BUSINESS OUTSIDER Logistics in SMEs

Tunji Adegbite
Paula, a budding ready-to-wear fashion designer and SME proprietor in Lagos has created a sensational dress. Everyone wants one and the dress has quickly become a status symbol. Her SME has sold out all pre-produced outfits and the orders keep coming in. The remaining stock of the silk print used for producing the dress cannot cater to the flood of orders coming in, especially through microblogging platform, Twitter. Also, for the first time since launch three years ago, Paula is receiving orders from other cities like Kaduna, Ibadan, Port Harcourt, Kano, and Owerri. Previously, her customers have been in Lagos and Abuja. How does Paula cope with this new challenge to her business processes?

Paula is not alone. Cost-effective logistics – the inbound transportation of raw materials, services or bulk goods and outbound movement of finished products to the consumer, is essential to the success of any business, and it has become an albatross for many micro, small and medium scale businesses. A comprehensive end-to-end logistics process includes supplier management, customs clearance, warehousing, inventory control, order processing, customer service, transportation, and packaging. Mastering this aspect of a business is a competitive advantage for organisations. Amazon dominates the e-commerce industry because of its impressive logistics procedures and local players like Konga and Jumia have since realised that it is critical to their business success.

To accomplish higher profitability and efficiencies, SMEs must understand how to efficiently manage their supply chain processes, ensuring on-time last-mile deliveries to improve customer experience. In a low trust society like Nigeria, businesses must focus on the less glamorous but crucial process of creating an efficient supply chain. Most Nigerian consumers abhor delays, are generally impatient, price conscious, and quickly switch brand loyalty.

Thus, it is vital to ensure that raw materials, bulk goods, and finished products reach their destinations on time, in good condition and at competitive prices.
Complex and fragmented, Nigeria’s logistics sector is complicated and fraught with challenges peculiar to the Nigerian environment. Port congestions, poor road networks, arbitrary customs duties, uncertainty in regulation, and other infrastructural issues continue to set the Nigerian logistics sector behind global standards regarding real-time tracking and reporting. A particular logistic challenge faced in Nigeria is the inadequate rail transport networks which mean that companies rely solely on road transport for intra-country logistics.
Businesses face cargo theft, traffic congestions, accidents due to terrible roads, and other transport-related risks.

Navigating the difficulties of these challenges can be expensive, and, in the past, only larger businesses were able to afford the associated cost of incessant logistics bottlenecks. Furthermore, they were primarily served by large logistics companies like DHL, SAHCO, UPS, and others. However, the sector has recently received an influx of last-mile logistics partners, freight forwarders and haulage companies creating innovative solutions and serving niche needs for SMEs – Kobo360, Max.ng, Gokada, GiGLogistics are notable players. Nigerian SMEs now balance keeping mission-critical functions in-house and outsourcing to third-party logistics partners other key components such as last-mile delivery.
Here are some key factors SMEs in Nigeria must keep in mind when developing a logistics strategy:

• Get it right from the start
Every SME must consider the 7 ‘Rights’ when developing its logistics strategy: Product, Place, Price, Customer, Condition, Time, and Quantity. From the choice of an in-demand product through market research, setting competitive prices, understanding the target market to customer-centric fulfilment processes, failure to implement the right strategies can lead to expensive disappointments.

• Flexibility
Small businesses experience inconsistent sales patterns, so it can be challenging to predict the fluctuation of product orders and, therefore, its logistics and distribution needs. To counter this, it is advised for the SME to select a flexible logistics partner with the resources to handle on-demand logistics needs and ramp up operations during peak sales periods.

• Familiarity and Expertise
It is important to consider your specific niche needs when choosing a partner.
The ideal logistics partner should be familiar with your particular business category to eliminate errors, reduce the time required for planning and optimise cost efficiency. For example, businesses that require delivery of production materials to remotely located factories should select providers familiar with the terrain, or businesses that need cold storage transportation should choose a provider already familiar with the challenges of transporting these types of products.

