Three Major Risks Faced by Investors in Qatar While Sourcing Equipment Abroad and How to Tackle Them

Three major challenges faced by Qatari investors when purchasing abroad

Overall, globalization of supply chains opens up opportunities to source a wider range of products that may not be available locally, at competitive prices. At the same time, importing equipment from abroad is a challenging process that requires more time, effort, and attention to detail compared to buying from the homeland. 

One of the biggest pain points faced by investors when importing equipment is ensuring that the product quality and all specifications match what they ordered. When you are dealing with suppliers in different countries it's not uncommon for the dispatched product to be different from what was initially agreed upon. At the same time, there is less flexibility to monitor production quality across borders than when sourcing locally.

Another major pain point is ensuring that the products comply with all applicable regulations. Each country, including Qatar, has its own set of rules and standards that goods must meet, not necessarily the same as in the exporting country. In Qatar, for construction materials, most commonly it shall be as per Qatar Construction Standard (QCS). For equipment, usually American standards would be required (e.g. ASTM, API). It’s important to make sure the compliance is ensured before products reach the destination country in order to avoid additional costs. Moreover, one should be cautious about environmental risks as well as health and safety compliance, as it could affect investor’s reputation on a global scale.

Lastly, there's the issue of verifying the right quantities are dispatched. This might sound simple, but it's surprising how often mistakes happen during the shipping process. These surprises at delivery can disrupt plans and cause additional delays and budget increase.

Two approaches to managing risks within the supply chain

When managing the procurement of industrial products in another country, investors have two options to consider. 

The first option is to hire a team or subject matter experts to study operating environment of the manufacturing country, including regulatory specifics. These experts would need to travel to the country themselves for quality control. This approach allows for direct oversight and control of the procurement process. By being on the ground, investor’s team can personally assess the quality of the equipment, negotiate with suppliers, and ensure that the procurement is conducted according to their requirements.

However, this option can be time-consuming and costly. It requires hiring and managing a team, arranging travel logistics, and potentially dealing with language and cultural barriers. Additionally, it may not be feasible for investors to be physically present in the country at all times, especially if they have multiple procurement projects or if the country is located far away, or due to restrictions such as pandemic.

The second option is to outsource the task of quality assurance to a third-party company such as SGS, specialize in providing inspection, testing, and certification services to ensure that products meet specified requirements. By outsourcing this task, investors can leverage the expertise and resources of these companies, saving time and effort.

Outsourcing to a third-party company can provide several benefits. These companies have extensive experience in conducting quality assurance inspections and can provide unbiased assessments of the equipment. They also have a global network of professionals who can be deployed quickly to various locations. This option also allows investors to focus on other aspects of their business while ensuring that their procurement is in good hands.

Ultimately, the choice between hiring a team and outsourcing to a third-party company depends on several factors such as the investor's resources and available expertise.