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Written by Steven Buckley
Director - International Marketing
EXE Technologies, Inc.,
Gulf States supply chains are facing unprecedented change – Logistics provider PWC Face up to the challenge with double-quick implementation of world best practice.
The GCC states are entering an unprecedented era of change. Customs de-regulation in 2003 and the abolition of tied agencies by 2005 will free up this once closed market. It will be a similar transformation to Europe’s experiences of open borders 12 years ago. Unlike Europe, which had many years to prepare and manage the change, this time it’s happening in a region where supply chain best practice is still being established and in double quick time.
This article tells the story of a third party logistics (3PL) company in the Middle East that has gone through a number of changes in the last twenty years to become the largest operator of its kind in the Gulf Region. According to the MEED Awards for Business Excellence, they have ‘undertaken one of the most impressive corporate re-organisations the region has ever seen’.
The Public Warehousing Company (PWC) of Kuwait was established in 1979 by the Kuwaiti government to provide high quality warehousing solutions and supply chain services to local, regional and multinational customers. Focussed primarily on land leasing, warehouse construction and real estate operations, the business grew over the years to encompass a number of sites around Kuwait.
In line with Kuwait’s economic growth plans (over 90% of the workforce were employed by the government), PWC was privatised (KSE: WARE) in July 1997 and a new management team was brought in, headed by Tarek Sultan as Chairman and Managing Director. With past experience of investment banking and technology-based corporate advisory services, Sultan was able to bring fresh eyes to a business that desperately needed vision and willpower to succeed.
Sultan and his team quickly realised there was an opportunity for business growth on the back of a small logistics operation that PWC had been running. Up until then there had been little opportunity for outsourced or third party logistics providers in the region - mainly for cultural reasons. Businesses simply preferred to keep their business to themselves and know that their stock was under their roof.
The decision was taken to build a 20,000 sq.m facility, fully air conditioned to provide ambient storage for the extreme heat of a Kuwaiti summer, which can be sweltering – it was over 45 degrees Celsius when I visited the site this Spring. The warehouse would provide 30,000 pallet locations using 18-metre high VNA racking and be the largest facility of its kind in the region. PWC wanted to provide an efficient and cost effective logistics operation with complete stock visibility. Something which would give their customers the data needed to make informed decisions and the comfort of knowing their stock holding was being managed properly. It was realised that as the essential IT backbone to the operations, a sophisticated Warehouse Management System (WMS) would be needed to operate the facility.
PWC are technical innovators in their own right and enjoy a strong partnership with Microsoft. They’ve co-developed an eCommerce product from which their customers can run virtual web-stores and are currently working on a customs clearance solution called Microclear which will be marketed as a replacement for various countries’ legacy customs systems – this is a company that clearly knows its onions when it comes to IT. For them however, there was only one choice when it came to the Warehouse Management System.
“We pride ourselves on the use of the best available technology and were clear about our needs.” comments Essa Al-Saleh, General Manager Business Development at PWC, “Firstly, we needed a software vendor that could support us locally in the region. The company we wanted to use not only had to be a leader in WMS but also one who could cope with the specific requirements of a 3PL operation, such as being able to handle multi-site and multi-customer operations on a single system. In addition we wanted a system that would allow us to streamline our operation. Most importantly, we needed to work with a company that would be willing to build a partnership with us. One company fitted that criteria.”
PWC chose EXE Technologies and the EXceed Fulfill WMS. “EXE were and remain the leader in solutions for third party logistics organisations and were also able to offer local support through their operation in Dubai.” Commitments made, the building project began and EXE were brought in to begin the software implementation. “We were still a fairly small company at the time,” continues Al-Saleh “and so EXE’s functional expertise was vital. They were able to give us a lot of support on hardware and other issues, guiding us and helping us to make the right decisions.”
