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Jumbo urges vendors to avoid stuffing channel

IT distributor insists supply chain efficiency is the key to a healthy channel in 2011

Jumbo urges vendors to avoid stuffing channel
Jumbo IT Distribution says that vendors need to take a realistic view of market demand to avoid over-stocking in the channel.

IT distributor Jumbo has outlined the key trends that it thinks will shape the Middle East channel in 2011 and warned that strong supply chain management policies must be enforced to prevent excess inventory clogging the market.

The issue of over-stocking continues to be a pertinent one in the Middle East channel, with some suppliers accused of employing overly-aggressive sales-in tactics.

Syed Arshad Chisty, head of IT distribution at Jumbo Electronics, believes the responsibility lies with vendors to ensure accurate and realistic forecasting.

"The key challenge for vendors will be to realistically assess the available market and ensure that the supply pipeline is in sync with demand," he explained. "Between them, vendors and distributors will have to ensure that any over-supply situation is avoided. A smooth supply chain coupled with financial discipline will ensure that the entire ecosystem remains healthy and profitable."

Although Chisty admits that the UAE channel is still emerging from a "tumultuous" 12 months, he believes there are ample opportunities for distributors that preach financial discipline and act conservatively when it comes to managing risk.

For Jumbo, which makes more than US$200m a year distributing Acer, HP and LG products, the mobile PC category - and specifically tablets - is the area to watch in 2011.

"We expect the tablet PC market to be hot in the Middle East in 2011," revealed Chisty. "Until now we have only seen the iPad coming into the Middle East through unofficial channels. We expect to see tablet products from almost all PC vendors and smartphone vendors, so it is going to be very competitive and interesting."

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