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Sat 27 Nov 2010 12:00 AM

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Outside expertise

While many companies have experienced a downturn from the global recession, the demand for supply chain consultancy has never been stronger, explains Mario Ghosn, general manager of Supply Network Solutions (SNS).

Outside expertise

Founded as a humble supplier of warehouse management systems
over 20 years ago, Supply Network Solutions (SNS) has successfully evolved into
one of the Middle East’s leading providers of complete
supply chain solutions. And with little doubt that lean supply chains have been
making the difference between sink and swim in today’s business environment, the
Lebanon-based company is feeling confident that demand for its diverse service portfolio
will continue to develop from strength to strength.

According to general manager Mario Ghosn, the key to SNS’s success
has been its dedication to the world of logistics, combined with the breadth of
services offered – ranging from consultancy and software solutions to warehouse
design and specialist training. Unlike other consultancies, which he’s reluctant
to describe as ‘competitors’, the company has focused exclusively on supply chains.
“Given the service portfolio of SNS...  there
are very few companies based in the Middle East
that can deliver such a breadth and depth of services,” maintains Ghosn.

With a client base that includes Nestlé, Proctor & Gamble,
and Middle Eastern retail powerhouse Alshaya Group, it’s difficult to argue with
the executive’s assessment. SNS has found favour in several different industries,
such as warehousing companies, transportation firms and government entities, as
well as wholesalers and retailers of consumer goods, apparel and footwear, electronics,
and pharmaceuticals. In response, it has launched offices in Dubai,
Saudi Arabia and South Africa to complement the Beirut headquarters.

Ghosn says the global economic crisis and inevitable glut in
revenues has seen an increased demand by clients to maximise the efficiency of their
supply chains. “The boom that was before the economic crises resulted in companies
focusing so much on increasing sales that they overlooked the increased and unnecessary
costs that they were incurring,” he explains, adding that following the downturn,
companies started to back-track and reassess their operations, looking at firms
such as SNS to help ‘trim the fat’ that had accumulated during the years of excess.

And at the crux of this quest for efficiency is the warehouse,
which Ghosn describes as the “heart of the supply chain.” While SNS offers consultancy
across the entire supply chain, from procurement and customs clearance to distribution,
it is warehouse design, operations and software solutions that are the most common
areas that clients request assistance in. “Although you can find some companies
that are operating based on best practices in the field, many still have a lot of
room for improvement,” says Ghosn, who points to demand forecasting and inventory
management as important factors in developing an overall solution.

He says that for many companies, the room for improvement lies
in under-used resources and assets, and that ensuring they offer maximum return
is essential. “This implies warehouse capacity is utilised at above 90%, truck capacities
are utilised at above 90% on transportation, labour is utilised at above 90% and
so forth,” according to Ghosn. “Unnecessary and redundant activities are very frequently
found in the supply chain processes, eliminating or reducing them can have a major
impact of the bottom line and can boost the overall efficiency of the supply chain.”

So how does SNS step-in to turn these issues around? “Depending
on the nature of the service required, we have a variety of approaches that we have
developed throughout the years to ensure the success of a project,” says Ghosn.

He outlines four main phases of the company’s consultancy process
as “information gathering and site surveys, brain storming and data analysis, documentation
of results, and presentation to the governing bodies of clients,” adding that when
a project involves the implantation of a software solution, additional education,
training and development phases are required prior to the go-live. “When evaluating
a customer’s supply chain, we normally benchmark against best practices in the field,”
he says. “The solution to improve a supply chain though, depends on its weaknesses.
It can be an organisational restructure, new standard operating procedures, training,
and recommendations of material handling equipment or software solutions.”

To ensuring optimal utilisation of assets and resources, he says
tools and standard operating procedures such as warehouse management systems (WMS),
transport management systems (TMS) and labour management systems (LMS) can provide
the framework required.  Technology, too,
can play a vital role in overall supply chain solutions, according to Ghosn. “Voice
picking, RFID and warehousing dashboards are among the top ranking new technologies.
Voice picking is one of the best performing picking systems currently available,
a hands-free/eyes-free technology critical for picking accuracy and speed.”

In the case of Alshaya Retail, which covers a wide variety of
sectors and includes brands such as Starbucks, Boots, Estee Lauder, The Body Shop,
Debenhams, Mothercare, Next and River Island; WMS formed part of the solution to
the company’s challenge of supplying stock to over 500 stores across the Middle
East and Africa. “Alshaya has built a state-of-the-art regional distribution centre
and out of this 50,000m2 warehouse, more than 250,000 units will be cross-docked,
picked or shipped every day,” says Ghosn. “The warehouse activities are performed
by a team of 200 operators connected concurrently to the warehouse management system.”

SNS implemented a “state-of-the-art WMS with a radio-frequency
module” including what the company describes as “an advanced cross docking feature.”
The result? An increase of 40% in productivity, a picking error of less than one
percent and the automated creation of receipts and sales orders. But the right software
and standard operating procedures count for nothing if the people operating them
are not up for the job. Ghosn identities labour, as one of the biggest challenge
to an efficient supply chain. “The skills and knowledge of labour in our region
is very low and is stopping companies from improving their performance,” he says.
“Providing the right knowledge and skills to your personnel is a key factor in increasing
the productivity and efficiency across the supply network.”

To achieve these goals, SNS offers training programmes that cover
warehouse operation, supply chain execution and technical skills, delivered year-round
at one of the company’s training facilities or on-site on an on-demand basis.

Another area that the Middle East seems to be lagging behind
in is the sustainability, an issue that is placing increasing pressure on international
supply chains, particularly in regions such as Europe,
to minimise their impact on the environment, according to Ghosn. “Unfortunately
when it comes to the Middle East, Latin America or South Africa we haven’t really witnessed
a high focus on being environmentally friendly.”

While the economic crisis hit many clients hard, did it also
affect SNS? Ghosn is unsurprisingly coy about any change in the company’s business
levels, but says the type of business and how it’s acquired is different from 12
to 18 months ago. “The economic crisis has rendered customers more cautious on implementing
critical and expensive solutions without the proper analysis and a well established
ROI study,” he says. “We have seen the customer demand shift more from software
into consultancies and audit engagements as they are looking to minimise their costs
and identifying the bottlenecks in their operation.”

And while for many, sales seems to be the ultimate focus when
times get tough, Ghosn urges companies to look outside their business to ensure
their bottom line is what it should, or could be.

“As in most types of consultancies, an external look offers the
advantage of a broader experience in the supply chain. Whereas many companies are
able to assess themselves and identify some of the weaknesses they are suffering
from, an external consultant has seen many other companies and is able to easily
benchmark against best practices. In addition, if you have been something for a
long time, you are the least likely to see that you are doing it wrong or that you
can do it better,” he says with confidence.

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