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

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.

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)

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

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 a leading online market places in Nigeria which runs transactions with business and carters for millions of customers in Nigeria. The challenges of its logistics management is unavoidable due the terrain and inadequate level of infrastructural development in the country. Thus, in order to improve logistics management, the barriers affecting logistics management shall be identified and measures for improvement suggested based on the research outcome.

Research relevance – This research is relevant to given the important role logistics process plays in improving capabilities of the organizations and enhancing their performance through proper management. Thus, identifying ways to improve logistics management in line with the research

7 questions enables improvement in logistics management and achievement of organizational goals which is the object of the research.

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 – The research objectives are as follows:

Research questions- The research questions are the set of questions that the study intends to answers and improve knowledge based on the subject of study and helps to address the research problem. The questions arising from the topic, improvement of logistics management on the example of Jumia Nigeria are:

1. What are the logistics management challenges for market place in Nigeria? 2. How can logistics management be improved?

Research method- The strategies utilized for this thesis is a 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 on improvement of logistics management on the example of Jumia Nigeria. Using purposive sampling, staff of Jumia service in Nigeria are selected to provide data about the ideas, experience in logistics management for Jumia services through interview and in line with the research questions.

1. THEORETICAL BACKGROUND: CONCEPTUALIZATION OF LOGISTICS MANAGEMENT

1.1. Concept of Logistics management

Historically, the word “logistics” originates from ancient Greek logos which is believed to be a semantics of the word that originates from the word ‘logistikos’ in which is translated as ‘science of computation in military terms (Leinonen, 2020). It is interpreted as “ratio, oration, calculation, word, speech, reason”, traced to the military (i.e the French Army General Antoine- Henri Gemini) who was believed to have written a book on logistics first in history in 1779 to 1869 (Farahani et al, 2011). It is a branch of science having to do with procuring, maintaining and transporting materials personnel and facilities.

Furthermore, the root of logistics was also perceived to have originated around the farm to market economics, and was at first documented around the early 1900’s (Globerson, 2014). In theory, the term “logistics” does not have a particular definition. In defining logistics authors emphasize on various aspects of defining of the concept, relating both the economic practice and to the knowledge areas, but some definitions of logistics includes the following. According to the American Council of Logistics Management, logistics is defined as “a process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and the related information’s from one point to another point of consumption for the purpose of conforming to the customer’s requirements”.

The adopted definition by the European Logistics Association states that “logistics is a concept that involves the organization, planning, control and execution of the flow of goods from the manufacturing places (i.e. purchase places), through the sphere of production and distribution, and finally to the consumers which aims to satisfy the demands of the market with minimal commitment and capital”. Other definitions of logistics process by various authors are presented in the table below.

Table 1. Definitions of logistics (Source: Sai, 2020; Kenton, 2019; Witron Logistik, 2017; AIMS Education, 2016; Kacmary and Fedoko, 2014; Johannensson, S. 2003 and Rushton et al, 2000)

Authors Definitions Sai (2020) The definition which states that “logistics it means the work that is supportive in nature and this logistics supports are essential for marketing and manufacturing operations”. Kenton, (2019) The logistics involves the overall ways of managing how the resources are acquired, stored and transported to the final destinations. Witron Logistik It is the art and science of managing physical space, time and location. (2017) AIMS Education – It is the art and science of obtaining producing and distribution of UK (2016) materials and products in the process places and in the right proportions. Kacmary and Logistics involves planning, controlling, implementing all done Fedorko (2014) efficiently, cost effectively and flow of raw materials in the process inventory, finished goods and other related information from the point of consumption to the point of origin for the goal of recapturing the values or effective disposal. Johannensson, S. It is a process of relation between human, nature, technology and (2003). resources that interact and unpredictably self-organize into emerging paradoxical pattern with creating potential value. Rushton et al, It is the various ways and one way to define logistics which equals (2000) materials management and distribution processes.

From the various definition above, it is agreed in the definitions the unifying logic is that logistics process involves movement from one point to the other. The logistics concept in based on an overall system view of the many functions in moving materials and goods from location to another. Thus, logistics works involves management looking for a way to manage the overall system instead of one aspect of the system. The operations in logistics include planning, implementing and maintaining the transport and storage of goods, control of

10 movement/placements of goods/or people and it also involves supporting services and information of the initial point to the end point, to achieve specified objectives (Team Lapaas, 2020, Emmanson’s Blog, 2009). The principal objectives of logistics processes are to ensure:

 Services to customers  Efficient planning of demand and supply and purchasing management  Management of transportation  Proficient quality control, insurance and customs  Management of warehouse  Management of inventory  Distribution  Productions (i.e in house logistics management)

Logistics is said to comprise of all steps of that ensures planning, supervision, execution and control of the time and space transformation of goods and the related transformation in quantity and range of assortment, the properties manipulation and the degree of logistics determination of goods (Szymonik, 2012). Logistics involves facilitation of relationship between production and movement of goods including time, cost and quality.

1.2. The types and components of logistics management

The logistics management activities are classified into two categories namely, inbound and outbound logistics.

 Inbound logistics- It involves the smooth running and cost effective inflow of materials as well as other inputs required for production or manufacturing process. It is the network that brings goods and services to the business (Lerner, 2019). This ranges from the raw production to the suppliers (vendors) and the plant for production. Therefore, inbound logistics essentially involves the entire process a business operations require to create the finished products that is finally sold to customers.  Outbound logistics- It involves the physical distribution management or the supply chain management. It is concerned with how the finished goods flow and other associated

information from the company to the customers (Sai, 2020). It involves the way finished goods to transported to their destinations and it normally works with various partners than the inbound logistics network (Lerner, 2019). Other types of logistic process are-  Reverse logistics- The process involves transportation of products from to location of customer to the seller. The reverse process entails collection, sorting, inspecting, refurbishing and distribution of the goods (Team Lapaas, 2020). Reverse logistics commonly involves the returning of a products to the manufacturer or the distributors or even forwarding it to the service section, recycling or refurbishing, it is sometimes referred to as the “aftermarket supply chain”, aftermarket logistics or ‘retrogistics’ (Essex, 2020).  Third party Logistics (3PL)- The third party logistics (also known as outsourcing) is mainly focused on movement of products from one location to another location end. This is due to the fact that it does not give consideration to a seller to customer or customer to the seller. They take the associated responsibility of delivering the goods or products to the right place at the expected time. It involves the movement of work, but it is not regularly the transfer of responsibility and accountability or oversight to the external services provider (Erturgut 2012). The third party logistics helps business owners to focus on their own primary operations rather than engaging in delivery monitoring which is past to the third party (Team Lapaas, 2020). The purpose of logistics is the efficiently enable flow of goods material and services from their respective place of origin to the final consumer (customer). The goal is to make sure that there is adequacy of place (moving goods to places where they have been demanded) and the time (maintaining the right level of stock and the proper distribution) of the goods and services.

Also, logistics requires proper management and the management involves continuous interface of activities. There is various definition of logistics management (LM) which all involves series of processes with the start point to the end in management. Logistics management comprise of the processes of planning, implementing and controlling the efficient flow of raw-materials, work in progress and finished goods and related information from the point of origin to the point of consumption with the outlook to satisfy the customers (Sai, 2020).

It is also a part of the process of the supply chain which involve planning, implementation and efficient controls, effective flow, goods storage, various services and require related information from the point of origin to the point of consumption of the products to meet the requirement of the customer.

The Council of Supply Chain management defines logistics management as “the part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet the requirements of the customers”. Also, Logistics management according to Stock and Lambert (2001) is defined “as a part of the supply chain process that plans implements and control the efficient, and effective flow and storage of goods and services, as well as related information from the point of origin to the point of consumption in order to meet the customer’s requirements”.

Logistics process management is considered a more practical, hands on part of the supply chain where goods are transported into a facility, properly and stored, handled and transported out. However, the difference is that the logistics management focuses on the short term procedures while the supply chain management focuses on the long term procedures. The logistics process requires lots of activities or operations while making up for the inputs of work force /members, information and technology, finances through actions of management and logistics activities between the consumers and the suppliers in an effort to ensure the result with output that gives them competitive advantage, time and movement of place utility efficiently. The component of logistics process management in shown in figure one below.

Figure 1. Components of Logistics management (Source: Kamthunsi, E., 2014)

The figure shows the components of logistics management from the one point to another which may be invisible to the customers who are at the end of the chain but it is of more importance to the suppliers (ventures) to ensure that the process managed and runs efficiently as at when due through each of the logistics process management. Thus, the logistics management involves a system on its own and it is expected to adequately plan an approach for its effectivity and the way in which the approach is applied as a whole, due to the fact that all the department involved are all working towards achieving the organization goal as every activities affects each order one way or the other.

In summary, Logistics management is the control of activities in the process. The encompass the design of the network, order fulfilment and transportation management in order to satisfy the customers and also ensure achievement of the objectives of the business. The aspects of logistics management are reviewed in the next subchapter.

1.3. Improving aspects of Logistics management

The advent of logistics management brought change in the way businesses are conducted today. As a result of technological development, logistics process management has advanced and gave better significance in conducting businesses (Abdul; Aun; Oladipo and Olota, 2019). Logistics process management is handled as part of the management of the supply chain which deals with the efficient process of management of goods. It involves logistics processes of management that integrates moving goods, services information and capital, the right from the raw materials sourcing, to the customers (Springinklee and Wallenburg, 2012).

The major goals of logistics management according to Mentzer et al, (2004) is the process of making available the right products at the right quality and at the right time in the right place at the right price to the ultimate consumer. The flow of information’s is one of the major component of logistics. The diagram below shows some of the various aspects of logistics management.

Informatio n flow manageme nt Packaging Warehousi and ng Unitization Manageme nt

Aspects of Logistics Transporta management tion Order Managem Manageme ent nt

Inventory Order Management fulfilment

Figure 2. Showing aspects of logistics management (Source: Author, 2021)

Logistics management involves various aspects. According to Ristovska; Kozuharov and Petkovski (2017) logistics process management includes:

Information flow management -in the competitive business environment today helps in the effective and timely response to the ever changing taste of customers and preferences which has become important for the success of business performance (Han and Trienekens, 2009). Information flow is defined as the flow of data from different directions with content variables between numerous data base in a company. Information flow within logistics process has become important because it enables the chain to responds in real time and with accurate data (Abdul; Aun; Oladipo and Olota, 2019). According to Stevenson and Spring (2009), the flow of accurate and real time information in logistics process is considered very crucial in the materials flow and management.

The flow of information allows logistics management become a crucial weapon in businesses arsenals which adds values to the bottom line (Closs et al., 2005); and a key success to the performance in the collaboration of logistics management and the business performance (Abdul; Aun; Oladipo and Olota, 2019). According to Wardaya (2013) states that “the sharing of information on transfer; exchange of information indicating the level and the position of the inventory; the sales data and information on the forecast; status orders information, schedules of production and capacity to deliver and the measurement of business performance became important to companies” and contributes to the improvement of the logistics management.

Warehousing management – it is a crucial part of the business logistics system that stores products (such as raw materials, finished goods, sphere parts and goods in process) at and between location or origin and at the point of consumption; it is made available by warehouse or centers for distribution (Murphy and Wood, 2008). Also, businesses consider the location of their warehouse facilities, cost factors, the resources (such as skilled labour) and the accessibility which has to do with transportation infrastructures (Abdul; Aun; Oladipo and Olota, 2019). All of this is put into consideration to ensure better proximity of the manufacturing facilities customers and their suppliers. Management can make sure that the warehouse meets all regulations by checking to ensure that –

 Safety measures complied  Ensure cleanliness

 Effective lighting  Safety of storage facilities  Ensure no obstruction  Inspect equipment’s  Secure stair railings and order measures in place for effectives logistics management of the warehouse.

Order fulfilment – it is important in the logistics management to ensure that the customer’s orders are orchestrated via shipment on a fast and safe delivery process. As ordering to products might seem simple, fulfilling the orders can be challenging when the numbers of orders increases. Rather than a sole supervisor, companies needs to implement a comprehensive logistics process and management to efficiently fulfil the request of customers. With a detailed standardized fulfillment logistics management an accurate and efficiently delivery process can be ensured. According to Henderson (2020) the logistics management to successfully prepare and deliver orders will involve-

 Recording details of order  Receiving payment  Checking the stocks  Requesting items from inventory  Checking quality of items  Print packing lists  Securely packaging items  Weighting/measure packages  Scheduling the delivery etc.

Order processing- order processing can be used for business that are direct and do not require extended order fulfilment system (Henderson, 2020). Order processing is focused more on the customer’s feedback while other operations essentially performs the same function. Order processing is an excellent alternative to make sure that the consumers are pleased with the products they buy which requires a process of supervision instead of multiple employees. According to

Henderson (2020) the logistics management required in carrying out a successful transaction with the customers and managers involves-

 Taking notes of client/order details  Checking stocks  Receiving payment  Scheduling delivery  Contacting the warehouse  Passing forward the tracking information to the customers  Doing follow ups on customer’s order

Inventory management- it is a strategic area in logistics operation process and it has the efficiency impact and effectiveness of the overall system of the supply chain. Inventory management provides some level of security against fluctuations of the demands by customers. Inventory management involves utilizes various data and information to keep track of the goods as they are moved through the production process, with IDs, lot number, serial numbers, cost of items, numbers of goods and accurate time and date when the goods are moved through every stage of the process (Abdul; Aun; Oladipo and Olota, 2019). Inventory management involves four categories which are:

 Raw materials- seller carries out the purchase of the raw material to fulfil the goal of production which is transformed into consumer goods;  Inventory on work in progress- it involves utilization processes and transformation of the raw materials while making them finished goods;  Finished goods- this is the complete products for consumers which are ready to be shipped for consumption, after being checked for quality and available for purchase;  Maintenance, repair and operation goods- are items that are used for the support in the process of production of finished goods to be made available for sales in future (Assestinfinity, 2019).

Inventory management involves managing various assets in the business. It helps link customers indirectly to grow business in the market. The process also involves ensuring that various elements when placing and receiving order are efficiently management such as-

 The current levels of stocks

 Budget of the company  List of orders  Approval of Purchase order  Details tracking  Time of arrival  Returning of goods damaged  Records of stock updates etc

Inventory management is beneficial as it ensures improved inventory and planning, organized warehouse, improved productivity and services and others. It enables enhancement of productivity through effective logistics management process to deliver high quality and upsurge in satisfaction of customers.

Transportation management- it is a subdivision of logistics and it has symbiotic relationship that requires care due to the fact that it is required by the entire production procedures to the end point (consumers) and returns. Transportation is expensive and complex which requires management, planning, controlling and smart strategies making decision on the areas of operations of logistics that are geographically moved and positioned inventory (Hughes, 2017; Bowersox; Closs and Cooper, 2010).