Winston Ellison is the Systems Manager at PWC. A long time EXE fan, he originally installed one of the first EXceed systems in Dubai for another EXE client, MMI Logistics in 1997. “EXE was truly a partner for us,” he says “you can’t be in the business without this WMS. But we were the first organisation in the Middle East to roll out this version of EXceed and were the first company in the region to offer portals access to the system. Being the first with any system implementation is never easy, but EXE were there when we needed them and worked hard to get the system up and running very quickly for us. Now the portals module provides our customers with instant Internet visibility of their stocks and the ability to place purchase and shipment orders on-line.”
The new warehouse, which features ambient, chill and frozen storage areas, was duly completed in June 1999. PWC was immediately able to take on the business of the biggest supermarket Cooperative society in Kuwait the following November, at which point the business really took off. “The EXceed WMS was performing beyond our expectations and the business was running extremely smoothly,” confirms a satisfied Al-Saleh. “We were able to assign a dedicated team to the new operation focussed on promoting our 3PL services and by April 2000 we achieved 70% occupancy of the multi-client warehouse. The business was accounting for 10% of our total revenues after just ten months of active operation and with customers in almost every vertical. We simply would not have been able to manage that speed of growth without the EXceed system.”
That was then. Today, PWC are close to capacity in their main multi-client warehouse and are looking to expand their operations with a new 23,000m² facility. They credit a large proportion of their success to EXceed. In addition, they are leasing and operating long term sole-user warehouses for the likes of Americana, Ikea, McDonalds and Nestle. PWC offer these multinationals a number of options once they have designed and built the warehouse; the client company can manage the facility with their own staff, manage the facility using PWC software systems and staff, or they can rely completely on PWC to run the entire operation for them.
PWC work quickly too. During my visit a new warehouse for the Kuwaiti Ministry of The Interior was nearing completion, PWC having broken the ground just 7 weeks earlier. In all, they have purchased over 150,000 sq. metres of land for multi-client and sole-use warehouses.
The next growth spurt for PWC will come from geographic expansion in the region, eCommerce, bonded warehouses, trade finance, and overland cross border trucking services according to Al-Saleh. “We’ve taken a small first step opening operations in Bahrain. In this part of the world you are obligated to work with a joint venture partner and so we’ve used that experience to work up our plans for other countries. We expect to be operational in Saudi Arabia, Qatar and Oman in the not too distant future.”
Unlike many 3PL’s, which concentrate on just a few sectors, PWC’s customer business is extremely varied. They hold foodstuffs, white and brown goods, electronics, pharmaceuticals – even motorcycles. So the ability to co-mingle (utilise a pallet location for multiple owners) is critical. Another key feature of EXceed for PWC is the billing module. EXceed Billing manages all customer invoicing, calculating the number of transactions and moves and then calculating and printing the invoices. The data from EXceed is then fed into Oracle financials for reporting and administration purposes through a direct system interface.
Another, often overlooked, benefit of EXceed is the ability to work in multiple languages – all from a single database. For PWC, the system works in both Arabic and English important both for billing purposes and system access for their 400+ staff. The system also uses application interfaces (API’s) to interface seamlessly with external customers’ systems.
“We’ve found the version we’re running of EXceed (v3.4) to be highly scaleable,” says Ellison. “Fully RF enabled, it handles over 90,000 SKU’s and 350+ live customers on a single site alone. We’re now looking to upgrade to the latest version of EXceed sometime in the next three months. Version 3.6 will give us additional functionality such as SKU substitution and increased lottable fields, as well as improved system transaction times. It’s important for us and our customers to be using the very latest technology”.
With over 2000 customers in and around Kuwait, PWC have re-invented themselves as a modern day third party logistics company and are clearly reaping the benefits. “We’re very hopeful for the future,” concludes Essa “there’s a huge opportunity out there and we think we’re best place to take advantage of it. Our relationship with EXE is one we look forward to continuing for many years to come.”
PWC can be found at www.pwclogistics.com. For further information about EXE visit the EXE website at www.exe.com
For more information on PWC services please contact:
Essa Al-Saleh
General Manager Business Development
Telephone +965 467 9863
Mobile +965 981 9961
essa@pwc.com.kw
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