Good corporate management policies and practices are universal: regardless of the industry in which the organization operates, profit making or not, a few basic principles are common across the board. With this in mind, the logistics industry can learn a few lessons on how to manage our business, and in some cases, how not to.
A major priority for any corporate entity is to utilize resources, more so financial resources, in a way that will best benefit the company. This means budgets must be carefully drawn up and followed, although allowing for contingencies. In running the entity that is our government, there have been a few hiccups as regards allocation of funds.
One of the more recent, and unfortunate, example is where KES 15million was dedicated towards funding 27 members of the Mandera County Council on a trip to Israel. The purpose of the two week trip, intended to feature members of the Public, Water and Agriculture committees, was to learn from the agricultural practices utilized in Israel presumably for adoption of the same in my natural hometown – Mandera.
It can be argued, rightfully so, that the bill for the trip is exorbitant especially with Mandera being among the bottom three poorest counties in the country. The business lesson here lies in the assigning of priorities: a fraction of the sum could have been used to research agricultural practices for arid areas within the country or from a closer African neighbor, with the rest going towards developing the community, many of whose residents cannot afford the most basic needs.
Business managers in the logistics industry are also expected to be thorough in their research of business partners, ensuring that they only deal with companies and contractors with a reputation for good work and dependability. It is generally not considered wise to court controversy through partnerships with firms which have a spotty track record.
Our government provides this lesson with the contested tender for the standard gauge railway, awarded to a company that as it later emerged had been blacklisted by the World Bank for eight years since 2009. The company is therefore ineligible for road or bridge works funded by the World Bank until 2017, a ban placed due to graft-related practices in a major bank-financed roads project in the Philippines.
Logistics firms will require association with contractors along the line for one reason or the other: be it supply of fuel, vehicle leasing, construction and much more, agreements will have to be reached for delivery of services. Supply chain managers must be careful in such instances to get proper, concrete contracts that clearly outline quotations for services and other pertinent terms to avoid intentional fraud or unnecessary confusion that may breed contempt and ruin a business relationship.
Still on the standard gauge railway tender, there have been conflicting and confusing reports about the total expected cost, with original estimates being undermined by official statements with contrasting information. With the Kenyan public seething over the recent revelation that the project would cost an additional KES 120 billion – with a ‘b’ – in taxpayer money, the importance of having clear cut contracts in business transactions cannot be stated enough.
On the positive side, it is necessary as a supply chain manager or corporate executive in a logistics firm to seek and embrace out of the box solutions or innovations that would benefit your company, either by increasing revenue or cutting costs. One such area that the government has done a fine job in is encouraging the rearing of everyone’s new favorite bird: quails.
Now, before you declare us proponents of a pyramid scheme, we concede that the value of a day old quail chick has dropped from KES 400 to KES 160 in two months, with eggs that would retail at KES 70 now going for KES 30. Indeed, in our rush to embrace investing in these nutritious and easy to care for birds, the Kenyan public has caused market saturation and a demand nosedive. In spite of this, however, we must salute the government’s valiant efforts to encourage our entrepreneurial pursuits through the Kenya Wildlife Service which has been working tirelessly to issue licenses to rear quails provided applicants meet the rearing requirements.
In fact, first time investors have turned to KWS for advise on where to sell their quail produce at this juncture with the government agency providing as much support as they can to develop the industry such as performing inspections of rearing facilities and advising on standards.
What would you say you’ve learned from our government about running your business?