The management of transportation in logistics is crucial because it takes about one third to two third of the entire logistics process (Bowersox, et al., 2010). In the logistics management point of view, transportation management has three major factors which are the performance in: cost, speed and consistency; therefore, logistics management involves utilizing transportation that enables minimization of cost of the total system (Bowersox, et al., 2010), some of which are-

 Annual inspections of vehicles  Long term repair cost  An overview of the conditions of the fleets etc

Packaging and unitization – the logistics management involves the care and condition of products. Therefore, packaging management is an important part of it. The Unitization is also considered crucial because it assists in storage and transportation of products. The simplest goods to move to the store is a cube, thus the attempt at packaging and unitization takes all various sizes

19 and shapes of the products and pack them as near as it is possible into packs cuboid in shape (Future Learn, 2017).

Logistics management helps businesses to manage how they move products and other information related through multi-faceted supply chain operations from the destination source (either at national or international) scale through using systems that ensures safety, reduces time and cost in a manner efficient (CITT, 2020).

In summary, the availability of information technologies enables the capacity to see data that are private in the system of collaboration and monitor the products developments, where there is information flow passing in all procedures in logistics management is improved. The management of warehouse, inventory, packaging and transportation are all processes that ensures smooth logistics operation without which can result in customer’s complaints and hampers the goal of the business and impact the business negatively.

The sustainability concept in logistics management emphasizes meeting the needs of individuals without hampering the ability to meet such need in the future, this is as to do with ensuring balanced environment for business and its logistics operations. Logistics management in Nigerian context (an example of Jumia Nigeria) is reviewed in the next subchapter.

1.4. Uncertainties of logistics process

There are uncertainties in the logistics process due to the complexities in the overall logistics process. Since logistics process management is sometimes measured based on means quantifiable and based on the notion of the various actors and parts which are all interconnected in the logistics process management. Logistics process management complexity is such that is comprise of interdependent actors interconnected and in the current situations transform their perception, update their goals and adapt to the context of both individual and collective given the various aspects of the logistics process management.

According to Nelson (2006) uncertainties in logistics process in divided into given in the figure below.

Custumers demand and expectation

Human Uncertainties in Internal Factors logistics process processes

General Trends

Figure 3. Uncertainties in logistics process (Source: Nelson, F., 2006)

Customers demand and expectation -The first dimension here relates to rise and changes in demands from customers, in which it results is increasingly affecting the logistics process. Since demands is not constant as its effects on logistics process is felt in the shrinking time windows for deliveries, customized order bookings, rise in the number of types of packaging, variations in numbers of products per pallets and order, rise in the frequency of deliveries etc.

The situation at times leads to rise in cost incurred in the logistics process just to meet with the service requirement and satisfy the customers and also build relationship with the customers. Thus logistics process provides crucial opportunities to build relationship and gain the trust of customers from the confidence built by meeting up with delivery demands including time. Also the contradiction between other part of the logistics company affects the logistics process of delivery of products, this is because the marketing or sales unit might take in orders that may be difficult to meet up. It thereby mounts more pressure on the logistics distributing channels who work hard to meet up with the customer’s expectation (Nelson, 2006).

Thus, effective communication between all interconnected aspects of the logistics process and management is important to achieve the organizational goal and meet the customer’s expectation without creating unnecessary constraint in the logistics process.

Internal processes -The internal processes in logistics process management is about the importance of functional integration (Pagell, 2004), and the importance of integration of marketing, sales and logistics (Mentzer et al., 2004). There is indication that the internal communication between marketing, sales and logistics is a source of the major uncertainty in the daily logistics process management.

Therefore, the perception of this in general is that the understanding of logistics process in an organization is a valuable activity which must not be limited. This is because it is essential to enable a smooth, accurate and efficient work that is not associated with more costs. The uncertainties in the internal process is a factor in logistics that occurs based on customers are invited into the arrangement rather late which is unnecessary.

Thus, the logistics process becomes a function of complying with instead of providing an effective solution from its inception. Furthermore, discrepancies do not only occur in the marketing and sales aspects, it also occurs between the IT and logistics units due to lack of effective communication (Nelson, 2006).

Human factors- the human factors comes up given the fact that humans are not robots and mistakes do happen in logistics processes. This human factors occurs in the aspects of influence in perception of human related uncertainties that may happen. Such uncertainties include truths hidden, power and also protectionism when an incident occurs.

According to Nelson (2006), the scenario of ‘power’ is an uncertainty factors which happens the process of making decisions, and it also makes communication harder, i.e. it was merely an obstacle that creates more problem in various situations. Also, the scenario of powers occurs due to fear, as individuals might be afraid of making decision due to internal structures of powers.

General trends – the general trends points at related general developments of new technology, concepts and ideas. This is due to the global environment that is ever changing and it necessitates continual checks for improvement effort made in the logistics process. Some of this changes are

22 in the radio frequency identification technology (RFID) and how to apply it to the process of logistics management as well as cost implications of acquiring new technologies.

Other areas are the rise in amount of ideas and concepts that are trending in the available markets, because it requires training workers in preparation for the future demands and requirements of logistics process which is both on short and long term basis.

In summary, human factors create both value and uncertainty in the logistics process. And it requires more awareness and understanding of the involvement of human to gain more leverage and improve efforts that creates higher levels of integration with customers and internal logistics processes. The general trends come with improvements and changes in technology, ideas and notions for logistic process management, and it requires adapting and training to meet up with the global trends. From one of the definitions of logistics process, it is a process of relation between human, nature, technology and resources that interact and unpredictably self-organize into emerging paradoxical pattern with creating potential value (Johannensson, 2003). This shows that logistics process involves difficulty in aspects where work of managers relates to the factors that integrates concepts, technologies, ideas etc during their logistics work activities.

2. EMPIRICAL RESEARCH METHODOLOGY

The empirical research methodology chapter comprises of the research methods applied for improvement of logistics management on the example of Jumia Nigeria research work. It is concerned with testing the theoretical concepts and the relationship that exist there to see how well they are reflected in the observation of the reality (Bhattacherjee, 2012). The logical sequence of the study, research techniques, procedures and sampling size are presented to explain the process. The ethical consideration for the study is also presented based on the ethics of research observed in this study as well as the limitations.

2.1. Logical sequence of the research

The logical sequence of this empirical research involves the steps presented with the figure below. Utilization of logistics management insights to carry-out a semi-structured interview with the example of Jumia Nigeria

Analyzing the challenges of logistics management using thematic analysis

Identifying the major themes and subthemes and presentation of the challenges of logistics management with and example of Jumia Nigeria

The PESTEL method, for analysis of logistics management (Jumia Nigeria)

Recommendation for improvement of logistics management

Figure 4. Logical sequence of empirical research (Source: Author, 2021)

The logical sequence above are the steps applied in the empirical study to achieve the purpose of this study. The empirical research methods involve a detailed presentation of the methods applied in the research and the process used to carry out the research as well as the analysis of the

24 research outcome. Thus the above steps are suitable for answering the research questions which are:

1. What are the logistics management challenges for market place in Nigeria? 2. How can logistics management be improved?

And also achieving the object of the research which is ‘improvement of logistics management’.

2.2. Research methods for improvement of logistics management

The method of this research involves the strategies, techniques and processes applied to derive data and analyse data in an effort to discover information’s on improvement of logistics management, this is to ensure that the subject of study is better understood as well as the cases looked at.

Thus, to achieve this the selected participants in the research have an understanding and experience in the logistics management in market places in Nigeria with an example of Jumia Nigeria. Therefore, the qualitative research methods were applied to gather data about the current situation, experiences, behaviours and the interpretation of the business (Jumia Nigeria logistics process management) in Nigeria.

