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S U P P LY C H A I N Creating a Contingency Plan M O B I L I T Y Autonomous Mobility- On Demand Solutions S U P P L I E R F O C U S Driven by Sustainability CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE SEPTEMBER 2020 Landmark Group announced the opening of its fully-automated Mega Distribution Centre – the largest of its kind in the GCC MEGA DISTRIBUTION CENTRE
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LOGISTICS NEWS ME | SEPTEMBER 2020 | 3 SEPTEMBER 2020 CONTENTS START 12 | NEWS FEATURES 16 | TALKING POINT 18 | MOBILITY 20 | COVER 26 | ADVERTORIAL 28 | SUPPLY CHAIN 30 | OP-ED 32 | SUPPLIER FOCUS FIND US ON YOUTUBE Subscribe to our YouTube channel to see things like site visits, interviews and much more CONTENTS S E P T E M B E R 2 0 2 0 R E A D A L L T H E L A T E S T I S S U E S O N I S S U U 20 32 12 16 WEBSITE: WWW.CBNME.COM/LOGISTICS-NEWS TWITTER: @LOGISTICSNEWSME FACEBOOK: /LOGISTICSNEWSME
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6 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM EDITOR’S LETTER SEPTEMBER 2020 subscriptions@bncpublishing.net CEO Wissam Younane wissam@bncpublishing.net Director Rabih Najm rabih@bncpublishing.net Group Publishing Director Joaquim D›Costa jo@bncpublishing.net +971 50 440 2706 Business Development Director Rabih Naderi rabih.naderi@bncpublishing.net +966 50 328 9818 Editor Kasun Illankoon kasun@bncpublishing.net Art Director Aaron Sutton aaron@bncpublishing.net Marketing Executive Aaron Joshua aj@bncpublishing.net Photographer Ahmad Khader PO Box 502511 Dubai, United Arab Emirates P +971 4 4200 506 | F +971 4 4200 196 For all commercial enquiries related to Logistics News ME contact sales@bncpublishing.net All rights reserved © 2015. Opinions expressed are solely those of the contributors. Logistics News ME and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Logistics News ME. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Images used in Logistics News ME are credited when necessary. Attributed use of copyrighted images with permission. All images not credited courtesy Shutterstock. Printed by UPP ON THE WEB Keep up to date with all the latest news, features and much more on our website. W W W . C B N M E . C O M / L O G I S T I C S - N E W S S U B S C R I B E A new Covid-19 Response Report (CRR) by Oxford Business Group (OBG), produced in partnership with Saudi Payments, charts the shift under way in the Kingdom towards e-commerce and digital transac- tions, which is expected to be instrumental in supporting the economy’s recovery. The CRR provides an in-depth analysis of Saudi Arabia’s response to the coronavirus in an easy-to- navigate and accessible format, focusing on key data and infograph- ics relating to the country’s socio- economic landscape. The Kingdom’s national payment infrastructure, which had already been strengthened before the pandemic took hold, and its pivotal part in easing the transition to online and mobile transactions, is a key focus. In its analysis, OBG shines a spotlight on the financial technology (fintech) segment, which is ripe for growth, buoyed by the efforts of the Saudi Arabia Monetary Authority (SAMA) to encourage its develop- ment and rising demand for innovative solutions. Topical issues examined include the steps finance companies are expected to take to adapt to the industry’s changing landscape, which range from collaborating with fintech enter- prises to ensuring they have the necessary technologies in place. Kasun Illankoon Editor, Logistics News Middle East A NOTE FROM THE EDITOR K A S U N I L L A N K O O N
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12 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM REGIONAL NEWS SHIPPING Dubai has successfully retained its leading position as the first city in the region to rank among the world’s top five destinations for the maritime industry in the International Shipping Centre Development, ISCD, Index for the third consecutive year, ranking ahead of Rotterdam, Hamburg, Athens, New York, New Jersey and Tokyo. The emirate’s continuing status as a global hub for maritime shipping and logistics was revealed in a report that was recently issued by Baltic Exchange, and Xinhua, a London- based international news agency affiliated with the China Economic Information Service, CEIS. The latest recognition once again underscores the competitiveness, attractiveness and inclusiveness of Dubai’s local maritime environment, which can be compared to the best in the world. The achievement can be attributed to the directives of the wise leadership to constantly enhance the legislative, regulatory frameworks and infrastructure, marine services, and logistical DUBAI AMONG WORLD’S TOP FIVE SHIPPING CENTRES FOR 3RD CONSECUTIVE YEAR continue to enhance Dubai’s competitiveness on the global shipping landscape, in line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, led by our comprehensive strategies to establish an attractive legislative and legal structure and further develop shipping operations, ports and marine support services and operations and maintenance of ships, taking advantage of technological developments, innovation and research.” “Outperforming other leading global maritime capitals such as Rotterdam, Tokyo and Hamburg, Dubai’s maritime industry has also become the first in the Arab world to accomplish this achievement.” “This recognition motivates us to continue our efforts to support Dubai’s position as a global business hub where East meets West, in line with the preparations for the next fifty years that chart a new stage of economic and development renaissance,” he concluded. capabilities, which also contributes to reinforcing the global community’s confidence in Dubai’s maritime sector. The index is based on objective criteria, which include the quality and efficiency of infrastructure, port productivity, the scope of maritime support services, and the competitiveness of the business and investment environment, among others. Sultan Ahmed bin Sulayem, Chairman of Dubai Ports, Customs and Free Zone and Chairman, Dubai Maritime City Authority, DMCA, said, “For the third year in a row, Dubai has succeeded to maintain its position among the world’s top five destinations for maritime shipping. The latest accolade is the outcome of the unwavering support provided by the wise leadership, in addition to the joint efforts undertaken by the public and private sectors to enhance the components of the maritime sector, to match the best in the world.” He continued, “Further inspired by this newest achievement, DMCA will A N U P D A T E F R O M A R O U N D T H E R E G I O N REGIONAL NEWS
LOGISTICS NEWS ME | SEPTEMBER 2020 | 13 SEPTEMBER 2020 ENVIRONMENT The Cathay Pacific Group has released its 2019 Sustainable Development Report, providing a comprehensive overview of Cathay Pacific’s and its subsidiaries’ approach to and performance in the areas of environmental, social and governance that are of great importance to our stakeholders. In his message in the report, Cathay Pacific Chief Executive Officer Augustus Tang writes: “At the time of preparing this report, a public health emergency has rocked the global economy. It feels more important than CATHAY PACIFIC TO HALF SINGLE-USE PLASTIC FOOTPRINT BY 2022 ever to foster positivity, to protect our people, to strengthen our communities and to confront the major challenges we face. We are very determined to play our part in this hugely important undertaking; one which requires us to be financially successful but in a socially and environmentally responsible manner. Our commitment to developing sustainably with transparency and accountability is undiminished.” With a focus on climate change, the efficient use of resources, waste management, and supporting our people and community, the Report sets out the Group’s efforts in moving towards greener aviation. Some highlights from 2019 include: New single-use plastic reduction target: We have set the target to reduce our single-use plastic footprint by 50% by the end of 2022, removing nearly 200 million pieces of single-use plastic from our operations annually. Fighting climate change We have introduced new efficiency initiatives, added six new, more fuel-efficient Airbus A350s to our fleet, and scaled up climate change risk and mitigation planning. Since 1998, our efforts have yielded a 27% cumulative improvement in fuel efficiency. Caring for our community: We continued to support the positive development of our communities through our new Cathay ChangeMakers initiative and the longstanding I Can Fly programme.
