Three trends that will disrupt the Middle East’s supply chain industry in 2019

As we approach 2019, Gautam Kumar, co-founder & COO, FarEye, examine the four major supply chain and logistics trends that are going to impact businesses in the MEA region.
Gautam Kumar, co-founder & COO, FarEye
Gautam Kumar, co-founder & COO, FarEye

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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.

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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.

See our video interview with Gautam on automation and machine learning in logistics below:

Adoption of Advance Supply Chain and Logistics Platforms

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.

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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.

Dealing with the ‘Inaccurate Address’ Challenge

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.

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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 ‘inaccurate-address’ problem,  supply chain and logistics companies need to embrace AI and ML-based platforms that can leverage advanced technologies to geo-locate a customer's delivery addresses intelligently. 

Improving Last-Mile Delivery to Boost Cx

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. According to Google, 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 Saas-based logistics and e-commerce platforms.

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