logistics middle east - august 2010

NEWS AND ANALYSIS FOR SUPPLY CHAIN MANAGEMENT PROFESSIONALSAUGUST 2010 ISSUE 71

DUBAI WORLD CENTRAL І AGILITY І GLOBAL SHIPPING & LOGISTICS І DHL І FARS AL MAZROOEI

An ITP Business PublicationLicensed by Dubai Media City

WMS MARKET REPORTHow to transform yoursupply chain with thelatest generation of WMS

DANGEROUS DISPATCHIs a region-wide blacklistwarranted for the local hazardous cargo market?

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PRESCRIBED SUCCESS

CENTRAL І AGILITY І GLOBAL SHIPPING & LOGISTICS І DHL І FARS AL MAZROOEI

Hellmann Calipar positions itself as the Middle East’s ultimate provider of healthcare logistics

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1

CONTENTS

www.arabiansupplychain.com | August 2010

CONTENTS

02 Editor’s LetterWith a focus on improved effi ciency and ROI, how important is eff ective communication?

04 Readers LettersReaders of Logistics Middle East provide their views on the industry’s hottest topics.

07 News Update• Cargo operators waiting on Al Maktoum• DHL opens first logistics facility in Hamriyah• Aramex ships lions from Jordan to Africa• TNT expands road network in Saudi Arabia• Momentum opens new warehouses at SICD• Logistics scholarships announced at UOWD• SNS designs Halwani warehouse in Jeddah• GWC to open Logistics Village Qatar in 2011• IDS launches supply chain consultancy• KSA set for $100bn logistics transformation

Issue 71 August 2010

14 ArabianSupplyChain.comHighlights of the month from the offi cial website of Logistics Middle East magazine.

16 Cover StoryWith the launch of a multi-million dollar facility in Dubai Logistics City, Hellmann Calipar CEO Madhav Kurup explains the company’s game plan for the Middle East.

20 Special ReportAn overview of the warehouse management systems (WMS) market in the Middle East, with profi les of the region’s leading suppliers.

26 Case StudyGlobal Shipping & Logistics (GSL) details its success story with the Manhattan Associates warehouse management system in Dubai.

30 Hazardous CargoIs a region-wide blacklist warranted for the Middle East’s hazardous cargo market?

34 Agility’s Top 10 WarehousesTh e logistics giant profi les its top ten storage centres in the Middle East and North Africa.

40 Ask the ExpertFars Al Mazrooei examines the benefi ts from

effi cient industry fl ooring in warehouse centres.

42 Facts and FiguresTransportation statistics from a variety of regional and international sources.

56 Face To Face InterviewFrank-Uwe Ungerer discusses his strategy as the new country manager of DHL in the UAE.

26 30 34

For the latest news and stories go to

16

2 AUGUST 2010 | www.arabiansupplychain.com

EDITOR’S LETTER

2

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s the end of summer is fast approaching, this seasonal industry-wide slowdown will soon be coming to an end. While this is good news for

those with a keen eye on quarterly reports, it also presents an opportunity for supply chain managers to take a closer look at their operational effi ciency. With that in mind, this month we’ll be examining Warehouse Management Systems (WMS) and the streamline eff ect of organisational communication that they so often provide. In a business where time is money, this technology proves too valuable to overlook.

Our cover story this month profi les a company that has placed its bets on the region’s emerging healthcare market. As prescription medicines and pharmaceutical supplies are in increasing demand, such products require a specialised supply chain. Hellmann Calipar’s CEO assures me that he is prepared to serve this booming sector, and the company’s new warehouse in Dubai Logistics City is testament to that fact.

AWe also shed some light on the world

of hazardous cargo in this issue. While it’s not as glorious (or profi table) as some of the other sectors, there is still a market for the storage and transport of precarious goods. We can only hope that companies are keeping up with the stringent standards that are currently in place. Some within the industry feel that undocumented, often dangerous shortcuts are happening in order to turn quick profi ts. Is a regional blacklist the most appropriate solution?

And although its reputation has taken a bruising in recent months, Agility wants our readers to know that the company is not going anywhere. With the expectation of a rebound from recent turmoil, we feature Agility’s Top 10 warehouses in the Middle East. Enjoy the issue and we look forward to welcoming you again next month.

If you have any comments to make on

this month’s issue, please email Casey

McFann, editor of Logistics Middle East

magazine ([email protected])

Audited by: BPA WorldwideAverage Qualified Circulation 6,379 (July - Dec 2009)

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READERS LETTERS

AUGUST 2010 | www.arabianbusiness.com/transportation4

Al-Futtaim and Toyota are supremeDear Editor,

I was interested to read your case study on the Al-Futtaim spare parts centre

in Dubai. Although I have never visited the facility, it’s not surprising to hear about the professionalism and effi ciency of this operation. Speaking as a customer, and not a logistics manager, its re-assuring to know that if anything happens to my

Toyota FJ7, the parts will be handled through the warehouse that was

featured in your magazine. It would be interesting to see how the facilities

of other manufacturers compare in the Middle East. Goher Iqbal

Finding a cool solutionDear Editor, Your feature on climate control and worker productivity was, for lack of a better term, a breath of fresh air. As a warehouse manager who has been in Dubai for 15 years, I can fi rmly attest to this. Although the controlled climate is implemented to maintain the integrity of stored goods, it will positively aff ect worker productivity too. We’ve all heard nightmare stories where people are forced to work in facilities where the temperature is unbearable. In these conditions, a cooler environment will always translate into greater productivity.Sachin Menon

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Kudos to the Waha Capital teamDear Editor, I’ve had the opportunity to conduct business with Waha Capital and its no surprise that the company has made your cover. It’s great to deal with such a professional team and I’m glad to see their Al Markaz project is starting to receive a great deal of attention. Abu Dhabi has emerged as a very important market in the Middle East and this development should play an important role in the logistics industry’s growth there. I’m confi dent the project, like the company, will prove to be a success. Martin Benson

The impact of globalisationDear Editor, I’ve been reading Logistics Middle East for a number of years now and it’s a great publication. However, I think it would be interesting to include a little more about the international logistics industry in your magazine. After all, we live in a global world now and it seems Logistics Middle East only focuses on this region, and more specifi cally the Dubai market. I would like to see more stories on Middle East relations with places like South America, China and the Indian subcontinent. I think it would be very interesting to know how business is conducted here versus there. What do the other readers think about my suggestion?Ramon Arevalo

Please address your letters to: Logistics Middle East, PO Box 500024, Dubai, UAE or email: [email protected](Please provide your full name and address, stating clearly if you do not wish them to appear in print. All letters will be edited for clarity of shortened to fi t the allotted space).

