2010 Middle East State of Supply Chain Management

State of the Supply Chain Management: Middle East Series 2010
B2G Consulting
Supporting Growing Markets
Foreword
© 2010 B2G Copyright - Middle East Series 2

Foreword
M iddle East benefits from an smoothen and ease business

exceptional position between transactions. However, the complex
Asia andchain
Europe.
fromThis confers to
performing to the
its challenges in the region cannot be
region aoptimum
large source
level the of business
supply chain ignored, and should be addressed as an
opportunities, which areto its
from performing stilloptimum
mostly opportunity to revolution the current
untapped. In this race, many GCC situation. Supply chain management is
countries have started to differentiate clearly lagging compared to more
themselves by launching large scale mature markets such as Europe, but we
initiatives. For example, the Kingdom of believe at “Art of International Trading
Saudi Arabia, one of the leading and Import (Artiti)” that the region
countries, has embarked on a massive should find innovative ways to
transformation through Saudi Arabian distinguish itself by providing world-
General Investment Authority (SAGIA). class services. We hope to see soon
Important investments have been done more GCC organizations globally
to support the development of logistics recognized for their high dedication to
infrastructure in the Kingdom (road and customers, outstanding quality and
rail networks, ports and airports facilities operational excellence, supported by a
etc…). In addition, laws and regulations dynamic and highly trained professional
are in the process of being adapted to workforce.
sm
Mohammed H. Al Qhahtani
ARTITI
level the supply chain from
performing to its optimum

Table of contents
Foreword 2
01 Introduction 6
02 Executive summary 8
03 Survey panel analysis 10

Where are your headquarters located?
What is your company’s annual revenue?
What is your number of employees?
What is your main sector of activity?
Industry insights: Conducting a cost reduction program

in the transport sector 12
04 Supply Chain maturity

How is the level of knowledge of your Supply Chain organization? 14
What are the Best practices currently used by your organization? 15
What are the activities outsourced? 16
What is your supply-demand model? 17
Which technology is being used to support your Supply Chain operations? 18
How is your Supply Chain considered by the top management? 19
What is the frequency of training for the Supply Chain staff? 20
Industry insights: Human Resources Management –

Recruiting Supply Chain Experts 22

Table
of contents
05 Supply Chain performance metrics

Perfect order fulfillment 24
Delivery performance 25
Total supply chain management cost 26
Cash-to-cash cycle time 27
Inventory days of supply 28
Days of payable outstanding 29
Days of sales outstanding 30
Industry insights: 3PL outsourcing in the Petrochemical

Industry 32
06 Supply Chain challenges

What are the top Supply Chain concerns your organization is facing? 36
How difficult is the recruitment of Supply Chain professionals? 37
What are the next initiatives you are planning to implement? 38
07 Conclusion 40
08 Appendix 41

Introduction
01
O ptimism is back in the Middle they will struggle to counter demand further solidified in recent years as
East, as the region shakes itself through scaling production, this coupled increasing volumes of finished goods
free from thefrom
free effects
theof effects
global recession,
of global with unresponsive supply chains will and raw materials passed through its
and once again and
recession, looksonce
forward
againtolooks
the lose valuable time to market. How will borders. The collective aspiration and
good forward
times. toSenior
the goodleadership
times. of these companies face the upcoming commitment of the region, in becoming
multinational companies based within operational and supply chain a world class transit hub, is evidenced
GCC iseffects of global
justifiably recession,
optimistic about and
the challenges, in an increasingly complex by unprecedented levels of investments
once
economic again looks
upswing, forward
however upon to the
closer global market, characterized by local in logistics infrastructure that will be able
goodone
inspection, times.
finds that only a few specificities? As a region, the GCC has to cope with expected increase in freight
have taken the opportunity during this undergone an extraordinary over the coming years, driven by double
recessioptimum level the supply
crisis to strengthen their operational transformation in recent years and has digit growth in South and East Asia.
chain from performing to its
readiness. Companies that exclusively emerged as a global freight hub by However set against this present and
optimum
opted for short-termism through ruthless virtue of its strategic location between future context, the following report
cost cutting as a means of survival Asia, Africa and Europe. Spurred on by poses a serious question: Do current
during the crisis, will find themselves World economic growth (before 2008), players within the region, whether at
unable to respond to the upturn, since its position as a global transit hub company, country or regional level have
they will struggle to counter demand further solidified in recent years as the vision and oversight to make the
©through
2010 B2G Copyright
scaling - Middlethis
production, East Series
coupled increasing volumes of finished goods necessary shift in paradigm, from a6
with unresponsive supply chains will and raw materials passed through its mindset which is purely focused on
Introduction
the vision and oversight to make the condition, and with due care and by reducing inventories, lowering
necessary shift in paradigm, from a attention to the environment, SCM deals operating costs, speeding product
mindset which is purely focused on with all business activities associated availability, and increasing service level.
logistics, to one which is holistic in its with satisfying a customer‟s demand. Structuring the supply chain requires an
treatment of the complete supply chain. SCM is the oversight of materials, understanding of the demand patterns,
Supply Chain Management (SCM) is the information, and finances as they move service level requirements, distance
corner stone of any successful strategy in a process from supplier to considerations, cost elements and other
and yet paradoxically it is also the least manufacturer to wholesaler to retailer to related factors. These factors are highly
understood of all disciplines, often under consumer. SCM involves coordinating variable in nature and this variability
resourced and devoid of investment. and integrating these flows (Information, needs to be considered to improve any
Misconceptions about the term “supply physical, financial flows) both within and supply chain.
chain” abound often leading to among business partners (suppliers, The ‘State of the Supply Chain
confusion between itself and logistics. service providers, customers). It is said Management Middle East’ aims to
While logistics involves getting the right that the ultimate goal of any effective draw a concise portrayal of the
goods, to the right place, at the right supply chain is to increase the customer current situation as seen by supply
time, at the right cost, in the right satisfaction in the most profitable way chain practitioners in the Gulf region.
condition, and with due care and by reducing inventories, lowering
There are six key elements to a supply
© 2010toB2G
attention theCopyright - MiddleSupply
environment, East Series operating costs, speeding product 7
chain:
Chain Management (SCM) deals with all availability, and increasing service level.
Executive summary
02
his report is the culmination of chains as chiefly driven by customer leadership in the face of competition,
T over six months of dedicated

research optimum
by B2G level
Consulting,
the supply
bringing
chain
demand, loosely linked together by
collaborative end-to-end partners,
increasing complexity and innovation,
supply chains must continually invest in
together from
under
performing
one publication
to its optimum
the 23.7% stated that their supply chains their human resource. However
collective level
wisdom
the supply
of chain
over from
225 were organized by function whilst only investment in training is particularly low
participating
performing
companies
to its optimum
based within 18.4% were structured in processes. in the region and the majority of
the GCC region. Supply chain The quality of human resource is the respondents (68%) provide training less
management (SCM) is the cornerstone critical success factor of any than 5 times a year to their supply chain
of any successful organization and the organization and supply chains are no staff, this phenomenon becomes
discipline increasingly finds itself exception, collaborative chains are especially acute when considering that
included in top management‟s strategic stretched across longer distances, 60% of their employees possess only
agenda. This is further borne out by the across many borders, in their search for rudimentary knowledge of fundamental
fact that 28.9% of all respondents low cost resources and at the heart of concepts. Not surprisingly education
consider their supply chains as strategic these networks are people managing reform is a top priority amongst GCC
to their business goals. 39.5%, of all complexity, technology and cross counties and there is a real need to
respondents‟ perceived their supply cultural relationships. To maintain develop best talent across the region.
chains as chiefly driven by customer leadership in the face of competition, GCC firms face a unique challenge
© 2010 B2G Copyright - Middle East Series
demand, loosely linked together by increasing complexity and innovation, where they are compelled to source8
collaborative end-to-end partners, supply chains must continually, invest in from a small pool of qualified local
Executive
summary
GCC firms face a unique challenge challenge facing the industry is the lack all respondents had implemented Sales
where they are compelled to source of visibility, both internally between & Operations Planning Process, and
from a small pool of qualified local critical processes and between critical more companies (42.1%) intend to set
professionals, who are hard to recruit partners, leading to soaring inventory, up such initiatives within the next 12
and even harder to retain, 84% of long lead times, high operating costs months. Pressures on lead-times,
respondents found recruitment of and low customer satisfaction. The inventory levels and costs have led the
qualified supply chain professionals volatility in the economy has been large majority of respondents to define
difficult, especially at middle mirrored by fluctuating demand, which mid-term plans to reduce logistics costs
management level (59.5%). Although has made forecasting, fraught with (36.8%), reduce delivery lead-times
outsourcing presents an immediate errors and much more difficult to (34.2%), optimize inventory levels
opportunity as a promising alternative, it manage. 73.7% of respondents stated (31.6%) and improve suppliers‟
is still a nascent industry in the region. that improving their level of demand performance (21.1%). Lastly, the
76.3% of respondents outsource at least forecasting was on top of their agenda importance of information is often
one logistics function. However, for 2011, followed by 63.2% who wished overlooked as a critical competitive
regardless of whether the supply chain to pursue inventory optimization. To resource, but its role is crucial to
is in-sourced or outsourced, the biggest improve demand forecasting, 20.7% of achieve higher productivity.
challenge facing the industry is the lack all respondents had implemented Sales responsiveness, interconnectedness
of visibility, both internally between & Operations Planning Process) in a bid (internally and externally)
9
and lower
critical processes and between critical to achieve a level of best practice and costs.
Survey panel analysis
03Study background
The “State of Supply Chain Management – Middle East Series” represents B2G consulting‟s largest annual review of global
supply chain performance focused on the GCC region. With participants from Saudi Arabia, Bahrain, UAE, Oman, Kuwait and Qatar,
the survey provides deep insight into the most critical yet least understood lever, i.e the Supply Chain management, to improve
significantly any company‟s operational profitability and margin‟s growth.
Consisting of a comprehensive online questionnaire, participants were invited to respond to 21 key questions covering the
different aspects of the supply chain management in terms of challenges, maturity and performance level.
Headquarters location Number of employees
2.6%
6.0%
18.8% 18.4%
11.4% Saudi Arabia
Bahrain
<10
Dubai
2.9% 101
Abu Dhabi
48.6% 501
5.6% Oman
18.0% 100
Kuwait
18.8% 18.4% >50
Qatar 28.9%
Other
20.0%
Saudi Arabia <101
15.8%
2.9%
101-500
Bahrain
501-1000
Dubai
Abu Dhabi
18.0% 1001-5000
%
>5000
Oman
28.9%
Kuwait
Qatar
Other 15.8%

