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BIOECONOMY DEVELOPMENT FACULTY Institute of Business And VYTAUTAS MAGNUS UNIVERSITY BIOECONOMY DEVELOPMENT FACULTY Institute of Business and Rural Development Research ADEBOYE FUNMI OMOTAYO IMPROVEMENT OF LOGISTICS MANAGEMENT ON THE EXAMPLE OF JUMIA NIGERIA Master’s Thesis Business Logistics study programme, state code 6211LX055 Business study field Supervisor Jolita Greblikaite (Asist. Prof. dr. name surname) (Signature) (Date) Defended___________________ _____________ __________ (Director of Institute) (Signature) (Date) Akademija, 2021 TABLE OF CONTENT Table of content…………………………………………………………………………………...2 Summary………………………………………………………………………………………......3 Introduction…………………………………………………………………………………….….6 1. THEORETICAL BACKGROUND: CONCEPTUALIZATION OF LOGISTICS MANAGEMENT ………………………………………………………………………….9 1.1. Concept of logistics process management……………………………………………………9 1.2. The types and components of logistics management………………….…………………….11 1.3. Improving aspects of logistics management…………………………….……………….….15 1.4. Uncertainties in logistics process……………………………………………………………20 2. EMPIRICAL RESEARCH METHODOLOGY………………………………………….24 2.1. Logical sequence…………………………………………………………………………….24 2.2. Research method…………………………………………………………………………….25 3. BACKGROUND TO LOGISTICS MANAGEMENT IN NIGERIA……………………………………………………………………………………31 3.1. Background to Logistics management in Nigeria (Jumia Nigeria) ………………………32 3.2. Jumia Nigeria Logistics management………….………………………………………….34 3.3. Logistics process management regulation in Nigeria……………………………………….36 4. RESEARCH ANALYSIS AND FINDINGS………………………………………………40 4.1. Challenges of logistics management in Nigeria……………….…………………………….41 4.2. Empirical research result presentation………………………………………………………46 4.3. PESTEL Analysis of improvement of logistics management………….……………………56 CONCLUSION…………………………………………………………………………………63 RECOMMENDATIONS………………………………………………………………………65 REFERENCES…………………………………………………………………………………67 APPENDICES…………………………………………………………………………………75 2 SUMMARY ADEBOYE FUNMI OMOTAYO Topic: IMPROVEMENT OF LOGISTICS MANAGEMENT ON THE EXAMPLE OF JUMIA NIGERIA Final work of MSC thesis- Pages 89, References 79, Tables 5, Figures 8, Pictures 6 Research object - Improvement of logistics management Research goal – To examine the theoretically the logistics management and analyze on the example of Jumia Nigeria seeking to identify and propose improvement measures. Objectives of research – 1. To examine the concepts of logistics management and explore the process and impact of logistic management; 2. To present the current situation of logistics in Nigeria (Including Jumia Nigeria) and empirically identify the challenges of logistics management on the example of Jumia Nigeria; 3. To suggest improvement measures of logistics management. Research method- The study involved collection of data or evidence from both secondary and primary scientific literature, statistical data sources, using qualitative research method to analyze in an effort to uncover new information and create better understanding. Also, staff of Jumia Nigeria were selected using purposive sampling to derive relevant information to enrich the study. Research result- from the reviewed literature and the outcome of the semi-structured interview, the logistics management in Nigeria in hindered by challenges ranging from regulatory, infrastructural deficits, poor logistics management on the part of operators and others. The PESTEL method for analysis of factors affecting improvement of logistic management was done to identify the external factors. To improve logistics process management, the gap in infrastructural development needs to be meet, and this can be realized through effective policies and political will to provide basic infrastructural development, security, improved regulation and others. The recommendation includes breeching the gap in infrastructure, proper regulatory frameworks, investment in new technology among others to improve logistics management in Nigeria. 3 LIST OF FIGURES Figure 1. Components of logistics management Figure 2. Showing aspects of logistics management Figure 3. Uncertainties in logistics process Figure 4. Logical sequence of empirical research Figure 5. The process of themes derivation from the interview ideas Figure 6. Internet download speed in some African countries Figure 7. Logistics performance index: Overall (1=low to 5=High) for Nigeria Figure 8. PESTEL analysis of factors affecting improvement of logistics management LIST OF TABLES Table 1. Definitions of logistics process Table 2. Criteria for selecting participants Table 3. Final themes developed from the original interview ideas Table 4. Category of licensing for operators in Nigeria Table 5. Theme development from the original interview information Table 6. Nigerian indicators in