Transformation in the telecommunications supply chain
Vodafone Qatar is a member of multinational telecommunications conglomerate Vodafone Group’s partner market programme, and is one of two operators in Qatar.
Hicham Nehme is Senior Supply Chain Manager at Vodafone Qatar and has 18 years of supply chain experience. “I’ve worked in different organisations and industries. Facility management, IT, manufacturing and for the last eight years I’ve specialised in telecom procurement. I've been CIPS-certified since 2013 and am a holder of an MBA and business administration system degree.” Nehme’s work has taken him to a number of countries in the MENA region and he has managed projects in India, Europe, and the United States. It’s not just his work keeping him busy, however. “I'm also the father of three lovely, beautiful girls - triplets.”
The telecommunications industry is in flux globally, with changes in finance requiring variations in strategy. “Telecom operators around the world are facing financial pressures, due to the shrinking of their profit margins and rising operating costs and investment demand,” Nehme explains. “What telecom companies realised is that to overcome many of these challenges it is necessary to reduce costs, and to achieve these goals, we must empower the supply chain role. The supply chain has become a critical department across any telecom company. Our involvement starts with the planning stage, not just the execution. We can help the decision-makers to build their strategy and to properly put their plans in place.”
Aside from financial flux, the industry has also experienced changes in technology, and Vodafone is at the forefront of implementing one of the most potentially transformative technologies in recent memory - 5G. “We’re proud to be one of the first operators in the world deploying 5G technology and making it commercially available for customers - an achievement we are really proud of.” Implementing 5G requires upgraded infrastructure, and “Vodafone Qatar is taking the lead to be part of that growth in the coming years,” says Nehme. “The telecommunications industry is critical for any country, and that’s where we play our role in supporting the growth of the economy.”
To ensure the efficiency of the supply chain in an evolving industry, Nehme has highlighted the importance of having clear strategies. Nehme emphasises that “to build a successful strategy we need depend on a number of essential factors. Now we analyse spending. We analyse the product as its bought. We ask, ‘what is the impact of any type of risk?’ We monitor all kinds of news to see how it will impact our strategy. The main pillars are global sourcing, risk and supplier management. For cost reduction, we use technology to enhance our procurement strategy and gathering data from different resources. This all helps us to build a strong strategy for the supply chain, to achieve our goals and objectives in the long and the short-term.
The organisation has the support of Vodafone Procurement Company (VPC), one of the largest procurement organisations in Europe. “VPC’s role is to maintain a level of world-class procurement, giving us access to a landscape of advanced tools and robust processes to smoothly facilitate interactions with our suppliers,” Nehme explains. “They help us to work faster, more simply and more securely. Vodafone Group also has strict policies on how it manages procurement operations, so we always refer to the Vodafone code of ethical purchasing in our day-to-day operations.”
The supply chain’s influence has also expanded beyond its usual remit to take a seat at the decision-making table. “Companies, and telecom companies specifically, must work on cost efficiency and how to manage their spend by using proper sourcing and negotiation plans, and planning ahead in collaboration with all other stakeholders and departments,” says Nehme. Thanks to its involvement in an early stage, Vodafone Qatar’s supply chain team can more easily align its strategy with the company’s overall goals and objectives. ”We assess what the company needs to develop our strategy – first planning is vital for the supply chain,” Nehme emphasises. “We collaborate with our partners and suppliers from outside and internal stakeholders. What is the best form of planning to do? What can we optimise for our three and five-year plans? This is the key part of any successful procurement strategy.”
At the same time, another important factor to consider is risk mitigation. “Risk is critical for supply chain management, in all terms,” Nehme says. “Supplier risk, fraud risk, bribery risk, delivery risk. Even managing risk in contracts is important. Coordinating with the legal department to achieve decreased risk or payments, all of this impacts supply chain decisions.” Another risk is spending outside the normal procurement policy, which Nehme refers to as ‘dark purchasing’. “We successfully managed to reduce this by helping internal stakeholders realise the importance of aligning with SCM and avoid this type of purchasing.”
Supplier relationship management (SRM) is undoubtedly one of the most important tasks for a supply chain department. “Making suppliers and business happy is the key to success for any supply chain expert or professional,” Nehme explains. “The partners we have locally and internationally are why we are successful. We build relationships with suppliers in different industries, focusing on encouraging local suppliers to invest more in the telecom industry. We have strategic suppliers in IT. We also have suppliers in the telecom industry like Hayat whom we count on for a lot of projects. HATCOM is another strategic partner working across many projects from our side. Tech Mahindra is one of the international suppliers that you will always find when you need them.”
Alongside the external implementation of 5G, internal technology transformation has also been a focus. “We changed our enterprise resource planning (ERP) system recently and moved to Oracle Fusion,” says Nehme. “That, I think, is a big step for the company. We used to use many software systems to manage our operations across different functions , some of which involved paperwork. But we’ve decided that, by June 2020, the supply chain at Vodafone Qatar will be completely paperless. We’ve digitalised all our processes and procedures. Supplier prequalification, supplier evaluation, supplier proposal evaluation, e-auctions, e-sourcing. These are all tools linked to the ERP, helping us to change the way we manage procurement activity within the organisation.” The introduction of new technology tends to require a process of change management, and in this case it was no different. “It was a little bit difficult to explain to someone who was used to using the same system for a long time how this move from a system they'd been using for the last 10 years was going to change their life and make it easier,” Nehme remembers. “But we worked to simplify the process and procedures to ensure that the delivery was successful from our side. ERP was our first step in digitalisation, and it was a critical step. Any organisation needs to have a proper ERP system to manage their processes, ensure transparency and make sure that everything is streamlined.”
While the ERP was the first step, going forward Nehme sees technology playing an ever-more crucial role in the supply chain. “Operators across the world are investing more and more in the supply chain,” Nehme concludes. “We're closely monitoring, for instance, blockchain and the impact it’s having on our industry and others. In the future, we're going to be using innovative tools and technologies like blockchain in the future to improve the role supply chain plays in any organisation – I believe digital transformation is the future of SCM.”
Qatar’s growth is also something Nehme has had a hand in, having previously worked on a number of large projects in the country. “I’ve been working in this part of the world for the last 13 years, mainly in Qatar. It’s been growing at breakneck speed. People here are really welcoming and they're closely tied to their culture. It feels like home. I’ve participated in a lot of projects, and when I'm driving passed and I know that I was involved, I feel very proud. The development that's happened in Qatar over the last 10 years is magnificent. I'm proud to have played a small role in this and wish the very best for this country.”