“History doesn’t repeat itself, but it often rhymes‚" Mark Twain observed.
Today’s supply chains face mounting pressures from macroeconomic environments best described by the acronym Vuca (volatility, uncertainty, complexity and ambiguity). The world stage has been besieged by ‘swan’ events — rare and extreme occurrences that are transforming global supply chains.
From the Covid-19 pandemic, escalating tensions between major trading powers, the persistent Russia-Ukraine and Middle East conflicts, technological avalanches spurred by AI, and climate disasters that sporadically devastate production regions, it is now common knowledge that the invisible supply chains we depend on can experience severe disruptions.
In South Africa, additional shocks in the form of infrastructure bottlenecks characterised by port congestion as well as deterioration of the rail and road systems, and electricity power shortages, have been experienced over the past few years.
The result has been an inflationary and high input-cost business environment, leading to logistical constraints that slow down manufacturing and retail.
Looking ahead, it is not unreasonable to assume that swan-event-based disruptions mentioned above will persist, making it necessary to continually improve supply chains until they become shock-resilient — a matter central to the South Africa’s economic stability and social well-being.
The economic toll on SA: present costs and future risks
Global supply chain pressures have had a profound impact on South Africa, with current numbers telling a stark story about the country’s economic vulnerability, which may persist well into the future.
Reports by the South African Reserve Bank show that manufacturing output remains under pressure, with the monthly data for manufacturing production in August highlighting a year-on-year decline of 1.5%, implying that the sector is operating under strain.
Imagine a South Africa where essential medicines are manufactured locally, where food systems rely primarily on regional agriculture, and where key industrial inputs are sourced from domestic suppliers. This isn’t economic isolation but strategic autonomy, maintaining global connections while ensuring that survival doesn’t depend on them.
The medium-term outlook reveals deepening challenges as global supply bottlenecks continue pushing shipping costs to higher-than-anticipated levels. The backlogs in South Africa’s major ports continue to delay trade exchanges, primarily due to inadequate infrastructure investment, capacity constraints and operational inefficiencies.
Civil unrest and rail infrastructure vandalism continue to pose a significant threat to logistics networks, resulting in an increased reliance on already congested roads for transporting bulk cargo rather than by rail.
These aren’t temporary disruptions but structural weaknesses that guarantee any future crises will hit even harder. The overarching implication is that South African businesses are working harder to earn less, trapped between rising costs and operational disruptions that show no signs of declining.
Long-term indicators paint an especially concerning picture for ordinary South Africans. Food prices remain volatile, with import costs for staples such as wheat, rice and other consumer-oriented agricultural goods fluctuating wildly in response to global events that are beyond local control. Energy prices exhibit similar instability, rendering planning difficult for both businesses and households.
This economic fragility translates directly into social hardship that will shape South Africa’s future. Reports by Stats SA show that GDP growth remains anaemic, stuck below 1%, while the population continues to grow at a faster rate. Unemployment, already at crisis levels above 33%, shows no signs of easing.
After inflation spiked near 8% during 2022-23, eroding purchasing power that will never fully recover, the recent moderation towards 3% offers cold comfort to families whose real incomes have been permanently reduced.
Without strategic interventions, South Africa faces a future punctuated by declining living standards and increasing social instability — a trajectory that supply chain resilience could help reverse.
Building resilient supply chains for the Vuca future
PricewaterhouseCoopers’ South Africa Economic Outlook 2024 report charts a pragmatic path forward that can be implemented immediately by businesses, governments and communities. The cornerstone is value preservation through intelligent adaptation.
Instead of simply relishing an uptick in their operations after each wave of turbulence, companies must reimagine their entire approach to managing disruption. This involves identifying vulnerabilities before they’re exposed by any crisis, building redundancies that may seem costly today but will prove invaluable tomorrow, and creating flexible systems that can rapidly reconfigure when disruptions strike.
Localisation emerges as perhaps the most powerful tool for future resilience. This doesn’t denote abandoning global trade but instead building robust local alternatives for critical goods and services.
Imagine a South Africa where essential medicines are manufactured locally, where food systems rely primarily on regional agriculture, and where key industrial inputs are sourced from domestic suppliers. This isn’t economic isolation but strategic autonomy, maintaining global connections while ensuring that survival doesn’t depend on them. Every rand spent developing local suppliers is an investment in national resilience.
