Sme advisor issue 131

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ISSUE 131 MONTHLY FOCUS: MANUFACTURING

AWARDS EDITION

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SME Advisor Middle East is aimed at business owners and senior executives across the GCC. Armed with practical advice, it has been highlighting key business issues for the small and medium enterprise segment since its launch in 2005.

The magazine addresses real issues faced by business decision makers, without resorting to jargon.

We understand that often, in small and medium enterprises, specialist business decisions are made by the owners and not by an army of c-level executives. At the same time, our content is equally relevant and useful for specialist, senior executives in mid-level enterprises.

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Co Founder and CEO Nadeem Hood

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From the web

Dubai South – SME Advisor’s successful ‘On the road’ series Dubai South recently collaborated with SME Advisor magazine to pilot a unique concept: On the road. This initiative gave SMEs a platform to showcase their businesses and get the exposure they truly deserved. Four Editors visited Dubai South’s Business Park and interacted with 20 SME owners to understand their growth, challenges and milestones. With face-to-face and video interviews, every company got the chance to share its story.

For further information, please visit: www.facebook.com/SMEAdvisor.

Eureeca’s Equity Crowdfunding licence As a multi-regulated platform, Eureeca has received licensing from the UK Financial Conduct Authority and the Securities Commission Malaysia in 2015, and recently the Netherlands Authority for the Financial Markets and Dubai Financial Services Authority (DFSA). Sam Quawasmi, Co-CEO and Co-founder of Eureeca, discussed the offering Eureeca would be bringing to the region. “Born out of Dubai, and after the Dubai Financial Services Authority’s (DFSA) tremendous efforts, Eureeca is delighted to be the first Equity Crowdfunding platform to be licensed to operate with a representative office in the DIFC. We offer investors a stable multi-regulated platform to invest in the businesses of the future,” he said

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Landmark Group’s fresh e-commerce strategy Published By: CPI Business FZ LLC Office 111, Building 4 Dubai Media City Dubai, United Arab Emirates

Contact Details: Tel: +971 4 433 2446 Email: info@cpibusiness.net Web: www.cpibusiness.net

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© Copyright 2016 CPI Business.

All rights reserved.

While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

Landmark Group’s Web Team recently replaced the existing online portal LandmarkShops.com with seven individual, brand websites – HomeCentre.com, BabyshopStores.com, MaxFashion. com, SplashFashions.com, ShoeMartStores.com, LifestyleShops. com and CentrepointStores.com, for Home Centre, Babyshop, Max, Splash, Shoe Mart, Lifestyle and Centrepoint respectively. At the same time, iPhone and Android apps for each of the seven brands were also launched. “We’re excited to announce this important pivot in our digital strategy. Our new brand sites and apps bring our millions of customers closer to the brands they love regardless of whether they shop online or offline,” says Savitar Jagtiani, Business Head, E-commerce, Landmark Group.

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Editor’s Note

Tradition meets technology While most businesses look at disruptive changes as a threat, the reality is that these can be powerful avenues for growth. Over the past decade, we’ve seen many such disruptions within the manufacturing sector – from advanced robotics to 3D printing to the internet of things. These are all technologies and innovations that are completely changing the game for traditional manufacturers.

Let’s take a look at 3D printing, for instance. Experts suggest that the global market for 3D printing is growing at a rate of 20 per cent year-on-year. This technology is allowing manufacturers to develop and improve products rapidly, at significantly lower costs. Moreover, it enables the creation of customised goods at affordable prices – giving smaller niche businesses a chance to compete with (and dominate!) their larger counterparts. We discuss this in further detail on pg. 40 with an expert from Autodesk.

RUSHIKA BHATIA EDITOR

As the backbone of the economy, it is critical for manufacturing companies to invest in these advancements, gain new insights and update their business models.

Several initiatives are being undertaken by the public and private sectors to support this change. In fact, it is this very ambition that is driving the nation’s government to implement its recently unveiled Dubai Industrial Strategy. The plan empowers businesses across several industrial sectors to innovate through cutting-edge projects and create top-notch products. To learn more about the plan and how it might affect your business, turn to pg. 46.

When we surveyed the market this month for our case-study section, we realised that the UAE is already seeing manufacturers emerge and scale across different specialisations including furniture & fixtures, mattresses, fashion, food & beverage, and kitchen equipment. All the businesses we spoke to believe that they are moving in the right direction and are fully equipped to take advantage of the fast-evolving landscape. On the top of their agenda is building a skilled workforce that will meet the needs of this rapidly changing sector. Find out more about their success strategies in our ‘Top change makers’ section on pg. 60.

Finally, while the potential benefits of these disruptions are tremendous, so is the challenge of preparing for their impact. Manufacturers that wait until these technologies exert their full influence on the sector, will do so at their own peril!

Bearing this in mind – and based on our interactions with notable manufacturing experts this month – we’d like to leave you with one key takeaway: embracing technology and riding on emerging opportunities is imperative for all manufacturers in order to stay competitive and move forward.

Enjoy reading this issue of SME Advisor!

Contents

The economist’s view 028/ Forces shaping the future of manufacturing 034/ Unlocking the potential of Industry 4.0 040/ How 3D printing is reshaping manufacturing

Editor’s roundtable 046/ Dubai Industrial Strategy – The path ahead

Talking trends 050/ Gulfood Manufacturing 2016 – Enabling growth

056/

A WIDE SPREAD ADOPTION OF SOLUTIONS LIKE SUPPLY CHAIN FINANCE WILL GO A LONG WAY IN ENSURING BANKS ARE ABLE TO INJECT LIQUIDITY INTO THE PHYSICAL SUPPLY CHAIN.

Infographic of the month

Top change makers

054/ Manufacturing trends across key markets

060/ Food for thought 064/ The nuts and bolts of success

Business Banking

068/ The metal man

056/ Supply chain – untapped opportunities for an SME

074/ Building the dream 080/ Made to measure

084/

BUSINESSES MUST EQUIP THEIR STAFF WITH THE RIGHT HARDWARE AND SYSTEMS TO KEEP THEM WORKING AT PEAK EFFICIENCY

Organisation & structure 084/ Powering productivity 088/ Manufacturing a great SME

Technology for business 092/ Spurring growth through the cloud

SME Beyond Borders special 096/ Showcase of the region’s best thought-leaders 098/ A powerful partnership - National Bank of Abu Dhabi 100/ The convergence of knowledge and power 106/ Etisalat’s Hello Business Pitch Please 108/ Understanding the attendee demographics 112/ Showcasing the deserving winners 116/ A tribute to our partners

Industry 4.0 has profound implications for consumers, businesses and the global economy. Find out more.

40

34 By making technology part of its process, ​Omasi is looking to boost customer service and productivity.

Businesses may come to love or fear the 3D printing revolution. Either way, they will have to come to terms with it. Here’s why...

80 96

​ review of two of the region’s most prestigious SME A occasions - SME Beyond Borders and Stars of Business Awards 2016.

Anirudha Panse, Head of Trade Finance Products at National Bank of Abu Dhabi (NBAD), shares his thoughts with small businesses looking to optimise the management of their working capital and cash…

56 60 Manar Al Jayouchi and Suzi Croft, Co-founders of 1762, explain what they are doing to gain a competitive edge…

C O N T E N T C U R ATO R S 026

CONTENT CURATORS Presenting this month’s portfolio of industry specialists and thought leaders, who played a critical role in producing the feature content of our magazine and ensuring that we were more topical than ever.

““ JÜRGEN BRIXEL SENIOR DIRECTOR EMEA MANUFACTURING INDUSTRY, SALESFORCE

SME ADVISOR

““

PATRICK VAN DEN BOSSCHE PARTNER A.T. KEARNEY

Manufacturers that can accurately anticipate how these trends will affect their businesses, such as the future needs and size of factories, the potential role of big data in improving productivity, workforce implications, and the level of automation to employ, can turn challenges into profitable opportunities.”

Industry 4.0 is the next revolution in industrialisation. The premise is to take all the individual processes and computing that factory machines perform in their siloed systems and import them into the cloud, meaning the workflow, upkeep, and management of each individual machine and series of machines can be done remotely

C O N T E N T C U R ATO R S 027

““ NAJI ATALLAH HEAD OF AEC & MANUFACTURING AUTODESK

3D printing manufacturing can now be done in the comfort of your own home, a hospital or even at school, bringing manufacturing to non-manufacturers or to non-traditional environments

““ HAMDAH BIN KALBAN SENIOR CONSULTANT – SOCIOECONOMIC DEVELOPMENT DEPARTMENT, STRATEGY MANAGEMENT AND GOVERNANCE SECTOR, THE GENERAL SECRETARIAT OF THE EXECUTIVE COUNCIL OF DUBAI

The Industrial Strategy, with its six priority sub-sectors, is closely linked to the emirate’s knowledge and innovation strategy and its aim is to make Dubai a knowledgebased, innovative and sustainable industrial centre

““ MARK NAPIER EXHIBITIONS DIRECTOR, DWTC, AND SHOW DIRECTOR, GULFOOD MANUFACTURING

The Government’s Dubai Industrial Strategy is so important – it outlines a clear vision to improve sustainable food supplies via home-grown manufacturing capacity and Gulfood Manufacturing will support with an industry-wide platform required to drive change and promote sustainable food manufacturing across the UAE and wider GCC region

SME ADVISOR

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FORCES SHAPING THE FUTURE OF MANUFACTURING From Adam Smith’s division of labour to the Industrial Revolution and the 1990s hightech boom, manufacturing shifts with periodic waves of disruptive change. Patrick Van den Bossche, Partner at A.T. Kearney, provides a comprehensive analysis…

EDITOR’S PICKS 01. With manufacturing technology heading in dramatic new directions, keeping pace with it is more important than ever.

02. Adopting an approach that isolates and evaluates the most relevant trends within the six core areas of your manufacturing business is essential for formulating strategies that deliver both an immediate impact and a longer-term advantage.

03. Integrating manufacturing with risk management for the entire corporate supply chain is a strong first step.

SME ADVISOR

A

s the latest waves of change gather momentum, 21st-century manufacturers face decisions that could create opportunities or competitive challenges as significant as the idea of interchangeable parts or Toyota’s improvements on Henry Ford’s assembly line. Today, the potential impact of new technologies such as 3-D printing, the risks inherent in global supply chains, the exponential growth of data, and the changing socioeconomic demographics are just a few of the new disruptors.

As a result, the future of manufacturing is again a hot topic in public debate and on boardroom agendas. Companies are looking for a unique competitive edge or ways to respond to the unexpected. Manufacturers that can accurately anticipate how these trends will affect their businesses, such as the future needs and size of factories, the potential role of big data in improving productivity, workforce implications, and the level of automation to employ, can turn challenges into profitable opportunities.

Among the questions that need answers: • What are the longer-term challenges that impact operations?

• How will these challenges affect the manufacturing setup and competitive environment?

• What solutions or best practices will address these challenges?

Compounding the current disruptive powers is the convergence of trends from multiple directions. To address them successfully requires being able to look in two directions at once. In this case, it requires considering both the familiar areas that constantly influence the business and the less-anticipated areas that can nonetheless profoundly affect a company. Initially, it helps to think in terms of six core areas within which the trends appear.

Three areas are likely already on your daily agenda: • Technological advances • New productivity levers • Workforce dynamics

Three others are likely on the periphery: • Globalisation versus regionalisation or localisation • New supply chain models • Environmental changes Based on our work in these six core areas and on insights gathered from our Global Excellence in Operations Factory of the Year competition, A.T. Kearney has identified the driving forces or trends we expect to be among the most influential to manufacturers.

In this article on disruptive change in manufacturing, we discuss three driving forces occurring in familiar areas: new

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SME ADVISOR

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PATRICK VAN DEN BOSSCHE PARTNER A.T. KEARNEY

manufacturing technologies, going beyond lean, and shifting labour relations. These are followed by an examination of driving forces that could be the source of looming blind spots: the power shift from West to East, endto-end optimisation, and elevated volatility and risk.1 Three driving forces in familiar areas ϭϭ New manufacturing technologies will reshape the traditional factory model New manufacturing technologies are emerging faster than ever. Some of them, such as collaborative robots and 3-D printing, are already disrupting the long-established environment on the factory floor and have the potential to fundamentally transform or even replace conventional manufacturing operations.2 For many years, security fences have segregated capital-intensive robots from human workers, which has limited the potential for automation in a wider range of tasks. Currently, automation experts around the globe are working toward the goal of bringing the robot “out of the cage” to fully exploit the potential of an improved collaboration between robots and operators.3 Future human-robot collaborations will SME ADVISOR

combine human agility and intelligence to solve problems with the durability and precision of robots at a lower cost. Also supported by easy and quick programming, such as motion or voice control, this new collaboration may lead to a marked change in productivity and profoundly affect the traditional factory model overall.

Manufacturing is already headed in this direction. Automobile makers BMW and Daimler are about to introduce collaborative robots on a large scale to replace the final assembly activities currently completed by human operators.

Also making inroads is 3-D printing: The global market for this technology is developing with 20 per cent growth yearon-year and is estimated to reach between

US$25 billion and US$50 billion by 2025.4 Even traditional manufacturers are realising the opportunities offered by 3-D printing.

GE envisions that someday, people will print entire aircraft engines. Other industry giants such as Samsung and Canon have already begun to use 3-D printing technologies. The potential benefits, whether from reduced manufacturing costs, improved lead times, or better quality, can be tremendous. And the ability to manufacture additive, individually customised products at a previously unachievable scale, cost, and lead time could open up whole new markets. Already today, 3-D manufacturing has in some cases surpassed conventional manufacturing for small lot sizes. For example, the Worcester Polytechnic Institute used this new

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““

Best-practice companies are already capitalising on their manufacturing knowhow to boost both internal performance and that of suppliers along multiple tiers.

technology to produce a medical implant at nearly 90 per cent lower cost and seven times faster.5 With manufacturing technology heading in dramatic new directions, keeping pace with it is more important than ever. Success requires actively scanning the new technology frontier regularly to position your company to capitalise on opportunities when they arise. Recognising these openings as they occur takes an understanding of the new technologies’ advantages and risks. And positioning operations for quick adoption of the right technologies begins with a rigorous assessment of the factories’ capabilities to take advantage of the technologies. Finally, it is imperative to put in place a clear road map for testing and adopting the technologies so you are ready to move as the opportunities and needs arise.

ϭϭ Going beyond lean is necessary to win

the productivity game Since the early days of the Toyota Production System and the buzz generated in 1990 by the book The Machine That Changed the World, thousands of companies have launched initiatives to eliminate waste in their factories, and more recently in their back office functions. Lean has long provided the philosophy and the toolset to achieve the required competitive edge in the productivity

game, but it didn’t work for every company.

Successful lean companies have achieved year-on-year productivity improvements of as much as 10 per cent, while others have struggled just to compensate for moderate wage inflation. With lean being ubiquitous, the question is: What comes next?