Survey panel
analysis
Survey participants
Nearly 230 companies participated in this 2010 survey, with data collection completed in November of 2010. The survey
population is composed of organizations from a diverse set of industries, including Retail, Oil&Gas, Consumer Goods, Mining and
metals, transport, industrial manufacturing, services, telecommunications, construction, health care and agriculture. The survey
reflects the response of the population which is composed of more than 60% senior executives in supply chain management, with
15% at the CXO-level. The region surveyed is only focused on the Middle East region particularly on the GCC countries: Saudi
Arabia, Bahrain, UAE, Oman, Kuwait and Qatar. And more than half of survey participants are companies with annual revenues
superior than $500 Million with a minimum of 500 employees.
Company annual revenue ($US) Main sector of activity
Industrial manufacturing 17,9%
Services 14,3%
13.2%
21.1% Consumer goods 10,7%
1M-25M Retail 8,9%

7.9%
26M-50M
Food and beverage 8,9%
51M-150M
151M-500M
Oil & Gas 7,1%
10.0% 10.5%
501M-1B Transport 7,1%
1B-10B
Mining and metals 5,4%
>10B
11.1% Construction 5,4%
26.3% Other 3,6%

1M-25M
Health care 3,6%
26M-50M
51M-150M Telecommunications 3,6%
151M-500M Agriculture 1,8%

5%
501M-1B
Real estate 1,8%
1B-10B
>10B 0% 5% 10% 15% 20%

Industry insights
Conducting a cost reduction program in

the transport sector
01 Company background and 02 Results
Challenges
Which results have been obtained after the
In few words, please describe your company implementation? How long did it take to reach the
activity. expected outcomes? What are the next steps?
“Mubarrad is a publicly listed Kuwait-based company, “It took six months after implementation to start seeing
specializing in land transport, logistics, heavy transport, truck improvements. The team built a 6-year strategic plan with
manufacturing and maintenance. Mubarrad is a GCC player clear objectives. At that time there was a significant drop in
with operations in Kuwait, Dubai, Oman and Egypt. With a sales, but we finally managed to increase the revenue by
market value of 21.6 Million KD, its assets are worth 37 33%. Several strategic initiatives were launched such as:
Million KD for a total of 200 employees (excluding drivers).”
 Upgrading transport asset quality and improving
utilization rate
Which pressures forced Mubarrad to embark on a
 Securing long term contracts
cost reduction program?
 Concentrating businesses in Oman and Dubai to
“After several acquisitions and major internal increase profitability
transformations, a new management team has been  Building up a new executive committee with a cross
appointed in mid 2010 to restructure completely the financial functional view to drive the change and bear
and operational departments in order to drastically reduce decisions as a team
costs. The situation when we arrived was a very high SG&A  Implementing a CRM system to optimize the
costs compared to the revenue, accentuated by a difficult decision making process with the market dynamics
economical context.”  Increasing project planning and execution to

increase the projects success rate
What did Mubarrad decide to do to overcome this  Close monitoring of losses
challenge?  Focusing on employees efficiency while
“The new management team decided to go for the best transforming the mindset from employees to
leaders
practices in the industry, and conducted several analyses
 Diversifying the logistics offering
(SWOT, balanced SCORE Card, zero based costing, Porter
 Expanding the regional coverage
analysis…) with the support of management consultants.”
Industry
Insights
Mohammad E. Al-Muaili
Vice Chairman - CEO
Mubarrad Transport Company
03 Key lessons learned 04 Which lessons to retain in conducting

such initiative?
Did Mubarrad face any difficulties during the
project phase?
“The major issue that we faced during the project “People are definitely the most important assets for a
phase was the change resistance from the existing staff, company, especially when the company decides to embark on
so we had to take tough decisions in order to a major transformation program that involves changing the way
institutionalize a full commitment from everyone and to it operates. We can witness it every day at Mubarrad, so we
bring the morale up within the company. As a new team, tried to really have the right personnel with the right mindset
we were constantly walking on eggs, as we wanted to who considers himself as an owner of the company rather than
improve the situation but without jeopardizing the day- just an employee. In the end, the success of the company lies
to-day operations. It was helpful to set up employees in a team effort and not on one-man show.
SCORECard,
not not only
only to monitor the to monitor the
individual individual
performance of each
each employee
employee but “People are definitely
but as well to assure
The challenge in the GCC is mainly
about having the right people, and
the most important
thatwell
as everyone
to assurewould be ablewould
that everyone to measure its own
unfortunately, there is a workforce
contribution
be able to themeasure
global initiative.
its own
One of the very first things that we did wasassets

to bring all for a company”
deficiency in this market, which is
contribution to the global initiative.
even stronger in the area of supply
One of the very first things that we
top
did management (including myself) in the same office chain and logistics. At Mubarad, we .
did was
was to
to bring
bring all
all top
top management
management (including myself)
close decided to tackle the skills issue through two educational
in thetosame
(including
the operations,
office
myself)
as the
close
in the same
executive
to the office used to
officeoperations, as the
be remotely located. It was important for us that we, the through
segments: one with small two to
workshops educational
improve thesegments:
technical
executive
close to office used
the operations,to be remotely
as the located. It was
management, one with small
and soft skills of the employees and workshops
harmonize to
theimprove
levels
important for lead
executive office
by example
usused
that towe, theand demonstrate led
management,
be remotely
by our
by
own acts the high commitment that we were expecting the technical and soft skills
between departments, and the other one with extra of the
example
located. Itandwasdemonstrated
important forby usour
thatown acts the high
from our employees.” employeesbyand
professional activities organized theharmonize
company to thecement
levels
commitment that we were
we, the management, lead expecting
by from our
the bonds and improvebetween departments,
the interpersonal and onewithin
relationships with
employees.”
example and demonstrate by our own
the company.” extra professional activities organized
acts the high commitment that we
S
“ expecting
were o far, from
the our
cost reduction
employees.”program has brought in substantial cost savings and this has
S
o far, the results were the reduction
and
by the company to cement the bonds
improve of the
the loss to 71 K KD
interpersonal
reflected positively in the overall result. The road is long and we haven‟t finished yet our
from 2.2 Million KD at the same period
relationships in 2009.
within The road is
the company.”
mandate.”
long and we haven‟t finished yet our mandate.”
Supply Chain maturity
04#1: How is the level of knowledge of your Supply Chain organization?
Introduction
Most companies enter supply chain to Knowledge of Supply Chain organization
improve profitability, through process
improvement and technology for more
responsiveness to consumer demands. 8,0%
Mature – with knowledge
However maintaining a competitive about advanced models
advantage depends on the ability of such as SCOR and supply
32,0% chain best pratices (S&OP,
each unit in the chain to apply VMI, etc…)
knowledge innovatively. Knowledge is Average – with basic
the competitive advantage in a supply knowledge about supply
chain (operational
chain – it not only enhances the
fundamentals)
efficiency of the operations but also
enables to foresee and manage Low – with ad-hoc
complexity and change. The major knowledge on supply
chain
challenge for companies is to acquire, 60,0%
develop and retain skilled supply chain
professionals to sustain efficiently their
supply chain performance.
Results
Analysis nationals (Saudization, Emiratization
The respondents were asked to indicate
The supply chain is one of the most etc…). In the face of fierce global
the level of knowledge of their supply
rapidly evolving disciplines, and the competition to recruit the skilled
chain organization. The results show
variances in supply chain activities resources, GCC Companies should
that:
require new set of skills and start looking at ways to develop and
32% of respondents have
experiences for world class supply chain secure domestically the skilled
advanced knowledge of supply
professionals. The noticeable shortage manpower, required to support the
chain concepts
in the Middle East of supply chain expansion of their organizations. In
60% present basic knowledge
professionals with the required skill-sets fact, some of the respondents have
on supply chain
is not something exclusive to this region already jumped on the bandwagon by
6% admit to have less
but it is likely to be accentuated by establishing “learning centers” to
knowledge
some governmental initiatives that develop training and education
encourage the employment of their programs to enhance local work force.
nationals understanding of the true root causes
© 2010 B2G Copyright - Middle East Series preventing the supply. 14
Supply Chain
maturity
#2: What are the best practices currently used by your organization?
Introduction
Everybody talks about best
Best practices in place
practices. But what does it really
mean in the Middle East context? It
Sales and Operations Planning Process 20.7% does not mean always getting the
Customer segmentation 15.3%
End to end Supply chain visibility tool 11.1% latest technology or doing exactly
Performance management 10.2%
Integrated business planning
what best-in-class companies did
8.0%
Real time information 6.4% lastly. “Best-practices” are the
Joint service agreement (JSA) 5.7%
Supply chain costing (Activity Based Costing) 5.1% methods, processes or activities
Collaborative forecasting 3.2% that are the most effective at
Lean methodology 2.5%
Customer collaboration 2.2% delivering the highest outcome in a
Competitive Benchmarking 1.9%
Vendor Managed Inventory 1.6%
particular context. It is critical to
Supplier collaboration 1.3% understand that the way of using
Formalized supply chain risk management 1.0%
JIT - Just in time 1.6% best practices are business-specific.
Financial supply chain (cash flow management) 1.6%
Consequently success depends on
Other 0.6%
choosing them with a thorough
0% 5% 10% 15% 20% 25%
understanding of the operations
involved while considering the
specific business environment.
Results Analysis
The top 5 best practices used by the The lack of visibility: internally amongst critical customers. This would logically
respondents are: processes, and externally between business explain the top 3 best practices
partners; have incurred high inventory levels, used by the respondents. The most
#1 Sales & Operations Planning process
significant operating costs, longer lead times advanced companies have
#2 End-to-End supply chain visibility
and lower customer satisfaction. To forecast the elevated the conventional S&OP
#3 Performance measurement
demand more accurately and plan the supply process to integrate R&D, Product
#4 Customer segmentation
accordingly, the respondents have implemented management, marketing and
#5 Integrated business planning
one of the most powerful best-practices in financial issues into the process to
Due to the recent financial crisis, there is demand planning: the Sales & Operations merge the operational and financial
a noticeable growing trend for financial Planning Process (S&OP). The S&OP process plans into a seamless business
supply chain practices, which were not provides optimum results when complemented planning and tactical execution-
very popular in the Middle East in the with end-to-end visibility systems and efficient directing process: The Integrated
past years. performance measurement tools for segmented Business Planning (IBP).
customers. This would logically explain
the position of the top 3 best practices used by
15
the respondents. The most advanced
#3: What are the activities outsourced?
Introduction
Outsourcing in the Middle East is a fairly
Outsourced activities
new trend knowing that most companies
have been in-sourcing the majority of 10,5%
their activities so far. In order to 28,9%

