Skip To The Main Content
Main Navigation Toggle
< Back to Listing

Cities and Continents: the Rise of Urbanization and Africa

  • Jennifer Proctor
March/April 2017

In the January/February 2017 department about the future of supply chain management, I wrote about how APICS used future-casting to develop an ongoing strategic framework, which APICS leaders call The Rise. In this and future magazine issues, I will dig deeper into the rise of supply chain and how it corresponds with other factors, namely

  • the rise of urbanization
  • the rise of Africa
  • the rise of the young and elderly
  • the rise of the role of women in global society
  • the rise of technological autonomy and intelligence
  • the rise of data
  • the rise of transparency
  • the rise of the speed of change.

 As the APICS board of directors and staff members worked together on this project, there was a common theme. Brian David Johnson, a renowned futurist, technologist, and author whom APICS engaged to work on the futurecasting process, says that theme was an increase, or rise. Furthermore, it stretches across economic, technological, and cultural areas.

“The future of supply chains will be significantly affected by these increases,” says APICS CEO Abe Eshkenazi, CSCP, CPA, CAE. “As we look out to the future of APICS, we need to understand, study, embrace, and ultimately take advantage of these factors.”

As with all futures, people play a vital role in what’s to come for supply chain. Therefore, APICS must work to increase its engagement with and responsiveness to supply chain professionals and others. Said another way, APICS must raise its influence and involvement in the world. Consider what Paul Keel, 3M’s senior vice president of supply chain, said earlier this year in a Forbes article: “While historically organizations looked to their supply chains primarily for productivity and cost reduction, today’s high-performing companies count on us for much more—for developing new products, protecting our environment, serving our customers, and driving meaningful value creation across the enterprise.”

How many of the factors of The Rise intersect with Keel’s observation? Let’s take a closer look at the first two: the rise of urbanization and the rise of Africa.

The rise of urbanization

People in cities are more influential to business than ever before. According to the McKinsey Global Institute, the top 100 cities, measured by expected global gross domestic product (GDP) growth by 2025, accounted for 38 percent of the global GDP, or around $21 trillion dollars, in 2007. Further, in 2020, the top 600 cities will account for nearly 60 percent of the global GDP while being home to 25 percent of the global population.

“The Rise related to urbanization has a dramatic impact on the downstream supply chain,” says Sharon Rice, former APICS vice president of strategy and now a strategy consultant. First, she says the population density in megacities significantly decreases the real estate available to open traditional brick-and-mortar stores. Add to that the trend of bringing products to customers—changing from the more traditional idea of bringing customers to products—and it’s clear that both shifts mean a dramatic need to innovate logistics, transportation, and distribution.

Lastly, Rice points out that congestion will heavily influence distribution in megacities, such as Seoul and Mexico City. Because of this, APICS leaders suggest supply chain may experience greater influence from apps, Uberlike couriers, and drones.

The rise of Africa

For years, experts have deliberated the influence of Brazil, Russia, India, and China—the so-called BRIC countries. Now, attention is shifting to Africa. Many nations in Africa, inspired by the growth of China and India, are pursuing economic advancement. However, they also face distinctive challenges.

The 2012 Forbes article “How Companies Overcome Africa’s Five Great Challenges,” written by experts at management consulting firm Bain Insights, highlights the most significant hurdles to doing business in Africa and how to overcome these issues:

  • Consider how to creatively work with Africa’s poor infrastructure while reducing operating costs.“The poor infrastructure also contributes to an uncertain supply of raw materials,” the authors write.“Market leaders surmount this challenge by building strong supplier relationships or even becoming vertically integrated to stockpile critical materials, better manage costs, and mitigate supply unpredictability.”
  • Create diverse and flexible models that route the most products to the most markets and consumers. This means recognizing how business is done now in Africa—via small stores and informal retailers— and how it could be done in the future.
  • There’s a shortage of information about and insights into Africa’s diverse consumers and its unique retail environment. Organizations must gain competitive advantages by doing their own research—supply chain management professionals can’t just rely on what’s out there now.
  • In a challenging business environment, it’s essential to partner with others, such as governments, businesses, and communities. These relationships can help businesses establish and gain credibility.
  • Commit to building an abundant talent pipeline locally. “Africa’s critical shortage of skilled professionals is mainly due to the population’s low education level and a troubling brain drain of the continent’s highly educated workers,” Bain’s experts write.

Although South Africa has already established itself as a strong trading partner with many companies and nations, Central and Northern African nations now are building their own manufacturing centers. “With high—and growing— numbers of individuals of working age, an abundance of natural resources, and desirable geographic locations, Northern and Central Africa are attracting a good deal of attention in the supply chain,” Rice says.

In the May/June 2017 issue of APICS magazine, this department will explore the next two factors in The Rise: the rise of the young and elderly and the rise of the role of women in global society. Until then, to learn more about APICS and the vision behind The Rise, visit bit.ly/APICSRise.

Jennifer Proctor is editor in chief of APICS magazine. She may be contacted at editorial@ apics.org.

To comment on this article, send a message to feedback@apics.org.

Comment

  1. RadEditor - HTML WYSIWYG Editor. MS Word-like content editing experience thanks to a rich set of formatting tools, dropdowns, dialogs, system modules and built-in spell-check.
    RadEditor's components - toolbar, content area, modes and modules
       
    Toolbar's wrapper 
     
    Content area wrapper
    RadEditor's bottom area: Design, Html and Preview modes, Statistics module and resize handle.
    It contains RadEditor's Modes/views (HTML, Design and Preview), Statistics and Resizer
    Editor Mode buttonsStatistics moduleEditor resizer
      
    RadEditor's Modules - special tools used to provide extra information such as Tag Inspector, Real Time HTML Viewer, Tag Properties and other.