Africa is overflowing with potential, as international firms seek to tap into growth rates that are expected to pass those of many developed nations.
In the last issue, Sherwood International, a division of Super Group (Pty) Ltd, looked at the challenges that companies face when moving into Africa. However, an aspect that must not be overlooked is the having the right skills set. €Knowing what you're doing could mean the difference between getting it right the first time, and learning the hard way how not to do business on the continent€, said Sherwood's General Manager of New Business Development, Neels Botha.
Before selecting the right skills set, it is important to define what moving into Africa means for your business, said Botha. Various opportunities for companies keen on doing business in Africa include:
€ Selling into distributors or wholesalers
€ Setting up or contracting a local agent
€ Establishing your own legal trading company
€ Forming a partnership or joint venture
€ Buying out, or merging with, an established company
€ Becoming a direct supplier to the target market
A company must first understand its current life-cycle phase, and the sector they aim to target. Firms could be mature and seeking to gain a footprint on the continent, or be a start-up and aim to launch a business or product in one, or several, African countries. Firms could also be involved in once-off projects such as large or small infrastructure development, or be fast-moving consumer goods (FMCG) companies needing to expand sales into the continent, noted Botha. Each of these has its own set of supply-chain needs.

MOVING INTO AFRICA
Entities wanting to move into Africa need know-how around export financing, country or regional-specific knowledge, local networks, setting up a business in a specific country and what regulations to bear in mind for each sector such as legal, banking and utilities among others, warehousing, as well as country-specific labour, operation, health and safety, food safety and hazardous material laws compliance. These are a few examples of the required knowledge. Several specific skills are required, which include solid sourcing knowledge, especially around commodities to make sure the best price is paid for goods. €The cost of commodity acquisition determines how competitive companies can be on products manufactured or supplied into Africa,€ said Botha.
In addition, the person responsible for sourcing must have detailed knowledge of the supply base to locate the best source€" Local or foreign €" to ensure it is competitive and remains competitive as their footprint grows.
Contractors need supply chain knowledge in order to manage risks around supply and offer legal contracting knowledge specific to the supplier, commodity and each country's legal requirements, noted Botha.
Transport is a vital area to make sure products arrive where, and when, they should. A knowledge of service providers and the multi-modal transport options available to specific destinations is vital, as are the custom and excise formalities to facilitate cross-border trade, which will require clear understanding of how to interact with clearing agents.
In addition, companies need to have access to people who know what transport solution is best for which commodity, said Botha. This includes selecting the most efficient mode such As:
€ How to consolidate loads and make best use of space to minimise freight costs.
€ Loading and product packing configurations to stop goods moving during transit.
€ Export packaging requirements, with a focus on destination import regulations such as fumigation.
€ How to secure loads for the relevant road condition, including Strapping, crating, and tarping.
€ Tracking and location-tracing capability of loads in transit.
When it comes to forwarding and clearing, skills required include people with detailed knowledge of export requirements and the documentation that may be needed to move goods.
The list includes export entries, SAD 500, EDI interface with customs, invoices, inspection certificates, import permits, product tariffing, transport documentation, as well as Southern African Development Community (SADC) certification.
Warehousing, if required, has its own set of specific skills, such as how to set up a warehouse and select the best location to suit the distribution model. Best practice, how to control inventory and handle material depending on the commodity are also important to know.
Other key skills include warehouse practices in receiving, quality assurance, binning, picking and store-flow planning for optimal efficiency. In addition, health and safety requirements,
ISO policies and processes, warehouse housekeeping and routine maintenance knowledge are required.
Added to handling warehousing, companies will also need skills to control inventory, such as the ability to create Inventory Material Master Lists with detailed catalogue descriptions as well as the classification and naming conventions around materials master lists. These lists include detailed volumetric descriptions and quantities.
Detailed knowledge of inventory planning is necessary to ensure availability and prevent stock outs. This includes knowledge of when to replenish stock, which is based on how critical items are, as well as supply lead-times, minimum and maximum stock levels, as well as when stock must be replaced from a safety point of view, among other issues.

GETTING GOODS THERE
When moving items into African countries, several other issues need to be considered that will require specific skills sets, such as how best to plan routes and optimise delivery. Some aspects that must be considered include reverse-drop sequencing and load planning to support the delivery schedule.
In the back office, skills will be needed to handle the financial administration of export transactions, including commercial and tax invoices, compliance with relevant tax jurisdictions around proof of export, payment to transporters, UCR creation and endorsing of SAD accordingly, as well as proof that debtors have been paid. Documentation to transport goods will also be required. Finance is a key area and often concerns many companies as risks abound. It is vital to create a financial model that reduces risks to a minimum, which is often the determining factor between success and failure.
Knowledge ranging from how to finance expansion as well as managing export transactions to taking care of in-transit risk is necessary. Marine insurance will often be required and companies need to ensure they have insurance in case they do not get paid by clients. Managing claims also requires knowledge and experience.
Firms must make sure they comply with exchange controls as these can vary significantly across various countries. A further serious consideration is for companies to manage their risk to foreign currency fluctuations.
However, getting the right skills mix in place is often a challenging task, regardless of the company's size or maturity.
Sherwood offers more than four decades of experience in customised, in-bound supply chain services and solutions across many geographical borders, especially on the African continent. This includes in depth knowledge of the finance models required, said Botha.
In the next issue, Sherwood International will examine how to avoid the pitfalls of assuming that one-size-fits-all when it comes to culture.

Physical Address:
3 Atlas Road
Elandsfontein
Johannesburg
South Africa
1406
Company Details:
CEO:
Mrs Alida Smit
Tel: +27 11 255 0300
Fax: +27 (0)86 521 4965
Email: info@sherwood.co.za
Sales:
Mr N Botha, GM Business Development
Tel.: +27 11 255 0309
Fax: +27 (0)86 570 2492
Email: sales@sherwood.co.za