We caught up with Ahmad Almubuslat, head of Supply Chain at Jordanian telco Umniah Mobile Company, who explained why seeing procurement as a strategic f...
Since its launch in June 2005, Umniah has become a leading player in the telecommunications space, offering high quality mobile, internet ad business solutions and transporting Jordan’s telecommunications services. Umniah, owned by the Bahrain-based telecoms specialist Batelco Group, is the third operating Telecom provider in Jordan. “Umniah isn’t the biggest provider in terms of customers but is the market leader in price. In addition, we maintain a high level of quality,” reveals Head of Supply Chain, Ahmad Almubuslat.
Umniah has a commitment to procurement and supply chain management as an integral part to its overall strategy, and this was what first attracted Almubuslat to move to the telco world. His career in procurement began with Royal Jordanian Airlines. “I started with no certificate, following the current policies and procedures of the company, but by 2009 I started following leading practices and gaining professional certification.” Almubuslat became the first Jordanian to gain the Certified Purchasing Manager Qualification from the Institute for Supply Chain Management, following this up with several other certifications. In 2014, he was headhunted by Umniah. “I accepted to join the company because of Umniah’s belief in procurement as a strategic function.”
Since then, Umniah has worked to manage its supply chain and contribute to networks across the nation, becoming Jordan’s fastest LTE network for 4G and Fixed in 2016. Of the three main markets in Jordan – voice, mobile data and managed data services (MDS) for business – the third was largely developed by Umniah and utilises microwave links. “In Jordan, Umniah has a very big market share for MDS across different industries and for individuals too,” says Almubuslat. “We also have a very competitive share in home internet.”
Within these segments, Umniah works to not only deliver cost savings but high quality too, thanks to relationships with suppliers. “We adopted the concept of the total value of ownership, not just cost, in order to deliver the best value at the best price”. Within the various governorates of Jordan, Umniah expanded in the capital, Amman, but did not stop there. “We have a huge market in other governorates which are large concentrated areas. The credit goes to our quality of coverage, together with a good service at the right price,” Almubuslat explains.
Getting this “right price” is a key responsibility of Almubuslat and his supply chain team, as it’s all about effectively negotiating with suppliers and managing an efficient procurement strategy. “Once I joined, we agreed to develop a supply chain function, which we have successfully managed this year.” Almubuslat heads up this new dedicated function, which plays an important strategic part for the company.
With this in mind, Umniah has already won some important tenders with organisations as large as the Ministry of Education (MoE), with the Connectivity Tender, a five-year contract, having been awarded in May 2016. “The main scope of the MOE Tender was to provide connectivity by establishing links for around 3,000 schools, directorate and administrative buildings in Jordan. This was almost the size of a new network, in addition to other requirements relating to attendance and surveillance solutions.
“The competition was tough, but we did something different by developing new ventures and partnerships with suppliers,” says Almubuslat. Umniah developed a venture between suppliers and manufacturers, utilising local contractors to deliver the best price. “We had to think outside the box, and this was the solution we found to bring best value for us and for the MoE. We then provided free safe internet to all schools through the ministry, to support the elevation of Jordan’s education system.”
Maintaining healthy relationships with suppliers and getting them behind Umniah’s vision is essential. Umniah promotes Early Procurement Involvement (EPI). “Umniah believes in the value of procurement and the value our team brings to the organisation through gaining better offers, time to market and margins, and it’s important to engage at an early stage,” Almubuslat explains. “This was also reflected on the supplier side by implementing Early Supplier Involvement, specifically for the strategic projects. There is an extended value in having a real partnership in place with our suppliers: engaging suppliers at the earliest applicable stages will strengthen our sincere intention of having the ownership of all stakeholders internally and externally.
“We also believe in and support our suppliers, most of which are mid-sized and easier to work with and grow. We’ve managed to develop two medium sized suppliers to become huge, competitive companies in Jordan. We also develop relationships with manufacturers. I have the choice between buying equipment then awarding another supplier the installation, versus developing a venture under our supervision. While the latter can initially be costlier, I choose to manage that long-term business relationship as it works out better overall in terms of pricing in this specific case.”
Efficient supply chain management not only makes savings, but ensures consumers get what they want, when they want. “There are some strategic items like SIM cards and CPE (consumer-premise equipment such as routers) for example that we need to have available at all times,” explains Almubuslat. A close eye is kept on quality. “We’re buying the network equipment at the best price, but the customer will not be able to benefit properly from our network unless we have a good CPE that can deliver the service with such a quality and speed.”
In terms of quality challenges, Jordan also has a special geographical nature. “We have a lot of mountains and valleys, which might limit what one site can cover in terms of area, so we’ve increased our number of sites. We also changed our CPEs to provide CPEs that deliver the best value by having excellent indoor coverage at the best price. This was initiated by the Supply Chain department, working alongside engineering and marketing teams.”
New network licences were also introduced to improve CPE coverage, since different licences available on the same site may give better service to individuals or companies. “We explored the market through our suppliers to check which licences were worth investment and found a licence that enhances coverage for the customer. The price was peanuts compared to the value of the service delivered to the end user.”
Service quality has also been improved with the delivery of a new 4G network for Jordan. “Adapting the current assets in delivering the latest technology guaranteed the best time to market and the best value. For instance, we have upgraded some existing sites to host LTE Fixed Technology.”
Batelco Group has recently revamped the Procurement Policies in order to assure having the best value for money in an agile frame. A collaborative process within Umniah ensures each contract awarded is compliant and shortens the approval process. “We always ensure full compliance with the Policies and Procedures, of both the Batelco Group and Umniah Mobile Company,” says Almubuslat. “Before making any strategic step we get the blessings of the Group and the board. We conduct pre-delivery inspection and on delivery inspection, and after that, we have multiple acceptance levels within a reasonable timeframe to assure that what is delivered is in line with what is requested.”
In addition, it is important Umniah ensures compliance with requirements from third parries including government entities. This is mandatory at all stages of the supply chain journey. “Umniah Mobile Company is the first telecom operator to join the Golden list under the Customs Department,” Almubuslat adds.
Umniah uses internally approved contract templates which act as framework agreements with key suppliers. “Awarding has become much more agile than before; this will enable us to enhance the time to market. We place a new annex/addendum for the new scope with the associated pricing and then issue the Purchase Order.”
Strategic sourcing is a key function under Umniah’s Supply Chain department. “We continually scan the market and conduct due diligence of benchmarking, not only in terms of pricing but also value, features and new technologies tobe included.”
Umniah Mobile Company is always keen to maintain its position as the price leader in the market, and this can be sustained and accompanied with better quality through a proactive Supply Chain department.