AfricaSupply Chain
Supply chains are becoming more complex and diverse, but the pitfalls remain the same, especially for fast-growth retail and ecommerce businesses. Given below are certain supply chain and logistics mistakes your company can skip so it grows faster.
Supply Chain Pitfalls
Fast-growth companies may stay on track by limiting product complexity, ensuring specificity in logistics rollout plans and maintaining cash control.
You can’t always control product complexity so companies usually start by managing the number of stock-keeping units. These decisions get made in the design process. A few key questions can help guide your choices.
- How is a simple release solving your customer’s needs?
- What is the least complex product you can introduce?
- When is variety important? If it is not, then hold off on variants.
The good thing about a simple release is that you can learn from your customer base, adding complexity as you go. You may also consider postponement, by adding variety at the end of the production line. Making the wrong inventory decision may result in scrap and availability issues. Customers may want none of a particular colour but more than what you have ready to sell of another. Simplicity can keep your business going, options can be a disadvantage.
Rollout planning deals with when and where you want to ship your product. Such plans have to be detailed because each geographic introduction includes importation complexities, labelling documentation, tariff implications, regulatory challenges and other trade strategies. Being simple helps. If it is possible to launch smaller at the start then learn from your customers, it’s an easier way to go. If you have to factor in multiple regions, start planning early. You might be able to test and design for multiple regions without actually shipping to such regions on launch. When you finally expand, you’ve already modelled the scenarios so you can maintain greater stability during periods of fast growth.
Cash Control
The third area to concentrate on is cash-control. Money related issues are some of the biggest reasons why start-ups fail. Even established firms may suffer cash flow issues because there are quite a few elements to consider here.
- Inventory cycles.
- Material lead times.
- Supplier payment terms.
- Customer payment terms.
Companies that experience rapid growth may depend on trade finance to help bridge certain costs so you can redirect cash into other parts of your company. Getting the funding you need, when you need it can help you take advantage of opportunities.
Thus, this is how you avoid common issues in the supply chain when you ship to Africa. Remember, a smooth supply chain ensures smooth commerce between you and your customers. So remember to keep the supply chain clean and glitch-free for a seamless commercial experience.