The “State of Supply Chain Management in the Middle East”

by From the Top on 2011-02-06

Federick GomerExecutive Summary

Supply Chain Management must be firmly fixed in the cross wires of any management strategy emerging from recession, if the Region is serious about competing internationally according to the survey conducted by B2G Consulting. The resulting report: “State of Supply Chain Management Middle East” is the culmination of over six months of dedicated research by B2G Consulting, bringing together under one publication the collective wisdom of over 225 participating companies. B2G conducted face to face interviews in conjunction with an online questionnaire centered on a 24 point agenda to carefully piece together an authoritative and contemporary account of the state of The Supply Chain within the Gulf Region. This instructive piece of research is a must read for any company serious about restructuring its operations.

The full report can be consulted at http://b2g-consulting.com/in-focus/

Major Findings
In the contemporary world, supply chains are stretched across countless borders, in their quest for low cost resources, and at the heart of these networks are people managing complexity, technology and cross cultural relationships. To maintain leadership in the teeth of competition, supply chains must continually, invest in their human resource just to maintain the status quo. However investment in training is abysmally low in the region and the majority of respondents (68%) managed a low score of only 5 times a year per employee.  Consequently underinvestment in training has led to a chronic shortage of qualified resource, which is woefully inadequate when it comes to dealing with modern supply chains.

Not surprisingly education reform is a top priority amongst GCC countries and there is a real need to develop best talent across the region.  GCC firms face a unique challenge through indigenization where they are compelled to source from a small pool of qualified local professionals, who are hard to recruit and even harder to retain, 84% of respondents found recruitment of qualified supply chain professionals difficult, especially at middle management level (59.5%). However, outsourcing could be a light at the end of tunnel and is now gaining momentum, an increasing number of promising new ventures have taken off, and 76.3% of respondents outsource at least one logistics function.

Poorly  integrated supply chains connected through a set of desperate technologies, made worse by lack of training has led to “Opaque Supply Chains” , eroding visibility of critical bottlenecks, leading to soaring inventory, obsolescence, long lead times, high operating costs and low customer satisfaction. The importance of a common IT platform, in achieving integration through improved information, leading to greater responsiveness and visibility, should not be underestimated.

The volatility in the economy during the crisis has been mirrored by fluctuating demand, which has made the business of forecasting, fraught with errors, further eroding visibility both upstream and downstream. Not surprisingly 73.7% of respondents stated that improving their level of demand forecasting was on top of their agenda for 2011, followed by 63.2% who wished to pursue inventory optimization.

To improve demand forecasting, 20.7% of all respondents had implemented S&OP (Sales & Operations Planning Process) in a bid to achieve a level of best practice and more companies intend to set up such initiatives within the next 12 months, as expressed by 42.1% of respondents.

In addition, competitive pressures on lead-times, inventory levels and costs have led the large majority of respondents to define mid-term plans to reduce logistics costs (36.8%), reduce delivery lead-times (34.2%), optimize inventory levels (31.6%) and improve suppliers’ performance (21.1%).

For further information, consult the full report at http://b2g-consulting.com/in-focus/

About B2G Consulting:
Based in the Middle East, B2G consulting is an international niche consultancy firm that focuses on supporting growing markets. From A to Z, the firm helps its clients to build profitable businesses in new and challenging markets, transforming their critical challenges into high value opportunities.

Its capabilities to support organizations encompass every operational aspect: 

 - Design of adequate solutions
 - Hands-on support for implementation
 - Execution and interim management

B2G Consulting currently operates in Eastern Europe, Middle East & Africa, Asia Pacific and China.

For further information, please contact Frederic Gomer, partner at B2G Consulting, at frederic.gomer@b2g-consulting.com