14 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM REGIONAL NEWS PRODUCTION FREIGHT AUTOMATION ENABLES MAI DUBAI TO MEET SOARING DEMAND FOR BOTTLED WATER AGILITY REPORTS USD $53mn NET PROFIT FOR THE FIRST 6 MONTHS OF 2020 Mai Dubai, a bottled water company fully owned by the Dubai Electricity and Water Authority (DEWA), revealed that it has been able to successfully address more than 15 per cent increase in demand for bottled water, thanks to the company’s advanced technological capabilities and a fully automated production unit. With eight fully automated production lines that are seamlessly integrated to two high bay warehouses, one for raw material and the other for finished goods, Mai Dubai has taken the lead step in technology adoption in the bottled water industry. The operations of the facility are fully automated, starting from the arrival of raw material in the warehouses till the very end, contributing to 100 per cent hands-free operations. Enterprise Resource Planning (ERP) and Warehouse Management System (WMS) platforms are smartly integrated to ensure smart and smooth intra-logistics. Digitally operated crane systems, lifts, monorails and conveyors receive the packaging material and store them in high bay warehouse to be issued to the production lines when demanded by the ERP. The Agility, a leading global logistics provider, today reported first-half earnings of 8.47 fils per share on net profit of KD 16.2 million (USD $53mn), a decrease of 61.3% over the same period in 2019. EBITDA declined by 20.1% to KD 75.8 million, and revenue declined 1.3% to KD 765.1 million. Tarek Sultan, Agility Vice Chairman and CEO, said: “We entered 2020 with our business on sound footing, which is one reason that we were able to react quickly to the sweeping impact of the COVID-19 pandemic. We acted immediately to protect employees, customers, and communities, including providing donated logistics support for local governments and NGOs around the world. We also took steps to bring operating expenses and other costs in line with the new environment. If the crisis has demonstrated anything, it is the essential value of logistics finished goods are then collected from the production lines and stacked in high bay warehouse. Alexander van ‘t Riet, CEO of Mai Dubai, said: “We have been able to effortlessly address the increasing demand for our products with highest efficiencies, optimized transactions, improved productivity and highly streamlined operations, thanks to our commitment to technology adoption. We are currently witnessing a ‘flight to quality’ as consumers prefer a trusted brand, like Mai Dubai during challenging times such as this. The advanced, flexible technical robotic solutions that we use give us a competitive advantage, helping us achieve fast turnaround times, full traceability and error free transactions.” “Artificial Intelligence- enabled and powered with smart data, our facility continues to run at a production capacity of over 1.5 million units per day. What’s more, the fully automated facility eliminates the need for human touch, from the receipt of packing materials all the way to the issuance of product to the sales vehicles,” he concluded. and supply chain providers in times of severe disruption.” Sultan said the economic fallout from the pandemic has had an uneven effect on Agility businesses. “Our contract logistics business and logistics parks have weathered this reasonably well because demand for storage space has been steady or increased, especially as customers have looked to add to safety stock or support pandemic-driven increases in e-commerce sales. In many instances, we are experiencing accelerated adoption of disruptive and emerging technologies related to the COVID-19 pandemic or underlying CSR paradigms. Other Agility businesses, such as aviation and airport operations have been directly impacted by the decline in air travel and traffic and are now pivoting towards the development of pioneering new technologies that will be essential to the re- enablement of global travel.”