optimize costs and deliver greater Logistics
efficiencies on all managed services, 23,7% Warehousing
Middle Eastern Corporate went through
Manufacturing
an intermediary phase of shared
R&D
services with a central department. As
IT
the supply chain sector has
15,8% None - Inhouse
professionalized along with the level of 10,5%
maturity of the organizations, an Other
increasing number of new ventures

have spun off, meanwhile developing 13,2% 18,4%
the outsourcing service offerings.
Results
23.7% of respondents do not outsource Analysis of manpower. One of the biggest
any of their activities. Amongst the Managing the supply chain has become challenges in outsourcing is to be able
respondents, who outsource some of increasingly complex, especially to understand and master the activity or
their functions, there are: coupled with the specific challenges in function that the company wants to
28.9% outsource Logistics the Middle East: narrow local supply outsource. Especially, before handing
function base, regulated markets, level of over its operations with potential related
18.4% work with contract maturity of business partners, shortage unresolved issues. Else this will only
manufacturers
of qualifies manpower etc…which has limit this initiative to outsource the
15.8% outsource Warehousing
services forced some companies to outsource current issues the company is facing.
some of their non-core activities such as Innovative companies amongst the
Considering the enabling functions, IT
logistics, warehousing or IT but as well respondents have embarked in a
and R&D represent altogether slightly
some of their very core activities journey, where they are accompanying
more than 23%.
including R&D, manufacturing, the service provider, as a partner, to
procurement and including the provision grow at the same pace, hand in hand.
of manpowerof . information and
© 2010 B2G Copyright - Middle East Series financial flows along the Customers by 16
optimizing the physical, information and
Supply Chain
maturity
#4: What is your supply-demand model?
Analysis
Supply-demand model
Inventory carrying costs count for a
large portion of total costs in many
13,2% 10,5% supply chains, so unsurprisingly
effective inventory management is one
Make/Deliver-to-stock of the most important issues that supply
chain managers are facing. Managers
18,4%
Make/Deliver-to-order have the difficult task to determine
which products should be made to
Mixed of Make to stock /
Make to Order order, and which should be made to
Make-to-Engineer stock in order to reduce the inventory
level while increasing (or maintaining)
the level of service. For made-to-stock
55,3% products, accurate demand forecasting
and proper inventory management
strategies must be determined to reduce
the level of inventory hold. For made-to-
Introduction Results order products, approaches for reducing
Competitive pressures on lead-times, The configuration of the supply chain customer lead time must be developed.
inventory level and costs have led many generally depends on the industry sector; The decision to use either a MTS or
organizations to review their production- however the respondents‟ responses MTO strategy depends strongly on the
inventory-delivery practices. In their give a good indication of the leading business specificities and has a
quest for “zero-inventory” goal, World- supply chain model present at the significant impact on the supply chain
class companies have started to regional level, which helps to understand performance. Indeed, with 55.3% of
determine the optimal conditions when the related supply chain challenges. The respondents using a combined
to hold a finished good inventory and large majority of respondents (55.3%) MTS/MTO strategy, it appears to be
when it is not. Based on that, the indicates that their supply chain model is much more effective than using either
resulting configuration selected, i.e. a mix of Make-to-Stock and Make-to- strategy exclusively. For this reason,
Make-To-Stock (MTS) / Make-To-Order Order. For the other supply chain most companies are employing a hybrid
(MTS) / Make-to- Engineer (MTE), is configurations: MTO–MTS approach, holding inventory
determinant of the performance of the 18.4% only have Make-to-Order in some cases, and producing to order
company‟s supply chain. 10.5% only have Make-to-Stock in other cases.
13.2% have Make-to-Engineer
#5: Which technology is supporting your Supply Chain operations?
Introduction
The importance of information is often Technology supporting the Supply Chain operations
overlooked as a critical competitive
resource. Indeed, its contribution to the Warehouse management system 34,2%
management of the supply chain is not Forecasting tool 26,3%
always very well understood. However, Performance measurement 23,7%
the role of the information technology in S&OP tool 21,1%
supply chain management is crucial to CRM application 18,4%
achieve higher productivity, Transportation management system 18,4%
responsiveness and lower costs. The SRM application 13,2%
everlasting changing customers‟ e-invoicing 13,2%
expectations have greatly increased Supplier management e-portal 13,2%
along with the internet trend, and have Capacity planning tool 10,5%
put on the spot the necessity of an Other 5,3%
efficient information system to support
0% 5% 10% 15% 20% 25% 30% 35% 40%
the end-to-end supply chain operations.
Results Analysis that imposes a greater discipline in

The top 3 information systems used by Traditionally, warehouse management anticipating and fulfilling the market
the respondents are: systems have been widely used to demand in a more cost-effective way. In
monitor the warehouse operations and this regard, to measure and control the
(34.2%) Warehouse management transactions. Indeed, WMS counts for effectiveness of their organization to
system (WMS) 34.2% of respondents‟ answer. On the supply the demand, companies have
(26.3%) Forecasting tool other hand, the lack of market visibility embarked on initiatives to improve both
(23.7%) Performance measurement in the Middle East coupled with a the visibility of their internal performance
tool versatile and hectic demand signal has and that of their business partners. The
forced companies to improve their volume of information processed
Further to the growing interest in the demand planning with more accurate requires the use of Business
S&OP process, there are 21.1% of forecasting tools. The market is Intelligence tools to segregate the most
respondents who are using related currently shifting from a supplier-push relevant information to support key
tools. model to a more customer- pull model business decisions.
that
Supply Chain
maturity
#6: How is your Supply Chain organization considered by top management?
Analysis
Supply Chain organization perception by top management With supply chains becoming more
dynamic and complex, organizations
Demand driven - Customer centric 39,5%

have begun to understand the
significance of having a high level
Strategic function (part of top management board) 28,9%
supply chain executive influence their
Function oriented
23,7%
(LOGISTICS/PRODUCTION/PURCHASING…) business strategy. Indeed, an efficient
Considered as a Cost center 23,7% supply chain management, which is
Collaborative with End-to-End partners (Suppliers /
21,1%
aligned with business strategy,
Customers)
Process oriented becomes critical to remain competitive
18,4%
(PLAN/SOURCE/MAKE/DELIVER/RETURN/ENABLE)
and profitable. Competition is no longer
Considered as a Profit center 10,5%
companies against companies but
Manufacturing driven - Internal focused 7,9% supply chains versus supply chains.
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

This mindset shift has supported
organizations to reshape their supply
chain management in a more customer-
centric supply chain. However major
Introduction Results organizational changes, from a
In today‟s business world, operations The respondents‟ perception of the functional model to a more process
and supply chain management are the supply chain is mainly demand driven- oriented model, are still slow to occur in
backbone of many companies. In this customer centric (39.5%), collaborative the Middle East. Besides this, there is
regard, more CEOs are including supply with end-to-end partners (21.1%) and an increasing trend to expand the
chain management in their strategic considered as a strategic department boundaries of the company‟s supply
agenda to differentiate themselves from
(28.9%), but remains organized by chain to integrate more external
their competitors. This shift has helped
functions (23.7%) rather than by partners. As a matter of fact, each
to see more supply chain executives at
processes (18.4%). Although for a member of the supply chain has an
the board table and has been
minority of companies (10.5%), the impact on the performance of the
accompanied by a transformation of the
supply chain is considered as a profit others, the overall supply chain and
way the supply chain management was
generator, the majority still sees it as a ultimately the end customer.
perceived within the organization.
cost center (23.7%).

