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African SMEs to grow faster through supply chain management

Small and medium enterprises (SMEs) have great potential for expansion in Africa, because they are agile and flexible enough to exploit the opportunities in the continent’s growing economies. This is according to John Lucas, Country Manager, DHL Express South Africa, who was speaking at the China Homelife & China Machinex Fair 2017 in Johannesburg earlier this month.

Lucas said that SMEs need to make supply chain management part of their business plan if they want to succeed.

“In order to succeed, an SME needs to be able to increase inventory velocity, achieve the shortest possible cycle times, continually improve their supplier performance and drive their sales and market share. Supply chain management is central to this.”

Lucas stated that the supply chain management research conducted by HIS Global Insight also explains the importance of SMEs engaging in international markets, as they become twice as likely to be successful than those that only operate domestically.

He added that DHL considered SMEs to be the engines for growth in Sub Saharan Africa, since SMEs make up a large portion of the employment for a number of African’s joining the working age. He said that 92% of DHL’s business globally came from the SME market.

“According to the World Trade Organisation, studies on African firms show that participation of SMEs in international markets can result in higher growth and employment through economies of scale and in enhanced productivity and innovation through learning effects.”

“Utilising opportunities to take part in the global economy will speed up SMEs’ growth,” said Lucas.

He did however explain that the kind of logistics was not without its fair problems, and a reliable logistics provider would make operations a lot simpler.

“Exporting goods can become challenging when going through customs, and improper or incomplete documentation, restricted items or any other issues could potentially add significant delays to one’s delivery. A good logistics service provider should be able to give its clients advice on how to avoid delays with customs, as well as be able to facilitate if goods are delayed at international borders,” concluded Lucas.

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