23dfvdv by dfvdvfurrrf

An ITP Media Publication

UPDATE [08] ANALYSIS [16] COMMENT [18] FEATURE [28] FOCUS [36] INTERVIEW [50]

JANUARY 2018 / ISSUE 160

news and analysis for supply chain management professionals

CASESTUDY CASE STUDY: LAST MILE FULFILMENT [26]

REPORT: TURNING FREEZONES INTO POWER PLANTS [34]

SEPHORA:

RETAIL EVOLUTION How Sephora is optimising its supply chain to eliminate out of stock incidents and minimise over stock costs. Download the free Logistics app and be the ямБrst to read the latest issue on your mobile devices.

NOMINATIONS OPEN FOR LOGISTICS ME AWARDS

JANUARY 2018 | CONTENTS

CONTENTS JANUAEY 2018

p20

p26

p34

COVER STORY

CASE STUDY

REPORT

SEPHORA

LAST MILE LOGISTICS

SUSTAINABILITY

Sephora has experienced tremendous growth in this market over the last five years and is now turning to innovative tech solutions to ensure its supply chain remains water-tight.

www.arabiansupplychain.com

With e-commerce becoming the breakout sector of the logistics industry, many couriers and 3PLs are positioning to secure more business, but what is actually needed by the online retailers?

DP World and RSA Logistics are the latest in a growing list of logistics companies in the UAE seeking to use solar energy to reduce costs and carbon footprint.

LOGISTICS MIDDLE EAST | JANUARY 2018

CONTENTS | JANUARY 2018

JOIN THE CONVERSATION

p20 Most popular news stories on arabian supplychain.com

p34

[1] R E G U L A R S

[ 8 ] UPDATE

[26] CASE STUDY

Stay informed with the latest industry news, from the land, sea and air.

Many couriers and 3PLs are positioning to secure more business, but what is actually needed by the online retailers?

[16] NEWS ANALYSIS The digital wave is lapping at the shores of the thirdparty logistics sector, but the big brand names are preparing to ride it rather than fight it.

[18] COMMENT

[40] RACKING Why is multi-tier racking so popular with major brands like Home Centre?

BMW halts production due to supply chain snag BMW has been forced to halt production due to a lack of parts available from its steering gear supplier.

[2]

VIDEO: How to wash an A380 without any water Emirates’ environmentallyfriendly aircraft cleaning technique has saved millions of litres of water.

[48] PRODUCTS

Zebra Technologies looks at the past, present and future of retail logistics.

The latest technologies and equipment advancing material handling, storage and transportation.

[20] COVER

[50] INTERVIEW

Sephora overhauls ME supply chain in gamechanging advancement.

Patrick Murphy, partner, Clyde & Co, specialist in maritime arbitration.

p26

Currently, there is nowhere in the world experiencing this kind of growth. The rate of change in this region is sometimes dizzying. If we feel that things move ‘slowly’ in the GCC, as is often stated, I would like to know what rapid growth looks like.”

JANUARY 2018 | LOGISTICS MIDDLE EAST

[3] Neutral Fuels’ world l rst breakthrough Neutral Fuels has become the lrst company in the world to commercialise an enzymatic biodiesel.

To have your copy of

delivered to your doorstep, subscribe by logging on to www.itp.com/subscriptions

p40

www.arabiansupplychain.com

E D I T O R ’ S

C O L U M N PO Box 500024, Dubai, UAE Tel: +971 4 444 3000 Web: www.itp.com Offices in Abu Dhabi, Dubai, London & Mumbai ITP MEDIA GROUP CEO Ali Akawi Group Editorial Director Greg Wilson EDITORIAL Editor Shaun Ebelthite Tel: +971 4 4443420 email: shaun.ebelthite@itp.com ADVERTISING Group Sales Director Sandra Spencer

Welcome to January, 2018. The beginning of a new year always feels buoyed by optimism for the year ahead, and if the various supply chain executives that I’ve spoken to over the last few weeks are right, we have every reason to be hopeful. The general consensus seems to be that this year will be one of growth and greater opportunity for the industry. I certainly hope they are right, because this magazine depends on your success for its own survival! With that in mind, let’s turn our attention to the year ahead and consider what’s in store for the supply chain sector in 2018. There are four keys trends I expect and hope to see happening in the industry in 2018. Disruptive technologies will hopefully go from being discussed to being implemented and executed. The industry will continue to rethink how they approach supply chain risk and elevate the importance of sustainability. Driven by consumer demand, transparency and sustainability will be practiced with more vigour in 2018 and finally, in 2018, intelligence and insight will substantially change the way supply chains are managed, moving them from reactive to responsive at last. See our cover story on Sephora for details! As always, enjoy the issue!

Tel: + 971 4 444 3246 email: sandra.spencer@itp.com Sales Manager Anup Dominic Tel: + 971 4 444 3244 email: anup.dominic@itp.com ITP LIVE General Manager Ahmad Bashour Tel: +971 4 4443549 email: ahmad.bashour@itp.com STUDIO Head of Design Genaro Santos Art Editor Samir Al Ghazal PHOTOGRAPHY Director of Photography Patrick Littlejohn Senior Photographers Rajesh Raghav, Efraim Evidor, Richard Hall, Ethan Mann Staff Photographers Lester Apuntar, Aasiya Jagadeesh, Ausra Osipaviciute, Grace Guino, Fritz Asuro, Sharon Haridas, Ajith Narendra PRODUCTION & DISTRIBUTION Group Production & Distribution Director Kyle Smith Production Manager Basel Al Kassem Production Coordinator Imad Aad Outsourcing Manager Aamar Shawwa Senior Image Editor Emmalyn Robles CIRCULATION Director of Conferences, Circulation & Data Michael McGill Senior Circulation Manager Manoj Chaudhary Circulation Executive Loreta Regencia MARKETING Director of Awards & Marketing Daniel Fewtrell Events Manager Sophie McHugh ITP GROUP Chairman Andrew Neil CEO Ali Akawi CFO Toby Jay Spencer-Davies Director Walid Akawi Subscribe online at www.itp.com /subscriptions

The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for

S HAU N E B E LTH ITE EDITOR SHAUN.EBELTHITE@ITP.COM

general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

MEDIA

JANUARY 2018 | LOGISTICS MIDDLE EAST

UPDATE | JANUARY 2018

UPDATE 01.2018 LAND +

SEA +

AIR +

S U P P LY C H A I N +

WAREHOUSE +

M AT E R I A L S H A N D L I N G Da Vince’s Salvador Mundi painting is the most expensive ever sold at auction.

Louvre Abu Dhabi’s US $450m painting to be shipped in bullet proof Kevlar crate The Louvre Abu Dhabi in December announced that it would be the new home of the world’s most expensive painting, a US $450-million portrait by Renaissance master Leonardo Da Vinci. The artwork was bought by the Department of Culture and Tourism. “Louvre Abu Dhabi is looking forward to displaying the Salvator Mundi by Leonardo Da Vinci. The work was acquired by the Department of Culture and Tourism - Abu Dhabi,” the museum said in tweets in both English and Arabic. “Salvator Mundi” - dated to 8

around 1500 - is the last known Da Vinci in the hands of a private collector. It was long believed to be a copy but was finally authenticated about a dozen years ago. The artwork is the most expensive painting in the world and will require exceptional and very careful logistics arrangements for its journey to Abu Dhabi, according to Gus VanGeijtenbeek, regional manager for Crown Fine Art. Crown Fine Art would not confirm whether it was involved in the transport arrangements, but the company is an international specialist in the handling of such pieces. Speaking generally about the logistics behind priceless artworks,

JANUARY 2018 | LOGISTICS MIDDLE EAST

VanGeijtenbeek said that the exact measures in place for Da Vinci’s Salvator Mundi would depend on the requirements of the insurance agency. “Artworks such as these are usually transported by what we call ‘witness load’, whereby there is an official from either the insurance agency or the owner following the artwork through each stage of the journey,” he told Logistics Middle East. “The individual will fly in the cargo hold of the aircraft next to the painting, which itself will likely be secured within a custommade bullet-proof Kevlar case,” he added. According to VanGeijtenbeek,

the actual transport of the artwork is a small part of the work involved in its logistics, with the planning process being the most time consuming element. “The minutia of the project will be examined well in advance,” he explains. “What route will be taken from the airport, how the painting will be physically carried to its display area, how it will be unpacked, every aspect of the journey is examined and planned well in advance, often with officials from a company like Crown Fine Art doing a walkthrough to ensure there are no unforeseen risks.” It is unclear when the painting will be flown from Christie’s in New York to Abu Dhabi. www.arabiansupplychain.com

JANUARY 2018 | UPDATE

UAE becomes lrst Arab state to get IMO’s Category B membership The UAE’s Federal Transport Authority has announced that the country’s bid for Category B membership of the IMO executive council has been successful. The achievement marks the first time in history that an Arab country has joined the decisionmaking body of the International Maritime Organisation. “The historic win provides a strong boost to nationwide efforts to consolidate the UAE’s presence as a major contributor to the accelerated growth of global maritime trade,” said Abdullah Belhaif Al Nuaimi, Minister of Infrastructure Development and Chairman of the Board of Directors of the Federal Authority for Land and Maritime

Transport (FTA). “The country is currently among the world’s top 10 in supplying oil and gas at a time when crude oil production is expected to increase from 2.9 million barrels per day to 4 million by 2040. We seek to move forward in the path of innovation and invest in R&D and human capital to anticipate and brighten the future of the maritime sector. “We will keep in mind our wise leadership’s vision as embodied by the objectives of ‘UAE Centennial 2017’ which aims to make the UAE the best and most advanced country in the world,” he added. Al Nuaimi added that the UAE’s Category B membership under the IMO’s Council will pave the way for the country to play a pivotal

The UAE delegation, front, takes it place for lrst time on IMO executive council.

role in shaping the future of the global maritime system. The IMO’s primary purpose is to develop and maintain a comprehensive regulatory framework for shipping and its remit today includes safety, environmental concerns, legal matters, technical

DHL Express exec says now is the perfect time to invest Ken Allen, member of the board of management at Deutsche Post AG, Division Express, says that the logistics industry and wider UAE economy is seeing stronger growth now than it has in 20 years. Speaking at the opening of DHL Express’ new Terminal 2 facility at Dubai Airport, Allen told delegates that he believes the regional economy has never been riper for growth. “What we hear in the media a lot is information that generally paints a rather grim picture, but I believe that the world is in a better position now than it has been in over 20 years,” he said. “Stock markets are at record highs, trade is growing and there is demand for our business.” Allen, who was part of the team that established DHL in the Middle East with its UAE www.arabiansupplychain.com

Ken Allen, member of the board of management at Deutsche Post AG, Division Express.

co-operation, maritime security and the efficiency of shipping. The IMO is governed by an assembly of members, of which the UAE is now a part, giving it greater clout in the drafting and execution of international maritime legislation.

hub in the 1980s, added demand from consumers was pushing a second wave of growth for the company, which has traditionally relied on B2B. “This facility has been built for our customers of course, and while that traditional B2B demand is still growing, there is also a global and especially local phenomenon of e-commerce, which is fantastic for our business and anyone involved in trade,” he said. Allen added that the digital revolution of the past decade or so had fundamentally changed the dynamics of entrepreneurship. “For the first time in history anyone in the world can be connected to everyone else in the world,” he said. “In theory, if you have access to broadband or a 3G connection via mobile, you can set up shop and be doing business with anyone in the world virtually overnight.” “We see this growth around the world and that B2C business is going to drive a second wave of demand that we’re now preparing for [with this terminal expansion],” he said. LOGISTICS MIDDLE EAST | JANUARY 2018

UPDATE | JANUARY 2018

E-com platform Dukkan Careem lrst in UAE to offer one-hour delivery Dubai-based ridehailing app Careem has launched e-commerce venture called Dukkan Careem, which is claiming to be able to provide delivery within the hour in the UAE. Dukkan, which is Arabic for ‘shop’, will sell fashion items made from 100 percent locally sourced materials with culturally-inspired designs through its website. Last mile fulfilment will be carried out by Careem, reportedly within an hour of a purchase being made. “We are extremely proud to launch Dukkan Careem and are excited to bring the Careem brand,

STORY SUMMARY UAE F&B DISTRIBUTOR DEPLOYS EDI FOR FOOD LOGISTICS

To support its supply chain network, UAE-based FMCG distributor NTDE, along with its sister 3PL company – INL, has deployed the Inlnite EDI Suite. Under the contract concluded, the EDI provider – Inlnite IT Solutions – is to establish Electronic Data Interchange (EDI) between NTDE Group and its business partners across the globe. This means that transaction and transport documents will be exchanged automatically, replacing communication by fax, email and post. Inlnite EDI Suite, which works on a computer-tocomputer basis, will connect the central systems of NTDE Group and its business partners. This way the parties will be able to send and receive transaction and transport documents instantly, via a dedicated EDI platform.

