Smooth operator

zoom

SUPPLY AND DEMAND: Didier Jourdan is trying to achieve the perfect mix of suppliers and distributors.

However, Jourdan believes that RFID is "still a few years off" in the consumer products sector, as the size of the goods being transported often makes it difficult to justify in terms of cost. "At the moment RFID is a touch too expensive for our kind of products," he says.

"Group-wide, we are looking at it more on a pallet, rather than a piece, level. That kind of technlogy is only really worthwhile for products that are worth a few thousand dirhams or more. On products that are worth less than a hundred dirhams, it has a huge impact on cost and, accordingly, the price on the shelf."

Beiersdorf currently utilises its base in Dubai as a hub to serve 16 markets, in each of which it has an established relationship with a local distributor.

Some of the relationships have been forged over the course of 10 to 15 years and it is clear that the company hopes to move closer to its partners in order to be able to manage stock more effectively.

"In each country we are using a distributor that is already operating in the local market," Jourdan remarks. "In some cases this is mandatory, but in others it's because we believe they have a stronger network for distribution. We support them with dedicated sales people, by distributing our products from the Jebel Ali hub and providing software. In fact, we are working on new software that will allow our distributors to run forecasting and correct MRP (material requirement planning), in order to have transparent coordination between them and us."

At present the company uses SAP for its statistical forecasting and content replenishment, but it is also looking elsewhere to provide a comprehensive stock management system.

"We don't believe SAP is flexible enough for our 16 partners, which include countries as diverse as Afghanistan and Yemen, through to more sophisticated countries like the UAE," he adds. "We have selected a much more flexible tool that will allow us to merge the data from those 16 countries into one system."

However, Jourdan stresses that the new software will sit alongside and complement the current SAP platform rather than replace it altogether. "SAP is a corporate tool and one that we are using 100% today," he adds.

"Our additional Salomon software will run alongside it and will allow us to deal closely with our partners. In terms of our current needs, it is far too costly to run SAP out to 16 locations. The region is not yet mature enough to map a full process via an efficient but rigid system like SAP."

It is clear that Beiersdorf is not a believer in the one-size-fits-all approach, which is evident by its use of different providers in the various steps of the supply chain. Deal, for example, will only play a role in managing incoming goods, storage and processing documentation for export.

The company put out a separate tender for freight forwarding activities, which was won by French firm Geodis Wilson.

However, Geodis will largely manage only inbound freight, whereas the company will rely on picking and choosing between variable rates when shipping out to local distributors.

"In collaboration with our partners, we are selecting freight forwarders by lane," says Jourdan.

"Deal has helped us in a few crisis points, but in each lane we are looking at who can provide the best cost and service, although we can't afford a poor service to leave us with lot of hassle in importing goods and transportation. We need a trouble-free supply."

The twin challenges for Beiersdorf are to have goods delivered in the most efficient way possible, and in increasing quantities.

"In order to comply with local regulations, all of our products have expiry dates on them," indicates Jourdan.

"It's important that we are able to deliver fresh products onto the shelf so consumers can use them for longer. We also have to entertain double-digit growth, which is challenging on the logistics side because we need to supply a market that is currently booming."

The Beiersdorf executive is therefore bullish about the future prospects in the Middle East market. "We expect our new partnerships will bring a much better service level to the region and achieve much better efficiency," he concludes.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM