Achieving manufacturing and supply chain success in Africa
For South African manufacturers, expanding into Africa has often proved fruitless. Why? According to speakers at the 2016 SAPICS conference for supply chain professionals, two mistakes that are being made are applying familiar product-focussed processes, and discounting the importance of working within the existing framework of local culture.
Carsten Schubert, East African Director at Transnova Africa, said: “Focusing too much capital expenditure on the production and manufacturing side without enough investment in the outbound supply chain – warehousing and distribution – is probably the single biggest mistake that South African companies make when expanding into Africa."
“South African businesses readily accept the status quo of logistics systems and processes already in place in the country targeted for expansion, rather than challenging them and looking for more efficient ways of getting the product to market."
There is also too much reliance on the local distributor's network, which means the manufacturer relinquishes control of its supply chain: “It is important to have visibility and control over your end to end supply chain,” Schubert warned. “Interacting directly and managing the relationship with your new customer base when you are trying to establish a foothold in a new market is a key success factor.”
Bryan Baylis, Associate Director of Supply Chain at Merck & Co Inc., said: “Every step of a new process needed to be designed through the eyes of the local workforce and their capabilities. When local supply chain owners completely understand the proposed solutions, only then can your team execute a sustainable process, which can successfully meet the needs of the organisation today and well into the future.”
The key to the success of an expansion project seems to be dependent upon keeping solutions smart enough to be effective, but simple enough to be sustainable in the local environment.
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