Interviewee: Rita Kavashe, CEO
What are your projections for the sector?
Given the favorable policy changes the government has introduced over the last few years, the future of the motor vehicle assembly industry in Kenya looks bright. To demonstrate our confidence in the market, over the last three years, Isuzu has invested nearly Sh2 billion shillings in capacity expansions, automation technology, additional warehousing as well Kaizen programs.
How did the pandemic affect your value-chain?
The most significant supply-chain issues in our segment were the shortage of Completely Knocked Down (CKDs) kits sourced from overseas and the global logistics disruption. In 2021, we only received 80% of our CKD orders resulting in a long back-order list.
Through analytics of our customer evaluations, NPS and CSAT, we know that customer satisfaction drops significantly in case of delays, so our main mitigation measure was to regularly engage our clients.
The communications strategy based on these customer insights helped us to maintain positive relationships with our clients. As a result, we saw a marginal improvement of customer satisfaction in the vehicle sales category, despite the significant pandemic-related disruptions.
Can you share learnings from these disruptions?
For many companies, the pandemic turned the topic of developing local suppliers from a soft talking point to a survival technique. Companies had to reduce their reliance on global supply-chains. In our case, we experienced a springs shortage and had to quickly move a local springs manufacturer from the testing stage to mass production.
Local companies, especially SMEs, require years of close collaboration and a significant investment of company time and resources to manufacture quality inputs. This investment is critical in the long run. Today, Isuzu sources more than 30% of parts locally, creating 10,000 jobs throughout the value chain.
How important is digitization of operations to Isuzu?
Being able to make data-driven decisions is an advantage. We run most of our operations on an Enterprise Resource Planning (ERP) system provided by SAP, which we first introduced in 2014.
Implementing an ERP system is a journey requiring significant effort. We already have four fully functional modules, spanning operations, business administration and sales. We are also in the process of rolling out Plant Maintenance and Fund Management modules, which is part of our strategy to digitize key priority areas of the business.
Covid-19 pushed us to intensify our digitization efforts, and we started working in ways, in which – for the longest time – we thought we could never succeed.
As our internal digitization was taking place, our customers started engaging us outside the traditional face-to-face set-up. One direct adaptation to this trend is the upgrade to our call center, which mostly dealt with after-sales support calls pre-Covid-19. Since mid-2020 we have a fully-fledged telesales team. Just a year later, our telesales saw an increase of 84% and the growth curve shows no sign of slowing down.
Did the pandemic accelerate your digital efforts in any significant way?
We have two main digital initiatives triggered by the pandemic.
First, there is our data science program, with a team currently going through the wealth of information we collect. The objective is to make our decisions more data-driven. Insights from the project have already shaped key strategic priorities like the re-opening of the Tanzania market where we are currently making in-roads.
The second digital intervention is a new telematics product, under development with Isuzu Motors and a local technology player. This is especially appealing to our corporate customers. Our decision to develop it came after requests by SMEs clients who may not be able to buy the costly fleet management solutions that larger organizations use.
Basically, even small organizations today are thinking of data collection and analysis as an important avenue to improve their operations and become more efficient.
What are the next steps in your B2B digital transformation journey?
Our desire is to fully integrate our local suppliers into the ERP system. At the moment – especially with our SME suppliers – we find ourselves working with excel sheets and phone check-ins. To overhaul the current system, we are planning a training program for our suppliers with the end goal to get them to regularly input data directly to the ERP system. If we succeed, we will be able to identify delays, quickly mitigate them and find solutions to improve reliability of the supply-chain in the long term.
Overall, we will continue to strengthen the data insights program and to invest in digital systems to further enhance customer value.