Five Benefits of Cloud-based Logistics Management for the MENA region
Five Benefits of Cloud-based Logistics Management for MENA by Hany Aly, Executive Vice President for Enterprise Business, du
The wheels are in motion for the transport and logistics sector thanks to heavy loads of technological innovation. Market research depicts that revenue for the Middle East’s logistics operations is expected to rise significantly over the next decade. And, one key area of disruption shaking up the industry is cloud-based management solutions, which are becoming more and more relevant towards extracting the utmost value out of operations and to delivering savings multipliers beyond previous industry advancements.
The impact of the cloud on logistics can sometimes be so overwhelming that it’s hard to discern exactly what it is changing. Nonetheless, it’s clear that the logistics sector is the backbone of international trade, facilitating a considerable proportion of resource toward the supply of materials for many other key sectors.
The logistics industry has continuously had to scale to keep up with the world’s growing population. This means an exorbitant quantity of goods movements are taking place every second, minute and hour of any one day. Globally, there are opportunities that the uptake in cloud-based solutions have been too slow. Citing a lack of digital culture and training in the sector, a recent report published by PricewaterhouseCoopers (PwC) found that the percentage of companies that rated themselves as ‘advanced’ on digitization was merely 28 per cent.
From a MENA standpoint, I believe a growing proportion of transport and logistics companies are beginning to understand the value digital transformation and cloud management solutions can provide. The World Bank’s Logistics Performance Index (LPI), which benchmarks performance in the sector to provide evidence for future policy making and potential reform, ranked the UAE 11th worldwide in its 2018 review. Since 2005, the World Bank’s Aggregate LPI has ranked the UAE (14th) ahead of countries such as Switzerland and the United States.
Also positioned in good stead on the index are Oman (46), Saudi Arabia (58), Bahrain (62) and Kuwait (66). In my opinion, there’s clear evidence that from a MENA point of view there is a vivid opportunity for the logistics sector to capitalize on digital adoption. Reforming logistics isn’t easy. But cloud technology has unheralded potential to enable newly-enhanced platform-based business models and solutions which could dramatically reduce costs and increase efficiency in the long run.
Real-time Pricing & Inventory Analytics:
Cloud management can eliminate administrative activities, creating efficiencies across the board. As a direct result of this, real-time analytics allow automation of manual freight bill payments and audit processes. Other aspects that can be improved with live readily-available data can extend to include transportation rates, surcharges and discounts, proposed rate changes.
In regards to inventory, cloud-based solutions could also improve automation and efficiency by tracking accessorials, match pay, auto-pay, track claims, while also rendering negotiations with carriers and logistics service providers on rates and equipment requirements. Overall, a reduction in transportation costs by optimizing bid execution and negotiating service provider rates could free up funds for global freight spend thanks to a vibrant step towards digital adoption.
Transport and logistics is one of the most data rich sectors in the globe. Adopting cloud management solutions will unveil a new realm of possibilities by optimizing data to engage with customers better and digitally integrate the value-chain to improve future management.
With cloud-based solutions driving new innovation, the transport and logistics industry is preparing for an overhaul of how immense volumes of data are handled and accessed. PwC’s report also found the industry has never had access to more data then at this point in time. If endless amounts of data are present in the everyday operations of logistics companies, then the opportunities are massive for improved cloud systems to compliment the sector’s financial prospects and efficiencies.
Transit Operations Merged:
Cloud technology can enable platform solutions, which in turns makes it possible to use new business models, such as ‘virtual freight forwarding’. The establishment of virtual freight corridors by Dubai Customs and the Department of Economic Development in Dubai has proven valuable for faster, easier and cost-effective movement of goods. Dubai Express, Aramex, Gulf Agency Co, Weiss-Rohlig UAE LLC and DB Schenker partook in the pilot phase forerunning the full rollout of the virtual corridor.
A state-of-the-art optimization engine that automatically finds the best solutions for your logistics needs, while adhering to your business requirements and trading partner capabilities. The cloud solutions are optimized to create more efficient and higher velocity logistics networks and can be used to centralize, plan and execute domestic and international shipments through consolidating orders, and streamlining location flow and calendars.
Live Supply Chain Visibility:
Having full vision of digitally transformed supply chains not only improves foresight of product movements, it also increases transparency for all stakeholders, from consumers to legislators. It’s becoming more essential for companies to have full visibility and respond immediately to issues that might not be in line with customers’ expectations.
With the ability to make succinct changes to improve service value and reduce costs via cloud-based business metrics, logistics companies can grow revenue, enjoy a decrease in supply disruptions and increase their issue resolution speed.
Rapid Scalability and Growth:
The transport and logistics sector will benefit from scalable solutions due to the frenetic pace at which trade occurs internationally and because it offers an agile solution to legacy and costly frameworks of the past. This standardized and harmonized processes across an organization is important for carriers who have grown through acquisitions, and currently rely on a patchwork of legacy systems. Overall, cloud management solutions deliver facilities performance that can handle bursts of traffics volume and create efficiencies in cost-effectiveness without the need to drastically alter current setups.