Supply chain – issues on assembly in new markets

Wooden block toy houseThis blog is the fifth in the series of Middle East construction industry submissions by Deloitte Middle East leaders. For more information, link to the GCC Powers of Construction: Meeting the challenges of delivering mega projects report at http://bit.ly/163aZOD

It’s another Sunday morning in Dubai. For the majority of the world’s population this is a day to unwind. This is a day to read the local newspaper, catch up on celebrity gossip, and put your feet up and generally de-stress. Not so for the UAE’s working class. For Sunday is a start of yet another working week. As the steady stream of our colleagues enter our offices in the Sila Tower (Sowwah Square-Abu Dhabi), our attention is caught by a segment on the radio. Hosts on the “Business Breakfast” show are interviewing yet another food chain that is about to launch in this bustling desert city. This time, it’s a pizza company that claims to have the world’s best suppliers in their back pocket and can therefore serve the world’s best pizza! “Yes,” nodded one of our trainees. “but can they deliver in a sandstorm, in the height of summer?” We look to him. He unknowingly revealed a supply chain challenge that would be critical to the pizza company’s success.

The Middle East, and the UAE in particular, has always been an attractive proposition for foreign investors, gathering the attention of many who have considered either establishing companies or entering into joint ventures with local companies to capitalise on the region’s growth opportunities. While we all are aware that we need to do our homework before taking this bold step, the reality is that not many of us take the time, effort and / or have the energy to consider all the options and risks. We seem to get caught up in the euphoria of it all and forget to think of what the key considerations to effectively manage supply chains in these growing markets might be.

We have recently completed a piece of work with a client that is facing challenges simply because he failed to recognize the importance of the supply chain on his business. His business, although based in a more mature market, has satellite offices in the UAE and in neighboring emerging markets. His project was suffering huge delays, and is still facing huge claims from his clients due to poor performance and non-delivery.

But he is not alone, and we are actively involved in this department in assisting large program owners with effective strategic execution and operational excellence for the enterprise wide programme delivery. Our clients are in the midst of delivering some of the largest and high-profile construction projects in the world facing these issues.

We are seeing increased activity and interest from companies and investors requesting our guidance to assist them in understanding and intelligently engaging with the domestic supply chain market that is critical to their survival and success. Below are some of the key points / factors we always ask our clients to help them get a better understanding of the fluid dynamics of supply chain management in these growing areas:

1. Financial
2. Regulatory
3. Operational
4. Geopolitical risk
5. Developing local alliances
6. Understanding local culture & practices
7. Managing risk and opportunity
8. Corporate and social responsibility issues

Supply chains assembly and optimisation is critical to the success of business in these new markets. Indeed, we may even go as far as saying that these countries’ vision will only be achieved if the related supply chains are efficient and effective. The ability to understand and evaluate the supply chain in the context of the new market is vital to detecting and mitigating supply risks before there is an actual impact. In other words, in the context of global demand, a professional localized view is needed to implement a successful supply chain in a new market.

One thought on “Supply chain – issues on assembly in new markets

  1. Interesting read. However, my question remains on how identifying the outlined risk considerations can help with understanding and formulating supply chain. That too, considering different business models – be it pizza or a construction company?

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