Systematic solutions

The logistics industry's growth has created massive demand for warehouse management systems. However, with a limited number of Middle East vendors, how do companies overcome such market limitations?

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The logistics industry's growth has created massive demand for warehouse management systems. However, with a limited number of Middle East vendors, how do companies overcome such market limitations?

The logistics industry in the Middle East has remained committed to matching international standards in all aspects of its operations, from loading techniques in storage facilities to safety procedures in cargo transportation.

In particular, the recent advancement in warehouse management systems (WMS) has caught the attention of companies in the Middle East, which are displaying an increased willingness to upgrade their technology infrastructure and match their counterparts in regions such as Europe and North America.

The advantages of such an approach are evident, with greater supply chain visibility and streamlined business processes having a direct impact on operational efficiencies and profit margins.

However, a limited number of solutions are currently being offered in the marketplace, which has ultimately narrowed the selection process for customers.

"It's a limited market, with perhaps two or three qualified vendors who actually understand the concept of warehouse management systems," explains Arun Kumar, IT manager of Global Shipping and Logistics (GSL).

"The rest are either representative offices with limited expertise or vendors without a true understanding of the Middle Eastern market."

Although frustration is evident amongst the logistics fraternity, the feelings are seemingly mutual with international technology vendors too.

The Middle East has represented a number of challenges, especially in the past when companies were content with manual processes and failed to grasp the operational benefits of warehouse management systems.

"After working in the United Kingdom for 20 years, followed by the Middle East for the past five years, I've personally noticed the contrasts between both markets."

"People have a lot of misconceptions about the software," states Steve Cross, managing director of ATMS, one of the leading suppliers of WMS systems in the Middle East.

Perhaps unsurprisingly, the cost implications of warehouse management systems have provoked some reluctance amongst potential customers in the region.

One of the attractions for such technology amongst American companies, for example, is the benefit of minimised labour costs, whereas the Middle East already boasts relatively cheap labour.

However, rising inflation has created some difficulties for companies in this region to retain their warehouse employees with low salaries.

Additionally, the mounting cost of land in the Middle East has sparked the trend for multi-storey facilities.

"The taller and narrower the aisles, the more difficult it becomes to operate a warehouse manually," says Cross.

The growth in implementation rates within the Middle East has levelled the playing field with other regions around the world.

Warehouse operations in this region are starting to correspond with international standards and potentially exceeding them in certain instances.

"In the past, the logistics industry in Europe and North America were miles ahead of the Middle East in terms of the warehouse technology being implemented," says Fadi Hamchaoui, warehouse and distribution director, KGL Logistics.

"However, we're starting to compete on the same level now, regardless of the market's history."

In many ways, this rapid growth has created a lucrative and hassle-free trading environment for vendors that are interested in penetrating the Middle Eastern market.

In Europe and North America, for example, vendors are normally replacing or updating an existing warehouse management system, which is both time-consuming and expensive.

On the other hand, the Middle East is encouraging the construction of new warehouse facilities, especially with projects such as Dubai Logistics City and Dubai Industrial City, which has created demand for brand new installations.

"The amount of business being developed in the Middle East is unprecedented," illustrates Rajesh Mukherjee, general manager of Transworld.

"Companies have traditionally looked at the region as a small market. However, the usage of warehouse management systems is becoming commonplace and when you consider all the storage facilities being constructed, this represents a very lucrative market."

Transworld has enjoyed the benefits of WMS technology firsthand, following the installation of the Exactus system by Business Systems Group (BSG).

"We needed to implement changes in our operations to match the requirements of customers," says Mukherjee.

"The Exactus system is superior to our previous forms of inventory control. It has changed our processes for the better and taken our operations to the next level."

RHS Logistics, another prominent player in the logistics industry, analysed several solutions before making its final decision on warehouse management systems. In the end, it purchased a product from the Dubai-based Span Group.

"Selecting your WMS technology is a very important decision. The better the system, the better a company can serve its clients," states Richard Bell, general manager of RHS Logistics.

The logistics company was determined to select a product that could be customised to match the requirements of customers.

This, it appears, has become a common request and the Span Group helped to ensure the company achieved its objective.

Although a significant percentage of companies in the Middle East are keen to foster relationship with local vendors, others believe it's still beneficial to consider products being sold by companies outside the region.

KGL Logistics, for example, selected a warehouse management system from the UK-based company Manhattan Associated, which has years of international experienced in logistics technology.

