Is the technology-powered logistics industry the key to unlocking Africa’s position in trade? Logistics and technology, on their own, have always aided businesses in increasing their efficiency. Together, by incorporating technological solutions into logistics, they have the potential to further optimize supply chain processes, allowing businesses to be more effective in managing how raw materials are obtained and products are delivered to market.
As a continent, Africa has embraced technology quickly. According to the World Bank, internet penetration has increased from 1% in 2000 to nearly 30% in 2020. A report by International Finance also add that technology uptake is driving African logistics innovation through the use of drones, mobile phone apps, and blockchain. With such rapid and open adoption, technology has the potential to revolutionize how integrated logistics is adopted in Africa.
Logistics technology: learning from disruption
At the height of the COVID-19 pandemic, the impact of technology on supply chains was evident when some e-commerce platforms saw a 50% increase in transaction volumes within the first six months of 2020 (UNCTAD). This was happening at the height of disrupted supply chains, when movement of goods and people was restricted, and workplaces were temporarily shut down.
While everyone else was trying to catch up, technology-enabled companies that could provide end-to-end delivery solutions to their customers grew their customer and revenue base. During the current rebuilding phase, the logistics industry has no choice but to learn from those who took advantage of the disruption.
Integrated technology logistics in Africa
Supply chains are made up of many moving parts, each with the potential for impediment, and each with their own specific purpose. Businesses rely on each of these components to function properly in order to achieve their overall goals. Traditionally, improvements to supply chain components have been differentiated, leading to increased individual efficiencies but with marginal advances to the overall system.
Integration helps to bring all the small improvements together for a larger overall benefit. Collaboration across the various facets of the supply chain is one of the key components of integrated logistics, providing businesses with better visibility of their moving parts from source to market. Enterprise resource planning, which determines what a business requires, must be in constant communication with the transportation management system, which determines how goods move from one location to the next. In turn, warehousing management systems must understand what is coming in and going out if storage is to be organized effectively. When all these systems are integrated, businesses have unprecedented visibility into their supply chains, allowing them to make necessary adjustments to their operations.
Technology as an enabler in Africa
The three systems can be linked now and, in the future, using technological tools. Some of the new technological advances that are assisting integrated logistics are the Internet of Things, cloud technology, machine learning, and blockchain. Emerging technologies, when combined with data collection at all points throughout the system, have the potential to completely transform how businesses move their goods.
The possibilities for Africa are endless. There is already infrastructure in place that can effectively use the opportunities created by technology to make supply chains more efficient, reliable, and sustainable. The ultimate step for businesses is to select a logistics partner who understands how to leverage available technological resources to integrate all levels of the supply chain.