The data derived was analyses using thematic data analysis, which involves analysis of the main issues or developing the themes arising from the body of evidence of the research work on improvement of logistics management. The process involves organising and summarizing the findings (i.e the interview ideas) from the large, diverse body of research (Pope, Mays and Papay, 2007).

The original data will be derived from the interview information’s and then organized and summarized in a table to form subthemes. The subthemes extracted will be taken from the original interview ideas gotten from participant through the interview which will then be developed into initial themes. After familiarization of the interview ideas, the process of developing themes from the interview information is indicated in the figure below.

Interview Original part Sub-theme Initial Theme ideas of interview Final Theme

Figure 5. The process of themes derivation from the interview ideas (Sources: Author, 2021)

The major opinions of the participants from is derived to make the final theme and it guides the interpretation of the outcome of the interview.

Data collection- The data used for this research is derived from both secondary and primary sources on the subject of study improvement of logistics management and example of Jumia Nigeria.

According to Bryman (2012) the “secondary data are that has been collected by somebody else than the researcher or researcher that are carrying out data analysis (e.g. archived data collected n higher institutions for it to be available to other researcher as secondary data source”. Thus, the secondary sources of data are sourced from existing literatures such as journals, reports, works of authors relevant for the research such as:

 Henderson, C. (2020). Complete guide to logistics management – Definition, process and more.  Ristovska, N.; Kozuharov, S. and Petkovski, V. (2017). The importance of logistic management practice on company.  Sai, S. (2020). Logistics management: Concept, Significance and key activities.  Springinklee, M. and Wallenburg, C. M. (2012). Improving distribution services performance through effective production and logistics integration.

While the primary data is derived by carrying out an interview on improving logistics management on the example of Jumia Nigeria using qualitative method. These data are collected by the researcher who also conducts the data analysis (Bryman, 2012).

Qualitative research method- Is a social enquiry that assist in understanding the world around us and the things that occurs as they are (Hancock, 2002; Patton, 2002). According to Lacey and Luff (2009), the “qualitative data collection method involves participant’s observation or in-depth interviews which focus on opinions expressed in words rather than numbers”. It explores ways of seeking to gather opinions, thoughts while also deriving better understanding of the information of participants. The questions used during the interview are based on the subject of the study are prepaid as guide questions to help during the interview with selected participants.

Research technique- The research adopts the qualitative research technique using semi-structures interview in an effort to derive and in-depth information from the participating respondents on logistics management in with an example of Jumia Nigeria. The semi-structured strategy comprises of dialogue between the researcher and the selected participants. This approach give room for flexibility in interview procedure, it supplements follow up questions, probes and allows more comments helpful for the research. According to Dejonkheere and Vaughn (2020), semi- structured interviews allows open ended questions and gives room for exploration of thoughts, feelings and certainty about a precise subject, the subject in this case is improving logistics process management with an example of Jumia Nigeria.

The interview will be carried out with selected participants via digital means (i.e Skype, Zoom, WhatsApp etc.) using the internet based on participant’s choice and convenient internet platform. The option of telephone discussion will also open if preferred by participants. The semi- structured for the interview is chosen to give the participants a relative free conservation and also ensuring that definite issues noted are covered with participants during the interview. The conservations will be recorded during interview for revisiting and analysis later.

Sample size- In empirical research, carrying out interviews, observing participants and documentation of the readings is considered as a technique that is effective for putting together data under ethnographic methods (Creswell, 2013; Hancock et al, 2002). The participants selected are staffs of Jumia Nigeria. Using purposive sampling, staff of Jumia service in Nigeria are selected

27 to provide data about the ideas, experience in logistics management for Jumia Nigeria services through interview and in line with the research questions.

Sampling size in qualitative research is mostly much smaller than that of quantitative research (Interq Research LLC, 2020). The small sampling size does not necessarily reduce the information given by participants, rather the data realize contains in-depth information that uncovers a range of opinions of participants which is based on their experiences and knowledge of the topic instead of have a repetitive information from larger audience. Using a large sampling size in qualitative research is subject to a risk of repetitions of data which hinders the realization of the goal of the research.

Thus, there is a risk in using larger sampling size in this research which is why the numbers of participants from Jumia Nigeria is 5 while relying on the integrity of selected participants in information sharing during interview. Therefore, 5 participants (managers/supervisors in the logistics section) are selected from Jumia Nigeria using purposive sampling.

Table 2. Criteria for selecting participants

No Criteria 1 Participants are staffs of Jumia Nigeria. 2 Have worked in the company for more than five years. 3 Within managerial and supervisory levels in Jumia Nigeria 4 Understand fully the subject of study (i.e. improving logistics management). 5 Shown willingness to take part in the research to share knowledge and experience in logistics management (Jumia Nigeria).

Method of data analysis – The qualitative data analysis is based on ideas, words, description of opinions by participants using qualitative content analysis. It can be sued to analyze data in several ways for the amount of information derived for the research which is transcribed and re-grouped into summarized categories and themes. Therefore, the research data comprise of collecting and organizing data to enable the researcher arrive at a conclusion about improving logistics management.

The analysis of the data derived enables the researcher find answers to the research questions, solve problems and gain additional knowledge beneficial to the study. The research questions are the set of questions that the study intends to answers and improve knowledge based on the subject of study and helps to address the research problem. The questions arising from the topic, improvement of logistics management on the example of Jumia Nigeria are:

1. What are the logistics management challenges for market place in Nigeria? 2. How can logistics management be improved?

According to Hammarberg; Kirkman and Lacey (2016) the use of thematic analysis for research “involves answering research questions about the perspective, experience and meaning from the stand point of the participants” and it is widely done in qualitative research data analysis and it is used for this research.

It is reliant on the identified research questions and the theoretical point of view in the reviewed literature prominent in the study. The data realized will be analyzed to provide answer to the research questions and cover the outlined objectives in the study (See Annex I).

Ethics of research- Ethics are set of rules broadly written and unwritten that governs the expectation of personal behavior of people and the behaviors of others. According to Patton (2002) ethics is important for research works for allow for ethical consideration given consideration to the participants. It also governs how scientific and other related research works are carried out and it comprise of issues that arises when human or animals are involved in any research (Resnick, 2015). Thus, it is necessary to give attention to factors used at arriving at decision bounds with ethics such as morals, commitment or obligations that is binding for proper conduct. Some areas observe in ethics for this research are-

Objectivity- It is important to avoid biases in research works, hence efforts were made to maintain objectivity during the research in terms of data analysis and interpretation of the outcome of the interview ideas.

Respect for intellectual property- It has to do with acknowledgment of sources of information used during the research, which implies that the contributions of authors are acknowledged in the literatures and listed as references.

Informed consent – The participants permission was first sort in every aspect of the research to ensure that the principle of informed consent is adhered to.

Confidentiality – The assurance of confidentiality to participants done to provide confidence in assuring that sensitive or opinions about logistics management with participants from Jumia Nigeria is ensured. This includes withholding names, contacts etc of participants based on the agreement and understanding reached before commencing the interviewing.

Giving consideration to the above was necessary to ensure that the participants and process is done confidentially to achieve the purpose of the research since it is majorly for academic purpose. The materials from secondary sources used are referenced in the theoretical aspects of the thesis.

Limitation of study

The main constraint during is the time it took to put together the research given the fact that assessing data in developing country Nigeria is a major issue. Also, the concerns of participants about being part of the study as they are skeptical about reason for this study, as given information may hamper their interest or that of their company (Jumia Nigeria) especially to competitors in the marketplace. This concerns where laid to rest since the research is majorly an academic research work.