Supply Chain
maturity
#7: What is the training frequency of the Supply Chain staff?
Introduction
Today, the global supply chain has
Training frequency of Supply Chain staff
become more complex with more
integrated perspectives, linking 4,0%
suppliers and customers. And one of the
most important drivers for success in 28,0%
deploying and running an efficient Never
supply chain is People. The challenge
Below 5 times a year
for supply chain executives, in the
Middle East, is to understand which
Between 5 to 10 times a
knowledge and skills are required, and year
to define the appropriate training and Above 10 times a year
education for their existing staff. As the
scarcity of skilled supply chain 68,0%
resources is exacerbated in the region,
training appears to be an adequate
solution more than anywhere else.
Results Analysis while in the UAE and Qatar private
The frequency of the staff training gives Education reform is on the top priority institutions are booming, in Saudi Arabia
a good indication of the importance of the focus is less on private universities,

list of the GCC governments, as the
education to the respondents‟ but rather on improving the quality of
need to develop best talents across the
management: public universities such as KAUST.
region becomes urgent to tackling the
68% of respondents provide Bahrain is making a point to differentiate
skills gaps, in a globalised economy. As
training to their supply chain staff itself from Dubai and Qatar by offering
a recent discipline, Supply chain
below 5 times a year training in services to cater for various
management is lacking of universities
4% of respondents provide training sectors, including banking and
between 5 to 10 times a year and private training centers to prepare a hospitals. However, Supply Chain
28% of respondents never provide highly skilled workforce for the future in management has not found its place yet
any training the Middle East. In this process, several in the academic programs and degrees
major initiatives in Education have been of GCC universities and private
launched to enter the era of Knowledge: institutions.

Industry insights
Human Resources Management:

Recruiting Supply Chain Experts
01 Company background makers are not able to improve the existing processes.
In few words, please describe your company Moreover, logistics companies are not using latest
activity technologies and thus, need more manpower to compensate
“We are a recruiting agency which represents IESF in this lack of technology.
Dubai. IESF (International Executive Search Federation) is

What attracts talents in the Middle East? How
the largest retained executive search group in the world
difficult is it to retain skilled resources?
identifying talent and leadership in 160 offices and 40
countries globally. We look for experts/specialists and talents “Some young talents look forward to getting more
using direct search approach. We have successfully made exposure than they would have in a mature market and to
searches in all support functions (HR, Finance, Supply endorsing real responsibilities. Besides this, the packages
“Good professionals
Chain, Logistics, Procurement and Project ement offered can be higher and tax
Management) and in the following industries: What levels are the most lacking in some
free in the Middle East?
countries of the
whoare not can handle the

“Senior Levels and MiddleMiddle
improve processes to increase quality, decrease costs and
IT/Telecom, Logistics, Engineering, East. On the other
Management are not strong
optimize cycle times. Consequently, decision makers
Manufacturing, Construction, Large Retailers hand, retaining talent is
full supplythechain cycle
enough to ensure that the strategies and tactics decided by
able to improve the existing processes.
and FMCG for UAE, Qatar and Saudi Arabia.” extremely difficult because of
Board/Executives are efficiently implemented.”
are very hard How doto thefind”

high inflation rates which have
02 What attracts
Manpower talents in the Middle
landscape nationalization
to be programs
reflectedaffect local
in salary
East? How difficult is it to retain
in the Middle East companies?
increases. training &
In addition, recognition is development, career
very important to
skilled resources?
How is the Middle East manpower
“S
landscape?
ome young talents look forward to getting “I
employees so that management growth, promotions,
should be ableincentives
to offer
t should be a two-way street; instead of focusing on these
on target reached…”
training & development, career growth, promotions,
“G
programs, companies should make a real selection of
“G
more
ood
exposure than
oodprofessionals
professionalswho
they
whocan
would orhave in a
can handle
handle full
mature market and to endorsing real
full or part supply
incentives on target reached…”
candidates and hire only motivated
What levels ones.
areNewly hired
the most
part
chainsupply
cycle chain cyclehard
are very are very hardforto two
to find find main
for reasons.
employees should be the
provided with
lackingdetailed jobthe
in thein descriptions
Middle East?
responsibilities.
two
Besides, the packages Which levels are most lacking Middle
First,main reasons.
universities First,
in the universities
region in the enough on
are not focusing
“S
and expected targets. It can take some time so it is better to
offered
region
can be higher
are not focusing
and
enoughthe
tax
on huge
free in some
Logistics-
East?
enior Levels and Middle
Logistics-Supply Chain despite needs of skilled start early during training and internships. New employees
countries of the the Middleneeds East. On the other
Supply
manpower
hand,
Chain in despite
this sector. huge
retaining
Moreover, we
talent is we
of skilled
can find a lot of
extremely difficult “S enior
should gainLevels
more and
Management are not strong
Middle in
confidence Management
themselves are
and not strong
be helped
manpower in this sector.
good operational people Moreover,
but they cannotcan think
find out of the enough to ensure that the
by a mentor.”
enough to ensure that the strategies and tactics decided by
because
a lot improve
of high
of goodprocesses
inflation
operational
rates which
people but
have to
theyto decrease strategies and tactics decided
box, to increase quality, the Board/Executives are efficiently implemented.”
be reflected
cannot think
inthesalary
out of cycle box,
increases.
improve
In addition,
processesdecision by the Board/Executives are
costs and optimize times. Consequently,
recognition is very important to employees so
to increase quality, decrease costs and “It should be a two-way street;
efficiently implemented.”
instead of focusing on
that
©
management
2010 B2G
optimize What times.attracts
Copyright
cycle
should talents
- Consequently,
bedecision
Middle East Series
able into offer
the these programs, companies should make a real selection of 22
training
makers areMiddle
& development,
not ableEast?
to improve How career
thedifficult
growth,
existing is it to
How do the nationalization
candidates and hire only motivated ones. Newly hired
programs affect local
Industry
Insights
Zoran Marinkovic
Partner - HR Solutions
BM Management
Consultancies – I.E.S.F.
How do nationalization programs affect local How is the educational system in supply chain?
companies?
“Instead of focusing on proposing Business Administration
“It should be a two-way street; instead of focusing on these degrees, universities should offer Logistics and Supply chain
programs, companies should make a real selection of programs. Internships and trainings are not very developed
candidates and hire only motivated ones. Newly hired in the Middle East whereas they would give a professional
employees should be provided with detailed job descriptions exposure and experience to students. Students would be
and expected targets. It can take some time so it is better to able to work with specialists and experts in supply chain and
start early during training and internships. New employees logistics as well as discover the various functions of this
industry.” industry.”
“Instead of focusing on
should gain more confidence in themselves
selves and be helped by a mentor.” How do you foresee the future of supply chain
Business Administration
manpower landscape in the Middle East?
How do you foresee the
03 Recruiting Supply Chain degrees, universities

“With the increase of regional future
supply chain and logistics aremanpower
of supply
competition chain
and because
landscape
critical in order to be able in
to
specialists
Are Supply chain professionals should propose deliverLogistics the Middle
the right quantity and quality East?
of products on time and
at the right cost, we need professionals who can challenge
more demanded compared to other
areas? Whatisisthe
areas? What thetrend?
trend?
and Supply
the existing chain
“With the increase of regional
procedures and who are familiar with the latest
competition and because
“The world
worldcredit
creditcrunch
crunch
hashas
mademade programs”
people realize that they
technologies. Companies should understand that they need
supply chain and logistics are
to spend time to draw-up an outstanding Supply Chain cycle
people
should realize
focus onthattheir
theycore
should focus on
business and expertise. This is critical in order to be able to
which can be implemented in a mid-term view.”
their coreinbusiness
the case and expertise.
Dubai where Thiswere less demanded
professionals deliver the right quantity and
is
in the
thecase
case
Supply in Dubai
in than
Chain Dubai
where
in where
professionals
the realprofessionals werebanking
estate or in the less quality
quality of products on time and of right
at the products on need
cost, we time
demanded
were lessHowever,
industry. in
demanded
Supplythe
Chain
intrend
Supply
thanwill
inChain
the
see real estatedemand
a huge or in thein andthe
professionals who can challenge at existing
the rightprocedures
cost, we need
and
than in Chain
banking
Supply the realwith
estate
industry. or in the
However,
new ports thebanking
comingtrend will renewed
up like see a huge
Zayed professionals
who are familiar with the latest technologies. who can
Companies
demand
industry. in
However,
Supply
Port & Khalifa Portthe
Chain
in trend
withDhabi,
Abu willnew
seeports
a coming
Kuwaiti up like
port near the challenge
should understand that they need the to draw-up
to spend time existing
borderdemand
renewed
huge with Iraq,
Zayed Saudi‟s
in Port
Supply ChainRed
& Khalifa PortSea
with new Gateway
in Abu Dhabi, Terminal
Kuwaiti an outstanding Supply procedures
Chain cycle and who
which can are
be
port
portsnear the
coming
extension, the border
of with
up like
Port Iraq,extensions
renewed
Salalah, Saudi‟s
Zayed Red Sea Gateway
of several ports in implemented in a mid-term view.”
familiar with the latest
Dubai…”
Port & Khalifa
Terminal extension,
Portthein Port
Abu ofDhabi,
Salalah, extensions of technologies. Companies
Kuwaiti ports
several in Dubai…”
port near the border with Iraq, should understand that they
Which positions in supply chain
Saudi‟s Red Sea Gateway Terminal need to spend time to draw-up
© 2010 Which
extension,
are
B2G positions
theMiddle
theCopyright
Port - of
inSeries
most
East
Salalah,
supplysought?
chain 23 Chain
an outstanding Supply
are the
(Procurement, most
sourcing, sought?
planning,
extensions of several ports in Dubai…” cycle which can be
Supply Chain performance metrics
05#1: Perfect Order fulfillment
Introduction
The Perfect Order Fulfillment represents Perfect order fulfillment (%)
the percentage of orders that are on
time, in full, with complete and accurate 9,7% 3,2%
documentation and no shipping 12,9%
damage. This customer-facing metric is

crucial as it measures the performance 50-60%
of the organization, as perceived by the 60-80%
Customer. Needless to say that this 80-90%