Dukkan Careem is rolling out within the hour delivery in the UAE.

which people know and love, into tangible products and merchandise,” said co-founder and chief executive

Mudassir Sheikha. When Logistics Middle East ordered from the website we were

given a series of three-hour delivery slots for the same day, suggesting that Dukkan may be giving itself some leeway with the ‘within the hour’ claim. Careem’s decision to handle delivery in-house follows a last mile trend at present in the e-commerce space, with more online retailers investing in their own last mile operations, rather than using a 3PL. Dukkan is the first e-com is the region to claim to deliver within the hour, but Logistics Middle East’s delivery took just over 24 hours to arrive, suggesting further refinement of last mile operations is still needed in the sector.

Shift becomes lrst rental company in Dubai to deploy electric cars Arabian Automobiles has delivered Ëve new Renault ZOE 40 Long Range cars to Shift, making it the UAE’s first car rental company to use electric vehicles (EVs) in its line-up. The zero emission Renault ZOE 40 Long Range will support Shift’s mission to reduce its carbon footprint in the country. “Arabian Automobiles is committed to supporting the UAE Vision 2021 sustainability objectives, which include increasing clean energy to 50 per cent of the total energy mix,” said Salah Yamout, director of sales and marketing at Arabian Automobiles. “By providing major companies like Shift with the new Renault ZOE 40 Long Range, we are contributing to this vision by introducing top quality EVs to the UAE’s car rental and leasing sector for the first time.” The Renault ZOE 40 Long

JANUARY 2018 | LOGISTICS MIDDLE EAST

Renault ZOE 40 Long Range.

Range is a 100% electric vehicle that offers a range of up to 300km in real driving conditions and a short charging time of only two hours, making it one of the most practical EVs on the market. Ashish Nanda, senior general manager at Shift Car Rental, commented: “We believe that EVs are the future of road transport so we are delighted to be introducing the Renault ZOE 40 Long Range to the UAE’s car rental market. Like our customers, we are increasingly environ-

mentally conscious, so this is an important move toward making our fleet cleaner and greener in support of our leadership’s sustainability agenda.” Arabian Automobiles was the first company to sell electric vehicles in the UAE and has now been supplying the market with EVs since 2013, making it the leader in the sector as well as the automotive industry’s chief contributor to the UAE Vision 2021 to cut down on emissions and fossil fuels. www.arabiansupplychain.com

JANUARY 2018 | UPDATE

Dnata and mydubai try out blockchain for air cargo dnata’s cargo operations, in conjunction with Emirates Innovation Lab, IBM and flydubai Cargo, has used blockchain technology for the first time. The test showed that blockchain can add value by eliminating redundant data and improve visibility and transparency for all stakeholders. As a result, processes can been more streamlined and simplified right from the origin to the final destination. “dnata has always been at the forefront of innovation, and the success of our study to use blockchain technology in our operations means greater security, efficiency and cost savings to our customers,” said Kevin Ennis, vice president commercial and business development for dnata’s UAE Cargo Operations. “We are on the cusp of revolutionising the way we operate, and the success of this initiative with our partners will give the industry a real boost towards seamless service delivery,” he added. Blockchain technology is a secure,

mydubai Cargo and dnata, in collaboration with Emirates Innovation Lab and IBM jointly developed a logistics platform in which blockchain infrastructure was implemented for the lrst time.

public electronic ledger and peer-topeer network, that can be managed autonomously to exchange information between different parties. In cargo, for example, much of the processes is traditionally paper based,

which requires multiple sign-offs by inspectors and receivers before goods can be delivered. flydubai Cargo and dnata, in collaboration with Emirates Innovation Lab and IBM jointly developed a lo-

gistics platform in which blockchain infrastructure was implemented for supply chain transactions from a purchase order from the origin to delivery to the Consignee warehouse at its destination.

DHL Express invests US$18mn in expansion of DXB Terminal 2 facility DHL Express has opened the doors to its newly expanded US $18-million facility at Terminal 2 in DXB. It will significantly increase the capacity of shipments managed every hour and strengthen DHL’s regional hub operations from Dubai. The 13,100 sqm facility, which is located in the Cargo Terminal at DXB, will have the capacity to manage up to 5,000 shipments per hour. That will double its current capacity of 2,500 and serve nearly 70,000 customers across the Middle East and North Africa (MENA) region. “The expansion of our facility at Terminal 2 in Dubai is www.arabiansupplychain.com

the latest investment by DHL to support economic growth in the country and wider region by facilitating global trade to and from our growing hub in the UAE,” said Ken Allen, member of the Board of Management Deutsche Post AG, division express. “We are confident that the new facility

will be able to adequately meet increasing demand for faster shipment deliveries, especially with the boom in eCommerce in region.” The new facility will enable consolidated export, transit and import operations with a customs’ clearance and hold area that will feed inter-con-

tinental and region-wide airand land-network distribution. An automated conveyor system with dual-view x-ray screening of parcels, imagecapture technology and an automatic bar-code parcel sorting system will enable the delivery of more than 120,000 shipments a day.

The expanded facility will increase DHL’s capacity to 5,000 shipments per hour.

LOGISTICS MIDDLE EAST | JANUARY 2018

UPDATE | JANUARY 2018

T H E

B I G

P I C T U R E

Emirates SkyCargo expected to launch dedicated e-com services Emirates SkyCargo has partnered with Dubai CommerCity to develop new solutions for the global e-commerce sector. The freight arm of Emirates Airline will work with the first free zone dedicated to e-commerce in the Middle East to identify the best methods to add value to e-commerce logistics. “Every day Emirates SkyCargo transports a large volume of e-commerce shipments as part of our mail or general cargo offerings. We are progressing to the next step where we cooperate more closely with e-retailers with the ultimate aim of getting products to customers even more quickly and cost effectively,” said Nabil Sultan, Emirates’ divisional vice president, cargo. “We are delighted to partner with Emirates SkyCargo, one of the world’s largest air cargo carriers, and we are confident that it will be a major boost to our strategic goals of making Dubai CommerCity a unified platform for government, administrative and customs services and logistics to help meet the needs of the e-commerce sector,” said Mohammed Al Zarooni, the director general - Dubai Airport Free Zone Authority (Dafza). Emirates SkyCargo has developed a number of transportation solutions targeted at specific industry verticals including Emirates Pharma for the transportation of temperature-sensitive pharmaceuticals; Emirates Fresh for the transportation of perishables such as fruits and vegetables, fresh fish and meat and Emirates Wheels for the transportation of high-value automobiles. It does not, as yet, have a dedicated e-commerce offering, but following this MoU it is to be expected that one will be rolled out soon.

Egypt modernises and secures national rail network Thales has been awarded a 3-year contract by Egypt National Railways (ENR) for the modernisation of the signalling and telecommunications systems and all works related to a 180 km section of line between the towns of Asyut and Nagh Hammadi. The stretch of rail is located in the Upper Egypt portion of the Alexandria–Cairo–Aswan rail corridor. 12

The project is part of an ambitious plan, promoted by the Ministry of Transport and completely financed by the World Bank, aimed at transforming Egypt’s railway infrastructure. This project will improve traffic safety and security to allow trains to travel at speeds of up to 160 km/h, as opposed to the current 120 km/h, and traffic volumes are expected to double. All of these changes will

JANUARY 2018 | LOGISTICS MIDDLE EAST

increase passenger and goods transport capacity across the backbone line that links the North and South of the country from Alexandria to Cairo all the way up to Aswan. This solution is designed to work together with the existing ATP system (Automatic Train Protection) and a future European Train Control System (ETCS). The project includes full protection of signalling and telecommunications systems

against cyberattacks to ensure safety and system availability. This is Thales’s second contract in this domain in Egypt and follows the project awarded in 2013 to modernise the line connecting Alexandria with Cairo. ENR is the second-largest railway operator in Africa. The network includes more than 5,000 km of lines and is the longest established rail network in the world after the United Kingdom’s. www.arabiansupplychain.com

JANUARY 2018 | UPDATE

STORY SUMMARY IATA SELECTS EMIRATES FOR LAUNCH OF DANGEROUS GOODS EFB

Emirates Airline will work with the International Air Transport Association (IATA) to launch its Dangerous Goods Regulations (DGR) for electronic flight bags (eFB). The airline is the first in the world to roll-out the new system, which is expected to bring the IATA DGR into the cockpit where flight crews make vital pre-flight and inflight safety decisions. The IATA DGR is designed to help the aviation industry to prepare and document dangerous shipments, as well as help track the latest developments in regulations for the safe transport of air cargo. It will help Emirates flight deck crews have efficient and easy access to updated regulatory safety information.

UAE included in DHL’s new online air freight quote and booking platform DHL Global Forwarding has rolled out an online air freight quote and booking platform called Freightquote, which offers doorto-door, airport-to-airport or a combination of either. Freightquote is available in 40 countries, including the UAE, and manages major tradelanes and point pairs. Immediate quotes for general cargo up to 2,000kg are provided, along with two transit speeds. “Customers are provided with a comprehensive quote, based on the pick-up and delivery location, plus their shipment details including weight and dimensions,” said DHL. “International shipping doesn’t need to be a complex task,” adds Angelos Orfanos, global head of marketing & sales at DHL. “From searching for the right supplier through to getting a competitive

price, this should be easily available online.” The quoted door-to-door all-in rate can also include import and export customs, as well as cargo insurance. The move comes as the logistics industry rides a wave of digitization that has seen new third-party booking sites emerge. As one of the largest 3PLs and express couriers in the world, DHL is less vulnerable to these new players, but the platform will likely boost profits by simplifying the logistics process enough to keep customers from straying to third parties. Because Freightquote connects to DHLInteractive, the company’s online customer shipping and tracking portal, DHL’s new service will streamline customers’ experience, which makes DHL a more attractive 3PL.

A service like Freightquote can be significant for a 3PL because it retains customers, while providing the assurance of a globally trusted brand. As technology and automation continue to simplify and streamline the supply chain process, more 3PLs will likely try to be all-encompassing in their services, but only the truly global brands like DHL and its major rivals will be able to do it effectively.

S T FA C T

2000

IMMEDIATE QUOTES FOR GENERAL CARGO UP TO 2,000KG ARE PROVIDED.

