A new strategy and massive opportunities – an interview with Chief Supply Chain Officer, Robert Smith
With our GSS division’s shift in strategy and exploration of new business opportunities, we sat down with our Chief Supply Chain Officer, Robert Smith, to learn more about the developments, as well as updates on other divisions he oversees.
Tell us more about GSS’ new strategy
Our new strategy has been developed with BMMI’s leadership team as part of the Group Strategic Planning process. It takes into account all of our strategic pillars and is aligned to deliver Sustainable Profit Growth while diversifying into areas where BMMI/GSS have significant core competencies. The basis of GSS’ strategy moving forward is centred on what we’ve learned from more than 15 years since we’ve been working internationally.
To best adapt in today’s business environment, it is crucial for us to be as agile as possible. For us to achieve that, we needed to move away from having heavy structures in several countries, as it makes it harder to be agile. Contracts come, and contracts go, and sometimes you employ large workforces with a lot of assets, and when the market changes that could get really difficult. That’s why we’re moving towards doing business with countries internationally, rather than by being specifically in them.
What does that look like in practice?
It’s almost like we’ve grown even more into our name, Global Sourcing and Supply, because essentially, we’re now doing business with the world. In addition to our two main logistics hubs, in Djibouti and in Bahrain, we’ve got two major thrusts at the moments.
The first is agro-commodity exports, which is extremely asset-light. We’re doing this in collaboration with other organisations that have got the structures on the ground, and we manage the process, starting from the farmgate procurement, to aggregation, cleaning, bagging, containerisation, and export. We’ve been able to develop strategic alliances and find ways we can come together to make this business grow so that each party benefits from that process.
At the moment, we’re trying to stick to a very narrow range of products. And we’ve got the experience on which products are easier for us to procure or make a margin on. For example, some of the higher value items we are working with at the moment include spices, such as peppercorn, cloves, cardamom and turmeric. We’ve also now started exporting cashews from West Africa for the first time and we’re building a lot of volume.
The second focus is procuring internationally and channelling products to Ethiopia through Djibouti. Manufactures in Ethiopia source materials through us that they need to manufacture their products. We are strategically placed in the Djibouti corridor so we can bring in materials internationally, and then they’re much closer to the manufacturers.
Thankfully we have a great reputation for being able to support this process and we’ve been in discussions with many companies. Our presence is slowly spreading through the market and we’re being recognised for our ability to deliver effective supply chain solutions, and we are now receiving back-to-back orders.
How do you plan to further develop this new strategy?
The definition of what it means to be international has changed for us. As I mentioned, previously it would mean adding another country or structure, but now it means doing business with the world. It makes opportunities even bigger and there are prospects for massive growth.
Our next step really is bridging our building blocks to get more origin-sourcing on board. This means that we would grow the number of origins for products, our capacity, and the volumes coming out.
For example, we visited Ghana recently to explore more opportunities. We also believe we can get even more materials out of Nigeria, Tanzania, and Madagascar. Thankfully, we have not faced many issues with finding customers as the global demand for these products is there. It is a case of how much we can get ready for export at the right price.
We also need to continue building up our capabilities, managing our supply chains, and meeting customer expectations. Another thing is that clients and customers don’t like to deal with traders, but rather they like to deal with people who deal from farmgate, as we do by working directly with producers. A trader can sell you a container today and then not be there tomorrow. But with us, they know they are working with an organisation that has invested in the total supply chain. We’ve always prioritised developing lasting and strategic relationships with our customers, and we continue to work hard for them to see us as long-term partners.
How has the team adapted to the shift in strategy?
It’s been very interesting and it’s a real turning point for the team. If you go back three years, we were mainly managing problems, but now we are managing opportunities. It’s a really different perspective because you can really start to think strategically and see how you can move forward even more clearly.
I believe the team is highly empowered. They understand the strategy and they’re coming up with massive opportunities all the time. With the prospects flowing in, it’s a matter of keeping everything under control, managing risk, making sure of staying within strategy, doing the right things when it comes to sustainability and developing strategic relationships. Thankfully, I lead a great team of people that is doing great things. They practice good judgement and don’t believe in shortcuts. The team is passionate about continuing to grow the business and taking initiative. And all of this makes me very proud because it reminds of one of my favourite quotes by Dwight D. Eisenhower about how leadership is the art of getting someone else to do something you want done because they want to do it.
Can you share any more updates from our international countries of operation?
We are still managing the USAID programme in the Horn of Africa through BMMI Djibouti, in addition to what we call the bulk operation of bringing high-volume bagged materials into Africa. For example, we recently had a 10,000 tonnes shipment come in that was pre-sold before it arrived. Because of the increasing volumes, and since it is a very busy operation in Djibouti, we now have 35,000 sqm of warehousing in three different free zones. We are by far the biggest logistics company in Djibouti and the Horn of Africa.
Our operations in Sudan remain very active and we have even recently renewed our contract with a big client, where they also added an additional site for us to service. We have some plans for business expansion in the next year as well. GSS is still considered the leading facility management company in Sudan, and it is the one that is most respected and wanted by the oil and gas sector.
In Iraq, we remain positioned to manage any government contract that might come through one of our international partners. We are also looking into developing our own brands into the market. We launched our Purely brand starting in Iraq, and we are planning to expand in the future. So far, we’ve delivered around 80 tonnes of products into the modern trade. Our range currently includes tuna, legumes and other ready-to-eat canned goods that are of high quality and great value. We are planning to expand into more outlets and are looking into adding Baghdad’s market into the equation as well. Plans are also in the works to extend the range and the number of Purely SKUs.
Any updates to share on other divisions you oversee?
I’ve always considered the core of BMMI to be supply chain and sales. On one hand, you have sales, and on the other end you start your supply chain until you deliver to your customers. This then becomes a loop, you keep selling, buying, procuring, and managing your supply chain.
The biggest part of this process is the supply chain, and we continue to focus on project New Dawn, our supply chain optimisation project. We’ve been working on the phases of the project and have completed our analyses and drawn observations and conclusions from that. We’ve then made recommendations on how to move forward. We are now planning to review our processes so that we can come up with a fresh process map. We will then have to identify what system changes will be required to help us with this optimisation.
When it comes to shipping, we are seeing a lot of development in our Saudi operations. While it still remains a difficult market in Bahrain, it is good we invested in a new structure a couple of years ago. With the ease of restrictions related to the pandemic, we’re starting to get more customers and are developing the business further.
On another note, our BLS facility in the Bahrain Logistic Zone in Hidd, as well as our warehouse in Sitra, has helped double our capacity. This ensures we have sufficient capacity for our needs in the future. Meanwhile, the team continues to take on third-party customers to utilise the additional capacity, which will also remain available to our in-house customers in the future.