90-95%
metric directly impacts the company‟s 35,5% 22,6%
95-100%
top line and affects the relationship with
Not measured
its Customer. Although the precise
quantification of its contribution to the
revenue growth is relatively challenging,
16,1%
the benefits are confirmedly substantial.
Results Analysis relationship that enhances collaboration

The respondents were asked to indicate Achieving high „perfect order fulfillment‟ and speeds up transaction between
the level of their perfect order fulfillment: levels demands more than just supply chain partners. Companies that
35.5% of respondents indicate that computing data from software. boast some of the highest Perfect Order
their perfect order fulfillment Companies must configure their supply rates carry less inventory, experience
reaches 95% and above. chain processes from end-to-end to shorter cash-to-cash cycle time, and
16.1% of respondents have a deliver the highest possible have significantly less stock-outs when
perfect fulfillment comprised performance. It involves much more compared to their competitors. AMR
between 90-95% than the logistics aspect of delivering a Research says the pay-off for
22.6% of respondents say that their customer. It includes putting in place companies with high rates of "perfect
perfect order fulfillment ranges accurate forecasting process and tools, orders" can be substantial. A 3 percent
between 80-90% building information systems that improvement in perfect order fulfillment
9.7% of respondents do not connect suppliers, customers and translates to a 1 percent increase in
measure this metric. internal departments, or developing profits, AMR says.
strong
Supply Chain
performance
#2: Delivery performance (line item delivery to first commit)
Analysis
Delivery performance (%) The first step in improving on-time
delivery is defining what it is. This is
generally a major challenge. Each
6,5%
customer may have his own definition of
9,7%
„on time‟. Companies will need to
32,3%
develop an operational definition for on-
50-60%
time delivery that is aligned with their
60-80%
business partners. Once done, it is
80-90%
important to understand that improving
90-95%
on-time delivery is mainly a matter of
29,0% 95-100%
issues concerning time and
expectations. Indeed, the expectations
must be well understood by both parties
22,6%
in order to avoid unnecessary
pressures. On the process side,
Forecasting, demand planning and the
Introduction Results supply chain configuration play a major
The „Delivery performance‟ or „On-time The survey results indicate that:
role in the performance of the on-time
delivery‟ is one of the key components
delivery. So to address the issue, supply
of the perfect order fulfillment. On-time 32.3% of respondents outperform
chain managers must examine carefully
delivery is measured as percent above 95% of On-time delivery
their demand processes to identify and
achievement within a window of time 22.6% of respondents deliver with a
measure those that are contributing in
that brackets the customer-requested performance between 90-95%
date/time and/or the business' 29% of respondents reach an the desired on-time outcome. From this
committed date/time. While price has average on-time delivery between analysis, managers will be able to tackle
always been a key element in the 80-90% counter performance related to process
purchasing decision, a constant and 16.2% of respondents are lagging lead times, capacity bottlenecks,
timely delivery is becoming increasingly with a delivery performance below process quality and etc… in the quest of
important due to the market‟s pressure 80% the 100% on-time delivery.
for speed and product instant availability

#5: Total Supply Chain management cost
Introduction
The Total Supply Chain Management
Cost measures the fixed and Total Supply Chain management cost (% revenue)
operational costs associated with the
Plan, Source, Make, Deliver and Return >25% 6.4%
supply chain processes. Concretely, the 18%-25% 10.6%

supply chain costs take into account 16%-17% 8.5%
order management (Deliver), material
14%-15% 12.8%
acquisition (Source), inventory carrying
(Indirect Plan), planning/finance (Plan), 12%-13% 14.9%
returns management (Return) and 10%-11% 19.1%

information technology costs (Indirect 8%-9% 12.8%
Enable). In a context of severe cost
5%-7% 10.6%
competition, it is important to know the
total supply chain cost to be able to <5% 4.3%
reduce the total cost of acquisition on 0% 5% 10% 15% 20%

any item.
Results Analysis
The respondents indicate that their total The total supply chain management cost provides a standard definition that helps
supply chain management cost counts can vary significantly between industry to align the way this metric is calculated.
between: sectors however the differences between "It is estimated that reducing the supply
best-in-class companies smooth over chain cost by 1 percent can be the
15 to 25% of their operational
regardless the industry sector. Median equivalent of increasing revenues from
revenue for 19.1% of respondents
companies have a supply management 4 to 12 percent" says Scott Stevens,
10 to 15% of their revenue for
cost which generally spans from 10%- CTO for the council. To reduce the
46.8% of respondents
15%, and best-in-class companies supply chain costs, managers should
5 to 10% for 23.4% of respondents
achieve cost performance under 6%. focus on non-value added time and
Under 5% of their revenue for 4.3%
This metric is still very difficult to track as costs in the supply chain including
of the respondents
it involves many processes, however the excess inventory, communication
Supply Chain Council‟s SCOR model inefficiencies, long cycle times and
(Supply-Chain Operations Reference) discoordination of efforts.
© 2010 B2G Copyright - Middle East Series model) the Customers by optimizing the
26
physical, Customers by optimizing the
Supply Chain
performance
#6: Cash-to-cash cycle time
Analysis
Cash-to-cash cycle time (days) The Financial supply chain is taking
more importance in CFO and Supply
0
chain top executives‟ agenda, as it
35%
0 offers significant potential to generate
30% bottom line improvement and create
0
competitive advantage. The Financial
0
Supply Chain refers to the end-to-end
20%
0 trade processes and information that
15% drive a company‟s cash, accounts, and
0
working capital. An optimized
0
management of the Financial Supply
0 Chain allows reducing the amount of
cash corporations need to hold. And the
0
<30 Days 30-60 Days 60-90 Days >90 Days cash-to-cash cycle time represents one
of its key performance indicators. The
shorter the cash-to-cash cycle, the less
Introduction Results the company needs working capital,
Often called cash conversion cycle, this The respondents were asked to indicate however depending on the industry
metric represents the time it takes for a their performance related to the cash-to- sector some significant differences
dollar to flow back into a company after cash cycle time (C2C). Companies which exist: sectors like Retail, Hospitality and
it has been spent on raw materials. It is are notable for their superior performance Telecommunication show negative cycle
one of the major metrics to determine in managing their working capital, have a times whereas sectors such as
how well a company is managing the cash-to-cash cycle time that is 2 times Agriculture, Mining & Metals, Industrial
working capital flow from suppliers shorter than the median and 3.5 times products or Chemicals have a cash-to-
(accounts payable) to customers shorter than the laggard. cash cycle time that is superior to 130
(accounts receivable) through the 30% of respondents have a C2C days. It is important for a company to
capital tied up in the company below 30 days shorten its C2C cycle time as much as
(inventories). It consists of days of sales 35% of respondents have a C2C possible, but also to balance its Days of
outstanding, days of payables between 30 and 90 days Sales Outstanding (DSO) and its Days
outstanding and inventory days of 35% of respondents have a C2C of Payables Outstanding (DPO) to
supply. above 90 days optimize its operational performance.

#7: Inventory days of supply (DIO)
Introduction
Inventory is the backbone of the war in Inventory days of supply (DIO)
supply chain management. Raw
0
materials, goods in process and finished 35%
0
goods all represent various forms of
30%
inventory. Each type represents money 0
tied up until the inventory leaves the 25%

0
company as purchased products. This
0
inventory represents a large portion of
the business investment and needs to 0
be well managed to maximize profits. 10%

0
One of the most important challenges of
0
inventory control is to have the items in
stock at the moment they are needed 0
while optimizing the cost of carrying this <30 Days 30-60 Days 60-120 Days >120 Days
inventory.
Results Analysis
Days inventory outstanding (DIO), is Successful inventory management especially when the company is able
also defined as days sales of inventory. involves balancing the costs of to meet its customer expectations.
The respondents were asked to indicate inventory with the benefits it provides. With improved visibility into supply
how many days on average their A poor management of inventory can and demand, supply chain managers
company turns its inventory into sales: result in a significant expense that can can make critical decisions about
affect profitability. Many executives how and where to reduce inventory
10% of respondents have a DIO fail to appreciate fully the true costs of and still maintain the highest level of
below 30 days carrying inventory, which include not customer service. Regardless the
60% of respondents have a DIO only direct costs of storage, insurance nature of the business, the main
between 30 and 120 days and taxes, but also the cost of money challenge lies in the capability of any
30% of respondents have a DIO tied up in inventory. Value of DIO organization to forecast accurately
above 120 days varies from industry and company. the demand and plan accordingly the
But in general, a lower DIO is better; supply including inventories.

