The Nigeria warehousing market is projected to increase to $170 million by 2023 due to the country’s infrastructure plans according to Ken’s research. This projection rests on the recent moves by the federal government to build more industrial parks around Lagos. In recent times, investors have erected many warehouses along the Lagos-Ibadan expressway in anticipation of boom in economic activities once the rail project along that corridor is completed.
Warehouses are highly essential because goods are often produced in anticipation of demands, either for a present time or the nearest future, and so should be preserved properly until they are demanded by the customers, albeit, the end users. Many businesses all over the world have adopted the system of warehousing, especially due to time utility; timely distribution and optimal delivery which helps reduce customers’ dissatisfaction and yields increase in labor productivity.
Warehousing, which is an integral part of the supply chain in various businesses, and a source for economic development. Overtime, it has proved to be a profitable extension of inventory management, towards many businesses, especially small and growing businesses in the world. It provides a defined position for valuables and helps tracking of products easier.
According to a newsletter written by Andra Picincu in 2019, about 8 per cent of small businesses do not track their inventory, and 24 per cent don’t have inventories at all. While this is a poor action to possess, many small business owners have not known or understood the importance of the warehouse system, and how effective it could be in their developing businesses.
The idea that the warehouse system is majorly for importers and exporters alone can’t be entirely true because of the efficiency in the warehousing system and how it is equitably cost effective for small businesses as well, the results that the system brings about; appropriate categorization, organization, and easy method of processing which makes even the supply chain more proficient.
Warehousing progressively becomes an economic enabler, as it gives opportunities to tap into wider markets. Pallet racks, conveyors, loading docks are a few equipment used in a modern warehouse which cause less risk to employees, less human errors, increasing the profit margins due to lower number of employees, and also labour productive. Some warehouse companies are invariantly introducing and finding new technologies to combine with the system (traditional design) already laid out, because of the productivity involved.
Sequel to the volume of international trade in Nigeria, international players in the market, growing use of technology and equipment, and expansion of industries and manufacturing units, the Nigerian warehousing market has substantially grown increasingly. Warehouse Management System (WMS) in Nigeria serves diversely; by contract and integration, market structure, operational model, end users and type of warehouses. Currently most efficient warehouses are situated in and around Lagos state due to the presence of industrial estates and nearness to sea and air ports in the country.
Few years ago, and currently in some areas, pallet is used to measure cargoes to be received in a warehouse, which can be time consuming; a warehouse company reported in an article, “a clerk measures a cargo dimension, and enter them in the warehouse management system (WMS) manually for 40 to 55 seconds, averagely, without the likelihood of human error.” This has made the dimensioning system more effective as it is also observed that warehouses that have incubated the dimensioning system reduced the time spent measuring boxes and or pallets at least by 68 per cent.
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Mobile technology has also become a benefit to those who has expended the knowledge, and acted on it. Almost every successful warehouse keeps records; data entry of all operations that is carried out at a time. An average warehouse runs more than 25 trips in a day, to and from a mobile shop in order to print records, and detail of jobs carried out, and entering it shipment to a computer, however, this will make workers invariably inefficient, which could cause a reduction of productivity and deficit in the profit margin. Some efficient warehouses are now using mobile computers, which are largely durable, as some are designed to withstand extreme weather conditions; (shock, temperature, etc.).Some have military-grade authorization, while some warehouses also make use of wearable barcodes, which is becoming more technical, ergonomic and helps workers to double task; both attending to reception of package and holding the scanner.
This is a consequence of what Gordon Moore, the American businessman stated in his popular law in 1965-The fast evolution of technology will continue to accelerate. We can see it, and also agree that any system or businesses unwilling to embrace technology is only counting days to failure or stagnation.
E-commerce businesses are growing radically, more exclusively since the Covid 19 lockdown happened in 2020. E-commerce in Africa is projected to have $75 billion worth of sales by 2025. Jumia, which started in Nigeria in 2012 was recently listed on the New York Stock Exchange. Its share price skyrocketed by 75 percent on the first day of trading, yielding more development and productive dive in the company’s service. Many organizations and businesses have subscribed to having 85-90 per cent of the businesses online because now trades are discussed, and processed, including dispatching of certain goods practically seen, and investigated online.
The e-commerce system has made it very necessary for almost all variations of businesses to rise sporadically, as almost anything is bought and sold online; on various platforms, even already made food, increasing the profit margins for the online platforms as well. Warehousing has further become a dependent unit for e-commerce businesses, saving and storing this package helping the inventory process become better.
The benefits of the warehousing system are all encompassing. In addition to the above, it also ensures price stability, and sometimes yields a larger profit from the storage of products, especially when the goods are not perishable. It should be recalled that some products have seasons, dictating when they will increase in value and need at certain periods. Their seasons equally affect the time their prices increase on a month -on-month, and the warehouse system becomes more efficient in yielding profits.
The spare parts for automobiles are mostly more promising to project in during the raining season, as items preserved in a warehouse stand a chance to yield more profits during the raining season. Clothes and fashion entrepreneurs could make an increase in profit margins during festive seasons since the demand for new clothes are higher during this time, and if the products are well preserved in a warehouse until time of essential value.
The modern warehouse management system (WMS) can be built to preserve perishable goods as well, either by equipping with a refrigerator, temperature control, or freezers, yielding more customers satisfaction as the case may be.
The Securities and Exchange Commission (SEC) released some rules, and one stating that “The warehouse should be located in a place with access to infrastructure to support its operations and have sufficient space for parking and movement of large vehicles, have an efficient system for loading and unloading of commodity including proper mechanism for segregation of different kinds/quality of commodity”.
