Supply Chain

Supply Chain In Africa: A Story to Tell and Listen To

Ask any business leader what their top challenge is today and – more than likely – the answer will be cost.  Ever since the first rumblings of the global financial crisis, businesses have been feverishly stripping out costs; headcount reductions have been the most typical immediate reaction to cost reductions, but organisations have also become acutely aware of the potential sustainable cost savings to be had across the supply chain. Clearly, it is time for Procurement functions to shine. However the reality is that most Procurement functions have not moved as quickly to address supply chain efficiency as some organisations have demanded. In fact, according to our research, many Procurement functions have struggled to raise their game beyond simple tactical activity and (re)negotiating low cost contracts, to a broader and more strategic role within the wider business.

The expectations of Procurement are shifting. Not so long ago, Procurement was considered to be an add-on service; it was the business that decided which suppliers were core to the organisation and little more was expected of Procurement than to battle some cost out of the contract and then hand the relationship back to the business to manage. Today however, many executives are increasingly looking to Procurement to engage the business in strategic conversations about how the supply chain can be optimised to deliver the greatest returns.

The Scenario in Africa

With 54 countries, more than 30 million Sq KM of land and more than 1 Billion people, the African continent has been described as a land of opportunity. As the continent is emerging and being a business hub of choice, how do we sustain growth in Africa? Seven out of the ten fastest growing economies are in Africa (World Bank report 2010). A target spend of more than US$43bn in the African continent is driven by the increased focus on infrastructure and manufacturing setups, majority of this spend is controlled by procurement organisations. By virtue of this trend, Procurement Advisory is growing at a rapid rate in the African continent, following the global growth rate of 4.7%.
In the video clip below, Dr. Dinesh Kumar, Head of Supply Chain and Procurement, KPMG South Africa shares the facts.

David Okwara

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