Supply Chain
performance
#8: Days of payable outstanding (DPO)
Analysis
Days of payable outstanding (DPO) The downturn in the economy and the
global financial credit crisis have
1
55% produced tremendous pressures on
cash reserves. Although the Middle East
1
region has been less impacted,
overseas suppliers have strengthened
0
the management of their credit affecting
0 the cash flow of companies, which used

25%
to stretch payables period. Recently,
0 this metric has been less in control of
15%
the company but rather defined by the
0 suppliers‟ payment terms. However, the
5%
DPO has still its importance in the
0 management of the supply chain as it
=<30 Days 30-60 Days 60-90 Days >90 Days
directly affects the financial capability of
the company‟s supplier which can limit
its growth and operational capability. As
Introduction Results the supplier plays a major role in the
The Accounts payable (A/P) are The respondents were asked to indicate company‟s flexibility, responsiveness
becoming a key component in the how many days on average their and costs, the company may bear the
optimization of the working capital, but a company pays their suppliers‟ invoices: substantial consequences of a
lack of maturity (technological, process, mismanagement of the A/P (operational
organization) in this discipline is slowing 55% of respondents have a DPO at
and financial). A win-win situation can
down its evolution. One of the key A/P 30 days or below
be established between the company
indicators is the days of payables 40% of respondents have a DPO
and its supplier, for example shorter
outstanding (DPO) which are a measure between 30 and 90 days
payment terms can be negotiated
of the company‟s average payable 5% of respondents have a DPO
against better service level or higher
period. Despite the general belief, a above 90 days
discounts on material purchase.
longer DPO can negatively affect the
suppliers and indirectly impact the
company on the long term.

Supply Chain
performance
#9: Days of sales outstanding (DSO)
Introduction
The Accounts Receivable (A/R) is one Days of sales outstanding (DSO)
of the most critical factors in the 0
optimization of working capital. Due to 35%
0
the high importance of cash involved in 30% 30%
running a business, it is in a company's 0
best interest to collect outstanding 0

receivables as quickly as possible. To
0
measure the average number of days
that a company takes to collect revenue 0
after a sale has been made, the
0
following indicator is commonly used: 5%
Days of Sales Outstanding (DSO). By 0
quickly turning sales into cash, the 0

company is more likely to reinvest faster =<30 Days 30-60 Days 60-90 Days >90 Days
and to support its growth.
Results Analysis median companies, and forecast with

The respondents indicate how many Amongst the different opportunities, 40% greater accuracy than median
days on average their company is able Accounts receivable is preferably used companies. To improve the DSO,
to collect the cash from their customers: by most companies to improve companies should streamline and
positively the cash flow. The sooner the automate the cash collection processes.
30% of respondents have a DSO at company can collect cash from its An automated process will fasten the
30 days or below customers, the better it can re-invest cash collection (ex: access to SWIFT)
65% of respondents have a DSO the money where it is needed. In and improve the invoicing accuracy. It is
between 30 and 90 days addition, it is important to note that the highly recommended to manage the
5% of respondents have a DSO timely collection of receivables helps to DSO in a more integrated way through a
above 90 days predict more accurately the cash formal Order-to-Cash (OTC) process,
requirements and limits the financial where the entire process from the
risk. Best-in-class companies are able customer order to the cash collection is
to collect receivables twice as faster as completely managed and controlled.

Industry insights
3PL outsourcing in the Petrochemical

Industry
The company was therefore seeking to develop a high-
quality strategic partnership with a Logistics Services
01 Company background
Provider that could:
“Petro Rabigh was originally a refinery with a capacity of  Provide a global logistics services offer (Freight
400,000 bbls/day which belonged to Saudi Aramco. When forwarding, warehousing, distribution, reverse
logistics)
Saudi Aramco decided to enter the Petrochemical market, it
was decided to create a new venture with Sumitomo which  Demonstrate the required experience and capability
was called Petro Rabigh. The company is located in Rabigh, to manage Petro Rabigh‟s logistics operations
165 kilometers north of Jeddah on the Red Sea coast. It is  Support Petro Rabigh to moving forward, during the
now producing a wide range of polymers, monomers and transition phase, from Project to operations mode”
refined products.”
Was this decision a premier in KSA? In the
Which
Whichchallenges
challengesforced PetroRabigh
forced to come to
PetroRabigh to Petrochemical industry? And in which
decisionofofoutsourcing
the decision outsourcing
the the logistics perspectives? Perspectives?
“We were seeking
come to the decision of
department?
logistics department?
outsourcing the logistics
department? to be world-class “This decision was a premier in
“This decision was a premier in the Petrochemical sector and
“P etroRabigh
etroRabigh was was seeking
seeking to to be be world-class
in the region. The initiative covers the logistics outsourcing
the Petrochemical sector and in the
by a 3PL of PetroRabigh‟s MRO business including, Door to
be world-class
organized.
world-class
“P etroRabigh
Its motto
organized. organized.
was
waswas
Its motto
seeking
to toIts
to
organized” door Freight forwarding,
become globally
be world-class
region. The initiative covers the
Warehousing management,
motto
recognized
become was to
globally and become
recognized locally globally
committed.
and locally In this logistics outsourcing by a 3PL of
Delivery to Internal end users including collection of end-
organized.
recognized
regards, Inwe
committed. Its
this motto
and
thisdecided
regard,
regards,wewe wasto to
locally
build
decided
decided become globally
a world-class
to build a world-class PetroRabigh‟s MRO business
user‟s returned materials and internal stock transfer,
recognized
committed.
logistics
logistics
to build function and
In
function this locally
regards,
within
within logistics
a world-class the committed.
organization.we
function To do that,Inwethis
the organization. To
had Including Door to door including,
Freight forwarding,
Door to door Warehousing
Freight
Reverse Logistics (End-users returns & Return to Vendor).
regards,
decided
do face
to that,
within the thetowe build
wereality decided
had to
organization. a
about to
world-class
Toface
dothe build
the
that, fact a
reality
we world-class
about the
that logistics was management, Delivery forwarding,
to Internal end users including
Warehousing
We were conscious that being the first company to do that
logistics
facttothat
considerably
had function
function
face logistics
thelagging
reality in within
was within
the the
about countrythe the
considerably
fact that organization.
compared lagging To
in
to the West. collection of end-user‟s returned materials
management, and internal
Delivery stock
to Internal
could have posed some risks, but we felt that logistics, which
do that,
organization.
the country
Consequently,
logistics we hadTo
was considerably todo
Petrocompared face
Rabigh that,
lagging the we
decided
in the reality
to to the about the
West.
outsource its transfer, Reverse Logistics end(End-users returns collection
users including & Return to of
is an emerging industry in the region, needed to be
fact
had that
complete
country to
Consequently, logistics
face the
inbound logistics
compared was
reality
Petro considerably
to theactivityabout
Rabigh
West.for decided lagging
its MRO and in
to Vendor). We were conscious returned
that being
end-user‟s the first companyand
materials to
supported by a leading organization. As a major company,
the
chemicals country
fact
outsource
Consequently, that
supply. Petro compared
logistics
its Rabigh
complete was
decidedinboundto
to the West.
logistics do that could have posed somestock
internal risks,transfer,
but we Reverse
felt that
our role is to develop the local industry and especially to
Consequently,
considerably
activity for
outsource its complete Petro
lagging
its MROinbound Rabigh
in
and chemicals the
logistics decided
supply. to logistics, which is an emerging industry
Logistics in the region,
(End-users needed
returns &
The company was therefore seeking to develop a high- support the logistics sector which is strategic in KSA. We
outsource
country its its
for compared
activity strategic
quality MROcomplete and to with the
chemicals inbound
a Logisticslogistics to be supported by a leading organization. As a major
The companypartnership was therefore seeking Services
to Return to Vendor).
took the risk albeit in a calculated way and it pays off.”
We were
activity
West.
Provider
supply. for its MRO
Consequently,
that could: and chemicals
Petro supply. conscious that being the first
develop a high-quality strategic partnership UAE, Qatar and  Saudi
operations
Arabia.”
Rabigh decided  Provide to aoutsource
global logistics services offer company to do that could have
The
The acompany
withcompanyLogisticswas(Freight was
Services
therefore therefore
Provider
seeking
forwarding, to seeking
that could:to
warehousing,  Support Petro Rabigh to moving forward,
its
© complete
2010 B2G Copyrightinbound
- Middle logistics
East Series 02 Manpower during the transition
posed
landscape in the phase,
some Middle from
risks, but we
East Project to
32
felt that
develop aa high-quality
develop distribution, reverse
high-quality strategic
strategic logistics)partnership
activity
partnership for  Provide
with aitsLogistics
MRO a global andlogistics
Services
operations mode”
logistics, which is an emerging
with a Logistics  Services theProvider How is the Middle East manpower landscape?
Provider that could:
Demonstrate
services offer (Freightthat could:
required experience and
Industry
insights
“We were conscious that being the first company to do that
could have posed some risks […] We took the risk albeit in a
calculated way and it pays off”
company, our role is to develop the local industry and meet our requirements. After the bid award of the LSPs, we
especially to support the logistics sector which is strategic in entered in a second phase of the project, where the selected
KSA. We took the risk albeit in a calculated way and it pays logistics provider was being integrated into Petro Rabigh‟s
off.” structure. Then, the third phase aimed at supporting the
newly implemented logistics operations during the critical
02 Approach
ramp up period.”
What were the project objectives and expected

How long did the project last?
outcomes?
“The main objective was to reduce the total cost of