NEWS AND ANALYSIS FOR SUPPLY CHAIN MANAGEMENT PROFESSIONALSJULY 2010 ISSUE 70

GULF WAREHOUSING COMPANY І AL-FUTTAIM LOGISTICS І GAC І MOMENTUM LOGISTICS

An ITP Business PublicationLicensed by Dubai Media City

PLAYING WITH FIRE Can the latest generation of fire protection systems safeguard warehouses?

CLIMATE CONTROL How a cooler warehouse can translate to increased productivity from workers

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CAPITAL GAINSWaha Land tackles the shortage of warehousing space in Abu Dhabi

tics Middle East, PO Box 500024, Dubai, UAE or email: [email protected] p

30 JULY 2010 | www.arabiansupplychain.com

31www.arabiansupplychain.com | JULY 2010

WAREHOUSE FIRE PREVENTION

WAREHOUSE FIRE PREVENTION

o the untrained eye, the latest in fire protection technology is something straight out of a science fiction novel. Take the latest highly-sensitive, laser-based VESDA detector for example. This aspirating smoke detection system can intelligently detect a warehouse fire at the very earliest stage, triggering four programmable alarms. Each alarm has a threshold set by the warehouse operator enabling a measured staged response to any threat – from a suspicious investigation to the highest-level involving the activation of sprinklers and emergency services. Unlike other many of its counterparts, this device is planted at ground level, and not the ceiling – very handy for a warehouse whose ceilings are so high that by the time smoke reaches there, the fire has spread out of control. VESDA is just one example of the many new fire detection and protection technologies available to warehouse operators desperate to protect their wares from damage. With the increase in warehouse fires being a continued cause of consternation for the Middle East, could these technologically advanced systems provide the solution to the problem? Craig Nixon, business development manager at Tyco Fire and Security UAE, believes so. As a leading fire protection and detection company in the region, and agent for VESDA, Tyco is

Furthermore, the real benefit of passive fire protection lies in maintaining the structure of building in the event of fire and preventing collapse. “Maintaining compartmentation can stop the spreading of a fire from warehouse to warehouse, as we have typically witnessed in heavy built-up locations like industrial zones,” says Lavender, pointing to the case of Dubai Industrial City which fell victim to one of the biggest fires to hit the region two years ago. Starting as an explosion in a fireworks warehouse, the fire spiralled out of control and engulfed more than 80 neighbouring warehouses in its wake. With scenarios like this, it is not surprising that fire protection specialists like Lavender and Nixon often feel frustrated with companies in the region who complain about the cost of fire protection systems. “Afterall, how expensive is the total loss of your business?” Lavender points out. “The cost of passive fire protection systems are minimal in the overall construction cost and are only a minor expenses in comparison.“ Nixon also agrees that whilst some warehouse operators in the region clearly do take fire protection very seriously, others can be reluctant to invest the capital required to get the best system for their

facility. “Some companies simply don’t want to spend money on fire protection and will do the minimum required.” he says. Despite their concerns however, both companies remain optimistic that the Middle East is slowly cottoning on to the benefits of fire protection systems in line with its global neighbours. Recent figures indicate that the global market for active fire protection is currently worth around US$5 billion annually and set to grow by around 5% in the next couple of years. But is the technology enough to convince the region’s warehouse operators?

As operator of several warehouses in the region, Bernard Dias, operations manager for RHS Logistics, believes that most forward looking companies do consider fire protection as an investment and not a cost. “The cost of not having the right type of investment in fire protection systems could be disastrous for the business,” he admits. The company uses a highly sophisticated laser system for both fire detection and prevention to protect its warehouses. Additionally, an in-rack sprinkler system and an overall sprinkler system in the shipping marshalling zone are on hand, should they be deemed necessary.

Recent figures indicate that the global market for active fire protection is currently worth around US$5 billion annually and set to grow by around 5% in the next couple of years

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“There is definitely not

enough attention placed on the importance of passive fire protection”

Playing with

Can the most up-to-date fire protection systems really guard warehouse operators from the threat of fire?

well-versed in protecting large buildings such as warehouses from fire. “Each company has to look at the risks presented in its warehouse to select the most appropriate system,” advises Nixon. “There is not one fix-it-all system for everything.” As warehouses, particularly in the Middle East, grow larger in size and volume, many of the previously used fire detection systems are now rendered largely ineffective. “Some of the new advances in detection technologies have been really targeted to bigger facilities with higher and larger open areas,” Nixon agrees. “As the height of these facilities increase, detection becomes more difficult and normal point type detection will struggle to detect.” Of course, it inevitably helps if fire protection needs are considered right at the beginning of the warehouse design process. Sadly however, it is much more often an afterthought once the warehouse has been built and the mechanical and electrical work has been done. “It is always easier to put systems in during the construction phase rather than do the work retrospectively,” emphasises Nixon. “Warehouse operators need to look at weight loading, water demands and those aspects which will potentially affect the structure itself during the design stage. When looking at racking systems within the storage facility for example, you need to take your fire systems into consideration during the design process of the warehouse.”

Whilst Dias believes that automatic fire suppression systems with standby fire protection stations are imperative, other fire safety measures can be equally important without relying on the latest technology for implementation. In many instances, for example, a fire can be discovered by a worker prior to the activation of a fire detection system, and this can be invaluable in providing early warning to the other building occupants and to the local and public emergency services. Having all staff trained on fire prevention procedures and use of basic fire fighting equipment is relatively cost-free and essential as part of a complete and balanced fire protection plan. Guidelines from bodies such as the US-headquartered National Fire Protection Association (NFPA) also advocate a balanced approach to fire protection which does not solely rely upon technology. Kathleen Almand, executive director at the NFPA’s Fire Protection Research Foundation, places the involvement of emergency response services at the top of the list. “Engaging the local emergency response team early in the design process of the fire protection system will ensure that it is designed with their capabilities in mind,” she says. Regular training of teams in the operation of the fire protection systems during a fire event is also essential.

It is not only active fire protection systems which should feature highly on the action list at the design stage. Passive fire protection solutions can help minimise the damage of a warehouse fire, particularly in places like industrial zones where many buildings are located in close vicinity of each other. Passive fire protection means taking structural considerations to hand when designing a fire-proof warehouse. This can be the key to reducing the odds of a fire occurring and to minimise damage through containment. “There is definitely not enough attention placed on the importance of passive fire protection,” argues Mark Lavender, sales and marketing director for Promat Fire Protection. “A lot of attention is focused on active systems like alarms and fire extinguishers but an integrated approach with both active and passive systems working together to protect an asset would be more successful.”Global company Promat specialises in passive fire protection solutions for the structure of buildings like warehouses, including fire compartments and barriers, sprays and paints, firestopping, fire rated partitions and ceilings as well as the protection of structural steelwork. As warehouses usually contain large undivided areas, the use of such methods, particularly fire walls or barriers, is extremely effective in avoiding the spread of fire, heat and smoke. 30 JULY 2010 | www.arabiansupplychain.com

The dangers of messing with fi reDear Editor, I thought the article on fi re protection services in the last issue of Logistics Middle East was spot on. Given all the outbreaks that have recently occurred in the UAE, it is no coincidence that companies without protection are the ones that burn to the ground. What is sad is that the workers are the ones who are injured or killed when something goes wrong. It is never the ‘decision makers’ whose blatant disregard so often costs not just dollars, but lives. Th e laws should be stricter in their application of passive fi re resistance. With the technologies that exist today there is no room for excuses. Otherwise we will continue to see more of the same tragedies.Tali Sarma

7www.arabiansupplychain.com | AUGUST 2010

NEWS UPDATE

Cargo operators play waiting game in shift to Al Maktoum

fter much-speculation about the number of cargo operators that will initially have a presence at Al Maktoum International Airport, the multi-billion dollar project has opened with a total of 15 carriers, according to a statement from Dubai Airports.

