Feature: OSN’s broadcast logistics operation
OSN operates across 20 diﬀerent countries in an emerging market region, which presents a host of different logistics challenges. It has its own in-house warehouses in eight core markets and works with 3PLs in all 20.
When one considers the scale and complexity of OSN’s logistics operation in the Middle East, it becomes clear why it is one of the pay-TV networks at forefront of investment in on demand viewing through online apps such as its hugely popular OSN Play and GO by OSN.
The network, the largest pay-TV brand in the MENA region, makes a significant investment in their logistics operations, shipping set top boxes and accessories into and around the region, every year.
“We have a world-class product - through our OSN boxes subscribers gain access to a world of quality entertainment so it’s our mission to ensure that the receivers are transported in an efficient, secure and speedy fashion,” says Maytham Al Khairulla, VP Business Support.
“What’s unique about our operation is that unlike fast moving goods where you bring in the product and then simply sell and deliver it to the customer, we have to maintain a link with the product throughout its lifespan.”
OSN remains the owner of all the set top boxes it distributes, and has to track them and have a return path to its refurbishment centres where quality checks are undertaken when it comes back from the market.
“We carry out detailed quality checks on any box that comes back from the market. This could be because the customer has upgraded or wants our latest OSN Plus HD receiver which is the region’s first Internet enabled satellite receiver and recorder with full 3D and HD capabilities.”
“We operate a hybrid model, so we have our own in-house logistics centres in the GCC countries and Jordan and Egypt and we also work with 3PLs. We work with Aramex, Agility, RHS Logistics and because of the seasonal nature of demand, having the flexibility and variable cost of working with them is very beneficial,” says Al Khairulla.
It also enables OSN to focus on the quality control and repair arm of its logistics operation, which is done through its eight in-house warehouses in Cairo, Jordan, Kuwait, Jeddah, Riyadh and Khobar and Bahrain and Dubai.
“All our quality control is done in-house, except in Doha and Riyadh, where it is done at the third party facilities, but by our own trained technicians.” RHS Logistics is OSN’s primary 3PL provider in the UAE, and through it OSN is able to make use of a high-tech tracking and inventory control system.
“Following a string of high profile contract wins, RHS Logistics has invested in development of technology systems and support personnel,” says Richard Bell, managing director of RHS Logistics. “As part of our agreement with clients, it’s clearly stated that we provide a 24x7 inventory access and EDI ( Electronic Data Interchange) for fast, accurate data transfers.”
Bell was speaking to Logistics Middle East as part of the company’s Power 50 nomination and not with specific reference to the company’s contract with OSN. “Information technology is a continuous development process and we have implemented a lot of applications outside our main WMS, which is individually tailored to our client requirements. Some of this has been developed in-house and others have been purchased.”
“In terms of the eight third party warehouses, we are located in Jebel Ali, Abu Dhabi, Qatar and in Kuwait, Cairo and Jordan, as well as the main hub in Riyadh,” says Al Khairulla, adding that the Eid al Adha holiday in September can be one of the most challenging times for OSN, especially in Saudi Arabia.
“We build in buffer stock around major festivals and holidays such as Eid. In addition, we also require the suppliers to have sufficient stock in their own warehouses in Jebel Ali, in case we have an increase in demand.”
This is important because OSN needs to order in new set top boxes in advance. Another of OSN’s 3PL partners, TNT, recently launched a new distribution centre in Dammam, Saudi Arabia, quintupling the size of TNT Express’ current sorting and customs clearance space in Dammam, but also allowing for a significant improvement in customs clearance efficiency and speed.
This is a key challenge for OSN, which needs to be able to get set top boxes into and out of the huge Saudi Arabian market as efficiently as possible.
TNT Express say they are now able to clear its customers’ goods quicker, with the additional space allowing more regular movements of trailers in and out of the clearance area.
A broader clearance window, with the ability to handle TNT Express’ Economy Express, Full Trailer Loads (FTL) and airfreight consignments, further strengthen service to clients. The facility is part of TNT Express’ Middle East road network, which connects the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait through multiple scheduled daily departures and 70 trucks.
“Our main distribution hub for the region is in Jebel Ali, we have around 159 SKUs. Some are specific for OSN like the set top boxes which have encryption specific to our company, they’re strategic products and there is a long lead time to order new ones,” says Al Khairulla.
OSN’s main suppliers are Humax and Kaon which supply its OSN HD boxes. OSN also uses PPC, Perfect Vision, MTI, Traix, Televes for the dishes, LNBs and cables. “We have different suppliers to deliver triple supply for strategic products to ensure there are no shortages.”
This buffer stock is one of the most important elements of OSN’s supply chain, alongside security of its set top boxes, which are priority products and need to be stored in a separate, secure area in the warehouses of its 3PL partners.
“Each box is serialised and is tracked per status and per location. So we know which box is with which customer, which warehouse etcetera. We also track the smart cards, which are married to a particular box and won’t work with any other,” explains Al Khairulla.
“For the distribution itself we’re completely outsourced across the region, we use DHL/ TNT and some of the smaller local players on a tender per route so for example Riyadh to Jeddah. In general DHL and TNT are used for the majority of cross-border routes and in all cases we have strict security requirements.”
OSN’s partners need to be able to track and display the full history of the set top boxes journey and a quality check is performed when it arrives in the warehouse. “So if boxes are sent from Dubai to a depot in Jeddah, it undergoes a quality check on arrival before it’s redistributed,” says Al Khairulla.
“Security is the main concern. Our boxes are robust and can survive in a climate of up to 60 degrees and don’t have an expiry date per se. We have very strict requirements in this regard, such as 24 hour CCTV, they need to be kept in a segregated area where only a select few individuals have direct access to the boxes. This is because of the encryption and anti-piracy requirements we need to meet for our content providers,” says Al Khairulla.
This was part of the reason that OSN decided to invest in achieving ISO 9001 certification. “As an international company, it is our responsibility to maintain a high-level logistics process. As part of that promise to our subscribers, suppliers and content providers we attained the ISO 9001 certification from Bureau Veritas in May 2016,” says Marytham.
“Bureau Veritas is a global leader in inspection and certification, and we partnered with them in order to be evaluated for conformity with ISO 9001 requirements for Quality Management Systems.”
OSN supply chain teams in the UAE and KSA worked on completing a series of rigorous tests and processes, which included documenting supply chain procedures and developing ISO quality standard operating procedures (SOP), conducting training and quality awareness sessions for all team members, and two rounds of internal audits.
The department also successfully passed two rounds of external audits in the UAE Saudi Arabia by Bureau Veritas. “ISO 9001 gives the organization the quality systems that will provide the foundation to better customer satisfaction, optimising operational cost, efficiency increase, and continual improvement,” says Marytham.
The award brings new processes to OSN’s logistical process and means that going forward internal customer satisfaction surveys will be conducted at least twice a year, and external surveillance audits will be conducted yearly by Bureau Veritas.
There are also future plans to widen the scope of the QMS to cover all OSN’s countries of operation and not just the UAE and Saudi Arabia.