Khalifa Port takes on SOHAR with EGA partnership Emirates Global Aluminium, the largest industrial company outside oil and gas, has signed a long-term port facility agreement with Abu Dhabi Ports to use some of the world’s largest bulk cargo vessels (Capsesize) to import raw materials through Khalifa Port. The agreement gives Abu Dhabi Ports the leverage to fund development of Port Khalifa to be able to accommodate these huge vessels, commonly known as Very Large Bulk Carriers (VLBC) and Very Large Ore Carriers (VLOR). Abu Dhabi Ports will fund and complete dredging and widening works to the Khalifa Port approach channel and basin including EGA’s berth. The dredging will deepen the channel to 18.5 metres and basin to 18.0 metres basis zero tide. The port will become the first in the Arabian Gulf capable of directly handling these massive www.arabiansupplychain.com

Captain Al Shamisi, CEO of Abu Dhabi Ports (left).

ships. At present, the closest deep water port with such ability is SOHAR Port in Oman, where the much larger Valemax (or Chinamax) VLOC ships are a weekly sight. EGA plans to use large dry bulk ships to import raw materials without the need to transfer all or some of the cargo to smaller vessels outside the port, reducing long-term shipping costs and improving environmental performance. EGA will use Capsize vessels to ship bauxite ore, the feedstock for alumina refineries, from the Republic of Guinea in West Africa. “Today’s announcement marks another milestone for Abu Dhabi’s maritime and trade industry, and demonstrates our commitment to ongoing innovation and expansion in response to market and customer demands,” said Captain Al Shamisi, CEO of Abu Dhabi Ports. LOGISTICS MIDDLE EAST | JANUARY 2018

UPDATE | JANUARY 2018

RSA Global could power 1000 homes with new warehouse solar roof Dubai-based 3PL RSA Global has launched the first solar rooftop in Dubai South on its flagship warehouse facility in Dubai Logistics City. The project developed by SirajPower is expected to generate 1.1MW, which is roughly enough to provide power for around 1,000 homes. Abhishek Shah, co-founder and group CEO of RSA Global, and David Auriau and Laurent Longuet, directors at Siraj Power, hosted a ceremony at RSA Global’s headquarters to showcase the project to customers and VIPs including Khalifa Al Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South. The power plant, developed and installed by SirajPower will provide an alternative source of electricity for the next 15 years and generate 90% of the energy required for the facility. The lease agreement between RSA Global and SirajPower signed earlier this year is aligned with Dubai Electricity and Water Authority’s (DEWA) Shams Dubai initiative.

STORY SUMMARY DUBAI TRADE CELEBRATES 275 GRADUATES FROM ITS CTLP & CCE PRO-

As part of the UAE Centennial Plan 2071, the UAE Energy Strategy 2050 has been announced to boost the country’s ambitions to increase the share of clean energy in the national energy mix to 27% by 2021 and 50% by 2050.

“In line with our core purpose of solving challenges for a better tomorrow, RSA Global is delighted to have achieved such an important milestone,” said Abhishek Shah, co-founder and group CEO of RSA Global.

SirajPower has delivered this project under a fully financed leasing scheme. SirajPower’s value proposition requires neither upfront investment nor operational obligations from RSA Global.

Etihad Cargo shakes up management team after making Carr vice president

Dubai Trade has graduated 254 professionals in the 6th batch of its Certified Trade & Logistics Professional (CTLP) programme. It has also graduated a further 21 professionals in the 1st batch of the Certified Customs Expert (CCE) programme. The graduation ceremony was attended by Mahmood Al Bastaki, CEO of Dubai Trade, DP World officials, and graduates’ families.

Etihad Airways has announced key changes to its air cargo division after making Justin Carr the new vice president of Etihad Cargo. Carr, who joined the company in the summer from DHL where he was Head of MNC business development for the Middle East and Africa region, will take over leadership of the Cargo team from December 2017. Strengthening the leadership team, Andre Blech has been

JANUARY 2018 | LOGISTICS MIDDLE EAST

Justin Carr the new vice president of Etihad Cargo.

announced as the new head of cargo delivery.

A seven-year veteran of the company, Andre oversees endto-end cargo operations including Etihad’s Hub, Network, Customer Service and ULD Asset Management. Also reporting to Carr, Roberto Gilardoni will expand his current role to include Freighters, Global Customer Management and Industry Verticals. In the three years Roberto has been at Etihad Cargo, he has successfully grown the charter business and freighter network. www.arabiansupplychain.com

JANUARY 2018 | UPDATE

How UAE online retailer AWOK.com handled logistics for Black Friday AWOK.com, one of the Middle East’s largest e-commerce businesses launched exciting deals for Black Friday, and partnered with four courier companies in anticipation of a major sales surge. “We have put great emphasis into customizing the type of deals we offer during this year’s Black Friday sale as our customers expect to have access to all to newest products, latest technologies and hottest brands on offer,” said Ulugbek Yuldashev, CEO & founder, AWOK.com. “We are offering up to 90% discounts during this sale.” Last year, AWOK.com had seen a 100% increase in sales, while this year’s Black Friday sale was anticipated to reach another 100% growth

Ulugbek Yuldashev, CEO & founder, AWOK.com.

compared to last year. AWOK.com has participated in Black Friday three times, but this year it was for the first time offering the deals to its customers in Saudi Arabia,

which has the largest number of ecommerce shoppers in the region. “AWOK is well equipped to handle the high sales demands during Black Friday,” said Yuldashev. “AWOK.

com has almost 200 in house couriers which is the highest number of vehicles owned and managed by any e-commerce company in the UAE.” “Apart from this AWOK.com has also tied up with 4 other courier companies to take care of the high demand and ensure timely delivery to its customers,” he added. E-Commerce will be a mega-trend for businesses in the UAE and the market is expected to be valued at $10bn (Dhs36.7bn) by 2018, according to Frost & Sullivan. Recent research conducted by Google reveals that the UAE leads global smartphone penetration at 73.8 per cent and the country’s internet usage statistics show that 91.9 per cent of the population has internet access.

STORY SUMMARY

GENAVCO CELEBRATES GOLDEN JUBILEE General Navigation and Commerce Company (Genavco), celebrated its 50th year Anniversary at Jumeirah Beach Hotel in December. This Golden Jubilee celebration was attended by all of their principals, customers, Juma Al Majid Group companies heads, JAM Group Corporate Business Units chiefs, current staff and many ex employees. Established in 1967 on Zaábeel Road, Karama, Dubai, Genavco is a flagship company of Juma Al Majid Group. In a 50-year journey that has seen it grow with the United Arab Emirates, Genavco has become one of the largest and most trusted names in the region’s Commercial Vehicle and Heavy Equipment market. Genavco has played a prominent role in building the nation through its involvement in infrastructural development projects.

www.arabiansupplychain.com

Tristar: banks and shipping must align goals and work together At the 3rd Annual Maritime Standard Ship Finance & Trade conference that took place in Abu Dhabi, Chris Peters, CEO of Emirates Ship Investment Company (Eships), part of Tristar Group, spoke about the economic factors changing the face of shipping finance. He was one of the speakers at the session on Shipping and Ports – How will politico-economic factors shape future opportunities and challenges? According to Chris Peters, “In 2015 the average tanker rate was over $36k/d whereas the oil price had slumped back to average only $44/bbl. In 2016 the rate was falling and again in 2017 the fall continued for tankers, whereas the oil price had been stable until a few months ago and now is trending upwards currently mid-high $50’s. The markets are unpredictable but we must adapt to the change. Banks must be more transparent

Chris Peters, CEO of Emirates Ship Investment Company (Eships), part of Tristar Group,

about their position so that shipping companies can work with them to ensure proper financing is available for business growth.” He pointed out that historically the banks have held on to their RaRoc models to protect themselves

from competition. “I think this is where the banks now need to move on,” Peters added. “If the clients understand the position of the bank then they can adapt themselves to work with the bank rather than against them.”

LOGISTICS MIDDLE EAST | JANUARY 2018

NEWS ANALYSIS | 3PLS

3PLS HIT BACK The digital wave is lapping at the shores of the third-party logistics sector, but the big brand names are preparing to ride it rather than fight it. In December DHL Global Forwarding rolled out an online air freight quote and booking platform called Freightquote, which oﬀers door-to-door, airport-to-airport shipping or a combination of either. It has made Freightquote available for 40 countries, including the UAE. The booking platform manages major tradelanes and point pairs. Immediate quotes for general cargo up to 2,000kg are provided, along with two transit speeds. “Customers are provided with a comprehensive quote, based on the pick-up and delivery location, plus their shipment details including weight and dimensions,” said DHL. “International shipping doesn’t need to be a complex task,” adds Angelos Orfanos, global head of marketing & sales at DHL. “From searching for the right supplier through to getting a competitive price, this should be easily available online.” The quoted door-to-door all-in rate can also include import and export customs, as well as cargo insurance. The move comes as the logistics industry rides a wave of digitization that has seen new third-party booking sites emerge. As one of the largest 3PLs and express couriers in the world, DHL is less vulnerable to these new players, but the platform will likely boost profits by simplifying the logistics process enough to keep customers from straying to third parties. Because Freightquote connects to DHLInteractive, the company’s online customer shipping and tracking portal, DHL’s new service will streamline customers’ experience, which makes DHL a more attractive 3PL. A service like Freightquote can be significant for a 3PL because it retains customers, while providing the assurance of a globally trusted brand. As technology and automation continue to simplify and

DHL has made Freightquote available for 40 countries.

The key is to provide a seamless customer experience across channels, so that the customer can choose what’s most effective for a given shipment” RALF MORAWIETZ, CHIEF INFORMATION OFFICER AT PANALPINA. 16

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

3PLS | NEWS ANALYSIS

Panalpina in September this year started trials with ad hoc air cargo customers, offering a “simple, quick and reliable” booking service, with instant quotes for door-to-door transactions.

In 2015, Kuehne +Nagel launched KN FreightNet.

Angelos Orfanos, global head of marketing & sales at DHL.

Ralf Morawietz, chief information officer at Panalpina.

streamline the supply chain process, more 3PLs will likely try to be all-encompassing in their services, but only the truly global brands like DHL and its major rivals will be able to do it effectively. DHL is latest in a string of global 3PLs to take this path. In 2015, Kuehne +Nagel kick-started the trend with the launch of KN FreightNet. The platform was first trialled in 2014 as a solution for airfreight customers, but was expanded to include quotations and booking of door-to-door Less-thanContainer Load (LCL) services, an important segment of Kuehne + Nagel’s seafreight business. Otto Schacht, executive vice president sea logistics, says: “We are proud to be the pioneer in our industry to make www.arabiansupplychain.com

LCL quotations and bookings as easy as possible for our customers. The speed and simplicity of KN FreightNet for LCL are the key elements of this innovative digital solution. Even highly complex door-to-door requests are calculated in seconds.” Kuehne + Nagel was followed by Panalpina, which in September this year started trials with ad hoc air cargo

customers, offering a “simple, quick and reliable” booking service, with instant quotes for door-to-door transactions. The platform, which has not yet been branded or officially released, is the result of nine months of development. “We are still in the early stages…but the rate of adoption will certainly continue to accelerate,” says Ralf Morawietz, chief information officer at Panalpina. The platform does not yet interact with carriers, which are increasingly offering their own online booking services, but Morawietz says that integration is inevitable. “It is in the making and we see and expect that our subcontractors – carriers in particular – are moving in the same direction, ie, providing electronic access to their service catalogue including pricing; interfaces we will certainly make use of,” he says. Third-party logistics providers have been criticised in recent years for lagging in the digital revolution, while other sectors, such as travel, now provide hotel bookings, flight reservations and car rental entirely online. The challenge for LSPs is that the logistics requirements of each customer are often highly unique. Complex shipments, such as out-of-gauge, still require direct communication, but in Panalpina’s case, Morawietz hopes customers will “start the journey digitally”. “The key is to provide an easy interaction and seamless customer experience across channels, so that the customer can choose what’s most effective for a given shipment. This is about striking the right balance between standard, fast and cost-effective services and tailored services.” He added that full automation for all bookings would be unlikely. “It would not be realistic or desired at this point.”