LOGISTICS NEWS ME | SEPTEMBER 2020 | 15 SEPTEMBER 2020 Abu Dhabi Airports Free Zone (ADAFZ), a wholly owned subsidiary of Abu Dhabi Airports, has record- ed a 109% increase in the number of companies reg- istering with the free zone authority in the first half of 2020, as compared to the same period in 2019. ADAFZ has also wel- comed two major interna- tional companies, SMSA Express and Honeywell, to its portfolio. The recent success is a reflection of ADAFZ’s central role in bolstering the economy of both the emirate and the nation during the CO- VID-19 outbreak. Speaking on ADAFZ’s ex- ceptional results for the first half of the year, Shareef Hashim Al Hashmi, Chief Executive Officer of Abu Dhabi Airports, comment- ed: “ADAFZ’s excellent per- formance in the first half of this year demonstrates its role as a powerhouse that enables economic activity across the emirate of Abu Dhabi. Through its work, ADAFZ helps to supple- ment the comprehensive stimulus packages imple- mented by Abu Dhabi’s leadership, and ensures that international compa- nies can continue to have a robust and reliable partner in the emirate. “We are particularly pleased to welcome both Honeywell and SMSA Express to ADAFZ, dem- onstrating the calibre of companies which our free zone attracts. Through furthering the number of companies which work in- side ADAFZ, we are able to burgeon Abu Dhabi’s eco- nomic future and contrib- ute to the wider growth of the emirate.” Adel Al Taheri, Head of Property Management and Leasing at Abu Dhabi Airports Free Zone, com- mented: “The success of ADAFZ in attracting new international customers is testament to the strategic investments which our or- ganisation has made in our suite of services and wide range of facilities available at the three airports, pro- viding organisations with a one-stop-shop to estab- lishing a business in the emirate of Abu Dhabi. “Our investments have proven particularly pru- dent during the current global pandemic, with our enhanced air cargo and freight transport capa- bilities supporting the suc- cessful operation of the health, food and beverage, and e-commerce sectors. We will continue to work with our partners to ensure they can benefit from our range of services as the world emerges from the impact of the pandemic.” ADAFZ has reported in its 2020 bi-annual results, with a 109% increase in the issuing of licenses highlighting that the most significant portion of com- panies signing agreements with ADAFZ come from the aviation, e-commerce, and healthcare sectors. In addition, ADAFZ also holds a strategic focus on welcoming companies based in both Europe and the Middle East in the ICT, logistics, pharmaceutical, and consultancy manage- ment sectors. ABU DHABI AIRPORTS FREE ZONE SEES INCREASE OF NEW CUSTOMERS BY 109% IN H1 OF 2020
16 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM TALKING POINT FUTURE OF UAE’S LOGISTICS & INDUSTRIAL SECTOR Ahead of this year’s Cityscape exhibition, Ian Albert, CEO of Colliers MENA, sheds light on the trends, developments and investment opportunities shaping the warehouse and logistics space The warehouse and logistics space is under- going a period of evolution in response to technological advances and other key drivers which are influencing changes in demand. We have seen many major developments within the logistics and industrial sector of the UAE and other countries across the GCC, with the proliferation of industrial zones and free zones driving and supporting the local and international manufacturing and indus- trial sectors. But a recent rise of automation and value- added services has brought rapid changes to the sector globally, transforming the way that warehouses operate, and redefining the way that the industry thinks about warehousing and logistics. This progress could offer a dynamic future for the UAE and the region, offering some genuine investment opportunities - from 3PL logistics and operational outsourcing through
LOGISTICS NEWS ME | SEPTEMBER 2020 | 17 SEPTEMBER 2020 to automation which streamlines everything from inventory to productivity within ware- housing. MANUFACTURING – SLOW AND STEADY WINS THE RACE The manufacturing sector makes up 10% of GDP for the UAE. Before coronavirus and the lockdown, growth in manufacturing was steady but healthy with highlights including KIZAD, the region’s largest industrial zone which is home to over 600 different compa- nies, and DP World, investing in smart trade, new technologies and innovation, as well as free zones across the Emirates. While COVID has asked some complex questions of various industries, it could pro- vide a genuine opportunity moving forward. The global supply chain was without doubt heavily impacted by the pandemic and the subsequent restrictions placed on travel, and this will likely persuade governments to invest heavily in local manufacturing. There is a real opportunity to produce lo- cally in order to become less reliant on inter- national supply, and the recent months of cri- sis management could persuade businesses to become more aware of the need to invest lo- cally. Investment in production lines, retailers and suppliers will fulfil the growing demand of fast but quality products that can cut out long-term costs and third parties. This shift will not happen overnight, but we are likely to see the foundations being laid for future expansion of the industry and action plans coming into play in the coming months and years. LOGISTICS AND WAREHOUSING – ROOM TO GROW Pre- COVID, ecommerce had been growing steadily as players in the UAE retail sector caught up with the demand for more online shopping and the decline of the need for retail space. This demand has only increased due to COVID, and the local lockdown and the re- strictions placed on travel worldwide. This dramatic shift in consumer behaviour has led to surging demand and an increased need for warehousing space from retailers, to support and maintain growth in this thriving and transforming sector. Changes include an increase in the number of fulfilment centres - support facilities which ensure the efficient preparation and delivery of products to the growing online audience. Dropshipping has also emerged as a retail fulfilment method for some brands, whereby items are shipped directly from a third party to a customer rather than being stored and transported by the brand. There is also a huge opportunity regionally for governments and investors in ‘on-demand warehousing’. This Airbnb style arrangement for logistics allows empty space within ware- housing to be let out for customers requiring extra space. Manufacturers and warehouse owners sim- ply advertise free space online or on an app and retailers and brands can secure ware- house and fulfilment solutions without any need for setup fees or long-term commit- ments. This marketplace model has proved to be a scalable and flexible solution to warehousing in the US, UK and other countries, and the format can offer huge success for retailers dur- ing peak periods, where demand spikes can be between 3-5x higher than normal. Recent data supports these transformative changes in approach to warehousing – almost 60-75% of customers have confirmed that they are willing to choose different retailers depending on speed of delivery time, meaning that any investment in improving warehous- ing and logistics is likely to pay for itself in the long term. HOW TECHNOLOGY WILL SHAPE WHAT IS TO COME All future growth in the region will require a strong foundation and investment on the tech- nological side, with AI and robotics needed to improve speed, efficiency and overall qual- ity control, and the Internet of Things funda- mental in brining all the pieces to together in the supply chain. What we can learn from this global pan- demic is that now is not the time for retailers to shy away from investment - on improved technology and development within the in- dustry. It is evident that the next phase for buyers and consumers will be linked to a price-premium relationship with speed of de- livery. This new structure and outlook for the industry is not difficult to achieve within the UAE, as the infrastructure is already in place to successfully roll out this modern approach. The growth within the UAE’s industrial and logistics industry has already proven it- self to be one that will sustain itself for years to come, and that growth will only continue to exceed expectations with continued invest- ment and improvement.
