Logistics News ME Forum | Panel 3: Supply Chain Woes
While the pandemic was a catalyst that rattled the supply chain sector, experts are of the opinion that this was trouble in the making. Numerous factors contribute to this problem.
But the shipping network shows no respite – supply chains continue to find itself in a logistics knot, ports face a never-seen-before congestion and shipping rates are yet to fall. What is the solution? The Logistics Forum held on 29 March at Sofitel Dubai The Palm answered these questions.
“Logistics and supply chain disruption is caused by factors internal and external to the supply chain. The trend towards globalisation augmented the impact of disruption on supply chains and businesses considering the knock-on effect which we clearly witnessed with the COVID-19 pandemic.
“Due to the increase in the sources of disruption, managing supply chains becomes riskier considering the related impact on business performance, continuity, and growth. Disruption exposes the vulnerabilities of supply chains that are driven by certain practices including extreme lean and cost-cutting, global outsourcing, economies of scale, and single sourcing. This is augmented by the outdated IT infrastructure, lack of collaboration, and new business models. Current supply chain lacks flexibility, visibility, and responsiveness which are essential for resilience.”
Dr Shereen Nassar, Global Director of Logistics Studies, Heriot-Watt University
“Disruptions to supply chain always happen when there is a misbalance between the demand and supply. When the pandemic hit us, there was a sudden drop in the demand, so it caused disruption. Last year, as we were coming out of the pandemic, there was a sudden spike in demand which caused even bigger disruption since there is simultaneously a shortage in the supply. Supply shortages are due to various reasons including port congestions, delay in shipping, vessel availability and geo-political reasons.
“Some of the steps that can be taken to counter the disruptions are going local by having a combination of global and local sourcing, increasing dependence on local and regional products where possible, having agile supply chains, better planning, and digitisation.”
Kunal Gupta, Director – Supply Chain, Bateel International
“The industry has been fractured since long before the COVID pandemic came to town. Let’s be honest, archaic practices, outdated infrastructure, and a lack of investment in certain areas has led to gaping holes that have, in effect, let water in and started to sink the ship.
“In the Middle East we’re quite lucky. The pandemic has been handled well by governments, there’s an abundance of new infrastructure and a work force that are willing to get out of bed in the morning to put in more than a full day’s work. Dubai is what I would describe as a bouncy ball. The harder something drops in Dubai, the quicker and the higher it bounces.
“Whilst technology can play a humble role in the road to recovery with new developments in AI and blockchain, it’s not a quick fix and still requires human oversight. Not one lifeboat is going to help the industry get back on the right track and it will take a combined effort together as an industry to bring her back up to full speed.”
Sherod Walker, Founder & Group CEO, The Waterfalls Group
“Supply chain management has grown over the years from a transactional unrecognized function to a key contributor to the boardrooms across the globe, establishing key alliances with strategic vendors and adopting largely disruptive technology that has transformed its very complex and unpredictable sourcing cycle.
“Supply chain professionals of this century are required to procure intelligently and anticipate global disruptions beforehand. Negotiation skills and contract management knowledge is also crucial in bringing about product and service value to the end user.
“Luckily, the advent of artificial intelligence platforms with the capability to provide 360-degree business intelligence, buyers and logisticians are provided with information on demand and sourcing capabilities that can advise professionals with an entire suite of information – from vendor compliance data to port congestion and container availability trends.
“Machine learning, arguably a subfield of artificial intelligence has created the space for supply chains to shift to omni-channels, an integrated network that connects social media platforms that track consumer activities and consistently and asynchronously, support their demands.
“Looking ahead, supply chain management will continue to be relevant even as it adopts the technological disruptors of today. Reducing carbon emissions and addressing return management due to increasing online transactions would also trigger a major paradigm shift in the supply chain domain globally.”
Zawahir Siddique, Associate Dean and Head of Blended Learning, Westford University College