3. BACKGROUND TO LOGISTICS MANAGEMENT IN NIGERIA

This section provides information on logistics management in Nigeria showing the impacts in plays in the economy of the country, a background to Jumia Nigeria logistics process is also presented showing it functions and operations, and the laws guiding logistics management in Nigeria.

3.1. Background to Logistics management in Nigeria

Logistics process plays a vital role in the growth of the economy of any nation as it is interlinked with various sectors of the economy such as health, manufacturing, transportation and others. It also thrives on certain resources such as infrastructures, ICT and others with efficient management for effective performance. The logistics process in business is as a result of the increasing complexities of the manufacturers suppliers with materials and shipping the goods out. Logistics processes on companies mostly specialize in the transportation, distribution, storage and packaging of goods. Most manufacturing company’s uses external organization for logistics processes.

Since, there are rarely any aspects of the development of a country that those not require logistics as an ingredient essential since its involves the collection, assembling, transfer, warehousing, customer clearance and distribution of goods, services and others to individuals or groups from one point to another (Ajiboye, 2011). The logistics is a very important aspects of production process which is not complete without the goods being transferred to the consumers in quest of the products (Ajiboye and Ayantoyinbo, 2009).

According the World Bank, logistics performance is captured by six main performance index which are: the logistics competence, customs, international shipping, infrastructure, timeliness and the tracking and tracing performance. These are the standards used for measuring logistics overall index for countries, regions etc perform in terms of facilitating businesses or trade. Thus, there is regular need for improvement of logistics to increase its competitiveness and effectiveness as logistics plays crucial role in the success factor of the flow of goods services with

31 regards to the time, cost and the variability in related trade activities which determines the countries potential to attract and maintain trade (Onyemejor, 2015).

During the last decade, the term logistics has been increasing used in the world of business as it is viewed as an important means of ensuring profitability. Organizations are now integrating their aspects of management and distribution process into the logistics supply chain and Nigeria is not left out of this new trend. This has led to growth in Logistic management in Nigeria over the years, it has become a fast growing business, this is shown by the value of the logistics sub-sector of the Nigerian economy which was put at about 250billion naira ($696 million US dollars) as reported by the Logistics and Supply Chain Industry report for 2018 (Oritse, 2019). The sum for 2018 was a rise of N50billion Naira ($140million US dollars) from that of 2017.

It has also led to the establishment of various logistics businesses in Nigeria who carry out logistics process management bridging the gap between the manufacturers or producers with their customers in Nigeria. This move by businesses in Nigeria is crucial to enable to have increased offer in the market due to the intensive competition and to survive the problems faced in the Nigerian market. It is also to enable these businesses meet up with the broadening marketplace and rise in competition, globalization which has resulted in greater demand by customers putting pressure on these manufacturers to increase their quality, flexibility and serviceability at a competitive cost (Abdul; Aun; Oladipo and Olota, 2019).

Having logistics process management team in businesses in Nigeria provides the organizations with the total operations cots and it increases their business activity efficiency. Some of the essentials of these logistics operators is their capacity to connect to materials, manage imports and exports, distributions, shipments, storage, cost freight handling, goods distribution and other related services.

Nigerian logistics industry has been on the rise due to the development of E-Commerce in Africa and by extension Nigeria. There has been a change from the traditional market with the current rise on online shopping which requires services of logistics sub-sector of the country’s economy. Various types of items are now being sort and bought online by consumers which ranges from house hold appliances, groceries, clothing, furniture and others which are purchased from online markets from both local and international businesses.

For instance, the Nigerian E-Commerce markets stands at $4,885.7 million US dollars in 2019 which resulted in a volume of market still expected to grow at a CAGR of 20.5% in the projected period of 2019 – 2023 in Nigeria (Mordor Intelligence, 2020). It resulted in the market volume of about $10,290.6 million US dollars’ projections by year 2023.

The Nigerian market’s largest section was the fashion industry with a market volume of $1,761.9 million US dollars and a user penetration was put at 52.2percent and is still expected to reach 75.2percent projections by year 2023.

Thus, the ease of payment by mobile money and debit cards also internet penetrations is expected to assist the E-Commerce in the country and it is also synonymous to the growth of Logistics sub-sector in Nigeria. The increase in E-Commerce in requires the services of market places such as Jumia, Konga, JIJI and others which makes the future of logistics services for this market places in Nigeria more important to meet customer’s expectation. An introduction to Jumia Nigeria with regards to its logistics operations is done below.

3.2. Jumia Nigeria 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). The company was established by Jeremy Hodara and Sacha Poignonnec in 2013 with its headquarters currently at Yaba, Lagos Nigeria.

Jumia Nigeria still remains one of the major online shopping destinations in the country where customers have access to a wide range of items selection for house appliances, items for children, electronics and many others (Jumia Group 2021). Jumia Nigeria ensures that these items are shipped directly to the homes or other locations at the convenience of respective customers which involves lots of logistics processes.

The company in 2015 generated about $234million US dollars revenue, the figure stands at 265percent growth for the revenue in 2014. By 2016, Jumia became Africa’s first unicorn being

33 valued at over $1billion US dollars. Jumia offers delivery of goods to customer’s nationwide, it also has free returns and offer opportunities to various convenient payment options for customers to choose from (i.e. cash payment on delivery, debit cards, Paypal etc.) which has been a boost to the increase online shopping in the country.

The goal of the company is to give shoppers opportunity to access affordable prices of great products, enjoy awesome shopping experiences with items ordered being delivered secure at the door step of the customers. The processes also involve supporting the evolution of the online culture of Africans and by extension Nigeria with partnership with vendors where buyers meet the sellers. But meeting the task of selling over 6,000, 000 products, dealing with over 50,000 international and local brands, over 10,000 active vendors and 4milllion subscribers requiring a range of logistics management process is particularly daunting in a developing country like Nigeria (Jumia Group, 2021).

The company utilize technologies to offer a wide coverage of services at a fast turnaround time by handling products reliably to ensure the success of their operations in rural and urbans areas in the country. The Jumia Logistics market place is based on proprietary of technology with aggregate to the supply capacity through the parameters of service quality, reachability of network and cost of delivery of these products (Jumia, 2020). It also offers logistics network, which involves its physical sites of over 20 warehouses (North of 110, 000 SQM) and over 1,300 drop off stations and pick up stations located across Jumia in 11 country market (in both urban and remote areas). Jumia Group comprise of the marketplace, Jumia logistics and Jumia pay. The Jumia market place enables millions of people to access thousands of sellers around the world and connect and transact businesses online. The Jumia logistics enables the delivery of items purchased by millions of customers as their packages are delivered to them through the network made available by their local partners (Jumia, 2020).

With unified integration of over 300 logistics partners Jumia Nigeria was able to package over 20 million products in 2019 (Jumia, 2020). Jumia Nigeria recognized the fact that logistics is the main cost driver of their business and they re-examine their cost but also seek the right partnerships and, people, technologies and infrastructures to manage the logistics process challenges. As part of the effort to boost logistics management for Jumia Nigeria, the company

34 adapted apps to drive the rider’s efficiency and ensure that their customers get a good experience while also receiving more orders from customers and growing the business in Nigeria.

Caring out businesses that is every depended of logistics process such as Jumia Nigeria is not an easy task as many challenges hinders the smooth operations of the logistics process management in Nigeria. The challenges confronting logistics management is reviewed in the next sub-chapter.

