Growing African Distribution Companies Through Effective Business Solutions

Published on 11th April 2018

From volatile foreign exchange rates to complex customs clearance procedures to unreliable logistics, African distribution companies face a range of challenges. At the same time, they have great opportunities to grow by meeting the continent’s increasing appetite for consumer goods from FMCG brands to electronics.

For many distributors, keeping track of orders-in, orders-out and returns as well as delivering orders accurately and on time is not easy. Combining real-time customer insights and order data may seem like the ideal way to simplify financial management and shipment processing, but it continues to be a major challenge facing all businesses.  

Research shows that many businesses are challenged with calculating accurate costs for customer shipments, based on location and delivery preferences – and that’s particularly the case in many parts of sub-Saharan Africa, where transport links are underdeveloped. The research also shows they face difficulties with legacy systems that require re-entry of information.

With these external pressures, it is critical that retailers and distribution companies stay agile and flexible – all without eating into their margin. But how can they simultaneously deliver low cost and high-quality products and an excellent consistent customer experience? The ability to adjust processes, information flow and operations through the supply chain is vital in an age of global competition.

Effective planning and management

Many of the issues often lie with the complexities and constraints of having critical information siloed in different software solutions that were not designed to work together. In addition to legacy business systems, many African distribution companies still run manual processes in parts of their organisation.

Time and resources that should be spent on serving customers and growing the business is unnecessarily spent on forcing the integration between these solutions. The cost and complexity of implementing and maintaining these integrations have led many organisations to compromise choosing one solution over the other or suffering from more basic functionality through a limited integration.

Many of these issues are being addressed by a new breed of business management systems. Organisations of all sizes can now access all the benefits of their data without being hampered by the technology. Adopting integrated best-of-breed solutions brings a range of benefits including cost reduction, efficiency gains, better competitive advantage and an improved customer experience.

For example, a recent Forrester study found that distribution companies saw a huge 237% return on investment (ROI) in just four months by implementing effective business management solutions. As well as receiving significant ROI in a short amount of time, they reported strong improvements in financial management, purchasing, inventory and services management, customer service, and sales management.

Technology is evolving

The improved accessibility, functionality and integration of these solutions, many of which were previously only available to large enterprises, means smaller distribution businesses and start-ups can now begin to reap the benefits. With minimal investment and resources, distribution companies can enjoy rich, integrated functionality to support all core business processes.

These processes can be easily adapted to fit company procedures, roles and preferences. By streamlining the business and integrating solutions, distribution companies stand to gain a range of advantages. But particularly, it will free employees from mundane tasks, enabling them to deliver the experience today’s impatient customer demands.

By Matthew Kibby,

Vice President: Sage Enterprise, Africa & Middle East.


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