Digitisation across the supply chain
02
Staying ahead through digitisation WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
HE Y K EL OUNI
w w w. a l g u r g . c o m
03
Key executives at the Easa Saleh Al Gurg Group LLC discuss how introducing a world-class supply chain has made the business a leader for the future
E
stablished alongside the evolution of Dubai, the Easa Saleh Al Gurg Group LLC (ESAG) has grown organically to become one of the leading business houses in the UAE. Now
commercialised into various necessities, it has tapped into key areas of progression in the Mid-
04
dle East, such as infrastructure and services, manufacturing and retail, housing six joint venture partners across a number of divisions. Representing 27 companies, the diverse business encompasses a consolidated structure in the management of its finances, legislation, corporate governance and IT operations. While businesses are able to rule independently alongside its robust framework, as well as developing their own business strategies, the business has sought to consolidate a number of areas, such as its purchasing, finances and legislative operations, believing that its true strength lies in numbers. Using innovative, sustainable and progressive practices, ESAG aims to remain at the forefront of changing market and industry trends, ensur-
05
w w w. a l g u r g . c o m
ing that its product and service offerings
ing ways to reduce costs, but drive higher
meet the needs of its customers and are
quality across its operations.
aligned with Dubai’s Smart City vision. To unlock further business growth,
“Five years ago, supply chain was not managed systematically at ESAG. Our
ESAG decided to undergo a deep dive
Chief Financial Officer, Werner Flaig,
into its supply chain functions in order to
introduced the concept of supply chain to
drive increased value across the business
the firm. When I came on board, the first
and remain competitive against new play-
priority was to understand different busi-
ers in the market.
nesses and add value into these
A family owned business, Abdulla Al
diversified units which would make us
Gurg has sought to build a business in
unique,” explains Irfan Kapadia, Group
alignment with Dubai’s 2020 vision, with
Head of Supply Chain.
the aim to make ESAG’s operations increasingly efficient, with a focus on find-
With 97 individuals situated across the supply chain, carrying out procure-
Your global transport and logistics partner www.ae.dsv.com | info@ae.dsv.com
With a strong presence and understanding in the Middle East - our services comprise of end to end solutions that bring value to your supply chain. We deliver your cargo safely, securely and on time anywhere in the world by air, sea, road and rail.
Tel : +971 4 4408 100 Fax : +971 4 4408 110
ment, logistics, demand planning,
Strength in consolidation
inventory planning and warehouse
In order to remain competitive, ESAG
management operations, ESAG’s
has adopted strategic sourcing as part of
diverse supply chain structure also
its cost structure and has formalised the
encompasses three individuals at Cor-
way it seeks to gather information. This is
porate Office undertaking its supply
then used to consolidate its require-
chain planning and governance activi-
ments, providing economies of scale
ties, as well as an operational team
when negotiating with suppliers.
under Kapadia’s leadership. “Companies are increasingly using
“We don’t just focus on local vendors or those based in one part of the world but
their supply chain to compete and gain
try to have multiple sourcing avenues
market share,” adds Kapadia. “Supply
globally. If I have two suppliers, we try
chain excellence is more widely
to have another two from the farthest
accepted, and we are no exception to it.”
regions so it does not affect the supply 07
w w w. a l g u r g . c o m
BIO
08
Abdulla Fareed Al Gurg Group CEO, Easa Saleh Al Gurg Group LLC Abdulla Al Gurg is the Group Chief Executive Officer of Easa Saleh Al Gurg Group LLC, a multidivisional conglomerate with 27 companies. The Group’s diverse product and business interests predominantly include retail, building and construction, industrial, real estate and joint ventures. Under his tenure the Group has expanded its footprint in the GCC region; in the Sultanate of Oman, Iraq and the Kingdom of Saudi Arabia. Abdulla has also been instrumental in leading the activation of a Treasury Management System, helping establish the first in-house Bank in the GCC region. He is also an active Board member within the Group’s joint ventures, namely Al Gurg Fosroc LLC, Siemens LLC, Al Gurg Smollan and Al Gurg Unilever, Akzo Nobel Decorative Paints LLC and Siemens Healthineers. Abdulla is also on
the Board of Directors for Drake & Scull International. Abdulla‘s leadership has enabled the Group focus on encouraging a learning environment through a dedicated Learning & Development Centre. His views on entrepreneurship and family businesses are constantly sought out in leadership forums. Abdulla is a member of the Board of Directors of the Easa Saleh Al Gurg Charity Foundation. In recognition of the Foundation‘s charitable efforts, he was the Lloyds TSB Torchbearer for the London 2012 Olympic Torch Relay.
