This article marks the final installment of a three-part series by McKinsey & Company on managing supply chains in emerging markets. Part 1 discussed Latin America, Part 2 looked at Asia, and the current article, Part 3, explores supply chains in Africa. Each article includes an overview of business and logistical conditions, followed by recommendations for successfully navigating the supply chain challenges that are specific to that region.
Africa presents unique, varied, and continually evolving challenges for supply chains. Even companies with long track records in the region are being forced to find new and creative ways to maintain growth and extend their reach into new countries and markets. While some of the lessons learned in other emerging regions are also applicable to Africa, it is likely that they will be only part of the solution. The rest will come from unique approaches tailored to specific countries, markets, and consumer groups.
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2. Build partnerships. Managing hundreds or thousands of subscale supply chains has the potential to be prohibitively expensive, even when treated as a long-term investment to build brand presence and market share. One key mitigating strategy adopted by successful companies in Africa is to find synergies and partnership opportunities that allow the costs and benefits of particular supply chain channels to be shared between noncompeting organizations.
A United Kingdom-based nonprofit called ColaLife, for example, uses Coca-Cola's distribution system to transport medicines to remote villages in Africa. The company has developed a wedge-shaped package that can fit into the gaps between bottles in the standard Coca-Cola crate, allowing drugs to be transported with no effect on the truck fill rates or the efficient packing and shipping of the core product. In addition, payment for transporting the medicines provides a useful additional source of income for the members of the Coca-Cola supply chain, from the manufacturer all the way to the rural retailers.7
Other organizations have recruited their own customers to play a more active role in their supply chains. A case in point is SMS for Life, a partnership involving drug maker Novartis, IT services company IBM, and mobile telephony company Vodafone. The three companies worked together to tackle the problem of poor supply chain visibility that leads to regular stockouts of malaria drugs in rural clinics in Tanzania. They built a system in which frontline health workers send a weekly stock count to a central database via short message service (SMS) text message. A simple Web interface allows health administrators to gain an immediate overview of drug inventory status, while the data also allow Novartis to ensure drugs are dispatched to the regions and clinics where they are most needed.8
Another example comes from Ghana, where the mPedigree system has been developed to tackle the widespread problem of counterfeiting in the pharmaceuticals supply chain. Drugs are printed with a unique code, concealed by a scratch-off coating. When consumers obtain a package of drugs, they can send the code by text message to receive confirmation of the legitimacy of the product.9
For example, Supply Chain Management System (SCMS), a specialty supply chain partnership for medicines to support victims of human immunodeficiency virus (HIV), established regional distribution centers (RDCs) in three out of these four zones: in Ghana, Kenya, and South Africa.10
Some companies have developed supply chain approaches that serve regions beyond Africa itself. Ford Motor Company, for example, set up a parts distribution center in Nigeria to serve not only the entire African continent but also to reach several countries in the Middle East.
Despite these improvements, much of Africa continues to struggle with poor logistics infrastructure and high distribution costs, requiring careful design of physical distribution networks (warehousing and transport) for commercial supply chains. Take road transportation as an example: The cost per ton-km in Africa exceeds the cost in Western Europe by at least 20 percent, and by as much as 120 percent, depending on the route.11
Establishing distribution networks within these alliances should enable improved service levels to customers. However, there is significant variation in the legal and regulatory strengths of the countries within the economic alliances, something that should be taken into account as supply chains are developed. For example, relatively weak legal systems and more complex and costly processes make it more challenging to establish supply chains in the 15 members of the Economic Community of West African States (ECOWAS) than in the smaller East African Community (EAC). Meanwhile, the Southern African Development Community (SADC) is larger, better regulated, and simpler to operate in than either ECOWAS or EAC.
Africa is growing more strongly today than at any time in its recent history. The continent's rising wealth is creating a surge in demand for a broad range of products. Meeting that demand across Africa's diverse physical, economic, and political conditions will require companies to be extremely creative and flexible with their supply chain solutions, however. The most successful organizations will be those that tailor their business and supply models to suit Africa's unique and varied needs.
