June 1, 2020

How Tech is Changing Logistics Across Africa & Driving Down the Costs of Goods

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Logistics, arguably the unsung hero of economic growth, is set to play a critical role in Africa’s development over the next decade.

In simple, the logistics industry is the network of services that support the physical movement of goods within and across borders. The efficiency in which these goods move through the system to their final destinations plays a significant role in a country’s participation in international trade.

According to the World Bank’s Doing Business report, it takes 39 days to export goods in Africa, including documentation, inland travel, customs clearance, and port or terminal handling compared to 15 days in high-income OECD countries. 

Logistics not only affects when we receive goods but also determines at what price. BCG, in a study, found that the cost of getting a product from the factory to an end-user in Africa adds an average of 320% to a manufactured good’s cost. While within Europe, logistics only add around 90%. This leads to mark-ups as high as 700%.

Over that past few years, tech-enabled logistics companies have popped up across the continent to provide predictability and reliability to transport. Lori Systems, the Nairobi based logistics company, is on a mission to drive down the costs of goods in Africa. 

Currently operating in five East African countries (Kenya, Uganda, Rwanda, Tanzania, and South Sudan) and Nigeria, Lori is powering African Logistics by leveraging technology that connects cargo owners to transportation seamlessly.

I spoke with Shem Ogumbe, Engineering Technical Lead at Lori about being at the forefront of Africa’s logistics industry, the challenges associated with it, and the keys to building successful software solutions in Africa.

Meet Shem Ogumbe

I joined Lori in October last year as the Engineering Technical Lead, and in my role, I build software and support engineers in developing software. 

I came to Lori because they were building a solution I really liked that was tailor-made to the African market. If you look at logistics in Africa, especially for landlocked countries, you will notice that the cost of items in, say, Uganda or Rwanda is higher compared to the price of a similar item in Kenya.  

Lori’s dream is to lower the cost of goods in Africa in frontier markets, and that really resonated with me. Think about this, Rwanda producers more avocados than Kenya, but Kenya exports more avocados. Reduction in the cost of movement could benefit the people selling the avocados, but also the country as a whole. 

Lori intends to make it easier for a cargo owner to match with a transporter, and monitor their progress during the different transit stages. With our software, cargo owners can see the location of their truck and stay up to date with any challenges that arise in transit. 

Imagine your container is leaving the port, and it has to go through three borders. Being able to see the information at every stage gives you peace of mind, comfort, and the ability to estimate a delivery date/time. That is, in a nutshell, what we do.

How did you translate the requirements of your business problem into code?

I came to Lori at a stage where the company was sure of where they wanted to go but slightly unsure of how they would get there. Of our four main applications, only one had an MVP out. Now we’ve gotten to a point where all of them are stable, so it has been a lot of work over the last seven months.  

To understand how we translated the requirements into code, first, you must understand that Lori is not just a technology company. Yes, we use technology, but we also have a lot of people and processes that work with the technology to make Lori function. In building what we have for all our applications, the focus initially was understanding the current logistics process. 

Pre-Lori, to locate your truck, the easiest thing to do was call the driver and ask, “where are you?” Then update your spreadsheet. Our process of getting the business requirements included mapping the existing manual processes to software solutions. 

Lori came up with a structure in which we have Product Managers and Product Operation Managers. The product operations managers are responsible for the day to day operations; they maintain daily contact with transporters, cargo owners, drivers, etc. and have a deep understanding of their challenges. As a result, they serve as the advocate for our customers and report problems to Product Managers.

Once a problem is presented, the Product Managers responsibility is to decide what solution we should create to address that problem. By analyzing the user and their behavior, they determine if we would need something like an app, a web page, or a process change.

Finally, the engineers translate the idea into code. 

What role did empathy play in building your product? 

Empathy is the most important thing in the software development process. You have to put yourself in the shoes of your user and understand their pain points. Imagine that it was you and build a solution as if you’re building it for yourself. 

Empathy is also important when collaborating in tech teams. This means understanding that everyone has good intentions. For instance, when the product manager tells the engineer what to build for the user, the engineer must understand that the product manager has the best intention of the user. And the same goes for the product manager when an engineer builds the product.

When building Lori’s solutions, we created a process of capturing the problems of our users. Once captured, we tell the user that, based on the problem, we intend to build this solution. Before building, we want the user to start visualizing what their life would be like after it’s built. This ensures that we don’t build software that the user does not find valuable. 

Then, we have user acceptance testing; this is where the user confirms that the product is what we said we’d build and that it actually solves their problem. Once it rolls out, there’s an iterative process of capturing and implementing feedback. 

 

What were some of the biggest challenges you faced building Lori? 

In every software development environment, I think the most challenging problem is actually building a solution that solves the problem. I have a policy that says, “ensure you solve the problem before you write the code.” This means you need to design, plan, visualize the architecture, and how the various components will interact and communicate before you start writing code.  

I started in a startup environment, and in that world, there’s a desire to release software fast. This often results in teams ignoring or not taking the ideation, planning, and designing stages seriously, and that comes back to bite you immediately.  

Whether the application is slow, some aspects don’t work the way you intended, or you realize that you’re not solving the user’s pain point because you failed to identify your intent for building the product. When you don’t do thorough planning, problems will arise. 

 

What do you believe are the keys to building successful software solutions in Africa? 

To build a successful software solution, you must first understand that Africa has a lot of talent. In an article, I read something recently that claimed there are very few developers in Africa, which is false. Africa has a lot of talent, but the distribution is as vast. Companies have to figure out how to access talent from around the continent by adopting policies that allow working remotely. 

Second, have Africa’s problems solved by Africans. You need to have an African perspective in your product lifecycle. I’ve seen a number of companies try to map what they have in Europe or the US to Africa, and most of the time it fails, partially because of the differences in cultures. 

At Lori, we’ve created a logistics marketplace, and we had to do it the African way. If we tried to build a solution like Uber Freight, where you simply get on an app and say, pick my stuff up from here and take it there, it wouldn’t work. 

In some African countries, the cost of smartphones is quite high, so people use feature phones, so a solution that requires a phone application wouldn’t work. Ensuring your solution has Africa in mind and includes an African perspective will help you build successful software solutions.

 

What are your thoughts on Tech in Kenya, and how can someone stay active?

Tech in Kenya is at an all-time high, in terms of talent and products. Startups, boot camps, and training programs are springing up everywhere. Founders, foreign and local, are coming up with great ideas. Engineers are in abundance, and it’s very easy to find some who are working remotely for companies in Silicon Valley. 

We are at a stage where you could say Kenya’s tech scene is world-class. Over the next few years, we will see a lot more success stories from Kenya making the headlines in international newspapers. Currently, people only know us for M-Pesa, and M-Pesa is an innovation that came twelve years ago. There are a lot of new companies that are also building great products. For the first time, we can purchase insurance, which is at the same standard as in the US. So, Kenya’s tech future looks bright.

We have numerous meetups and groups like Javascript Nairobi and Machine learning Nairobi. As well as support from the large organizations, in 2018, we had Python Nairobi, and for the first time, the Python Foundation International was among our sponsors. In Kenya, there is a minimal barrier to entry. It’s as simple as attending a few meetups, meeting engineers and data scientists, and finding a mentor who can help you get to where you want to be.

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