Indian And African Supply Chain Problems Business Essay


Globalization is in its upward trends and with the passage of time all markets become saturated Kersten and Blecker, 2008. In the recent past, this had resulted in increased competition among companies and investors across the globe (Kersten and Blecker, 2008). Hence, one of the nascent ways of increasing profits for both companies and countries is to co-operate and collaborate with regard to supply chain management (Lysons and Farrington, 2006). Supply chain management refers to a system of organizations, people, technologies, information and resources involved in moving a product or service from supplier to customer so as to create a value chain (Lambert, 2006). This is achieved through optimization of inter-organizational processes, activities, capital and information so as to cut down on costs and improve value proposition to the customer (Worldwatch Institute, 2004). However, there are panoply of challenges involved in a modern supply chain management and these act as snags preventing firms from realizing the above mentioned benefits.

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In today's business fraternity, an effective and efficient supply chain is necessary for sustainable competitive advantage (Vrat, 1999). However, in India, the supply chain management is still in its early phases of implementation (Sarkar, 2012; Vrat, 1999). Management of supply chains is a complex process and this is also applicable for Africa, considering its current geo-political and economic environment. It entails and influences the entire business activities and processes of a firm and its partners (The Economic Times, 2009). Understanding the complexities and the dynamics of supply chain is sometimes very challenging, though it is a prerequisite for effective and efficient management of supply chain (The Economic Times, 2009).

In recent years, firms have faced increasing challenges with regard to supply chain management. Companies have not been able to clearly identify and manage employment conditions, labour, and environmental factors at various levels of their supply chains. In this regard, Responsible Supply Chain Management (RSCM), as a section of a firm's Corporate Social Responsible (CSR) policies and strategies, has grown to be the main focus of most organizations/firms. In the same perspective, many standards, principles, code of conducts, and guidelines have been developed with respect to supply chain and international scope. These include the Guidelines for Multinational Enterprises of the OECD (Organization for Economic Cooperation and Development) and the UNGC (United Nations Global Compact). There are also other international initiatives impacting on social issues within the supply chain like the ETI (Ethical Trading Initiative), which is concerned by enhancing working conditions.

In the last two decades, procurement executives have seen their supply chain networks grow and become more interrelated and intricate. Their roles have been shifted from just ensuring supply of inputs to achieve the short-term demands, as it was formerly, to roles that calls for their increased concerns with reducing the costs, maintaining an improving quality, and making sure that the supply links are well positioned to support the firm's strategic goals.

In the growing business environment, suppliers and their operations are positioned in many time zones with diverse cultural norms (Kwon and Suh, 2005). Thus, executives in procurement face panoply of supply complexities. In order to realize best standards of performance in procurement, firms need to comprehend its related risks and respond appropriately to them. Apart from understanding and reacting to risks such as macroeconomic risk, commercial risk, and political risks, the firms also need to understand the opportunities based on indicators external to their traditional line of expertise.

In the last three decades, the structural issues in supply chains such as the use of: just-in-time systems, cheap labour to cut costs, computerization of supply chain process to ease administration are likely to be followed for many more years to come (BizCommunity, 2012). Due to the 2008-2009 economic downturn and the other risks facing the global business environment, there are changes that have significantly impacted the supply chains. One of the changes that have been witnessed is the threat of disruption to the supply chain. These threats can be categorized into four levels: disruption of oil supply in North Africa and Middle East on the back of growing insurgencies, public strikes and demonstration due to decreased government expenditures, disruption to global supply of automotives due to the Tsunami and the subsequent nuclear disaster in Fukushima, and the high rate of piracy, (BizCommunity, 2012).

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Due to supply chain challenges, it is very hard to achieve best practices in procurement, which goes beyond supplier-centric to ensuring stability in supply (Mitra, 2006). In an attempt to reduce the likelihood occurrence of unexpected challenges, procurement firms have, always in the past, placed a lot of their synergies on strategies and solutions that can reduce the risks, which are directly associated with suppliers, which include supplier failures and suppliers product quality failure. Close monitoring can help in achieving supply stability (D&B, 2011). However, it evolves over time hence they can be anticipated and planned for. In the anticipation and planning of stable supply, there should be significant consideration given to natural disasters, global financial crisis, and global piracies (D&B, 2011). The biggest supply chain challenges are in talent management, customer service cost control, supplier-partner relationship management, and planning and risk management (SCC, 2012).

