Duhqa Streamlines Africa’s supply Chain

Our African continent has enormous potential with some of the fastest growing economies on the planet. Duhqa operates out of Africa and we are very keen to address the challenges of the supply chain sector we are in. The increase we see in adoption of tech solutions is really thrilling and has been a long time coming. In our recent blog, we explore these key challenges and the solutions we are creating.  

Formalising Fragmented markets – Modern trade like supermarkets and mini marts in African countries is still in the very early stages of development with the exception of a few markets like South Africa and Kenya. The population they serve is below 10%. Majority of Africans are shopping from micro stores. Reaching large numbers of these micro stores (Mom & Pop, Dukas, kiosk, Sooks) is difficult and costly business.  Our inventory purchase app has allowed us to consolidate the orders and then push to manufacturers. This creates economies of scale and lowers the cost of serving the micro stores. 

Organising the disorganised Third party logistics (3PLs) and skills gaps – In many countries organised 3PLs revolve around independent transporters with limited number of vehicles. We laud what these family owned, sole proprietors have done. However, many 3PLs might lack the required skills and professionalism. Normally, ongoing training and support are required and can fix the challenges. This is something we do and has great results coupled with customer rating for every delivery.  Another challenge comes from poor remuneration leading to high staff turnover and impacting cost. Having an earning mechanism that allows better earning per hour or per move has allowed us to address this. 

Effective Distributors – Finding the right distributors to reach the vast numbers of traditional outlets is difficult for manufacturers (if not impossible) and it requires enormous development and training to serve markets. The distributors, largely brick and mortar, lack tools that can help them become more effective in managing customers. At Duhqa, we believe they serve a key aspect of the market - “warehouse managers” Rather than replace them, we are developing tools to make them effective.  As with many emerging markets, the outlet base keeps evolving as outlets open and close. Keeping the outlet list up-to-date can be a difficult undertaking but the technology we give them allows them to rise to the occasion.

Access to capital – Finding a good distributor is just a start. The next big challenge is limited sources of capital for distributors. Many manufacturers need to support their distributors and partners during the start-up phase and in many cases, provide loans or bridge capital to support their cash flows. With Duhqa, the visibility we are creating and faster sales cycles allow all involved in the supply chain to get paid faster and better. In addition, our end to end financing of the supply chain that we are building allows cheap access to working capital. Three months credit period can now be a month and this saves finances that can translate to lower prices of goods. 

Developing easy Technology – If you are navigating the business landscape in Africa, it won’t take too long to realise that most companies operate on a combination of software (e.g. ERP), Excel, pen and paper. Mobile technology holds great potential and we are getting there, but few companies have viable commercial models. Finding the right solution is key. Knowing this, we have made Duhqa App a light app. We have made the sign up process easy and provided customers with foot soldiers to assist. Making the lives of customers simple is key and we cannot claim to have achieved that until a customer's lives are better because of working with us. 

Reducing distances - In most African countries, the trade centres are often far apart, increasing cost and making economies of scale impossible to achieve. How we are shortening these distances is by creating verticals and hubs that allow us to bridge distances and create affordable costs of logistics between those hubs. Think of consolidators and agents. 

Creating inventory visibility – Where is the cheapest litre of milk being sold in Africa? Let's narrow down to Kenya, where can I find the best priced kilo of flour? Poor data storage fragmented and in bits by multiple players leads to a lack of visibility in the supply chain with increased out of stocks (OOS). Increasing visibility can take time and might include a combination of technology and manual processes. As an organisation, we believe in the power of data. Duhqa is collecting a lot of data, making sense of it and availing it to those in the supply chain to use in decision making. The play here is to create efficiency. 

Influencing better Warehouses – A common misconception of a warehouse is that it’s a big house with nothing in it. This is way far from the truth.  Warehouses for rent are poorly designed, with poor yard management, ventilation and equipment that you can take your bedroom, convert to one and make do!. Finding a professional warehouse operator can be a daunting experience too. The data we sit on allows us to know where real estate developers can construct based on movement of goods. We can now tell where it makes sense to set up a cold chain warehouse or fulfilment center. Further, we can extrapolate the future of warehousing based on consumer trends. 

Even with all these challenges, Africa still holds great potential. There has not been a moment in African history like today where we see more Africans believing in the ability of the continent and actually doing something about it. The investor confidence we see attests to this and companies can only ignore the continent at their own peril. These challenges and many more are being overcome.