlines processes, thereby reducing delays, operational errors, and ensuring that resources are used efficiently.
This will ultimately lead to a culture of cost savings and faster delivery times. The supply chain will also enjoy improved customer satisfaction because it caters to their needs.
4. Supply Chain Innovation
When there is integration, it fosters collaboration between stakeholders and supply chain partners. The right communication setup could lead to the development of new ideas and technology.
These developments, also known as supply chain innovation, can foster rapid growth and help the supply chain or business capture more market shares.
Challenges of implementing Supply Chain Integration in Africa
Many businesses will struggle with supply chain integration because of the uniqueness of African supply chains’ difficulties. Some of the challenges they face are:
1. Technological Barriers
Although technology is the lifeblood of modern supply chain management, Africa still has a huge resistance to its implementation, primarily because of the cost.
Businesses have to buy the infrastructure, hire the right people with the right skills, and, in many cases, have a maintenance budget.
The initial capital needed to set up the entire tech system might overwhelm these businesses.
Now, when they partner with much larger supply chains or organizations with the infrastructure, it becomes difficult to integrate with them. And in many cases, these larger supply chains may not have very good alternative options.
2. Complexity of the Integrated system
Integration of various processes across multiple stakeholders and partners can get quite complicated and, many times, cumbersome.
Complexity could arise from the volume of data, the different formats, security, and data authentication.
The complex nature of the process could create a need for new skills and expertise, which may be in short supply across the continent.
3. Risk Vulnerability
When a supply chain manages integration, it becomes more vulnerable across the board, especially when it entails different regions across the continent.
Considering the political and security risks on the continent, the supply chain becomes more vulnerable because when one part of it is impacted, it can disrupt the entire supply chain if proper steps are not taken.
For example, monitoring crises across the regions where the supply chain operation is prevalent and then plotting alternatives as the risk of disruption becomes increasingly likely.
Factors that Can Impact Supply Chain Integration Across Africa
Some factors can determine the level of success of your supply chain integration.
- The level of collaboration between all relevant parties involved.
- The flow of information and the accuracy of data shared between parties
- Buy-in from leadership and stakeholders (internal and external)
- Technological infrastructure each stakeholder can bring to the table
- Stakeholder capabilities and capacity.
Does Supply Chain Integration Work in Africa?
Supply chain integration requires data and technology to function. Because of the widespread resistance of tech infrastructures on the continent, businesses find it challenging to sync data.
These businesses are often small-scale, but they are the main feature of the African economy.
The larger supply chains are few and far between, and even when they demand supply chain integration from the smaller businesses, they compromise because of a lack of vendors that meet their requirements, making it quite challenging to achieve.
There is also a need for collaboration with businesses or suppliers who share the same goals. When there is an effective collaboration, the flow becomes seamless.
So yes, it can work on the continent. Still, it might only be limited to larger supply chains until technology and other paraphernalia are widely accepted.
FAQs on Supply Chain Integration
These are the popular questions with regard to supply chain integration across Africa.
Q1: How can supply chain integration in Africa be facilitated by technology?
Across the continent, technology such as blockchain, cloud computing, and mobile apps can be used to improve data sharing, collaboration, and supply chain visibility.
Q2: Do supply chain integration practices vary by region amongst African nations?
Indeed, disparities in infrastructure, economic development, and regulatory settings give rise to regional variations.
Q3: How does the African government support supply chain integration?
Governments can promote integration by enacting laws that promote infrastructure spending, ease trade, and harmonize regulations.
Q4: How might supply chain integration help small and medium-sized businesses (SMEs) in Africa?
Through partnerships or technology adoption, SMEs can integrate their supply chains to gain access to broader markets, increase efficiency, and lower prices.
Conclusion
The article provides insight into supply chain integration across Africa. It explores the benefits and challenges of organizations operating on the continent when trying to build or develop an integrated supply chain.
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.