While climate change may accelerate, geopolitical tensions may intensify, and technological disruption may become more pronounced, let us never forget that South Africa possesses sustainable advantages. These include abundant natural resources, an entrepreneurial culture and hard-won experience borne from surviving previous crises.
The circular economy offers another transformative opportunity. Instead of the traditional “take-make-waste” model adopted primarily from Western economies, which depends on constant resource inputs, circular systems create closed loops where today’s waste becomes tomorrow’s raw material.
Picture factories where nothing is discarded, where products are designed for disassembly and reuse, where scarcity drives innovation rather than shortage. This isn’t just about environmental consciousness; it’s also about economic survival in a resource-constrained future.
Most urgently, South Africa needs a new model of public-private collaboration. With government fiscal resources strained and public institutions overwhelmed, traditional service delivery models are no longer sustainable. Instead, something more radical should be proposed: true partnerships where business and government share both control and responsibility.
The Gautrain demonstrates this model’s potential, as do successful water projects in Kenya and transport initiatives across Africa. However, success requires ensuring that transparency, accountability and a genuine commitment to public service become non-negotiable throughout the entire process.
These partnerships could transform South Africa’s ports, repair the rail system and ensure reliable electricity — the very foundations upon which resilient supply chains are built. The recent opening of the freight rail network to private operators is a significant step in the right direction.
Educational institutions, particularly South African universities, must also participate in this transformation. Tomorrow’s leaders and managers require training that balances cost-efficiency with resilience, using African case studies rather than Western theories.
Research must focus on practical questions: how can township businesses build resilient supply networks? What reshoring opportunities exist for critical industries, such as how South African can attract global firms that are relocating their manufacturing from Asia? How can circular economy principles work in South African contexts? How should the role of government be redefined or streamlined to facilitate an enabling regulatory environment? And how can South African pivot on the current AI-driven and related technological shifts to build smarter supply chains?
Critical to this transformation is the implementation of the stress-testing framework developed by MIT’s David and Edith Simchi-Levi.
Their approach, detailed in a 2020 article in the Harvard Business Review, introduces two key metrics that every business should understand: Time to Recover (the time it takes for operations to resume after a disruption) and Time to Survive (the duration for which current resources can sustain operations during a shutdown).
These aren’t abstract concepts, but practical tools for identifying vulnerabilities and mapping the way forward for both problem prevention and solution.
Just as banks stress-test for financial crises, South African businesses must stress-test for supply chain disruptions. The government should require such testing for essential goods providers, creating national resilience through individual preparedness.
The suggestions mentioned above are not simply about preventing the next crisis. Instead, they are about building a South Africa that thrives in spite of the Vuca environment.
Resilient supply chains make food affordable, regardless of global shocks and electricity becomes reliable despite fluctuations in global energy markets, while creating employment that distant events can’t disrupt. With resilient supply chains, communities can support one another through local production networks, fostering mutual aid and resilience.
Additionally, businesses will view disruption as an opportunity for innovation, and the nation will be able to control its own economic destiny.
While climate change may accelerate, geopolitical tensions may intensify, and technological disruption may become more pronounced, let us never forget that South Africa possesses sustainable advantages. These include abundant natural resources, an entrepreneurial culture and hard-won experience borne from surviving previous crises.
What’s needed now is a collective will ― the government creating enabling environments, businesses investing in resilience in addition to efficiency, higher education strengthening the knowledge-generation and innovation economy, communities supporting local producers, and individuals understanding that slightly higher prices for local goods are insurance premiums against future catastrophes.
The key takeaway from this discourse is a call for a paradigm shift in our thinking, from obsessing over whether another crisis will strike to focusing on our preparedness when it does.
• Chengedzai Mafini is a professor and executive dean of the faculty of management sciences at Vaal University of Technology, South Africa
• Joyendu (Joy) Bhadury is a professor and dean of the Bryan School of Business and Economics at the University of North Carolina at Greensboro, US. He is also a visiting professor in the Faculty of Management Sciences at the Vaal University of Technology in South Africa
For opinion and analysis consideration, e-mail opinions@timeslive.co.za
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