Fuel – N 5.00

Ok. So the government has decided to reduce the cost of fuel.

Big deal. Or is it.

How does this impact your bottom line? Have you ever thought how much you spend in getting from one place to another? Oh yes if you do look at the manufcturerr details for fuel comsulption mer kilometer you have a vague idea. how about how much you spend per minute?

This info gives you a more complete picture of how much fuel is consumed in getting from point A to point B. That way, you know if your vehicle is consuming more fuel than is normal, therefore determining if the vehicle needs to be checked if it is consuming more fuel. The more fuel consumed, the more it affects your bottom line.

Monitoring your fuel budget consists of this and much more. Get a very comprehensive tracking service which give you enough amunition to know when your drivers are off the specified routes and how much time is wasted on the road may be the best chance you have at besting the competetion.

Transport Crises

The situation in Nigeria has not really changed regarding the delivery of petroleum products after all.

Granted this time its not really due to a scarcity in the traditional sense, but that the tanker drivers will not deliver the fuel. So they have parked their tankers on the outskirts of Lagos and threatening to continue to do so unless they are allowed to continue being a menace to other road users especially in the Apapa area.

Traveling by road to the eastern regions of the country is worse now due to the poor condition of the road between Lagos and Benin. Specifically the Ondo-Benin section of the road, then from Onitsha onwards. The Governments of those areas should do something or face loosing lots of Man-Hours to traffic.

It could be that they generate adequate revenue from the people selling ‘pure water’ and other items along the road at such bad spots.

Someone should please check this out and advise in the interest and safety of the road users.

Lagos Delivery

Cargo delivery is a major hassle in many metropolitan areas of Lagos, and is usually a painful process.

Hoodlums known as “AREA BOYS” extort money from delivery crews and can take up an inordinate amount of time before negotiating “fees“. Areas Like Ijora and Lagos Island are particularly difficult as the “boys” can ask for up to 50k Naira before permitting any delivery in their area.

The Police are not necessarily a major harrasment.

Traffic in Lagos add a significant time overhead to operations, so make allowances for road delays.

Nigeria’s Import And Export Destinations

According to details were published in the Daily Independent of March 8th

Nigerian imported 26 million tonnes of cargo in year 2005  from 114 different countries,  a large percentage of which from the United States of America,  followed by Taiwan, and the Brazil. Cote D’ Ivoire was the highest source from Africa.

Meanwhile, non crude oil export was 13.5 million tonnes for the same period, shipped to 9 the United States of America, the United Kingdom, France and Germany primarily. It is noted that there were no significant exports to the West African Sub-region, however. Angola is the most to an African Nation.

Commodity analysis of the non crude oil exports handled by Nigerian Ports shows that Liquefied Natural Gas made up 83 per cent and Redefined Petroleum Product 10 per cent. General Cargo is 5 per cent of the total while Dry Bulk Cargo (Animal feed, Cocoa Beans) etc made up the remaining 2 per cent.

What does the Law say?

Human activity is usually governed by one or more sets of law. the supply chain is subject to a lot of laws from different fields as the activities here cover a lot of discipline.

Clearing your cargo from the Nigerian ports involve traversing a legal minefield where ignorance of the law is no excuse as they say. It does get very costly when one is very unaware of the implications.

Luckily, the set of laws governing the Nigerian ports is available for all to see online. The Nigerian Ports Authority Decree of 1999 is available among other laws from http://www.nigeria-law.org.

There are several law enforcement bodies represented at the Nigerian ports and this is part of the reasons why customs clearance takes a lot of time. These enforcement agencies are not all available to examine the goods at the same time and it takes one who is knowledgeable about the procedures to get things done in good time.

Some of the enforcement agencies are:

1. NCS – The Nigerian Customs Service
2. NPA – The Nigerian Ports Authority
3. NDLEA – The National Drug Law Enforcement Agency
4. FEPA - The Federal Environmental Protection Agency
5. NMA - National Maritime Authority
6. JOMALIC – Joint Maritime Labour Industrial Council
7. NAFDAC – The Nigeria Authority for Food and Drug Administration and Control
8. NSC - Nigerian Shippers Council
9. NPF – The Nigeria Police Force
10. SON – Standards Organisation of Nigeria
11. SSS – State Security Service
12. DMI – Directorate of Military Intelligence
13. Nigerian Navy

Please note that as at the time of this writing, NMA and JOMALIC have been merged to form a new organisation called NAMASA – National Maritime Administration and Safety Agency.

