PWC urges logistics outsourcing

The supply chain services provider says food retailers and suppliers could save 15-20% by outsourcing warehousing and delivery operations.

  • E-Mail
By  David Ingham Published  February 15, 2005

PWC Lebanon is encouraging the country’s supermarkets and food & beverage suppliers to look into the benefits of outsourcing their warehousing, logistics and distribution operations. PWC, a Kuwait-based supply chain services provider, recently entered the country when it bought out the entire warehousing operations of Spinneys Lebanon. As part of that deal, PWC will provide central warehousing services for Spinneys and deliver stock from its central storage facility to the supermarket chain’s outlets in the country. The value of the 14 year deal depends on the volume of goods that PWC handles for Spinneys. “Logistics outsourcing can potentially bring a 15-20% reduction in costs,” says Riad Chababi, operations manager, PWC Lebanon. “Outsourcing works for companies that have volume and those that are acting on a regional level. We’re targeting companies that offer consumer products, food, electronics and beverages.” By early February, PWC was handling around 100,000 cases in-and-out per month for Spinneys Lebanon, which reports annual revenue of around US $100 million for its five Lebanon stores, soon to be expanded to seven. “What we’re trying to do is ship orders on time and accurately,” says Chababi. “As of today, we’re achieving 98% fulfillment rate on what they are ordering and what we are shipping. With that, we’re increasing the availability of products on shelves and that means higher sales.” PWC Lebanon’s objective now is to convince more retailers and suppliers of the benefits of outsourcing their logistics operations. The company has been in talks with one beverage company that is looking to partially outsource its warehousing needs and bring in a partner with distribution capabilities outside Lebanon. PWC has a well established warehouse and trucking network in place in the GCC and with the move into Lebanon has taken a crucial step towards building its network in the Levant. In order to be able to satisfy the needs of potental customers, PWC has been upgrading the warehouse facilities it acquired from Spinneys with investments in IT, racking, equipment, employee development and cold storage areas. “We’re trying to create something that is new for the Lebanese market,” says Chababi. “We’re looking at logistics as a science." Lebanon’s traffic problems and its older road network do present challenges for logistics companies. PWC is getting round the problem of congestion by making deliveries at night. Spinneys recently announced plans to open 15 new stores across the Middle East and West Asia, and PWC would appear well placed to become the supermarket’s preferred logistics provider wherever it operates. Chababi says that PWC would certainly be looking for such an agreement, but that he cannot comment on whether or not a deal is in the works. With the infrastructure in place in Lebanon, PWC now only has to persuade the country’s supermarkets and suppliers that its services can make a difference to them. “Outsourcing is a new concept in Lebanon. However, this trend is picking up...,” says Chababi. “Organisations in Lebanon see that the warehouse is a liability and that it is better to invest in something that is related directly to their core business.”

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code