What to Consider When Expanding Your Supply Chain in Africa

As your business continues to grow, it is only normal to want to consider expanding its operations, including those of its supply chain, and the closest opportunities are neighbouring markets across Africa.

But expanding is not automatic. There are activities or task that has to be in place. For instance, planning, market research, and others.

There are also very important questions to consider when expanding your business and its supply chain. In this article, we will review some of them.

1. Do I Understand The Market?

Every market is different. For instance, if you are coming from the Benin Republic, you cannot expect to meet the same factors in Ghana.

You might be thinking that most African cultures are similar. True, they are, but the markets are not.

Although the African continent is special in that the cultures are more the same than they are different, especially in the Sub-Saharan region, the markets are still different.

For example, you must consider purchasing power, demand, competition, and others. When you understand the market you are entering, half the battle over expansion plans is over.

When trying to understand the market, you may want to consider methodologies like market research, surveys, or partnering with economic experts and consultants in the country of choice.

If you understand the new market, you can design the supply chain to suit the demand of that market better.


2. Who Do I Create a Strategic Partnership With?

Collaboration is the spice of any working supply chain, especially larger ones. Who you partner with can determine the success or failure of your supply chain.

Strategic partnerships are usually the way to go when you do not have the capital or expertise to manage one or more aspects of your supply chain.

This could be in your supply chain’s distribution, production, or sourcing arm. When building strategic partnerships, it is important to consider businesses or vendors who already enjoy success in the market.

You may consider new businesses with a management team that has had great success in the market. These partnerships will help you break into the market quickly despite limitations.

But maybe more importantly, they could help you build quickly and grow your influence.

There are strategic partnerships, and then there are leverage partners or collaborations. The latter are vendors that help you with day-to-day operations across the supply chain.

These vendors handle important activities but are dispensable. For this type of supplier, you will need to diversify or have multiple of them on standby in case one or more disappoints your supply chain.

Remember, as a new player in the market, you want to tick all the right boxes with suppliers.


3. What is the Best Distribution Network to Reach My Customers?

Distribution networks are channels your supply chain uses to get the goods it produces to the end users, who are also your consumers.

Good distribution networks can simplify your logistics and transportation across the board. However, when they are poorly chosen, they can frustrate your supply chain efforts.

When selecting or identifying the best distribution networks, you should consider the players, retailers, and wholesalers.

You should also consider where your customers are and the avenues to reach them. For instance, e-commerce is a new trend on the continent, but you may not meet all your customers there.

Finding the right channel or network will help simplify your supply chain efforts and go a long way to determining how your customers perceive your business or supply chain.

Depending on the region, you may face a few challenges to optimize your distribution channels, such as infrastructure or security. But those will all be covered in our next point.


4. Do I Like the Risk Assessment?

Every market has unique risks attached to it, which could be internal or external. Whichever way they come, they can potentially cause serious disruptions in your supply chain.

Internal risks are easier to assess and mitigate, but external risks are what you should be very weary about. In many cases, they are beyond your control.

For instance, political instability, vendor delays, and disruptions from poor infrastructure.

The political instability is currently plaguing a few nations across the continent. But it can potentially expand to more regions, especially those with tensions.

Many more nations are peaceful across the continent, and you may want to redirect your attention to those areas.

There are risks other than political instability, and like every other market, there may be concerns and opportunities. The best-case scenario is knowing your risk appetite and deciding whether you like the odds.

There are many concerns across Africa, but there are many more opportunities and reasons to consider expanding your supply chain operations across the continent.

The items listed here will help you quickly determine whether or not you are ready and able to take on new markets.