Digitalisation of logistics sector in Zambia to unlock growth

The United Nations Economic Commission for Africa (UNECA) executive secretary, Vera Songwe, has said that Africa has all the pre-requisites for rapid economic transformation in the next decade.  “But the importance of digitalisation and the digital economy in driving growth and structural transformation, as well as optimising fiscal performance in Africa, cannot be overstated,” she said.

This optimism is reflected in the massive potential of the Zambian logistics sector. The industry is primed to increase revenue from opportunities that arise out of digital transformation.

Says Mupota Muchelemba, Managing Director of Seidor Zambia, “Zambia is a land-locked country, rich in natural resources, with good road infrastructure, so it is not surprising that the number of freight management and transportation businesses is growing. Now it’s time for companies to optimise their supply chains by investing in their business processes through the leveraging of digitalised information.”

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 still manage these complexities using multiple small systems,” explains Muchelemba. “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 inefficiencies. Three or four disconnected 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 financial losses.”

At a recent event hosted at the Seidor Zambia office in Lusaka, Jason Kazilimani, the CEO of KPMG and President of the Zambia Institute of Chartered Accountants (ZICA), spoke about how important it is that Zambian industry transforms in order for it to move with the times and remain sustainable.

The growing opportunity (or threat) of globalisation also needs to be considered, with many international businesses wanting to expand into Africa. These competitors will enter the Zambia marketplace with effective digital systems in place already, making them a more competitive option than local suppliers.

It also then becomes essential for local businesses to control costs, to keep their prices down and offer market-related fees. It therefore becomes a priority to know where costs are coming from and whether saving is possible.

To ensure growth, the local industry needs to remain competitive by embracing digital transformation.

Says Muchelemba, “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 logistics businesses into one system. SAP Business One, combined with the specially developed logistics functionality of the Transport One add-on, has solid local case studies behind it.”

Zambian logistics businesses that use SAP Business One such as Juba Transport and AM Motors, have clearly shown 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. 

Explains Muchelemba, “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.”

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 software 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.

Source: Seidor Logistics