Technorati Tags: Supply Chain, Logistics, Law, Decree, Enforcement, Police, Ignorance, Nigeria, Ports, Authority, Customs, Import, Export,

Get in on the Nigerian Export Game

In a bid to boost presence in the international market, the Nigerian government has approved what it calls The Commerce 44 initiative. The policy involves the tax-free export of 11 categories each of solid minerals, agricultural products and groups of locally-manufactured items to 11 international markets.

The categories are as follows:

Agricultural Category
Cocoa, cotton, cassava, gum Arabic, sesame seeds, cashew, sheanuts, ginger, vegetable, fruits and other Nigerian food items.

Solid Minerals Category
Kaolin, coal, bauxite, barite, tin, zinc, tantalite, columbite, iron ore, clay products (pottery), gems and precious stones.

Manufactured Products Category
Textiles, films and music, vegetable oil, rubber products, foot-wears, shrimps, pharmaceutical products, leather, beverages and soft-drinks as well as bottled water.

And the markets:

International markets
Japan, North America, India, China, ECOWAS, European Union, Turkey, Iran, Thailand, the Caribbean and Latin America.

Abolished duties and taxes:

·        N25, 000 levy by the National Agency for Food and Drug Administration and Control (NAFDAC) per container

·        One per cent export duty

·        N1, 000 sales tax

·        Cocoa development duty, and

·        Several other charges levied at state levels.

To further sweeten the deal, Government will also reduce delays in the processing of exports at the ports and accelerate the refund of Export Expansion Grant (EEG) to businessmen, which currently take up to 14 weeks.

 

A few Links:
FG initiates ‘Commerce 44’ for agricultural export

Doing Business

The World Bank provides plenty of statistics for economics in different countries. They even have a website for doing business in various countries.

This report is one such report. Here, you can see the economies of Nigeria by different criteria: income per capita, the informal sector, and population, and this report summarizes the procedures, time, and costs to build a warehouse in Nigeria.

You may find it interesting to compare the figures with those of other countries. Including the OECD countries and neighbours.

This page provides a snapshot of each country’s aggregate ranking on the ease of doing business and on each of the ten topics that comprise the overall ranking. Data is also provided for each country for all the 10 topics covered in the database.

Nigeria Region: Sub-Saharan Africa Income category: Low income Population: 131,529,669 GNI per capita (US$): 560.00 Nigerian Laws

Ease of…	2006 rank	2005 rank	Change in rank
Doing Business	108	109	+1
Starting a Business	118	115	-3
Dealing with Licenses	129	134	+5
Employing Workers	56	56	0
Registering Property	170	171	+1
Getting Credit	83	76	-7
Protecting Investors	46	43	-3
Paying Taxes	105	99	-6
Trading Across Borders	137	141	+4
Enforcing Contracts	66	105	+39
Closing a Business	72	72	0

Outsourcing Logistics

As most large businesses move towards lean operating methods, outsourcing logistics requirements can help to reduce your company’s costs, improve your customer service quality, and increase the synchronization of activities throughout your supply chain. It can also help to identify opportunities to generate savings in your transportation, warehousing, and private truck fleet operations.

Sometimes a mix can be a better deal. By determining where your strengths lie, a Third Party Logistics company, – acting as consultants – can help you choose which part of the supply chain to outsource. Therefore you need only outsource parts for which your current solution is deficient. Thereby improving your competitiveness with much larger companies with seemingly boundless resources.

These third party logistics services can be as simple as brokering out and managing freight flows for the customer to more complex and difficult set-up and operation of major warehouse or distribution center operations.

Some 3PLs are internet based, and they offer load brokerage and freight matching services, or act as a hub to present to users a whole host of companies and services need by logistics and supply chain professionals as well as the information they need to do their jobs.