LOGISTICS MIDDLE EAST | JANUARY 2018

COMMENT | MARK THOMSON

COMMENT MARK THOMSON

The Evolution Of Retail

Mark Thomson, retail and hospitality director, EMEA, Zebra Technologies looks at the past, present and future of retail logistics The retail industry is a dynamic one, always adapting to better cater to customers. For the past decade, we’ve seen a handful of updates and advancements that have propelled the industry forward. No matter how much the industry changes, the idea that “customer experience is king” will always stay the same. To understand the past — as well as the future — of retail, it’s critical to understand a fundamental concept documented by Harvard University’s N.S.B. Gras. In 1939, he observed that the progression of any institution, including the retail industry, “is linked to the progression of the economic and social system.” In other words, retail is at the effect of economic and social forces and must constantly adapt as it seeks to win customers and create the ultimate customer experience. Over the years, the approach to delivering an exemplary customer experience has shifted. And as we move deeper into the digital age, retailers must focus their efforts on three key areas while looking toward the future: workforce, supply chain and bridging the gap between the physical and digital worlds. Workforce Today’s store associates are some of the most well-equipped, dataoriented decision makers, able to convert simple store visits into rich customer experiences that convert to sales. It is this devel18

JANUARY 2018 | LOGISTICS MIDDLE EAST

opment that led to the rise of a new employment role in major stores—the online concierge — to build on online purchases picked up in-store. However, the future of retail holds even more workforce changes. With augmented productivity wearables, asset intelligence data and robots becoming more prevalent, retailers are challenged to evaluate a new kind of workforce — one that incorporates these technological advances to aid in the shopping experience, but also keeps the human aspect of associates to preserve the in-store experience. Supply Chain As the workforce embraces new technology, so too will the supply chain. Technologies that enable visibility will propel the supply chain and industry forward. Retailers, shoppers, warehouse managers, supply chain managers — all will enjoy unprecedented visibility. Asset tracking will provide new data and analytic insights for retailers to better understand customer trends. The ability to track inventory on an item level will ensure flawless fulfillment. Smart sensors will enable fast shipping — as early as same-day delivery — or in-store pickup as data-capturing scanners in the warehouse and IoT solutions across supply chain operations facilitate each step of the process. Finally, 5G wireless networks, said to be deployed by 2020, will ensure radio signals with low latency, allowing for commercial use of drone deliveries as well as deliveries by autonomous trucks. Part of the future of retail lies in the future of the customer experience — and fulfillment of expectations beyond the limitations we know today. What started over the past century with “More, Cheaper, Better” is now evolving into “Personalized,

Got something to say? If you have any industry comments to make please e-mail: shaun.ebelthite@itp.com

Intelligent, Now.” The three pillars of today’s consumption models: retail, e-Commerce, and mobile commerce will be optimized to create a new supply chain system driven by Enterprise Asset Intelligence, artificial intelligence (AI), cloud data analytics and wearable productivity solutions. Bridging The Physical And Digital Another component that plays a large part in the future of retail is a mesh of physical and digital. The merging of these two worlds—paired with the benefits of ubiquitous mobile connectivity — is accelerating the adoption of the Internet of Things (IoT). IoT will have as much impact on human lives, businesses and institutions as did the harnessing of water for steam power, the discovery of electricity and the computer age. In other words, it will — and is already beginning to — transform the world. According to the recent Zebra Retail Vision Study, 72% of retailers plan to reinvent their supply chains with real-time visibility enabled by automation, sensors and analytics. In fact, 65% of retailers plan to invest in inventory and supply chain automation by 2021. Every year, retailers are faced with new trends, new demands and new technologies. To keep improving the customer experience and moving the industry forward, retailers need to adapt. It’s a fast-paced industry, so those who don’t stay ahead of the game now will quickly fall behind. About the author: Mark Thomson, is retail and hospitality director,, EMEA, Zebra Technologies.

www.arabiansupplychain.com

LOGISTICS MIDDLE EAST AWARDS | 2017

NOMINATIONS NOW OPEN Nominations for the Logistics Middle East Awards are now open for a limited time.

TP Media Group, the publisher of Logistics Middle East and ArabianSupplyChain.com has announced that nominations are now open for the 2018 edition of the Logistics Middle East Awards, the biggest awards ceremony for the logistics and supply chain sector in the region. The awards were re-branded last year as the Logistics Middle East Awards to reflect the changing nature of the logistics sector in the GCC. Previously, the awards were held as the Supply Chain and Transport Awards (SCATAs). The SCATAs were first held in 2007 and since then have become an industry gold standard for the recognition of best practise, innovation and efficiency in the regional logistics industry. “During the eleven years that the awards have been held the industry has also evolved significantly, with the establishment of specialist 3PLs, technology providers and freight forwarders serving growing niches and specific sectors within the wider GCC economy,” says Shaun Ebelthite, editor of Logistics Middle East magazine, which hosts the awards. “The Logistics Middle East Awards therefore have a much sharper focus on the companies and individuals working for logistics and transport companies in the Middle East with a host of new categories.” The Logistics Middle East Awards will be www.arabiansupplychain.com

held in April 2018 and will give the region’s logistics sector a platform to recognise the best industry achievements from the past twelve months in specific sectors of the economy from FMCG through to automotive logistics. To nominate: http://www.arabiansupplychain.com/logistics-awards/ For table bookings and other enquiries, please contact: Sophie McHugh Direct:+971 4 444 3223 Email: sophie.mchugh@itp.com Teri Dunstan Table Sales Executive Direct: +971 4 444 3227 Email: teri.dunstan@itp.com LOGISTICS LOGISTICS MIDDLE MIDDLE EASTEAST | JANUARY | JUNE 2018 2013

FEATURE | SEPHORA MIDDLE EAST

RETAIL LOGISTICS EVOLUTION

Sephora has experienced tremendous growth in the Middle East market over the last five years and is now turning to innovative technological solutions to ensure its supply chain remains watertight against the oil-price storm.

Sandeep Walia, head of supply chain for Sephora Middle East.

Sadi Abdel Kariem Hassouneh, director, Middle East & Africa, Slimstock.

www.arabiansupplychain.com

JANUARY 2018 | LOGISTICS MIDDLE EAST

SEPHORA MIDDLE EAST | FEATURE

Sephora’s Dubai Mall store alone sees five times more sales than some of its entire national European markets.

f you fail to plan, then you’re planning to fail,” this was the comment with which Sandeep Walia, head of supply chain for Sephora Middle East, opened our interview about the retailer’s new partnership with inventory optimisation experts Slimstock. Logistics Middle East has a particular affection for pithy quotes, so we knew right away this was going to be an interesting story. When the high-end beauty retailer came to Slimstock, it was facing a unique challenge, according to Sadi Abdel Kariem Hassouneh, director, Middle East & Africa, Slimstock. “It had experienced extremely rapid growth over the last five years that would require new state of the art demand planning, forecasting and inventory optimising tools for end to end collaborative planning,” he told Logistics Middle East. “On top of this, it had also launched omnichannel retail operations, with two new online stores and a number of new stores across the region.” As a result, Sephora’s GCC supply chain operations had become more complex

and required an upgrade from a systems and process point of view. “We have several million SKU-Location combos and in the last five years that has increased five times over,” explains Sandeep Walia, head of supply chain for Sephora Middle East. “To put that in perspective, our Dubai Mall flagship store alone now sees five times more product sales than some of our national European markets.” To keep up with demand and ensure ‘on shelf availability’ of its products, Sephora had expanded its workforce and 3PL arrangements, but found this wasn’t providing optimal efficiency. “We had been using old-fashioned supply chain planning processes that were time consuming and labour intensive, they were also inaccurate and couldn’t be adapted to changing market dynamics,” says Walia. “Our teams currently spend a lot of time doing store transfers or express shipments to ensure that there is on-shelf availability, which

WHAT SLIM4 DOES SPECIFICALLY IS IT AUTOMATICALLY IMPORTS THE CUSTOMER’S DEMAND DATA AND CREATES A FORECAST USING THE APPROPRIATE ALGORITHM FOR EACH SPECIFIC DISTRIBUTION PATTERN, IT THEN OPTIMIZES THE STOCK LEVELS AND CREATES THE ORDER ADVICES,” SADI ABDEL KARIEM HASSOUNEH, DIRECTOR, MIDDLE EAST & AFRICA, SLIMSTOCK www.arabiansupplychain.com

increases supply chain costs, and we needed a partner that could help us overcome these issues.” So during the first half of last year, Sephora Middle East undertook a major market analysis of inventory partners, ultimately preferring Slimstock’s inventory experts and automated inventory optimising solution ‘Slim4’. “By investing in this planning technology we’ll be able to execute our logistics operation more efficiently,” says Walia. “Slim4 is an automated forecast and demand planning tool that utilises multiple algorithims to ensure the availability of every SKU at every store and distribution centre. This automated statistical modelling through Slim4 will enable us to cut down on supply chain costs by as much as 25%.” “What Slim4 does specifically is it imports the customer’s demand data and it sorts it out in terms of normal distribution, seasonal distribution, lumpy distribution, one-off spikes, and creates a forecast using the appropriate algorithm for each specific distribution pattern. The system then automatically calculates buffer stock, optimal stock on hand, plans for any events or promotions and for a retailer, the presentation stock as well. It also takes into account economic order quantities, so for example if the usual order volume for Chanel No. 5 is 200 units, but

IMPLEMENTATION OF SLIM4 IN A COMPLEX SUPPLY CHAIN According to Hassouneh, the implementation has been done over the course of the last three months of 2017, with Sephora planning to go live with Slim4 in early 2018. “Sephora found Slimstock from Gartner’s magic quadrant where we were labelled as a challenger because of, and I quote, ‘our domain expertise, excellent references and customer satisfaction’,” says Hassouneh. “Slimstock has done more than 100 system implementations in 2017 globally on time and within budget and its typically done in three phases, the first is developing a logistics blueprint of the client, the second is training and the third is optimisation so that Slim4 does exactly what they need it to.” Slimstock also has local hotlines that clients can use to get dedicated technical support as they come to grips with the system. “This is why we have 20 offices globally, we believe at our core that we need to be where our clients are if we are to provide the highest quality of products and service. Also, each region has its own specific supply chain issues and the more local our experts are, the greater their understanding of what the customer is going through.”

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | SEPHORA MIDDLE EAST

S T FA C T

25%

Sephora prioritises on shelf availability against overstock complications. Slim4 mitigates the chances of both.

EXPECTED COST SAVING FOR SEPHORA’S ME SUPPLY CHAIN WITH SLIM4.

there’s an economic order quantity of 400 pieces it will calculate that into the order form and when its time to order it will show up in the planners’ daily tasks.” “All of this automation leaves the user free to focus on what’s important, the unusual demand patterns and how to plan for them. This is what we call management by exceptions and this is where we know planners in the region, (like Sephora’s) need to be focusing their time,” adds Hassouneh. So what previously required a dedicated team of more than a dozen supply chain management professionals several hours to research and plan will now take just a few minutes with a few clicks of a button, according to Walia. “This solution is a good fit for Sephora’s operations because as a retailer we face three key challenges, that are often at odds,” he says. “First, we want to ensure maximum on shelf availability of products, so we want to eliminate out of stock, but we also want to avoid overstock, and at the same time we want to reduce express loads that are costly and free up supply chain staff for more value added tasks and not repetitive tasks that could be automated and be updated on a minute by minute basis.” Across the Middle East, he adds, the general tendency is to employ more labour when demand goes up, but this isn’t necessary if you have the right automated technologies. “It’s not just hands we need its brain as well,” he says. And it’s in Sephora’s ambitious expansion plans that 22

JANUARY 2018 | LOGISTICS MIDDLE EAST

OUT OF STOCK VERSUS OVER STOCK For a retailer the main focus is eliminating out of stock, or reducing it as much as possible because it carries a financial implication. According to Sandeep Walia, head of supply chain for Sephora Middle East, this is not only because the retailer loses revenue from that lost sale, but also because it undermines brand loyalty and could lead to a lost customer. “We want to keep availability at 99% and we can only do this costeffectively with Slim4, because what retailers do is they will over stock instead, which drives up logistics costs, but is the better of two evils. In addition, when in-store stock begins to run low earlier than expected, you have to pay for an express delivery, which increases transport costs.” So Slim4 will reduce the risk of out of stock by increasing availability and will also pick up on all the spikes in the past sales behaviour of a product to avoid overstock. It brings down Sephora’s supply chain costs on both ends.

www.arabiansupplychain.com

SEPHORA MIDDLE EAST | FEATURE

Slim4 will forecast demand for every product in every store.