3.3. Logistics management regulation in Nigeria

The regulatory aspects of logistics for operators is usual just like regulation of operators of other sectors of the Nigerian economy. The logistics operators in Nigeria are guided by the NIPOST ACT, section 62, CAP 127 (i.e. The Nigerian Postal Services Act, 2004) which has been in existence since 2001. But in July 2020, the Nigerian minister of communication and digital economy, “Dr Isa Ali Ibrahim Pantami” approved a new guideline for the regulation of the courier and logistics sector (Balogun, Mbah and Omoniyi, 2021).

The essence of the new regulation 2020 is to repeal the rigid old one, according to the minister of communication and digital economy for the couriers and logistics sector was to enhance the operations of this sector in Nigeria. the old law was focused on the big players in the courier and logistics services, but the new law opens opportunities for various operators. The new guideline was also aimed at making it possible for operators irrespective of their category to have ability to be identified with specific address and location that is traceable to before and after engaging their services (Elebeke, 2021). This move is expected to eliminate the risk of dubious operators who may want to take advantage of the poor control of the sector to operate illegally.

Application for Licensing in logistics services in Nigeria -The regulations apply to licensed courier and logistics services operators and also the companies seeking license to either operate a logistics company or courier services in Nigeria. the Logistics service in this sense includes:

 Conveyance  Haulage

 Dispatch or delivery of goods and other items (weighing not less than 50kg).

The courier services aspects include-

 Merchandise delivery  Door to door time sensitive and secured services (document, parcel delivery etc)  Cargo delivery (weighing a total of note less than 0.5kg/not more than 50kg)

The purpose of the regulation was to make available a regulatory framework that ensures an effective and efficient courier and logistics services licensing and procedure as well as regulation of these courier and logistics operations in the country (NIPOST, 2020). Thus, to achieve this goal, the new regulations provides for the following six categories of licenses-

Table 4. Category of licensing for operators in Nigeria (Source: Balogun, Mbah and Omoniyi, 2021)

Categories Fee for Fee for Renewal Licensing Scope Licensing (Naira) (Naira) International 20, 000, 000 8, 000, 000 Logistics services carried out courier License across international borders National courier 10, 000, 000 4, 000, 000 Logistics services carried out license nationwide Regional courier 5, 000, 000 2, 000, 000 Logistics services carried out license within the geo-political zone in Nigeria, such as south-west geo- political zone, North-east geo- political zone etc. State courier 2, 000, 000 2, 000, 000 Logistics services within a state services license e.g. Lagos, Ogun state etc. Municipal courier 1, 000, 000 400, 000 Logistics services carried out services license within specific city within states in Nigeria

Special SME 250, 000 100, 000 Logistics services that are in courier services operation within a specific city license and do not have more than 5 motor bikes/motorcycles for its operations.

The six categories in the table above are the classes of operators in the country with fees for new operators who want to register and stipulated fees for the operators who are already in the business of logistics and courier services in Nigeria. also, the regulation benchmark stipulates that the courier and logistics service operators must maintain guidelines of the new regime.

The operators are also required to contribute the total sum of 20percent of their total annual revenue to the Postal Fund for the development of postal services in the rural areas as well as the underserved areas according to the NIPOST Act of Nigeria (Balogun, Mbah and Omoniyi, 2021). Part the new guideline also stipulates that the licensed courier and logistics service operators through the ‘Postmaster General’ effect free delivery for ‘Universal Postal Service’ obligation or any “Social Delivery’ for the interest of the country (NIPOST, 2020). The new guidelines are also to help ensure trustworthiness and diligence in logistics process and operations in the country.

The ethical benchmarks for operators - The Nigerian ethical benchmarks for logistics/courier service operators in the country are expected to be met under the new regulations, such as-

 The operators must establish clear procedures and maintain a customer care unit to manage complaint;  The non-compliance with these ethical benchmark or the whole regulation shall constitute a ground for revocation the license or the refusal to renew the licenses of an operator;  False declaration by an applicant in the process of obtaining their license shall constitute a ground for revocation of a license, refusal to renew their license and even total rejection of the offer of application for the license.

In a situation where any operator given license is convicted of criminal offence under the NIPOST Act under any enactment, law or regulation, it shall constitute a ground for rejecting the application of revocation of the license given. An operator that fails to renew its license within

37 three months before its expiration may also constitute a reason for revocation of such license. And if an operators persist in providing services after the deregistration or during its suspension, the entity shall pay the fine that is equivalent to the previous fee for the category of license paid for and an additional fine of 25,000 naira for every day after the suspension of deregistration of the operator (Balogun, Mbah and Omoniyi, 2021).

The department that handles the requirement for the operators of carrying out services is the `Courier Regulatory Department (CRD)’. The CRD is a specialized arm of the NIPOST that is given the responsibility of developing the courier/logistics sector in Nigeria. The CRD required are expected to be submitted with application for the license or renewal license by the operators (NIPOST, 2020). Apart from the federal laws (NIPOST Act, 2020), at state levels the requirements vary based on the state laws guiding operators and mobile vehicle licenses. For instance, the Lagos State stipulates that operators of courier/logistics services have their branded vehicles. The LASAA agency requires all persons that intends to sue branded vehicles to submit an application to get permits for such purposes.

Thus, the two types of branding recognized are partial and full branding. While the companies that needs to brand vehicle are expected to get ‘mobile advert permit’ which allows them use signage and branding on their vehicles for advertisement in Lagos state. The fees vary from heavy duty vehicles to as low as bicycle and push cart from N50,000 to N19,000 for full branding and N9,900 to N1,900 for partial branding of these vehicles. The fees for branded vehicles are also is required to be paid by operators at the local government tier of the Nigeria (Balogun, Mbah and Omoniyi, 2021).

In summary, the introduction of new regulations for the courier and logistics sector in Nigeria has rather raised more concern for operators given the cost implication of new licensing and renewal of licenses by existing operators. The first of this concerns is if the CRD requirements which exists even before the new regulations are still applicable with for announcement made officially by the Ministry of Communication and the Digital Economy in this regard. It seems as if the requirements for obtaining the license under the new regulation and the requirements for the CRD is expected to run concurrently until clarification are made by the ministry. Main while, the major issues is the cost implication for the courier and logistics operators in Nigeria as the amount stipulated by the regulators for operators is rather exorbitant. The cost further makes the overhead

38 cost of logistics services in the country higher which is not beneficial for both the logistics operators and the customers alike. Finally, the issue of regulation if properly effected for logistics operation in Nigeria also results in trust by customers.

4. RESEARCH ANALYSIS AND FINDINGS

The research analysis is presented in this section. The research data analysis is a very important aspect of the research as it comprises of the systematic application or logical technique of describing and explaining, condensing and a recap as well as evaluation of the data derived from the semi-structured interview. Since the research is a qualitative study involving interview with participants, the interview was done using the interview guard questions to help pay attention on the subject of the research.

All the information presented by participants are based on their opinions and knowledge of the subject of study which helps to find answers to the research questions (Please see annex I). The participant’s opinions derived from the interview is developed and summarized into theme as shown in the table below.