"The process was very straight forward. Manhattan Associates invested its full efforts to make the implementation a complete success," says Hamchaoui.

"The system is incredibly flexible and configuration takes less than two hours."

"We actually researched a lot of different products and Manhattan Associates stood out from the competition, mainly because it boasted of superior functionality and reliability, in addition to ease-of-use and simple implementation."

The logistics industry in the Middle East has gained a stronger understanding about the benefits of these systems, especially in the last five years, and this trend is expected to continue in the immediate future too.

"In many cases, a logistics company must operate a warehouse management system to secure more business," explains ATMS's Cross.

"The benefits of a WMS are unlimited. When supplied from a reputed vendor, it can help monitor the standard of operations and identify areas of improvement."

"The system also leads to better customer service, improvements in productivity, and reductions in expenses."

However, as many companies have clearly identified, installing WMS technology is not for the faint hearted.

It takes time, effort and money, making it imperative to have confidence in the vendor supplying the software.

"This is perhaps the reason why such a limited number of companies are supplying these solutions to logistics companies in the Middle East, as the installation can be complex and requires the most experienced suppliers to achieve the right results," says Cross.

"Its not just WMS suppliers that need to be carefully monitored though."

Companies must ensure that their warehouse is running in an optimal manner with good people and good processes before trying to implement a WMS, otherwise expect failure.

BSG

What are the key attributes of the EXACTUS system?

We offer a range of tightly integrated, highly configurable and easy-to-use supply chain solutions. Built around the WMS foundation are modular solutions to address finance, transportation, freight, trading partner and performance management.

How tough is the competition between WMS suppliers in the Middle East?

There are about three prominent and reputable WMS vendors that we come across. Occasionally we do hear about some less established ones trying to make inroads in this market.

There are some 'no win' competitive situations that we deal with. For example, when decision is driven by price alone, with little regard for the functionality offered by the products.

What makes your system different from competitors?

We provide out-of-the-box performance management solutions to help customers achieve more accurate and up-to-the minute information, which cannot be achieved from basic reporting that is available with most WMS applications.

SPAN

What are the key attributes of the SPAN system?

Span resells one of the most renowned WMS in the world.

The actual product is called Exceed and was originally written by Exe Technologies and transmitted to SSA Global before being acquired by Infor.

It possesses all forms of advanced functionality, such as RF picking and receiving, intelligent configuration for put away, and enhanced technology to optimise the space and the resources within any warehouse.

It is also equipped to run with voice picking and is RFID ready.

How tough is the competition between WMS suppliers in the Middle East?

There are less than six WMS programmes being sold in the Middle East, however according to a recent study, 60% of WMS installations fail.

This is due to the failure of the implementation team.

What makes your system different from competitors?

Compared to most of the WMS, Infor was not conceived to help meet a single requirement at a time but was designed from the ground up to distribution centres and 3PLs.

The output is extremely easy to use, flexible, and is able to satisfy the most demanding environments.

Manhattan associates

What are the key attributes of the Manhattan system?

We have over 17 years of experience, a strong global presence and a history of 15 years of profitability.

Our SCOPE product ranges from planning and forecasting through to execution, including warehouse, labour, trading partner and transportation management and slotting optimisation.

How tough is the competition between WMS suppliers in the Middle East?

The WMS solution from Infor is still a significant force in the Middle East.

However, we see that customers in the Middle East are very keen to understand and learn from their respective industry leaders and in doing so, realise the benefits that can be obtained from deploying world-leading supply chain management solutions.

What makes your system different from competitors?

Our capacity to truly optimise holistically across solutions from planning to execution. A third of Manhattan Associates' employees are dedicated to research and development.

This strong investment in products and technologies is a key component of our future successes and that of our customers.

ATMS

What are the key attributes of the ATMS system?

Our system is easy to use, quick to implement, end user configurable, designed for 24/7/365 and requires no maintenance.

More importantly for Jebel Ali users it is fully compliant to the Jebel Ali customs topology and bonded warehousing.

We own the product so this gives us a bigger price advantage and more flexibility for the customers to invest.

How tough is the competition between WMS suppliers in the Middle East?

WMS suppliers are growing but not very rapidly. We anticipate having tough competition in the future. Right now everyone has the market share. It's a vast market for anyone to tap into.

What makes your system different from competitors?

Our product is end user configurable and not customisable.

All of our customers are using the same system with different configurations. We aim for zero bespoke and this will reduce the paybacks.

In addition, we run many workshops, which are free of charge, to encourage awareness of WMS.

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