The ICDM model targets both adults and children who have communicable or non-communicable chronic diseases [13]. The main implementers of this chronic care model at facility level are administrators, primary healthcare nurses and medical officers (generalist doctors), ICDM champions (nurse advocates for ICDM model activities), the district clinical specialist team (DCST), ward-based outreach teams (WBOTs) and community healthcare workers (CHCWs) [13]. The main activities of the ICDM model are overall health services re-organization, strengthening of support structures (supply chain management), clinical management support (DCST) and assisted self-management (WBOTs and CHCW) [13].
Supply chain management: Lack of proper supply and management of batteries, booking books, printed materials on the chronic diseases, essential equipment and other consumables were also cited as factors that could reduce adherence to the ICDM model guidelines. The availability of technology to collect accurate data and to enhance communication between the clinic and the patients was thought to also potentially improve fidelity by enhancing precise bookings and adherence to clinic appointments.
The findings of systematic reviews of studies conducted in developed countries are comparable to the results of this study, in that financial resources (infrastructure and more personnel), leadership and acceptability of the model to staff and patients and training of the chronic disease management model are important to support implementation of the model [9,10,11]. The need for communication, and a culture that promotes quality improvements was not identified as important in this study unlike the findings from the systematic reviews. In addition, supply chain management identified as important in this middle-income setting did not emerge as a challenge in developed countries [9,10,11].
This study aims to understand the impact of the COVID-19 pandemic by comparing the performance of three major supermarkets in South Africa and addressing the following questions. 1) What is the impact of a supply chain disruption on the food system? 2) What interventions (short and long-term) are taken by the food supply chain to mitigate disruption? 3) What does the post-pandemic picture look like for the food retail sector? This study adopts a comparative research approach and investigates direct strategies adopted by various food supply chain actors to mitigate the impact of covid-19. This study compares how retailers Checkers, Woolworths, and Pick n Pay have adapted their business models to remain resilient during COVID-19 lockdown. The results show that the food supply chain remained resilient even with demand management challenges at the lockdown. Food supply chain issues came under a spotlight as borders and production plants were shut down or restricted to contain the spread of the virus. This study establishes that the food shortage is primarily caused by panic buying at the beginning of lockdown, causing shock in the supply chain cadence. The other aspect of food security issue is attributed to food availability and socioeconomic problems resulting from loss of income. On sustainability, there are fears that control measures such as packaging (increased use of plastic), cleaning chemicals, waste and sanitisation of space to maintain hygiene as required for covid-19 can undermine the gains towards preserving the environment.
South Africa has the tenth longest road network in the world and the largest in Africa. Its ports are managed by the Transnet National Ports Authority (TNPA), a state-owned company. The ports and road network are vitally important for South Africa and its Southern African neighbors, including Lesotho, eSwatini, Botswana, Namibia, Zimbabwe, and Mozambique. The July unrest and any future bouts of politically motivated civil unrest remain a key consideration for logistics managers seeking to ensure its goods and personnel's smooth and safe transport and delivery. While this threat is the most prominent now, the threat to the sector from service delivery protests and general criminal and corrupt activity is well-established and will continue to threaten and cause disruptions within the supply chain.
Security managers and companies seeking to safeguard their supply chain should ensure that all threats and vulnerable locations are identified. All risks should be reviewed and documented, from widespread acts of civil unrest to petty theft at storage sites.
Research purpose: The purpose of this study was threefold, namely to (1) determine whether there is a clear understanding of supply chain risk management (SCRM) within the South African third-party logistics service providers (3PL) industry, (2) investigate the primary sources that lead to disruptions and vulnerabilities within the supply chains of South African 3PL organisations and (3) establish the current tools or methods used by supply chain practitioners to mitigate supply chain risks within the 3PL industry in South Africa. 2351a5e196
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