The answer is two-fold. First, after lean comes “more lean,” since many companies are still applying lean to only a portion of their manufacturing operations, thereby leaving significant opportunity on the table.

Second, those that have rolled out lean broadly and widely will look beyond their lean production and management systems to systematically expand their scope beyond manufacturing—for example, going after both input factors and supporting functions.

Paper manufacturer Sappi, for example, has watched as factor costs for natural resources and energy starting to outweigh its labour costs. The company will benefit from redefining its manufacturing approach to focus more on resource efficiency. Regarding functional scope, it is clear that multiple improvement opportunities cannot be addressed solely on the factory floor. Rather, they have to reach into adjacent value chain functions, particularly those in production support and supply chain management. The company also has to re-examine the extent of cooperation between organisational silos (also referred to as interoperability) and collaborate more with suppliers, clients, and other stakeholders to take the next step toward improved productivity.

In addition, consumer electronics companies such as Sony or Philips face the challenge of reducing their time-to-market in order to outperform the competition. One way to do this is by maximising operational flexibility by leveraging third parties and minimising their own assets, which frees them to focus on controlling the supply chain.

By becoming “virtually vertical,” companies get beyond their own limitations.

Efficient product individualisation is another factor in improved productivity.

Leaders in the automotive and durable consumer goods industries are addressing it with a focus on flexibility. Volkswagen, for example, has used modular product platforms to foster product variety in large-scale production. Manufacturers are also introducing modular building blocks for greater cost efficiency. The modules enable factories to exchange product families to maximise facility usage and regain productivity advantages. Still, the scope for modularisation extends far beyond the production line (for example, to organisational structures across factories).

So when it comes to finding the next productivity frontier in manufacturing operations, expand your horizons by revisiting the effectiveness and scope of existing lean initiatives and work together with both internal functions and other players in your company’s ecosystem to find additional joint productivity opportunities.

ϭϭ Shifting labour relations will increase the

number of managed relationships Despite increasing automation, people remain among the most important resources to any manufacturing operation. That’s reason enough to shift interactions with workers higher up on the priority list.

It wasn’t so long ago that unions were losing members and seemed to be losing influence in companies and in politics. In Great Britain, for example, union density decreased sharply from 50 per cent in 1980 to less than 27 per cent in 2013.6 Yet today, almost everywhere in the world, workforces have established increasing numbers of networks and groups representing their interests to counterbalance this past trend. In previously non-unionized countries, such as China, organised labour’s political and operational influence is growing.

Even in Western economies, specialist unions that represent small groups are on the rise and are successfully exerting their influence.

Rather than having to interact solely with large unions, a new, more fragmented landscape is emerging.

SME ADVISOR

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This growing labour relations trend is already challenging the manufacturing world. Low-cost locations suddenly require an increased focus on the “human resource,” while at home, the stakeholder landscape of labour relations is expanding. On top of this, international union networks are emerging, and the shortage of skilled labour worldwide is forcing manufacturing executives to rethink how they approach labour relations.

Being strategically and tactically ready for this new situation is vital. A fresh assessment of possible exposure to these issues can help identify new vulnerabilities and provide a benchmark for actively monitoring future changes in both domestic and international locations. Based on what you find, decisions are made about developing mitigation strategies and contingency plans to shape labour relations and, ideally, to move toward a better model of cooperation with your workers and workforce representatives that fosters a true entrepreneurial spirit.

Identifying blind spots on the periphery In the latter half of our examination of what’s shaping the manufacturing landscape, we look at three driving forces that may pose worrisome blind spots if competitors recognise their importance before you do.

ϭϭ Heed the power shift from West to East

The transformation of the Chinese manufacturing industry is another driving force that should be on every manufacturing executive’s agenda, and not only those with factories in China. Many leading Western companies have interdependencies with China, either as a sales market, a location for manufacturing sites, or as a source for suppliers. In addition, Chinese companies’ international M&A activities have increased noticeably.

China’s prominence means that rumbles felt within its borders are felt worldwide. China is an important provider of manufactured goods and even more a consumer of capital equipment and consumer products. Due to

SME ADVISOR

rising labour rates, targeted to increase by 10 to 20 per cent annually in the coming years, the Middle Kingdom is losing its status as the number one low-cost country in the public debate. (The cost advantage to Western countries still remains significant, however.) It would also benefit from investing in vocational education and the acquisition of skills among its putative future human resources. High turnover rates continue to get in the way of implementing efficient processes, too.

Yet, the pace at which China has developed during the past 10 years makes it likely that it will continue to advance rapidly. A shift from low technology and low-productivity manufacturing to high technology and high productivity is already happening, although at a fairly moderate pace, as many Chinese companies adopt automation to compensate for higher labour costs. The best Chinese factories employ Japanese or German lean experts to reach the next levels of productivity. In fact, we expect rising labour costs in China to make Chinese manufacturing in the midterm more competitive. We see this happening particularly in the original device manufacturer segment focused on consumer electronics and represented by companies such as Wistron, Compal, and Foxconn, whose manufacturing footprints extend across

China. It is noteworthy that the next source of Chinese productivity gains is within the multi-layered and oversized overhead of the management and engineering areas.

A closer look at front-runners such as automotive suppliers indicates that this trend is already under way. Labour-intensive, low-technology production is moving to new low-cost countries such as Vietnam and Bangladesh. Meanwhile, a flow of highend production from Western countries to China, spurred mainly by a favourable productivity and labour-cost ratio, local market importance, and duty-free delivery, will compensate for this movement.

Indeed, the power shift from West to East calls for action now, beginning with a review of your existing footprint strategy and the productivity levels that will be required to respond to influences from the East.

2. Achieve true end-to-end optimisation, from raw materials to recycling Today, the trend is to focus on core competencies, with manufacturers transferring numerous functions to suppliers and other third parties. The extent of vertical integration—and the importance of manufacturing—often decrease in the process. In Germany, for example, vertical integration in the automotive industry, specifically with original equipment manufacturers, has fallen to about 20

per cent of manufacturers.7 At the same time, a company’s influence over its own manufacturing cost structure has waned. To realise full manufacturing potential requires adopting a true end-to-end perspective that expands optimisation, from raw materials suppliers to end consumers and even recycling.

Best-practice companies are already capitalising on their manufacturing know-how to boost both internal performance and that of suppliers along multiple tiers. This trend has found firm footing in the automotive industry with upstream and high-touch supplier fitness programmes.

Even market-oriented companies such as Mondelez, Bosch, and Siemens Home Appliances have launched joint initiatives and expect high payback in terms of cost competitiveness, more innovation, and improved delivery performance and quality.

In addition, new collaborative opportunities are emerging, from joint factories and other assets to formal and informal best practice exchanges. We should see increased downstream optimisation as well, driven by joint manufacturing forecasting and planning, value-added service specialists, and capitalising on customer intimacy to encourage recycling of materials.

The key here is to take advantage of your true end-to-end optimisation opportunities

to get back into the driver’s seat and achieve a full value-add process. Undoubtedly, the importance of manufacturing in this process will rise again as a consequence.

ϭϭ Know the elevated risk and volatility that will challenge global supply chains Supply chains have developed rapidly in the past decades as they have become more global and efficient. At the same time, they are more exposed to different and higher risk levels. Natural disasters and economic disruptions have caused immense financial and reputational damage to global supply chains. Examples include the tsunami and nuclear catastrophe in Japan, economic uncertainty in the Eurozone, and volatile and politically uncertain African markets.

Clearly, mitigating these risks is a crucial role for manufacturing executives to safeguard material flows via upstream elements in the supply chain. Integrating manufacturing with risk management for the entire corporate supply chain is a strong first step. Winners in this new environment of elevated risks and volatility will be those companies that understand the risk drivers and build in resilience and effective response mechanisms. Among the first movers addressing this strategic trend is Toyota, whose misfortunes as a result of multiple catastrophic events in recent years is widely

known. Thanks to a risk management plan it put in place, even though the company cannot predict the nature of future supply chain disruptions, it now ensures that it is prepared and organised in a way that will allow it to recover within two weeks of any disaster.

It is vital to fully understand the changes and risks in your supply chain, not only as they could occur within your industry, but also as they could affect the industries of your suppliers and customers. Constant monitoring of risks and making corrections after noting early warning signs is an excellent first measure. Also, it is wise to develop and align mitigation action plans across functions as well.

Leading into the future: prepare for rapid change It is true that the world often takes manufacturing for granted. But when disruptive trends change manufacturing in fundamental ways, all eyes turn to those capable of navigating the rapid shifts with insightful and responsive strategies. Adopting an approach that isolates and evaluates the most relevant trends within the six core areas of your manufacturing business is essential for formulating strategies that deliver both an immediate impact and a longer-term advantage.

REFERENCES: 1 SIX MORE TRENDS WILL BE DISCUSSED IN FUTURE PAPERS IN THIS SERIES, 2 3-D PRINTING IS ALSO KNOWN AS ADDITIVE MANUFACTURING, 3 THE ECONOMIST TECHNOLOGY QUARTERLY, 7 SEPTEMBER 2013, 4 WOHLERS ASSOCIATES 2013; A.T. KEARNEY'S GLOBAL BUSINESS POLICY COUNCIL, 5 WWW.WPI.EDU, 6 CHRIS WRIGHT, "WHAT ROLE FOR TRADE UNIONS IN FUTURE WORKPLACE RELATIONS?," ACAS, SEPTEMBER 2011, 7 BDI (FEDERATION OF GERMAN INDUSTRY) NOVEMBER 2013.

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UNLOCKING THE POTENTIAL OF

INDUSTRY 4.0

SME ADVISOR

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With a lot being said about the Fourth Industrial Revolution, how does a manufacturer decode the vital growth signs? Jürgen Brixel, Senior Director EMEA Manufacturing Industry, Salesforce, combines baseline data with expert analysis to offer critical insights…

JÜRGEN BRIXEL SENIOR DIRECTOR EMEA MANUFACTURING INDUSTRY SALESFORCE

Industry 4.0, or the Fourth Industrial Revolution, is set to revolutionise the manufacturing and production industry by integrating the Internet of Things (IoT), cloud computing, data integration and other technological advances into the heart of production and manufacturing systems.

There are lots of elements that go into the concept of Industry 4.0, so we’ve broken down some of the key concepts, as well as what it is, where it came from, and what it means for the manufacturing sector.

What is Industry 4.0?

Industry 4.0 is the next revolution in industrialisation. The premise is to take all the individual processes and computing that factory machines perform in their siloed systems and import them into the cloud, meaning the workflow, upkeep, and management of each individual machine and series of machines can be done remotely.

To understand how this works, you need to understand two concepts: cloud computing and the internet of things (IoT).

Cloud computing is hosted on the internet and allows for remote access to apps, services, and stored data. The internet of things builds on this concept by using the cloud to store and automate processes in objects that are synced to the internet, like internet-enabled automobiles and remote home lighting and shade systems. Industry 4.0 utilises both cloud computing and the internet of things to take processes that are normally managed internally by both people and machines and move them into the cloud where they can be managed from anywhere in the world.

The Fourth Industrial Revolution challenges the traditional way that manufacturing and production systems in factories currently function, with centralised and offline systems that are not inter-connected. The prediction is that these factories will soon evolve into “smart factories” with the capability to

EDITOR’S PICKS 01. Industry 4.0, or the Fourth Industrial Revolution, is set to revolutionise the manufacturing and production industry by integrating the Internet of Things (IoT), cloud computing, data integration and other technological advances into the heart of production and manufacturing systems.

02. The Fourth Industrial Revolution challenges the traditional way that manufacturing and production systems in factories currently function, with centralised and offline systems that are not inter-connected.

self-manage issues and internal processes.

In turn, manufacturing execution systems (MES) that determine how factories run and function will have to evolve with these concepts in mind or get left behind.

The history of Industry 4.0 Though industry experts disagree on how quickly this evolution will occur, Industry 4.0 has been seeping into the manufacturing sector since 2011.

Coined in Germany at the world’s biggest industrial fair, Hannover Messe, it has since emerged as a concept that has not only set the wheels in motion to leverage Germany’s engineering and manufacturing prowess, but that will take the rest of the world’s manufacturers along with it.

Since that first announcement, Industry 4.0 has started to disrupt the manufacturing industry. There’s a reason Industry 4.0 has been heralded as the Fourth Industrial Revolution — it has the same potential to disrupt the industry the other three industrial revolutions had during the Victorian era with mechanisation, in the early 1900’s with assembly lines, and in the mid to late 1900’s when computers first appeared on the factory floor.

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For every business that is considering a digital transformation in manufacturing, there is another that simply refuses to acknowledge Industry 4.0 is happening.

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Unlike the revolutions of the past, however, this one has been a long time coming, allowing for manufacturers and systems time to get ahead before it hits. Still, Germany continues to lead the way in developing the thought leadership of Industry 4.0, with a significant amount more research, search queries and coverage from the German sector than in all the English-speaking divisions combined.

Industry 4.0 and the Industrial Internet of Things We can think of cloud computing and the internet of things as the springboard that has brought Industry 4.0 to the forefront of our factories. That’s why some have also come to call it the “Industrial Internet of

Things”. Outside of factories, these “things” are called Cyber-Physical Systems (CPS): physical objects with embedded software and computing power, like the navigation system in your car or the activity tracker on your wrist.

Within a manufacturing system, these “things” become more complex and are called Cyber-Physical Production Systems (CPPS). CPPS are software-enhanced machinery that not only have computing power like typical IoT objects, but also have embedded sensors and actuators designed to self-diagnose and make decisions based on their current state.

As explained in the Journal of Innovation Management, “a smart resource or CPPS will know its state, its history, its maintenance plan, its capacity,

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Unlike the revolutions of the past, however, this one has been a long time coming, allowing for manufacturers and systems time to get ahead before it hits.

its range of possible configurations and setups, etc.” This is the big difference: CPS work independently to communicate and store information in the cloud, where CPPS work to form a self-maintaining, selfdiagnosing network in the cloud.

The Journal of Innovation Management has published research on the revolution and future of these Manufacturing Execution Systems (MES) that found that for Industry 4.0 to take effect, multiple “technology enablers” such as 3D printing, mobile devices and big data, among others need to work together to create a new working system. The manufacturing systems of the future, including MES, will have to be built to support this paradigm shift.

Challenges of Industry 4.0 The challenges of Industry 4.0 are immense. Not only will this enhanced system require a complete upheaval of the way factories currently work, it will also change the way suppliers, workers, engineers, and analysts work as well. Off the back of a new report from business advisory firm BDO, Business Weekly estimates that while UK manufacturers recognise Industry 4.0’s importance, “only eight per cent of UK manufacturers have a significant understanding of the processes involved despite 59 per cent recognising that a fourth industrial revolution would have a big impact on the sector.” A lack of education can result in a lack of investment.

