When Governance Fails
‘Across industries, directors face tensions between short-term returns and long-term sustainability, between financial performance and safety, ethics, and compliance.’In this article for the Director Magazine, principal consultant Arinze Oduah highlights why boards must move beyond a short-term financial focus to embed safety, ethics, and sustainability into their governance practices.Read the full article here
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Lagos Business School Partners with Multus Competentia to Deliver Strategic Procurement Excellence
Our Managing Consultant, Mr. Arinze Oduah FCIPS, was recently invited as an external resource to Lagos Business School (LBS) to deliver the Strategic Procurement Module of the Developing Analytical Competences for Managers (DACMO) course.Participants unanimously commended his deep expertise, engaging delivery style, and ability to translate complex procurement strategies into practical, real-world applications.What Participants Said:“Mr. Arinze is absolutely fantastic. Extremely knowledgeable, brilliant, and competent in the transfer of knowledge. Excellent.”“He used practical real-life experience to illustrate and explain procurement strategy… very engaging and caught my focus throughout the day.”“The facilitator knows his onions. Very vast in knowledge and understands the subject matter very well. Great class it was!”“In short, we were caught up in a spell being under his tutelage!”“Mr. Arinze did absolute justice to this subject… calm and engaging delivery style, vast knowledge of world history and current affairs, practical and professional.”
Highlights from the CIPS Nigeria Monthly Education Seminar
Earlier this month, our Managing Consultant, Arinze Oduah, shared a presentation on the ‘Strategic Geographic Positioning of Lagos as Trade Hub’ at the CIPS - The Chartered Institute of Procurement & Supply Nigeria Monthly Education Seminar.Senior officials of the Lagos State Government at cabinet level were present, as well as the Director General of the Lagos State Bureau of Public Procurement. The CIPS UK CEO, Ben Farrell MBE, and the CIPS Director for the Middle East, Asia, and Africa, Sam Achampong, were also in attendance.Lagos has the potential to become an important global trade hub, but this requires a significant investment in strengthening the supply chain and trade enablement infrastructure.
Energy Institute’s Energy Sustainability Conference: Balancing Energy Security and Sustainability in Africa
Post-Conference Reflections on Strengthening Africa’s Energy Supply ChainsThe 14–15 November 2024 Energy Institute conference in Lagos Nigeria, themed "Balancing Energy Security and Sustainability in Africa", was a call to action for sustainably addressing Africa's energy challenges and unlocking its immense potential. I was privileged to contribute to these critical conversations through my session, "Strengthening Africa’s Energy Supply Chain: Advancing Local Manufacturing and Infrastructure Development."The Case for Strengthened Supply ChainsAfrica’s energy future—both in fossil fuels and renewables—depends on robust, integrated supply chains. On one hand, there’s an urgent need to pivot towards natural gas as a transitional fuel, given its lower emissions and availability across the continent. On the other, Africa’s renewable energy potential in solar, hydropower, and geothermal remains underutilized. This dichotomy underscores the need for a comprehensive, end-to-end approach to developing Africa’s vast energy potential.Accelerating the Shift to GasNatural gas offers a bridge to cleaner energy systems while addressing Africa's growing energy demand. Yet, supply chain inefficiencies—from limited refining capacity to inadequate distribution networks—delay this transition. Domesticating the manufacture of critical equipment and materials for the natural gas value chain, upgrading existing infrastructure, investing in modern gas processing facilities, and creating regional pipeline networks are critical steps forward.Unlocking Renewable Energy PotentialAfrica’s renewable resources are vast, especially:Solar: Untapped solar energy could meet the continent's energy needs many times over.Hydropower: The Congo River alone could provide up to 100 GW of 350 GW power potential.Geothermal: East Africa’s Rift Valley holds up to 15 GW of geothermal potential.However, over 70% of the technology used to harness these resources is imported. By developing local manufacturing capabilities, Africa can reduce costs, create jobs, and increase energy access.A Vision for Local ManufacturingFor Africa to fully benefit from its energy resources, it must control key parts of the value chain. Take solar energy as an example: Africa possesses the critical minerals needed for solar panels, batteries, and installation kits. Policies that prioritize maximum in-country value added in mineral extraction, manufacturing, and installation at micro, mini, and utility scales can help transform these resources into self-reliant energy systems.Such an ecosystem demands:Investment: Long-term financial commitments to build manufacturing hubs.Policies: Tax incentives, streamlined regulations, and trade facilitation through initiatives like