Problems of Logistics Facing SMEs in Nigeria
SMEs in Nigeria face several problems such as raising capital and dealing with bigger competitors. It is interesting to note that logistics remains one of the biggest challenges that SMEs face. This problem is not local to Nigeria, rather, it is one that SMEs all over the world battle with.
When you have a clear understanding of what logistics is, then it becomes easier to tackle this problem. We will provide a few definitions in this post and identify some common logistics problems. After this, we will attempt proffering solutions to major logistics problems facing SMEs in Nigeria.
What is Logistics and Logistics Management?
Logistics is a broad term that refers to the process of coordinating resources and moving them from one location to another. By resources, we mean human beings, inventory, materials, and equipment. They are always being moved from the point of storage to the point of use or deployment. In business, logistics refers to how the flow of things between point A (origin) and point B (consumption) are managed. The aim is always to meet the needs of the end consumers.
Logistics management, on the other hand, is concerned with the effective management and efficiency of a company’s daily activities. The major goal, in this case, is to provide the right allocation per time. Even though logistics management is slightly different from supply chain management, both work very closely.
Logistics problems facing SMEs in Nigeria
Do you run an SME in Nigeria and you have to deliver products to different locations periodically? If your answer is yes, you should have a vivid picture of the different logistics problems in Nigeria. Bigger companies may not be able to relate because SMEs tend to bear the brunt more.
Some of the most common problems include:
a. Controlling costs especially transportation costs.
c. Identification of risks and mitigation of possible risks.
d. Matching technological developments.
e. Targeting global markets.
While there are many logistics problems peculiar to different industries, these seem to cut across boundaries. Of the lot, the first two are most pressing and stem from a long list of factors. It is no secret that at times, the cost of delivery of certain items is costlier than the items.
When you consider timeliness, it becomes almost impossible to meet the expectations of the customers. Unexpected issues may arise in transit, some of which are beyond the control of the delivery companies. Several other factors like bad roads, fuel prices, illegal road levies, etc. are part of the problem in Nigeria.
Don’t get us wrong, we don’t mean that larger businesses don’t suffer from these challenges. They do, but in the end, they seem to have the capacity to weather the storm. How do the SMEs weather the storm of logistics problems?
How to solve logistics problems
We have outlined some major logistics problems above with a very important question following. In this section, we will attempt to provide a few answers to this question. Rather than blame the government and other powers that be, it is important to seek solutions. Here are some thoughts to consider below:
Outsourcing Logistics Services
It is important for businesses that seek to grow quickly to have a range of products and services they offer. Customers are in search of enterprises that offer them the full package. Without an iota of doubt, doing this will make your business grow fast but it will result in logistics problems.
One way to save yourself is to outsource your logistics services. This saves you from packaging goods and shipping them. Doing this also saves cost and ensures that products get to their destinations faster.
Adopt Logistics Software
As your business grows, it becomes increasingly difficult to track inventory and other numbers. Even if you outsource your logistics services or you run a department in your company, it is not enough. The only way to keep track of your numbers and products is through logistics software.
Thanks to technology, we have different kinds of logistics software targeted at different businesses. It doesn’t matter your size, growth potential, or industry, there is something to meet your needs. With logistics software, you can easily track sales records, inventory, expired goods, in-demand products, etc. This presents you with several advantages including the ability to make well-informed projections.
Inventory organization is a very important task that twenty-first-century companies must carry out. Without proper organization, you will lose track of goods and your inventory. This will have negative effects on your business as you are likely to face financial loss and poor performance.
To avoid all of this, you must optimize your inventory organization measures. Once you can intensify your efforts, it will ease the handling of goods making the process more efficient. Don’t forget, if you have a comprehensive storage solution, it will become easier for your business to thrive.
Track the competition
One of the reasons why you are struggling currently is that there are bigger competitors. Since the playing ground is not level, you have to strive to track your competition and match their efforts. This can be very daunting for SMEs in Nigeria considering the number of resources at their disposal.
What you can do is track your competitors and watch how they handle these problems. When you do, you should see their different measures of handling logistics problems. This will empower you with sufficient information on how to deal with your logistics problems.
Using their template is great but to get better results you can tweak it to suit your business. For example, if they use a logistics company, you should find one too. Only in your case, ensure that it is affordable for your business and efficient enough to meet your needs.
We have outlined several logistics problems facing SMEs in Nigeria. Along with these, we have proffered a few solutions. While the onus is one the government to alleviate the logistics problems of SMEs, we must also put in some effort. What other solutions to logistics problems do you have? Drop them in the comments section.