18 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM MOBILITY AUTONOMOUS MOBILITY-ON- DEMAND SOLUTIONS Intensifying Urban Mobility Challenges Emphasize The Need For An Overhaul Of Public Transport Services, Says New Report By BCG and HSG
LOGISTICS NEWS ME | SEPTEMBER 2020 | 19 SEPTEMBER 2020 Traffic systems worldwide are broken, and countless cities across all continents are be- ing confronted with mounting urban mobil- ity challenges year-on-year, with congestion, carbon emissions, space, and road accidents all becoming increasing causes for concern. Although several new mobility solutions are poised to address these issues beyond 2030, determining which solutions to adopt for each city has been unclear until now, ac- cording to a new report by Boston Consult- ing Group (BCG) and the University of St. Gallen (HSG), Switzerland. The report, ti- tled ‘Can Self-Driving Cars Stop the Urban Mobility Meltdown,’ illustrates how emerg- ing mobility solutions will benefit some me- tropolises more than others depending on the suitability and mobility ecosystem of each individual city – with the KSA and UAE likely to benefit most in the region from au- tonomous mobility-on-demand (AMoD) with the adoption of AVs and robo-shuttles to rejuvenate public transport services. Although AVs could transform urban mo- bility, enthusiasm toward them has cooled because they will not be available at scale for at least another decade and could exacerbate urban sprawl or traffic volume if they appear independently of suitable regulations and polices. Despite the current skepticism, how- ever, AV pilot programs continue to attract investment. As per BCG and HSG research, the major obstacle facing the KSA and UAE is comparatively new and developing public transport systems, which leads to higher con- gestion in metropolitan areas. Riyadh and Dubai’s population is currently over seven million and three million, respectively, and rising every year – emphasizing the under- lying need to introduce sustainable public transportation systems. “Many cities, including Riyadh and Dubai, have been grappling with transpor- tation-related issues on multiple fronts, and AMoD solutions could help tackle these challenges,” said Giovanni Moscatelli, man- aging director and partner, BCG. “We antici- pate around half of AVs alone will be com- mercial vehicles instead of privately owned, which would deliver greater convenience than conventional mass transit options do.” To investigate the impact of AMoD solu- tions on mobility ecosystems in the future, BCG and HSG developed a sophisticated simulation tool to analyze the technology’s effects over time concerning traffic volume, road fatalities, transportation costs, total parking space, energy consumptions, and journey times. As a first step, five city ar- chetypes were identified – Highly compact middleweight, Car-centric giant, Prosperous innovation center, Developing urban power- house, and High-density megacity. Crucially, Riyadh and Dubai have both been placed in the Car-centric giant category as they that have large populations but very low density. Car-centric giants such as Riyadh and Dubai, which are spread out and have devel- oping public transportation systems, would benefit from robo-shuttles and AVs more than any other scenario. As these would re- place private cars, BCG and HSG have con- cluded that annual fatalities and total park- ing areas would decline by 37 percent and 35 percent, respectively. Traffic volume would drop by four percent, energy consumption by 12 percent, and transportation costs by 13 percent, while journey times would also decrease by 3 percent. At the same time, journeys per year in terms of private cars and public transit would decrease by 27 percent and two percent, respectively, when compared to current and projected future modal splits – while robo-taxi’s and robo- pods each account for 11 percent of trips annually in the forecasted model. However, while some automakers and tech companies plan to launch AVs by the mid-2020s, it will most likely take cities several more years to fully prepare for them – meaning such ben- efits will not come to fruition until the early 2030s. Both Riyadh and Dubai stand to capi- talize, and the development of AVs could make their respective urban environments greener, more flexible, and help support sus- tainable transportation systems. “AVs, including robo-shuttles and robo- taxis, are suitable for Riyadh and Dubai, and the onus is on planners to conduct and continue conducting pilot projects – using policy measures such as dedicated lines, easy availability, price advantages, and good user experiences to promote their uptake,” said Edoardo Geraci, who works on the Future of Mobility for BCG Middle East. “Mass transit systems in car-centric giants tend to be subpar, thus AMoD solutions will have to be extremely convenient and embedded into a wider digital ecosystem to convince com- muters to dispose of their private vehicles,” complemented Ingmar Schaefer a core team member of the BCG automotive and mobil- ity practice. Edoardo Geraci, who works on the Future of Mobility for BCG Middle East Giovanni Moscatelli, managing director and partner, BCG
Landmark Group announced the opening of its fully-automated Mega Distribution Centre – the largest of its kind in the GCC COVER STORY 20 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM L andmark Group announced the open- ing of its fully-automated Mega Distri- bution Centre (DC) at JAFZA, Dubai – the largest of its kind in the GCC. With distribution being the backbone of retail, the Group invested over AED 1 billion with a firm strategy to further strengthen its sup- ply chain capabilities and build a facility that can serve as a logistics and distribution hub for the region. The Mega DC will also play an integral role in enhancing Dubai’s posi- tion as a hub for global logistics and trade. Chairwoman and CEO of Landmark Group, Renuka Jagtiani, said: “The open- ing of Mega DC marks a huge milestone for Landmark Group. As a home-grown brand present in this region for over 46years, we remain committed to this market and are always looking ahead. Through the years, we have seen Dubai emerge as a global and economic business hub, giving us the op- portunity to innovate and invest in the most- advanced technology and processes for our business. Today, innovation drives economic growth and development, greatly influencing modern industry. We are very proud to have built this fully-automated facility, which will serve our customers even better by ensuring speed and agility of operations but will also project the future of supply chain for our re- gion.” Mihin Shah, Group Chief Supply Chain Officer, Landmark Group, talked to Logistics News ME to discuss about their decision to open the new mega distribution centre: OPENING OF NEW MEGA DISTRIBUTION CENTRE As one of the largest non-food retailers in the region, Landmark Group handles and distributes substantial volumes of apparel, footwear, accessories and general merchan- dise. To begin with, we realized that han- dling enormous volumes in manual DCs could limit our growth. Second, the Mega DC in the Free Zone gives us the advantage and flexibility to distribute our goods as we want within the region at short notice with options of multi-modal transport. As a fully automated DC, it is also an enabler for e- commerce as it can service both B&M stores and B2C direct to the end consumer at very high speed and turnaround times. Finally, this is our investment for the future. We also built this facility with an additional capac- ity for our 3PL venture, Omega logistics, to cater to external customers who can benefit from this facility and associated efficiencies. There are several associated benefits of the fully automated mega distribution cen- tre. For instance, there has been a significant reduction in lead times/order cycle time due to high processing speeds. We have been
LOGISTICS NEWS ME | SEPTEMBER 2020 | 21 SEPTEMBER 2020 able to provide a greater level of service to our stores and end consumers. Another huge benefit is that centralization of stock in a connected free-zone enables us to distribute last minute as per demand, resulting in better realizations. POSITIVE EFFECTS ON THE SUPPLY CHAIN While we are fresh out of transition, we are already seeing the benefits in terms of speed to market and improved OTIF per- formance. The enabler for delayed distribu- tion decisions has started helping us to meet our demands of different markets better and improve realizations. We have already seen during COVID times that this allowed us to change original allocations and instead send supply to markets that were more open and trading well. Also, we are able to service the stores with store friendly deliveries thereby increasing the efficiency of the retail floor.