ALL OF THIS AUTOMATION LEAVES THE USER FREE TO FOCUS ON WHAT’S IMPORTANT, THE UNUSUAL DEMAND PATTERNS AND HOW TO PLAN FOR THEM. THIS IS WHAT WE CALL MANAGEMENT BY EXCEPTIONS AND THIS IS WHERE WE KNOW PLANNERS IN THE REGION, (LIKE SEPHORA’S) NEED TO BE FOCUSING THEIR TIME,” SADI ABDEL KARIEM HASSOUNEH, DIRECTOR, MIDDLE EAST & AFRICA, SLIMSTOCK

During ‘seasonal’ demand spikes, accurate forecasting and supply chain planning is more important than ever.

the Slim4 solution really packs a punch. “If Sephora is opening a new store, such as their new outlet at La Mer Beach, they can simply copy the demand profile of a particular store, such as the JBR branch, and apply it to the new store,” says Hassouneh. “The system then creates the initial stock levels and then adapts to the unique demand dynamics of that location on a day-by-day basis.” According to Hassouneh, the system adapts daily for every SKU within every location. This data is then displayed on a user-friendly dashboard with all the calculated information, little flags where attention by the user is needed and tasks that the user is required to do broken down by day, week and month. The beauty behind these dashboards are that we can customise them to the user to ensure that within 2 or 3 clicks they can analyse their entire stock at any level whether it be article, brand, supplier, category, store, www.arabiansupplychain.com

country or even region.” For a retailer like Sephora, the most critical issue, the worst case scenario in any supply chain operation, is running out of stock of a particular product. “For a retailer the main focus is eliminating out of stock, or reducing it as much as possible because it carries a financial implication, not only in that you lose revenue from that lost sale, but also because it undermines brand loyalty and could lead to a lost customer,” explains Walia. “We want to keep availability at 99% and we can only do this cost effectively with Slim4, because what retailers do is they will over stock instead, which drives up logistics costs and has P&L implications, but is the better of two evils,” he says. “So Slim4 will reduce the risk of out of stock by increasing availability and will also pick up on all the spikes in the

past sales behaviour of a product to avoid overstock.” This attention to spikes in the past sales behaviour of a product is especially important in the UAE retail market because of the huge impact of Ramadan and ‘Saudi holidays’ demand phenomenon, adds Hassouneh. “During these holidays millions of Saudi Arabian nationals come to Dubai to shop,” he explains. “Retailers stock up for this because of the massive spike in demand and Slim4 will help Sephora efficiently plan for and automatically execute the boost in inventory requirements during these events and subsequently bring the levels down after the events, ensuring that Sephora customers visiting the store will find the items they need whilst Sephora keeps their total inventory costs down.” “It takes seasonality and ‘events’ like promotions into account and analyses our future needs based on our turnover statistics from previous events of that kind. Ramadan for instance is the major sales event in the Middle East, we see a surge in throughflow of products during the month and it builds up gradually over the course of several weeks,” says Walia. “Slim4 will tell us what needs to be shipped when to handle that demand.” The benefits for Sephora then are clear, but Logistics Middle East wanted to know how the retailer went about implementing such as huge change of processes into its regional supply chain operation. According to Walia, it wasn’t such a major change afterall, which is a major part of the reason they chose Slimstock over other technology partners. “The first thing we did last year was to get smart people on-board, supply chain experts with prior international planning experience in mature markets, who then built collaborative processes between departments and Slim4 will facilitate the execution of those new planning processes,” he says. “We chose Slim4 over five other solutions LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | SEPHORA MIDDLE EAST

Sandeep Walia, head of supply chain for Sephora Middle East.

Sadi Abdel Kariem, Hassouneh, director, Middle East & Africa, Slimstock.

because Slimstock was the only one that was truly flexible and willing it must be asked what security F A T to understand our constraints and particular needs. The other measures Slimstock has S C T FA partners were imposing their software on us, what I mean by in place, considering the sensitive nature, that is we would have to significantly adapt our processes to their system.” and vast volume, of SLIMSTOCK HAS According to Hassouneh, the implementation has been data involved. Sadi DONE 100 SYSTEM Abdel Kariem Hasdone over the course of the last three months of 2017, with Sephora planning to go live with Slim4 in early 2018. souneh, director, IMPLEMENTA“Sephora found Slimstock from Gartner’s magic quadrant Middle East & Africa, TIONS IN 2017 where we were labelled as a challenger because of, and Slimstock, was unGLOBALLY. I quote, ‘our domain expertise, excellent references and phased by the question. customer satisfaction’,” says Hassouneh. “Slimstock has done more “The Dutch Ministry of Defence than 100 system implementations in 2017 globally on time and within uses Slimstock,” he quips, and inbudget and its typically done in three phases, the first is developing a deed this does provide an indicalogistics blueprint of the client, the second is training and the third is tion of the integrity of the system, optimisation so that Slim4 does exactly what they need it to.” but according to Hassouneh, the Slimstock also has local hotlines that clients can use to get dedicated more important question is how technical support as they come to grips with the system. “This is why secure are the clients’ servers or we have 20 offices globally, we believe at our core that we need to be cloud partners? where our clients are if we are to provide the highest quality of products “The system can be installed and service. Also, each region has its own specific supply chain issues on the clients’ local sever, via the and the more local our experts are, the greater their understanding of customers cloud partner or Slimwhat the customer is going through.” stock can host the system for the In this globalised economy of IoT and constant cyberattacks, however, customer, but most clients install the system wherever their ERP enOUR TEAMS CURRENTLY SPEND A LOT vironment is, so it’s really a question of how secure their hosting OF TIME DOING STORE TRANSFERS OR environment is,” he says, adding EXPRESS SHIPMENTS TO ENSURE THAT that, despite the characteristic reTHERE IS ON-SHELF AVAILABILITY, WHICH luctance of the regional logistics INCREASES SUPPLY CHAIN COSTS, AND WE market to adopt new technologies, “now is the perfect time to be here NEEDED A PARTNER THAT COULD HELP AS in the Middle East.” OVERCOME THESE ISSUES,” Sandeep Walia, head of supply SANDEEP WALIA, HEAD OF SUPPLY CHAIN FOR chain for Sephora Middle East agrees. “The market has taken a hit SEPHORA MIDDLE EAST

100

JANUARY 2018 | LOGISTICS MIDDLE EAST

since the oil prices fell, but most companies are now looking seriously at optimisation and this is what Slimstock does. When you’re experiencing slowing growth and a potential cashflow problem, this is when you need to optimise your supply chain,” he says. “We’ve seen this happen in Europe and North America. When companies are first getting established they’re setting up warehouses and distribution networks, but these are logistics issues and supply chain management requires more than just logistics execution. “You need end-to-end demand planning and inventory optimising and this is what we’re seeing happening more in this market, this is where Slimstock comes in.” As Walia mentioned at the beginning of our interview, if you fail to plan, you’re planning to fail, and unlike many retailers, Sephora aims to transform its supply chain into a value adding partner that contributes positively to P&L. “We are deploying this software in Southeast Asia, but we’ll go live with it in the Middle East first and then in March next year we’ll begin integrating this system with our operations in Europe,” he says. www.arabiansupplychain.com

acme-world.com

75 - 2015 19

WAREHOUSE AUTOMATION We at Acme Group supply solutions and services to help you manage your in-house materials handling requirements. Whether you are an industrial enterprise, wholesaler, retailer or government institution, Acme Group has a solution that shall help you manage material flow along the entire supply chain. Acme provides the following solutions Supply chain automation solutions

Palletised goods storage solutions

AS/RS, Conveying systems

pallet racking, drive in, VNA

Order fulfillment solutions

Small parts storage solutions

pick by voice, pick by light, sorters

boltless shelving, plastic storage bins, totes

Robotic Material Handling

Multi-tier storage solutions

palletisation, pick and place

Platforms, mezzanine, 2/3 tier shelving

Man to Goods System

IT solutions

Cavalry Order Processing

Warehouse Management Systems

Experience the world of Acme Group at acme-experience.com

Call us today at 800 ACME or email us at wa@acme-world.com and start growing your business Tel (+971 4) 3769 000

customised solutions that work

CASE STUDY | LAST MILE

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

LAST MILE | CASE STUDY

ADAPT OR PERISH IN THE LAST MILE With e-commerce becoming the breakout sector of the logistics industry, many couriers and 3PLs are positioning to secure more business, but what is actually needed by the online retailers?

www.arabiansupplychain.com

LOGISTICS MIDDLE EAST | JANUARY 2018

CASE STUDY | LAST MILE

Wadi.com brought its last mile operations in-house because it struggled to find a reliable 3PL partner.

t’s not often that a press release gets Logistics Middle East excited. Inevitably, it’s a company doing what everyone else is doing and passing it off as new with some PR platitudes. The announcement of the launch of Dukkan Careem, however, was different. Here for the first time was an e-commerce platform claiming to be able to make deliveries within an hour of ordering. Not next-day, or even same-day, but an hour. It made us think of a comment made by Leena Khalil, cofounder of Mumzworld.com, at the recent Leaders in Logistics Conference 2017. “In more developed logistics markets there are 3PLs that talk about delivery KPIs in terms of minutes not hours, there is no one in the UAE or wider Middle East that is even thinking this way let alone practicing it,” she told delegates during our E-commerce Panel discussion. She was responding to a question from conference chairman Michael Stockdale, CEO of B2C Logistics regarding Amazon’s new one-hour and half-hour delivery windows, but it was part of a broader discussion around the need for express logistics companies in the region to adapt their services to the needs of online retailers. The primary challenge faced by e-commerce companies is in the last mile. According to statistics compiled by Invesp, at least

I’M LOOKING FOR COURIERS THAT ARE ABLE TO PUT OUR CUSTOMERS FIRST AND ADAPT TO THEIR NEEDS. OFTEN WHAT WE PRIORITISE (OUR CUSTOMETRS) IS NOT WHAT THE 3PL PRIORITISES” ANWAL SARFRAZ, CO-FOUNDER AND CEO OF WADI.COM 28

JANUARY 2018 | LOGISTICS MIDDLE EAST

Leena Khalil, co-founder of Mumzworld.com.

30% of all products ordered online are returned compared to only 8.89% bought in a physical store, and the vast majority of these returns occur within the first 24 hours, because a huge percentage of online purchases, as in physical stores, are impulse buys. So e-com platforms need to get their product to customers quickly. However, according to

Khalil, few express logistics companies in Dubai are able to do this. “There are 130 3PLs and express courier providers in Dubai, but there are only two types of solution,” she said. “We don’t want standard delivery packages, we want the courier to plan their schedules, their solutions around the needs of our consumer.” Kanwal Sarfraz, co-founder and CEO of Wadi.com, agreed. “I’m looking for couriers that are www.arabiansupplychain.com

LAST MILE | CASE STUDY

The E-commerce Panel at the Leaders in Logistics Conference, from left: conference chairman Michael Stockdale, CEO, B2C Logistics; Anass Boumediene, co-founder and coCEO of Eyewa; Leena Khalil, co-founder of Mumzworld.com; Kanwal Sarfraz, cofounder and CEO of Wadi.com.

able to put our customers first and adapt to their needs,” she said, adding that because of Wadi.com’s focus on ‘cash on delivery’ (COD), many 3PLs and express logistics providers don’t want to prioritise its clients. “What we prioritise is not what our partners prioritise. We do cash on delivery, which leads to a lot of returns, and our partners weren’t interested in doing delivery, we’d get complaints about our partners not delivering on time, during Ramadan especially this became a major problem.” It was because of these issues that Wadi.com brought its last mile operations in-house. “Consumers don’t mind waiting for a product bought online, but if you say it will be delivered in five days, or six days, make sure it is delivered in that time frame,” she added. “Failure to meet these commitments is what undermines consumer confidence in a particular e-commerce platform, which is what leads us to turn away from the courier companies that can’t give us the reliability we need.” Having established its in-house delivery operations, and grown considerably to become the largest online retailer in the region after SOUQ.com, Wadi.com is now being approached by couriers that want its business once more. Handling more than one million SKUs per month, with a fleet of more than 150 delivery vans, Kanwal acknowledges that they will need to outsource more, but they’re extremely selective, preferring to work with LSPs that know Wadi.com’s core markets inside out. “We interview LSPs a lot and they’re all super ambitions, but they’re extending their reach too far and wide and don’t specialize in a particular area,” Khalil agreed. “I’d rather have a super specialist courier company that only operates in Dubai, one in Abu Dhabi, one in Bahrain etc. I don’t like being told about how they’re going to be in ten countries within a year, because that says to me www.arabiansupplychain.com

Mahmoud Al Bastaki, CEO of Dubai Trade.

that you’re not mastering your core location first.” For Anass Boumediene, cofounder and co-CEO of Eyewa. com, this specialisation in the market, knowing how to find people in that market, is ex-

tremely important, especially given the nature of returns in COD. “When a return occurs something went wrong in one of the three stages of the process, either for the e-com itself, the consumer or the 3PL,” he said during the

LOGISTICS MIDDLE EAST | JANUARY 2018

CASE STUDY | LAST MILE

Dukkan Careem delivered Logistics Middle East’s order 24 hours later than they’d promised, but still faster than any other e-com currently operating in the UAE.