• Location
Last-mile delivery and the cost of fulfilment can impact a business’s profitability. As such, selecting providers with a wide coverage area and/or fulfilment hubs closer to densely populated areas may keep service costs down for SMEs. The cost of delivery factors in the consumer purchase decision and managing selecting a service that keeps total cost competitive will result in increased product sales.

Improper logistic planning can negatively impact profitability. For example, a small Nigerian fashion business releases a new summer collection and suddenly receives more orders than it ever has historically. The company which has failed to create any plans to ramp up production or adjust delivery time or evaluated the capacity of its logistics partner to deliver raw materials in accelerated time or complete last-mile deliveries to new locations falls behind production timelines. It has to contend with irate customers, cancelled orders and expensive express shipping through new partners.

Volatility, Uncertainty, Complexity and Ambiguity (VUCA) will continue to impact logistics in Nigeria. While innovative solutions continue to be developed to meet these challenges, SMEs must focus on creating effective supply chain processes to minimise loss and improve profitability.

_Adegbite is a thought leader in Strategy and Supply Chain and has worked with leading organisations like PwC and an IOC. He is the founder of Naspire, a business research platform using contextual business insights to help entrepreneurs and professionals succeed in Africa. He can be reached via tunji@naspire.com. Views expressed in this article are personal and do not represent the views of any institution he is affiliated with.

Is Prolonged Sitting the New Smoking?
Just like people thought smoking was harmless years ago, a lot of people still think sitting for a long stretch of time is harmless but that can’t be any further from the truth.

In 2009, a Canadian study was published in the Journal of Medicine and Science in Sports and Exercise which found a close relationship between long hours of sitting and an increased risk of death.
And just like exercise doesn’t necessarily counteract the negative effects of smoking, it also doesn’t counteract the negative effects of prolonged sitting.
Our bodies are designed for movement and its evident in the way it’s structured with over 360 joints and about 700 skeletal muscles that allows for easy fluid motion.

Our blood depends on us moving around to be able to circulate properly, nerve cells benefit from movement but unfortunately with evolution, our lifestyle has become more sedentary by the day considering many of us spend most of our entire workday at a desk, followed by sitting through rush hour traffic and then some downtime in front of the tv.
When we’re standing, the muscles in our lower back and our core are engaged in maintaining the spine in a neutral position.

As soon as we sit on a chair with a backrest, those muscles are disengaged and the whole weight of the upper body is concentrated on the lower lumbar region of the spine, hence increase in posterior annulus strain and intradiscal pressure (pressure on the vertebral column) causing sciatic nerve damage and back pain most people suffer from.

Production of lipoprotein lipase, an enzyme that’s important for breaking down fats and cholesterol from the blood, is almost deactivated or stopped during prolonged sitting times, as a result causing a decrease in metabolism over time.

Prolonged sitting, especially in a slouched posture is one of the major causes of poor blood circulation which can be dangerous to your health.
Because the symptoms aren’t obvious when you’re young, after about three hours of sitting, there’s a 50% drop in artery dilation, and as a result, a decrease in blood flow, thereby slowly suffocating you like a cigarette would.

Sitting has been compared to smoking as a silent killer, as sitting for two hours straight can take away as much of your life as smoking a cigarette would according to the British journal of sports medicine.
If you’re guilty of spending the majority of your days sitting down for prolonged periods of time, here’s a few tips to help change that;
1. Break up every hour of sitting by introducing small bouts of walking movements throughout your day.
2. Adjust your chair to a vertical spine posture to reduce uneven pressure on your spine from sitting in a slouched position.
3. Set a reminder to move every hour.
4. Use phone calls as a que to take a walk or pace around the room.
5. Invest in a standing adjustable desk.
The key is to break up your sitting times, get your muscles working and gets that blood flowing!
–– Odunuga is a certified fitness trainer and is the founder of Easyfit, a brand that aims to simplify the obscurity that people have about fitness. You can follow @Easyfitng on instagram for fitness tips, motivation and healthy recipes and reach her at Easyfitng@gmail.com.