African supply challenges

There’s a lot too learn from African small businesses. With supply chain bottlenecks and shortages a regular occurrence in some markets and industries, African entrepreneurs are always searching for alternative supply chain solutions.

Don’t stick your neck out. Develop your own alternative supply chain solutions and don’t over depend on a single solution. Test your alternative solutions on a regular basis and make changes where required.

 Lean can be mean. Lean strategies are all the rage. Study your supply chain strategies carefully and be clear how it can work (if at all) in your African markets.

 Lead times. Assess Lead times and expect and plan for shortages. Consider local conditions and determine safety, buffer and cycle stock.

 Land routes. A number of African ports are operating at capacity and bottlenecks and strikes could have severe consequences. Identify regional hubs (Johannesburg, Lagos and Nairobi) and assess the potential to truck goods via land routes.

 Source locally. Sourcing from local suppliers might be more expensive, but it could be a viable short term solution to keep consumers satisfied. Restoring trust and rebuilding relationships are impossible calculations on an Excel spreadsheet.

 Regional warehouse. Study the potential of regional warehouses and determine how it can work for you during country specific shortages.

 Collaborate with big and small. Collaborate with importers and specialized traders. Small businesses are normally more agile to deal small disasters.

2 comments

  1. * Lean can be mean

    There are a lot of so called lean management discussions. Unfortunately some of them have nothing to do with Lean and I would call them Mean management. When applying “Mean” strategies, organisations don’t remove the fat from the organisation but are actually cutting the meat. This means that capabilities, flexibility and knowledge disappear and will make it hard for an organisation to sustain.
    Lean Logistics on the other hand does not only focus on individual cost factors such as transportation or warehousing, but rather focuses on “total cost of ownership”. It identifies which activities create value to the customer and which parts are pure waste and as such can be eliminated without disrupting the organisation.

    * Land routes

    In general trucks are a very effective way of transportation. Ships are slow while planes are expensive. It is obvious why planes are too expensive but even ships are expensive if you take all costs in consideration (for example ships are slow which means cash is tied up in the inventory on the sea, extra travel documents are required which all need to created and managed, extra transportation cost/time to and from the ports, expediting when shipments are late to reach the port, etc)
    As mentioned before the “total cost of ownership” needs to be taken in consideration when you decide on you supply chain strategy.

    * Sourcing locally

    Sourcing locally might be more expensive but when you honestly look at all costs (including potential shortages, expediting, managing distant relationships, etc) it might be even a better solution. So don’t discount it right away as a short-term solution.

  2. * Lean can be mean

    There are a lot of so called lean management discussion. Unfortunately some of them have nothing to do with Lean and I would call them “Mean” management. When applying “Mean” management, organisations don’t remove the fat from the organisation but are actually cutting the meat. This means that capability, flexibility and knowledge disappear and will make it difficult for organisations to sustain.
    Lean Logistics on the other hand does not only focus on individual cost factors such as transportation or warehousing, but rather focuses on “total cost of ownership”. It identifies which activities create value to the customer and which parts are pure waste and as such can be eliminated without disrupting the organisation.

    * Land routes

    In general trucks are a very effective way of transportation. Ships are slow while planes are expensive. It is obvious why planes are expensive but even ships are expensive if you take all costs in consideration (for example ships are slow which means cash is tied up in inventory on sea, extra travel documents are required which all need to be created and managed, extra transportation cost/time to and from the ports, expediting when shipments are late to reach the port, etc)
    As mentioned before the “total cost of ownership” needs to be taken in consideration when you decide on you supply chain strategy.

    * Sourcing locally

    Sourcing locally might be more expensive but when you honestly look at all costs (including potential shortages, expediting, managing distant relationships, etc) it might be even a better solution. So don’t discount it as a short-term solution only.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s