New research reveals AI and information systems can enhance resilience in South Africa’s fast-moving consumer goods (FMCG) industry.
Supply chains underpin global commerce, ensuring goods move efficiently from manufacturers to consumers. The COVID-19 pandemic, however, exposed their fragility, particularly in SA’s FMCG sector. Border closures, volatile demand and logistical bottlenecks revealed an urgent need for transformation.
The study, led by Wesley Niemann, a lecturer in the Faculty of Economic and Management Sciences at the University of Pretoria (UP), explores which AI capabilities hold the greatest value and what drives their adoption in this industry. It highlights how digital tools can help mitigate disruptions and improve supply chain performance.
Geopolitical tensions, regulatory changes or sudden climate events could still upend supply and force reliable suppliers out of business. This is where AI and advanced information systems come in, reshaping how supply chains recover, adapt and thrive.
“The FMCG industry’s primary challenge lies in its vulnerability to disruptions,” says Niemann. “With products that have short shelf lives, managing inventory, forecasting demand and ensuring timely delivery are paramount. Disruptions, whether from global pandemics or natural disasters, can lead to overstocking or understocking – both costly errors.”
Globally, supply chain disruptions cost industries billions of dollars annually. In the FMCG sector, delays can lead to significant losses due to expired goods or unmet consumer demand.
By adopting AI, SA’s FMCG industry can address local challenges and set an example for other developing economies. With capabilities like real-time tracking, predictive analytics and automated decision-making, AI can redefine how supply chains operate worldwide.
“Retailers are in the early stages of adopting AI algorithms to forecast demand and optimise stock levels in real time. This reduces the risk of overstocking or understocking, particularly for products with short shelf lives.
“This capability allows retailers to adapt quickly to fluctuating demand, minimising waste and ensuring consistent availability of essential items. By analysing consumer behaviour and sales data, they can better anticipate demand, thereby reducing stock-outs and minimising waste.”
Niemann says retailers and third-party logistics providers have incorporated AI-driven analytics to improve supply chain visibility and optimise route planning. This integration has resulted in reduced operational costs and better service delivery.
What sets the research apart?
Although supply chain resilience is widely studied, limited research addresses the developing world, where digital transformation faces notable constraints. This study contributes to that gap by providing insights specific to SA’s context.
It underscores the importance of internal integration within firms and external collaboration with supply chain partners, areas that are often underexplored. Nonetheless, challenges persist.
“Many South African firms face digital skill gaps and high implementation costs,” says Niemann. “Addressing these barriers requires collaboration among industry, academia and government to create supportive policies and training programmes.”
He says AI and information systems are not just buzzwords; they are critical tools for building resilient supply chains.
“As South Africa’s FMCG sector continues to recover from the pandemic, embracing these technologies can ensure long-term sustainability and global competitiveness.”
The research highlights the importance of business investment in innovation and the role of policymakers in fostering an environment that supports digital transformation. It suggests that leveraging AI could help SA address supply chain challenges and build greater resilience, efficiency and equity.