S T FA C T

$20BN THE MIDDLE EAST E-COMMERCE SECTOR WILL DOUBLE IN VALUE BETWEEN NOW AND 2020.

same panel at Leaders in Logistics Conference 2017. “If you deliver fast you will have less returns, this is especially the case in cash on delivery because you’re asking the customer to hand over money at the moment of delivery, when the impulse to buy may have passed. This is why speed and convenience is so important.” “We have enough data online to be able to pinpoint a consumer even without them providing the correct address, so if couriers used technology correctly they’d be able to crack the market and survive in the new digital world,” adds Khalil. Going back to Dukkan Careem, they have decided from the outset to operate their last mile in-house, using the Careem infrastructure and network itself. When Logistics Middle East ordered from the website at 3.45pm in the afternoon, we were given a 4pm to 7pm delivery slot for the same day, suggesting that Dukkan may be giving itself some leeway with the ‘within the hour’ claim. However, by 6.30pm the delivery had still not come, and we received a call to inform us the delivery would be made the following day. This failure to follow through was handled well because it was done in-house. There are online retailers using couriers whose products are simply not delivered for certain customers, and no feedback is given because the retailer isn’t aware of it and the 3PL doesn’t inform them. The Middle East e-commerce sector may be small compared to the rest of the world, and possibly in need of greater consolidation, (it is worth less on an annual basis than the entire turnover of Amazon), perhaps leading 3PLs to not take small e-com platforms seriously, but this mindset needs to change,

WE HAVE ENOUGH DATA ONLINE TO BE ABLE TO PINPOINT A CONSUMER, IF COURIERS USED TECHNOLOGY CORRECTLY THEY’D BE ABLE TO CRACK THE MARKET AND SURVIVE IN THE NEW DIGITAL WORLD” LEENA KHALIL, CO-FOUNDER OF MUMZWORLD.COM 30

JANUARY 2018 | LOGISTICS MIDDLE EAST

Kanwal Sarfraz, co-founder and CEO of Wadi.com.

because the market is growing. It is expected to reach USD 20 billion in 2020, more than double the USD 10-billion forecast for the coming year. Mahmoud Al Bastaki, CEO of Dubai Trade, giving a keynote speech at the Leaders in Logistics Conference 2017, said that e-commerce was changing the face of the logistics sector. “E-commerce is changing our world, retailers have been pushed to go online, they never considered this before,” he said. “The consumers of the future want us to shift our logistics in a new direction. SOUQ.com was acquired by

Anass Boumediene, co-founder and coCEO of Eyewa.

Amazon and was born in Dubai, we’re very proud of this. There is Noon.com as well and their ambition is inspiring. They’re talking about delivery within a few hours of purchase. E-com is pushing logistics in ways that were unimaginable a few years ago.” He issued a warning for industry though, that in this time of change, with customers, and therefore the e-commerce platforms that sell to them, changing their approach and becoming more demanding, couriers and LSPs need to keep up. “We need to keep changing, if we don’t continue to evolve and adapt, we will become irrelevant,” he said. www.arabiansupplychain.com

1 MILLION SQ FT OF WAREHOUSING SPACE

COLD STORAGE OPEN YARD

CHEMICAL (TEMPERATURE CONTROLLED) (DG & NON-DG) BULK & RACK TEMPERATURE CONTROL

BATTERY CHARGING

CONTACT US INDU MARITIME & LOGISTICS JAFZA, United Arab Emirates Telephone: +9714 - 8860141 Fax: +9714-8860142 Email: info@indulogistics.com

PREVIEW | LOGISTICS ME AWARDS

TIME TO

NOMINATE Nominations now open for the 2018 Logistics Middle East Awards.

he 2017 edition of the Logistics Middle East Awards saw significant growth in nominations and attendees, reflecting the importance of the only awards event for the logistics and supply chain industries in the region. Hosted by Logistics Middle East magazine, the awards reflected the developments and progress made by a diverse array of logistics players and stakeholders during the course of the preceding year. In 2017 for the first time the awards provided an opportunity for logistics end users to nominate. As a result, we had Loreal, Swiss Watch Group, Vale Oman and Nestle among the finalists, all of which run specialist distribution networks in cosmetics, retail, mining and fast moving consumer goods. Below is our list of winners in the 2017 Logistics Middle East Awards, be sure to nominate in 2018 if you’d like to stand among these winners.

•FMCG Supply Chain Management of the Year – GAC Group •Pharmaceutical Supply Chain Management of the Year – Emirates SkyPharma •Manufacturing Supply Chain Management of the Year – Vale Oman •Retail Supply Chain Management of the Year – L’Oreal •Automotive Supply Chain Management of the Year – Al Futtaim Logistics •Luxury Supply Chain Man-

agement of the Year – Swiss Watch Group •Corporate Social Responsibility of the Year – UPS •Technology Implementation of the Year – Gulftainer •Bespoke Logistics Project of the Year – AlMajdouie De Rijke Logistics •Express Logistics Provider of the Year – FedEx Express •Supply Chain Hub of the Year – Jebel Ali Port (DP World)

2017 Awards Winners •Energy Supply Chain Management of the Year – Neutral Fuels •Project Logistics Manager of the Year – Walid Khoury, managing director, ALS Logistics Solutions 32

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

LOGISTICS ME AWARDS | PREVIEW

BOOK A TABLE AT THE LOGISTICS MIDDLE EAST AWARDS

The winner of FMCG Supply Chain Management of the Year - GAC Group.

If you’d like to ensure you don’t miss the biggest awards evening of the regional logistics calendar, contact Teri

Dunstan, tables sales executive, ITP. Email: teri.dunstan@itp.com Telephone: +971 4 444 3227

Technology Implementation of the Year went to Gulftainer.

Winner of Retail Supply Chain Management of the Year – L’Oreal.

Bespoke Logistics Project of the Year goes to AlMajdouie De Rijke Logistics.

The winner of Automotive Supply Chain Management of the Year – Al Futtaim Logistics.

Express Logistics Provider of the Year is FedEx Express.

NOMINATE IN THE 2018 LOGISTICS MIDDLE EAST AWARDS If you’d like to see your company added to this list, contact Sophie McHugh, events man-

www.arabiansupplychain.com

ager at ITP. Email: sophie.mchugh@itp.com Telephone: +971 4 444 3223

The award for Corporate Social Responsibility of the Year went to UPS.

Winner of Retail Supply Chain Management of the Year – L’Oreal.

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | SUSTAINABILITY

UAE LOGISTICS HUBS HARNESS THE SUN DP World and RSA Logistics are the latest in a growing list of logistics companies in the UAE seeking to use solar energy to reduce costs and carbon footprint.

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

SUSTAINABILITY | FEATURE

BY RAISING AWARENESS OF RENEWABLE ENERGY, WE ARE WORKING TOWARDS A CARBON NEUTRAL FUTURE FOR THE UAE. THIS PROJECT DEMONSTRATES THE SCALE OF DP WORLD’S AMBITION TO BE A WORLD LEADER IN SUSTAINABILITY,” SULTAN AHMED BIN SULAYEM, DP WORLD GROUP CHAIRMAN AND CEO

www.arabiansupplychain.com

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | SUSTAINABILITY

uringthesummer, the United Arab Emirates is one of the hottest countries in the world, while during the winter, it has one of the most temperate climates in the world. This makes it a winter tourism hub, as well as one of the most challenging environments for cold chain logistics during the summer. But, the challenges posed by the sun are also an opportunity, because that heat can be harnessed and used to power the electricity grid. The Dubai Clean Energy Strategy aims to provide 7 percent of Dubai’s energy from renewable sources by 2020. It will increase this target to 25 percent by 2030 and 75 percent by 2050. Incidentally, 2050 is the same decade that the UAE plans to land men on Mars. Both of these ambitions may seem fantastical, but just over 30 years ago, the plan for Dubai to become the city it is today seemed equally unrealistic, and major logistics companies across the industry are getting behind the Dubai Clean Energy Strategy. Aramex led the charge way back in 2010 when it installed solar-powered lights at its warehouse facilities in the UAE, becoming the first company in the Middle East to do so. The project has saved an equivalent of three million watts of power and reduced carbon emissions by 26 metric tonnes annually. Then in 2016 DP World announced that it would turn Jebel Ali Freezone

The Dubai Clean Energy Strategy aims to provide 7 percent of Dubai’s energy from renewable sources by 2020.

S T FA C T

88,000

JAFZA IS HAVING 88,000 SOLAR PANELS INSTALLED ACROSS THE FREEZONE.

into the largest solar energy plant in the Middle East. The plan involves the installation of 88,000 solar panels in three phases that will eventually provide more than half of the energy requirements of the entire freezone, which is roughly half the size of the Republic of Malta and home to more than 7,000 companies. Phase One will be completed during the first half of 2018, and is expected to

Warehouse roofs have a uniquely flat design that lends itself to solar plant installation.

SIRAJPOWER’S SOLAR PLANS SirajPower is a joint venture between Akuo Energy of France and Corys Environment of Dubai. It started operations on its first project in Dubai in January 2016, and since then has secured a number of large and prestigious projects, all with blue chip names in the region. Siraj has also set out to finance 50 megawatts of solar rooftop projects over the next five years in Dubai as part of the Shams initiative. The project developed by SirajPower for RSA Global is expected to generate 1.1MW, which is roughly enough to provide power for around 1,000 homes. “This example of providing cheaper and cleaner electricity is a clear opportunity for RSA Global but also for all industrial and commercial businesses in general,” says David Auriau, director at SirajPower. ”Our commitment is to innovate to deliver unique and tailored solar energy solutions together with custom financing options to suit both commercial and industrial needs.”

JANUARY 2018 | LOGISTICS MIDDLE EAST

IT IS NEVER EASY TO BE THE FIRST. WE WERE THE FIRST COMPANY TO COME AND SET UP IN DUBAI SOUTH AND WE TAKE PRIDE IN OVERCOMING CHALLENGES AND ADOPTING NEW TECHNOLOGIES QUICKLY,” ABHISHEK SHAH, CO-FOUNDER AND GROUP CEO OF RSA GLOBAL www.arabiansupplychain.com

SUSTAINABILITY | FEATURE

Sultan Ahmed Bin Sulayem, DP World group chairman and CEO.

