Operations, risk, and small firms: Field results from irrigation equipment vendors in Senegal

Abstract

What are supply chain management challenges in a lower-income economy, and how do managers at smaller firms address them? This field study presents these challenges from the perspective of the 60 managers who run firms selling irrigation equipment in Senegal. By canvasing 35 cities, we gain unique visibility into how private supply chains, on which public officials and smallholder farmers in Africa rely, effectively deliver agricultural goods. The primary challenges for managers in this supply chain are day-to-day risks that are quality and contractual in nature and have financial implications. City size in combination with supplier type, firm size, and manager network determine risk exposure. Firms' efforts to manage the chain are more reactive than proactive and more informal than formal, which reveals an opportunity for public agencies to support supplier and customer coordination. Public decision makers should tailor support to account for the differential risks that city size brings to supply chain management. This support should include not just financing the firms directly but should also entail giving loans to customers, certifying suppliers, and sharing inventory risk with public and nonprofit partners.