09
chain. The same goes for our local
procurement activities. We know the
suppliers,” explains Kapadia.
shortest logistics time window and can
“We have streamlined a lot of our pur-
optimise cost. This gives us an advantage
chasing where we have received over
for the future to be competitive in markets
30% savings in many of our companies
which are rapidly changing in this region.”
because of our consolidation. This all
Additionally, with a number of suppliers
adds up into our supply chain savings,”
utilising different systems, ESAG has had
observes Abdulla Al Gurg, Group Chief
to become increasingly agile.
Executive Officer. “This has provided a number of advantages,” adds Flaig. “Automatically, we manage compliance and speed in the supply chain and our
“There are certain parameters which we set for supply chain, which enables us to build our strategy and adopt more towards external parties. It’s been a learning experience for us” says Al Gurg. w w w. a l g u r g . c o m
10
BIO
Irfan Gafur Kapadia Group Head – Supply Chain Easa Saleh Al Gurg Group LLC Irfan is a procurement & supply chain strategist with over 15 years of global experience in diversified industries ranging from Manufacturing, Trading, FMCG & Retail offering senior level expertise in strategic sourcing, supply chain transformation, supplier relationships and change management
with companies based in USA and UAE. He has driven processes, developed systems and established centralized supply chain & procurement departments for the companies he has been associated with. Currently working as Group Head of Supply Chain in ESAG, he has transformed procurement department from a clerical function to become the integral part of execu-
The use of data
Taking a measured and deliberate
In the age of digitally savvy and
approach to investing in its transfor-
empowered customers, ESAG are
mation journey, the company has
known as pioneers in adopting new
assessed numerous factors, such
technologies, exploring opportuni-
as its existing resources, readiness
ties to enhance interactions with its
and how enhancing key operations
customers across all touch points.
and processes contribute to its
The business became the second company in the region to adopt SAP’s
overall business objectives. “We were one of the early adop-
full suite back in 2006 and it was the
ters of a Treasury Management
first in the UAE to migrate on SAP ECC
System, the first in-house virtual
on HANA technology. The company
bank in the region, as well as new an
was also amongst the few to imple-
ERP system, SAP’s Business
ment ReFX (a Real Estate Module of
Objects and more. We have also
SAP), Open Text and VIM for docu-
invested in a new customer rela-
ment filing and invoice management.
tionship management (CRM)
tive management designing business strategies and adding value into business processes across the group. He is currently managing supply chain operations with planning of procurement, international freight forwarding, transportation, warehousing, inventory control and distribution for effective functioning of various business units of ESAG. Irfan is very passionate about achieving excellence in supply chain
and has featured as key note speaker at various procurement and supply chain forums and continuously works to enhance the reputation of procurement and supply chain functions.
w w w. a l g u r g . c o m
11
system and a point of sales (POS) system,” notes Al Gurg. “We brought SAP Ariba on board last year and have deployed its upstream module to streamline our supplier registration, sourcing and contracts to automate our Procureto-Pay processes,” adds Kapadia. “We are looking into data analytics in demand planning and digitise our in-bound and last mile logistics. We work to make sure that whatever technologies are available, we assess them and see how it will ben12
efit the business, grow our top line, save cost and improve efficiency. Working to capture all moments
“We have really streamlined a lot of our purchasing where we have received over 30% savings in many of our companies because of our consolidation. This all adds up into our supply chain savings” — Abdulla Al Gurg, Group Chief Executive Officer
through the use of technology, such as track and trace, ESAG has appointed a number of individuals with significant expertise in utilising data and analytics. Becoming more
“To ready ourselves for the
scientific in its approach, the busi-
future, we are investing in technol-
ness will gain a greater
ogy for the benefit of our diverse
understanding of the information
portfolio of businesses, including
received, drawing on lessons from
process automation, mobility, cus-
advanced markets, and combining
tomer service, e-commerce and
this with its understanding of cultural
securing our data infrastructure, as
nuances that contribute to the cus-
well as our procurement and logis-
tomer experience within the UAE.
tics processes,” Al Gurg adds.
Change management Despite its ongoing transformation, it has been imperative for ESAG to undergo an essential change management process. By fully digitising its procure-to-pay processes, overhauling its supplier relationships and promoting collaboration across its sourcing, invoice submission and payments, Flaig explains that it has presented the biggest challenge. “We can invest millions into software and give a complete landscape of technology to our staff and to our businesses, whether it’s a fully automated treasury management or ERP system or even the adoption of SAP Ariba software. Nevertheless, if people don’t get comfortable with the technological advantages we have, we can’t bring our horsepower to the ground. “Years ago, it was clear that companies didn’t want to invest that much in training their employees. This is the biggest challenge in the entire region, but the more awareness we create in
w w w. a l g u r g . c o m
13
our team, the competitive advantage we will have in the future. “We have to invest in our people in order to enable them to change as fast as the markets are continually changing.” With this in mind, the business has placed significant investment in developing a robust team who have a deep understanding of the company and its long-term goals. Investing in the development of its own training centre, ESAG delivers over 780 hours of training to its 14
3,000 employees in a number of areas, from supply chain, governance, and legislation, to soft skills, such as managing conflict. The company also delivers a number of women’s empowerment initiatives. “We also cover SAP software utilisation and VAT training, which
and of course, our internal policies
was introduced this year. I also
and processes” observes Kapadia.