“The selection of the Logistics Service Provider lasted 3
months whereas the implementation phase took more than 6
ownership, but besides financial considerations, we needed
months. The ramp up phase lasted 6 months.”
to have the right expertise to conduct this critical work.
Indeed, the plant has to function 24h a day, 7 days a week
and the cost of an equipment breakdown can be substantial. 03 Results
So the timely supply of the right parts becomes a critical key
to guarantee a seamless operation of the plant. Finally, our “After the integration of the 3PL in our organization, we
objective was to expand the level of know how in logistics managed to put in place efficient processes that enable the
both, for us internally by bringing a logistics expert within our logistics operations to be more responsive to urgency,
organization, and as well, by helping a 3PL to gain maturity especially when a part is needed on a short notice period.
in outsourcing and to acquire specific knowledge in the On the other hand, the tangible result was a significant
MRO-Petrochemical business.” improvement of the on-time delivery from both side, on the
suppliers side and to the customers side too. However, we
Which strategy was selected? are still facing some issues of low performance from some
“The project started with the selection of the Logistics suppliers which affect our own 3PL performance, so for the
next steps, we intend to implement a supplier performance
Service Providers (LSPs). We conducted both a technical
program to support our suppliers to improve their delivery
and a commercial evaluation to assess the capabilities of the
and reliability performance. Through more awareness and
LSPs to
stronger incentives with a rewarding system, we expect to
see a significant improvement in our suppliers‟ performance
“PetroRabigh was seeking to be world-class levels.”
Industry
insights
Abdullah Al Saif
Materials Supply Manager
Petrorabigh
stronger incentives with a rewarding system, we expect to “We have experienced the outsourcing concept at Petro
see significant improvements in our suppliers‟ performance Rabigh, and the results are more than convincing. I can only
levels. recommend to other companies to focus on their core
business and to outsource their non-core activities as long
04 Key lessons learned
as they find the right partner. For us, the critical path,
besides the change management, had been the quality of
How challenging was the integration of a 3PL
the information: we faced quality issues from our different
within Petro Rabigh’s organization? Is a bold
systems which had impacted the performance of the 3PL.
leadership enough to conduct such major change
The integration of our suppliers, 3PL and our company was
in an organization?
very challenging with a lack of data integrity. We could not
“A
“At the beginning, we had to face strong resistance to compare apples with oranges. The quality of data is really
t the beginning, we had to face
critical amongst the supply
critical chain the
amongst partners
supply to secure
chain the
partners
““It is high time toof the end-to-end
change, to delegate key activities to an external company,
strong resistance to change, to delegate
integrity
and with time, we have built trust and we can now work in information
to secure the integrity Conclusion
flow.”of the end-to-end
key activities to an external company,
capitalize on “Itour
total transparency with our 3PL partner. The other main
and with time, we have built trust and
information flow.
is high time to capitalize on our experience amongst the
challenge was to develop a cost-consciousness mindset, as
experience amongst
we can now work in total transparency
1% of cost reduction equals to 5% of sales increase. So we
To conclude,
supply chain professionals, in the Petrochemical
it is high time to sector, and
capitalize
with our 3PL partner. The other main to start sharing theon
outcomes of such initiatives.
our experience amongst theThe supply
model
the supply chain

had to educate our people to be more cost-focused in their
challenge was to develop a cost- has been tried successfully as a pilot at
chain professionals Petro
in the Rabigh and
Petrochemical
management of the operations.”
consciousness mindset, as 1% of cost can be easily duplicated. Wetoneed
sector, and to workthe
start sharing asoutcomes
a group
reduction
What wouldequals
you to 5% of sales
recommend professionals”
to companies which towards the goal of such
helping each other
initiatives. The to overcome
model our
has been
increase. So we
are looking had to educate
to outsource their our
logistics services? challenges. The kingdom of Saudi Arabia
tried successfully as ais pilot
located
at at the
Petro
management
people
Key success of factors,
to be morethecost
operations.”
focused
pitfallsintothe management of their
avoid? Rabigh
strategicand canand
place begroup
easily duplicated.
will have to fully
towards We
theplay need
its
goal toofwork
ofrole as a
logistics
helping each
operations.” group towardsthe
hub between the goal
East and
other of helping
tothe West,each
overcomeand other
each
our to us
of overcome
have
challenges. to
The
What
“We havewould you recommend
experienced to concept at Petro
the outsourcing lift the
our level of expertise
challenges. and of
Thekingdom
kingdom know howArabia
ofSaudi
Saudi to make
Arabia itlocated
happen.”
is islocated atatthe
a
companies
What
Rabigh,would which
and theyou recommend
are
results are lookingtoto
more than companies
convincing. which
I can only strategic place andstrategic
will haveplace
to fully
and play
willits roletooffully
have logistics
play
outsource
are willing to
recommend theircompanies
to other
outsource logistics
theirtologistics
focus onservices?
their core improve their delivery and reliability performance. Through
hub between the East and of
its role thelogistics
West, so each
hub of us has
between the to lift
East
services?
Key success
business andKey
factors,
success
outsource pitfalls
their factors,
to avoid?
non-core activities as long as more awareness and stronger incentives
the level of expertise and
and know
the how
West, and eachwith
to make of usa have
rewarding
it happen.” to lift
pitfalls to avoid?
they find the right partner. For us the critical system, we expectthe to see
What would you recommend to companies which level of expertise and know howour
a significant improvement in to
path, besides the change management, had improve
suppliers‟their delivery and
performance
make
reliability performance. Through
levels.”
it happen.”
© 2010
“We
are B2Gexperienced
have Copyright
looking - Middle East Series
the outsourcing
to outsource their logistics services? 34
been the quality of the information: we faced more awareness and stronger incentives with a rewarding
improve their delivery and reliability
Key success
concept at Petrofactors,
Rabigh, pitfalls to avoid?
and the results
especially
quality issues from our different systems system, wetoexpect
supporttothe logistics
see sector improvement
a significant which is strategic in
in our
Supply Chain challenges
06
#1: Top Supply Chain concerns your organization is currently facing?
Introduction
The supply chain has become Top Supply Chain concerns
increasingly complex and the volatile
Improve demand forecasting 73.7%
economy has significantly contributed to
Reduce and optimize inventory levels 63.2%
bringing in the supply chain landscape Reduce delivery leadtimes 57.9%
more challenges. Economists and Improve supplier performance 42.1%
Reduce logistics costs 41.0%
experts are in agreement that a
Develop collaboration within the supply chain partners 39.5%
recovery is under way and will persist Improve distribution network 34.2%
above 2011; however Supply chain Increase inventory turnover 26.3%
Increase warehousing capacity 23.7%
managers will still have to face greater
Fasten operations with supporting technology 22.5%
difficulties in managing their supply Increase delivery reliability 21.1%
chain during the upturn, especially those Reduce time to introduce new product 19.4%
who drastically downsized their supply Reduce manufacturing costs 15.8%
Improve asset utilization rate 13.2%
chain capabilities without preparing the
Other 10.5%
return of the growth.
0% 10% 20% 30% 40% 50% 60% 70% 80%
Results Analysis
The top five challenges enumerated by With a volatile economy, the demand Due to limited resources, the delivery
the respondents are: has been fluctuating much more than leadtimes have been abnormally
usual which has made the forecast of stretched and have become less and
Improving demand forecasting less reliable, both on the customers and
the demand more challenging and
(73.7%) suppliers‟ sides. The recurrent issue is
less accurate. Unsurprisingly,
Reducing and optimizing inventory not new in the Middle East, on the
improving the demand forecasting
levels (63.2%) suppliers‟ side but the phenomenon has
appears on top of the other supply
Reducing delivery leadtimes been dramatically emphasized during
chain challenges, followed by the
(57.9%) the downturn, with a greater lack of
inventory optimization. As demand is
Improving suppliers performance visibility on the demand and supply sides
less predictable, the planning of the
(42.1%) for the suppliers. This has resulted into
resources and in particular inventory
Reducing logistics costs (41%) degraded service levels and higher
becomes more difficult. This generally
leads to inadequate inventory levels. logistics costs.

Supply Chain
challenges
#2: How difficult is the recruitment of Supply Chain professionals?
13,5% Senior positions (VP