Beyond education, not all businesses can afford to completely revolutionise or overhaul their systems. Some factories still haven’t caught up with the last industrial revolution, so they should be focusing their energy on practical and incremental approaches to improve things like their efficiency and product quality. Those that are somewhere in-between will need to be able to bridge the gap by marrying the technology they already have with what’s coming.

And what’s coming isn’t just machines that think in the cloud, there’s also going to be mountains of new data. This is a challenge that non-industrial businesses are already facing—what do we do with the piles of data we’ve collected and how do we prioritise the important parts? Now, it will be a question for those implementing the Industrial Internet of Things as well.

Advantages of Industry 4.0 Still, amidst all these challenges, the benefits and idealism of Industry 4.0 prevail. From productivity to customer personalisation, it’s hard to deny that those who are scared away by the challenges are also fleeing from the potential overcoming these challenges brings.

The most obvious advantage is increased productivity and profitability. In a late 2014 survey from PwC, companies who are actively implementing measures to implement Industry 4.0 solutions expected more than 18 per cent higher productivity over the next five years. With higher demands on the industrial sector to produce more materials with fewer raw materials and less energy, implementing decentralised systems that promote efficiency, flexibility, and are more sustainable is a must. Integration of smart materials and equipment that can diagnose and fix itself will help streamline processes, make more versatile production decisions, and invariably increase profitability.

Customers will benefit as well. We already know that automating productions can improve quality, consistency and reliability, but there has always been a cost associated with personalisation. Now, made-to order or customisable products can be more easily created and for lower cost, no matter if a company prints personalised t-shirts or customises prosthetic legs with a 3D printer. If a process can be customised based on the product it’s producing, variants in the products should be much easier to accommodate.

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It’s critical that manufacturers begin building their digital transformation roadmap today before they get left behind.

Lastly, remember all that challenging data? It can draw huge benefits if managed correctly. In that same PWC study, 90 per cent of companies said they believe that the ability to analyse data will be decisive to their business model in five years. This can be used to further optimise productivity, analyse the effectiveness of products, regulate the types of products being produced, and more. The fear of too much data dissolves with data lakes and big data processing, leading to data reporting and analytics.

Industry 4.0’s impact and where we are today Even though some UK businesses have said they are struggling to keep up with the expectations set in other manufacturing realms, other reports state that by 2020, European industrial companies will invest €140 billion annually in Industrial Internet applications, which is encouraging.

We’re seeing this at Salesforce within our own customers’ successes. Beth Comstock, GE’s CMO asked herself, “If my jet engine SME ADVISOR

could talk to me, what would it say?” With the implementation of GE’s data feed from a GE NX engine, now she knows. They used an engine’s data feed from a dreamliner for Japan Airlines to diagnose potential issues, then sent this data on to engineers. Though it wasn’t able to repair itself, this is a classic example of how the Industrial Internet of Things can translate mechanical issues into human action.

For every business that is considering a digital transformation in manufacturing, there is another that simply refuses to acknowledge Industry 4.0 is happening.

Meanwhile, Salesforce provides key capabilities to succeed in the Industry 4.0 age with its customer success platform.

The Fourth Industrial Revolution won’t swoop into our operations and factories overnight, this is certain, but the technology that has elevated industries once again isn’t going anywhere but up. It’s critical that manufacturers begin building their digital transformation roadmap today before they get left behind.

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HOW 3D PRINTING IS RESHAPING MANUFACTURING As 3D printing technology is rapidly being adopted for use by a myriad of industries, how does it stand to impact mainstream manufacturing? Naji Atallah, Head of AEC & Manufacturing at Autodesk, shares his perspective…

EDITOR’S PICKS 01. As accuracy has improved and the size of printed objects has increased, 3D printing services are being utilised in a number of industries today including aerospace, automotive, healthcare and sport.

02. 3D printing in healthcare still may have some years to go before mass adoption is widely accepted, but early developments to create tissue, organs, bones and prosthetic devices provide a glimpse of how lives may be improved.

03. In Holland, a local company MX3D has set out to 3D print a fully functional, intricate steel pedestrian bridge over water in the centre of Amsterdam to showcase new revolutionary technology.

Form, function and the future When the first Industrial Revolution began in the 18th century, society made its first push from an agrarian way of life to an economy fully dominated by industry and machine manufacturing. This push garnered the introduction of the factory and the idea of modern day manufacturing. Success was measured by how much you could create in how little time, which eventually became the catalyst for a worldwide economic boom.

With the introduction of a host of innovative ideas like the factory, the steam engine, and textile machines, a new era was born in the race to create and make things.

Fast forward almost 300 years, this very race still continues albeit with a new

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NAJI ATALLAH HEAD OF AEC & MANUFACTURING AUTODESK

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look. For instance, the idea that modern manufacturing could be done without a factory would have almost seemed farfetched to some, especially since manufacturing has been synonymous with factories, machine tools, production lines and economies of scale. The idea that manufacturing can exist without tooling, assembly lines or supply chains is disruptive in nature but that is what is emerging as 3D printing starts to take centre stage.

3D printing, which is a kind of additive manufacturing, has been around for decades but what’s new however is that the technology has reached consumerfriendly price points and footprints, new materials and techniques are making new things possible. The new industrial revolution will hope to open up manufacturing to the whole world – anyone and everyone can be a part of the process. 3D printing manufacturing can now be done in the comfort of your own home, a hospital or even at school, bringing

manufacturing to non-manufacturers or to non-traditional environments.

The printed world As accuracy has improved and the size of printed objects has increased, 3D printing services are being utilised in a number of industries today including aerospace, automotive, healthcare and sport. In aerospace for example, using generativedesign software and 3D printing, Airbus with Autodesk’s help was able to manufacture something called a bionic partition. That partition, the slim but all-important wall that separates the crew from passengers, includes space for emergency stretcher access and holds the crew’s fold-down seating for take-offs and landings. The bionic-design partition weighs 30 kilograms, which is 45 per cent lighter than conventional partitions, resulting in huge savings in both fuel and carbon footprint. This technology although small in nature has the capabilities of being a huge step for mankind. Today a 3D printed partition, tomorrow a 3D printed airplane. The

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3D printing has paved the way for change by ensuring that the technique in creating a product is not just replaced, but significantly improved.

technology has brought changes many would have thought impossible only a few years ago.

The automotive industry has many examples of 3D printing success stories. One example of these success stories is from Arizona-based Company, Local Motors which has aimed to create the first road-ready 3D printed car. The LM3D Swim which is roughly 75 per cent 3D printed will be up for pre-order as early as next year. In addition to using additive manufacturing, Local Motors also partnered with industry leaders to further enhance the driving experience through cutting-edge technologies.

We have seen great strides in 3D printing in the healthcare and sport industries as well. For instance, healthcare can be attributed with having the most inspiring use of 3D printing, where the technology has had the potential to save lives or dramatically improve them. By printing complex material that we could not do

previously, we are able to mimic human bones ensuring strength and durability.

3D printing in healthcare still may have some years to go before mass adoption is widely accepted, but early developments to create tissue, organs, bones and prosthetic devices provide a glimpse of how lives may be improved.

German athlete Denise Schindler has bridged the gap between health and sport by working with Autodesk recently to become the first athlete to compete in Paralympics with a fully 3D-printed prosthetic leg at the Rio 2016 Paralympic Games where she won a silver medal.

Within the sport industry as a whole, 3D printing is utilised to manufacture high quality products for athletes of all shapes and sizes. In sport, we have seen the likes of Under Armour move into the 3D-printed game with the launch of its limitededition performance training shoe,

US$100 mn The amount Autodesk announced it is willing to invest in 3D printing companies.

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Today, we are on the brink of the biggest change in how we make things since the industrial revolution, and 3D printing is one of the reasons of the disruption.

The Architech. The Architech is a highly advanced, multi-purpose athletic shoe that was designed specifically for customers who regularly perform a wide range of exercises and activities. It has a latticed, 3D printed midsole that is as lightweight and comfortable as a traditional athletic shoe, but also adds the type of stability usually reserved for more specialised shoes. With the creation of shoes like this, we have entered a new era in which the capabilities of wearable 3D printed technology are endless.

3D printing has paved the way for a change in business operations by ensuring that the technique in creating a product is not just replaced, but completely bettered.

In the field of construction, we have seen the creation of bridges or buildings significantly improve. In Holland, a local company MX3D has set out to 3D print a fully functional, intricate steel pedestrian bridge over water in the centre of Amsterdam to showcase new revolutionary technology. MX3D equips industrial multiaxis robots with 3D tools and develops the software to control them. The team research and develop ground-breaking, cost-effective robotic technology that can 3D print beautiful, functional objects in almost any form. This would have been thought of as unimaginable previously as manufacturing was always associated with goods as opposed to construction.

We can consider ourselves lucky that we can witness a sweeping change in manufacturing that has allowed us to create entirely new products that may not have existed or have been imaginable years ago.

Powering 3D printing What we see now is merely a glimpse into what a 3D printed future will look like. To help consumers (especially businesses) prepare for this new era of design, tech leaders are committed to introducing sound solutions. For instance, the team at Autodesk is developing a robust portfolio

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of tools to help people thrive in this new era. These tools are designed to be accessible, easy to use and powerful.

As an example, Autodesk Netfabb 2017 is a comprehensive toolkit for additive manufacturing professionals. Users can access all the software they need to reduce costs, increase efficiency and improve part performance in industrial 3D printing production environments.

It integrates design enhancement, manufacturing preparation and build simulation tools in one software environment that shares a common installer, common file formats and process definitions.

Another area that is being looked at very closely is the implementation of 3D printing on a large scale. With Project Escher, an assembly line of 3D printers governed by a smart setup that can control an endless number of print heads to create larger projects. It aims to be a faster way to manufacture complex parts by coordinating independent printers to create one large build volume. It works by giving different bots different print jobs.

Not only has this ensured that the object being printed will be larger, but the time needed to do so is significantly cut down.

Autodesk also recently announced its willingness to invest up to US$100 million in 3D printing companies. The Spark Investment Fund, which will be operated within Autodesk, is the first of its kind for the 3D printing industry and will invest in entrepreneurs, start-ups and researchers who push the boundaries of 3D printing technology and accelerate the new industrial revolution.

Today, we are on the brink of the biggest change in how we make things since the industrial revolution, and 3D printing is one of the reasons of the disruption. The opportunities are greater than ever.

Together we are changing the way the world is designed and made.

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DUBAI INDUSTRIAL STRATEGY – THE PATH AHEAD Dubai Industrial Strategy 2030 is a key initiative catalysing the transition towards more sustainable economic growth. After its recent unveiling, we look ahead to the opportunities it presents.

SME Advisor speaks to Hamdah Bin Kalban, Senior Consultant – Socioeconomic Development Department, Strategy Management and Governance Sector at The General Secretariat of the Executive Council of Dubai HAMDAH BIN KALBAN SENIOR CONSULTANT – GOVERNANCE SECTOR THE GENERAL SECRETARIAT OF THE EXECUTIVE COUNCIL OF DUBAI SME ADVISOR

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What does the Dubai Industrial Strategy aim to achieve? What are its objectives and action points?

The Dubai Industrial Strategy 2030 is one of the most important elements in achieving the objectives of Dubai Plan 2021. It emphasises on reinforcing the emirate’s position as a global centre as well as a preferred destination for a number of industries and sectors under the leadership of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, and pursued thoroughly by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council.

Dubai Industrial Strategy identified a strategic vision and set five key objectives until 2030. Its aim for Dubai is to “become a global platform for knowledge-based,

sustainable and innovative industries”. The strategy focuses on six main sub sectors: Aerospace, Maritime, Pharmaceuticals & Medical Equipment, Aluminium & Fabricated Metals, Fast Moving Consumable Goods, and Machinery and Equipment.

The five key objectives are: 1. Growth engine: increase total GDP and value-added of manufacturing.

2. Innovation-based: enhance depth of knowledge and innovation.

3. Home for global business: become the preferred manufacturing platform for global businesses.

4. Environmentally sustainable: promote environmentally friendly and energy efficient manufacturing.

Adopting Islamic standards: become a centre for the global Islamic products market.

Why is manufacturing important as part of the country’s diversification agenda?

The industrial sector is considered the fourth largest strategic sector and has recorded a CAGR of five per cent over the past few years and contributes ~10 per cent to Dubai’s economy. The reasons are: to increase the resilience and diversification of the Dubai economy; increase exports and convert reexports to value-added exports; serve local market demand; focus on specialised niche industries for Dubai where suitable; and support the services sector.

What are key initiatives in the pipeline to nurture the growth of the manufacturing sector?

The implementation of the Industrial Strategy has started in September 2016.

The strategic initiatives will be executed through specialised teams; the key

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The implementation of the Industrial Strategy has started in September 2016.

responsibility of the teams is to oversee and ensure implementation of programmes and execution of deals. The teams are currently working on profiling the initiatives and setting an implementation plan, which will be announced by Q1 2017.

Is Dubai set to become the next global manufacturing hub? What are strategies in place to achieve this vision?

The Industrial Strategy, with its six priority sub-sectors, is closely linked to the emirate’s knowledge and innovation strategy and its aim is to make Dubai knowledge-based, innovative and sustainable industrial centre.

This could be achieved through boosting Emiratisation in Dubai’s industrial sector through universities and entrepreneurial projects, open door meetings with the private sector, providing finance and credit as well as stimulating banks to support manufacturing companies, especially SMEs, and promotion of research and development by creating a collaborative platform between universities to work together in the area of R&D. This is vital to the advancement of the industrial sector and to further SME ADVISOR

strengthen its important role as a pillar of Dubai’s economy.

Is there any advice you would like to give to manufacturing businesses in the country?

My advice is to be innovative and to keep innovating and not wait for government announcements and directions. The private sector is the main driver of this strategy and it cannot be achieved without their mobilisation. Therefore, their support is required in two critical ways: investing in the six sectors of focus and channelling their requirements to the government to ensure support is provided adequately and on time.

We have assigned a team leader for each of those sectors where the private sector can have direct access. They are as follows: Dubai South for Aerospace, Dubai Maritime City Authority for Maritime, Dubai Science Park for Pharmaceuticals & Medical Equipment, JAFZA for Aluminium & Fabricated Metals, JAFZA & Dubai Wholesale City for Fast Moving Consumable Goods, and Dubai Wholesale City and JAFZA for Machinery and Equipment.

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GULFOOD MANUFACTURING 2016:

ENABLING OPPORTUNITIES FOR GROWTH

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Gulfood Manufacturing 2016 was successful in connecting nations, suppliers and industry-related businesses – further strengthening Dubai’s position as a key player in the global food manufacturing landscape.

Mark Napier, Exhibitions Director, DWTC, and Show Director, Gulfood Manufacturing, gives his post-event analysis…

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How has Gulfood Manufacturing developed over the years?

