Brian Cartwright, regional MD for Logistics Executive meets Ingo Kloepper, CEO Middle East and Africa, for Damco to talk competitive supply chains and big data
This month I caught up with Ingo Kloepper, CEO, MEA for Damco. Ingo has been living and working in MEA since 2007 and is an expert in logistics, particularly ocean freight related supply chain management.
He joined Damco in July 2015 having had a long and successful career with another major multinational 3PL. He has already made an impressive impact at Damco since taking on responsibility for their MEA regional business. So I was very interested to meet with him and ask his opinions on the current state of the supply chain in this market and to try to understand just what he is doing to make a difference for his clients that has given his business the edge on the competition.
What in your opinion is a major area that companies struggle with in their supply chains across MEA?
I have personally spent eight years in this fast-growing market, and this has repeatedly shown me that our greatest challenge across the industry is limited or incorrect visibility of the full supply chain. There is always a sense that one doesnt have all the information at hand to make an informed decision at a given time. Limited supply chain visibility, incorrect documentation and delayed receipt of documentation in turn lead to delays and demurrages as well as stock-outs and failure to meet end-customer requirements. This ‘waste’ across the supply chain will often add up to millions of Dollars.
Many companies still struggle with purchase order visibility, and this is an area that Damco continues to lead the industry. Turning to documentation, it must be remembered that physical documents are still the preferred mode across the Middle East countries. Damco has learnt to provide both the e-document as well as the hard paper document, and our e-document capability is arguably the best in the market, and has helped us and our customers tackle this challenge.
What can companies do to better streamline their supply chain in order to differentiate themselves from their competitors?
Increase supply chain visibility, make informed decisions and ultimately take waste out of their supply chains. Making use of a visibility platform alone will not create the desired value as these platforms do not validate or ‘manage’ data and importantly – do not act or make decisions upon the data that is provided. Companies will still need a service provider, who provides these and many more services. Damco has been involved in supply chain management for more than 20 years, whereas most of our competitors have only added similar activities in recent years. Supply chain management is Damco’s DNA and in pretty much all of our offices worldwide we offer extended services such as vendor management, inventory management, documentation management, business process management, load and package optimisation and supply chain modeling to name a few.
What would you say are the major choke points when moving goods across the GCC countries?
The six GCC countries move significant volumes of cargo between them. Three major choke points stand out. One, most GCC countries have complex and manual customs clearance procedures. Second, congested customs borders, and thirdly, there is a limited number of qualified service providers. These three bottlenecks when combined have a significant impact on supply chain and inventory costs. Damco has been operating in the Middle East for many years, and we are constantly advising our clients on the status and requirements of various customs borders, and subsequently any required changes towards a different border or transport mode if one of them becomes congested.
Big data is being a talked about a lot lately but how will this help you to better support your clients?
Damco will better serve the clients out of the combination of Big Data and our exceptional people. Big Data, advanced analytics and prediction methods make us aware of untapped potentials in the supply chain, about potential risks towards the critical parts of the value chain of our clients. The combination with our highly skilled people puts Damco into the unique position to design the most robust supply chain, to have proactive supply chain management in place, to react when needed and by that limiting the impact of disruptions and take the customer on a journey to improve the supply chain day by day. The world is changing fast and the best support for our clients lies in agility, time to market and the capability to reinvent the optimal supply chain every day. Big data is the key enabler for such a journey.
Are companies asking too much from the 3pls?
Not at all. We are professionals in organising and managing global supply chains, taking care of millions of containers across the globe, hundreds of thousands of tons of airfreight, hundreds of thousands of truck loads as well as managing complex logistics operations in warehouses or container freight stations around the globe. It is what we do and we do it well. We are experts in this, and we welcome companies asking for more from their 3PL partners.
Are your relationships with clients collaborative or generally service provider vs customer?
Definitely collaborative. We value our client relationships and have worked to nurture strong key account management proficiency. We are extremely proud that we have been able to work together with our customers to develop and improve their business and our market-leading retention and customer satisfaction results reinforce this. Our focus with our customers is to see them as business partners, and it is therefore in our best interests to see them achieve growth.
What other areas of the supply chain do you think could be handled more efficiently?
One of the biggest challenges that many companies face are conflicting priorities and objectives internally within their supply chain. For example, buyers are often measured solely on their purchase cost and they may ignore the impact on the rest of the supply chain this may manifest in large bulk orders being placed on suppliers. The knock-on impact of this will then hurt the warehousing team who may be stuck with excess stock for many months, logistics managers – who may end up with under-utilized containers and product moving from non-focus origins, and finance managers who may feel the pinch on their cash flow. This silo-thinking normally results in sub-optimal performance for the company as a whole. Damco has worked with our partners to measure the total cost and impact of decisions being made up-stream in the supply chain. We jointly come up with more balanced scorecards for teams, and focus on helping educate and potentially modify the behaviors of the different actors within the supply chain. We have already seen increased efficiency and minimised losses in working this way.