As the global economy continues to change, retailers, manufactures and other sectors are increasingly facing difficult, and sometimes unique, challenges that impact their supply chains. This is according to Sumesh Rahavendra, Head of Marketing for DHL Express Sub Saharan Africa.
“Successful companies in 2015 will be those that can adapt to the fast changing global environment, such as unstable currency markets, the fast growing global population and rising number of internet users, and make them work in their favour.”
“Business decision-makers should be asking themselves how they can respond quickly to fast-changing customer demand, how they can contain or reduce escalating costs and how they can enter emerging markets without substantially increasing their risk.”
Rahavendra elaborates on a few areas which are key to building a well-designed supply chain:
- Annual planning and reviewing: This lays the foundation for an efficient supply chain as it assists business owners to see the bigger picture and enables them to be flexible in the face of changing business needs. All potential risks must be identified and assessed, no matter how improbable.
It is equally important to review the past year to ascertain what impacted their supply chain, and what can be improved upon to avoid unnecessary interruptions in the future. For example, the fluctuating fuel price directly impacts delivery costs. It is therefore important to streamline delivery processes in order to stabilise costs and in turn, keep client tariffs stable.
Another area to look at is seasonal spikes in business which may require additional resources. For example, retailers often experience a surge in sales over the festive season – effective solutions need to be put in place to avoid customer delay, and ultimately complaints.
- Reverse logistics: This is often overlooked, however, effectively managing the flow of returned goods and packaging is key to reduce unexpected costs.
- International supply chain management: Trading across borders can present a number of challenges, unique to each country. In Africa, these include congestion in major cities, such as Lagos and Nairobi, customs inconsistencies with regards to product classifications and duty and tax exemptions, which can lead to complex customs clearance processes, and a lack of air connectivity with just over 12% of cities served by just one flight a week. It is important to understand these challenges and make the necessary plans to circumvent potential delays.
Rahavendra said that in order to maximise a business’s bottom line, decision-makers should aim to take a more holistic approach to managing supply chain risk and achieve greater visibility, flexibility, and control.
“Businesses in Africa are under increasing pressure in the current economic climate to remain competitive, both locally and globally, and sometimes lack the ability to build resilient supply chains. Outsourcing logistics strategically can make a significant contribution to a business’s profitability so make sure that you have the right partners who understand the global economy and more importantly, the intricacies of doing business with each individual African county – it’s not a one size fits all approach,” concludes Rahavendra.