Distributors and supply chain organisations in the Middle East and Africa are embracing a digital-first approach to tap the immense opportunities for growth in the region, but many of them face significant challenges including a lack of visibility across the supply chain, a lack of skills, and a reliance on legacy systems, according to an IDC Technology Spotlight commissioned by Infor, the industry cloud company.
The opportunity in the distribution sector is especially pronounced in the GCC and Egypt where national visions to support economic growth and diversification, and fast-growing young populations, are driving demand for logistics and supply chain services. For example, Saudi Arabia’s National Industrial Development and Logistics Program plans to add $320 Billion to the country’s gross domestic product by 2030, while the UAE intends to triple the industrial sector’s economic contribution over the next 10 years through its ‘Operation 300bn’ strategy.
The most significant challenges encountered by distribution and supply chain players in the MEA region are related to data, skills, and outdated systems, according to IDC’s MEA Supply Chain Survey 2022. Indeed, 49% of respondents said that data and analytical capabilities are too slow and not real time; 43% cited a lack of digital skills; 36% a lack of quality data or large sets of unstructured data; and 34% cited outdated IT systems.
Legacy systems is a particularly prevalent issue. IDC’s survey revealed that most organisations in the MEA region still rely on spreadsheets and standalone applications to run the supply chain function. These systems lack the integration capabilities that enable organisations to effectively work in industry ecosystems and hinder the effective use of enterprise intelligence.
These challenges are having a material impact on the ability of distributors to cater effectively to growing demand. For example, 56% of the respondents in the survey said that they faced a lack of supply chain visibility and flexibility to see market changes in real time, hindering their ability to respond to market threats and opportunities. Meanwhile 45% said they faced a lack of digital competencies, limiting their ability to transition the supply chain to new business models.
“Distributors in the MEA region have the potential to realise significant growth in the coming years as regional economies grow and diversify. But to achieve this, they will need to overcome key barriers to true digital transformation,” said Jebin George, IDC’s senior program manager for customer insights and analysis.
The most effective way for companies to transform is to embrace a cloud-based, digital-first approach and invest in best-of-breed digital solutions such as enterprise resource planning systems, supply chain management systems, warehouse management systems, and transportation management systems, IDC noted in its info brief.
Kerry Koutsikos, Infor’s GM and VP for Middle East and Africa region, said, “With our industry-specific cloud-based solutions, Infor is ideally placed to help logistics companies and distributors in the Middle East achieve their transformation goals, including improving visibility across the supply chain and increasing their agility to respond quickly to market changes. We look forward to continuing to support organisations in transforming their operations and boosting their ability to serve the region’s dynamic economies and national visions.”
Infor is already supporting the transformation efforts of organisations involved in distribution across the region. For example, Zahid Tractor, a supplier of construction machinery and commercial vehicles, transformed the way it interfaces with OEM partners, increasing supply chain visibility and improving service levels for its customers, after deploying Infor M3 for Equipment (a suite of manufacturing, distribution, equipment dealership, and rental ERP solutions). The solution was implemented as a hybrid model, with workloads hosted on-premise and in the public cloud. Infor M3 met all the requirements for the interface-driven initiatives Zahid Tractor has with its OEM partners.
Infor M3 is transforming key areas of Zahid Tractor’s operations, from equipment lifecycle, employee productivity, and rental service to maintenance, field service, refurbishment, and manufacturing. This end-to-end solution provides directors, management, and front-line teams with valuable data that assists in planning, day-to-day operations, control, and decision making.