For its third edition in 2016, Gulfood Manufacturing registered year-on-year growth of 20 per cent in terms of exhibitors and exhibition space. By expanding the exhibition to over 80,000 square metres this year, we welcomed 1,600 exhibitors from 58 countries and 29 official national pavilions, including first-time pavilion participants Indonesia, Ireland, Russia and South Africa.

The show was completely sold-out. Amid such strong demand from regional food production and processing companies for innovative ingredients, machinery, equipment and cold chain solutions, initial feedback from this year’s exhibitors and visitors suggests there is further room for growth in both - our core sectors and specialised niche areas. As such, we are already working on further expansion for Gulfood Manufacturing 2017.

Why is Gulfood Manufacturing so important for the region? How does it impact the manufacturing industry?

Gulfood Manufacturing provides a onestop-shop to source the latest ingredients, processing machinery, packaging equipment and logistics, warehousing and cold chain solutions to enable faster, cheaper and cost-effective production of safer and more reliable products. Having this type of in-market access to global suppliers, technologies and automated solutions is hugely important for food producers operating in a region which currently produces only 30 per cent of its food requirements and imports the remaining 70 per cent. According to a MEED Insight Thought Leadership Report released at this year’s show, the GCC’s food import bill will double over the next few years to a value of US$ 53.1 billion, making it vital in terms of food security and economic diversification that the region establishes a broader, more sophisticated and sustainable food manufacturing base across the GCC food sector.

The UAE is leading this push and Gulfood Manufacturing 2016 fell just months after His Highness Sheikh Mohammad bin Rashid

Al Maktoum, Vice President and Prime Minister of the UAE and the Ruler of Dubai, launched the Dubai Industrial Strategy – a multi-faceted policy that aims to elevate Dubai into a global platform for knowledgebased, sustainable and innovation-focused businesses. The Dubai Industrial Strategy aims to help generate more than 27,000 jobs and an additional AED160 billion in the emirate’s economy by 2030. Among the objectives in Phase One of the strategy are increasing total output and value-addition of the manufacturing sector; enhancing the depth of knowledge and innovation; making Dubai the preferred manufacturing platform for global businesses; promoting environmentally-friendly and energyefficient manufacturing systems; and making Dubai the centre for the global Islamic products market. In line with this, Gulfood Manufacturing’s mandate to capitalise on unprecedented market demand across the region’s manufacturing, processing, packing and ingredients sectors aligns perfectly with the top 75 initiatives outlined in the Dubai Industrial Strategy.

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What was new at this year’s edition?

MARK NAPIER EXHIBITIONS DIRECTOR, DWTC, AND SHOW DIRECTOR, GULFOOD MANUFACTURING

In addition to new-to-show exhibitors, pavilions and visitors, this year’s Gulfood Manufacturing hosted a series of specialist conferences including the brand-new Food Logistics Forum, the region’s only food and beverage-specific logistics event.

The Forum brought together the region’s leading production, foodservice, retail, logistics and transportation players for two days’ of intensive education sessions, as well as dedicated time to build new business relationships and explore best practices. We also added ‘The Talks@Gulfood Manufacturing’, a series of tailored industry panels where sector investors were able to gain industry-wide insights to make informed purchasing decisions across the Middle East and North Africa’s food and beverage (F&B) ecosystem. And although not specifically ‘new’, Gulfood Manufacturing 2016 rolled-out its largest Hosted Buyer Programme sponsored by Tetra Pak to date.

The programme brought together more than 2,000 of the region’s biggest and most important industrial buyers in what is now the global food industry’s largest Hosted Buyer Programme. The initiative provided tremendous opportunities for regional and international producers and buyers to network in a tailored trade platform.

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Was there a theme surrounding this year’s event?

Although Gulfood Manufacturing wasn’t held under a central theme, the show was split into three specialised sectors:

• Ingredients Middle East featured

fine and functional ingredients and the latest bulk and commodity ingredients, innovations, tastes and flavours.

• ProPack Middle East covered

automation, processing equipment and packaging machinery to solve production challenges and increase volume, flexibility, efficiency, quality and cost control.

• Logistics Solutions Middle East was

tailored for firms sourcing materials handling, transport and commercial vehicles, IT and technology solutions, warehousing operators, facilitators & service providers.

80,000 sq. m.

Total exhibition space this year

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As the region’s largest and most influential trade show for the food manufacturing sector, Gulfood Manufacturing is the perfect venue for visitors to source the latest industry innovations.

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How do you remain the show of choice for exhibitors and visitors within this space?

As the region’s largest and most influential trade show for the food manufacturing sector, Gulfood Manufacturing is the perfect venue for visitors to source the latest industry innovations in business sectors ranging from meat, bakery, beverage and confectionery, to fats, oils, dairy and seafood. We are still collating final attendance at this year’s show but we will have easily surpassed our growth targets recording over 30,000 visitors for the 2016 edition.

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What does this region need to do in order to become the global authority within F&B manufacturing and trade? What are the major challenges that we need to overcome?

With its growing populations, overdependency on food imports and minimal arable land, regional governments are fully aware of their food security challenges. This is one of the primary reasons that the Government’s Dubai Industrial Strategy is so important – it outlines a clear vision to improve sustainable food supplies via home-grown manufacturing capacity and Gulfood Manufacturing will support with an industry-wide platform required to drive change and promote sustainable food manufacturing across the UAE and wider GCC region.

1,600 The number of exhibitors at this year’s edition

58 The number of countries represented

29 The number of official national pavilions

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A GLOBAL SNAPSHOT – MANUFACTURING TRENDS ACROSS KEY MARKETS

United States

Japan

Thailand

Manufacturing in the US employed 12.3 million workers and supported 56.6 million workers in 2015

67% of global manufacturing executives report that Japan is extremely competitive in terms of talent

Manufacturing exports were valued at US$167 billion in 2014

A typical US manufacturing worker earned an average of US$79,553 in 2014 in comparison to US$64,204 in other industries

30% report that Japan is extremely cost competitive

66% of global manufacturing executives

59% say the country’s legal and regulatory systems are extremely competitive

report that the US is extremely competitive in terms of talent 33% say that the US is extremely cost competitive 66% say the country’s legal and regulatory systems are extremely competitive

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87% of the country’s total exports are manufactured goods

United Kingdom UK’s manufacturing exports accounted for 63% of the total merchandise exports over 2010-14 In 2014, hi-tech manufactured goods accounted for 58% of total manufacturing exports

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sources: Deloitte

Germany

India

China

73% of global manufacturing executives report that Germany is extremely competitive in terms of talent

Manufacturing exports valued at US$174 billion

33% of global manufacturing executives report that China is extremely competitive in terms of talent

28% report that Germany is extremely competitive on the basis of cost 67% say the country’s legal and regulatory systems are extremely competitive Ranked 9th on the basis of quality of infrastructure by IMD in 2015 The average hourly rate of a manufacturing worker is US$40.50 per hour (as per 2015) – one of the highest in the world

43% require high-skill and technological intensity It is predicted that by 2020 India will recover to the 5th position of the most globally competitive manufacturing nations 35% of global manufacturing executives report that India is extremely competitive in terms of talent 62% believe that India is extremely competitive in terms of cost 24% say the country’s legal and regulatory systems are extremely competitive

69% believe China is extremely cost competitive 23% say the country’s legal and regulatory systems are extremely competitive

UNCTAD, Manufacturing exports Merchandise – Trade matrix by product groups, exports in thousands of dollars, annual, 1995-2014, http://unctadstat. unctad.org/wds/ TableViewer/tableView. aspx?ReportId=24739, accessed in January 2016.

Elizabeth Scott and Howard Wial, Multiplying Jobs: How Manufacturing Contributes to Employment Growth in Chicago and the Nation, University of Illinois at Chicago, May 2013, Page 9, cuppa. uic.edu/data/CUED_ Manufacturing_Jobs_ May2013.pdf, accessed in January 2016. 2.

National Association of Manufacturers, Top 20 Facts about Manufacturing, www. nam.org/Newsroom/ Top-20-Facts-AboutManufacturing/, accessed in February 2016 SME ADVISOR

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SUPPLY CHAIN FINANCE –

UNTAPPED OPPORTUNITIES FOR SMES Anirudha Panse, Head of Trade Finance Products at National Bank of Abu Dhabi (NBAD), shares his thoughts with small businesses looking to optimise the management of their working capital and cash…

T ANIRUDHA PANSE HEAD OF TRADE FINANCE PRODUCTS, NBAD

he SME and MME (Mid-Market Enterprises) segment forms an important component of the physical supply chain. The businesses that fall under this category toil endlessly with the aim of providing uninterrupted supplies of critical goods and services (raw materials) to large corporates. This allows large corporates to convert/consolidate such massive amount of supplies into finished goods and deliver them to the mass population in a timely manner. Maintaining a strong and healthy supply chain is critical for any corporate because any disruption in the physical supply chain will result in unnecessary delays and costs. In order to keep the physical supply chain healthy, it is important that the financial needs of the supply chain are handled promptly and efficiently.

Understanding the challenges Let’s take a closer look at some of common challenges that companies typically face in the realm of supply chain.

• Negotiating a trade commercially is generally a win-lose proposition i.e. if one trading party ends up getting a better term, then the other party will most likely be compromised or vice versa. This is even more relevant and challenging if the negotiations revolve around financial considerations. Generally, the SME/ MME ends up being on the receiving end and is therefore either left feeling the brunt or having to find its own way to manage business within the negotiated commercial terms.

• Liquidity attracts liquidity. As compared to the SME/MME

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Banks and large corporates need to collaborate and work together and piece the physical supply chain together with financial supply chain.

This is where NBAD’s SCF solution kicks in to create a win-win proposition for large corporates and SME/ MME suppliers.

segment, the large corporates have little problems in raising fresh liquidity in the market. Ironically, the SME/MME is generally the one that needs to be kept liquid to ensure a healthy supply chain.

• Banks/FIs have had a tough

experience in the last few years during the financial crisis. This has resulted in tighter regulations for banks; they are urged to follow stricter KYC requirements, stringent lending policies, improved pricing return hurdles, etc. This makes credit scarcer and it’s generally the SME/MME again that ends up being on the losing side of the financial negotiations.

Solutions for growth So is there a solution that can create a win-win situation for the large corporates as

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well as the SME/MME players? Absolutely!

Here are a few suggestions of how banks, corporates and the SME/MME segment can create a mutually beneficial system of growth: • Banks need to ensure liquidity flows into the SME/MME segments without exposing themselves to undue risk on their own balance sheet.

• Banks and large corporates need to collaborate and work together and piece the physical supply chain together with financial supply chain.

The significance of supply chain finance Large corporates can collaborate with NBAD in offering a Supply Chain Finance (SCF) solution for their suppliers. NBAD’s SCF solution allows the SME/MME suppliers to raise non-recourse finances against their receivables from the large corporate typically at the large corporate sponsored lower interest rates. This solution thus helps the suppliers in generating liquidity at a lower financing rate contributing to savings in their business. Corporates may ask for a share in the benefits of such reduced interest rate, however the overall deal should still work in favour of the supplier’s business. This enables a win-win solution for corporates and their suppliers.

NBAD is the first regional bank to be able to offer a solution which achieves the abovementioned objectives. It is able to provide a wide portfolio of sound supply chain finance solutions to SME/MME suppliers of a large corporate that banks with NBAD. Some of the primary features of its Supply Chain Finance (SCF) solution are as follows: • SCF allows financing of domestic and cross border post shipment commercial transactions • The buyer would buy goods/services in the normal course of their business from various suppliers giving them commercial payment terms • This generates Accounts Receivables (A/R) in supplier’s books

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A wide spread adoption of solutions like supply chain finance will go a long way in ensuring banks are able to inject liquidity into the physical supply chain.

• Using SCF as a tool, buyer allows

suppliers to sell the A/R for early cash to NBAD, typically at buyer sponsored interest rate • Buyer pays NBAD on the commercially agreed due date with the supplier One of the most striking features of this SCF solution, however, is its high-level of automation that streamlines the end-to-end process making the entire experience hassle free for its users. The web-based platform is fully secure and allows buyers and suppliers to undertake transactions by following a few simple instructions.

NBAD’s solutions offer the following benefits to buyers and suppliers: For the buyer: ϭϭ Improves working capital and liquidity. ϭϭ Fosters stable relationship with the supplier ensuring long-term partnerships

ϭϭ Allows Off balance Sheet treatment

(obligation should not qualify as Bank Debt)

For the supplier: ϭϭ Infuses fresh liquidity, with a positive impact on cash flow. ϭϭ Certainty of payment and a better understanding of the timeline and status of invoices. ϭϭ Provides additional source of financing without impacting existing credit limits.

The experience a financial partner brings on board can help your business unlock value from your supply chain and contribute to the creation of a flexible financing strategy.

Partnerships of this kind create a rare win-win situation for the physical supply chain players and help the SME/MME segment concentrate on growing their business without worrying for burgeoning cost of debt or absence of liquidity.

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Food for THOUGHT Manar Al Jayouchi and Suzi Croft, Co-founders of 1762, are at the helm of one of the region’s most successful F&B brands. In conversation with SME Advisor, they explain what they are doing to gain a competitive edge and open up about their plans for the future…

MANAR AL JAYOUCHI C0-FOUNDER 1762

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SUZI CROFT C0-FOUNDER 1762

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EDITOR’S PICKS 01. Manar Al Jayouchi and Suzi Croft, Cofounders of 1762 (part of the Appetite Group), want to make healthy eating in the region as easy as possible.

02. Searching for skilled talent in a tight market is proving to be difficult. But, Manar and Suzi are determined and fully committed to hiring only the best.

03. In the first five years, the business has quadrupled in size and has expanded from Dubai to other Emirates.

From idea to action Manar Al Jayouchi and Suzi Croft, Cofounders of 1762 (part of the Appetite Group), want to make healthy eating in the region as easy as possible. With the ambition to enable easier access to honest and quick food, they decided to create Appetite. A home-grown concept, the rustic/ industrial shop boasts a variety of nutritious meals. Be it morning coffee or lunchtime snack, Appetite caters to every meal of the day. Priding itself on its commitment to honest and preservative-free food, it has ensured that its meal items are of interest to every type of audience. “There was a gap in the market for quality, wholesome products for busy people who are constantly on-thego. Moreover, we believed that the Middle Eastern market was quite attractive – it was a great market to be in. The middle class population was growing which meant the need for quality products and better services was continually on the rise. We saw the opportunity and decided to take advantage of it,” quip the dynamic duo.

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Confident about their idea, they decided it was worth betting their savings on it. “Of course, having an idea is one thing, but it is the implementation of the idea that is crucial. And, no idea can be executed without the right financial funds. We decided to invest whatever savings we had along with the support of our friend Nabil, who was a dynamic catalyst of this project.”

