CIO Africa: What is your sense of the current trade landscape in Africa in light of supply chain issues that arose from the pandemic and war in Ukraine?

Typically in supply chains, there are three parameters that are important: cost, reliability, and length of the supply chain, or the time it takes to connect from one market to another. During COVID-19, all three of these were affected quite significantly by air, sea, and land. Trucks were impacted because of increased restrictions; air passenger capacity basically stopped, which included a lot of cargo, causing a lot of disruption; and on the sea front, a lot of capacity was lost in China with the zero COVID-19 policy, in addition to unions in the US going on strike at Long Beach, which is the largest port servicing that market. So it’s been a difficult time. In Africa, the first major impact came from COVID-19 itself via the restrictions that were brought in by countries in terms of movement. The second came from the three modes of transport being impacted by artificial removal of supply, resulting in massive price increases. Third, now with the war in Ukraine, the basic cost of fuel, which was very low during the COVID-19 period, increased significantly. But things are improving. My view is that China is slowly normalising as global demand is falling sharply because of inflation. So even though the supply problem is not getting solved, we’re starting to see a significant normalisation of rates. What isn’t happening still is the reliability and the aspect of timeliness to reach key markets. These are both still challenges.

Many of those issues feel out of the control of African businesses. What can companies on the continent do to fortify themselves against shocks to the system?

What’s been happening is that many of the large companies who own the infrastructure, like KLM, Air France, ships, and large trucking firms, don’t really operate in Africa. They’re constantly looking for the highest value creation, so they tend to go places that either offer extremely good prices or have the capacity to do large volumes and have extremely good infrastructure that improves their efficiency. So the thing we need to do in Africa is to reduce the friction that operates within the chain. When ships come into a port in Mombasa, for instance, we need to streamline the processes so they don’t have to spend a lot of time sorting out basic processes, which is what happens today. And when a plane lands in Cape Town with cargo, how can we reduce the amount of bureaucracy that is needed? If you do that, you’ll start seeing a lot of traffic, and people will start pricing things correctly. 

Mehul Bhatt

Supply Chain, Transportation and Logistics Industry

May 6, 2022

Source: Maziar Adl, CTO | Gocioust | Manufacturing Tomorrow

Product managers are in a tough position in 2022. Many supply shortages for items like chips or raw materials are expected to be backed up until 2025 or longer. The cost of shipping has increased exponentially – according to Freightos, shipping rates have almost tripled from a year ago and have risen 12-fold from two years ago. 

There’s little manufacturers can do until more supply becomes available. There is hope for the future as supply chains slowly diversify. For example, chipmaker Intel recently announced that it would invest billions of dollars building new chip plants to circumvent backed-up supply chains in Asia.

These disruptions will take years to resolve and depressurize. Manufacturers can’t wait on new factories or the next wave of industrialization for products that need to be built now. Here are three ways manufacturers are redefining their product roadmaps to account for supply chain issues. 

Manufacturers are stepping back to rethink their product roadmap entirely

Product plans laid years ago cannot continue on a ‘just-in-time’ management system of the past when goods flowed much more freely through the supply chain. 

Today, many product managers have made the hard but necessary choice to pull back manufacturing plans altogether and rethink their company’s entire manufacturing strategy to account for such disruption. For some, this means reverting to building and selling older products until the supply chain inefficiencies can be solved to make new products. 

When manufacturing at such scale, it’s extremely capital intensive to plan a product up to 10 years out from delivery. It’s even more capital intensive to not deliver on those plans. A setback in the short-term is a solution in the long-term for manufacturers today. 

As part of this “pull back and rethink” strategy, successful manufacturers should spend extra time on scouting the disruptions in their supply line. Talk to your suppliers and build relationships – sometimes, special relationships can lead to getting first access to a key manufacturing material once it becomes available. Tesla’s foresight and access to chips to develop its electric vehicles, beating out Apple and others EV competitors, is a great example of how scouting and relationship building can help manufacturers win. 

Once disruptions are known, manufacturers should draw a clear line between these disruptions and any dependencies in their product portfolio. This will help leaders see the bigger picture on how products will be affected and better predict where product plans need to change. 

Manufacturers are finding new ways to work with available materials

Ports are starting to make headway in the extreme shipping backup they’ve faced in recent months. But it’s too soon to expect relief to come with many other factors contributing to shipping delays. For one, the global pandemic is not over yet. Vaccination requirements are different across the world and this has affected freight, port and logistics workers, even trapping some workers at ports. In other parts of the world, including Canada and now the U.S., truckers are going on strike, backing up supply chains even more. The global conflict in Ukraine will have a separate but significant impact on the movement of goods. 

Supply chain volatility will not decrease in the near future and may be here to stay more permanently. For product managers, previously accessible may continue to be stuck somewhere in transit or entirely inaccessible. As a solution, manufacturers are turning to more predictable supply chains with more available materials to work around manufacturing gaps. Product managers are working collaboratively to reconfigure the scope of the product, change the product and find a new way to build it that aligns with the current supply.

Leaders are redefining product teams’ communication strategies

Because product managers are working backwards and around supply chain issues with product plans, designs and materials, manufacturing processes have become much more complicated. The supply chain crisis has pushed product managers – and entire manufacturing teams – to completely shift the way they work. 

In the past, product managers strategically tracked their products and needs using basic presentation tools and spreadsheets, making manual updates in static documents. With supply chain issues necessitating so much change to product roadmaps, multiple connected documents have become harder to update and keep track – especially as workers come and leave jobs at a faster rate. Digital tools that pull in manufacturing data from across the organization can make product roadmaps more efficient and keep product managers focused on solving problems.

Better communication between all stakeholders in the product roadmap is essential to keeping projects on track through supply chain issues. As a result, the lines between product manager and project manager roles are blurring. Product managers are beginning to actively use project management tools or work more closely with project managers. Meanwhile, in their role for keeping projects on time, on track and on budget, project managers have to collaborate with product managers when supply chains necessitate roadmap change. 

Bring senior leadership in to win

Aligning changing consumer needs, business goals, and volatile supply chain variables is a monumental task for any product team. As manufacturers work around the disruption caused by the supply chain crunch, it’s essential that product managers make decisions that benefit the company’s entire portfolio rather than one individual product. Because of this, leadership must stay involved and tuned in to changes to the product roadmap. As communication channels grow between product managers and project managers, these teams must also bring fresh updates to leadership at a higher frequency. In this way, companies can make better decisions overall and are prepared to change course once again when the next supply chain snag or other crisis changes the product plan.

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