22 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM COVER STORY Omega Logistics has already attracted some big customers and discussions are on to take advantage of the many benefits of using our Mega Distribution Center. TECHNOLOGY AND INNOVATION The Mega DC is equipped with the state of art logistics technology handling merchan- dise across all load units – piece level, carton or tote, palletized and Garment on Hanger. The material flow is interchangeable across these load units and is supported by an in- tegrated array of automated systems con- trolled by the WMS that is connected with our ERP systems. Some latest innovative technologies include Robotic Shuttle Sys- tems equipped with inter-aisle technology, High Speed Conveyors and sortation sys- tems, Fully automated unmanned High Bay warehouse having an ASRS system for pal- lets - this is a unique rack-clad SILO con- struction at 43 m height making it the tallest warehouse in the GCC. The Oxy-Reduct fire Prevention System in the High Bay is another key element which prevents fire by reducing the oxygen in the fully automated warehouse so fires can nev- er break out. This is again a first in GCC at this scale. We have also deployed Auto- matic inbound and induction systems with 3D Scanners, High speed Goods to Person (GTP) picking stations that improve picking efficiencies by up to 8X than manual ware- houses and Unit sortation systems with Gar- ment on Hangers. AUTOMATION Automation is an enabler for business growth. Besides providing a very fast servic- ing and turnaround time, it also allows man- aging volume volatility without associated uncertainties like availability of manpower. It certainly also aids in meeting changing requirements of end customers, like shift to- wards e-commerce. The current pandemic has certainly brought technology and digiti- zation to the fore, with benefits such as han- dling high volumes that too with safe social distancing. Logistics and supply chain, by the very nature of operations, is hence set for major transformation towards automation. CHALLENGES An automated DC is made of multiple inte- grated systems and must be well supported by associated processes of planning, opti- mum resourcing, services and maintenance support, and highly skilled technical person- nel. The journey from a manual DC to an (Right to Left) Chairwoman and CEO of Landmark Group, Renuka Jagtiani and Group Chairman and Chief Executive Officer of DP World Sultan Ahmed Bin Sulayem
LOGISTICS NEWS ME | SEPTEMBER 2020 | 23 SEPTEMBER 2020 Mihin Shah, Chief Supply Chain Officer, Landmark Group
24 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM COVER STORY SEPTEMBER 2020 automated one requires an intensive trans- formation exercise across all functions of the supply chain from sourcing, planning, logis- tics, operations and retail. Multiple internal and external stakeholders have to relearn the business processes, but once accomplished the benefits are immense. SMART DUBAI 2021 As a homegrown retailer headquartered in Dubai since 1995, we are proud to have grown along with the city’s unique vision and inevitable growth. As an organization that is committed to its customers and in- vested in the region, over the years we have embraced and led innovative technology in retail that not only helped our business grow steadily but also contributed to the lo- cal economy. As I mentioned, the Mega DC is one of our key investments into the future. This DC is made not only for challenges of today but for the future as well and echoes the vision of Smart Dubai 2021. With fully integrated smart technologies and first-of-its kind innovations in logistics automation, the Mega DC is our investment and commitment to the future of retail in the region. We have brought together the best of technology and innovation to strengthen supply chain not only for our group but also as an offering to other businesses and make our business future ready, for our online & offline cus- tomer, much like how the Smart Dubai 2021 initiative is preparing Dubai to embrace the future.
