Eyefortransport Middle East Summit - Dubai
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1 Middle East - Connecting the Middle East to the World: Key Success Factors for Logistics Companies by Dr. Mehmet Gumus American University of
2 Outline 1. Logistics costs as % GDP 2. Integrated Logistics Activities 3. Transportation part of Logistics 4. Sectors and products in the regions 5. Trade in UAE 6. Factor to consider
3 Logistics in a Global Economy Country GDP (US $ billion) Logistics (US $ billion) Logistics (GDP %) China India Taiwan Germany Spain Denmark Italy Approximate National Logistical Expenditures, Bowersox et al., 2006
4 Region s Position in a Global Supply Chain Air, Water, Land (Truck), Rail, Pipeline
5 Integrated Logistics Management Challenges: - Different processes has to be integrated - Multiple companies located in different counties are involved Facility Network Warehousing Material Handling Packaging Integrated Logistics Management Order Processing Transportation Inventory
6 Relationship among Transportation Participants Physical movement of goods Public Governmental regulations Government Shipper Carrier & Agents Consignee Movement of Information Internet Risk and Security Issues
7 GCC Top Companies Gulf Cooperation Council (GCC) is composed of Kingdom of Saudi Arabia, United Arab Emirates, Kuwait, Bahrain, Qatar and Sultanate of Oman. Rank Country Company Sector Market Value ($ billion) 1 KSA SABIC Industrial KSA Savola Group Food & Bev Kuwait PWC Logistics Services KSA Yamam Cement Cement UAE Dana Gas Industrial UAE Kingdom Hotel Investments Hotels 1.2 Sectors: Banking, Cement, Electricity, Finance, Industrial, Real Estate, Services Industrial Products: Petrochemicals; basic chemicals, fertilizer, metals, PVC and polyester
8 Closer look at the trade in UAE - The Multi Commodities Centre - Commodity market place in - Rated A by Standard and Poor s - gold & precious metals, diamonds & colored stones, - energy and other commodities industries - Free Zones: One-stop-shop for companies, located by ports Example: Jafza, the free zone in Jebel Ali - DP World UAE: The region s leading port operator - Customs: GCC Common Customs Law
9 - The Sun Never Sets Logistics Hub and T o u r i s m World Class Shopping Malls - all sorts of products from all around the world - tax-free shopping World Class Hotels/ Real Estate - construction International Fairs -products and people e.g. GITEX 2006
10 Factors to be considered for Logistics companies Cost Competitive pricing: all units/incremental units discounts Incoterms: Excellent understanding of pricing structures Quality Goal: the right product at the right time and at the right place Delivery time: Shorter Delivery date: On time delivery Delivery quality: Avoid quantitative & qualitative defects en route Flexibility Delivery flexibility: Respond quickly to changes requested by the customer Readiness to provide information at all stages Technology Ability/Eagerness to employ the latest concepts and technologies in transportation logistics
11 Risk Factors - Sample questions of risk evaluators - Did any problems with delivery dates occur in the past? - Are there any problems with the agreed type of delivery? - Is the provider always accessible at normal business hours? - Does the provider have any emergency concepts? - Does the provider support future-oriented concepts in logistics? - Is the price level acceptable in comparison to the function?
12 How Logistics Risks Evaluated by Purchasers Total Cost of a Risk Factor = Probability of occurrence (risk evaluation) x Duration of the impact (days) x Cost impact ($) of the Risk per unit time (day) - Risk: High - Medium - Low - Work with the purchaser company to achieve success in the long run PARTNERSHIP IS THE KEY TO THE SUCCESS IN GLOBAL SUPPLY CHAINS
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