The Zambian logistics sector is primed to increase revenue if they can grab opportunities that come from digital transformation. As a land-locked country, rich in natural resources, with good road infrastructure, it is not surprising that the number of freight management and transportation businesses is growing.
Earlier this year, the UNITED Nations Economic Commission for Africa (UNECA) executive secretary, Vera Songwe, reportedly said “The continent has all the pre-requisites for rapid economic transformation in the next decade but the importance of digitisation and the digital economy in driving growth and structural transformation, as well as optimising fiscal performance in Africa, cannot be overstated.”
In Zambia, we have good roads and warehouses. Now it’s time for companies to optimise their supply chains by investing in their business processes through the leveraging of digitised information.
Managing many moving parts with digital transformation
Most local distribution businesses primarily transport goods for mining companies, agricultural products or general freight. In addition, there is a need for the transport of imported or exported goods for use locally or in neighbouring countries.
This leads to a lot of moving parts that have to be optimised. Companies, for example, need to have a healthy fleet, which has to be close enough to where goods need to be collected and delivered and to beat the competition in terms of rates.
Many businesses manage these complexities using multiple small systems. For example, one system may look after contracts while another logs and tracks goods. Some companies are known to just have a billing system in place and use, for example, a GPS tracking system.
This means that the vast majority of the local transport and logistics companies in Zambia are still relying on paper-based and/or manual systems. Just by their nature, this is open to error. Three or four unconnected systems with different people using different spreadsheets leads to things falling through the cracks. This has the knock-on effect of a loss of trust by clients and potential losses.
Keeping up with technology
We recently hosted an event at our office in Lusaka where Jason Kazilimani, CEO of KPMG and former President of the Zambia Institute of Chartered Accountants (ZICA), spoke about how important it is that we transform our businesses so that they move with the times and remain sustainable. It is not about an accounting system anymore, but about bringing business processes together using technology.
There is also the opportunity (or threat) of globalisation to account for. International businesses want to expand into Africa. Many of them already operate with effective digital systems, making them more competitive and able to take business from local suppliers.
Digital transformation not only helps businesses run more efficiently, it directly translates to the opening up of revenue streams and helping to serve customers better -making businesses competitive in a global marketplace.
Customer demands and cost control with digitally transforming
There is an opportunity for widescale improvement and growth in the local transportation and logistics sector through investment in the right technology. The target markets are already using certain types of technology and these clients get frustrated with service providers who are not able to provide the information or documentation they need.
It’s also essential to control costs to stay in business. Companies have to charge market- related fees, so they cannot just increase fees, or they’ll lose business. It’s a priority to know where costs are coming from so that it’s possible to know if savings can be made, for example, how much is spent on fuel or tyres.
Finding a better way
There are very few systems that can effectively track and manage all the parts of a distribution business. Not many ERP systems can effectively combine all of the financial and operational aspects of transport businesses into one system.
SAP Business One, combined with the specially developed logistics functionality of the Transport 1 add-on, has solid local case studies behind it.
Juba transport and AM Fleet both clearly show how profitable it can be to move to the right integrated system. Both have been able to automate workflows, increase efficiency and get an accurate real-time overview as well as valuable insights into their businesses.
Previously, Juba Transport used three different systems to manage the finance, transport operations and maintenance parts of their business. This involved a lot of paperwork and expense. Now they have access to real-time information. They know when permits need to be renewed, they can schedule maintenance of vehicles and can track all expenses, the progress of deliveries and more.
A very important characteristic is that the system integrates with GPS vehicle tracking apps such as Geotab and Wialon.
Find a partner you can trust to help you make the most of your investment
As logistics is a very specialised industry, it is important to choose the right partner to help you invest in digitalising your business.
The right partner is one who has experience in your industry and already understands the challenges of your type of business. It is not enough for a service provider to know the system; they need to understand your industry in order to properly hold your hand and help you make the most of your investment. It is a big investment and you risk the success of your project if you don’t have the right partner.
Digitalisation is here to stay and with the right systems, there are immense opportunities for growing Zambian businesses to adapt to modern, global best practices to compete in the international marketplace and build wealth.