Technology-driven Logistics, the future is here!

Technology-driven Logistics, the future is here!

Now that the laws allowing for the use of drones for commercial purposes are here, it is only a matter of time before we see the unmanned aerial vehicles dotting our skylines as they deliver goods, unshackled from our snaking traffic.
By Meshack Kipturgo

This is the future of logistics, transportation that is driven by technology and with minimal human assistance, and now is good time to look at what this will mean for Kenya’s logistics industry.

First, it is worthy to note that Kenya is not the pioneer on the use of drones in the region. The crown goes to Rwanda which is already using the aerial vehicles to deliver blood, medical supplies and other life critical inputs to those in need, especially in far-flung areas with rugged terrain that makes timely delivery of goods difficult. Additionally drones are not only able to punctually deliver this essential goods but more impressive, at an affordable cost.

For Kenya we have many situations where the use of commercial drones is perfect. A good example is in the delivery of examination papers. The Kenya Certificate of Primary Education (KCPE) failed to take off on time in parts of Narok County as rains made road transportation unusable. This is an example where a drone would have come in handy and assured timely delivery of examination papers. The picture of examination officials treading in deep waters to transport exam materials that was making rounds on social media is a stark reminder that we need to invest in a logistics system that is immune to shocks such as flooding.

Expanding our imagination even further, would drones have been used to deliver election materials for the General Elections?  Going back to costs, would drones have been able to deliver these goods in a timely and more cost effective manner? These are some situations where the government ought to seek the services of technology-driven logistic companies.

The private sector can also use this technology for parcel delivery, especially at a time when more Kenyans are embracing online shopping. While we are still on the private sector, one area that needs to rapidly adopt technologically-driven logistics is the booming retail sector.

Retailers often cite that one of the biggest costs they incur is shrinkage or losses that are the result of shoplifting, internal fraud or goods lost in transit. To reduce losses associated with shrinkage some of the strategies that retailers use include outsourcing of security services and stock management all of which add costs to a business that competes on razor thin margins.

Some of the ways in which retailers can use technology driven logistics and improve efficiency include adaptation of Radio Frequency Identification (RFID) technology. RFID technology enables the tagging and tracking of all items in a store.

At any given time the goods, from apples to computers, items can individually be tracked from the time they enter the retail premises all the way to point where they are packed and leave the shop. Stores can trace at exactly what point a product was lost, whether by accident or design. Vital data that enables management to implement strategies that can reduce this shrinkage can be made using analyzed data from this technology. Retailers in more advanced markets are additionally using robots for inventory management at their stores, greatly improving efficiencies and reducing costs.

Chinese e-commerce behemoth sold a world record $25 billion sales in one day, which was made possible, in part, by its investments in robots that control its warehouses more efficiently than humans.

Closer home Kenya is not short of examples of losses that private companies and the government incur when their stores/warehouses are not properly managed or when they become victims of employee mischief.

Overall consumers and taxpayers stand to reap the biggest dividend from investments made in technologically driven logistics and now is the time to make these decisions. Of course there are those who have valid concerns that these technologies will result in job losses, but as computers taught us, new technologies create new industries. Did Uber drivers or social media managers exist a decade ago?

On a more somber note, technology is one solution to the death and mayhem that occurs every festive season. Human error is the biggest cause of road fatalities in Kenya and to reduce this risk we should begin to imagine a country where driverless cars and trucks are on our roads. From Amazon to Uber, the tech companies are investing in this technology that will soon become the norm in the more mature markets.  Kenyan transport officials ought to similarly begin interrogating these lines.

The writer is the Managing Director at Siginon Group.