“The entire process from the idea stage to inception to actually selling took almost a year. We started the business with AED 280,000 to be precise, along with a small kitchen and two staff members,” Manar says with a smile. “Looking back to that day, it feels remarkable how quickly we’ve turned things around.”

And, it’s remarkable indeed. Manar and Suzi’s business has undergone rapid expansion since inception. In the first five years, the business has quadrupled in size and has expanded from Dubai to other Emirates. The company has a team of 210 employees with plans for further growth in the near future. “I think our biggest

milestone has been our shift from being a manufacturer to being a manufacturer with our own retail operations,” adds Suzi.

Overcoming the challenges – with bite-sized solutions The biggest challenge for the F&B entrepreneurs has been finding the right people to manage its high volume of orders efficiently, while maintaining consistent taste, service and quality. “We believe that any team is as strong as its weakest link and we only got better when we had the right people in the right places. At the end of the day, who you surround yourself with makes all the difference. So, the biggest challenge for us is the recruitment of the right people and retaining strong and effective team members.”

Searching for skilled talent in a tight market is proving to be difficult. But, Manar and Suzi are determined and fully committed to hiring only the best. “We’ve reached the conclusion that you have to invest in the right team and we have

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Established: June, 2005

Employees: 210 (currently)

Year on year growth: 10% USP: Offering wholesome, quality and fresh products.

Challenge takeaway: Being persistent and focusing on the customer.

directed a big chunk of our returns into hiring the best team possible to cover the ever-expanding part of the business. We also understand that hiring is a two-way street; in order to work with skilled staff, it is important to establish quality processes and integrate the latest technology. Technology is the core of any business today; it’s making everything more accessible. Data analysis is important to understand our business, and with new software, it helps our operations on the daily. More streamlined operations create a positive working environment – not just for the management, but the employees as well,” they explain.

Their strategy to combat this challenge has been straightforward. “We take time out to sit down with our recruitment partners and talk to them about our company culture and long-term goals. If they aren’t educated about the business, how can we expect them to find the right candidates? You’ll be surprised to find out what a great impact this has on the results!”

Another area that the dynamic duo has been increasingly looking at has been creating a niche for themselves in an already crowded market. “Until a few years ago, price was the determinant factor in terms of business survival. You would have to be cheap in order to stay in business (especially within the F&B industry). More recently, however, the focus has been on quality and innovation – which is the sign of a maturing market. What personally works for us is scoring our business on a quantitative and qualitative matrix. We, as founders, still believe that our recipe for success depends firmly on meeting the highest score within the following key points: quality

and consistent products; value for money (expensive or cheap is not important as long as you deliver the value); quality service; and keeping up with new trends.

Recipe for the future Speaking of their growth plans, Manar and Suzi say: “Currently, we are looking to focus on retail expansion and build up for better processes (plans) for profit centres.

For the next two years, we will focus on retail. We just launched Appetite the Shop a bit over a year ago so we want to cement our presence on this platform. Finally, providing a more competitive service is what we will continue to focus on in the coming year.”

Do they have plans for regional and international expansion? “Yes we do. We are currently working on building our franchise as well as fuelling expansion.

There has been a lot of interest across the GCC and Europe. There are still a lot of new markets we need to enter. There’s still a lot of work to be done.”

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THE NUTS AND BOLTS OF SUCCESS Rotte Gulf is all set to take the manufacturing industry by storm with its innovative solutions and ambitious growth plans. We sit down with Tiberiu Calinescu, GM, Rotte Gulf.

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otte Gulf FZC is part of the Rotte Group, which was established in 1991 in Tata, Hungary. Currently, it operates across Central and Eastern Europe – with a presence in Middle East since 2009.

Explaining his company’s core offering, Tiberiu Calinescu says: “Within the UAE and GCC market we are focusing on: retail outlets equipment; hotel equipment and institutional furnishing (schools, universities); and office furniture. Simply put, we are in the shop fitting and hotel equipment business. Our sector has seen great development in Central and Eastern Europe, but when the crisis hit in 2008 we had to look for new markets and that’s what brought us to the GCC – and specifically UAE.” Carving a niche Tiberiu opens up about the different stages of his journey. He says: “Once we had made up our minds to enter this market, we visited the country as tourists and did a lot of research.

We explored manufacturing, trading and retail outlets across the country to assess the

market need for our products. We reached to the conclusion that there was definitely a niche audience we could target. The possibilities were limitless and the number of projects we could tender for was quite large!”

The first step for Tiberiu was to determine the USP of his offering: “Our strength lied in the ability to deliver turnkey projects while constantly communicating with our customers. Starting from the first phase, we offer consultancy, 3D planning, manufacturing, shipping, warehousing, installation, warranty and specialised after sales service. We ensure that every project undertaken offers outstanding quality. And, this is exactly what we decided to continue focusing on.”

What followed was Tiberiu’s quest for finance. “Initially, we wanted to reach out for investment. Ultimately, we decided to do things the hard way and bootstrapped.

My partners and I invested all our personal savings into the business – which was around AED 300,000. As entrepreneurs, we had to learn everything step by SME ADVISOR

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EDITOR’S PICKS 01. Starting from the first phase, Rotte Gulf offers consultancy, 3D planning, manufacturing, shipping, warehousing, installation, warranty and specialised after sales service.

02. Rotte Gulf’s primary revenue stream is shop fittings.

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step, experience by experience and build everything brick by brick.”

Challenges abound Sharing the very first hurdle his company faced, Tiberiu says: “We were familiar with the products that we were selling, but lacked skills in terms of the servicing side of our business. We combatted this by hiring a strong fitting team, which was ready to solve any technical issues and overcome any unforeseen customer challenges during installation.”

Tiberiu’s problems didn’t quite end there. When Rotte Gulf made an entry into the Middle Eastern market, it was a forerunner in its field. But, stiff competition in the market meant prospective clients were hesitant to work with a new entrant.

“Although the initial reaction to Rotte Gulf’s products was good, it faced difficulties in marketing and selling its product. It was a newcomer in already competitive market with very little exposure. The major challenge was having good sales meetings, even though the

feedback we would get was fantastic, it wouldn’t convert into sales. A lot of clients required references and needed processing time. Nobody wanted to be the first one to try our products and services. It is quite difficult to find your first major client, who will help you showcase your capabilities,” he opens up.

But Tiberiu didn’t lose hope. They continued working on their differentiating factor. “We invested into market research and tapped into the local knowledge base to understand how we can better fulfil the needs of our customers. We also ensured that we were always updated with the new trends, products and technologies.

This really helped us turn things around.

Last year, for instance, we installed a Gatekeeper system for one of our clients that allowed them to secure their trolley fleet and keep them in the designated area which was a premiere for the GCC market.”

Eyes on the prize Now that Tiberiu has successfully made inroads into the market, he is quite happy

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Established: 2009

Employees: On a group level, there are 400+ employees, but the active sales force in the region includes 7 people as well as independent fitting teams.

USP: Premium product range and outstanding project management.

Challenge takeaway: Endurance

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Nobody wants to be the first to try your products and services.

It is a challenge to find your first major client, and showcase your capabilities.

with the projects his company is working on. “We successfully completed several hypermarket, supermarket and hotel projects in the region (UAE, Bahrain, Kuwait, Oman). Some of our customers include Geant, MAF Carrefour, Union COOP, Abu Dhabi Coop, Al Ain Coop, Spar, Gulfmart, Khimji Ramdas, Renarte Hospitality etc.,” he says excitedly.

But of course, the ambitious entrepreneur already has plans for further expansion up his sleeve. “In the short term, we are looking to expand the sales force and expand our client portfolio. In the long term, we might look into the possibility of locally fabricating equipment. We’ve done projects in UAE, Bahrain, Oman and Kuwait, but not yet in Qatar and Saudi Arabia, so the next step is to enter on those markets as well. What’s great is that the market trends are in our favour because the region’s retail design is adopting the European style and we are quite familiar within that space. For this market, we are definitely the right fit.” We surely think so, Tiberiu!

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THE METAL MAN The products and solutions that Mohd Al Sheikh’s company offers put it several steps ahead of the market – and the competition.

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EDITOR’S PICKS 01. Lions Metals not only provides various different models of standalone ovens, but also offers value-added products and services 02. Since its launch in 2013, the kitchen equipment manufacturer Lions Metals has organically grown into seven countries, with 35 distributors and 44 sales points.

03. When Mohd Al Sheikh set out to build his business, he had a very clear strategy in mind: to be the first UAE brand that is recognised globally in the kitchen equipment, home appliances and picnic equipment.

From a small business to a huge success Since its launch in 2013, the kitchen equipment manufacturer Lions Metals has organically grown into seven countries, with 35 distributors and 44 sales points. And, it doesn’t stop there. The company has also managed to secure clients in international markets such as Canada, India, USA and Pakistan. So, our first question to Mohd Al Sheikh, Founder and CEO of Lions Metals, is: what is the secret behind the exponential growth of his small business?

“It has been such a terrific journey and a humbling experience indeed. We’ve gone through highs and lows – just like any other company does – but what is important is that we are still here today. I think the success of our business can be attributed to two critical factors. One is that we are a home-grown company; we established our business in the UAE and always ensure that the needs of the local markets are met.

Second is our diverse product offering; we have over 155 in-house designed unique products – some of which have already been launched, while some are still in the pipeline.”

Trial and error Although Mohd Al Sheikh has taken his business to new heights, success didn’t come easy. The process of prototyping his product took months and required several iterations. “At the time of inception, we took up the challenge of prototyping our ovens, and ended up failing numerous times. Of course, it was a difficult process and we had to be patient. After every failure, the design had to be completely revamped and a new prototype was built.”

Developing the perfect product was imperative for Mohd Al Sheikh, and this wasn’t due to his knack for precision.

He knew very well that in his business

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What really sets Mohd Al Sheikh apart is that he isn’t shy to talk about his failures.

segment, i.e. kitchen equipment, safety, energy saving, capacity and speed were critical elements. Every detail needed to be thought out carefully before he could launch his product.

“After 10 failed prototypes, it was in 2013 that the team had a breakthrough.

We were happy with our final prototype and knew it had everything we wanted.

It ticked all the right boxes and was built at an affordable cost,” he reminisces.

His determination and perseverance had finally yielded results! What really sets Mohd Al Sheikh apart, however, is that he isn’t shy to talk about his failures. “I truly believe that every mistake, failure or misstep is a learning experience and if it hadn’t been for those first few iterations, we wouldn’t have been able to perfect our product. In fact, my team and I refer to them as the ‘famous failures’,” he says jokingly.

Today, Lions Metals not only provides various different models of

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With a vision to strengthen his market presence and expand his network, Mohd Al Sheikh is already mulling over the working of his future business model.

standalone ovens, but also offers valueadded products and services. “We deal in genuine parts; all parts used within our equipment are made exclusively for us, therefore customers always have to buy it from us directly. We have also diversified our offering to include accessories such as extra trays, gas regulators and heavy duty lighters.”

In addition to his specialised product portfolio, Mohd Al Sheikh points out that his company is quite innovative when it comes to the operating business model.

“Our business model uses a two pronged approach. We not only deliver solutions to Distribution Network Partners (Commercial kitchen equipment suppliers), but also work with major catering companies as well as leading chain restaurants.”

The future is bright With a vision to strengthen market presence and expand his network, Mohd Al Sheikh is already mulling over the mechanics of

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his future business model. “We are keen to launch our latest invented products as well as introduce our showrooms across the region that are directly owned by us and then spin those off into franchises. Building an online presence is also a top priority; we aim to create an e-commerce platform to sell and deliver our products. These are all avenues for growth, and will help us reach our customers faster and more efficiently.”

When Mohd Al Sheikh set out to build his business, he had a very clear strategy in mind: to be the first UAE brand that is recognised globally in the kitchen equipment, home appliances and picnic equipment. It is this very ambition that is driving him forward. “Looking to the future, we want to have a solid a footprint in 35 countries in the segments decided by year 2021 and we want to reach AED 1 billion in sales by year 2023,” he surmises. Well, one thing is for sure. There is no one better than the aspiring Mohd Al Sheikh to achieve this ambitious target.

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Building

the dream

Intercoil makes for an intriguing case study because it marks the convergence of three critical aspects of running a business: the succession of a family-owned firm, the journey of a manufacturer and the transition from a small business to a large enterprise. Hassan AlHazeem speaks to SME Advisor and highlights the peaks and pitfalls‌

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EDITOR’S PICKS 01. Hassan did not always intend to follow in his father’s footsteps – he received a Bachelor of Science degree in Computer Science and an MBA degree in International Business Administration – but he enjoyed manufacturing. He was passionate about solving a problem for people and helping them enhance their day-to-day lives.

02. Intercoil has grown through self-financing and has no current plans to seek investors.

HASSAN AL-HAZEEM MANAGING DIRECTOR INTERCOIL INTERNATIONAL

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assan Al-Hazeem is your typical entrepreneur – passionate, organised and extremely driven. As soon as we sit down, he gets straight to the point: “Let me tell you how it all started. Intercoil International was established by my late father Abbas Ali AIHazeem over four decades ago, and I took over the management of the company in 1999. My father’s first business was carpets trading in 1958, which later evolved into a furniture and furnishing retailing and manufacturing group. Intercoil started as a polyurethane foam company in 1974 – the region’s first company of its kind. Over the years, Intercoil continued to expand and diversify, and eventually identified mattresses as its core offering when it recognised the importance of sleep on an individual’s health and wellbeing. We realised that without it, even the simplest of tasks can become insurmountable. So we made it our responsibility to not only provide healthy sleep solutions, but to educate our customers on the importance of a healthy lifestyle.”

And, it has been an incredible journey for Hassan and his family. One with its fair share of opportunities and challenges.

“Absolutely! We have worked hard over the last 40 years to build a brand that connects with our customers and delivers an excellent value proposition. We have been fortunate to receive several accolades for excellence in business performance, such as the Mohammed Bin Rashid Al Maktoum Business Award, and we have successfully implemented an ambitious growth strategy outside of the Gulf region, and developed a strong presence in 23 countries. We also signed our first licensing agreement with the Bombil Group in Kenya, which signified the maturing of our company on an international scale. These are all significant achievements for the company, which have contributed to making Intercoil the company it is today.”

Enhancing capabilities After his father, Hassan was at the forefront of one of the most prestigious manufacturing firms in the region. He knew he had a mammoth task at hand.

He did not take his position for granted and began looking for ways to improve the company’s offering.

The first step was the investment: “Our investment is ongoing in order to ensure we stay abreast of the latest technologies and at the forefront of this competitive market. Our most recent investment of AED 35 million on the automation and reengineering of our manufacturing processes has enabled us to increase our output and meet increasing demands.”

