Opportunity for Africa to support supply chains

Mar 16, 2020 | Manufacturing, Markets, Organisations

COVID-19 exposes supply chain risk to companies choosing to source from a single geographical area. Companies need to implement longer-term solutions to ensure business continuity.
While the world continues to witness the impact the COVID-19 virus is having on humanity, it’s also exposing many flaws in business processes and more interestingly, manufacturers supply chains.

As of 15 March, it seemed China was over the worst part of its COVID-19 with some manufacturing returning and retail opening. But the rest of the world is locking down and embracing what’s to come.

For those businesses with multiple regional supply chains and manufacturing/assembly operations, the risk would have been mitigated. For example, when the China supply chain ground to a halt during February, the rest of the world was operational. Now, as the rest of the world is bunking down, China is returning to some form of normality.

But as the virus spreads and factories close down, global manufacturers have found their assembly lines slowing down as a result of a reduced supply of parts/products. The virus has exposed risk to those companies who choose to source from a single geographical area, with many not having contingency plans in place to combat such scenarios as COVID-19. With this in mind, companies need to implement longer-term solutions to ensure business continuity by building a stronger supply chain using multiple regions.

We believe this is an opportunity for African markets to build a case for major manufacturers to de-risk their supply chain to not only source from multiple geographical regions, but also assemble/manufacture in multiple regions. Investment could establish manufacturing facilities that can produce parts and equipment, from locally mined materials and minerals on the African continent, which would provide manufacturers with critical (dual) alternative source of materials, equipment and parts.

Having two known and approved suppliers available to supply parts from different parts of the world, could reduce the risks on the global supply chain in the event of an epidemic like COVID -19.

Africa’s young and entrepreneurial population can be educated and supported to provide a cost-effective solution that could offer an alternative to manufacturing companies in the Asian markets.

For this to happen, the African governments will need to ensure they improve their education curriculum and simplify the investment process by removing bureaucratic red tape and ensure they offer an appealing investment environment with easy access to capital and investor funds.

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