comparison with other middle income economies (2016) 4 GLOSSARY OF MAIN CONCEPTS CAGR- Compound Annual Growth Rate CAMA- Company and Allied Matters Act CDR - Courier Regulatory Department FEPA- Federal Environmental Agency LASAA- Lagos State Structure for Signage and Advertisement Agency LASEPA- Lagos State Environmental Protection Agency MVAA- Motor Vehicle Administration Agency NESREA- National Environmental Protection Agency NIPOST- Nigerian Postal Service RFID- Radio Frequency Identification Technology SME - Small and Medium Enterprise HDI- Human Development Index 5 INTRODUCTION In the business world today, logistics management is confronted with many challenges, it is a combination of business, resources and the many core activities of an organization. Logistics is the doctrine of creating efficient flows as much as possible (Storhagen, 2018). The logistics activities are formed from the integration of supply and distribution activities being integrated together (Ghoumrassi and Tigu, 2017). Logistics in businesses is very crucial for effective running of the business between the producer, supplier and the customers. It involves detailed process of organization, implementation and operation of businesses (Westland, 2019). The aspects of business comprise of the process of logistics for the flow of work from the beginning to the end for the purpose of fulfilling the expectations of customers and also that of the organization. The logistics activities in a business organization is a move to satisfy customers by achieving the time and location related to the challenges of the market as well as through the cost of the provided services also taking quality, customers need and purchase power into consideration (Ghoumrassi and Tigu, 2017). Without logistics management, the several phases of markets into products and services will fall into disordered mess very quickly. Therefore, according to Westland, J. (2019) “logistics management on businesses requires having the right items in the right amount at the right time and place for the right cost and also in the right condition and finally to the right customers”. Businesses utilize logistics management in a process to more efficiently and effectively move resources and products from conception to completion and to the customer who are the last on the chain. The idea is to introduce logistics management as a response to the necessity of the increasingly rise of integrated system, which involves process of planning and coordination of the materials flow from the sources of supply to the point of consumption rather than managing theses flows as a series of tasks done independently (Sadjady, 2014). Logistics management are utilized by online markets places all over the world such as Amazon, Konga, Jumia, Ebay among others to purchase and distribute products from producers to customers. For these businesses logistics management typically includes activities of inbound and outbound transportation management, warehousing, fleets management, materials handling, 6 design of logistics networks, order fulfilment, management of inventory, third party logistics procurement management, packaging and others. Therefore, Jumia services which is the leading online markets place for consumer’s in Nigeria is used as an example for logistics management. Jumia services is part of Jumia Group which is also the leading online market place in Africa involved in market place, logistics and services and payment services. Jumia logistics were reserved for e-commerce, food vendors and third party businesses who can leverage on its network, technology and services in Nigeria and 10 other countries in Africa (Alekhougie, 2020). Thus, the research on improvement of logistics management using Jumia service in Nigeria as an example is carried out. It examines the concepts of logistics management, impacts of logistics management and a background to Jumia services. It also identifies the challenges of logistics operations of the organization through primary sources of data using qualitative research method. This is necessary for the research in order to suggest ways of improvement of logistics management based on the outcome of the findings in this research work. Research problem- the improvement in technology has changed the phase of business which either adds value to logistics management or becomes chaotic due to adequate or inappropriate process of management. Given the complexity of the process involvement in logistics management, it still suffers from many issues in which businesses in developing countries like Nigeria still battles with. An effective logistics management requires certain factors for smooth running such as the strategy, logistics technology and others. Jumia services launched in Lagos Nigeria in 2012 has become
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