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26 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM ADVERTORIAL ONE CLICK DELIVERY SERVICES REBRANDS AS LYVE One Click Delivery Services, one of the fastest growing last-mile delivery platform compa- nies, has just completed an extensive rebrand- ing effort to mirror its ushering into a new era of digital growth and development. One Click Delivery Services – now known as Lyve – has cemented its position as one of the major play- ers in the last-mile delivery solutions market in under three years by partnering with tycoons across multiple verticals and rising up to the challenge during the COVID-19 pandemic. All throughout 2019, Lyve has invested its resources and manpower in technology, believ- ing that the success of last-mile logistics lies at the core of digitization. Through the continuous improvement of its software and the diversifica- tion of its products, Lyve branched out into new verticals such as courier, pharmaceuticals, Tel- ecom and e-commerce – acquiring prominent clients while also penetrating new markets such as Kuwait, KSA, Egypt and India. During the COVID-19 pandemic lockdown which has required outlets to temporarily close their doors and revisit their business model – Lyve has experienced an unprecedented surge in delivery demand. “Through our acquisition of new verticals and multiple new clients, we have naturally been led to optimize and further enhance our operation strategies as well as our image to bet- ter meet our clients’ demands. Rebranding has come as a step towards asserting our presence as a reliable and experienced partner”. Hassan Hallas, CEO and co-founder of Lyve. The rebranding of One Click Delivery Ser- vices’ identity consists of a new company name, logo and website which express the dy- namic expansion of the company and its vast growth and development, with digital efficien- cy as its core value. The name Lyve - a play on The last-mile delivery technology company One Click Delivery Services announces exciting rebranding the word ‘live’ is synonymous to a continuous presence and connectivity on ground and on- line. The slogan ‘Beyond delivery’ explains the multiple ways in which Lyve assists its clients – referring not only to its adaptability and cus- tom-made solutions, but also to the data and analytics available for clients to assess and op- timize their activities. Its clear-cut and neat logo reflects straightforwardness and transparency – val- ues by which the company operates. With the color theme being bright red with a twist of black and white, Lyve asserts its boldness – a confidence acquired by the sat- isfaction of both its clients and employees, whom they see as partners. As for the website, it was entirely re- vamped into a customer centric platform de- signed to empower prospect clients to fully learn about the multiple services available in
LOGISTICS NEWS ME | SEPTEMBER 2020 | 27 SEPTEMBER 2020 a clear and user-friendly manner. ‘Our brand has developed and matured tre- mendously through great new products and ro- bust technology, which we are ready to show- case in an up-to-date, sophisticated manner that reflects our capabilities. We are proud of what we have achieved so far and are excited to take on new challenges in Lyve’s name. Krystel Hodroge, Marketing Director of Lyve The rebranding of Lyve embodies its mis- sion to grow along its partners and raise the standard of the last-mile delivery, changing the way customers experience delivery in the region. On a mission to help businesses thrive in to- day’s digital landscape, Lyve empowers their partners with the latest and most advanced platforms enabling them to efficiently cater to the modern customer’s needs. Together with its ever-expanding portfolio of digital transfor- mation and patented technologies, Lyve’s plug and play solutions empower businesses across multiple verticals to seamlessly manage logistic operations, optimize fleet schedule and track- ing, enable brand presence and enhance more customer reach-out channels. All this with an advanced and powerful analytics engine at your fingertips. Leading brands from the e- commerce, pharmaceutical, telecom, grocery and F&B industries are amongst Lyve’s numer- ous clients globally. With its main offices in the UAE, Lyve also operates from multiple coun- tries around the world. Hassan Hallas, CEO and co-founder of Lyve
28 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM CONTINGENCY PLAN Mansoor Sarwar, Regional Director, SAGE Middle East, give his view on the value of the supply chain contingency plan SUPPLY CHAIN The exponential growth in global trade over the past few decades has led to today’s supply chains becoming incredibly complex, which has resulted in disruption to manufacturers and distributors. While you may have risk management processes in place to deal with controllable and foreseeable challenges, such as compliance, financial and ca- pacity issues, these processes may still not prepare you for world-defining events. For example, draw- ing from the ongoing pandemic, you may need to cope with fewer staff, a dramatic decrease in pro- ductivity, and a change in customer spending. TEN BUSINESS CONTINUITY STEPS TO TAKE NOW In terms of contingency planning, what should you do in the short and medium-term, and what steps can you put in place to ensure you’re pre- pared in the long run? Here are some immedi- ate and long-term business continuity steps you should take to protect the supply chain. 1. Consider your people. Their welfare is para- mount, and they are a critical resource in the suc- cess of your business. You may have to rethink work practices. Look at who can work from home and who needs to be on the front line. 2. Monitor all developments across your sup- ply chain. If you don’t have full visibility, pri- oritise getting this set up as soon as possible. 3. Build an in-depth emergency operations structure and process at the plant level, with predetermined action plans for communica- tion and coordination. This could include allocating designated roles for employees, en- suring you have communication and decision- making protocols in place and emergency ac- tion plans for customers and suppliers. 4. Make sure your inventory is accessible and
LOGISTICS NEWS ME | SEPTEMBER 2020 | 29 SEPTEMBER 2020 outside the impacted areas and logistical hubs. 5. Work closely with your legal, finance and HR teams to understand what the financial and legal implications are if you can’t get sup- plies to customers. 6. You may have to include additional steps to the contractual arrangements with custom- ers. If you can’t meet your obligations, a clear understanding of your contractual terms will allow you to plan and prioritise your response. 