Optimization of Supply Chain Management

November 10, 2020

The Covid-19 pandemic has drastically changed the way supply chains work overnight. In the GCC region, restricted movements due to Covid-19 had resulted in supply chain disruptions. As a result, Covid-19 has made trade and supply chain operators automate their workflow and warehouses overnight with digital transformation solutions such as drones, blockchain, robotics, analytics, and Artificial Intelligence (AI). As the curfews and lockdowns are relaxed, trade activities are expected to pick up in H2 2020 with the help of these digital transformation initiatives.

The United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) are likely to emerge as front runners in technology adoption in supply chain. The supply chain framework has benefited from government initiatives and increased internet penetration. Modern warehouses are becoming automated with increased usage of robotics, and companies are experimenting with the use of autonomous vehicles and drones for efficient and faster deliveries. Few key drivers for moving towards a digital supply chain include improving speed to market; avoid contactless deliveries, and better productivity. Shifting towards digital will also unveil new field of opportunities for supply chain operators that could positively impact revenues, working capital, and costs.

KSA and the UAE are using blockchain, the Internet of Things (IoT), analytics, and robotics to a higher degree to position themselves as a global trade and investment hub. Blockchain is also being used to help meet challenges arising out of supply chain failures. The technology has dramatically improved the efficiency and reliability of supply chains in the logistics industry. For example, the World Economic Forum (WEF) collaborated with the Abu Dhabi Digital Authority, Dubai Future Foundation and Saudi Aramco, among others by launching a Blockchain toolkit for supply chain management. Dubai Future Foundation (DFF) foresees a greater role for 3D printing, Unmanned Ground Vehicles (UGVs), Unmanned Aerial Vehicles (UAVs), the Internet of Things (IoT), augmented reality, exoskeletons and companion robots in the future.

Emirates NBD had launched a digital supply chain financing platform for its corporate and institutional clients. The bank’s smartSCF platform is expected to offer businesses in the UAE a set of integrated, automated tools designed to enhance and simplify their supply chain collaborations while optimising working capital and reducing transaction costs. The platform enables clients to benefit from improved cash flow efficiencies while their suppliers benefit from early payment of their invoices, without the need for collateral and at competitive rates. Emirates NBD’s smartSCF platform fulfils the growing need for digitisation of supply chain management and financing, which has emerged as one of the top priorities for corporate clients across industries.

Agility’s logistics expertise was used to set up a strategic supply chain for the GCC after the government detected the first Covid-19 case and prioritised food security and helped the supply chain. Around 15 Agility logistics experts worked closely with the government to set up a control tower. Agility created digital tools, including an online tool for the government to use to receive bids and requests from external parties wanting to participate in the government plan, as well as a digital dashboard to monitor inventory levels.

Digital transformation initiatives in supply chain have become increasingly powerful and businesses that make use of it are expected to stay resilient throughout the pandemic and even post-pandemic. Shippers and logistics companies have learnt that investing in automation and data results in making agile, smart decisions for supply chain. The GCC countries are expected to continue to invest heavily in digital transformation solutions in supply chain as it attempts to enhance its position as a hub for international commerce in the current pandemic scenario as well.

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