manage supply chain-related
“We have heavily invested into supply
training, where every quarter we
chain digitisation, so we have ongoing
gather our supply chain commu-
training which is always happening,
nity and teach them the principles
making sure procurement executives
of procurement, what’s happening
know how to create purchase exercita-
in the supply chain industry, how
tions, how to create sourcing requests
the logistic system works, our pro-
and how to collect it with suppliers. All
cess flows and how to negotiate,
of this happens at the training centre.”
ESAG Showroom
15
Long-standing reputation A key figure in the UAE, ESAG is keen to lead by example and places particular emphasis on giving back to local communities in a number of health, education and labour initiatives. Regularly donating clothes for families who are supported by the Red Crescent Authority in UAE, the business also supports local hospitals through blood donation. “For our employees, we also provided complimentary health tests to commemorate International Diabetes Day, offere breast cancer awareness programmes as well as wellness programmes, such as free yoga classes,� explains Flaig. w w w. a l g u r g . c o m
16
“From a supply chain perspective, we
they offer different discounts for our
are also heavily involved. For example, we
employees. Any external activities that we
recently did a healthcare check-up for all
do, we drive partnerships with our suppli-
of our 800-plus labour employees, so the
ers. We give them a say in the process. It’s
supply chain team brought our water sup-
not an individual task, but one where the
plier on board, who came and distributed
supply chain comes together.”
free samples of water and juices for the labour staff,” adds Kapadia. “Similarly, we have collaborated with different partners in the market, where
With a long-standing reputation, ESAG remains proud to have a number of successful business relationships, many which have spanned over 50 years, such
17
“We have to invest in our people in order to enable them to adapt to continually changing markets” — Werner Flaig, Group Chief Financial Officer
as British American Tobacco, Siemens and Dunlop, amongst others. Its values begin with its staff and are extended to its vendors and clients. Developing an organisational structure, combined with technology, the business is now able to successfully discuss, negotiate, and work with both international and local business partners effectively, leading to continual business growth. w w w. a l g u r g . c o m
Iftar event at a mosque built and managed by ESAG “This holistic approach of being ahead of the curve in the market puts us above the competition, which will make us survive as a business and will continue to enable us to drive a long-term, sustainable, strong performance,” says Flaig. “We remain unwavering in our commitment to conduct all of our business activities with integrity and excellence, and ensuring the trust of our shareholders, customers, employees and business partners,” concludes Kapadia. “We will continue to leverage our expertise to achieve sustainable growth in our identified areas of strength and remain agile and responsive to both the market and our customers’ 18
requirements, exploring opportunities for growth into new sectors through a combination BIO
Werner Flaig Chief Financial Officer, Easa Saleh Al Gurg Group Werner Flaig joined Easa Saleh Al Gurg Group LLC in 2011 as Group Chief Financial Officer with responsibility for all financial operations and long term financial strategies of 28 operating companies active in retail, real estate,
industry, trading, banking and investment finance in the Lower Gulf Region and the UK. He came to the United Arab Emirates in 2009 as Chief Financial Officer of Siemens LLC, UAE, responsible for the financial operations of all Siemens entities in the Lower Gulf Region. Werner started his career in 1991 with Siemens AG, Corporate Finance, later Siemens Financial Services, and now possesses 25 years of executive level experience leading structured finance operations.
19 of deepening relations with existing
Werner has had P&L responsibilities as General Manager in operational businesses for large infrastructure projects in SouthEast Asia and China. His experience also includes leading concession companies as well as structuring and arranging international debt financing. Werner has a university degree in business administration from the University of Erlangen-Nuremberg, Germany, and studied also at Duke University, North Carolina, USA.
partners and further diversifying our current portfolio of businesses to tap into new customer segments,� concludes Kapadia. “Carrying forward the legacy of our founder, our preparedness and foresight has created processes and policies that guarantee the longevity of the business. A testament to that is being a successful family run Emirati company with three generations working side by side.�
w w w. a l g u r g . c o m
Baniyas Road 6B St Al Gurg Tower 1 Dubai, United Arab Emirates www.algurg.com