Gau­tam Ku­mar, co-founder & COO, FarEye, ex­am­ines the four ma­jor sup­ply chain and lo­gis­tics technology trends that are go­ing to im­pact busi­nesses in the MEA re­gion.

Logistics Middle East - - FEATURE | TECHNOLOGY -

Thanks to cus­tomer ex­pec­ta­tions, the sup­ply chain, and lo­gis­tics in­dus­try have evolved sig­nif­i­cantly over the past few years. Brick and mor­tar pro­cesses of de­liv­er­ing goods and ser­vices are just not good enough. Hence, there is a grow­ing need to de­ploy tech­nolo­gies that em­power busi­ness to keep up with cus­tomers. In 2018 we wit­nessed sig­nif­i­cant ad­vance­ments in the sup­ply chain and lo­gis­tics field. But there are still a plethora of chal­lenges that need to be ad­dressed.

In the Mid­dle East and Asia (MEA), small-scale restau­rant own­ers are find­ing it dif­fi­cult to com­pete with food ag­gre­ga­tors that have no in­ten­tion of gen­er­at­ing prof­its.

In coun­tries like Dubai, in­ac­cu­rate ad­dresses re­main a big chal­lenge. In ad­di­tion, im­prov­ing last mile de­liv­ery to boost cus­tomer ex­pe­ri­ence will con­tinue to be a prom­i­nent trend.

So, as we ap­proach 2019, let us ex­am­ine the four ma­jor sup­ply chain and lo­gis­tics trends that are go­ing to im­pact busi­nesses in the MEA re­gion.

In the Mid­dle East re­gion, rev­enue from food the de­liv­ery mar­ket is ex­pected to grow at an an­nual growth rate of 13.6 per­cent, re­sult­ing in a mar­ket vol­ume of US

$2.8-bil­lion by 2023. Hence, it’s not sur­pris­ing that in­vestors will con­tinue to fund food ag­gre­ga­tors.

Not wor­ried about gen­er­at­ing prof­its, th­ese food ag­gre­ga­tors are sel­dom known for play­ing by the rules and con­flicts of in­ter­est be­tween th­ese ag­gre­ga­tors and restaurants own­ers are com­mon.

The ques­tion is, how does a restau­rant com­pete with th­ese ag­gre­ga­tors who are de­liv­er­ing food at cut-throat prices? There is no easy an­swer to this, but adopt­ing an ad­vanced sup­ply chain and lo­gis­tics plat­form can surely solve a lot of prob­lems.

Take this case in point. A pizza place in Dubai wanted to part­ner with a food ag­gre­ga­tor to scale de­liv­er­ies. Un­for­tu­nately, it didn’t work out be­cause the lat­ter was in­sist­ing on credit card pay­ment op­tions on their plat­form and de­manded 37 per­cent of to­tal trans­ac­tion value.

The only way out for the com­pany was to have a sup­ply chain and lo­gis­tics man­age­ment plat­form that would make de­liv­ery ef­fi­cient and cost-ef­fec­tive.

Lev­er­ag­ing such an ad­vanced plat­form, the pizza par­lour built its own pro­pri­etary dig­i­tal e-com­merce plat­form to ex­e­cute de­liv­er­ies and the plat­form worked won­ders.

An ad­vanced sup­ply chain and lo­gis­tics soft­ware helps busi­nesses in­crease fleet vis­i­bil­ity, boost cus­tomer ex­pe­ri­ence and en­gage­ment, op­ti­mise de­liv­ery routes, cus­tomise de­liv­ery lo­ca­tions, and pre­dict com­mu­ni­ca­tions and so much more.

Mov­ing ahead, with the way e-com­merce is flour­ish­ing, I feel it will be a ne­ces­sity for or­ga­ni­za­tions to dig­i­talise and au­to­mate their lo­gis­tics op­er­a­tions com­pletely.

The in­cor­rect and in­ad­e­quate postal ad­dress is a ma­jor prob­lem that sup­ply chain and lo­gis­tics busi­ness face in the MEA re­gion.

A large lo­gis­tics com­pany in Dubai high­lighted that in the Mid­dle East it is com­mon to see pack­ages and let­ters ad­dressed to a per­son in a city with no proper de­liv­ery ad­dress. All they usu­ally have is a name and a mo­bile num­ber. And it is the de­liv­ery com­pany’s re­spon­si­bil­ity to in­ves­ti­gate, re­search and find out the in­tended de­liv­ery ad­dress.

Imag­ine this. You are a re­puted lo­gis­tics com­pany. It costs you around US $5-$7 to de­liver a par­cel to a cus­tomer’s lo­ca­tion. In rare cases, it may so hap­pen that a few de­liv­ery ad­dresses pro­vided by cus­tomers were in­ad­e­quate or did not have a proper postal code.

Like a good lo­gis­tics com­pany, you took it on your­self to spend more time, money and man­power to find out the ac­tual lo­ca­tion of the cus­tomer and de­liver the par­cel.

In some cases, the cost in­curred in do­ing this might not hurt a com­pany’s bot­tom line, but imag­ine if this hap­pens reg­u­larly with tens and thou­sands of parcels. The col­lec­tive de­liv­ery cost will bal­loon to some tens of bil­lions of dol­lars per year. And that’s ex­actly what’s hap­pen­ing in the MEA re­gion.

To re­solve this ‘in­ac­cu­ratead­dress’ prob­lem, sup­ply chain and lo­gis­tics com­pa­nies need to em­brace AI and ML-based plat­forms that can lever­age ad­vanced tech­nolo­gies to ge­olo­cate a cus­tomer’s de­liv­ery ad­dresses in­tel­li­gently.

Next-day de­liv­er­ies, cus­tomiz­ing de­liv­ery lo­ca­tions and tim­ing on the fly, pa­per­less billings and more such cus­tomer ex­pec­ta­tions will con­tinue to drive busi­nesses to em­brace ad­vanced sup­ply chain and lo­gis­tics plat­forms.

On­line cus­tomers in the MEA re­gion want re­tail­ers to de­liver ‘in-store’ like buy­ing ex­pe­ri­ence fo­cused on in­stant grat­i­fi­ca­tion. In the UAE only 53 per­cent of re­tail­ers of­fer click and col­lect as a ser­vice, and only three re­tail­ers of­fer next-day de­liv­ery.

The only way to be on top of the ‘cus­tomer ex­pe­ri­ence’ trend is to dras­ti­cally im­prove last-mile de­liv­ery with ad­vanced Saas­based lo­gis­tics and e-com­merce plat­forms.

Only three ma­jor re­tail­ers in the UAE of­fer click and col­lect.

Gau­tam Ku­mar, co-founder & COO, FarEye.

In­ac­cu­rate ad­dress sys­tems are a pri­mary im­ped­i­ment to same-day de­liv­ery in the GCC.

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