7. Look at ways to balance supply and de- mand, and build a buffer when it comes preventing contingencies from recurring. If you take the necessary action such as scenar- io planning exercises, for instance, you can develop action plans and include steps to di- versify your supply chain and source alterna- tive supplies. If you’re also looking to handle better disruptive events in the future, it’s not enough to think about supply chain strategy in the conventional sense. You’ll need to re- think logistical strategy and manage supply chains proactively to anticipate disruption rather than merely responding to it. Be clear on the processes of all your suppli- ers, even those upstream and several tiers back. If you don’t have this clarity, your business is less likely to have the ability to respond or es- timate impacts as you are unfamiliar with up- stream suppliers. Understand where your criti- cal vulnerabilities lie. Your supply chain may have a dependency that puts your business at risk if a major issue requiring extensive dam- age control occurs. For example, you may be dependent on a supplier with a single facility and a large share of the market. If a problem occurs (anything from your supplier going out of business to a pandemic), you’ll be left with massive difficulties. RETHINK THE DESIGN OF YOUR SUPPLY CHAIN Several organisations build supply chains with globalisation in mind – the assumption has been that global trade allows us to source, pro- duce and distribute products from locations at the lowest cost. Today, we may be looking at an era of new supply chain design where businesses can be ultra-agile and responsive in dealing with changing policies, regulations and natural disasters. Redesigning your supply chain is a complex undertaking. However, en- suring backup capacity for supply, production, and distribution means you reduce the risk of your entire supply being disrupted. The second and primary sources should ideally be located away from each other. This will minimise your risk but could lead to an in- crease in costs. Similarly, having production fa- cilities with local sources of supply spreads the risk and could cut transportation and logistical costs. It’s almost impossible to anticipate the arrival of a global crisis, but businesses can di- minish their impact by improving their supply chain preparedness. By putting the right plans in place before a disruption occurs, and testing and learning before the fact, you’ll ensure your business is in the best possible position to move ahead and weather the storm. to stock. 8. Identify ways to diversify your suppliers and revisit your risk management process. 9. Work with stakeholders and your most criti- cal suppliers to prepare for potential material and manufacturing capacity shortages. 10. Review business forecasts and run scenari- os to determine where you are at risk now and in the future. ADAPT YOUR LONG-TERM SUPPLY CHAIN STRATEGY Once you have these steps in place, it’s about
30 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM OP-ED PAPERLESS STRATEGY Yasser Ali, Sales Director for Pagero Middle East, looks at how GCC countries are implementing digital initiatives to build a smarter economy in an effort to close the VAT gap, as well as four key reasons why organisations should consider a paperless strategy Post the coronavirus pandemic, globally, there is a growing focus on improving sus- tainability. Adoption of new technologies like AI, Data Analytics and RPA (robotic process automation) means that the focus is no longer just about being digital, but rather better equipping internal business processes to survive challenging situations like this in the future. Yasser Ali, Sales Director for Pagero Mid- dle East, looks at how GCC countries are im- plementing digital initiatives to build a smart- er economy in an effort to close the VAT gap, as well as four key reasons why organisations should consider a paperless strategy. GCC GOES DIGITAL Paperless strategies are already in action across the GCC. Committed to delivering its last paper transaction in 2021, the Smart Dubai paperless initiative has been imple- mented by the government in a major step towards making Dubai a smart city of the future. Smart Dubai is well into its second phase: organisations like Dubai Electricity and Water Authority, Dubai Land Depart- ment, Roads and Transport Authority and Department of Tourism and Commerce Marketing have now become completely paperless. With 100 percent of internal pro- cesses scheduled to be digitalised from 2021, initiatives such as electronic invoicing (e-in- voicing) will soon become an integral part of the digital transformation journey. Saudi Arabia generates over 15 million tons of solid waste each year, with paper making up almost 29 percent. To tackle this, the Saudi Ministry of Justice took the first step last year with the paperless courts initia-
LOGISTICS NEWS ME | SEPTEMBER 2020 | 31 SEPTEMBER 2020 tive to increase efficiency and reduce paper waste. Now 72 percent of ministries are pa- perless in KSA, with initiatives in place for all ministries to go paperless by 2023. More recently, Kuwait’s Government, in response to counter the effects of Covid19, announced that Kuwait Municipality would be going pa- perless by introducing e-correspondence with Government agencies as part of the precau- tions to fight the virus. FOUR REASONS TO GO PAPERLESS Gartner’s 10 IT Cost Optimization Tech- niques for Private and Public Sector Organi- sations report highlighted that the imple- mentation of shared services, standardised applications and optimisation of the work- force to streamline costs should be explored by CIOs. One initiative which aligns with a paperless, cost effective strategy would be to automate the Accounts Payable process – particularly the automation of supplier in- voicing through e-invoicing. Millions of invoices are sent and received means achieving huge cost savings and pro- cessing data quickly and automatically. 2. Increased productivity: Without an auto- mated AP process, 84 percent of staff time is spent on transaction processing, leaving only 16% for value-added activities (Ardent Part- ners, 2020). Adopting technology to automate the supplier invoice flow means the amount of human time to process an invoice in reduced substantially. Increasing the overall productiv- ity of staff, more time can be devoted to fur- ther enriching tasks such as ensuring contract compliance, mitigating compliance issues, ra- tionalising supplier spend, and managing cash flows and budgets. 3. Faster cycle times: Ardent Partners reports that the average time to process an invoice is 8.3 days based on the fact that approximately 75 percent of the suppliers still submit invoices on paper. This explains why only 4 percent of businesses pay their invoices on time. Slow cycle times can have an adverse effect on busi- ness and unplanned cash flows while invoices with inaccurate data delays further processing. This means using more human resource and time and often effects the relationship with vendors which may cause you to miss out on early-pay discounts. Automating the AP pro- cess allows you to achieve quicker cycle times and accurate processing of data. 4. Fewer errors: An automated AP process helps eliminate payment errors because: a. Invoice headers and line-item data is cap- tured without manually keying, ensuring data accuracy; and b. Invoice data is validated against ERP in- formation early in the AP process, quickly calling out duplicate payments Data accuracy is vital. With a completely au- tomated system, all the relevant data points are validated against supporting documents such as POs and delivery notes. This results in a seam- less flow of accurate data into the ERP system, meaning fewer payment errors as invoice dupli- cation and data validation/manual errors are avoided. Automating your supplier invoice process is huge step in the right direction on the journey to digitalisation. Working in line with government initiatives to reduce waste and create efficient processes, organisations in the Middle East can benefit from the value that supplier automation through electronic invoicing. globally each year, and the number of in- voices sent is forecasted to quadruple by 2025. Whilst necessary for profit and growth, the in- voicing process takes time and resource. Giv- en the current state of the economy post pan- demic, organisations now need to maximize as much of their limited resources as possible. With this in mind, let’s highlight the bene- fits of adopting a completely automated sup- plier invoice process: 1. Significant labour savings: Huge finan- cial gains and decreased labour costs can be achieved through streamlining the supplier in- voicing process. Manual tasks like download- ing PDF attachments, scanning documents, manually keying in data or coding invoice information, searching for lost data, reconcil- ing supplier and PO information, and much more are some of the biggest contributors to high accounts payable (AP) processing costs. Up to 80 percent of these costs can be saved when adopting a software that streamlines the invoicing processing (Billentis 2019). Automat- ing the entire AP process journey therefore
