Almasa fired up by new logistics hub

Company starts operations of its new 17,000 square metre warehousing hub in Jebel Ali next month

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By  Andrew Seymour Published  September 23, 2008

Volume IT distributor Almasa has vowed that resellers will see a dramatic improvement in its logistics capabilities when it begins operating from a new 17,000 square metre warehousing hub in Jebel Ali next month.

Almasa has spent US$13m developing the facility, which will serve as the company’s regional mother hub and employ 70 people once it officially opens in mid-October.

“This will be the largest distributor-owned warehouse facility in Jebel Ali — I’m very confident of saying that,” declared Frank Sheu, CEO at Almasa. “It will provide us with a more responsiveness supply chain performance. Bearing in mind that other than JAFZA we also operate a local warehouse in Dubai, in-country operations in Kuwait and Saudi Arabia, and a small warehouse in Cairo, this will allow us to respond to our supply chain performance much better.”

Sheu insists the facility will help the distributor increase inventory turnaround and export products to anywhere in the region within 24 hours, while the implementation of specialist supply chain software is designed to facilitate warehouse management and customs clearance. It is also planning to give resellers access to a series of online tools allowing them to track orders and monitor delivery status.

The facility is destined to represent a radical shift from Almasa’s existing supply chain strategy, which has been heavily dependent on third party logistics providers and seen the distributor split inventory between five different locations.

Tony Manning, CFO at Almasa, believes the move to an independent hub that it owns and manages will result in instant benefits for both the company and its customers.

“I think logistics costs in the industry are rising and if you can achieve some economies of scale then it obviously helps in terms of your overall cost structure and that is something we want to achieve from this facility,” he explained. “Because of our growth we have suffered in the last year from having to operate from a number of different locations. It has made it very difficult for our customers at times and what this does is gives us a very solid platform for the future that will allow us to improve our customer service and get it back to what it should be.”

Manning says the hub also gives Almasa the opportunity to evaluate its logistics processes from vendor-level upwards and “re-engineer” the supply chain to exploit the additional storage infrastructure at its disposal.

Given that Almasa only plans to utilise 5,000 square metres of the total available space to begin with, it is exploring the possibility of forming a strategic alliance or joint venture with a logistics company in a bid to maximise its asset. “We know the distribution industry, and if we can bring in a partner who is a specialist logistics provider then I think we could have a very strong proposition,” said Manning.

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