AfCFTA.Capacity Building: Training a skilled workforce in energy technologies.Strategies for Infrastructure DevelopmentAccessing energy resources means overcoming infrastructure bottlenecks. Pipelines, storage facilities, and decentralized mini-grids can connect rural areas to the energy grid while enabling manufacturing clusters. Public-private partnerships (PPPs) have proven effective in financing and executing such projects globally, and similar models can thrive in Africa.Policy, Innovation, and Long-term CommitmentAchieving energy independence requires an alignment of policy, strategy, and innovation:Green Finance: Mobilizing funds through green bonds and impact investments can accelerate the transition to renewable energy.Technology Transfer: Collaborations with global firms can enhance Africa’s technical capabilities.Integrated Supply Chains: Leveraging AfCFTA to build cross-border networks for raw materials and finished goods.Concluding ReflectionsThe Energy Institute conference emphasized that Africa’s energy story is at a pivotal moment. Strengthening energy supply chains isn’t just about meeting immediate demands—it’s about securing a sustainable and prosperous future. With an integrated approach, Africa can harness its resources to power industries, drive development, and assert itself as a leader in the global energy landscape.The path forward requires political will, transnational collaboration, bold strategies, and unwavering commitment over the long term. Together, we can transform challenges into opportunities and deliver energy solutions that resonate across generations.
Supply Chain Visibility and Collaboration Platforms: Enhancing Efficiency and Responsiveness
Summary"Global supply chain visibility and collaboration have proven to be game changers in the industry, with companies reporting up to a 30% reduction in lead times and 15% savings on logistics costs, according to McKinsey’s research on end-to-end supply chain management.” According to Gartner, organizations with high visibility and collaboration improve overall efficiency by 15-25%, translating directly to higher profits.Industry analysts estimate that global supply chains could save up to $1.5 trillion annually through improved visibility and collaboration, which would encompass inventory optimization, logistics savings, and disruption avoidance.The global supply chain visibility market alone is expected to grow from $3.8 billion in 2023 to $7.4 billion by 2028. This opportunity is immense, and Nigeria’s supply chains stand to gain substantially as we seek to strengthen our competitiveness in a rapidly globalizing economy.This growing investment in supply chain visibility is transforming how industries operate. The journey from opaque, slow-moving supply chains to agile, data-driven systems can make a difference of millions in savings and faster time-to-market, empowering companies to stay resilient and responsive even amid unexpected disruptions.IntroductionSupply chain visibility is the ability to view or track inventory as it moves through the supply chain. Supply chain visibility is the complete, end-to-end view of a company's logistics, inventory, and warehouse management processes and people in real time.Supply chain collaboration involves coordinating with internal departments and external partners to sustain an optimized supply chain flow, efficiently meet demand, and ensure on-time, in-full delivery.It means establishing real-time shared visibility and processes with supply chain partners to facilitate the identification and resolution of issues.Supply chain collaboration encompasses the full scope of supply chain functions, including purchase order processes, forecasting, capacity planning, and quality management.Real-World Examples of Tangible BenefitsFinancial Savings & Waste Reduction through Real-Time Data SharingProcter & Gamble’s (P&G) Cost Savings: Through real-time collaboration platforms, P&G has reduced its overall supply chain costs by around 10%. By sharing data in real-time with suppliers and logistics providers, they have cut excess inventory by 20% and avoided waste associated with product expiries.Zara’s Fast-Fashion Lead-Time Reduction: Zara’s supply chain visibility is one of the reasons behind its success in fast fashion. By having near-instant data from manufacturing to store inventory, Zara can adjust production based on demand and has achieved lead times as low as two weeks from design to store, compared to the industry standard of six months. This has boosted profitability and reduced markdowns significantly.Improved Inventory Management & Customer SatisfactionWalmart’s “In-Stock” Initiative: Walmart uses visibility technology to monitor product availability across its stores, reducing stock-outs by more than 16%. The ability to track and replenish stock dynamically has resulted in higher customer satisfaction and increased sales. Walmart’s improved inventory management has saved it an estimated $2 billion annually.Amazon’s Lead-Time Reduction & Profit Growth: Amazon’s supply chain visibility has reduced delivery lead times by 20-30% through optimized warehouse locations and real-time tracking. This agility has enabled Amazon to deliver over half of its orders in two days or