Middle East supply chains need to move to online networking

By Estelle Shumann

In today's increasingly global marketplace manufacturers and distributors need every advantage they can get when it comes to keeping and building business relationships. Where previously loyalty and past experience were often the main reasons driving supply chain relationships, now increased competition online has made "overall price" a much more compelling factor: the vendor, manufacturer, or retailer offering the lowest price often wins the deal, and all of this can be decided with just a few keystrokes and mouse clicks.

Dealing with multiple suppliers across the globe can make managing a supply chain something of a headache. The most successful businesses today use a variety of e-commerce tools to help keep tabs on all aspects of their product's production and delivery. The simplification that comes with modern technology means that companies are able now to devote more time and financial resources to caring for consumers, while saving money on overhead costs.

Embracing e-commerce as a way to manage supply chain activities is particularly important for new or emerging businesses, as the practice tends to level the playing field regardless of experience or longevity. A number of industries in the Middle East are finding tremendous success using online platforms of management. The Middle East is rich in oil and natural gas reserves, which it regularly exports all over the world, but it is also home to a number of emerging sales and transportation companies seeking to capitalize both on the region's favourable location between the major trade zones of both Europe and Asia, and on the significant economic uptick the region has experienced over the past few years.

The sheer number of participants in everything from the shipment of consumer goods to the drilling and export of refined oil has made doing business today in many ways a struggle to stay relevant. Effective and efficient supply chain management has never been so important.

"Companies that exclusively opted for short-termism through ruthless cost cutting as a means of survival during the crisis will find themselves unable to respond to the upturn, since they will struggle to counter demand through scaling production," B2G, a consulting group, said at a 2010 conference titled "State of the Supply Chain Management: Middle East Series."

"This coupled with unresponsive supply chains will lose valuable time to market," the group said. Phrased differently, unless companies are able to keep up with the times, competitors with more efficient, more responsive systems will soon replace them.

Much of the efficiency in the modern marketplace comes from new uses of technology. With e-commerce, all participants in the supply chain are linked electronically, and can confer and coordinate within seconds.

"It is now possible to integrate suppliers and their goods-from pencils to poles-with end users over an electronic-economic platform that supports inquiries, purchase orders, shipment, tracking and delivery," Electric Light and Power, an advocacy group for those in the energy industry, said in a report about online supply chain management. "All this is done without large stacks of inventory taking up warehouse space."

The potential for savings is enormous. The efficiency also frees up time that companies can devote to the customer experience. Sometimes this is through direct outreach; other times, it is simply by building user-friendly interfaces online through which people can seamlessly find, rate, and purchase products. Customers, just like the businesses they buy from, have an ever-expanding realm of choices. The most streamlined and efficient option usually comes out on top.