Supply Chain Management at STC-Case Study



The selected company for the supply chain report is Saudi Telecom Company STC. Since its foundation in 1998, the company has been offering various telecommunication services in various regions of the Kingdom of Saudi Arabia. The company is operating and providing various business-related services to the main cities of the KSA and, therefore, has become one of the leading telecommunication companies in Saudi Arabia with its second-largest branch office located in Jeddah, Saudi Arabia. There are more than 100 million customers of Saudi Telecom Company, in all over the world and that is why the company has been identified as the first telecommunication organization in the Kingdom of Saudi Arabia. In this regard, STC has been providing the best telecommunication services and other solutions related to telecommunication to millions of customers, whereas emphasizing more on the internal capabilities of the company. Besides, STC is also concentrating to improve its business operations with the sole purpose to expand its business, all over the world in the future.

Moreover, the company is ready to enter within the global competitive atmosphere of the telecommunication sector, especially with the aim to expand its business outside of the region of Saudi Arabia, whereas maintaining and improving the overall strategic outlook of the company to sustain its competitive edge. Therefore, the company is more likely to offer complete trust and satisfaction to all of its stakeholders, involving consumers and employees of the company as well.

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The company is also intended to improve its technology outlook, whereas involving new technological advancements, with the sole purpose to increase efficiency and effective of the overall business of the company (Hamed, 2015). Therefore, the company is looking to integrate and expand its supply chain network to allocate resources in a useful manner with the intention to gain complete and firm support from other business sectors like real estate so that they can offer business opportunities to expand telecommunication services of STC, across the globe.

Vision & Mission of STC

To lead the telecommunication sector, while offering excellent telecommunication services to all of the customers of STC and offering a new digital change, in the Kingdom of Saudi Arabia. Additionally, STC holds the mission to promote, diversify, and expand its business operations, in the field of telecommunication, while offering new business dynamics and other forms of improvements so that means of telecommunication can be improved, accordingly (Qamar, 2017).

My Job at STC

My job at STC is to serve as a logistic analyst over which I am responsible to observe the overall business cycle of the STC linked with service delivery and final clearance of a telecommunication service. Also, my job is to identify logistical factors, in various business operations of STC that are mainly responsible for less efficiency of supply chain at STC and that take extra profit margins to increase overall performance level of the company.

Goals and impact of Supply chain decisions on the success of STC

The supply chain offers many distribution choices and other facilities, in the form of a network, over which a company becomes able to execute acts of locating various sources, changes within sources to achieve final products, and finally the supply of final products to intended customers. The company has decided to take supply chain-related decisions to improve its operational activities as well as to establish a firm strategic outlook among competitors. In reality, the first major goal of the STC to approach supply chain management is to lower the inventory with the aim to re-observe levels of services, lowering lead time of suppliers, and to clearly talk about capacity problems at STC. Another goal of using supply chain at the STC is to give rise to the overall revenue of the company whereas satisfying demands of consumers in an efficient manner. Last but not least, another goal of using supply chain at STC is to escalate the pace of transactions, while substituting real-time information (Al Hamed, 2016).

Now coming to supply chain decisions and their impact on STC, it would be fine to know that the STC has taken two major supply chain decisions with the sole intention to align all of the resources of the company to increase its productivity and to deliver final products in time towards more consumers in new markets of Saudi Arabia, in the telecom sector.

In this regard, the first supply chain decision that STC is intended to take is location decision. As mentioned above, the company is looking to expand its business operations outside the boundary of the Middle East and, therefore, the company has decided to change its geographic location to create a new supply chain network. The location decision of supply chain at STC has positive impact on the success of the STC, as it will offer a chance to measure size, location, and number of markets in new locations over which it will be easier for the company to achieve useful ways through which the STC can have a smooth flow of final products towards intended customers in new markets (AlRowaily, 2012). However, to effectively take the location decision of supply chain, STC has also optimized its business activities to measure production costs, tariffs, taxes, duties, production limitations, local content, as well as distribution costs, as location decision is not only for strategic purposes of STC but also for the use of its operational activities for the business success, as a whole.

The second supply chain decision STC is more likely to take transportation decision, as a strategic technique, over which the company is more likely to reduce its costs of transportation, especially when establishing its business in new regions both in the Middle East and other regions of the world in the future. With the use of effective transportation mean, the company also looking to reduce indirect costs linked with transportation. Some transport means are reliable and secure and save time but they are expensive in nature like shipping through air. Almost 30% costs of logistics at STC is of transportation and, therefore, can influence the economic outlook of the company. Therefore, the STC is more likely to take transportation supply chain decision to properly manage shipments. Whereas establishing an effective transportation strategy for the company.