The second step was product diversification: “It is important for us to continually introduce new product innovations. Our newest mattress series – Evolution – is a breakthrough innovation in the mattress industry which took between six to eight months to be developed. Our research showed that when a customer is shopping for a mattress, the biggest bottleneck in choice of a mattress is uncertainty over choice of comfort level (the softness of the mattress) and the disagreement between couples in terms of whose preference should be considered.

At a later stage in the life of the mattress, another important product failure is that when the mattress gets dirty/stained, there is no recourse for the customer to restore the hygiene and cleanliness of the product, except by replacing the whole mattress.

Evolution overcomes these two critical product gaps by designing the mattress as a modular product with separate parts. The design process was thorough, as we established our own research and development team that conducted extensive tests internally, followed by a number of focus groups externally. We had no pre-launch ‘problems’, although we received some valuable feedback about

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Established: 1974

Employees: Over 500

Year on year growth: 20% USP: The Bedroom by Intercoil is a onestop-shop for sleep; offering complete bedroom furniture, bedding, bed linen and accessories for every member of the family.

Challenge takeaway: Business success and happiness in life can be achieved only if we love what we do. Channelling our commitment, dedication, patience and perseverance towards achieving our dreams will help us remain focused. This is something I learnt from my father, who was a visionary entrepreneur; he had the heart, passion, and vision and nothing stopped him from achieving his goals.

finishing and fabrics which we incorporated into our final modifications. As with any new mattress, we initially tested the Evolution in Dubai, before rolling it out to the other Emirates and greater Gulf.”

He adds: “We are continuously investing in our company to improve all facets of the business, from people and talent, to technology, infrastructure and performance.

We are constantly communicating to customers, listening to feedback in order to refine our products and service, and to maintain our brand promise and sustain consistency. We are fortunate to enjoy a strong and loyal clientele in the region, but we never stop looking for ways to innovate, grow and expand in order to remain competitive. More importantly, we promote healthy sleep and healthy life, and this is something that we are passionate about and something which goes beyond the bottom line.”

And, these strategies have surely worked for Hassan. Under his leadership, the business has expanded into new markets and new verticals through an ambitious growth plan. Today, Intercoil operates eight distribution centres and 23 retail outlets across the region, covering 23 countries in MENA and Levant, with over 500 employees, 50 distributors, vendors and agents and three state of the art manufacturing facilities, including one in Saudi Arabia. It also recently completed the first licensing agreement for Intercoil in Kenya, East Africa.

Identifying lapses – and finding solutions Funding regional growth and expansion has been an ongoing challenge for Intercoil. “A burgeoning economy, growing population, geographic centrality and healthy income levels have earned the UAE a front runner position in global emerging markets in recent years.

75% B2B remains Intercoil’s largest revenue stream, contributing to more than 75% of its annual turnover, although it continues to work on growing the retail and hospitality sectors.

25% - 35% The largest change in its revenue stream in recent times has been that retail has grown to account for more than 25% of its total turnover, while hospitality sales grew to more than 35% of its B2B business.

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Before launching any new product or series, we conduct intensive focus groups to understand the needs and expectations of the customer.

There are, however, certain barriers to growth that can hinder a company’s development such as ownership laws, rules and regulations and general financing issues,” says Hassan.

“We have overcome some of these challenges by starting lean, despite the initial temptation to set up a larger infrastructure due to economies of scale.

When setting up distribution centres in new markets, we outsource logistics and implement an effective just-in-time (JIT) inventory approach, which allows us to capitalise on warehouse space and increase efficiency while decreasing waste and associated inventory costs. Obviously this requires a strong understanding of the market, customers and forecast of demands, so we ensure we have an innate understanding before expanding into any fresh market and a likelihood that new showrooms will be self-sustainable. Once a business grows and justifies scaling up, we remain prudent in building in-house capacities and resources.”

Upgrading through innovation There is no one better placed than Hassan to talk about some of the industry’s leading trends. He considers technology as one of the biggest disruptors and is ensuring his team is ahead of the curve. “We are currently working on our e-commerce platform to provide a streamlined and convenient shopping experience to customers. In terms of products, we recently launched a revolutionary new mattress called the NGMatt. A fully customised ergonomic mattress, NGMatt can adjust to the sleeping patterns and positions of its users. With built-in intelligence to monitor sleep quality and patterns, and the ability to learn and self-adjust its firmness configuration, it allows users to fully maximise their sleep. The whole world is fast moving towards digitisation,

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and bearing this in mind the mattress is easily controlled through a smartphone app, and provides the user with reports on their sleep quality.”

Another trend that Hassan identifies is personalisation. “There is a growing demand for personalisation. The “one size fits all” philosophy is convenient but ultimately unsatisfying, especially for couples who have differing sleep habits and patterns. For instance, we have a global patent pending for the new Evolution Series we have developed and manufactured – giving the customer the creativity and freedom to personalise their comfort levels, support, and different fabric technologies for each side of the bed. Each segment is easily replaced, thanks to a detachable top panel, offering easy customisation,” he explains.

Looking ahead Intercoil recently began operations in its new manufacturing facility in Saudi Arabia, so understandably its immediate priority is to ensure that its new facility is fully functional and everything is running smoothly enough to enable it to increase its market share in the region. “We are looking to develop our retail footprint further and have plans to open another seven showrooms in the GCC alone in coming months. We are also looking to enhance our presence in primary markets through franchising and licensing agreements, and are particularly interested in Africa, CIS countries and Eastern Europe,” explains Hassan.

He adds: “In the long term, we are taking steps to launch new manufacturing facilities in both Egypt and India to better service the surrounding areas. We have aggressive and ambitious plans for 2017 onwards and plan to double in size again over the next five years after consolidating and leveraging our current resources and infrastructure.”

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Made to Measure By making technology part of its process, ​ Omasi is looking to boost customer service and productivity.

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EDITOR’S PICKS 01. Omasi’s product range can be found in over 20 stores in the UAE. 02. The design phase was the most critical part of setting up Omasi.

03. Omasi is a very friendly, technology savvy entity that transmits its values not only through its products but also in the way that it communicates with our customers.

Established: November, 2014

Employees: 2

Year on year growth: 300% USP: Great quality combined with excellent customer service.

Challenge takeaway: You can never take anything personally in business or anything for granted, be it customers, suppliers or employees.

It is very important to keep the lines of communication open and maintain relationships.

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As we sit down with the two Finnish expats Hanne Ripsaluoma and Terhi Pinnington – the Co-founders of Omasi, it’s not hard to see the passion in their eyes. They are driven, ambitious and have a strong vision for the future.

“We have both been in Dubai for well over 10 years and we are big lovers of the beach, outdoors and fashion. Omasi fills a gap that we identified in the market for stylish, trendy and good quality products that combine our Nordic roots with the way of life in the UAE. Omasi in Finnish (our mother tongue) means ‘yours or your own’ and all our products are designed keeping in mind the different shapes, forms and requirements of our clientele and the practicalities required for the outdoor, beachy lifestyle,” they open up.

With very few resources at their disposal, the duo was well aware of the challenge they were faced with. But, they remained unfazed. “Given the level of standards at which Omasi was set out to be, the monetary value was significant, at least for us as we funded the company ourselves. It was not in the millions, however not very low either. This is not even accounting for the opportunity cost of our daily jobs that we gave up to pursue this dream. But, as is the case with any entrepreneur, we made the sacrifice to go after our passion.”

What came next was the initial set up of the business. “The design phase was the most critical part at the start of setting up Omasi. We invested a significant amount of time and money to test the market and really identify what works and what doesn’t.

Irrespective of how much you try to get it perfect the first time, sometimes risks must be taken and you need to launch before you feel ready; this is the life of the entrepreneur, right? Since the start of this dream, many things have worked well and others not, but more importantly we have learnt from our mistakes and Omasi is thriving based on our experience,” they admit.

A stitch in time Omasi is an up and coming fashion retailer, targeting the right audience is vital for its growth. “One of the biggest challenges for us has been to identify the optimal distribution channels for our products. Considering that our broad range of products cater to different market segments (e.g. kids, beach lovers, fashionistas), to open the different channels of distribution has not been that easy. Sometimes the timelines from signing the contract to getting the products to the shelves is not as quick as we would like it to be,” say Hanne and Terhi.

When the going gets tough, the tough get going. This couldn’t be truer in the case of

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the Omasi team. “As an entrepreneur, you have to be persistent and never take no for an answer. That has worked for us. The quality standards and the differentiated proposition of Omasi has opened doors for us at major retailers and hospitality outlets. Working closely with our partners and clients has shown the dedication and attention to detail that Omasi stands for. This speaks for itself and helps us overcome issues.”

And this positive attitude is helping fuel Omasi’s growth. “Omasi has grown tremendously since our humble beginning just over two years ago. Omasi started as an idea between us but now we are placed in over 20 stores, revenues continue to grow in the double digit range month after month, profitability is also on the rise and being cash flow positive really provides us with the unique platform to continue to grow and expand.

We are quite pleased and very proud with the results. In terms of financials, Omasi’s product range can be found in over 20 stores in the UAE and we are currently searching for new retail points of sale across the GCC. The expansion is enabling us to leverage economies of scale for the procurement of materials and production, but always keeping quality standards to the highest levels.

Dubai is a very entrepreneurial city with a lot of opportunities, but the start-up cost can be challenging for a small company.

It all adds up before you can even start to operate and get any revenue in. Omasi is a very optimistic brand at heart and the challenges can always be turned into positive elements.”

with a unique selling point. Furthermore, Omasi is a very friendly, technology savvy entity that transmits its values not only through its products but also the way that we communicate with our customers. We keep our social media channels constantly active and open for communication. We highly value excellent customer service and believe that if you create a fabulous product and make the customer experience unique and superb, the clientele will come. This might sound like “Apple” jargon, but it has really worked for Omasi.”

And, the results are for everyone to see.

“We are proud to say that our product designs and quality have gained the attention of some of the leading hotel brands in the UAE and has enabled us to be part of their VVIP promotions and hotel launches. We were also shortlisted finalists at the Stars of Business Awards this year which gave us a great sense of achievement.”

Tailored for success Looking to the future, Hanne and Terhi plan to start their expansion across the GCC and then take over the world! “We are also looking at more collaborations with the corporate clients and hotel groups.”

Is external funding on the cards? “We self-funded Omasi, have grown organically and the company is now cash flow positive.

Thus, in terms of funding, rather than looking for cash investment, Omasi could be open to strategic investors that could support our growth in strategic markets, combined with the appropriate financial appetite to be part of this fantastic journey with us,” they respond.

Any parting words of advice? “They always say the first step is the hardest and in most cases this is true. Even if you are not an expert in everything you will be guaranteed to learn on the way. Always stay true to yourself and concentrate on your end goal.”

And, for Hanne and Terhi, the end goal is nothing short of being the best.

Riding the technology wave Given the nature of their business, Hanne and Terhi know that technology will be one of their biggest assets. They explain: “Attention to detail, flexibility and a collaborative approach to deeply understand our partners and end users has provided us SME ADVISOR

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POWERING

PRODUCTIVITY The Manufacturing Productivity Technology Centre’s collaboration with SPRING Singapore is helping SMEs adopt bite-sized productivity solutions. Here, they share their fundamental lessons with UAE’s manufacturing SMEs.

EDITOR’S PICKS 01. Technology is the key to higher performance and productivity.

02. Having greater awareness of each production stage will put SMEs in a better position to identify and reduce waste, and speed up processes.

03. An overall equipment effectiveness (OEE) assessment uses software tools to collect and analyse machine productivity data. It helps identify the causes of breakdowns and failures.

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ee Eng Wah, Director of the Manufacturing Productivity Technology Centre (MPTC) at the Singapore Institute of Manufacturing Technology, believes that technology can be used as a tool to meet business targets efficiently without wasting unnecessary resources. At the same time, most SMEs do not have the resources to adopt costly productivity solutions with long implementation time. That’s where MPTC’s five bite-sized productivity solutions come in. Since 2013, MPTC has worked with SPRING Singapore under its Collaborative Industry Projects (CIP) initiative to progressively develop and roll out these solutions which can help SME manufacturers use technology to improve productivity, reduce labour and operation costs – without requiring a great deal of investment. The CIP initiative promotes cross sector collaborations between SMEs and industry partners – such as Trade Associations and Chambers, and Centres of Innovation – to solve common industryspecific and business challenges.

“We worked with SPRING to ensure these productivity solutions are simple, easy to adopt and require minimal cost and implementation time for SMEs,” says Dr Lee. So far, more than 160 SMEs from various industries have benefited from the productivity solutions. “On average, each SME has seen a 20 per cent increase in productivity,” Dr Lee reports. So what do these bite-sized solutions look like in action?

Lesson One: Measuring productivity In November 2014, Keystone Cable, a Singapore-based manufacturer and supplier of cables, worked with MPTC to conduct an overall equipment effectiveness (OEE) assessment to accurately measure and improve machine productivity. The assessment, which uses software tools to collect and analyse machine productivity data, helped Keystone Cable identify the

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causes of breakdowns and failures, and improve the effectiveness of its machinery.

Thanks to the OEE assessment and software tools, the number of breakdowns has been reduced by 29 per cent and machine set-up time has been cut by 59 per cent.

Lesson Two: Track-and-trace solution Dynamics Circuit Singapore specialises in maintaining and repairing manufacturing equipment for clients in various industries.

However, manually managing and tracking a large number of customer products proved to be time-consuming and labourintensive. In August 2014, the company implemented MPTC’s item management and tracking system, which uses radiofrequency identification (RFID) tags to track items and collect accurate data in real time. The system has since simplified the company’s stocktaking processes, reduced labour time by up to 60 per cent and boosted its supply chain visibility.

Lesson Three: Lean and efficient Last year, Piaget Chemicals & Manufacturing reassessed the business processes it has used for more than 40 years. The local chemicals supplier used MPTC’s lean implementation solution to make the best possible use of its resources. First, the company’s staff were trained in lean techniques. Then MPTC helped Piaget Chemicals manage its inventory, including disposing of old products and improving its use of floor space. Previously, for instance, it used to take staff up to 10 hours to arrange packaging pallets for unloading, and dismantle and dispose of rotting pallets.

After implementing the MPTC solution, this time has been reduced by 20 per cent.

Lesson Four: Managing high-mix, low volume manufacturing Techcom Technology – a local provider of precision sheet metal, machined parts and subassembly work – implemented MPTC’s high-mix, low volume solution to reduce waste, optimise production flow

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Businesses must equip their staff with the right hardware and systems to keep them working at peak efficiency.

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and boost productivity. The solution helps companies improve operational efficiency through planning production, scheduling and tracking the shop floor. It helped Techcom eliminate non-value added manual processes, decrease missing items during production, and reduce errors and delays. Since adopting the solution, Techcom has seen a 70 per cent reduction in the number of missing items during production and a 20 per cent increase in on-time deliveries.

