In the first installment of this post, we reported on Peter Smith’s recent travels to deliver part of a lecture series in Dubai. From a procurement and supply chain perspective, we find the Middle East to be an absolutely fascinating market, given its potential to leapfrog other markets (including various Asian countries) in relative maturity in terms of the adoption of new approaches, skill sets and technologies.
The region is ideally suited to serve as a beacon for procurement and supply chain maturity when it comes to serving and taking advantage of trade opportunities with regional emerging markets in Africa and in the Far East. Yet a number of issues should be considered when assessing the relative opportunity and supply management sophistication today. These include:
- The role of logistics versus broader value-added services in procurement and supply chain. Truly modern airports and ports cannot alone make up for a lack of focus in other areas of procurement and supply chain. Moreover, the regional obsession with airfreight in the region – I hear this from everyone who has engaged in supply chain activities in the Middle East – is somewhat odd compared with other areas.
- Cultural practices, vertically-integrated trading companies/conglomerates and embedded relationships still form the structure of many corporate bonds in the Middle East. Like the trading companies in Japan and Korea, which have a long history of favoring and structuring supply networks “within the family,” so too will corporate organizations in the Middle East need to confront the need for more openness in working on a global basis with suppliers.
- The role of women in procurement and company leadership is one that the Middle East needs to take more seriously. Women form a huge portion of the rising expertise and leadership in procurement and supply chain organizations in the West. The Middle East will be at a disadvantage from a talent perspective until it addresses gender equality in the workplace.
To be continued.