Amongst the tenants are Coyne Airways, which fl ies scheduled A300 and Il-76 fl ights from Dubai to various locations in Iraq and Afghanistan, and Rus Aviation, which will move over from its current base in Sharjah. Other operators that have signed agreements include the likes of Aban Air, Aerospace Consortium, Aviation Service Management, Rial Aviation, Sonic Jet and United Aviation Services.

Offi cials are adopting a two-pronged strategy to convince airlines to register at Al Maktoum International, offering a string of business incentives and banning certain types of older cargo aircraft from the emirate’s main Dubai International Airport. However, a number of the market’s leading players appear to have adopted a ‘wait and see’ approach before shifting over their operations to the region’s newest aerotropolis.

Cargolux senior vice president of sales and marketing Robert van der Weg said that the airline – one of the world’s biggest all-cargo carriers – had no plans to relocate its operations from Dubai International Airport “at this time”.

Atlas Air, which has a fl eet of 28 B747 freighters and an offi ce in the Dubai Airport Free Zone, said that any fl ying and related ground operations activity at the new airport would be dictated entirely by demand from its clients. “We certainly have the ability and fl exibility to fl y into a great number of airports around the world, including Al Maktoum International, on either a recurring or a periodic basis – all depending on our customers’ wants and needs,” said Bonnie Rodney, Atlas Air’s marketing and communications director.

But a spokesperson from FedEx, which owns the world’s largest cargo airfl eet, said it had no plans to move from its regional hub at Dubai International Airport’s Terminal 2.

AThe multi-billion dollar airport has opened with 15 carriers including Rus Aviation and Coyne Airways

NEWS UPDATE

Dutch express giant TNT indicated that it was “excited” by developments at the site, and that its future operational position “had to include” the new airport. “We are preparing ourselves for the coming years in close cooperation with the authorities and will be able to discuss our growth strategies further in the coming months,” said TNT UAE sales and marketing director Mark Woodcock.

A senior executive from DHL’s local logistics partnership said that it was planning to utilise the new airport and its logistics facilities, although not immediately. “Danzas is looking forward to set up offi ces and warehouse in the cargo village as well as Dubai Logistics City in the next two years,” stated DHL Global Forwarding’s emerging markets CEO, Enver Moretti.

Dubai World Central’s vice president of cargo and logistics Andrew Walsh told Logistics Middle East that the airport was indeed working closely with the express fi rms to ensure that they would have all of the required facilities. “At the moment, that segment of the industry is heavily integrated with the passenger industry, as cargo operators move a lot of material via belly capacity – so they are likely to stay at the current airport for the time being. However we are talking to them about the facilities and we will need to develop those facilities out of Dubai World Central,” Walsh said.

Walsh also mentioned that he was confi dent in that the new airport would meet its fi rst-year target, which is to fi ll the capacity of the cargo terminal by October 2011. The facility has been designed to handle 250,000 tonnes a year. “To translate that, that’s currently the volume that we see all the main-deck freighters taking to and from Dubai International Airport today,” he added.

Phase 1 of Al Maktoum International Airport features an A380 capable runway, 64 remote stands, a cargo terminal with annual capacity for 250,000 tonnes of cargo, and a passenger terminal building designed to accommodate fi ve million passengers per year.

PHASE ONE: AL MAKTOUM INTERNATIONAL AIRPORT


NEWS UPDATE

workshops and offi ces at the site, together with other specialist activities such as container cleaning and repair.

“We have steadily built up facilities, particularly warehousing, at the SICD in response to customer demand, and I’m delighted that we can now offer a further 12 units in

Aramex has completed the recent transportation of two lions from Jordan to their natural habitat at Lionsrock Big Cat Sanctuary in South Africa. The precious cargo, which included a young lioness, a male lion cub and three spotted hyenas, was shipped on behalf of the Princess Alia Foundation andmarks the second time this year the logistics fi rm has transported lions from the Jordanian capital to South Africa. “Our gratitude goes to Aramex, who helped to arrange the transfer and sponsored the fl ight,” stated the foundation.

TNT has expanded its Middle East road network with the introduction of 30 new trailers, which will assistthe company to capitalise on Saudi Arabia’s strong growth potential. “The Kingdom’s economic growth has given businesses like TNT theconfi dence to implement expansion initiatives,” said Nael Attiyat, sales and marketing director of TNT SAB. “Strengthening our fl eet of delivery trailers will also complement the growing preference of Middle East customers that have opted to use road networks over traditional air and sea freight services.”

Agility boosted its social corporate responsibility (CSR) programme by hosting a fundraising event for the Children’s Cancer Centre Lebanon (CCCL) last month. The logistics company hosted an outdoor screening of the fi nal World Cup 2010 match in Beirut and raised over $13,500. The event was attended by over 300 people. “Giving back to local communities is core to Agility’s culture. With our global footprint as a company, we are in a privileged position to help,” explained Raymond Rizk, chief executive offi cer of Agility Lebanon.

DHL has increased its presence in the United Arab Emirates with

the opening of a logistics centre in Hamriya Free Zone (HFZ).

The facility, which will provide bonded or duty free facilities for the import or export of shipments across the GCC, makes DHL the fi rst express

DHL has become the fi rst express courier company to establish an offi ce at the Hamriya Free Zone development in Sharjah

Momentum Logistics has now completed 35 units at Sharjah Inland Container Depot

Momentum Logistics has completed its third phase of new

warehousing at the Sharjah Inland Container Depot (SICD), with 35 units now available at the site. The latest phase included the addition of nine 800m2 units and three 600m2 units.

According to Matthew Derrick, general manager of Momentum Logistics, the initial vision behind SICD was to develop the site as a ‘mini bridge’ linking bonded movements from Khorfakkan Container Terminal (KCT) to the heart of the United Arab Emirates, while providing a logistics and distribution centre in its own right.