Lesson Five: FIT for SMEs CYC Movers, a local company that provides international and domestic relocation solutions, used to manually record staff attendance using a paper-based timesheet system. Because its staff are often required to work on-site at various locations, the company found it difficult to keep track of attendance and overtime claims. It decided to implement MPTC’s field worker identification and tracking (FIT) system, an RFID- and smartphonebased solution that can be used by companies from any industry to efficiently track staff

whereabouts during work hours. FIT has helped CYC Movers simplify its payroll processes, improve the accuracy of attendance data and reduce payment errors.

Optimising productivity for future success In October 2015, MPTC rolled out an affordable ‘manufacturing control tower’ system for SMEs. The software platform allows SMEs to view all components of their production processes online, and track and monitor supply chains remotely. “Having greater awareness of each production stage will put SMEs in a better position to identify and reduce waste, and speed up processes,” says Dr Lee. Overall, given the tight labour market, Dr Lee believes businesses must equip their staff with the right hardware and systems to keep them working at peak efficiency. He puts it this way: “Ultimately, with increased productivity and profitability, small businesses will be able to compete effectively in global markets.”

Reproduced with permission from SPRINGnews April 2016 issue. Published by SPRING Singapore.

FIVE PRODUCTIVITY SOLUTIONS FOR MANUFACTURING SMEs 01. Measuring productivity: An OEE assessment to accurately measure and improve machine productivity.

02. Track and trace solution: An item management and tracking system, which uses RFID tags to track items and collect accurate data in real time.

03. Lean and efficient: Lean tools, techniques and concepts are applied to eliminate wastage such as extra transport, excess inventory, unnecessary motion, waiting and over-production.

04. Managing high-mix, low-volume manufacturing: This helps companies improve their operational efficiency and service through planning production, scheduling and tracking the shop floor.

05. FIT for SMEs: An RFID- and smartphonebased solution to efficiently track staff whereabouts during work hours. FIT simplifies payroll processes, improves the accuracy of attendance data and reduces payment errors.

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MANUFACTURING A GREAT SME Having built his business from scratch, Chris Ferguson of Credence International knows the pains and pleasures of starting a new company all too well. Recently, the company crossed the ‘allimportant’ two-year SME milestone and is showing no signs of slowing down. We reached out to the seasoned entrepreneur and gained insights on his winning strategy…

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EDITOR’S PICKS 01. A great business should be built as if it will be around forever, but in a way that will also attract potential buyers.

02. Financial forecasts, profit & loss accounts and cash flow modelling are crucial elements that need to be in place before looking at funding options.

03. Working in a crowded marketplace requires that businesses constantly keep an eye on radical technologies, new inventions and emerging trends.

C

hris Ferguson founded Credence International in September 2014.

From an ambitious start-up to a well-established SME, his journey to the top has been quite remarkable.

Some of the major milestones the company has enjoyed include: creating a robust management structure; hiring an outstanding team; arranging an MBO from the original venture capital partner; gaining regulatory approval; and building a business that is completely unique in its marketplace.

The current economy requires that SMEs take a good look at the fundamentals of their businesses. As markets mature, SMEs can be hit the hardest by issues such as tight cash flows, increasing costs and decreasing value. So, how does a business owner – with limited resources – run an effective and profitable company? Here are top tips that can help SME owners stand out in a crowded marketplace –

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CHRIS FERGUSON CEO CREDENCE INTERNATIONAL

Step One: Business planning and feasibility Before entering a new business, doing your research and understanding the mechanics of your sector is incredibly important. Your initial research should consist of: • Market size and feasibility – Is there a market? Who is the competition?

Are you in the right location? What are the consumer patterns in the sector? Is it a growing or shrinking market?

• Technical feasibility – Every company needs a technical infrastructure and this needs to be factored when starting a business.

• Competitor analysis – Who does what and how? How are you different? Don’t be slightly different.

Be majorly different, be a disrupter, change the industry for the positive and shout from the rooftops about how you are different.

• Scalability – Can the business expand? Is it local, global or a mix? What challenges need to be overcome as the business grows?

Is it a volume player or a boutique select player?

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• Market disruptions – Is there a new

development that will take market share? If so, can you take advantage of it, compete with it or join it?

Second to market often irons out the mistakes that the first mover made – Myspace vs. Facebook is a great example in this regard!

Statistical data: 64% of companies with a business plan experienced growth, compared to 18% of companies that didn’t have a business plan Step Two: Mapping out an exit strategy Ask yourself the tough question: why are you doing this? A great business should be built as if it will be around forever, but in a way that will also attract potential buyers.

Are you starting the business with a view to selling it to a larger competitor or entity?

Do you have a target buyer? If so, what do they look for, what is their strategy and how do they work? Always remember that a

business should be built strategically with an end game in mind.

Statistical data: According to Securian Financial Group research, 54% of business owners plan to leave their business in the next 10 years, but 72% have taken no exit planning action Step Three: Sprucing up your finances Financial forecasts, profit & loss accounts and cash flow modelling are crucial elements that need to be in place before looking at funding options. Build these conservatively with a contingency and ensure that you have tested all the costs; don’t just guess! Operating a lean business is great for keeping as much control as possible. Cash flow is the most critical aspect of running a business; not having sufficient cash to expand is a disabling feeling that will drive you insane.

If you are not a financial expert and do not know how to build the forecasts and models,

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Credence International meets many SMEs and helps them organise their company finances so that they are well-positioned to secure finance.

then request help from a firm that can help you with this, and they will probably end up being able to help you to raise funds for your new venture too. At Credence, we did this through our corporate proposition. We meet many SMEs and help them organise their company finances so that they are well-positioned to secure finance. Having the finances of a firm properly organised minimises risks, giving its owner the peace of mind to concentrate on the core business.

Statistical data: 50% of SME owners say that they maintain audited financial statements Step Four: Looking for funding and strategic partners Once you’ve actioned the three steps mentioned above, the next stage is to attract strategic partners to the business. There are several different avenues of doing this.

How are you funding the business? Are you using your own funds, venture capital or Angel Investment? If you are working with an investor, can they provide more than just money? What are the expensive

services you require? Look for a backer that is capable of providing the services you need at a more affordable cost. More importantly, partner with someone that already has a large network – this will give you access to service providers that are willing to set up contra-deals. For example, a lawyer can offer legal services to a marketing agency in exchange for promotional material. Get creative and don’t be afraid to explore all the options at your disposal.

Statistical data: 80% use personal savings as the primary source of finance for starting their business in the region Step Five: Getting ahead with marketing A business is nothing if nobody knows about it. So, tying up with strategic marketing partners, right from inception, is crucial for visibility and presence. There are various marketing platforms including press, online, radio and events available to you. Learning to allocate the right budget to the appropriate platform will enable you to take your business to the next level.

32% of SMEs believe that increasing competition from tech-savvy counterparts is a major challenge

Statistical data: 41% of business owners consider marketing as the biggest challenge to generating revenue Step Six: Integrate technology into your business Working in a crowded marketplace requires that businesses constantly keep an eye on radical technologies, new inventions and emerging trends. Adopting the latest technologies will improve efficiency, streamline operations and ultimately boost revenue. Data will also play a pivotal role; businesses will increasingly need to use analytical tools to understand evolving customer needs, forecast future market patterns and build intelligent operating systems.

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SPURRING GROWTH THROUGH THE CLOUD Philippe Fanjere, VP Europe, Middle East and Africa, Maestrano, presents effective strategies to implement cloud technology within your manufacturing SME.

A PHILIPPE FANJERE VP EUROPE, MIDDLE EAST AND AFRICA, MAESTRANO

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lot has been said about cloud technology and its benefits; over the last couple of years it has evolved to play a major role in the growth and expansion of businesses. For instance, manufacturing companies that are looking to set up new plants in emerging countries can now fully streamline processes using a cloud-based system. This enables them to access data remotely, as and when required. It also means that the new plant is fully connected with the home base almost instantly – without having to go through software implementation from scratch.

We reached out to Philippe Fanjere, VP Europe, Middle East and Africa, Maestrano, to provide practical guidance on the way moving forward…

Blueprint for growth As the GCC countries accelerate their economic diversification plans, the nonoil sector is taking up a growing share of economic activity. In the UAE, the private sector now accounts for 77 per cent of GDP, up from 66 per cent ten years ago.

The role that SMEs are playing in this transition is significant. According to the UAE SME council, SMEs generate around 60 per cent of the country’s non-oil GDP and account for around 95 per cent of all registered companies.

Despite the crucial role they play in overall economic wellbeing, the challenges facing the region’s SMEs are many, and range from unsupportive banks to difficulties getting bills paid. One

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EDITOR’S PICKS 01. As SMEs become stable and start to grow, they quickly run into the limitation of ICT systems that were put in place in a hurry when the company was starting out and had little money.

02. SMEs should look for solutions that allow them to add fields and customise specific processes quickly and easily, without needing a consultant to move into your office.

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challenge that receives less attention, but is equally pressing, is the state of their ICT (Information and Communications Technology) systems. As SMEs become stable and start to grow, they quickly run into the limitation of ICT systems that were put in place in a hurry when the company was starting out and had little money.

A growing business needs robust sales, service and administration processes, with the ability to analyse and make sense of all the data the company is generating from its customers, suppliers and employees.

The solution is to use modern business management software with built-in business intelligence and reporting tools.

Until recently, however, SMEs wanting such systems have had only one option: to undertake complex and costly on-premise deployments of business software.

Most of us are now familiar with the challenges associated with these projects,

including the need to buy and maintain expensive computer hardware, buy and install the software, hire personnel and partners to get it working, and, finally, keep it all running.

Thanks to advances in cloud technology, such problems can now become a thing of the past. With cloud solutions, businesses can now ‘subscribe’ to software, just as they do any other digital service.

Instead of spending tens of thousands of dollars, and waiting months, to get the software up and running on premise, you invest in a robust internet connection and are then ready to go. The software is already set up in highly-secure data centres and once connected, SMEs pay affordable monthly subscription fees based on the software selected and the number of users.

SMEs can add users and functionality as the demands of the business dictate.

The sophistication of today’s cloud-based ‘software as a service’ solutions should not be underestimated. Feature-rich applications are available that cover every aspect of the business, including finance, sales, service, HR and marketing.

The right solution will allow you to be up and running almost immediately, without extensive customisation of the software.

SMEs should look for solutions that allow them to add fields and customise specific processes quickly and easily, without needing a consultant to move into your office. Terms & conditions should also be clear and easy to understand, with subscriptions provided on per month, per user basis and without long periods of lock in.

Some cloud providers will only offer you solutions from a single vendor, while others will allow you to choose specialised solutions for the different parts of the business (the ‘mix & match’ approach).

Whichever approach you do adopt, data entered in one application (such as HR) should be instantly replicated in others (such as payroll). Sophisticated business

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SMEs should look for solutions that allow them to add fields and customise specific processes quickly and easily, without needing a consultant to move into the office.”

intelligence tools should be able to pull data out of the different applications and generate reports in an easy-to-understand dashboard format.

Maestrano’s globally patented technology Connec!™ was developed with this type of cross-application integration in mind. It allows more than 70 applications that make up the Maestrano cloud solution to work as one, by automatically updating each with the most recent data entered in any of them.

Designed for SMEs that may want to ‘mix & match’ applications, it is complemented by a reporting dashboard that provides SMEs with easy to understand intelligence on the state of their business.

Tackling hurdles Historically, there have been strong arguments against the cloud model.

Regionally, one of the strongest, that data may be sitting offshore, has now been overcome. Most regional telecomms operators, and a number of independent

83%

79%

believe cloud technology has enabled them to access tools they weren’t able to afford otherwise

report that cloud computing opens access to new markets and revenue streams

providers, have now constructed data centres within their countries, ensuring that government and semi-government entities can rest assured that their data has not seen been sent offshore.

With data centres being built in country, customers also have the peace of mind of knowing that their service provider is based locally, rather than sitting overseas in another time zone.

The problem of data centre location may have been overcome, but questions continue to be asked about the security of third-party data centres. Corporations the world over are hacked every day and no single system can claim to be 100 per

cent secure. Cloud providers today are well aware of the threats they face, however, and have made significant investments in specialist solutions to protect their systems from attacks. Your data is probably safer in their data centre than it would be on your own premises.

Thanks to rapid advances in technology, the region’s SMEs no longer need to grapple with the headache of costly, complex on-premise software installations. A feature-rich, affordable alternative is now available in the form of cloud-based, software as a service solutions. There has never been a better time to move your business operations to the cloud!

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SME BEYOND BORDERS SHOWCASE OF THE REGION’S BEST THOUGHT-LEADERS

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he SME sector is seen as the backbone of the region’s economy, and CPI Business is proud to be among the first to recognise its extraordinary potential. With eight years of dedicated publishing and events management in the SME space, we were well-positioned to present a unique view of the market and create a successful conference such as SME Beyond Borders.

Building on last year’s success, SME Beyond Borders returned to the UAE for its finest gathering. The interactive conference was held in Dubai on Thursday 27 October 2016 at Atlantis, The Palm – hosted by CPI Business, presented by the National Bank of Abu Dhabi (NBAD) and co-curated

by Etisalat.

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The landmark forum attracted over 1500 entrepreneurs, investors and business leaders from across the GCC and addressed a wide range of topics from SME funding, innovation, the role of social enterprises to gender equality in the workplace.

It was also the first time ever that some of the most prominent VCs and PE firms came together under one roof to discuss SME funding. The likes of Gulf Capital, Middle East Venture Partners, Lumia Capital, The Abraaj Group, Abu Dhabi Financial Group, Impulse International, Wamda Capital and BECO Capital convened in one strategic platform to discuss funding opportunities and challenges.

IN THE FOLLOWING SECTION, WE PRESENT ALL THE MAJOR HIGHLIGHTS…

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A POWERFUL PARTNERSHIP

N

ational Bank of Abu Dhabi (NBAD) is dedicated to supporting the UAE economy, and in particular the SME segment’s growth across the region. NBAD believes that a thriving SME sector is essential to the nation’s prosperity and that smaller businesses have a critical role to play in the diversification of the UAE economy as well as in future job creation. According to UAE Ministry of Economy, SMEs account for 86 per cent of the workforce in the private sector and for more than 60 per cent of the UAE’s GDP. Research shows that they typically generate revenue six times faster than larger businesses. Supporting the growth of SMEs is therefore a top

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priority for NBAD across the UAE and the wider region.

Given this vision, presenting SME Beyond Borders – one of the leading events in the region to highlight the challenges and opportunities for SMEs – was a natural choice that underscored this commitment.

Nilanjan Ray, Head of Commercial Banking at NBAD, remarked: “We believe in SMEs, which is why we continue to invest in them.

They account for more than 60 per cent of the UAE’s GDP and are key drivers behind job creation and economic growth in the region. We are proud to have supported thousands of SMEs over the years, be it through funding or through the NBAD SME Academy skills building workshops.”