Table 3. Final themes developed from the original interview information (Source: Author, 2021)

No Final themes 1 Logistics process management 2 Regulation challenges 3 Economic and skills challenges 4 High logistics operating cost factors 5 Logistics limitations 6 Regulation challenges 7 Improvement of logistics process management 8 Taxation laws improvement 9 Roles of policies by government and legislators 10 Management roles

4.1. Challenges of logistics management in Nigeria

Generally, the logistics management in Nigeria is confronted by numerous challenges even though many opportunities are available in Nigeria for businesses to tap into. According to the Nigeria country guide report (2020) states that “a huge deficit and anti-business climate and government policies, poor road network, unstable electricity and others has led to the challenges in various processes of logistics, making it difficult for logistics business owners in Nigeria to achieve efficiency for the benefits of their business. With local stakeholders unable to meet with their financial obligations, transferring costs and charges to the end users (customers) which makes them uncompetitive and it gives room for the foreign owned business operators with better financial abilities to absorb higher levels of the risk in business to enter into Nigerian market and entrenched corruption, and others being the additional factors”.

Thus, infrastructure is a major requirement for logistics operation and the supply chain development objective (such as good roads, modern transport networks, availability of steady electrical power supply etc.). To maintain a competitive logistics, a constant upgrade of the regional infrastructural mix is required. In developed countries like US, Japan, EU countries and Canada they have a highly developed national highway systems, port facilities, state of the art air freight handling system, sophisticated information systems, communications facilities that are very advanced, elaborate rail networks and multimodal transportation which is very beneficial to logistics process management and operations in these countries (Madu, 2015).

Therefore, Logistics can be attributed to the major indicator for the advancement of a country’s economy which is expressed boldly in the trades facilitation and business competitiveness. But, it is rather unfortunate that there are deficits in the regional and national’s infrastructures advancement in Nigeria. The cost of assessing internet facilities is the country is still generally very high and standard of connectivity is still poor when compared with developed countries with fast 4G networks and gradually moving towards 5G. According to the M-Lab report of (2019) in Nigerian National Broadband plan 2020-2025 it was indicated that the “internet download speed for Nigeria is still low when even when compared with other African countries is shown in the figure below.

10 8,4 8 7,63

4 3,2 2 2,34

0 1,56 South Africa Kenya Rwanda Ghana Nigeria

Figure 6. Internet download speed in some African countries (Source: M-Lab, 2019)

The figure above shows that internet down load speed in South-Africa at 8.4percent, Kenya at 7.63percent, Rwanda at 2.34percent, Ghana at 3.2percent, while the download speed for Nigeria still is at 1.56percent lower than its counterpart. This are some of the constraint for logistics process management which considers time and cost management important for customer’s services delivery.

According to Flex Space report (2017) the “Nigerian logistics and supply chain industry has suffered setbacks in the last two years indicated in the logistics performance index of the World Bank Group bi annual metrics reports”. The continual under performance of Logistics in Nigeria was still in existence in the World Bank Logistics Performance Index which reflected poor ranking. According to Oritse (2019) states that the survey carried out by the Lagos Chamber of Commerce and Industry (LCCI) in 2018 shows that “Nigerian economy lost an estimated annual revenue of about N3.46 trillion (naira) due to the current crisis of poor infrastructure, poor implementation and corruption at the Nigerian ports, of which about N2.5trilliion (naira) are corporate earnings losses across the various sectors of Nigeria economy”. The Nigerian logistics performance index was put at 2.53 according to the World Bank: Economics Trading (2021) shown in the figure below.

2,9 2,8 2,8

2,7 2,64 2,59 2,6 2,53

2,5 2,45 2,4 2,4

2,3

2,2 2007 2010 2013 2014 2016 2019

Figure 7. Logistics performance index: Overall (1=low to 5=high) for Nigeria between 2009 and 2019 (Source: World Bank: Trading Economies, 2021)

The essence of the logistics performance index score is to reflect perceptions of the country’s logistics based on its efficiency in customs clearance process, ease of arranging competiveness of priced shipment, quality of trade and transport related infrastructures, ability to track and trace consignment, logistics service quality and the frequency of the shipment getting to the consignee with the period scheduled. This implies that a current performance for Nigeria has not reached it mark yet to gain higher score (5=high) given it current challenges. The logistics performance index: overall (1=low to 5=high) in Nigeria is 2.53 1=low to 5=high in 2019 (World Bank, 2021), which is rather on the average. The issue is that it has gradually dropped from 2.8 around 2014 to 2.53 in 2019 rather than improving.

Another challenge in logistics management in Nigeria is the issue of logistics education. The major corporate growth and profitability in many years from now is through providing top quality customer services at the lowest overall logistics cost. This requires adequate logistics professionals, with analytical and technological skills, practical down to earth logistics experience, supply chain knowledge and line management leadership skills (Madu, 2015). Therefore, it demands a high performance of government institutions in financing and development of skills for the Logistics industry. Logistics management requires professional at every level which includes –

 Analysts

 Stock controllers  supervisors  IT professionals  Managers  Sales professionals  Directors and vice presidents etc

The above skills have been lacking to some extend in Nigerian logistics market place due to the fact that some of these areas of logistics operation requires specialty in skills to function efficiently. This situation in logistics process management would be more efficient when the business invests in training of their workforce rather than employing hands from abroad who are not familiar with the Nigerian logistics systems. Thus, the Nigerian logistics industry in confronted with the following challenges in its logistics process management -

 International shipment time delays;  Poor capabilities for tracking and tracing of goods;  The logistics quality and competence is poor;  Customs clearance and process efficiency is poor;  The poor quality of related transportation infrastructures and trade;  The ease of competitive priced shipment arrangement;  The logistics services quality;  Poor investment in logistics education/training  Tracking and tracing consignment ability;  The frequency at which the shipment reaches the consignee with the scheduled time frame.

According to the World Economic Forum (2016-2017), “the global competiveness index ranks Nigerian infrastructure is at the bottom as the country is ranked 132nd out of 138 countries, the report also states that the poor state of supply of infrastructure is the largest constraint to carrying out business in Nigeria.”. Also in 2017, the Economic Recovery and Growth Plam (ERGP) states that the deplorable condition of infrastructure is one of the major factors that seriously undermine economic performance.

Table 6. Nigerian indicators in comparison with other middle income economies (2016), (Source: UNPD, 2016)

Country Population Population Land Percentage GDP per GDP per HDI in millions density Area per persons capital capital (person per living in (PPP) (MER) hectare) urban area (Thousand (Thousand USD) USD) India 1327.0 4.5 297.3 42.0 6.0 3.9 131 Indonesia 260.6 1.6 181.2 10.6 10.6 4.4 113 Nigeria 186.7 2.1 91.1 5.3 5.3 2.7 152 Pakistan 192.6 2.5 77.1 4.8 4.8 1.4 147

Countries like Pakistan, Indonesia and India are comparable to Nigeria in terms of economy, land area, size of population, urbanization level and population density as shown in table 6. But, Nigeria’s Human Development Index (HDI) is still very poor at 157th out of the world when compared with these countries. These are some of major gray areas in the logistics process management in Nigeria.

In summary, the there is a huge opportunities available for the logistics sub-sector in Nigeria given the business potentials available due to the markets in Nigeria. the country was named the biggest economy in Africa which is an indicators of the part the logistics operation holds in ensuring that consumer’s services are carried out between sellers and buyers in the country efficiently.

However, based on the above challenges and others the logistics management in Nigeria currently has not performed optimally. The complex natures of logistics management require that there should be provision of resources to meet with the demands of the various aspects of Logistics process management. However, the characteristics of a country’s infrastructures (both soft and hard infrastructures) and institutions determines how logistics performs. These includes how well their imports, procedures, regulations and behaviors are.

The subject of this study is the improvement of logistics management on the example of Jumia Nigeria which will involve an empirical study of Jumia Nigeria to identify the challenges experienced in their logistics management.