SICD now acts as the headquarters for Momentum Logistics, complete with new

DHL opens Sharjah free zone facility

Momentum expands SICD warehouse units

EXPRESSLOGISTICS

Express facility will provide bonded and duty free facilities for import-export shipments across the GCC

courier company to establish an offi ce in the Sharjah free zone.

“The opening of this new facility will enable our customers to benefi t from duty free import and export shipments, and will provide us with the competitive advantage of being the only courier company in the Hamriyah Free Zone to offer

this service,” commented Derek Tully, operations manager of DHL Express in the UAE.

“With over 23 facilities and service points across the UAE, this facility is also a testament to DHL’s commitment to offer customers in the UAE the highest standards of service, convenience and quality.”

3PL

NEWS IN BRIEF

this ideally located position – perfect for storage plus cargo distribution on adjacent uncrowded roads to all parts of the UAE,” stated Derrick.

“The new warehouses provide safe, secure, insulated storage at the heart of one of the UAE’s most important logistics centres,” he continued.


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UOWD launches logistics scholarshipLogistics professionals are being invited to apply for a range of

‘industry partner’ scholarships launched by the University of Wollongong Dubai (UOWD).

“We currently have a number of scholarship students under a partnership with Dubai Municipality, focussing on our Master of Quality Management degree,” stated Rob Whelan, president of UOWD.

“The university has also established partnerships with The Mohamed bin Rashid al Maktoum Foundation, the Road and Transport Authority (RTA) and the Dubai Statistics Centre,” he added.

With no particular quota on the number of scholarships offered, Whelan hopes to attract professionals within the logistics and supply chain sector, as well as qualifi ed students with a fi rst

EDUCATION

degree, eager to get into this rapidly growing industry.

“A recent survey indicated that over 60% of people working in this industry lack a specialised qualifi cation in supply chain management,” said Whelan.

“This is an opportunity to develop higher level skills in the logistics industry and our experience indicates that

graduates from UOWD Masters programmes have enhanced work opportunities and promotion prospects. This is an exciting industry in the UAE and our logistics programme is a strong, relevant and unique qualifi cation that will open up many opportunities for graduates, as well as benefi t the logistics industry overall.”

NEWS UDPATE

Research shows that 60% of logistics professionals do not have SCM qualifi cations

IDS Scheer has launched a supply chain consultancy package in the Middle East to advise companies on the best methods of reacting to market changes and increasing their liquidity. The solution is based on a four-step method, with customers being offered proposals to improve their supply chain within three weeks. “With our method, we establish a close connection between IT and supply chain management,” explained Matthias Schubert, a consultant with IDS Scheer. “Based on that, we derive where the customer needs to take action and help them to realise improvements in their operations.”

NEWS IN BRIEF


NEWS UPDATE

will position the Kingdom as one of the world’s leading logistics hubs by 2020, stated the government division, which has identifi ed 19 priority opportunities for transportation projects in Saudi Arabia.

SAGIA went on to say that 15 of the projects would be based in economic cities and overall, a $100 billion investment was anticipated over 10 years.

Gulf Warehousing Company has confi rmed that operations at the forthcoming Logistics Village Qatar (LVQ) development will commence in January 2011. The fi rst phase of the supply chain company’s project will include 70,000m2 of warehousing space in total. “The entire team is very excited about this project and convinced that it will change the perception of logistics infrastructure in Qatar,” stated Ranjeev Menon, CEO of Gulf Warehousing Company. “Construction has continued to progress and Logistics Village Qatar is set to go-live next year.”

Epoc Messe Frankfurt has announced that its latest Material Handling Middle East event will return to Dubai International Convention and Exhibition Centre from 25th to 27th September 2011. “We are excited about embracing new trends in the supply chain industry and working to ensure Materials Handling Middle East 2011 acts as the ideal platform for key players to come together,” said Ahmed Pauwels, chief executive offi cer of Epoc Messe Frankfurt.

Transworld Logistics has been awarded a two-year contract withENOC International Refi ning & Marketing and ENOC Process Company. Under the agreement, the Dubai-based company will provide a range of freight forwarding and clearing services from its central warehouse in Jebel Ali Free Zone. “We are leveraging our strengths and expertise in managing business for oil companies in the United Arab Emirates and are delighted to add ENOC to our prestigious list of customers,” commented Warren Jacob, CEO of Transworld Logistics.

Halwani Bros has selected SNS to design its forthcoming

warehouse facility in the Saudi Arabian city of Jeddah.

The design process will provide Halwani Bros with a detailed warehouse AutoCAD layout, which includes the design of racking systems, marshalling and staging areas, number and positions of inbound/outbound docks, positions of auxiliary areas and the orientation of the storage aisles.

In addition, SNS will complete a full review of operational procedures at the warehouse in an effort to minimise overall costs, streamline throughput and goods fl ow and ensure compliance with warehousing best practices.

“Being selected by a company the size of Halwani Bros in

Mario Ghosn, general manager of SNS (right), celebrates his latest contract in KSA

Saudi Arabia is poised to invest US$100 billion over the

next 10 years, transforming the Kingdom into a leading international transport and logistics hub, according to recent announcement by the Saudi Arabian General Investment Authority (SAGIA).

The strategic location and infrastructure development

SNS wins Halwani warehouse contract

SAGIA has identifi ed key investment opportunities in Saudi transportation projects

Saudi eyes $100bn logistics transformation

WAREHOUSE

Company will review the procedures at Saudi Arabia facility to increase client’s supply chain effi ciencies

LOGISTICS

NEWS IN BRIEF

“Of the projects, fi ve would be ports, three would be aviation-related, three would be rail-based, while another three would be road-related,” stated a SAGIA report.

It goes on to detail fi ve logistics centres planned for the Kingdom, adding that Jeddah Islamic Port alone could boost capacity by 30-50%. Regarding aviation, SAGIA went on to say that “air operators would be sought to drive expansions to Saudi Arabia’s air transport infrastructure”, with signifi cant upgrades already underway at Jeddah Airport and a new cargo village in the planning stages.

As such, Saudi Arabian domestic cargo demand is expected to grow by a 4-5% compound annual rate through to 2020, while international fl ows are expected to grow at around 5% and 7-8% for air and sea cargo respectively, the report added.

Saudi Arabia proves once again the value of SNS in the local market,” stated Mario Ghosn, general manager of SNS.

“We will put forth all our efforts to ensure that our results will exceed their expectations of the project,” he added.


ubai marked its transition into a two-airport city last month, with the much-awaited launch of cargo operations at Al Maktoum International. A number of cargo carriers have registered to operate in the airport – which is part of the multi-billion dollar

Dubai World Central development – including Aban Air, ACI, Aerospace Consortium, Aviation Service Management, Coyne Airways, EuroAsian Services, Rus Aviation, Sonic Jet, SunGlobal, Skyline and United Aviation Services.

