Column by Farid Faraidooni, chief commercial officer at du.
In today’s turbulent global economy, by far and away the biggest challenge facing logistics managers is to find new ways of reducing costs in their supply chain.
Industry opinion shows technology is considered a critical enabler in achieving this goal. One study reports that as many as 44% of transport sector professionals believe the deployment of new forms of information and communication technology (ICT), will help them unlock new levels of operational innovation, and so reduce their cost base.
It also means being better able to anticipate customer service needs. This is key when, increasingly, the need is to react to changes in customer demand which now often happens at internet speed. Routing plans, delivery windows and order instructions need to be continuously updated to meet changing customer demand.
There is no need to look further than the logistical hub that is Dubai for some great examples of how logistics companies are solving these problems through the adoption of new forms of ICT-based communications services.
Particularly successful has been the emergence of wireless vehicle tracking, which is being pioneered by companies like FOSS in Dubai. A major supplier of installation services in the region, the tracking system it uses exploits the full potential of mobile location services powered by the wireless telco network.
The solution makes use of the advanced features in Google Maps to provide a visually rich display on an office wall-mounted large-screen monitor, which allows the company to view the position of an individual vehicle or the status of its entire ﬂeet.
Because tracking and routing features are already integrated, logistics operations become more economical, deliveries easier to manage, and overall customer service enhanced. Goods, people and resources are always carried from point A to point B as fast and as cost-effectively possible.
In an industry with so many moving parts, the management of mobile assets is of increasing importance. But assets at rest also need special attention, as companies squeeze costs out of their opera tions flows.
In Dubai’s Jebel Ali logistics cluster for instance, automated warehousing systems rely on radio frequency-enabled hardware to achieve maximum efficiency and accuracy in lot control, inventory accuracy, space utilisation, picking accuracy and order fill rates.
This efficient management of supply chain assets is absolutely fundamental to the growth of the economy in the region, with the smooth running of road, air and shipping routes being a major element in everything from construction to the timely delivery of food to supermarkets.
Being able to do more with less is becoming vitally important in the sector, and smart goods-handling systems, intelligent automated warehousing, and ICT-coordinated just-in-time scheduling, all figure in this regard.
As well as reducing costs, academic research has shown that the benefits of ICT innovation in logistics service include improved quality of service, better supply chain coordination, and easier service customisation and diversification.
ICT innovation allows the region’s logistics firms the unique capability of cost-effectively scaling their operations to meet the escalating demand. This has special relevance in GCC countries, where the demand for logistics services is building year by year, fuelled by the region’s high level of capital investment in infrastructure projects, consumer spending and fast economic growth. In Qatar, for instance, the contract logistics sector expanded by over 23% in 2011.
The potential for further growth is particularly notable in one area. The future of retail is going online, and logistics companies stand to benefit tremendously. Already some of the region’s biggest courier operators offer tightly-integrated supply chain services like shop and ship specialised shopping, and overseas online catalogue shopping services.
In a region famed for its retail sector, the use of such services is on the rise because of the increasing popularity of smartphones and tablet computers among consumers, which leads them to spend more time online, including shopping.