Optimising South Africa’s supply chain through efficient risk management

As 2024 draws to a close, DEVLYN NAIDOO reflects on the lessons of the past year, celebrating achievements while identifying opportunities for continuous improvement – a cornerstone for all supply chain practitioners. 

The South African supply chain landscape is dynamic and ever-evolving. With each passing day, our nation becomes more industrialised and modernised, making it an exciting space in which to operate. Optimising South Africa’s supply chain through efficient risk management and planning is critical for resilience, cost reduction, and maintaining a competitive edge. Effective risk management involves identifying, assessing, and mitigating potential risks that could disrupt the flow of goods and services across the supply chain. 

The flow of goods, services, and data in a typical supply chain involves numerous stakeholders and processes. Wherever control exists, advanced planning is essential to ensure adherence to regulatory requirements in both the exporting and importing countries. When constraints or anomalies arise, they must be addressed through the appropriate stakeholder channels. This is often facilitated by organised bodies representing traders’ interests. 

Proactive compliance: the cornerstone of success 

Clearly defined guidelines and standardised operational procedures issued by the relevant government departments are essential to foster seamless processes and encourage proactive compliance. Beyond meeting regulatory requirements, proactive compliance hinges on advanced submissions, accounting for processing times, and budgeting for backlogs caused by the sheer volume of international trade versus resource availability – a global challenge.  

Transit times, influenced by the chosen modality and ports of origin and destination, further constrain traders’ ability to rectify non-compliance. Legislation across regulatory authorities is clear: no cargo should be loaded onto a vehicle, ship, or aircraft unless specific provisions are fully met. Any permits applied for after cargo departure – or even at the purchase order stage – will likely lead to unavoidable escalations due to non-compliance.  

To contribute to South Africa’s economic prosperity, traders are encouraged to study regulations pertinent to their commodities, engage with industry associations to confirm the latest procedures, and ensure full compliance.  

The role of exceptions in supply chain management 

Supply chains are inherently unpredictable and emergencies do arise. While such situations are often beyond the locus of control, a demonstrative history of proactive compliance makes managing exceptions significantly easier. Compliance with customs administrations’ requirements for cargo reporting and transactional declarations is equally critical for managing supply chain risks related to safety, security, and legality. Key aspects such as customs valuation, origin, and classification – along with a proper understanding of international commercial terms (Incoterms) – are non-negotiable. These elements mirror other regulatory, statutory, and legislative requirements.  

Regulatory compliance complexities

The regulatory landscape governing imports and exports is vast. South Africa has over 128 external customs and excise manuals, policies with annexures, legally published guidelines, government-gazetted notices, and other standard operating procedures. These are accompanied by approximately 21 primary legislative acts prescribing compliance requirements. 

It is crucial for traders to be fully aware of the regulations affecting their products, financial flows, and data processes. The primary role-players in the supply chain include importers and exporters, regulatory authorities overseeing compliance, logistics service providers, and, ultimately, the end consumer. 

Knowledge is power, compliance is key 

Awareness and understanding empower traders to make informed choices. Proactive compliance helps to avoid unnecessary costs, delays, and inefficiencies, ensuring smoother transactions and more robust supply chains. As we move forward, I wish all traders success in achieving compliance across their product, financial, and data flows. 

In the words of American author Daniel H. Pink: “Control leads to compliance; autonomy leads to engagement.” And as Dr Juanita Maree, CEO of the South African Association of Freight Forwarders, reminds us, it is not countries that compete, but the supply chains within those countries that create real impact. 

Further resources are available from the SARS website.