What was the impact of Covid 19 on Supply Chains in your country Kenya?
Supply Chain Infrastructure in Kenya and possible across Africa had reached its maximum elasticity prior to Covid-19 and the pandemic made that apparent. Despite the growth of internet penetration and e-commerce retail in Africa over the past 10 – 15 years, especially in countries such as Nigeria, South Africa, Kenya and Egypt, not much had changed in Supply Chain Infrastructure. Real estate asset quality, availability and management have remained in the same state they were 60 years ago. This includes critical delivery and distribution assets such as roads and warehousing. In essence, supply chain assets and management did not evolve to match the digital innovation wave. E-commerce technology has introduced automation into the supply journey for buyers and sellers, yet the fulfilment process has remained mostly manual. This infrastructure gap and incompatibility became apparent during the first few months of the pandemic.
How did this affect your company?
We ran a last-mile delivery company before Covid-19 that primarily transported single to medium size orders to the end consumer. During the lockdown, beyond the restriction on movement which obviously affected our business model, we witnessed massive shortages in inventory levels within the business to the business’s supply chain. Brands could not source their supplies, in cases where the products were available, they were warehoused in regions that required up to 72 hours of travel distance which could not be achieved during the lockdown. This gave us the idea to explore the business-to-business angle.
We realised that the steep entry cost of warehousing and the absence of automation in the fulfilment process was a major stumbling block to e-commerce retail and that presented an opportunity to build a technology-enabled solution for flexibility and scalability within the supply chain. We tasked ourselves with developing a solution that will bridge the gap for both the warehouse asset owners and the e-commerce brands. We pivoted our business in this direction and now provide an integrated order fulfilment service across three areas;
- Low entry cost, short-tenured, flexible micro-fulfilment warehousing networks similar to the Amazon model aimed at cutting down delivery timings to 6-8 due to warehousing proximity
- Warehouse management and automation to simplify processes, enable real-time inventory management for both the brands and asset owners and maximise warehouse capacity through aggregate warehousing
- Integrated last-mile transportation partnerships to complete our offer as a one-stop end-to-end order fulfilment partner
How has the innovation impacted your organisation’s performance and what do we expect in the near future?
For us, the pandemic triggered innovation and a complete shift in our business model and that has begun to drive traction for us and the brands we have since partnered with. We are working with Duhqa (see duhqa.com), Trokical brands, a manufacturer/distributor among other brands in the pipeline in Kenya. Our greater goal is to help MSMEs in Africa tap into flexible and scalable resources they wouldn’t ordinarily access, to excel in logistics, warehousing and fulfilment enabled by technology
We work closely with brands to improve their fulfilment processes thus freeing them from the logistics component of their business operations which then allows them to focus on their core capabilities. We are disrupting the supply chain industry through technology that provides real-time inventory data to brands, and asset owners alike, and creating a new warehousing model that did not exist. We have engaged with the insurance sector to develop appropriate products to match the micro-fulfilment model which is designed to accommodate the storage needs of small brands that may require storage services for as little as one week. We are de-risking warehousing investment for the asset owners, by aggregating small business storage which maximises capacity usage.
We are in our early stages, and we have gotten a lot of traction and scalability and are gearing up for our pre-seed fundraiser to support technology development and capacity building.
What was the biggest shift/change in your business model as a result of the pandemic?
We went from a pure last mile-transport business to on-demand warehousing and fulfilment which affects the whole cycle of operations and customer experience.
From a continental perspective, where do you see African Supply Chains in the next few years?
I am looking forward to a lot more innovation in supply chains across the continent, cross border trading within the region is still inefficient and the pandemic made it evident that we need to become less import-dependent. The recent war in Ukraine also shows how dependent we still are on imports from other parts of the world. Innovation from a regulatory perspective is very important in this regard. I am looking forward to the impact of the AfCFTA cross-border export and manufacturing. Resource-rich African countries should be able to process goods and easily distribute them on the continent at a friendly rate and in good time.