Structure of Supply Chain of Saudi Telecom Company (STC)

Saudi Telecom Company (STC) has a robust supply chain structure that is making it easy for the company to maintain is monopoly in the Saudi telecom industry. The company has a sound structure for its supply chain. The first phase in this regard is procurement that includes creation of contracts with suppliers and other related activities. Order management is the next step in this regard and it includes orders regarding shipment and other related activities such as orders to Saudi Telecom Company (STC) for its services. Manufacturing is the next phase of supply chain for Saudi Telecom Company (STC) in which the company produces its services. Moreover, inventory management comes next and it is helpful for the company to manage its inventory with ease and perfection and to integrate its various departments (Alsughayir, 2014). Logistics is the other department of supply chain for Saudi Telecom Company (STC) that makes it easy for the company to dispatch its shipment. The last part or section in the supply chain structure for Saudi Telecom Company (STC) is service and maintenance in which the company deals with issues regarding its services to add value to its customers.

The figure shows the supply chain structure for Saudi Telecom Company (STC)


My Role in Supply Chain

My role in the supply chain of Saudi Telecom Company (STC) is logistics analyst and I have to deal with all incoming and outgoing products and services in the company. The primary aim of my job is to ensure that supply chain of the company is doing well and it has no challenges or issues that can reduce the scope of the company and that can influence its overall performance negatively. My role provides value to the supply chain of Saudi Telecom Company (STC) in sense that I have to deal with overall logistics activities of the company. I analyzes logistic issues or challenges in the company and propose significant solutions for Saudi Telecom Company (STC) to deal with these issues or challenges. It makes it easy for the company to improve its supply chain task functions and to stay competitive in the market. My role can forecast industry trends and I can make changes or updates in the supply chain of Saudi Telecom Company (STC) to make it successful. However, my role misses an authority to devise and implement a significant policy for the company because my role is not of a senior manager of Saudi Telecom Company (STC).

Achievement of Strategic Fit by a Company

It is important for a company to have a perfect balance between its supply chain and competitive strategies to become successful. A company can achieve strategic fit between its supply chain strategy and competitive strategy by aligning these strategies with each other. It means that a firm should set its strategic competitive strategy according to capacity or capability of its supply chain. For instance, in case of Saudi Telecom Company (STC), it is not a good option for the company to start those services that are out of its scope and its supply chain cannot support such services (Baghdadi, 2013).

The best option for the company is to devise and implement those policies for its strategic competitive strategy that can get support from its supply chain. In the same manner, another method for maintaining a balance between supply chain of a company and its strategic competitive strategy is to devise its supply chain according to its mission and vision. It would help the company to have a supply chain that makes it easy for the company to achieve its strategic goals and objectives. These two strategies can help businesses to have a perfect balance between their supply chain and strategic competitive policies.

Bullwhip Issues

Bullwhip issues are common issues for supply chain of businesses and the essence of such issues is that they delay organizational tasks and reduce their scope. It is the case for Saudi Telecom Company (STC) as well. Supply chain of the company faces various bullwhip issues or challenges. The most significant issue in this context is delays in information transmission. It means that Saudi Telecom Company (STC) lacks robust information technology infrastructure and it faces various other managerial issues or challenges that delay its activities resulting into overall delay in organizational task functions. Another bullwhip issue faced by Saudi Telecom Company (STC) in this context is inadequate communication or collaboration in the company. It means that the company faces issues with its communication platforms that result into delays in its task functions.

Moreover, Saudi Telecom Company (STC) faces various difficulties in its supply chain and such issues reduce the scope of the company and makes it difficult for it to complete its tasks on time. The company uses both push and pull strategies according to its business requirements (Hamed, 2015). It used push strategy when it has to push its customers away from its products or services. On the other hand, Saudi Telecom Company (STC) uses pull strategy when it has to create an attraction for its products and services for its customers.

Forecasting Techniques

Saudi Telecom Company (STC) uses various forecasting techniques to predict demand of its products and services for its customers. The most significant strategy that the company uses for forecasting is drift methods. The essence of this method is that it forecasts an increase or decrease in the demand of a product or a service over time. It means that the method helps Saudi Telecom Company (STC) measuring average change in its historical data over a specific period. This average change is termed as drift (Qamar, 2017).