To celebrate the launch, Sheikh Mohammed bin Rashid al-Maktoum, prime minister of the United Arab Emirates and the ruler of Dubai, and his son Sheikh Hamdan Maktoum, deputy ruler of Dubai, were provided a royal tour last month, alongside HH Sheikh Ahmed Bin Saeed Al Maktoum, president of Dubai Civil Aviation Authority and chairman of Dubai Airports.

“Phase 1 is the fi rst step in a long infrastructure development project that over time will see our new airport transformed into the world’s largest global gateway and a multi-modal logistics hub, while playing an increasingly integral role in the ongoing economic and social development of Dubai,” said Sheikh Ahmed. “It

Dis a proud day for Dubai and an auspicious occasion for the future of global aviation.”

Th e initial phase of the airport will feature an A380 capable runway, 64 remote stands, a cargo terminal with annual capacity for 250,000 tonnes of freight and a passenger terminal building designed to accommodate fi ve million passengers per year. “Although it’s a long-term project, the need for a second airport in the near to mid-term is clear,” stated Paul Griffi ths, CEO of Dubai Airports. “Dubai International currently has capacity for 2.5 million tonnes of cargo, while volumes are expected increase to 3 million tonnes by 2015.”

Griffi ths added that the new airport’s facilities and connectivity to the Jebel Ali Port and Jebel Ali Free Zone is being acknowledged by adopting airlines. “We are delighted with the response from cargo operators who are seizing the opportunity. DWC opened with 15 cargo airlines signed up and we expect that number to increase steadily over the next few months.”

Once completed, Al Maktoum International will be the largest airport in the world, with fi ve runways, four terminal buildings and annual facilitation for a total of 160 million passengers and 12 million tonnes of cargo.

Dubai celebrates launch of cargo operations at DWC

NEWS UPDATE

NEWS UPDATE


AUGUST 2010 | www.arabiansupplychain.com14

EDITOR’S CHOICES

SPOT POLL

What are your long-term predictions for Al Maktoum International Airport in Dubai?

62.5% 20.8%16.7%The airport will probably be a success over time

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SPECIAL REPORTTOP 10: Emerging Logistics Markets 2010Transport Intelligence ranks the attractiveness of countries from the developing world in terms of their logistics market potential.

PHOTO SPECIALEtihad highlights from Farnborough AirshowAs launch customer of the Airbus A330-200 freighter, Etihad CEO James Hogan attended a special handover at last month’s event.

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1 Emirates staff evacuated from burning warehouse

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The project is likely to exceed expectations

The airport will struggle to achieve its long-term targets

Th e remains of a man missing since the National Paints headquarters fi re in Sharjah earlier this year has

been found in the gutted remains of the factory and warehouse facility. Th e body of electrician Khurshid

Ahmed, who worked with the company for three years, was discovered near a chemical tank where the

blaze is believed to have started, according to local media reports. Th e Indian man was reported missing

by his 38-year-old brother Tabreer Ahmed after the large-scale fi re. National Paints, which has refused to

comment on the situation, initially believed the man had absconded.

A second body, also found in the building last month, has not been identifi ed. Both of the victims were

found by company employees who were given access to the facility to start clean-up operations. Th e inferno,

described by authorities as the biggest factory fi re in the emirate, took fi refi ghters from all over the country

more than seven hours to control. It started again two days later, and for a third time fi ve days later. One

National Paints employee said chemicals used in making paints most likely disguised the smell of the

decomposing bodies, thereby preventing fi refi ghters from locating them.

Corpses found months after warehouse fi re

The Best in Service, Quality and Efficiency

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AF Logistics SITL Show Vertical Ad3 indd 1 3/15/10 9:25:57 AM


COVER STORYCOVER STORY

Madhav Kurup, chief executive offi cer

of Hellmann Calipar Healthcare Logistics

17

COVER STORY

www.arabiansupplychain.com | AUGUST 2010

COVER STORY

development. A joint venture between Hellmann Worldwide Logistics of Germany and Calipar Integrated Logistics of India, the 100,000 square foot facility is being marketed as the latest pharmaceutical hub in the MENA region, and certainly one of the most advanced.

Th e US$8 million (Dh29 million) centre is strictly dedicated to the

healthcare sector, maintaining capacity for up to 9000

pallets, as well as cages for expired or damaged goods. Kurup hopes to have 60% of the warehouse stocked within the year,

having already signed commitments from a European

manufacturer and a handful of regional companies. “We have a huge

interest in more clients,” he explains. “We are currently in talks with others and will fi nalise contracts with four to fi ve clients in the next few weeks.”

Valued at more than US$12 billion, the Middle East’s pharmaceutical market has steadily increased over the years, and is expected to grow at a healthy clip of 10-15% annually. With more than 450 pharmaceutical manufacturers in the region, Kurup is confi dent that HCHL will be well positioned to capture a fair share of the market.

With the exception of Egypt, all Middle Eastern countries are high importers of branded drugs and pharmaceuticals. With Saudi Arabia responsible for over a 49% market share, it is the largest regional market by volume, while the United Arab Emirates comprises 35% of total GCC drug market spending. “Th e profi le in this region has been very low to date. Prominence has risen now though, and we have had to meet demands,” says Kurup

ith increasing demand for pharmaceuticals in the Middle East, it’s diffi cult to ignore the growing importance of storage

and transportation effi ciencies for the healthcare sector. After all, the sensitive nature of this cargo would make exposure to the region’s unforgiving climate an expensive mistake.

To address this challenge, drug manufacturers and distributors have started to look for logistics companies with specialist expertise in the handling of pharmaceutical goods, a situation that Madhav Kurup, chief executive offi cer of Hellmann Calipar Healthcare Logistics (HCHL) has actually welcomed with open arms.

“We need to create specialisation within industries,” he states with conviction. “Th is product cannot aff ord to sit on an airport tarmac for three hours, it simply can not happen. And we realise that healthcare is a fast growing sector, and thus it needs to be supported with a proper supply chain.”

As a fourth-generation family business, Hellmann Logistics was launched in 1871, with a focus on transporting goods throughout Germany. Th e veteran company has since grown into a multinational logistics provider, seeking to fi ll niche markets such as healthcare, aviation parts, automotives, high-tech goods, and biotechnology.

Th e Middle East is expected to play a fundamental role in its future growth, especially with the opening of a fl agship warehouse facility at Dubai Logistics City last month – one of the fi rst to commence operations at the multi-billion dollar

W

“We realise healthcare is

a fast growing sector and needs to be supported

by a proper supply chain”

PRESCRIBED SUCCESSMadhav Kurup, chief executive offi cer at Hellmann Calipar Healthcare Logistics, discusses the challenges of keeping cool in the Middle East’s warming healthcare supply chain.