Supply chain,
27,0% CSCO,Supply chain Analysis
Difficulty to recruit Most searched positions
director…) People are generally wrongly placed at
4,0% the last position after technology and
13,5% Senior positions
13,5% Middle
(VPmanagement
12,0% Seniorprocesses.
positions (VP Basically, Operations are
13,5%
13,5% Supply chain,
Senior positions (VP
positions
Senior (Logistics
positions (VPchain,
Supply
27,0% 27,0% CSCO,Supply
Supply chain, manager, supply
chain chain,
Supply chain
run bychain
people and the productivity is
27,0% CSCO,Supply chain CSCO,Supply
27,0% director…) manager,
director…) CSCO,Supplydirector…)Warehouse
chain
directly linked to the performance of the
Middle managementmanager, etc…)
director…)
positions (Logistics
manager, supply chain operators. Even best practices cannot
Technical experts
relatively difficult Middle management
manager, Warehouse
manager, etc…)
Middle management
positions (forecasting,
(Logistics supply chain
Middle management be (Logistics
effective if the staff is not able to run
normal Technical experts positions
manager,
(forecasting, supply analyst
supply
chain etc…)
chain
positions (Logistics
analyst etc…) manager,
themsupply chain In addition to that, as
properly.
relatively easy manager, Warehouse
manager, supply chainWarehouse
manager,
59,5%
59,5% manager, etc…) manager, Warehouse supply chain has become more
manager, etc…)
manager,
Technical experts etc…) complex, it has emerged a new breed of
Technical experts
(forecasting, Technical
supply chain
experts supplysupply
(forecasting, chainchain
professionals with a new
analyst etc…)(forecasting, analyst
supply etc…)
chain
set of required skills. To be able to
84,0% analyst etc…)
59,5% manage a global and complex supply
relatively difficult 59,5%
59,5% chain in a highly dynamic environment,
normal
professionals need to have both “hard”
relatively easy
analytical skills and “soft” leadership
skills. In Today‟s context, the supply
Introduction Results
chain professional must be able to
Today‟s supply chains face a severe The respondents were asked to cite the
integrate the big picture in his supply
global shortage of talent and skills profiles the most searched and to
chain strategy which includes finance,
whereas the demand in the profession indicate the level of difficulty in recruiting
sales and marketing. He also needs to
has never been greater. Even though supply chain professionals:
extend his perimeter across the supply
this shortage is more accentuated in the 84% of respondents find the recruitment
chain partners, from the suppliers to the
Middle East, the trend is really global of supply chain professionals relatively
end customers. The strategic position of
and affects every market, regardless its difficult, especially at the middle
this discipline, has forced managers and
level of maturity or geographical management level (59.5%) like
directors to develop an effective vertical
localization. The recruitment and Materials Management Manager, but
communication towards the top
retention of the skilled people who have also for more technical positions such
management which considers more and
to manage companies‟ supply chains is as forecaster. 13.5% of respondents are
more the supply chain as a key
becoming the next biggest challenge of facing difficulties to recruit top managers
competitive differentiator.
the century. at the position of supply chain directors.

Supply Chain challenges
Supply Chain
challenges
#3: What are the next initiatives you are planning to implement?
Analysis
Next initiatives planned to be implemented within the next Respondents have clearly identified the
12 months weakest point yet most critical in their
Improve demand forecasting 42.1% supply chain: their ability to forecast
Reduce logistics costs 36.8% accurately the demand. Buying too
Reduce delivery leadtimes 34.2% much inventory can be costly in terms of
Reduce and optimize inventory levels 31.6%
space and trapped capital and exposes
Improve supplier performance 21.1%
Develop collaboration within the supply chain partners 21.1%
the company to high level of
Increase warehousing capacity 18.4% obsolescence. Underestimating demand
Improve distribution network 18.0% usually leads to backorders, stock outs
Fasten operations with supporting technology 17.6%
and poor service levels. Anticipating
Increase delivery reliability 15.8%
demand accurately and efficiently is
Increase inventory turnover 15.1%
Reduce time to introduce new product 13.2% crucial to balance a minimized inventory
Improve asset utilization rate 13.0% investment and optimized revenue
Reduce manufacturing costs 5.3% opportunities. A more accurate
Other 2.6%
forecasting provides the company with a
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% better ability to plan the supply
accordingly, in a more cost-effective
Introduction Results way. As a matter of fact, once the
Against conventional wisdom, it is even The top 5 initiatives that the forecast accuracy has been improved,
more critical for companies to invest respondents are planning to implement, there is a subsequent impact on the
time, effort and money in improvement within the next 12 months, correspond inventory levels and the associated
projects during downturn period. to the major challenges cited previously: costs. Part of the logistics costs is
Investing money on projects is often automatically reduced and the delivery

Improving demand forecasting
disputable and difficult to defend without lead-times can be improved too. Once
(42.1%)
a solid business case, however the pay the company has a better visibility of the
Reducing logistics costs (36.8%)
offs have proved to be substantial. It is demand, the relationship with its
Reducing delivery lead-times
often the only way to get ahead of the suppliers can switch from an ad-hoc
(34.2%)
competition. To address their mode to a more anticipative
Reducing and optimizing inventory
challenges, the interviewed companies collaboration where the supplier is able
levels (31.6%)
have presented the course of mid-term to plan ahead of time and fulfill its
Improving suppliers performance
actions that they are planning to take. delivery commitment.
(21.1%)

Conclusion
Conclusion
07
A Supply chain under pulls itself free from recession, in a supply chain, competing with other
construction… would be an competition for scarce resources will supply chains, all focused in delivering
apt title for the “2010
summa State of the Supply
recessioptimum level intensify, there will be a greater value to the end customer. Integrated
Chain Report”.
the There
supply waschain
an increased
from movement of goods across borders, and supply chains underpinned by common
awareness of the strategic
performing importance of
to its optimum there will be a downward pressure on technology, systems and processes, will
supply chain management in the Middle prices driven by the end customer, lead to agility and flexibility in the form
East over the course of 2010 and an whilst scarcity will ensure rising factor of shorter lead times, and reduced costs
even sharper focus was brought to bear input costs. Companies merely as a result of lean inventory and lower
upon driving bottom line profits. competing on cost will find their profit cost of ownership through shared
Strategic Supply Chain Management margins under serious threat and only investments. In an adversarial customer
has far reaching consequences, beyond companies that decide to innovate supplier relationship, there will always
the scope of just logistics and if through differentiation will succeed in be a trust deficit, however, once trust is
deployed correctly can form an defending their margins. In a post replaced by collaboration, the entire
unassailable defense against recession world companies will end-to-end supply chain can be equally
competitors, resulting in a true increasingly find themselves part of an profitable for every player: from the
competitive advantage. As the world integrated network of companies, locked suppliers to the end customers.
pulls itself free from recession in a supply chain, competing with other
© 2010 B2G Copyright - Middle East Series pply chain has a greater interest to
40
supply chains, all focused in delivering
As the world pulls itself free from maximize the profitability of its business
value to the end customer.
recession, competition for scarce
Appendix
08
Appendix
About B2G Consulting:
Based in the Middle East, B2G consulting is a newly created firm

focusing on supporting growing markets, from A to Z, we help our
clients to build profitable businesses in new and challenging
markets, transforming their critical challenges into high value
opportunities, and our capabilities to support organizations
encompass every operational aspect:
 Definition of operational strategy
 Hands-on support for implementation
 Execution and interim management
B2G Consulting currently operates in Eastern Europe, Middle

East & Africa, Asia Pacific and China, the organization is
embarking on an ambitious expansion plan with the goal of
reaching 25 emerging markets by 2020…
Authors:
Frederic Gomer Simon Chauvin

Partner Senior consultant
B2G Consulting
B2G Consulting
frederic.gomer@b2g-consulting.com
Simon.chauvin@b2g-consulting.com
Mobile: +65 972 604 97 Mobile: +973 39 31 98 83
© 2010 B2G Consulting .This document is the result of primary research performed by B2G Consulting. B2G Consulting methodologies provide for
independent and objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire
contents of this publication are copyrighted by B2G Consulting and may not be reproduced, distributed, archived, or transmitted in any form or by any
means without prior written consent by B2G Consulting.

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State of the Supply Chain Management: Middle East Series 2010

© 2010 B2G Copyright - Middle East Series 2

M iddle East benefits from an smoothen and ease business

© 2010 B2G Copyright - Middle East Series 3

03 Survey panel analysis 10

Industry insights: Conducting a cost reduction program

04 Supply Chain maturity

Industry insights: Human Resources Management –

© 2010 B2G Copyright - Middle East Series 4

05 Supply Chain performance metrics

Industry insights: 3PL outsourcing in the Petrochemical

06 Supply Chain challenges

© 2010 B2G Copyright - Middle East Series 5

T over six months of dedicated

Headquarters location Number of employees

© 2010 B2G Copyright - Middle East Series 10

Company annual revenue ($US) Main sector of activity

Industrial manufacturing 17,9%

1M-25M Retail 8,9%

26.3% Other 3,6%

151M-500M Agriculture 1,8%

© 2010 B2G Copyright - Middle East Series 11

Conducting a cost reduction program in

“After several acquisitions and major internal increase profitability

and operational departments in order to drastically reduce decisions as a team

economical context.”  Increasing project planning and execution to

03 Key lessons learned 04 Which lessons to retain in conducting

One of the very first things that we did wasassets

04#1: How is the level of knowledge of your Supply Chain organization?

#3: What are the activities outsourced?

their activities so far. In order to 28,9%

increasing number of new ventures

#4: What is your supply-demand model?

#5: Which technology is supporting your Supply Chain operations?

Results Analysis that imposes a greater discipline in

#6: How is your Supply Chain organization considered by top management?

Demand driven - Customer centric 39,5%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

© 2010 B2G Copyright - Middle East Series 19

#7: What is the training frequency of the Supply Chain staff?

Results Analysis while in the UAE and Qatar private

a good indication of the importance of the focus is less on private universities,

© 2010 B2G Copyright - Middle East Series 20

Human Resources Management:

Dubai. IESF (International Executive Search Federation) is

whoare not can handle the

are very hard How doto thefind”

03 Recruiting Supply Chain degrees, universities

05#1: Perfect Order fulfillment

damage. This customer-facing metric is

of the organization, as perceived by the 60-80%

Customer. Needless to say that this 80-90%

Results Analysis relationship that enhances collaboration

#2: Delivery performance (line item delivery to first commit)

© 2010 B2G Copyright - Middle East Series 25

#5: Total Supply Chain management cost

supply chain processes. Concretely, the 18%-25% 10.6%

returns management (Return) and 10%-11% 19.1%

reduce the total cost of acquisition on 0% 5% 10% 15% 20%

#6: Cash-to-cash cycle time

© 2010 B2G Copyright - Middle East Series 27

#7: Inventory days of supply (DIO)

tied up until the inventory leaves the 25%

be well managed to maximize profits. 10%