4.2. Empirical research result presentation

The object of this study is improvement of logistics management. To achieve this, the process comprised of identifying participants willing to partake in the research to provide their opinions on logistics management with Jumia Nigeria as an example. Thus, the result of the empirical research is presented in line with the final themes (table 3) developed from the excerpts of the interview ideas. The final themes are used in the empirical research result presentation as follows for easy understanding of the outcome of this research.

Theme: Logistics process management

The logistics management in Jumia Nigeria from the interview opinions reveals that it involves managing activities between sellers and buyers of the products on the Jumia Nigeria market place. This logistics process management according to the participant opinion reveals that it involves “more of how we manage the activities within our company and outside with clients connecting sellers and buyers, which involves transportation”. Jumia Nigeria 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), it reveals the wide service coverage their logistics process covers such as warehouse management, supply chain management, inventory management, order tracking, ensuring accurate delivery to customers, maintenance operations etc. The complexity of logistics activities makes it important for adequate planning, controlling, implementing all done efficiently, cost effectively and flow of materials in the process inventory, goods and other related information from the point of consumption to the point of origin for the goal of recapturing the values or effective disposal.

Another participant says that “logistics process management is broad. It depends on which area of operation the personnel belong. It entails, ensuring the warehouses are run effectively,

46 fleets managed, IT and marketing unit’s integration, personnel’s take inventories etc.”. Furthermore “It usually involves aspects of inventory, maintenance, stock taking, cost management, fleets operations etc. given the various aspects, team work is essential for every aspect of our logistics process to run smoothly within and outside with the other parties”.

Thus, since the logistic 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, integration and management operation of every unit are necessary to actualize the effective management and customer satisfaction. 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). The Jumia Nigeria market and other online market place has been increasing in customers visits and in purchase over the years, thus there is need to meet the rising needs for logistics services in Nigeria. And given the position of Nigeria as the largest economy in Africa, the logistics process management (i.e efficient human resources, materials resources, effective regulations etc) is essential to meet up with the demands of customers which is continually increasing in the country. But the logistics process management is however confronted with many challenges in Nigeria given the Jumia example.

Theme: Regulation challenges

The challenges regulation in in logistics process management according to the participant’s opinions entails the challenges encountered during operation due to the enforcement of regulations by various offices working with the federal, state and local government agencies. One of the participants stated that “Often the logistics process from ports for imported goods, due to regulatory issues at the ports affects movement and supply of these goods to our customers. Which is beyond our own control has time and cost in this cases are hampered”. The inefficiency among officials of government and corruption during services impedes the logistics process.

For example, one of the participants mentioned issues of policies “The challenges with regards to policies is the instability and lack of thoughtfulness of the legislature in laws as regard license renewal. And other state laws which makes the fees quite high. The new levies for renewal of license for logistics operators is outrageous”. Regulation bureaucracies in Nigeria at federal,

47 state and local government rather than helping business to run smoothly in terms of regulation raises concerns due to overlapping of government agencies (in the case of the NIPOST Act and CRD regulations for logistics operations in Nigeria), it also in result financial burdens for operators due to multiple levies. The participant’s states that “the government policy those not make room for effective logistics operations and sustenance of logistics business as it is done in modern countries. Also the bottle necks affecting logistics also have to do with government tariffs systems, trade restrictions and business regulation is a major constraint to logistics process management”.

This regulatory issues should strengthen logistics processes in the country to help business grow and strengthen trust and confidence of customers in need of logistics services in Nigeria rather than weaken these processes, overlapping or duplicity of agencies and regulations adds constraint to the already complex logistics process management.

Theme: Economic and skills challenges

The opinion of the participant’s reveals that the logistics process management in Jumia Nigeria alongside other logistics outfit in operation in the country are confronted with economic and skills challenges. The participant states that “some limitation we experience is in trained personnel’s. Due to the economic realities most often our staffs leaves for personnel’s reasons, thus it affects smooth running of our logistics process due to retaining of staffs and cost and time involved”. According to Madu (2015) states that “a broad base of business skills, knowledge of the logistics process and relevant work experience open better opportunity to have a carrier with a logistics services provides and others organizations, such as the stock controller, fork-lift truck drives or staffs who operates ta the warehouse. This implies that an effective logistics process management requires skills to efficient carry out the numerous activities in operations. But the economic situation in the country according to the respondent’s opinion makes it difficult to retain already trained staff, as they continue to seek better employment opportunity in other organization as a result of the inadequate remuneration to get at the current employment.

According to Madu (2015), in an effort made by organizations to be competitive in the global market, they require to move the services or products around the world to meet customer’s needs and demands; this however cannot be achieved without efficient human resources. Giving

48 the staff a conducive working condition, fair wages to meet up with their socio-economic obligation and investment in training and equipment can help gain commitment of staff to achieve the goal of the logistics company and retain capable hands in the logistics company longer.

Theme: High logistics operating cost factors

The logistics process management is particular time, cost and efficiency to satisfy customers. According to Kacmary (2014) states that “logistics process involves planning, controlling, implementing all done efficiently, cost effectively and flow of raw materials in the process inventory, finished goods and other related information from the point of consumption to the point of origin for the goal of recapturing the values or effective disposal”.

Thus, the ability to reduce cost minimally is important in logistics process management. The opinions of the participant reveals that “inadequate infrastructures affect our business, as most of our logistics operations in done via road transportation. Other alternative such as train, light rail etc is available in developed countries helps to meet up with time, and reduce cost of transportation of goods”. The implies that the cost incurred due to poor and congested roads transportation affect the overall cost of operations.

Also another participants reveals that “one of our major limitation is cost of logistics operations which contributes to the prices paid for delivery and cost of products. The inflation rates, cost of maintenance and running of operations is always on the rise. Without reduction is cost the logistics process cannot be sustained”. This implies that a lot of funds goes into vehicle operations and maintenance of vehicles due to the poor roads, poor road networks and congestion on roads during logistics operations. This would have otherwise been the case if the road networks are good and alternative transportation facilities are available making it less depend on vehicular movements.

According to Madu (2015) states that “infrastructure can be seen as the basic structure that fosters the good performances of the countries, states and cities essential services. Hence, a country requires good investment in the different modes of transportation, constant investment from both the private and public to have a good logistics infrastructural system. In a global market that is competitive, infrastructures that are compatible with the demands and needs are compulsory, in

49 order to transmit to customer’s products and services through various producers and demand centers (like Jumia Nigeria) in different parts of the country and the world at large. Thus, the need for investment in infrastructural projects and developments cannot be overemphasized for effective logistic operations and management.

Theme: Logistics limitations

The logistics process management in Nigeria is confronted with various limitation some of which have been discussed in the themes above. Others limitation according to the opinions of the participants are “The limitation of logistics is Nigeria is mostly due to the poor infrastructure conditions in most parts of the country, especially places outside the CBD. This includes roads and transportation, electricity, internet access, ware house facilities, control of the ports etc.”. The erratic supply of electricity in the country make it more expensive to generate power for internal operations as they rely on diesel generators to power equipment’s adding to the fuel consumption cost for running fleets for their logistics operations.

According to Njoku (2016) states that “in the panel of African progress reports shows that electricity in Africa, and in Nigeria particularly is stagnant since 2015, when it managed to get up to 4, 810.70 MW after many years of it hovering around 1000 to 2000MW. It also reports that the present state of electrical power supply in the country is unacceptable as the country needs at least 30,000MW to the economy of Nigeria”.

As at 2018, the Nigerian average household only have access to uninterrupted power supply for just six hours a day out of 24hours leading to majority depending on power generators (Invoice, 2019). The inadequacies and deficiency in Nigeria infrastructures makes it difficult to effi