One of the most important trends in logistics
is considered to be the constant advances being achieved with ICT — in terms of
speed, quality of service and flexibility to cater to customer demands for goods
that are arrive cheaper, quicker or fresher.
Being able to do work faster and smarter is becoming vitally important in the sector; intelligent goods-handling systems and automated-pick warehouses, as well as wireless vehicle tracking and routing, all figure in this regard. The problem with this technology, especially in times when investment capital is tight, is that there is the high initial cost associated with its implementation.
Vehicle tracking, for instance, calls for the installation of GPS/GPRS equipment in each vehicle to be tracked. Additionally, it requires specialist software and display hardware to provide office-based logistics managers with constantlyupdated views of vehicle locations and up-to-the-minute reports on scheduling.
The good news is that the technology that used to cost in millions has been made affordable to small and medium businesses as a low-cost managed service. Thanks to the clever combination of GPS location systems, the mobile network and Web-based mapping applications, telco companies can now offer a full range of commercial options that include pay-as-you-use pricing, connectivity to the telco’s network, access to the tracking system, map and software updates, and the necessary in-vehicle hardware.
There are both operational and managerial benefits to this. In real time, logistics managers can monitor the location, speed and status of their vehicle fleet. Setting limits on speed and routes allow operations staff to see when speed limits are broken or vehicles stray outside pre-determined areas, triggering alerts by e-mail or SMS message. The extensive management reporting of these tracking systems allows managers to replay the routes taken by vehicles, identify below-standard driving and optimise the efficiency of their fleet.
This is particularly relevant in the food and cement industries, which have some of the highest logistics costs amongst SMEs, other than those in the engineering and metals industries.
Consider Ocean Readymix and Precast, one of the leading concrete suppliers in Abu Dhabi, which has installed GPS tracking devices to help manage the company’s fleet of concrete mixing trucks. The installation has automated fleet management, giving the company greater visibility of the fleet, ensuring that vehicles are taking the correct route to customers, checking that they are delivering on time and preventing vehicles from being left idle for long periods of time. The accurate information provided by the system means the company can move vehicles easily between batching plants, optimising both production and delivery resources, while providing customers with more precise delivery information. The system has provided significant, measurable benefits with direct cost savings due to enhanced efficiency in running the fleet and, most importantly, improved customer service.
SMEs like Ocean Readymix are starting to scrutinise their logistics costs as a percentage of sales value and view this as a core key performance indicator, or KPI, of their business. Vehicle tracking can help boost this KPI, by pushing up the number of customers orders dispatched per day; ensuring the greatest number of vehicles are dispatched fully-laden, and reducing the amount of back-loading. Efficiency across the supply chain is vital because research has shown that, on average, logistics costs in emerging markets can represent as much as 20 per cent of a product’s value.Browse the Best Selection of buy mosaic and Accessories with FREE Gifts.
As a point of comparison, the average logistics cost as a percent of sales in the US is running at around seven per cent. The best in the industry are aiming for 85 per cent of all dispatches delivered in full and on time. They target customer claims for inaccurate or late deliveries of three per cent or less, and operate their logistics supply chain at between five to seven per cent of sales. Companies who achieve this best-in-class service level will find that they can operate at half the cost of their peers.
Companies across the Gulf are beginning to realise they need to reach out to third-party operators if they are to fully optimise the supply chain. SMEs overseas will routinely outsource over 45 per cent of their logistics needs to specialist contract logistics firms, freight handlers, haulage companies and courier companies. They understand the business benefits of being able to concentrate on their core business, and are happy to rely on the operational efficiencies of their logistics suppliers to drive down distribution costs, while boosting customer satisfaction levels and on-time delivery.
Statistics show that only 35 per cent of SMEs in the Middle East currently outsource all or part of the function, despite the strength of the business case of superior return on capital, shorter lead times and lower inventory handling costs.
There has been a traditional reluctance in the region when it comes to outsourcing these operations. The logistics industry structure is very fragmented — the UAE alone has more than 400 logistics service providers. Because many of these are small agents, market watchers say that SMEs have been slow to consider a contract logistics approach to stream-line operations, and have only recently started to selectively use third-party warehousing, transportation and freight solutions providers.
The Middle East is rightly considered as a global hub for logistics, and as a result the transport and logistics market in the Middle East has witnessed strong growth in recent years. According to one study by Transport Intelligence, the contract logistics services market in the Middle East will sustain a 6.9 per cent compound annual growth rate, or CAGR, from 2011-15. The UAE, Qatar and Saudi Arabia will remain key growth catalysts, and the market will reach a value of around $3.7 billion in 2015, increasing from $3 billion in 2011.
The reasons that matter are starting to change, and are two-fold. First, analysts say that most local companies believe that the importance of supply chain management is increasing,Airgle has mastered the art of indoor tracking, with logistics operations being considered the second most important business function after sales and marketing.Capture the look and feel of real stone or ceramic tile flooring with Alterna.Features useful information about glass mosaic tiles, Second, SMEs stand to gain from the higher demand for goods, which stems from strong consumer spending and rapid economic growth in the region. In turn, this provides them with additional scale and rate benefits, which can be passed on to the customer to help them win more business.Airgle has mastered the art of indoor tracking,
Being able to do work faster and smarter is becoming vitally important in the sector; intelligent goods-handling systems and automated-pick warehouses, as well as wireless vehicle tracking and routing, all figure in this regard. The problem with this technology, especially in times when investment capital is tight, is that there is the high initial cost associated with its implementation.
