Supply Chain in Emerging Markets
How DDRMP can be used to Mitigate Supply Chain Barriers in Africa
Africa is one of the fastest growing economies globally, and as such is a rapidly becoming the focus of local and international interest as an emerging market , . The opportunities to expand into Africa are many, varied and most importantly, potentially highly lucrative. Despite the benefits and potential for growth organizations are finding there are several barriers to entry into, and growth within, the emerging African market, particularly from a supply chain perspective , . One of the largest supply chain challenges to overcome in any emerging market is that no two countries, or even regions within a country, are the same . This requires organizations to devise innovative solutions to ensure their supply chains are efficient. Coca Colas’ unique transportation logistics solutions , and Twiga Foods’ innovative use of available technologies combined with market understanding [7
- Geographic constraints in the form of access to multiple transportation modes (sea, inland waterway, rod and rail) and the physical location of the market base, including distances between these and established transportation routes.
- Instability (economic, political, social, etc.) leading to high variability. This is often linked with high risks and a lack of security.
- Political and regulatory barriers can come in many forms, including corruption, lack of legislation and/or transparency and sudden policy changes.
- Limited transport and logistics infrastructure which can be of poor quality where extant.
- Lack of supply chain structure resulting from a fragmented supply chain and narrow supply base.
- Market structure variability including customer disposable income and local competitors.
- Shortage of basic skills and/or
knowledgespecifically related to Supply Chain and logistics. This is often exacerbated by a lack of resources to address the skills gap.
- Differences in culture (business and otherwise), language and trust in partnerships prevents inter-organizational growth and visibility.
- Poor strategic Supply Chain planning.
From the lists above, three factors emerge as having a large impact on Supply Chains in Africa:
- Supply Chain Volatility/Variability: This can result from all the barriers listed at the Macro and Market Levels.
- Lack of Supply Chain Visibility: This can result from a lack of infrastructure, Supply Chain structure, and a paucity of skilled individuals.
- Lack of Supply Chain Skills: This is largely caused by those barriers listed in the Supply Chain level, however a lack of resources is a large contributor.
DDMRP to Address Supply Chain Volatility/VariabilitySupply chain volatility is a term that is often used interchangeably with supply chain variability . It’s also a term that is being used more frequently as supply chains grow in size and complexity. But what exactly is ‘supply chain volatility’? This is a question that has been asked repeatedly by
DDMRP to Increase Supply Chain VisibilitySince the early 1990s, when the concept of supply chain visibility was introduced as Supply Chain Event Management , the need for
- Enhanced end-to-end business process efficiency
- Visibility to supply chain “blind spots”
- Real-time visibility to customer requirements
- Enhanced customer responsiveness
- Superior handling and execution
- Decreased material and labour costs
- Better inventory management
- Improved business metric monitoring and outcomes
- Optimized logistics and transportation efficiency
DDMRP to Bridge the Supply Chain Skills GapThe field of supply chain management is facing a skills crisis in both established and emerging markets, with demand for skilled supply chain professionals exceeding supply six to one . This crisis is occurring at the same time as the field needs skilled professionals more than ever, as it is becoming one of the most critical areas for overall business success in all markets . This situation has occurred because supply chains have become increasingly complex and
- Generic: Tasks performed in a wide range of occupations.
- Specific: Tasks performed in one or a few occupation types (cannot be defined generically).
- Cognitive: Tasks requiring thinking activities such as problem solving.
- Interactive: Tasks requiring all types of communication and/or cooperation.
- Physical: Tasks requiring dexterity or stamina.
iSimPlan for DDMRP as a Tool for Competing in the Emerging African MarketAs can be seen from the above analyses, DDMRP provides a means to address the three largest barriers to entry and success in an emerging African Market; high volatility, poor visibility and lack of skills. This is achieved using dynamic stock buffers to absorb volatility, a focus on flow to improve visibility and an easy to use and understand methodology to address the skills gap. With supply chain management becoming one the most important functions in any business , it is imperative that organizations find effective solutions which are easy to implement in the short term, but are also sustainable in the long term. DDMRP is such a solution. A number of technologies exist to assist organizations in becoming demand driven, although most have been designed in and around established markets. iSimPlan, the first Demand Driven Institute Certified DDMRP software developed in Africa, is a web-based DDMRP software solution specifically designed to be able to address the challenges of supply chain efficiency in an emerging African Market. iSimPlan addresses the innate volatility of the emerging African market by strictly adhering to the DDMRP tenets of Position, Protect, Pull. This is achieved through our emphasis on the coaching of Planners in the strategic selection of buffered item and the correct construction of the buffer for buffered items. From a visibility perspective iSimPlan has been proven to pinpoint data inaccuracies within an organizations’ ERP through our unique connector. This connector integrates directly to the ERP, making sure that one source of data is used for all supply chain functions within your organization. This provides your organization with the ability to view the stock levels of buffered items across all echelons at a glance. This can be customized to suit any business’ needs, from high level overview to detailed reports, using our Dashboard and Reports functionalities. iSimPlan has specifically been designed to be understood by all users, regardless of their skill level. With any system implementation project, some people will need a more in-depth knowledge of DDMRP, while others will simply need to understand basic tenets and the use of the system. As a part of our implementation process, we coach your organization in identifying the skill levels and placement of those involved in the project. We also provide access to different courses which would supplement the knowledge of DDMRP and iSimPlan. Would you like to leverage DDMRP to improve your success in an emerging African market?
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