less, contributing to over $5billion in annual profit.Collaboration for Responsiveness During CrisisFord’s Supplier Network during the Semiconductor Shortage: Ford’s real-time data sharing and collaboration with suppliers helped it reallocate semiconductor supplies to high-demand models, sustaining production and revenue when others struggled. Visibility reduced lead times for sourcing alternative suppliers by about 30%, minimizing revenue loss during the crisis.Reduced Emissions and Increased SustainabilityUnilever’s Emission Reductions: By implementing visibility tools to monitor the carbon footprint of its logistics, Unilever reduced transportation emissions by over 10% in Europe. This aligned with its sustainability goals and attracted eco-conscious consumers, boosting the brand's reputation.Key Technologies for Visibility and CollaborationCloud-based Platforms (SAP Ariba, Oracle SCM Cloud): Enables seamless data access across geographies, allowing real-time inventory and supplier management.Internet of Things (IoT): Track shipments and monitor conditions (e.g., temperature for perishables) in real-time, as used by Maersk and DHL to reduce spoilage and ensure quality.Blockchain for Secure, Transparent Records: Blockchain ensures immutable, shared records in the supply chain. Walmart’s food traceability project on IBM’s blockchain reduced the time to track produce origins from weeks to seconds.Artificial Intelligence (AI) for Predictive Analytics: AI enhances demand forecasting and identifies optimization opportunities. Coca-Cola uses AI for demand prediction, improving accuracy by over 25% and reducing stockouts.Competencies and Enabling CultureData Analytics and Tech-Savvy Procurement Skills: Organizations need skilled personnel trained in data analytics, logistics technology, and data security. Lagos Business School and other specialized programs can support building these competencies locally.Cross-functional Collaboration & Transparency Culture: Successful visibility requires open data sharing across functions, with clear communication and shared objectives across departments and with partners.Emphasis on Trust and Agility: Agility is achieved through a culture that prioritizes rapid response and transparency, allowing quick decision-making in line with the organization’s objectives.Risks, Opportunities, and BenefitsRisks:Data Security Concerns: Increasing visibility across networks can expose organizations to cybersecurity threats.Adoption Challenges and Resistance to Change: Transitioning from legacy systems can be challenging, requiring training and cultural adaptation.Opportunities:Enhanced Resilience and Agility: Visibility prepares companies to respond quickly to supply chain disruptions, safeguarding revenue.Data-Driven Decision Making: Real-time data allows organizations to proactively make informed decisions, leading to operational and financial improvements.Benefits:Financial Savings & Operational Efficiency: Companies with integrated visibility systems see 15-20% savings in logistics costs, according to McKinsey. Real-time visibility reduces inventory costs and enhances speed.Sustainability and Reduced Waste: With insights into logistics and sourcing, companies can cut emissions, achieve sustainability targets, and align with global supply chain standards.What’s Next: Beyond Visibility and CollaborationThe next big wave in supply chain management will be the integration ofautonomous systems and predictive analytics, aiming to create self-learning supply chains that adapt and respond to trends and disruptions automatically. These systems leverage AI and machine learning to:Automate Supply Chain Adjustments: Self-learning algorithms will make real-time adjustments without human intervention, such as rerouting shipments and recalibrating production schedules.Predict and Preempt Disruptions: Predictive analytics will anticipate market changes or risks, allowing organizations to pivot before disruptions occur.Enhance Customer-Centric Strategies: Using insights from autonomous systems, supply chains will become even more responsive to customer demands, tailoring production and distribution accordingly.How Organizations Can Prepare:Invest in AI and Machine Learning Expertise: Building or sourcing AI capabilities is essential to stay competitive as the technology evolves.Collaborate with Technology Partners: Partner with leading-edge technology providers to pilot autonomous systems and predictive solutions.Embed a Continuous Improvement Culture: Cultivating a mindset of innovation within the supply chain will allow organizations to be at the forefront of adopting autonomous, self-learning systems.ConclusionToday’s supply chains must be responsive and self-learning to be competitive. This requires an intentional, significant and continuing investment in developing supply chain visibility and collaboration. For organizations in Nigeria, this journey can make us leaders in Africa’s evolving supply chain landscape. By embracing visibility now and positioning for autonomy tomorrow, we can turn supply chains into powerful engines of resilience and growth in the fiercely competitive global market. Let's therefore seize this moment to make Nigerian supply chains the benchmark for excellence.