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COVER STORY


proximity within Dubai World Central, and Al Maktoum International Airport, which allows it to rapidly redistribute goods within minutes to markets around the region and world. “We are at the doorstep to the new airport on one side and Jebel Ali sea port on the other. Th is will prove invaluable as we move forward, as our clients will have near immediate access to markets,” says Kurup.

While the future looks bright for this market-specifi c sector, Kurup is also quick to acknowledge some of the challenges facing operators in the Middle East. “Although this is the hottest global region in temperature, there are inconsistent standards and a lack of regional quality hubs. It’s no wonder the providers have been slow to act. However, we feel that this has presented

an opportunity that we are more than capable of fi lling.”

In an attempt to bring more transparency to supply chains,

Kurup describes the role of what he likes to call “validated freight management” in guaranteeing uniformity within storage and distribution. In utilising the latest technologies, validated freight management is the act

of recording temperature across the entire supply

chain. Th e

According to Business Monitor International (BMI), the prescription sector is indeed on an upward swing, boosted by a growing population and changing disease profi les. For instance, the UAE is tackling an obesity and diabetes epidemic, which will require the long-term treatment of related health conditions such as increased blood pressure and heart disease.

BMI’s report goes on to state that the health challenges plaguing the UAE have come to refl ect the wider GCC community; together, the six states have the highest rates of obesity in the world and, within 10 years, their populations are expected to increase by a third to reach 53 million.

Th is bodes well for HCHL, as the company has strategically positioned itself, as well as the Dubai Logistics City facility, for the infl ux in this consumer-driven demand. Consider that one major benefi t of HCHL’s new hub will be the

Healthcare reforms in the region have increased the potential for higher per-capita spending on medicines, while government budgets allocated to pharmaceuticals have also increased. - Business Monitor International

Market Information information is presented in real-time to HCHL’s clients, and should there be any spikes in temperature, it will be seen immediately. For manufacturers and distributors trying to take back some control over their product, additional oversight has proved a major selling point.

“You have to gain customers’ confi dence to gain credibility. Th is industry will gain more respectability as it creates greater solutions,” argues Kurup.

“Th ere was once a time in Dubai where customers demanded assets.

‘How big is the facility,’ they would ask. Th ey thought an

established brand became so by being rigid, yet credible. It quite eff ectively reinforced a company’s reputation to

its clients. Th is however, is no longer the case. Our

fl exibility in off ering solutions has presented us with far more

opportunity to satisfy our clients’ demands. We pride ourselves in being based in solutions, processes, IT systems, and skilled people,” he adds.

“Some other companies out there are weighed down and severely limited in what they can off er. Th ey are asset heavy, and largely infl exible. If approached by a customer with a specifi c request, they can’t always guarantee that the service can be provided. We’re diff erent in that we don’t ask the customer to come and fi t in a box. Rather, we create tailor made solutions to meet the demands of each customer.”

While Kurup and his team are actively seeking clients to fi ll the company’s new warehouse, the executive remains confi dent about the the facility, as well as

the HCHL brand itself. So in terms of space, costs, and effi ciency, are they

looking for smaller clients or larger more wholesale-minded clientele?

“In terms of capacity, we are fl exible. One customer can even

take up the entire warehouse,” says Kurup. “Th is facility

will be successful if we listen and react to our

customers’ requests and expectations.”

Within this niche market, such as attitude

does indeed sound like a prescription for future

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Projected value of the worldwide pharmaceutical market within a decade

$1 trillion


WMS MARKET OVERVIEW


WMS MARKET OVERVIEW

s the supply chain remains as dynamic as the industries in which it serves, it remains vitally important that service providers are continually

progressing forward with their technology. “Companies cannot aff ord to remain

idle,” says Margareta AbuRas, managing director of the supply chain consultancy fi rm Integral. “Th ey will soon fi nd that the competition has left them behind. Th is includes WMS technologies as well as techniques, including the adoption of voice picking, pick by light, RFID and automation. In addition to technological advancements, providers must incessantly keep pace with numerous changes in commercial requirements, customs and other authorities’ rules and regulations.”

According to AbuRas, the economic and fi nancial challenges to global commerce over the past two years have heightened awareness as to the necessity of reviewing one’s supply chain strategies. “Quite simply, most existing processes have largely become obsolete, as they were designed for a far more stable business environment. Re-engineering supply chain business processes therefore becomes a must. After all, if you keep doing the same thing and expecting diff erent results, you are setting yourself up for failure,” she says.

“One of the major challenges that must be overcome in the Middle East is the

sub-standard educational programmes provided to those in the industry. Th e market needs educational fundamentals to be established, prior to investing in WMS-based solutions.”

AbuRas believes that this essential base of knowledge will provide the industry with a better grasp of developed techniques and terminologies, so often found to successfully increase effi ciency and lower operating costs.

One major educational aspect that AbuRas would like to bring clarifi cation to is the diff erentiation of Enterprise Resource Planning (ERP) and Warehouse Management Systems (WMS). “While ERP is nevertheless the backbone of a business infrastructure within the supply chain, they are not designed to support the complexity and fl exibility of a supply chain. For more complex supply chains, ERP and WMS complement each other by building structural fl exibility in the business environment,” says AbuRas.

Although some might disagree, in terms of the big players within the WMS market, AbuRas says there is only a handful globally, which include SPAN with Infor SCM and LogCubes with Manhattan Associates in the Middle East. Others, such as Exactus, ATMS and Ehrhardt + Partner Solutions also have a sizeable share of the market. “However, being a big player in the WMS fi eld should not just involve the revenue fi gures. I believe that local and regional support in terms of understanding customer

A

When seeking to lower costs and streamline operations, the implementation of a WMS solution can pay dividends in the long run, explains Integral’s Margareta AbuRas.

und to ency

al

d ntERPne of a

thin the supply d to support the

a supply chain. hains ERP and

“If you keep doing the same thing and expecting

different results, you are setting yourself

up for failure”

Manhattan Associates and RedPrairie remain the market-leading providers of WMS software on a global level Margareta AbuRas, managing directior of Integral

requirements, while customisation and implementation of the system, remains equally as important.”

Consequently, she says, the continuous support provided by competent WMS service providers should remain of paramount importance. “Logistics is a real time operation, and cannot wait for month

end to close like a balance sheet. A functionality issue that is not

tackled on time could prove disastrous for operations. Th ese factors should be heavily considered when selecting a WMS provider.”

In terms of the future of the Middle East WMS

market, AbuRas thinks it’s increasingly bright.

“It’s often a case of starting at ground-zero. Being introduced to the WMS market right now presents a wealth of opportunity to clients that are seeking improved supply chain solutions. I believe the regional market will continue to grow as more and more WMS vendors will be coming into play” says the consultant.