The NBAD SME Academy, which was launched in partnership with CPI Business as a pilot programme in September 2015, provides a series of free Skills Based Workshops, focusing on helping SMEs develop fundamental skills to succeed.

The Skills Building Workshops held so far have been delivered by experts including Moody’s Analytics, the Association of Chartered Certified Accountants, Ron Kaufman, Nathan Gold, Dentons, Deloitte and Hawkamah - the Institute for Corporate Governance. Upon successful completion of each Skills Building Workshop, participating SMEs receive a Certificate of Completion, which will serve as an additional credential for their business.

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A brillant display of NBAD’s offering

Nilanjan Ray of National Bank of Abu Dhabi presents the coveted Award to Dr. Azad Moopen

Abhijit Choudhury Acting Group CEO, National Bank of Abu Dhabi

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THE CONVERGENCE OF KNOWLEDGE AND POWER – CO-CURATING WITH ETISALAT

Hundreds of events featuring thousands of speakers take place annually in the UAE. The question then is: how does one stand out from all the noise? It is imperative to facilitate a dialogue that truly creates impact and proves to be relevant to the audience. With this mission in mind, the team at CPI Business reached out to their Strategic SME Partner – and one of the region’s foremost authority on the sector – Etisalat. As the region’s leading telecoms provider and with a network of over 300,000 SMEs – their capability is second to none.

So, it was only natural that we partnered with one of the most influential entities in the space and combined forces to curate the region’s most-awaited SME conference. But, SME ADVISOR

that was just the beginning. What followed was months and months of research, surveys, data crunching, and well a few sleepless nights! The result? An agenda that addressed the three most critical aspects of the SME ecosystem – ϭϭ Sustainability. ϭϭ Inclusiveness. ϭϭ Innovation.

This partnership proved to be one of the most critical aspects in shaping the success of the conference. The combination of CPI Business’ event organising expertise and Etisalat’s extensive market intelligence created an unforgettable experience for the attendees. Echoing a similar sentiment,

John Lincoln, Senior Vice President- Small and Medium Businesses (SMB), Etisalat, said: “SME Beyond Borders 2016 proved to be a unique platform that attracted a blend of local and international Small and Medium Businesses (SMBs) innovators, who are disrupting traditional business models.

As co-curator and SMB Strategic Partner for this event, we are extremely proud to have joined forces with our partners to support this sector by bringing beneficial content to drive incremental value for SMBs. Etisalat’s primary objective is to empower start-ups and SMBs with knowledge of global best practices that will help increase productivity and profitability, and this conference was definitely a step in the right direction.”

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The Etisalat and CPI Business teams

An intensive discussion before the event

John Lincoln, SVP-SMB, Etisalat leads a meeting session

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DISSECTING THE AGENDA MEET THE TRANSFORMERS WHETHER IT BE REDUCING CARBON EMISSION, CREATING BETTER EFFICIENCY OR SAVING LIVES THROUGH THE ACTIONS OF FEW OR MANY, IMPROVING OUR FOOTPRINT IS A GROWING IMPERATIVE. ONE THAT IS BEING ADDRESSED BY MORE COMPANIES AROUND THE WORLD EVERY DAY. THIS SESSION CELEBRATED VISIONARIES MAKING A DIFFERENCE FOR OUR CHILDREN IN MULTIPLE WAYS.

DISRUPTING MONOTONY THIS SESSION HIGHLIGHED BUSINESSES THAT ARE GOING AGAINST THE NORM – A SILICON VALLEY ENTREPRENEUR WITH A US$400 MILLION EXIT BEHIND HIM, WORLD, A MUSIC MAESTRO CHALLENGING THE OVER FUELLED MUSIC INDUSTRY AND A LOCAL GENIUS WHO TOOK AN OLD SCHOOL INDUSTRY AND MADE IT MATTER IN THE PRESENT DAY! THE SESSION OFFERED THOUGHT PROVOKING INSIGHTS.

THE INCLUSIVE AGENDA THIS SESSION WAS LITERAL TO ITS NAME – A WOMEN LED –WOMAN ONLY – WOMAN INSPIRED LINE UP THAT WENT FROM A MINISTERIAL INSIGHT TO AN NGO AND THE CHALLENGES ASSOCIATED WITH THE ROLE.

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86% OF BUSINESS OWNERS ARE LOOKING TO MAKE A DIFFERENCE BUT ONLY 42% ARE ACTUALLY TAKING THE EFFORT TO IMPLEMENT THE THOUGHT

32%

A PWC REPORT POINTS OUT THAT 32% OF CEOS CITE ‘STRATEGIC THINKING’ AND ‘FLEXIBLE THINKING’ AS THE TOP CAPABILITIES THAT LEADERS OF THE FUTURE WILL NEED TO POSSESS.

3%

ONLY 3% OF CEOS OF FORTUNE 500 COMPANIES ARE FEMALE AND 40% OF LARGE CORPORATIONS ADMIT THAT THEY DON’T HAVE WOMEN ON THEIR BOARDS.

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SPEAKER QUOTES MASOOD AL AWAR, CHIEF OFFICER – COMMERCIAL, DUBAI PROPERTIES

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In the last ten years, Dubai Properties has been developing a diversified portfolio to support SMEs.

HALA GHANDOUR, DEPUTY MANAGING DIRECTOR, DUBAI EXPO 2020

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We hope to make Expo 2020 the most inclusive Expo ever.

JOHN LINCOLN, SENIOR VICE PRESIDENT – (SMB), ETISALAT

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What is good for the SMB is good for the UAE, and what is good for the UAE is good for Etisalat.

ASAM KHAN, CHIEF OPERATING OFFICER, EXPONENT TECHNOLOGY SERVICES

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I can predict that within the next ten years, the sight of a drone hovering in the skies will illicit the same awe and wonder that you experience when you see a car passing by you.

PETER VOOGD, FOUNDER, GAME CHANGERS INC

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The point is, we’ve had enough of all this theory now is the time for action. It’s only with action that we’re going to achieve our goals.

ABHIJIT CHOUDHURY, ACTING GROUP CHIEF EXECUTIVE OFFICER, NATIONAL BANK OF ABU DHABI

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As a result of the governmental support, the region is experiencing unprecedented opportunity for existing and rising entrepreneures.

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THE DAY IN PICTURES

For the first time ever, the region’s most prominent VCs and PE convened

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YOUR THREE-MINUTE PITCH STARTS – NOW! Etisalat’s Hello Business, “Pitch, Please!” proved to be the adrenalinfilled highlight of this year’s glittering SME Beyond Borders…

Imagine this: you get a chance to present your business idea to the CEO of the most powerful venture capital business in the country. You’ve got three minutes (not a second more) to give the business pitch of your life. Could you do it?

This was the core premise of Hello Business, “Pitch, Please!’, an all-out pitch competition powered by Etisalat, where 12 business owners had the nail-biting task of giving their best pitch to a panel of five discerning judges - in front of a live audience!

The 12 businesses had already survived a strict shortlisting process, submitting their business plans online on the SME Beyond Borders website. The successful candidates came from just about every business sector imaginable - from IT to contracting and legal to wellness consulting! No one sector generated the best applicants, but on paper, it was a dead heat between the 12 applicants.

The question was, who will be No.1 at pitching when the chips were down?

For the contenders, a lot of nerves, a lot of choking and a lot of indecision followed - but the 12 competitors were ready for the big day, and their turn on a bare podium, where Moderator, Paul Godfrey, would call their names at random to give the apex pitch of their careers.

Led by Nathan Gold - who was counting down the three-minute window for each competitor the panel of Judges included: SME ADVISOR

Nathan Gold, Samer Al-Nimr, Managing Director, deliver2mum and Esam Mahmoud, Vice President, SMB marketing Etisalat.

• Esam Mahmoud, Vice President,

SMB Marketing, Etisalat • Luis Tomassoni, Global Head of Business Marketing, NBAD • Brad Wylie, Founder and Director, One Business Centre • Chris Ferguson, CEO, Credence International Perhaps the most surprising factor was the level of intense crowd involvement, with an animated, vibrant audience leaping on every error and triumph of phrasing.

After adjourning for an hour’s deliberation, the Judges made their decision, having assessed factors such as – • Whether a business concept could effectively be scaled-up

• The importance of distinguishing between the best public speaker and the best business concept • The overall clarity of the pitch content

There was one clear winner - Samer AlNimr, Managing Director, deliver2mum, a business that had a great core concept, clear goals and a CEO who was cool, collected and convincing throughout.

Congratulations on the pitch of the day - a structured and charming approach that was to be well-rewarded by a crystal trophy later in the evening, at the spectacular SME Stars of Business Awards 2016.

““

It was very noticeable how many people had gathered around Etisalat’s Hello Business, “Pitch, Please!”, seeing it as one of the most important attractions of the day. I was very impressed by the calibre of all the contenders, who showed real bravery in daring to pitch in front of a live audience. I believe that the training and experience they received today will be of practical value in helping them deliver a professional and well-structured pitch to secure finance and resources in the future.”

ESAM MAHMOUD, VICE PRESIDENT, SMB MARKETING - ETISALAT

SME ADVISOR

““

The SME Beyond Borders conference was truly rich in content, diversity and quality, and one that all partners can surely be proud of. The Awards were equally spectacular and well-executed!

Thank you all at CPI Business for the relentless hard work and commitment to delivering yet another landmark event.

THOMAS ZACHARIAH HEAD OF MARKETING GLOBAL COMMERCIAL BANKING NBAD

UNIVERSITIES-COLLEGES

TRAVEL-TOURISM-LEISURE

TELECOMMUNICATIONS

SPONSOR

SHIPPING-TRANSPORT-LOGISTICS

RESELLERS-DISTRIBUTORS

PROPERTY-REAL ESTATE

OTHER

ORGANIZER

NO DATA

MULTI BUSINESS GROUPS

MEDIA

MATERIAL SUPPLIER

MANUFACTURERS-VENDORS

INTERIOR DESIGNER

INFORMATION TECHNOLOGY (IT)

HOTELS-HOSPITALITY MANAGEMENT

HEALTH CENTRES-HOSPITALS

GOVT. ORGANIZATIONS

GENERAL TRADING

FOOD AND BEVERAGES-CATERING

FILM-PRODUCTION

FASHION-APPARELS

ENTERTAINMENT

ENERGY-OIL-GAS

ELECTRONICS-ELECTRICAL

DEVELOPER

CONTRACTOR

CONSULTANT

BUILDING AND CONSTRUCTION

BANKING-FINANCE-INSURANCE

ARCHITECT

ADVERTISING-PR AGENCIES

ACCOUNTANTS AND AUDITORS

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ATTENDEE DEMOGRAPHIC STATS AND TESTIMONIALS PROFILE OF ATTENDEES

250

200

150

100

50

0

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PROFILE OF ATTENDEES

NUMBER OF EMPLOYEES PER COMPANY C-SUITE

600

CONSULTANT

500 ADMINISTRATION /SALES

400 IT OTHER

300 200

DIRECTOR

100 0 0-10

““

The SME Beyond Borders event was a very well organised informative event for the SME sector and a good platform for networking and getting business opportunities

11-50

51-200+

OTHER

MAIS KAWARMARKETING MANAGER AVIATION DUBAI SOUTH

SME ADVISOR

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STARS OF BUSINESS AWARDS 2016: SPOTLIGHT ON SUCCESS

O

ctober 27 marked a day of celebration in the calendar of several SMEs; it was the date when the UAE saw one of the most glamourous and prestigious occasions – NBAD Stars of Business Awards 2016.

Held in the stunning setting of Atlantis, The Palm, this year’s Awards hosted 500 highprofile attendees, including senior government officials, captains of industry and owners of the region’s leading businesses.

Stars of Business Awards 2016 was also one of the most selective in terms of the winners – all the nominees had to go through a rigorous two-step nomination process set in place, working together with our Advisor and Validation Partner – PwC. The highlight of the night was the ‘Personality Awards’ segment, where four special awards were granted for notable contributions within the regional business landscape. These were –

EMIRATI BUSINESS LEADER OF THE YEAR: HER EXCELLENCY REEM AL HASHIMY LIFETIME ACHIEVEMENT AWARD: DR. AZAD MOOPEN, CHAIRMAN & MANAGING DIRECTOR, ASTER DM HEALTHCARE CAPTAIN OF INDUSTRY – MALE: MAAZ SHEIKH, CO-FOUNDER & CEO, STARZ PLAY CAPTAIN OF INDUSTRY – FEMALE: RENUKA JAGTIANI, VICE CHAIRPERSON, LANDMARK GROUP

Now you can read all about these honourable winners and everything that went on during the glamourous, glittering evening – all in this special section.

Congratulations to all our winners and happy reading!

SME ADVISOR

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SME ADVISOR

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THE CHAMPIONS OF BUSINESS

Professional services: AES International

Star of Manufacturing: Hira Industries

Education: American University in Dubai

Property Agent: Gulf Sotheby’s International Realty

SME ADVISOR

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Media: OMD

Healthcare: Medigo - Enhance

Contributions to CSR: Global Development Group

Contributions to Sustainability: Diamond Developers

SME ADVISOR

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THE CHAMPIONS OF BUSINESS

Special recognition – Media: Orient Planet

Excellence in Trade: GEFCO LLC

Lifetime Achievement: Dr. Azad Moopen

SME ADVISOR

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Excellence in Retail: Damas Jewellery

E-commerce: Zomato Middle East

Special recognition – CSR: Emirates Foundation

Captain of Industry: Starzplay

SME ADVISOR

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OUR VALUED PARTNERS SME Beyond Borders 2016 was the result of the remarkable vision and strategy of several leading entities that came together from different realms of the business landscape.

We would like to applaud the exceptional commitment of all these partners and their teams, who stood by us right from conception to implementation.

On behalf of the entire team at CPI Business, a huge thank you to all our sponsors, partners, VVIP speakers and attendees. SME Beyond Borders 2016 wouldn’t have been a success without your support.

SME ADVISOR

PRESENTING PARTNER

STATEGIC SME PARTNER

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SME ADVISOR

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SME ADVISOR

Multi-Currency Business Accounts Interest and Non-Interest Bearing Business Accounts POS Transaction Accounts Low Minimum Balance Requirements

NBAD Business Account Solutions.

Multiple benefits from a range of business accounts www.nbad.com NBAD Commercial Banking offers a wide range of business accounts with multiple benefits, to help your business move ahead.

• Available for Small and Medium Enterprises and Multinational businesses • Range of business accounts with multiple benefits to choose from • Option of multi-currency & interest and non-interest bearing business accounts • Low minimum balance requirements • Hassle-free account opening process SMS ‘Account’ to 2050, or email: CommBankingSales@nbad.com 800 2211 www.nbad.com Subject to bank approval. Terms and conditions apply.