Nwaka advances fulfilment-hub model for local manufacturers

Commercial strategy expert, Ebuka Nwaka, has proposed shared fulfilment hubs to help small Nigerian manufacturers overcome the warehousing and delivery barriers limiting their ability to sell nationally.

The proposed model would allow manufacturers operating within the same industrial cluster or commercial area to share storage, packaging, inventory-management and transportation services.

Nwaka, who is currently getting his MBA at Kellogg, said many small manufacturers could produce marketable goods but lacked the logistics capacity required to serve customers outside their immediate relocations.

Under the framework, participating businesses would send completed products to a shared hub, where orders from distributors, retailers and online buyers would be processed and dispatched.

The hubs would also maintain standard product information, track available inventory and coordinate deliveries through approved logistics providers.

Nwaka said the arrangement could reduce the cost of national distribution by spreading warehousing, technology and transportation expenses across several manufacturers.

He explained, “A small producer may not generate enough orders to operate an independent warehouse or negotiate favourable delivery rates. A group of manufacturers combining shipments could achieve better vehicle utilisation and reduce the cost attached to each order.

“The proposal focuses on the operational stage between production and the customer, which has been identified as one of the weakest points for many small manufacturers.

“Manufacturers often invest in machinery, raw materials and employees without developing equivalent systems for inventory control, packaging and distribution.

“This can result in unsold stock in one location while potential buyers elsewhere struggle to obtain the same product.”
Nigeria’s Labour Force Survey for the second quarter of 2023 recorded manufacturing as the main activity of 11.1 per cent of respondents captured in its industry classification.”

Nwaka argued that strengthening the distribution capacity of smaller manufacturers could improve their ability to retain customers and expand production without immediately establishing branches in several states.

He stated that the model would begin by grouping manufacturers according to location, product category and delivery requirements.

According to him, businesses producing household goods, construction materials or packaged industrial products would require different storage and transportation arrangements.

He stressed, “Each manufacturer would submit standard information covering product dimensions, weight, materials, available quantity and handling requirements.

“The shared hub would use the information to plan warehouse space, combine compatible deliveries and update buyers on product availability.”
Nwaka said accurate inventory records would be essential to prevent businesses from accepting orders they could not fulfil.

The framework would therefore measure stock received, orders processed, delivery time, damage rates and returned products.

Rather than building new facilities immediately, the system could begin with existing warehouses operated by private logistics companies, cooperatives or manufacturers’ associations.

Nwaka proposed a pilot involving a limited number of businesses and one product cluster before expansion into additional locations.

His recommendation draws on experience managing materials, vendors and storage arrangements across industrial project sites in Nigeria.

He worked in infrastructure investment and large-scale retail strategy, where inventory availability, supplier performance and delivery costs influence commercial decisions.

According to Nwaka, those principles could be adapted to the operating conditions of smaller Nigerian manufacturers.

The framework would also allow manufacturers to retain control of production and pricing while outsourcing parts of fulfilment that they could not manage efficiently alone.

Nwaka said the proposed hubs should not become compulsory intermediaries or impose charges that make locally produced goods more expensive.

He added that manufacturers would need transparent fee structures showing the cost of storage, packaging, order processing and transportation.

The performance of each hub should also be measured by completed deliveries and cost reductions rather than the number of businesses registered.

Nwaka maintained that the framework could support regional trade by helping manufacturers build reliable distribution records before attempting exports.

“Businesses that could demonstrate stable inventory, consistent packaging and dependable delivery within Nigeria would be better prepared to enter neighbouring markets.

“The proposal shifts attention from increasing production alone to ensuring that completed goods can move efficiently from factories to buyers.

“Under the shared-hub model, manufacturing growth would depend not only on what Nigerian businesses could produce, but also on whether they could store, package and deliver those products reliably across the country,” he stated.