Logistics

Logistics is the art or science of moving resources efficiently with the minimum of cost and disruption from one place to another. I saw this  definition on Wiki:

“Logistics is the process of strategically managing the procurement, movement and storage of materials, parts, and finished inventory (and the related information flows) through an organisation and its marketing channels in such a way that current and future profitability are maximised through the cost-effective fulfillment of orders”

This used to be just another part in the supply chain process but has grown to include purchasing, and warehousing.

The key points to note in any definition are efficiency and movement.

The movement part is rather easy. A resource has to be moved from the originating point to a place where it will fulfil a need. the tricky part, is doing it efficiently.

In Nigeria, processes tend to be complex – Sometimes unnecessarily so. this means that to efficiently move a resource to the customer, is very demanding. one must navigate several obstacles especially regulation.

Logistics Performance Measurement and the 3PL Value Proposition.

Excerpts copied from Logistics Quarterly the official magazine of the Logistics Institute. For the whole article, click here

The case for logistics performance measurement
The five most recent studies published by the Council of Logistics Management on the subject of performance measurement in logistics had three significant findings in common (Kearney 1984; Bowersox et al 1989; Byrne and Markham 1991; Global Logistics Research Team at Michigan State University 1995; Keebler et. al. 1999):
(1) Most firms do not comprehensively measure logistics performance,

(2) Even the best performing firms fail to realize their productivity and service potential available from logistics performance measurement, and

(3) Logistics competency will increasingly be viewed as a
competitive differentiator and a key strategic resource
for the firm.

There are three major reasons why firms measure their logistics performance. They are to (1) reduce their operating costs, (2) drive their revenue growth, and (3) enhance their shareholder value. Measuring operating costs helps to identify whether and where to make operational changes to control expenses and to discover areas for improved asset management. To attract and retain valuable customers, the price/value of products offered can be enhanced through cost reductions and service improvements in logistics activities. The returns on stockholder investments and the market value of the firm are impacted by the performance of firm logistics. These seem to be obvious reasons why companies should want to be competent in performance measurement.

The 3PL value proposition
Third party logistics providers enable firms to achieve reduced operating costs and increased revenues in new and existing markets. 3Pls provide firms an opportunity to enhance their market value by reducing ownership of assets, which translates to a higher return on remaining assets and greater return on stockholder investment. 3PLs also bring to the relationship their specialized expertise in managing logistics with contemporary technology and systems. The COO’s decision to outsource company logistics operations to the 3PL is often justified solely on the favorable difference between the more efficient 3PL’s price for the services and the firm’s higher costs of existing operations. The chief marketing officer views the enhanced services and distribution reach of 3PLs in existing and new markets as translating into increased sales and better long-term relationships with customers. CFOs are delighted to see assets — property, plant, equipment, and even inventory — disappear from the firm’s balance sheet, freeing up cash for more productive uses, instantaneously and “permanently” improving the company’s returns on assets. CIOs are often very pleased to have access to the 3PLs systems and technology resources, avoiding the cost and trauma of upgrading their own. Reliance on the 3PL alliance frees up company employees to focus on their core competencies, doing more of what they are good at and less of what can be done better by the 3PL. Chief logistics officers begin to realize that ownership of resources is not necessary to achieve control over the results.

Conclusions
In today’s competitive market place what distinguishes winners from losers is the ability to differentiate themselves through their service and product offerings. For many firms, the service differentiation is accomplished by how well the logistics process is managed. To achieve excellence in logistics, successful firms ensure that the key logistics processes are aligned with the firm’s business strategy and measured against predetermined performance objectives. Additionally, the top firms are jointly defining the specifics of each measure with their trading partners (customers / suppliers / 3PLs) to create a common understating of expectations. While some firms are developing their measurement capability internally, a number are turning to 3PLs to support their needs. As focused service providers, 3PLs are ideally positioned to bring the systems, process design, and managerial expertise to aid in establishing and implementing a comprehensive logistics measurement effort. The 3PL is also often in the position to act as a catalyst for meaningful dialogue between trading partners to establish a level of service performance that truly adds value.

Regardless of the approach a firm takes in establishing logistics measurements, the real value comes when the information is acted
upon to align the effectiveness and efficiency of the logistics process performance to a level that is valued by customers. How well is your organization meeting your customers’ logistics expectations? What
role can the 3PL have in your success? Now may be the time to start measuring your logistics performance.

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