“However, in the longer term, I would like to see more relevant supply chain education initiatives. Not just one day supply chain conferences, where the networking is great and speakers are witty, but rather an education in effi cient market practices and procedural safety, taking precedent to everything else. Th is will make our industry stronger in the Middle East, as the progressive growth of warehouse management systems continues well into the 21st century,” she concludes.


WMS COMPANY PROFILES

EXACTUS - NASSER TUFAIL, CHIEF EXECUTIVE OFFICER

What are customers in the Middle East demanding from their WMS providers? Common requests from customers include lower upfront acquisition costs, faster return on investment, and tighter integration with existing systems. This will allow them to create real-time operations for sharing and synchronising data, with up-to-the-minute information being presented in a graphical, easy to decipher format. More recently, customers have also been asking for yard management, voice picking and confi gurable workfl ows, and some have also expressed an interest in SaaS or software on demand pricing models. In certain markets where there is a strong manufacturing base, companies want to leverage warehouse management systems around their manufacturing operations for the traceability of raw materials into fi nished goods.

How does the regional market for WMS compare to more developed countries? While around for perhaps the last 15 years, the use of warehouse management systems in GCC countries has become more widespread in the last three to fi ve years. Whilst the US and European logistics markets have historically been far more advanced in terms of leveraging WMS and other related technologies, GCC markets are starting to catch up, as the scale of operations becomes more complex and size of the logistics operators bigger. In the early days, there were many deployments that took too long to implement, did not meet expectations or failed altogether. There are some horror stories that prospective buyers of WMS systems were very conscious of and withheld from venturing into this area. Of late, this prevailing attitude has changed as there are many solid references from customers, and admittedly not just ours, who are taking full advantage of WMS technologies to gain a competitive edge and realise signifi cant market benefi ts.

Are there instances where WMS would not be appropriate to implement? Whilst there is little doubt that any warehouse could benefi t from a WMS, not every warehouse may necessarily need a WMS. For instance, when the initial costs of acquisition and ongoing support cannot be offset by the benefi ts of implementing a WMS. Some companies that only deal in inventory management could probably handle their operations with an ERP and may not need a WMS at all. In a small company with a warehouse that handles a limited number of SKUs and already has an in-house legacy system or ERP that can direct basic warehouse tasks, there may not be the need to deploy a WMS. But with requirements for such things as real-time control, customer and product based task workfl ows, contract billing and inventory deployment, it is highly likely that a WMS will almost be a necessity.

What are some problems faced with clients utilising WMS for the fi rst time? There is an initial learning curve that is required for effective use of a warehouse management system and, not surprisingly, the fi rst time a WMS is deployed, user productivity will normally drop before it improves. At this stage, detractors within an organisation might try to make a case for the virtues of a paper-based system and decide not to lend their necessary support. It is imperative that all concerned parties are on board during the implementation and deployment phase, and that these issues are well understood by all. When companies start utilising a WMS system for the fi rst time, one of the challenges they typically face is data

synchronisation with existing systems such as ERP and they may notice an inventory balance discrepancy, which creates doubts in some minds. Again, the right expectation levels must be set at the outset, as it is unlikely warehouse management systems will give incorrect data and it is most often a user error.

Have recent market conditions positively or negatively affected WMS demand? Although 2009 was a relatively soft year overall for the logistics industry, due to the worldwide recession and its resultant effects on the GCC markets, the second quarter of 2010 has seen some increased activity in the WMS space and we expect this trend to continue. Rather than maintaining a wait-and-see approach, customers are now beginning to engage and move forward with their plans to become more competitive by employing these technologies sooner rather than later.

What technological advancements would you expect or like to see in the future?We are beginning to see an increase in the overlap in functionality between warehouse management systems and other systems such as ERP, transportation management, supply chain planning, manufacturing and distribution requirements planning and execution systems. We believe that interoperability between different systems, either through overlap or tighter integration, will only lend to enhancing real-time

visibility in the logistics operations. We also predict that voice

picking will become more mainstream as customers seek to improve visibility between the workforce and operations sectors. Finally, there is also increasing demand in pick-to-light technology as it seems

to be gaining greater traction within the

Middle East region.



REDPRAIRIE - PETER VAN MERODE, DIRECTOR

What are customers in the Middle East demanding from their WMS providers? Companies across the region are demanding fi xed priced and fi xed scope implementations for their warehouse management systems. The ability to purchase leading-edge WMS technology with the options for including transportation, retail store and workforce optimisation across the supply chain are key business drivers across the region.

ATMS - STEPHEN CROSS, MANAGING DIRECTOR

What are customers in the Middle East demanding from their WMS providers? The focus now is very much on proven systems, with solid functionality and good local support. This has meant that most of the voyages of fantasy have dropped by the wayside. We are however introducing new technologies like mobile CCTV for security of the warehouse itself and the associated delivery vehicles. This technology has now come of age and is ideal for ensuring the security of the supply chain.

Are there instances where WMS would not be appropriate to implement? In this region, perhaps the fi rst area to focus on is people’s ability to run a warehouse properly. WMS is not a magic wand, but a tool to be used by people who understand warehousing and have the drive to improve their operations. People are key to this. It is all about methodology before technology. Your warehouse needs to be of a reasonable size in terms of location, product movements and product codes in order to justify a warehouse management system.

What technological advancements would you expect or like to see in the future?RFID is moving forward slowly and steadily, but only for niche applications. Voice directed picking is also becoming more widespread. Interestingly, mobile computing hardware is coming down rapidly in price, including both WiFi and GPRS, which will drive wider adoption of WMS both within and outside the warehouse. Finally, remote warehousing is now within the reach of most companies, allowing them to track, trace and record stock wherever that stock might be in the world, including small unmanned warehouses.

How does the regional market for WMS compare to more developed countries? The gap is certainly narrowing and the GCC has now caught up in terms of functionality. The next challenge it to ensure that customers make good use of the functionality through regular localised training and support. Some areas, like voice directed picking are lagging, but it is an economic return on investment question in my opinion. It remains contingent upon the size and operational capacity of your facility, more-so than just going for the latest and greatest technology.

How does the regional market for WMS compare to more developed countries? The decision-making process is often slower and providing a return on investment within the initial sales circles can be challenging, simply due to a lack of historical data in many organisations. Corporate organisations are also less agile in making large capital expenditure commitments, as there’s more red-tape. There is still a reluctance to deal with organisations that do not have a local presence in all countries and the concept of remote support, although fully excepted in the west, is still considered a barrier in the Middle East region.

What are some problems faced with clients utilising WMS for the fi rst time? There is sometimes a lack of understanding about what a tool like WMS can bring to their business. Often a company either under values the benefi ts or inversely over estimates what a WMS will achieve for them. This is purely down to education and can be resolved by ensuring that before any decision is made, the fi rst-time-user fully explores their requirements. Once a WMS vendor is selected the next big issue is commitment, which is required at every stage of the business relationship.

