Partner Insight: Meet the Huawei global partners - How EZY and Huawei added real value to Pakistan's ICT supply chain
Valued-added reseller and distributor EZY Technologies operates in 15 Asian countries, including the Philippines, Vietnam, Indonesia, India, and home territory Pakistan. It specialises in providing internet, hardware, and communications systems to sectors such as Finance, Education, and Energy that are critical to these fast-emerging economies - one reason for the company achieving a compound annual growth rate (CAGR) of 50 percent.
In 2015, EZY became a Huawei distributor in a roster that currently includes other blue-chip partners such as IBM, Oracle, Microsoft, VMware, and Dell. However, the two companies quickly realised that it was essential for them to build a much more efficient supply chain locally.
This was a significant problem in Pakistan: the rupee had depreciated, SME profits had been hit, end-to-end (E2E) supply periods ranked lowest in the region at 24 days, and foreign exchange policy had tightened - becoming even more restrictive in 2018. Overall, the environment for successful international trade appeared to be deteriorating in the country, long before the coronavirus crisis hit.
That didn't stop EZY's clients from being just as demanding as in other high-octane markets. Customers wanted new technologies ‘yesterday' for their own businesses to capitalise on new opportunities and be more profitable and efficient. However, the local economy seemed stacked against ambitious suppliers providing the agility that clients needed, alongside the right technologies.
There were logistical problems in the channel, too. For example, production, sales, and inventory (PSI) management was typically poor, lead time and production forecasts were inaccurate; local freight companies were numerous, but many offered unreliable and inconsistent services; and the regulatory environment for imports was complex and inefficient.
To remedy this, Huawei Supply Chain and EZY organised a channel summit with Tier-2 agents in the Karachi region. The aim was to deepen cooperation and collaboration between key businesses, build a first-class service infrastructure, and create real value for customers - while fostering a competitive environment that would support the growth of both companies - and their customers.
Huawei Supply Chain drove the process of identifying both the pain points and the solutions in partnership with EZY. It set four targets: shortening the E2E supply cycle; improving logistics quality; reducing the number of freight forwarders; and switching the supply centre to Dubai - all long-term solutions rather than quick, tactical wins.
First, the partners shortened and optimised the turnaround period for orders. For example, EZY reported that Optical Network Terminals (ONT) typically took 45 days to arrive after a purchase order was received.
Huawei and its distributor visited Cybernet, an ISP customer in Karachi, to gain insights into its needs. The customer also shared its own internal PSI system. As a result of this and similar meetings, shipments can now be completed within a week of the purchase order being received.
Next, Huawei and EZY optimised the estimation process and aligned it with offline shipments in the real world, improving the accuracy of real-time shipment data, reducing inaccurate estimates, and shifting logistics bookings forward.
Logistics cooperation, speed, and efficiency were major targets for improvement. EZY had originally issued free on board (FOB) contracts to more than 10 Tier-2 resellers who had limited logistics capabilities at the departure port.
The partners worked with logistics companies to root out inefficiencies and reduce the need for Tier-2 resellers to provide their own transportation. When more mainstream freight forwarders are used for logistics as planned, the booking period will be shortened further from 7-10 days to just 2-3 days.
Customs clearance had long been a problem for any businesses in Pakistan that were working with overseas suppliers. The government maintains strict foreign exchange controls, so Huawei Supply Chain's ability to overcome these obstacles and reduce shipment times has been critical to the partnership succeeding.
The results speak for themselves: by 2019, the E2E supply period had been reduced to 13.1 days - 11 days shorter than in 2018.
Huawei Supply Chain also applied for type allocation codes (TACs) from the Pakistan Telecommunication Authority (PTA) in advance. This solved problems that had been caused by being unable to share TACs within the channel, and reduced the application time by an average of 15 days.
The partners' achievements are certainly being noticed. In a third-party customer satisfaction survey, Huawei Supply Chain scored 81.7 points, 8.7 points higher than any of its competitors. Meanwhile, EZY has been ranked first among all ICT distributors in the Middle East.
Huawei Supply Chain and EZY now plan to collaborate more widely in the local supply chain, and streamline operations from the Dubai centre to local hubs. This will further shorten Huawei's product supply cycle for end customers, which is typically 25 days for sea transportation and 10 days for air.
"It has been a tremendous journey with the global leader in ICT solutions, Huawei, and it will continue to be one," said Saeed Sheikh, EZY Technologies' CEO and MD for Pakistan and MEA.
"Gaining the Pakistan market for Huawei wouldn't have been possible for EZY without Huawei's support. I would like to thank Huawei's team for their support toward improving supply chain issues between EZY and Huawei.
"Huawei is our core product, being a VAD, and we value their strategy and work accordingly."