S T FA C T

50%

DP WORLD WANTS HALF OF JAFZA’S ENERGY NEEDS TO BE MET BY SOLAR ENERGY BY 2020.

group chairman and CEO. “We strive to integrate sustainability into everything we do and I believe it is essential to modern business practice.” What’s interesting, however, is that DP World is not alone in its efforts to reduce the carbon footprint of Jafza. Many of its tenants are following Aramex’s lead and joining the march to energy self-sufficiency. In

August 2017, AMI Middle East launched a 615 kWh solar PV plant on the roof of its logistics hub in Jebel Ali Freezone, becoming the first freight forwarder in the UAE to use solar energy on this scale. The solar rooftop produces almost enough energy every hour to provide what the average US home consumes in a month (897 kWh per month according to the US Energy Information Administration). Over the course of a year, the solar PV system will generate approximately 950,628 kWh and reduce CO2 emis-

ALEC ENERGY READY FOR SOLAR REVOLUTION

provide 40% of the total energy consumption of the freezone. After phase one is completed, phases two and three will install further solar installations in Jafza and Mina Rashid, with more than half of the freezone’s energy needs expected to be met by solar panels by 2020. “By raising awareness of renewable energy, we are working towards a carbon neutral future for the UAE. This project demonstrates the scale of DP World’s ambition to be a world leader in sustainability and we look forward to sharing the learnings across our business and also with our stakeholders,” says Sultan Ahmed Bin Sulayem, DP World www.arabiansupplychain.com

ALEC Energy is a business unit within ALEC, a large UAEbased construction company. ALEC Energy was established mid-2015 to address the DEWA SHAMS Dubai Rooftop Solar Programme. “This Net Metering Concept, which allows the customer to connect a solar plant to the DEWA grid, has the benefit of both reducing your energy bills whilst securing consistency of supply and reducing your carbon footprint,” says James Stewart, general manager, ALEC Energy. This is especially applicable to large industrial buildings and warehouses as they generally have significant electricity requirements and large flat roofs that make it straightforward to install a renewable energy solar plant. “This enables them to reduce their DEWA electricity costs by typically 50% to 70% if they opt for investing in the plant,” Stewart adds

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | SUSTAINABILITY

JAFZA’s ultimate plan is to use solar plants to achieve energy neutrality.

S T FA C T

80%

MORE THAN 80% OF JAFZA’S LAND AREA IS TAKEN BY BY WAREHOUSES WITH FLAT ROOFS.

sions by 668 tons annually. RSA Global completed a similar project in December, but this time in Dubai Logistics City. The project developed by SirajPower is expected to generate 1.1MW, which is roughly enough to provide power for around 1,000 homes, or 90% of the warehouse’s electricity needs. The system has a lifespan of 15 year, which means that it will only need to be replaced after 2030, when Dubai hopes to get 25% of its energy from such sources. “In line with our core purpose of solving challenges for a better tomorrow, RSA Global is delighted to have achieved such an important milestone,” said Abhishek Shah, co-founder and group CEO of RSA Global. “Together with SirajPower and all our partners, we believe in the importance of protecting our environment. We hope this will open the door for many others to follow in our first steps to contribute to the ambitious target set by the UAE leadership with the launch of the UAE Energy Strategy 2050 to increase clean energy use by 50%,” he added. David Auriau, director at SirajPower says that installation such as these are attracting growing interest from industrial and logistics companies. “This example of providing cheaper and cleaner electricity is a clear opportunity for RSA Global but also for all industrial and commercial businesses in general,” he said. “At SirajPower, our commitment is to innovate to deliver unique and tailored solar energy solutions together with custom financing options to suit both commercial and industrial needs. We share with our clients, partners and Dubai’s Authority a common mission, which is to develop renewable

IT’S ONE OF THE VERY FEW WIN-WIN BUSINESS ARRANGEMENTS AROUND. THE CUSTOMER SAVES ON THEIR UTILITY BILLS, GETS ALL THE BENEFITS OF A FULLY MAINTAINED RENEWABLE ENERGY PLANT AND CONTRACTS WITH A LEADER IN CONSTRUCTION IN THE UAE,” JAMES STEWART, GENERAL MANAGER, ALEC ENERGY

JANUARY 2018 | LOGISTICS MIDDLE EAST

energy sources as we believe in its true and immense potential for the future of the Emirate.” The solar rooftop was installed by SirajPower under a fully financed leasing scheme that is being offered in the region by a number of solar power specialists, including Yellow Door Energy, which installed AMI’s solar roof, and Alec Energy. The ‘deal’ requires no upfront investment or operational obligations from the logistics company on whose roof the

James Stewart, general manager, ALEC Energy.

solar panels are installed. Essentially, the warehouse operator surrenders their roof to the energy provider and then rents it back on a 15 to 20 year lease in order to utilise the power produced. “The customer warehouse leases it from us at a cost that is discounted to what they would normally have to pay DEWA for the energy produced,” explains James Stewart, general manager, ALEC Energy. “The customer only needs to appoint us (at no cost) to get the DEWA NOC, review and sign the www.arabiansupplychain.com

SUSTAINABILITY | FEATURE

RSA Global’s solar roof will generate 90% of the warehouse’s energy needs.

S T FA C T

1000

THE RSA PROJECT IS EXPECTED TO GENERATE 1.1MW: ROUGHLY ENOUGH POWER FOR 1,000 HOMES.

lease, then sit back and reap the long term benefits of cheaper energy.” According to Stewart, this is the more popular of the two options available because it costs the logistics company nothing in terms of capital outlay. The alternative is for the warehouse owner to appoint an EPC contractor to design and install the system. The customer pays fully for this, appoints an Operation & Maintenance Contractor over the lifetime of the plant, and then reaps the full benefit of all electricity produced. Either way, the warehouse owner benefits from the renewable energy, but with the first option, they do so without any capital expenditure. “It’s one of the very few win-win business arrangements around. The customer saves on their utility bills, gets all the benefits of a fully maintained renewable energy plant, contributes to the government SHAMS Dubai Programme and contracts with a leader in construction in the UAE,” says Stewart. And through other initiatives to cut energy requirements, the warehouse could in fact become energy neutral or even a net-producer of electricity, which can then be fed back into the DEWA system, producing money for the company. “This Net Metering Concept, which allows the customer to connect a solar plant to the DEWA grid, has the benefit of both reducing your energy bills whilst securing consistency of supply and reducing your carbon footprint,” says Stewart. The concept is seeing rapid adoption by warehouse operators because of the unique design of a warehouse roof that makes it readybuilt for solar panel installation. “The initiative is especially applicable to large industrial buildings and warehouses as they generally have significant electricity requirements and large flat roofs that make it straightforward to install a renewable energy solar plant,” says Stewart. Pivoting back to Jebel Ali Freezone, with more than 80% of the total land area taken up by warehouses (according to Ibrahim Al Janahi, the deputy chief executive of Jafza), the opportunities for the use of solar energy become clear. If warehouses can reduce their reliance on DEWA by 70 to 90 percent, and if DP World’s freezone-wide solar plant simultaneously produces half of the energy requirements of all tenants by 2020, the freezone, which already accounts for more than 7 percent of all employment in Dubai and facilitates a quarter of the GDP, may in fact become an energy producer. www.arabiansupplychain.com

Abhishek Shah, cofounder and group CEO of RSA Global

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | STORAGE & RACKING

RACKING FOCUS: MULTI-TIER

There are seven main racking solutions used by warehouse operators across the industry, here we take an in-depth look at multi-tier. 40

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

STORAGE & RACKING | FEATURE

www.arabiansupplychain.com

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | STORAGE & RACKING

here are a wide range of storage solutions available for your warehouse and they’re the key part of the warehouse that make it economically viable in terms of volume and through flow. The basic concept of a warehouse was pioneered by the Roman Empire and in the centuries since, the base model has remained unchanged. It is still a large rectangular building filled with goods that cater to the needs of a particular product. They’ve gotten bigger yes, and a lot more goods can be stored on a per cubic metre basis, and that’s principally because of the advancements made in racking design in the 20th century. Warehouse volume utilisation has increased exponentially over the last several decades because of it. “There are various racking designs to provide the optimum space utilisation and the greatest number of pallet positions. Space is money, especially in the UAE, so optimal design is extremely important,” says Kannan Chandrasekaran, divisional sales manager, UAE, Kanoo Machinery, which provides complete warehouse operations packages. Space is money, that is the most important issue for any warehouse operator and it has to be matched to the needs of the warehouse (an e-com platform for example will need storage bins rather than pallets, an FMCG 3PL

Home Centre opted for multi-tier racking from SPAN in its new warehouse in Dubai South.

HOME CENTRE’S RACKING

S T FA C T

45,625

SPAN INSTALLED A HUGE MULTI-TIER RACKING SYSTEM ENCOMPASSING A 45,625 SQM STORAGE AREA.

SPAN is a solution provider of systems and equipment for warehousing and supply chain.

In Home Centre’s new DC in Dubai South, SPAN installed a huge multi-tier racking system encompassing a 45,625 sqm storage area. It provides a total volume of 57,547 cbm, with a typical single compartment size of 3,300 mm wide, 1,050 mm deep, and 1,200 mm high. There is a 13.55 meter ground plus four level multi-tier mezzanine. It consistes of standard racking bays with intermediate storage levels along with mezzanine floors and accessories. The mezzanine system is 13,550 mm high, on a footprint area of 9,125 sqm. “We have a great relationship with Landmark Group regionally, and have partnered with them and executed several projects in the past that are quite similar to this one,” says Nadim Al Fakih, head of regional accounts, SPAN. “I believe that with our expertise and knowledge, we were able to entirely understand Landmark’s/ Home Centre’s needs and operation, as well as provide reliable material, service and execution; in terms of our products, system engineering, consideration of the highest safety standards and our in-house installation team.”

JANUARY 2018 | LOGISTICS MIDDLE EAST

www.arabiansupplychain.com

STORAGE & RACKING | FEATURE

for distribution centres, supply chains, and workplace requirements. SPAN recently completed the racking installation for Home Centre’s new Distribution Centre in Dubai South, a major project that will make the home retail giant’s GCC logistics network more dynamic. Home Centre opted for a multi-tier racking solution. “In the case of Home Centre DWC, there are a lot of mid-sized and heavy SKUs. Thus, the racking system is scaled and tailored to Home Centre’s exact requirements,” Fakih says. “The sizes of the compartments are designed to fit Home Centre’s products. The mezzanine floors, aisle directions and aisle sizes are designed to increase efficiency and throughput considering Home Centre’s operational requirements.” Multi-tier racking then game Home Centre the best possible balance between making use of volume, while still enabling efficient operation of the warehouse. “Multi-tier mezzanines

are designed to maximize the use of available height in non-palletized goods storage operations, which are generally labour intensive and have a high rate of piece-picking. Unlike conventional steel structures, multitier mezzanines can be easily modified, extended or relocated,” Fakih adds. The surge in e-commerce and omni-channel distribution is also driving the need for better space utilization and organization in warehouses and DCs in the region. For Ulugbek Yuldashev, the founder and CEO of the UAE e-commerce platform Awok.com, the focus in the design of his fulfilment centre has been on finding a way to reconcile these two contradictory needs. “We’ve gone higher to maximise volume in the fulfilment centre, we’re using multi-level racking because we want to use as much of the space as possible,” he says. But, we’ve also designed the racking so that every level is walkable using a PDA, with each item being picked manually. We do this because each order contains multiple products from different locations within the centre.”

S T FA C T

30,000

TOTAL NUMBER OF INDIVIDUAL PRODUCT POSITIONS IN AWOK. COM’S DUBAI WAREHOUSE.

will need selective racking for palletised goods etc). It’s in the grey area between the need to maximise volume, while enabling efficient through flow of goods, that the right racking solution comes into its own because it minimises the degree to which operators have to compromise. “The main challenge for every project is to provide an efficient design that not only maximizes the storage capacity of the available space but also offers the best operational flow. The storage compartments must be a good fit for the products’ size, weight and quantity,” explains Nadim Al Fakih, head of regional accounts, SPAN; a leading consultant and regional solution provider of systems and equipment

THERE ARE VARIOUS RACKING DESIGNS TO PROVIDE THE OPTIMUM SPACE UTILISATION AND THE GREATEST NUMBER OF PALLET POSITIONS. SPACE IS MONEY, ESPECIALLY IN THE UAE, SO OPTIMAL DESIGN IS EXTREMELY IMPORTANT,” KANNAN CHANDRASEKARAN,

Ulugbek Yuldashev, founder and CEO of UAE e-commerce platform Awok.com.

DIVISIONAL SALES MANAGER, UAE, KANOO MACHINERY

www.arabiansupplychain.com

LOGISTICS MIDDLE EAST | JANUARY 2018

FEATURE | STORAGE & RACKING

The SPAN team at Materials Handling Middle East 2017.