In the same manner, Saudi Telecom Company (STC) uses another significant forecasting strategy termed as Naïve approach that uses the actual values of last period for forecasting future needs or demands of its customers and other market trends. Moreover, Naïve approach eliminates the need of adjusting previous data and there is no need for establishing casual factors in this context. The strategy helps Saudi Telecom Company (STC) to compare its forecast data with data created or developed by other sophisticated methods or approaches. Furthermore, Saudi Telecom Company (STC) is using time series method as the major forecasting technique. The major goal of this strategy is to analyze time series of data for extracting reasonable statistics and other key features of the data (Sharma, 2014). In simple words, it is right to say that this method uses previous values or data of an organization that is Saudi Telecom Company (STC) in this case to predict its future data or values.

Dealing with Inventory

Saudi Telecom Company (STC) uses various methods for dealing with its inventory or for its inventory management. The most significant method used by the company in this context is regular auditing by the internal and external auditors. The primary advantage of this type of inventory management strategy is that it makes it easy for the senior management of the company to make informed decisions based on its actual inventory value (Sharma, 2014).

In the same fashion, Saudi Telecom Company (STC) uses First-In First-Out (FIFO) strategy for dealing with its inventory. The major objective of this strategy is to rotate inventory of the company by selling the oldest items or products in its inventory. The major advantage of this technique is that it makes room for new products or services by replacing old products and services. Furthermore, Saudi Telecom Company (STC) is using contingency planning strategy for managing its inventory with excellence (Zahrani, 2012). The essence of this strategy is that it makes it easy for the company to have a plan B to deal with its inventory related issues or challenges. Likewise, Saudi Telecom Company (STC) uses accurate forecasting strategy for having the exact demand for its products and services. It helps the company to have robust plan for its success.

Supply Chain Integration Level

Saudi Telecom Company (STC) has a high level of supply chain integration in its various sections or segments. These include

Product Flow Integration

The product flow of the company is highly integrated that means Saudi Telecom Company (STC) has robust strategies for integrating various departments for ensuring laminar flow of products and services. The company has strong communication and collaboration among its departments that allows it having ripple free products flow (Al Hamed, 2016). For instance, the marketing and order taking section of the company is highly integrated with its production or manufacturing department that allows the company to have error free product flow.

Integration of Information Flow

Saudi Telecom Company (STC) has robust integration of its information flow. It means that Saudi Telecom Company (STC) has efficient information technology platform that it enabling the company to have an integrated flow of communication or collaboration. The major advantage of integration of information flow is that is makes it easy for the company to keep its internal and external stakeholders informed (AlRowaily, 2012).

Relationships in Supply Chain

Relationships in supply chain refers to connections in supply chain. It means connections of the company with its internal and external stakeholders. The internal stakeholders of the company in this case include employees and senior management of the company having robust connections with supply chain of Saudi Telecom Company (STC) and the external stakeholders for the company in this regard include supplier and vendors for the company that provide its raw materials for its products or services production (Alsughayir, 2014). It is important for Saudi Telecom Company (STC) to have sound relationships with its suppliers and vendors for ensuring robust supply chain.

Significant Problems and Opportunities

The three significant problems in supply chain of Saudi Telecom Company (STC) include poor information flow, poor communication flow, and fragile connections with its suppliers. It means that the company is facing serious issues regarding its information technology and communication platforms and these channels are not helping the company to become successful (Baghdadi, 2013). Moreover, Saudi Telecom Company (STC) is having poor connections with its suppliers and vendors that it not good for the company in sense that it cannot ensure continuous supply of its products and services to its customers without having robust connections with its suppliers and vendors.

The three major opportunities for Saudi Telecom Company (STC) in this regard include having an ERP system in the company that would make it easy for Saudi Telecom Company (STC) to ensure laminar flow of communication and information. In the same manner, it is significant for Saudi Telecom Company (STC) to have a robust information technology network or platform. It would help the company to ensure error free information services to its clients and customers (Qamar, 2017). In the same fashion, this strategy would enable Saudi Telecom Company (STC) to improve its internal flow of information thus making is easier for the company to crack its goals and objectives.


To conclude, the study analyzes supply chain structure of Saudi Telecom Company (STC) and it highlights various issues faced by the company and suggests various solutions that can help Saudi Telecom Company (STC) to overcome these issues.


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