Supply Chain Challenges in Africa – Why is it so difficult?

Forecasting demand and managing stakeholder engagement in supply chain management are difficult at the best of times, even in the most developed markets . With limited growth opportunities in the industrialised world, companies searching for untapped markets are now dispatching executives to far-flung places on the continent that were previously only traversed by adventure seekers and mercenaries. As Africa increasingly becomes part of the global supply chain mix, the lack of infrastructure development, remains a major stumbling block for investors. On arrival, executives frequently identify nascent demand for their products, but with increased operational complexity compared to their home regions.

For example, in African markets there is often difficulty forecasting demand, dealing with fluctuating costs and sometimes depreciating currencies. In some cases, importers might also struggle to get their hands on foreign exchange, resulting in a fragile domestic supply chain. Ask any Ethiopian importer and they will attest to the struggles with hard currency. On occasion, the availability of certain stock keeping units (SKUs) can also fluctuate dramatically.

The following are among the supply chain challenges that foreign companies need to address as they expand their reach into Africa. The list may seem long and daunting, but with rising consumer demand in one of the world’s last great untapped markets, the continent offers high returns for those who succeed.

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Published Strategic Marketing Africa Q2 2015