The products Home Centre sells come in all shapes and sizes, making multi-tier the best option.

THE MAIN CHALLENGE FOR EVERY PROJECT IS TO PROVIDE AN EFFICIENT DESIGN THAT NOT ONLY MAXIMIZES THE STORAGE CAPACITY OF THE AVAILABLE SPACE BUT ALSO OFFERS THE BEST OPERATIONAL FLOW. THE STORAGE COMPARTMENTS MUST BE A GOOD FIT FOR THE PRODUCTS’ NADIM AL FAKIH, HEAD OF REGIONAL ACCOUNTS, SPAN

SELECTIVE PALLET RACKING This is the most basic and most common storage system used in warehouses. With selective racking, every pallet you have is accessible at all times. Giving you immediate access to all stored products, this system is very fast to use and is great when you have a huge range of different products that you need to access regularly.

DOUBLE DEEP PALLET RACKING If you’re looking to maximise storage capacity in limited space, then double deep racking could be the solution for you. In this system, pallets are stored two deep at each access point, so front row pallets will need to be moved out of the way in order to access the back row. By reducing your aisle-to-rack ratio, you’ll gain space and stock rotation will still be possible. To use this system, you’ll need a special reach forklift truck, and the double-deep system does increase picking times. 44

JANUARY 2018 | LOGISTICS MIDDLE EAST

DRIVE-IN PALLET RACKS Also known as drive-through racking, this system is very high density, providing excellent storage capacity. A drive-in rack has no aisles, saving a significant amount of space. Pallets are stored in a continuous block, using a last in first out principle. This system is operated with standard forklifts and is good for non-perishable items and fast-moving stock.

NARROW AISLE PALLET RACKING Narrow aisle racks provide you with highdensity storage up to a height of 13m, where pallets are manoeuvred using turret trucks and automatic stacker cranes. The benefit of this system is that it gives you immediate access to all items while maximising storage capacity with its very limited aisle space.

CANTILEVER RACKS This racking style is designed for use with items of varying lengths, shapes and sizes. When your products can’t be stored on standard pallets, a cantilever rack allows you to carry a wide range of stock without needing multiple racking systems to accommodate them. Cantilever systems can reach great heights, giving you high storage density per metre on the ground and making the best use of available space.

LIVE STORAGE RACKS These racks use gravity to gently roll cartons or pallets to the pick face of the system, working on a first-in-first-out basis. In live storage areas, forklifts are physically separated from pedestrians to increase worker safety and efficiency. Using this method means stock rotation is automatic, so it’s great for perishable items.

www.arabiansupplychain.com

DOWNLOAD OR UPDATE THE APP NOW ON YOUR IOS DEVICE

info@storall.ae | www.storall.ae

SERVICES: STORAGE SOLUTIONS WAREHOUSING & LOGISTICS SELF STORAGE PACKING & REMOVALS ANCILLARY SERVICES

AND MUCH MORE!

Tel: +971 4 880 3644 | Fax: +971 4 880 3643 Jebel Ali Industrial Area 2, P.O. Box 79775, Dubai (UAE)

PRODUCTS | WHATâ&#x20AC;&#x2122;S NEW

PRODUCTS Logistics Middle East reviews the latest gadgets, essential kit and product innovations making an impact in the GCC supply chain market BEUMER BAG-IN-BAG SYSTEM

01 EASY INTEGRATION Bagging, film packaging and palletising can be easily and seamlessly combined in a continuous production line.

02 HIGH CAPACITY The BEUMER bag-in-bag is designed for inline packers with a capacity of up to 800 bags per hour.

03 The new BEUME R bag-inbag system qu ick ly and reliably packs filled paper bags individually or in groups with a weather-resistant plastic film. This protects the contents against moisture, dust, insects and other environmental inf luences during storage and transport. The BEUMER bagin-bag is easy to integrate into existing filling and packaging systems. The impermeable film keeps dust from escaping from the filled 48

JANUARY 2018 | LOGISTICS MIDDLE EAST

bags, and it prevents product losses. The films have thicknesses of 30 to 100 microns, so material costs are low. The outer packaging in the paper bags does not require an intermediate layer made of PE, a fact which also cuts costs and increases filling performance. The highly efficient system is so reliable that ultrasonic welding of the bags is usually not necessary. The BEUMER bag-in-bag, offered to customers in cooperation with Tentoma, has a wide range of uses. For the BEUMER Group the focus is on packaging of bags,

but the technology is also suitable for goods with lengths of up to eight metres and product circumferences of 600 to approximately 5,600 millimetres. Thus the system can also be used for bar stock, insulation materials or consumer goods. Users can integrate it seamlessly into their work processes by simply installing it in existing feeding line. Thus the BEUMER bag-inbag supplements the BEUMER fillpac inline packer and the BEUMER paletpac high-performance palletiser.

MULTIPLE APPLICATIONS The flexible BEUMER system can be configured for three different applications: a semiautomatic insular solution, a fully automatic depalletising, packaging and palletising line, or an integrated solution in which machines can be switched on individually.

www.arabiansupplychain.com

DO YOU WANT TO SHOWCASE YOUR PRODUCT HERE? E-mail your product information to: shaun.ebelthite@itp.com

PRODUCT FOCUS

WHAT’S NEW | PRODUCTS

HÖRMANN HTL 2

Hörmann’s HTL 2 telescopic lip dock leveller allows the retailer’s pallets to be situated at the end of the vehicle’s loading surface, thus providing a better use of loading space. The telescopic lip can be extended and retracted in a targeted manner via separate control buttons, and can be easily controlled on the loading surface.

BEUMER PALETPAC

With the layer palletiser series Beumer paletpac, the intralogistics specialist supplies high-capacity machines, which stack bags filled with bulk material on pallets gently and exactly layer by layer. Multiple pallet loads created with the Beumer paletpac can even be stacked one on top of the other to save storage space. www.arabiansupplychain.com

TRUCKING

TSL 1128 READER

The new 1128 Bluetooth UHF RFID Reader is designed to read and write to EPC Class 1 Gen 2 (ISO18000-6C) UHF transponders and communicate with a variety of host devices via Bluetooth wireless technology. With its Impinj R2000 core and range of interchangeable high performance antennas it gives the user high levels of flexibility.

PRORUNNER MK5 VERTICAL CONVEYOR

Guaranteeing an uninterrupted product flow from one level to another, this conveyor has a patented cam follower system which provides shock-free movement, and keeping products horizontal. This heavy duty, welldesigned vertical conveyor is also available in stainless steel and is known for its reliability, low maintenance and longevity.

Trucking Wheelblocker Horma nn ha s launched Wheelblocker – a new piece of safety equipment that locks lorries into the loading bay, designed to prevent workplace transport injuries that usually happen during the unloading and loading process. The manuallyoperated system locks lorries and trailers into place. The wheel-blocking system MWB, effectively prevents the lorry from leaving the safe docking position, thus increasing safety at the loading bay. The system has a rotating arm lock, fold-out support pedestal and operating lever to detect the working position of the wheels. An advanced LED sensor signals when vehicle has been secured and the status of the lorry is displayed in the hall along with a key switch that provides an override function for swap containers. Another convenient feature is that MWB carriage does not need to be moved to the end-of-travel position after release. When the arm is folded in, it can move freely and can simply be repositioned for the next vehicle. The system is suitable for all common lorries.

LOGISTICS MIDDLE EAST | JANUARY 2018

THE BACK PAGE | FIVE MINUTE S WITH ...

F I V E

M I N U T E S

W I T H . . .

Patrick Murphy, partner, Clyde & Co, specialist in commercial disputes and maritime arbitration WHAT DOES THE EMIRATES MARITIME ARBITRATION CENTRE MEAN FOR THE LOCAL FREIGHT FORWARDING INDUSTRY? It plugs a gap, because you have the big maritime arbitration centres in Singapore, Hong Kong, Hamburg and London with nothing in between continental Europe and the Far East and this is one of the fastest growing maritime centres. There also aren’t any specifically maritime focused arbitration centres out here. It takes time to get going because you need to get people referring to EMAC in their contracts and then you need to get the disputes coming through so realistically it will be years before there is a proper body of cases going through, but you have to start somewhere. What you also need is a large base of expert witnesses and arbitrators and there isn’t that depth here yet, but that will grow with EMAC. This is a very important step in the process of building a modern maritime arbitration centre to service the needs of the Middle East. WHY IS THIS KIND OF LOCAL ARBITRATION CENTRE IMPORTANT FOR THE LOGISTICS INDUSTRY? Experience shows that a local arbitration centre is important to people who have disputes that need resolving. When clusters have been set up in London or Paris or Singapore and you have arbitration centres focused there, you get a critical mass of people using those centres, some of it is to do with time zones, some of it is to do with local culture or language, but it is important for the ultimate users that they have a local base. It has proven to be important here with other arbitration centres such as DIAC and the DIFC LCIA centre. People use them once they’re established because local is important, but another aspect to this is that industry experience is important. We’ve seen in other parts of the world where there is a maritime focused arbitration centre that the maritime industry tends to use those specialist centre for their dispute resolution. In London it has long been accepted that arbitration is a go-to means of resolving disputes by the maritime industry, it isn’t something that is seen as a last resort, it’s a normal incident of commercial life. So the maritime industry has always looked to arbitration as a sensible way of resolving disputes, and they also value the input of industry specialists to arbitrate on these matters. So EMAC brings these two aspects together. HOW WILL JURISDICTION BE DECIDED FOR EMAC IN TERMS OF CARGO BEING IMPORTED OR EXPORTED INTERNATIONALLY?

JANUARY 2018 | LOGISTICS MIDDLE EAST

PATRICK MURPHY, partner, Clyde & Co, specialist in commercial disputes and maritime arbitration It will be down to what is agreed on in the contract. You can’t have local arbitration unless both parties have agreed in the contract for any disputes to be referred to EMAC. If no particular arbitration centre has been stipulated in the contract, then both parties would need to agree on where it was going to be referred. This is unusual though. WHY CAN’T THE DUBAI COURTS PROVIDE THE SAME SERVICE AS EMAC? The Dubai Civil Procedure Code provides a mechanism by which arbitration can be conducted under the auspices of the Dubai onshore courts, but it is quite short, around 18 articles long, and doesn’t provide all the invisible

infrastructure and support that is expected of a modern arbitration centre, such as what is provided by the UNCITRAL Model Law on International Commercial Arbitration and if you contrast the Dubai Civil Procedure Code with the UK Arbitration Act 1996 or the Singapore Arbitration Act, it comes up short. What you have in the DIFC, which has its own legal system and courts, is a UNCITRAL Model Law based arbitration law, which does foster and engender good modern arbitration practise with a powerful court behind it that gives support to arbitration and arbitrators to render quick and enforceable awards. It can step in and freeze assets in support of arbitration.

www.arabiansupplychain.com

AWARDS2018

TUESDAY 17

APRIL

DUBAI The Logistics Middle East Awards

save the date RECOGNISING EXCELLENCE IN SUPPLY CHAIN AND LOGISTICS

IN THE MIDDLE EAST

APRIL SUN MON TUE WED THU

FRI

SAT

For further information please visit: www.arabiansupplychain.com FOR SPONSORSHIP ENQUIRIES, PLEASE CONTACT:

FOR NOMINATION ENQUIRIES, PLEASE CONTACT:

FOR EVENT ENQUIRIES, PLEASE CONTACT:

FOR TABLE BOOKINGS, PLEASE CONTACT:

ANUP DOMINIC

SHAUN EBELTHITE

SOPHIE MCHUGH

TERI DUNSTAN

Sales Manager, Logistics ME Telephone: +971 4 444 3244 Mobile: +971 55 974 5317 Email: anup.dominic@itp.com

Editor, Logistics Middle East, Direct: +971 4 444 3420 Email: shaun.ebelthite@itp.com

Event Manager Direct: +971 4 444 3223 Email: sophie.mchugh@itp.com

Table Sales Executive Direct: +971 4 444 3227 Email: teri.dunstan@itp.com