32 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM DRIVEN BY SUSTAINABILITY SUPPLIER FOCUS Bin Brook Motors & Equipment L.L.C., was established in the year 1969 and is a member of the Bin Brook Group – a pio- neer business house in Abu Dhabi, United Arab Emirates. Logistics News ME takes a closer look at how the company has per- formed in 2020, their objectives, there vi- sion towards a sustainable transport future, and their relationship with Scania. GOALS AND OBJECTIVES “Our goal is to lead the shift towards a sus- tainable transport system with alternative fuels and connectivity being the two pri- mary objectives. We also aim to expand our service network to reach more customers in the region and be known as a one-stop- shop. We are not only a distributor of com- mercial vehicles and heavy equipment but also as a provider of service maintenance contracts, fleet management, genuine spare parts, and financing.” PERFORMANCE IN 2020 “This year has been remarkable so far, one that was completely unforeseen, and the disruption in our market was no exception. Our performance in Q1 & Q2 was excep- tional, where we could meet the heights of the same level of last year in Year to Year comparison. The result was an outcome of unstopped business activities, fulfilling the norms of authority, which was initiated dur- ing the Q1. We expect a two-digit increase in the market share when the year ends.” COVID-19 IMPACT “Bin Brook Motors & Equipment L.L.C. have taken a pledge to fulfill our customers’ In conversation with Mansur Ali, Sales Manager at Bin Brook Motors & Equipment LLC
LOGISTICS NEWS ME | SEPTEMBER 2020 | 33 SEPTEMBER 2020 commitment by delivering quality products, services, and maintaining operations safely and healthily. Since the world announced the pandemic outbreak, the company im- plemented precautions based on the regula- tions made by the local government, world health organization, and our principals. This was then communicated to our em- ployees, customers, and suppliers in order to avoid the spread of the virus. A regular disinfection program is also practiced, and it is mandatory to disinfect all incoming and outgoing vehicles from the workshop. All our employees are provided with hygiene essentials. Social distancing is strictly practiced inside the facility to avoid contamination, and our staff was also put on a work from home schedule to reduce manpower in the workplace. All meetings and training were done online. Since visi- tation was temporarily prohibited, we took advantage of the latest technology to com- municate with our customers and princi- pals. Adapting to these new precautionary standards is not easy, but we have to em- brace these changes as it is now our new normal to carry on business while main- taining the health and safety of everyone, depending on it.” COMPANY’S GROWTH “Commercial vehicle business has wit- nessed remarkable changes in the past decade. More than buying the vehicle or service, the focus shifted more towards the complete solution. We lead the journey from the front, providing tailor-made mod- els to match different business segments. We pioneered in adapting the concept of Total Operating Economy (T.O.E.), which consider more realistic business situations, rather than Total Operating Cost (T.O.C.). The legal demand for more environmental- ly friendly vehicles was another milestone, and we expect the trend will continue with stronger demands for it.” RELATIONSHIP WITH SCANIA “In 2019, we celebrated 40 years of a fruit- ful relationship with Scania. We have seen and have been a part of Scania’s historical developments and always wanted to bring the Scania’s philosophy to Abu Dhabi. In return, we have contributed by sharing our experience in developing Scania’s product to fit the local working atmosphere best. It Mr. Ayman Hafez – General Manager at Bin Brook Motors & Equipment LLC Mr. Mansur Ali, Sales Manager at Bin Brook Motors & Equipment LLC
34 | LOGISTICS NEWS ME | SEPTEMBER 2020 WWW.CBNME.COM SEPTEMBER 2020 SUPPLIER FOCUS was not only the geographical facts, but the complete work culture was always on the discussion at Scania’s R&D. The journey has seen its ups and downs, but the relation with Scania is phenomenal.” PROVIDING AN EFFECTIVE SERVICE “Since the beginning of the last decade, cus- tomers from different segments have been focusing on their operational demands, and it surprisingly varies from business to business. This was when we established the ‘Pre-sales’ department, which acted as a strong link between the factory and the Sales department and the customers. It was then that we started working on the segmen- tation to optimize our products to fit best the customer needs. The factory was well prepared, thanks to the iconic modular con- cept, which later became Scania’s philoso- phy. Our sales force is actively involved in discussions with the customer to ensure that our solution is for the business that matters. In any case, we firmly believe that trust is earned by the After Sales support. Our ser- vice team loop in at a very early stage, when the vehicle is being specified, to never face surprises. The priority is to increase the uptime and profitability by proper use of cars. This journey starts with comprehen- sive driver training and continues through monitoring and sharing operational analysis and corrective coaching. The exceptionally trained support staff are always equipped to meet any challenges, and our focus on T.O.E. continues.” SUSTAINABLE SOLUTION PROVIDER “Our journey towards becoming a sustain- able solution provider for the transport in- dustry has begun, and our focus moving forward is to improve our current facili- ties to offer a wide variety of services and increase our market share. We believe the shift would be possible with the help of in- frastructure development, new products, advanced technical training for service tech- nicians, dedicated customer service, and extending support to the authorities on the discussion for the future of Abu Dhabi.” Mr Moeen Bin Brook - Owner of Bin Brook Motors & Equipment LLC
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Scania Touring HD range a privilege to own The Scania Touring is a coach designed to meet your needs for occasional service and regular service over long distances. You will enjoy full support from a single point of contact since all parts, maintenance and repairs are backed by Scania’s comprehensive global service work. The possibility of fast deliveries gives your business plenty of flexibility. If you’re focused on good total operating economy, this coach is destined to be a profit source for years to come.