African tech leaders grapple with new supply chain reality

Is COVID-19 the black swan event that will transform global supply chain models? Having already exposed vulnerabilities across countless industries, we chatted to supply chain experts to find out.

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When times are tough, people stop buying luxuries and focus on necessities. This seems logical enough but changes in consumer behaviour have a pretty dramatic impact on global supply chains, says Andrew Dawson, managing director at MACMobile, a South African supply chain solution business with offices in Kenya and Mauritius.

Something like mealie pap, a popular and affordable breakfast dish of milled white maize enjoyed across South Africa, is a low-margin good for suppliers. When you aren't selling your higher margin goods – those at the top of the pyramid – and there's a drastic rise in demand for goods with smaller margins, at the bottom of the pyramid, your costs are likely to skyrocket, he explains.

When the pandemic really got serious, there were widespread backlogs due to the shutdown of transportation into and out of major global cities, notes Kavitha Prag, digital supply network and operations lead at Deloitte Consulting Africa. Now, we're focussing less on a lack of capacity and supply and more on a lack of demand because the economic crisis is deepening. This trend is especially concerning for smaller, less liquid suppliers.

Pandemic disrupts supply chain

Traditionally, contingency and supply redundancy strategies are built around "predictable" disruption. But none of the data we had to make these predictions could prepare us for the level of disruption the world experienced thanks to COVID-19. Many of the measures put in place to mitigate interuptions have proven to be powerless in creating supply chain resilience when tested under true "black swan" circumstances like a global pandemic, Prag says. "The absolute state of paralysis that still exists across supply chains months after the start of the pandemic is forcing organisations to not only rethink how they're managing their supply chains, but also to reassess the skills and data sets needed to effectively handle disruptions going forward."

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