Boeing Dreamliner Case Study: Impact of Poor Supply Chain Visibility and Collaboration
Outcome: Boeing suffered significant losses due to gaps in supply chain visibility and collaboration in its 787 Dreamliner project. This illustrates how a lack of integrated visibility and insufficient supplier collaboration can lead to serious financial and reputational repercussions.BackgroundThe Boeing 787 Dreamliner was an ambitious project to revolutionise the aviation industry with an energy-efficient, lightweight aircraft. To actualise this vision, Boeing decided to outsource the production of key components to suppliers worldwide, including major sections of the aircraft’s fuselage, wings, and avionics.Boeing aimed to leverage suppliers’ specialised expertise and reduce development costs by splitting production across a global supply chain.However, this approach required tight visibility and seamless collaboration across a complex network of more than 50 suppliers in over a dozen countries. Unfortunately, Boeing lacked the necessary supply chain integration to monitor each part of the production effectively. This gap ultimately led to significant challenges.The CrisisDue to limited visibility and lack of real-time communication with suppliers, Boeing encountered several critical issues:Component Delays and Quality Control Issues: Suppliers struggled to meet Boeing’s production timelines, and some delivered components that were incompatible with other parts or did not meet quality standards. This lack of synchronised standards caused costly delays in assembly, as parts often had to be reworked or replaced.Assembly Bottlenecks: Without real-time insights into supplier schedules, Boeing’s main assembly plants frequently received components out of sequence or in incomplete sets. As a result, production bottlenecks emerged, leading to months-long delays in the assembly process. Boeing was forced to halt production multiple times awaiting missing or corrected parts.Supplier Communication Breakdown: Some suppliers were unable to manage their own supply chains effectively, which compounded the problem. Because Boeing had not established strong collaborative links with its suppliers, it often learned of these issues too late to make timely interventions or adjustments.Cost Overruns and Penalties: The cumulative effect of delays, rework, and production stoppages quickly escalated costs. Initially projected at $5 billion, the 787 Dreamliner development cost ballooned to over $20 billion due to these supply chain disruptions, excluding financial penalties for late deliveries to customers, further damaging its bottom line.Financial and Reputational ImpactBoeing’s lack of visibility and collaboration cost the company years of lost revenue. The delays meant that many of its customers—airlines eager to reduce fuel costs with the energy-efficient Dreamliner — had to wait years beyond the promised delivery dates. Some airlines even canceled orders, forcing Boeing to pay significant compensation fees and damaging long-standing customer relationships.The delays and problems tarnished Boeing’s reputation for reliability and innovation. This negative perception affected the Dreamliner project and future sales, as customers became wary of Boeing’s ability to deliver on time and manage complex projects effectively with long-lasting impacts on its market share and profitability. Airbus seized this opportunity to capture a significant portion of the wide-body aircraft market (A350 and A330), establishing itself as a strong alternative to Boeing. The Dreamliner’s setbacks ultimately shifted the competitive dynamics, allowing Airbus to gain ground in a market previously dominated by Boeing and leading to the defection of many key customers such as Emirates to Airbus.Lessons Learned and Subsequent ActionsFollowing the 787 Dreamliner crisis, Boeing completely overhauled its supply chain processes to regain control over production and ensure better collaboration with suppliers by focusing on:Improved Supply Chain Visibility: Boeing invested in visibility tools and systems to monitor real- time status updates from suppliers, with a clearer view of production stages and potential bottlenecks.Enhanced Supplier Collaboration: Boeing also adopted a more hands-on approach with key suppliers, involving its engineers directly in the suppliers’ processes to ensure compatibility and quality. This closer collaboration allowed for proactive problem-solving before issues could escalate.Centralized Supply Chain Management: Boeing brought a greater portion of the supply chain under its direct control, reducing its reliance on third-party suppliers for critical components. This strategy gave Boeing more oversight and agility, decreasing dependency on external timelines.ConclusionThe Boeing 787 Dreamliner crisis is a cautionary tale about the importance of supply chain visibility and collaboration in de-risking complex global supply chains. Without the ability to monitor and coordinate across its global network, Boeing suffered significant financial losses and reputational damage that took years to repair. This example highlights the critical need for visibility tools, real-time communication, and collaborative partnerships in any complex supply chain, especially as companies look to navigate an increasingly interconnected global marketplace.
