The year of a global pandemic, 2020, was one of the most impactful chapters in the global logistics and supply chain sector. From travel shutdowns to issues with material sourcing, there were several setbacks in the supply chain and logistics industries, including various disruptions at all stages. Moreover, while the world was trying to sink in the ripples of the pandemic, it enlightened several other problems within the industry – which was the slowest to adopt technological advancements. As a result, the accelerated issues showcased many vulnerabilities, creating a sense of urgency across the supply chain.
However, they all need to focus their energy on to think what is next. With life returning to almost normal, it is imperative to absorb all the learnings from the pandemic and navigate towards developing post-pandemic requirements for global supply chain and logistics. An efficient, lean and profitable supply chain is proactive rather than reactive – meaning businesses need to recalibrate their logistics to face the ‘new world.’ Learning from the various challenges the sector faces, the industry is shifting its attitude towards what is necessary to thrive. Moreover, with the surging demand within the digital and online world, the question arises, ‘Is the industry ready?’
According to a report by Reportlinker.com, the freight and logistics market in UAE is expected to reach USD 31.41 billion in 2026 growing at a Compound Annual Growth Rate (CAGR) of 8.41 per cent between 2021 – 2026. Furthermore, the report asserts that the UAE freight and logistics market has been growing gradually, mainly driven by the consistent and fast growth of e-commerce across the globe and the region, along with rising international trade.
While logistics companies look to simplify their processes and implement ways to face the ongoing challenges within the industry, various elements must be considered to meet the growing demands. Here, Dr Shareen Nassar shares her insights which will help the industry cope with logistics changes.
Mapping Vulnerabilities For Resilience
As with any industry, supply chain and logistics organisations face many issues throughout their processes. Understanding shortfalls and risks that can potentially harm and slow down smooth operations are basic knowledge and play an important role in protecting the organisation. However, it necessitates going beyond the surface and mapping the full supply chain, including distribution facilities and transportation hubs. It also requires having an overall picture of every cog in the wheel and the vulnerabilities they face or the potential ones that may occur. This process can undoubtedly be financially heavy, but the possibility of such an exercise safeguarding the organisation from failing will ultimately be beneficial. From understanding technical issues, technological shortcomings, and risks to workforce disturbances and raw material considerations, pre-empting problems and working on solutions will save costs and man-hours in the long run. This is seen as the foundation for building resilience as a business strategy and value that has become mitigation for various sources of vulnerabilities driven by uncertainties as a common aspect of a modern business ecosystem. A resilient logistic and supply chain can cope with not only operational risks associated with the mismatch between supply and demand with a direct impact on operational performance but also major ones with a significant impact on business performance. How logistics and supply chains are managed determines their resilience level that should be supported by internal and external stakeholders’ collaboration, flexible and agile systems and mindsets, and nurturing the risk management culture in all aspects of the business.
Omnichannel Shipping
According to Harvard Business Review, the Amazon effect pushes traditional retailers to offer more omnichannel touchpoints to support increasing demand. Omnichannel shipping means providing a seamless approach to meeting customer expectations, thereby increasing customer loyalty. Logistics companies must review their procedures and offer a more robust approach to shipping. From customers walking in-store to look around and buy products, there has been a shift to click and buy. Now customers want most of their shopping done online with either home deliveries or easier ways to connect and collect. For example, in the UAE, brands such as Noon have to pick up and drop boxes in easily accessible areas where customers can come and collect their purchases at their convenience instead of waiting for them to be dropped home. In the USA, Walmart has started a unique programme where they incentivise employees for drop-offs, which can be done while they are on their way home after work. There is a growing interest in adopting this approach through the cloud shipping model on a wider scale using the cloud shipping process, which utilizes online tools to choose a carrier and service to ship a package. In addition,
Manpower Upskilling
Logistics and supply chain is a manpower-heavy industry. From manufacturing facilities to managing supply chains to the last mile, the sector requires human intervention at every step. It is overwhelming for logistics personnel to keep up with crises, changes in the industry, surging and dropping demands, and technological advancements. To overcome any challenges that employees, specifically skilled labour, face, it is imperative that they continue to upskill and reskill themselves. While the sector’s basis may remain the same, there have been so many shifts that something that may have been an important subject in a logistics course may turn out to be one of the least important chapters. Every business is as good as its people, and businesses that don’t change due to shifts in supply and demand and current trends will become obsolete in a few years. Every skill needs to be enhanced; businesses must encourage employees to take additional courses to improve and increase their knowledge.
Optimisation Through Technology And Analytics
While we have established that automation and digital technologies are t the way forward, logistics has been a relatively slower adopter. This can be improved by developing clear digital business and supply chain strategies backed by management support. Big data and analytics help logistics companies deal with data and number crunching. Analytics helps organisations keep up with escalating demands and understand them the more organised way. Furthermore, using technologies such as Near-Field Communication NFC facilitates electronic devices, including mobile phones and payment terminals, to connect for payment and related transactions. With transport networks increasingly becoming interlinked, NFCs can support easy transportation and transit payments.
Additionally, the Cloud-based Transport Management System (TMS) is another technology gaining momentum in the industry. It can help organisations have greater transparency and visibility, reducing time for verifications and other routine tasks. Disruptive technologies allowed innovative solutions which offer end-to-end logistics platforms that connect various parties. The end-to-end solutions, ranging from packaging, warehousing, and transportation to order fulfillment, helps businesses improve supply network visibility, efficiency, and performance.
While the industry has a long road ahead, many learnings can be taken from the past three years to improve or create a better path for where it is headed. Logistics is an essential part of nearly all businesses. Effective and efficient logistics can provide a competitive edge to businesses and increase profitability. Supply chain and logistics move the world, and the importance of the industry is stark. And with agility and resilience, it can face any disruptions that come its way.