Vehicle tracking, for instance, calls for the installation of GPS/GPRS equipment in each vehicle to be tracked. Additionally, it requires specialist software and display hardware to provide office-based logistics managers with constantlyupdated views of vehicle locations and up-to-the-minute reports on scheduling.
The good news is that the technology that used to cost in millions has been made affordable to small and medium businesses as a low-cost managed service. Thanks to the clever combination of GPS location systems, the mobile network and Web-based mapping applications, telco companies can now offer a full range of commercial options that include pay-as-you-use pricing, connectivity to the telco’s network, access to the tracking system, map and software updates, and the necessary in-vehicle hardware.
There are both operational and managerial benefits to this. In real time, logistics managers can monitor the location, speed and status of their vehicle fleet. Setting limits on speed and routes allow operations staff to see when speed limits are broken or vehicles stray outside pre-determined areas, triggering alerts by e-mail or SMS message. The extensive management reporting of these tracking systems allows managers to replay the routes taken by vehicles, identify below-standard driving and optimise the efficiency of their fleet.
This is particularly relevant in the food and cement industries, which have some of the highest logistics costs amongst SMEs, other than those in the engineering and metals industries.
Consider Ocean Readymix and Precast, one of the leading concrete suppliers in Abu Dhabi, which has installed GPS tracking devices to help manage the company’s fleet of concrete mixing trucks. The installation has automated fleet management, giving the company greater visibility of the fleet, ensuring that vehicles are taking the correct route to customers, checking that they are delivering on time and preventing vehicles from being left idle for long periods of time. The accurate information provided by the system means the company can move vehicles easily between batching plants, optimising both production and delivery resources, while providing customers with more precise delivery information. The system has provided significant, measurable benefits with direct cost savings due to enhanced efficiency in running the fleet and, most importantly, improved customer service.
SMEs like Ocean Readymix are starting to scrutinise their logistics costs as a percentage of sales value and view this as a core key performance indicator, or KPI, of their business. Vehicle tracking can help boost this KPI, by pushing up the number of customers orders dispatched per day; ensuring the greatest number of vehicles are dispatched fully-laden, and reducing the amount of back-loading. Efficiency across the supply chain is vital because research has shown that, on average, logistics costs in emerging markets can represent as much as 20 per cent of a product’s value.Browse the Best Selection of buy mosaic and Accessories with FREE Gifts.
As a point of comparison, the average logistics cost as a percent of sales in the US is running at around seven per cent. The best in the industry are aiming for 85 per cent of all dispatches delivered in full and on time. They target customer claims for inaccurate or late deliveries of three per cent or less, and operate their logistics supply chain at between five to seven per cent of sales. Companies who achieve this best-in-class service level will find that they can operate at half the cost of their peers.
Companies across the Gulf are beginning to realise they need to reach out to third-party operators if they are to fully optimise the supply chain. SMEs overseas will routinely outsource over 45 per cent of their logistics needs to specialist contract logistics firms, freight handlers, haulage companies and courier companies. They understand the business benefits of being able to concentrate on their core business, and are happy to rely on the operational efficiencies of their logistics suppliers to drive down distribution costs, while boosting customer satisfaction levels and on-time delivery.
Statistics show that only 35 per cent of SMEs in the Middle East currently outsource all or part of the function, despite the strength of the business case of superior return on capital, shorter lead times and lower inventory handling costs.
There has been a traditional reluctance in the region when it comes to outsourcing these operations. The logistics industry structure is very fragmented — the UAE alone has more than 400 logistics service providers. Because many of these are small agents, market watchers say that SMEs have been slow to consider a contract logistics approach to stream-line operations, and have only recently started to selectively use third-party warehousing, transportation and freight solutions providers.
The Middle East is rightly considered as a global hub for logistics, and as a result the transport and logistics market in the Middle East has witnessed strong growth in recent years. According to one study by Transport Intelligence, the contract logistics services market in the Middle East will sustain a 6.9 per cent compound annual growth rate, or CAGR, from 2011-15. The UAE, Qatar and Saudi Arabia will remain key growth catalysts, and the market will reach a value of around $3.7 billion in 2015, increasing from $3 billion in 2011.
The reasons that matter are starting to change, and are two-fold. First, analysts say that most local companies believe that the importance of supply chain management is increasing,Airgle has mastered the art of indoor tracking, with logistics operations being considered the second most important business function after sales and marketing.Capture the look and feel of real stone or ceramic tile flooring with Alterna.Features useful information about glass mosaic tiles, Second, SMEs stand to gain from the higher demand for goods, which stems from strong consumer spending and rapid economic growth in the region. In turn, this provides them with additional scale and rate benefits, which can be passed on to the customer to help them win more business.Airgle has mastered the art of indoor tracking,
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