When it comes to managing Supply Chain Challenges and Risks, South Africa leads the way among Brics countries with regard to handling and navigating these hurdles, but is still lagging behind developed countries as reflected in a research report compiled by advisory service firm KPMG in 2013.
The firm reports that “South Africa’s performance is bench-marked against approximately 180 nations by organisations such as the World Bank and the International Monetary Fund (IMF) who look at supply chain components which are planning, sourcing, manufacturing, delivery and return of goods and services.”
The report notes that there are a number of challenges that limit South Africa’s ability with regards to managing Supply Chain risks and efficiencies. It stresses that while road transport is the most-used form of transport in Africa it hosts the following drawbacks:
- Road density is low, at approximately 9.9 to 52 kilometres per 1000 kilometres of land area used for roads.
- The cost of exporting goods is higher than US$2 000 per container, while in other BRICS nations it is only US$800.
- The lead time to export via road is 30 days, while it is 13 days in other developing nations.
The report adds that infrastructure in Africa is another hurdle to ensuring supply chain efficiency and translates to a shortage of efficient rail infrastructure. Should this mode of transport be updated and maintained Africa would have less congestion, pressure and damage to its roads which would enable easier and less costly road maintenance and development by transferring a portion of the 80% of 90% reliance on road transport to rail.
Further a lack of skills and technology also contribute and rest heavily on the ability of South Africa to develop and evolve its supply chain into and across Africa.
On a Positive Note
Africa has been deemed as the growth hub for future development and investment owing to the vast amount of unexplored minerals and resources and the rate at which some African countries are developing. This growth will reflect positively on South Africa’s ability to expand, develop and increase the efficiency and reach of supply chains. Owing to economic development, infrastructure will be more readily available and the different modes of transport will leave supply chains with more cost-and-time efficient means to transport products from point A to B.
Increase in Development and Demand for Transport and Warehouse Software
With a positive reflection for growth in Africa comes great excitement for transport and warehouse software developers to support the increase in demand for maintaining logistics infrastructure and transport modes and services. In addition, the demand for mobile software and POD software will also be on the increase as these technologies greatly aid in increasing efficiency in warehousing and transport processes.
However, to ensure adequate maintenance and operation of logistics software solutions in African countries, IT skills have to be developed and nurtured and African companies need to ensure that staff are up-skilled and trained to operate logistics software systems to their full capabilities.