Why the Russia-Ukraine Conflict Could Mean Less Laptops, Phones and Cars For Everyone
The Russia-Ukraine War Supply Chain Disruption and What to Do about ItToday, the greatest risk posed to global supply chains is undoubtedly the Russia-Ukraine conflict. Russia is Europe’s most significant energy supplier in the form of oil and natural gas. The conflict has pushed oil prices above $100 a barrel, directly impacting manufacturing, inflation, and GDP growth across Europe and the world. More specifically, the supply of some strategic raw materials essential for manufacturing a range of industrial products that derive substantially from Russia will be disrupted, and these include: copper (10% of global reserves), nickel, platinum, aluminum, and some rare earths.ContextAfter years of skirmishes and ceasefire violations in the self-declared republics of Donetsk and Luhansk that broke off from Ukraine, Russia formally recognized these republics and launched ‘special military operations’ against Ukraine on 24 February 2022. In most of the West this was seen as an invasion and a violation of the territorial integrity of Ukraine. Since then, the conflict has escalated with several rounds of economic sanctions levied on Russia, while attempts at negotiating a settlement continue in parallel, but without high hopes for early resolution.Predictably, the war itself, and the economic sanctions applied against Russia by the EU, the UK, the US and some of their other allies, have had varying and unfolding negative impacts on the global supply chain. These impacts are remarkable for their Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). This is coming at a time when most of the world is yet to recover from the global COVID-19 pandemic that significantly disrupted global supply chains.Russia controls almost 44% of global palladium supply, while Ukraine produces about 70% of the global neon supply, and these two key raw materials are required to make chips. In order words, the current pandemic-induced chip shortage will be exacerbated by the current crisis and will further impact the global manufacturing of everything containing semiconductors, including: Laptops, kitchen equipment, mobile phones, washing machines, cars, oilfield equipment, and so on.The war has also turned the Black Sea marine logistics hub south of Ukraine into a global supply chain bottleneck impacting the export of bulk food items such as wheat, barley and rye. The effects are already reverberating around the world, including in Africa where a number of countries (Egypt, Kenya, Nigeria, and South Africa) depend on both Russia and Ukraine for significant proportions of their wheat imports. Exports to Russia from Africa will also be impacted, for instance in South Africa, where 7% of citrus exports are destined for Russia.Freight constraint in the Black Sea has also impacted the transportation of essentials such as refined petroleum products, with knock-on effects on petroleum products supply in countries such as Nigeria. Black sea freight rates and insurance have escalated, in some instances by over 200%, raising prices of certain imports by over 10%, and doubling lead times on average.What to Do about ItOrganizations must prioritize the management of their supply chain risk exposure from this war in the following way:Map their supply chains to expose points of vulnerability, identify the risks, assess them, rank and prioritize, and generate indicative mitigation measuresConduct a stress test of their supply chains for vulnerability, always bearing in mind that the fallout may be closer and deeper than it may appear on the surface, because geographical distance from the epicenter of the crisis is not correlated with the extent of supply chain disruption and impact on operationsDevelop a Response Plan, resource it, and implementIn parallel, develop a scenario-based Business Continuity Plan (BCP) based on a worst case outcomeIn summary, the Russia – Ukraine war has complicated the global supply chain challenges unleashed by the COVID-19 pandemic since Q4 2019. The global supply chain impact is certain to be deep and complex, even while it continues to expand rapidly. Forward looking organizations will structurally assess their exposure to this risk and develop a solid plan to counteract it. At Multus Competentia Limited we can help you navigate this risk, and even transform it into competitive advantage for your organization. Let’s talk.