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Supply Chain Case Study: Canon Middle East

by Ahmad Lala on Jul 30, 2012




Canon Middle East (CME) in Dubai is the regional headquarters for the widely recognised brand. It is responsible for supplying 45 countries across the Middle East and Africa region with around 90 per cent of exports managed from its Jebel Ali Free Zone (Jafza) warehouse.

Logistics Middle East Magazine asked Canon’s director, supply chain management, Richie Cuthbert, to take us through the company’s supply chain operations.

“The supply chain management function is an integral part of our business, supporting sales to regional partners from demand creation through to accurate fulfillment and on-time shipment to meet customer requirements. Our focus on continuous improvement of our supply chain demonstrates our commitment to the business initiatives that deliver a clear competitive advantage. We’ve recently introduced a new approach to demand management and fulfillment, as we move towards a truly demand-driven supply chain,” says Cuthbert.

Sourced

Since the introduction of the Dubai hub, the majority of our products are sourced from the Far East, with some smaller volumes of accessories and other low volume products coming from Europe.

Transport

Being an environmentally responsible company, the primary mode of transport for inbound product supply, regardless of origin, is by ocean. Currently over 95% of our products are transported by ocean; the aim is to move completely to ocean for the inbound supply chain.

Storage

Our products are stored within the Jafza area in ambient and air-conditioned facilities. High value products are stored within a separate secure storage location, including VAL area, with controlled access.

Volumes

We currently handle around 7-8000 cbm per month for regional distribution outbound operations, executing between FCL/FTL 130-140 shipments and 500-600 local deliveries per month. We have over 1200 finished goods for merchandise products across B2B & B2C segments, and 3500 moving parts. In terms of value added logistics operation, we are involved in the kitting of approximately 55,000 units per month, and the localisation of around 217,000 products per month.

Facilities

We have a range of air-conditioned TAPA certified facilities, including value added logistics and secure storage for high value photo video products. We recently introduced mobile storage units for Canon Emirates, which I believe is a first for UAE, to support consumables delivery, again providing Canon with a significant competitive advantage in supporting local customers. The operations performance is continuously monitored through key performance measures that drive efficiency whilst ensuring effective management and reduction of operational costs.

Challenges

The MENA markets are growth territories each with its own specific challenge: language; borders, unrest, customs regulations, accessibility, etc. We at Canon understand and have the ability to support the uniqueness of each of these markets. Supporting sales growth across these territories requires understanding of customer requirements, and close co-ordination between the business and the supply chain. The supply chain is generally viewed as a cost within any organisation, therefore it’s important that its function is aligned closely to the business and marketing plans, and that the business is aware of its capabilities and the costs associated with serving customer requirements. The supply chain function is Canon’s tool towards delivering a competitive edge to the business.

Delivery

The introduction of the demand driven supply chain concept supports our strategic direction of an end to end value chain approach, thus improving stability, predictability, and reliability of the ‘forecast to deliver’ process, bringing Canon and the customer closer together. The product offerings sometimes require additional security measures and pose geographical challenges in the Middle East and Africa markets, demanding the use of multiple modes of transport: ocean, road, rail and air. Consumer electronics are desirable goods by nature: being of a size and value that make products attractive for theft, and generally rank at the top of the most commonly stolen cargo. Storing and transporting these products requires additional security measures across the entire value chain.

Logistics partners

Our approach is to seek continuous improvement within the processes that support the business. Thus, wherever there is a feasible opportunity to outsource to the right kind of service provider, whilst maintaining the required levels of control over our operations, we would explore the opportunity further. In this regard, we are open to additional outsourcing opportunities. The needs of our business are highly demanding. We look to work with trusted and reliable partners that understand the nature and dynamics of our business, and look beyond the short term, towards building a sustainable long term partnership.
 


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