For Supply Chains in Uganda, 2024 is going to be a year of the ‘thin line’ in the sense that supply chains are going to have more pressure exerted as they balance the rope of cost and service delivery. From where we sit at Africa Nxt Gen Foundation, we have some critical questions that will require answers as one plans for 2024.

• How to Manage Inventory Costs?

Inventory, Inventory, Inventory, all supply chains must find ways of answering this question. Starting with the raw materials inventory (how to stock just enough and how to stock safely). Supply Chains must start to think of how to break reliance from the global world. Many supply chains are now global-dependent and thus affected by changes in the global environment. Localization could offer some solutions. As supply chains calculate safety stocks, it’s important to revise the formulas to incorporate the slow moving and obsolete deductions. SLOBs must thus be accounted for right from the raw materials end to the finished product.

Important on inventory cost is spares management. Supply Chains must explore new strategies with key equipment suppliers. There’s need for consolidation when it comes to players in the same industry. If a given valve is the commonest in the region, then it is better for supply chains to shift to a similar spare. Standardization of key spares for different equipment and operations will come in handy. Again, localization will also feature heavily on this front.

Inventory should also be managed with better consignment stockings, monitoring on work in progress and finished goods should continue to be on the radar for supply chains. 2024 calls for a holistic and detailed view of all inventories in the supply chain.

• How to Re-Negotiate Outbound Logistics?

Supply Chains often sign long-term logistics contracts. In 2024, this shouldn’t be the case. Where possible, Supply Chains should think of renegotiations of contracts. There’s possibility that a supply chain is paying the wrong type of rate. Are you paying per truck load instead of per pallet or per tonne? Is the rate type the right one for your type of product and operations?

• How Agile is the Sales and Operations Planning? Is your Business ready for Integrated Business Planning?

Accuracy and effectiveness of the Sales and Operations Planning (S&OP) process will feature on the top list for most supply chains in Uganda. The ability for this process to be agile and resilient, with a cost-agenda perspective. In 2024, the S&OP teams will have to play a more strategic role and have a finance-centric model driving the process.

• What are the Supplier Partnerships?

Supply Chains in 2024 will have to rethink supplier relationships, from the selection, the evaluations, the maintenance, and the service contracts. The Supply Chains that will be resilient and have strategic outcomes will have to remodel their supplier partnerships for performance. Are your suppliers able to produce for you and store for you?

• Is decision-making in your supply chain Data-Driven?

In 2024, data-driven supply chains will take the day. In line with the integrated business planning, supply chains must find the insights in their data and once found, they must move fast and translate this to implementation. What is the most cost-effective way to produce a product? What is the most cost-effective way to distribute it?

• What is the role of the Human Capital in your supply chain?

When we speak supply chains, the human element is often ignored. Yet, the biggest contributor both directly and indirectly, the most variable factor in building strategic supply chains is the human element. From the direct labour costs that form the cost of goods element in supply chains to the operational impact of the human capital. Has the human capital been trained on the cost-impact of their actions in the supply chain? Are they learning and innovating as fast as possible? If you run production lines, are the operators aware of the cost impact of inefficient runs or reworks?

• What is the radical rethink of your supply chain?

Supply Chains in 2024 will require radical rethinking. That’s from the inputs to the outputs. From the inbounds to the outbounds. Radical in the sense that supply chains will have to rethink utility costs and how to segment them per area of operation to enable isolation of inefficient areas. Costs such as depreciation may have to be rethought from angles of Asset Lives. Have the assets been categorized, correct? Are the asset lives right? It’s possible to be suffering higher depreciation impacts that necessary. Supply Chains will also have to run experiments on their operations, try out new ways, reconfigure operations and record the results of such. Employees should be onboarded on the innovation train, for example how to reduce touches in sections? Every touch in the supply chain is a cost. How are raw materials and products directed as near as possible to where they will be used or loaded out? Supply chains in 2024 must also keep on the watch out for the inflationary impacts, the Ukraine-Russia war, the emergence of possible pandemics or issues that can shut down the global network. Thus, the Supply chain risk radar must be at an all-time high in 2024.

Sustainability, Risk and Technology?

Finally, as 2024 opens up, Supply Chains must think greatly on how to de-risk their supply chains. It is not just enough to think about risk and how it is to be mitigated. The best thing is to think about de-risking. How to ensure that your supply chain is able to actually exploit some of the potential risks? In line with risk, Sustainability is going to be a challenge as things like scope of emissions, and sustainable chains are going to feature on the platform of great supply chains. Is your supply chain geared for sustainability? Finally, supply chains must be thinking technology, how to acquire the best technology to unlock productivity, but also how to finance that technology without impacting the chain?