India is ranked the sixth-largest Asian trading partner in South Africa (SCC, 2012). The total trade between the two rising giants is expected to reach $ 15 Billion (Times of India, 2012) with regard to imports and export of food, technology and agriculture-based products (Cilliers and Nagel, 1994). Currently, there are number of African countries whose reliance on India has grown with regard to demands of Indian products (Ministry of Commerce & Industry, 2010). The African purchasing power grows in relevance to Indian companies (Lynch, 2002). In addition, the five primary sectors: food processing, water management, information technology, pharmaceuticals and health, as well as education are considered as engine for enhancing India-Africa trade (Tompkins, 2011). We all know that India, in the recent years, has been identified as the major recipient of global FDI (Foreign Direct Investment). But owing to the increased financial clout of the Indian conglomerates, India has also become a significant global investor with increasing international investments targeting resource rich markets including Africa. Hitherto, India's FDI in Africa stands at $49701.6million.

1.2 Problem Statement

The background study shows that there are a number of global factors that have great potential to impact the efficiency and effectiveness of supply chain management. These, in the context of this study, are perceived as challenges. Although various regions in the world face these challenges in varying proportions and types, the fact that they are global implies that India and Africa are also grappling with these challenges. There is an increasing trend in India's FDI in Africa as Africa as it is a resource rich continent and its growing affluence means that it is an attractive destination for Indian conglomerates to sell their products and services. Therefore, without proper understanding of these challenges in the context of the types of supply chains that exists between India and Africa would mean total failure in realizing successful trade between the two nations. These propositions place the current study in good position to carry out a comparative research on the supply chain challenges between India and Africa.

1.3 Aim / Objectives of the Study

The aim of this study is to establish and compare supply chain management challenges between India and Africa. In this respect, the following objectives will form part of this study:

To establish supply chain challenges associated with employment conditions, labour, and environmental factors in India and Africa.

To establish how international standards, principles, code of conducts and guidelines contributes to supply chain management challenges in Africa and India.

To establish how supply chain management challenges, in Africa and India, impact on the costs and quality of products and service being traded between the two nations.

To establish how Africa and India identify and adopt responsive measures in counteracting supply chain risks.

To establish the major causes of supply chain challenges in India and Africa.

1.4 Research Questions

In order to achieve the above aim and objectives, this study proposes to answer the following question:

Is there good understanding of entire business activities, processes, complexities, and dynamics of supply chain between India and Africa?

Does poor identification and management of employment conditions, labour, and environmental factors lead to supply chain management challenges between India and Africa?

How do international standards, principles, code of conducts, and guidelines contribute to supply chain management challenges between India and Africa?

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Does supply chain management challenges, in Africa and India, impact on the costs and quality of products and service being traded between the two nations?

Can cross-cultural challenges be associated with supply chain management challenges between India and Africa?

What are the responsive measures adopted by India and Africa in counteracting the risks associated with supply chain management challenges?

Does the use of just-in-time systems, cheap labor, and computerization of supply chain help to reduce supply chain management between India and Africa?

Do global economic downturns and risks contribute to supply chain management between India and Africa?


This study proposes to use both quantitative and qualitative approaches to collect data (Saunders, Lewis and Thornhill, 2003). Quantitative methods will further be used to analyze data, and to present the findings. Quantitative data collection approach will be majorly based on quantity measures that lead to generalization of ideas while qualitative approach will majorly focus on textual data associated with respondents' feelings, experiences and attitudes (Saunders, Lewis and Thornhill, 2003). The design will be exploratory research given the fact that there is no single study that has been carried out with regard to the current study topic. Based on these propositions, the study will majorly use survey questionnaire to gather data, and statistical approaches to analyze data and present the findings.


The significance of this research is attributed to its immense contribution to both academic and professional pool of knowledge. The findings of the study will add more knowledge in the academic fraternity with regard to supply chain management challenges between Africa and India. In fact, there is high likelihood that this study will bring about more opportunities to further study the various challenges affecting India and Africa for sustainable growth in the globalization era. Professionally, the findings will be useful to various sectors of the world economy. In this regard, foreign investors in various categories and levels from both India and Africa will be able to have access to abundant information on challenges that may face in their supply chains. Hence, the study offers solutions to such challenges. As a result, it can be seen that the study will greatly benefit not only India and Africa but also other global investors targeting the two countries in this study.


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