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Becoming a Smart Port

Feature Article | August 3, 2015 by Judith Magyar

Kenya Ports is redefining the economy of a region.

There are four ways to transport people and goods: air, water, rail or roads. In East Africa, where many countries are landlocked, 70% of passengers travel by road, 28% by air and only 2% by rail. It’s different when it comes to cargo. The vast majority of goods (98%) coming into the region arrive by sea to the ports of Kenya. From there, 65% of cargo moves out on trucks and the rest by rail.

Trade meets technology

Congestion at Mombasa seaport in Kenya and Dar el Salaam seaport in Tanzania presents the greatest challenge. Until recently, no attempts had ever been made to automate processes resulting in inefficiency and huge delays. Raw materials lose their freshness, and cargo distribution to industries becomes increasingly expensive. As a result, the region was not competitive with the rest of Africa or the rest of the world.

“Kenya’s ports are 100% government owned, but they have their own corporate governance and authority to make business decisions as an organization. So theKenya Ports Authority decided to solve their problems the smart way,” says David Ochieng, the SAP account executive for this customer.

The long term goal, to be like the Port of Hamburg, first required a core ERP and an automated back office. Only then could other critical elements be added to the roadmap.

People make it happen

But even more important than technology, becoming competitive requires a performance oriented culture, something that was lacking in the organization before. Now, Kenya Ports has implemented automated processes such as time management and payroll functions for their 7000 employees along with training and development opportunities.

Equally important is the topic of security. Kenya Ports already runs a non-SAP security management system which will be connected to SAP’s system to automate all entry and exit points for vehicles and passengers. Another future step will be to facilitate yard management with sensors to gain full transparency on the location and movement of containers.

Becoming smart step by step

For Kenya Ports, technology is critical from the operational point of view. Analytics will provide clarity in governance and enable risk management. Business networks connecting suppliers is part of the roadmap. Automated finance, procurement and supply chain management are already increasing efficiency and generating significant increases in revenue. Last year Kenya Ports handled 1 million containers. These unprecedented results have been attributed to automation and the new performance driven culture. If these were the achievements of the first phase, just imagine what lies ahead!

@magyarj

The Disruptors is a series of short stories of customer innovation from around the world.

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