Is Africa an attractive market for supply chain IT companies? Money Web recently published an interesting article covering this issue.

It is often remarked that Africa is on the wrong side of a global digital divide. On one side of this divide are those countries with the IT systems, infrastructure and knowledge to use information technology as an enabler for national growth and productivity. On the other side is the so-called 'developing' world, where IT systems, skills and infrastructure are in short supply, and national growth is hindered as a result.

Things are no different in the area of supply chain technology. Supply chain and logistics operations worldwide have benefited enormously from developments in information systems and technology in the past decade, particularly specific functional solutions for key parts of the supply chain and logistics management process. So, for example warehouse management has become much more efficient through the use of tailored IT solutions, as has transportation efficiency through the use of various track and trace and GPS solutions carried on board vehicle fleets.

Africa's unique situation presents some unique challenges to the efficacy of these solutions on the continent, however. In many agribusinesses across the continent, for example, thousands of small scale farmers service milling, processing and manufacturing businesses. Co-ordinating invoice and other business processes in this scenario requires the use of information technology systems which usually aren't in place.

In terms of addressing the infrastructure issues, many african countries, particularly in sub-Saharan Africa, have made giant strides in introducing more sophisticated telecommunications systems into their countries, but there are usually also management and skills shortcomings, even in countries with relatively advanced economies, such as South Africa.

The African Opportunity

In terms of supply chain and logistics technology, huge opportunities exist in different industries in many African markets, which emerge as these countries begin to develop economically, often after many years of political turmoil. For example, in the Angolan mining industry, procurement bills can run into many millions of dollars per day, costs which can be appreciably reduced with the deployment of suitable logistics and supply chain IT systems.

In other markets, many of the requirements are for rebuilding of national infrastructure, which usually involves distribution � for example in national water distribution systems. In Zambia, fuel distribution for a major multinational fuel company happens through a network of sub-contracted truckers � a situation that cries out for the effective management of these companies by an IT-enabled 4PL solution provider. Similar examples abound in other industries � for example the sugar industry in Sudan.

What these opportunities have in common is they require logistics software, solutions and skills rather than physical assets such as trucks. Routing, scheduling and other logistics management expertise and skills development needs to be part of the support structure for markets in the rest of Africa, and this can be done from relatively sophisticated countries where some of that skill and expertise does exist, like South Africa. As telecoms backbones begin to build out in the African continent, and bandwidth becomes more available, such solutions can also be provided remotely in order to develop the continent�s economy and begin to bridge the digital divide.