Are there instances where WMS would not be appropriate to implement? Yes, often where a company’s supply chain strategy is still within its infancy or where simple paper based solutions can cope with non-complex operating conditions. Have recent market conditions positively or negatively affected WMS demand? Both. We have seen some expenditure programmes frozen until business confi dence is fully returned and we have also seen organisations making rapid decisions because they have to optimise their inventory in tough economical times.

In what direction do you see WMS technology heading? WMS is becoming a commodity and the traditional WMS focused market is consolidating. The future will belong to the suppliers that can continue to innovate and expand their portfolio of mobile or on-demand products and execute over the web/cloud/mobile devices. Some organisations will continue to grow by adding more smart SCE applications and demonstrating end-user benefi ts. Others will be absorbed by acquisition or simply not be able to compete because they cannot innovate fast enough.

What are some problems faced with clients utilising WMS for the fi rst time? Trying to do too much, too quickly. I believe in adopting the crawl, walk, run principle. Get everyone trained in the basics, get them using the system properly, start enjoying the benefi ts of the WMS platform, then begin a progressive programme of using more and more of the functionality – when and where it’s applicable. If just being introduced to the technology, you can’t expect to know everything about it right away.



EPS - RAMON THOMS, REGIONAL DIRECTOR

What are customers demanding from their WMS providers? Customers in the GCC expect no different than customers in the rest of the world. A world-class WMS should provide easy to use and easy to understand warehouse processes. It should defi ne a clear structure within the warehouse and it should deliver valuable information like stock on demand, resource and space utilisation. Also expected is an easy integration of existing IT-systems like SAP, Oracle, MS Navision, seamlessly integrating the WMS into a complete supply chain.

How does the regional market for WMS compare to more developed countries?The Middle East is catching up. Lots of companies in this region did their homework during the crisis. They identifi ed their own strengths and weaknesses and are concentrating on their core competencies to eliminate unnecessary wastes of money. It’s not only manpower that will satisfy the information thirst of companies, but rather modern systems capable of delivering KPI to decision makers.

Are there instances where WMS is not appropriate to implement? No. WMS is necessary nowadays, rather than being something that is nice to have. It is something that each and every company should use to gain independency from the workers knowledge and to fulfi l the requirements of a steadily growing market. What are some problems faced with clients utilising warehouse management systems for the fi rst time? That the wrong partner to implement such a critical business application was chosen. The actual software is not the only criteria when selecting a solution; remember that the implementing partner also plays a vital role in this process. If the partner does not understand the client’s business, the project will fail. Many Middle East companies made the mistake of not carefully choosing the right partner. Just selling the software on a CD without the proper know-

how does not help companies in the long-run. WMS is a business critical application that has an impact on the daily operation. Have recent market conditions positively or negatively affected WMS demand? Recent market conditions have positively affected the WMS demand. Warehousing and logistics is one of the most under-

estimated business aspects of the modern time on a global level.

What direction do you see WMS heading? Technology advancements we would like to see in Middle East warehouses include pick-by-voice, which eliminates most of the pick-errors done by warehouse personnel. It boosts the performance and delivers transparency to the entire process.

SPAN GROUP - KAMEL EL-GHOSSAINI, REGIONAL MANAGER- SUPPLY CHAIN SOLUTIONS

What are customers in the Middle East demanding from their WMS providers? Clients are looking more into optimisation and cost savings with their WMS. For SPAN and Infor WMS, this is a request that some companies missed during the busy days. The Infor Tier 1 WMS is all about optimisation, cost saving and cost tracking.

How does the regional market for warehouse management systems compare to more developed countries?In terms of warehouse infrastructure in the Middle East, I would say Dubai is better positioned than a lot of further developed countries. However, more investment is required in professional training for warehouse staff. We have to admit that a lot has been done since early 1996 when we started, however in logistics there is always room for improvement, mainly in the areas of customs clearance and electronic date exchange within the GCC boarders.

Are there instances where WMS is not appropriate to implement?When we propose a WMS, there is always a need and a ROI involved. We work closely with our client to qualify and quantify the need and the challenge they are facing and decide accordingly if a WMS is appropriate. In many instances we request the clients to upgrade their warehouse storage equipment prior to implementing a warehouse management system. The proper foundation must be in place to ensure successful WMS implementation. What are some problems faced with clients utilising WMS for the fi rst time? In any software implementation, there are a number of project success factors. First, clear customer expectations, second, right implementation partner and third, right product selection. Also, fourth is management commitment to the project’s success. Whenever one of the following is lacking, challenges will appear. Have recent market conditions positively or negatively affected WMS demand? We have seen positive demand. Customers are willing to take more time to evaluate the proper WMS solution and look for the right partner to work with. We encourage all of our clients to do so. SPAN has been the partner of choice with a very professional and experienced implementation team and with our tier 1 Infor WMS, we clearly standout.



LOG CUBES - TAREK SAOUD, DIRECTOR

What are customers in the Middle East demanding from their WMS providers? Lately we noticed that customers are demanding two main criteria from WMS providers. The fi rst is the usual stable and bug-free warehouse management system that will help them in tracking, controlling, and optimising inventory, labour, equipment, and space. However the second and new criteria is the qualifi cation of vendors in logistic practices, and the ability to transfer knowledge and expertise. We are seeing more and more cases where customers are enquiring if we can perform consulting work to defi ne defi ciencies in their current operations and to suggest how to overcome these challenges. We fi nd that trend pretty unique to previous years where the client’s requirements were primarily driven by technology solutions, while the knowledge and know how of the vendor was a bonus.

How does the regional market for WMS compare to more developed countries?The Middle East market is different from country to country. As we all know Dubai, and to a large degree Kuwait, were the leaders and the catalysts in opening the eyes of the region to the fact that logistics is a serious business and needs to be approached professionally. The operators of infrastructure facilities such as ports, customs systems, distribution centres, and transport companies must work hand-in-hand to effectively raise the standards and professionalism. This is what was achieved in Dubai and that caused a race among service providers such as 3PLs and large distribution companies to invest and update their systems to a state-of-the-art WMS. Now we see a similar level of awareness in Qatar and Bahrain. In Saudi, we are currently witnessing the awakening of a sleepy logistics industry and business owners there are realising that this is the new competitive weapon that will set them apart.

Have recent market conditions positively or negatively affected WMS demand? A WMS vendor is like a stock broker. During good times they are in demand because the customer’s business is expanding and in need of organisation. During bad times, visionaries and leaders keep WMS vendors busy because they see it as an opportunity to improve and correct internal procedures and operations by implementing a WMS. So I consider vendors in the WMS domain to be

somehow protected from the fl uctuations in market conditions.

Are there instances where WMS would not be appropriate to implement? Absolutely. A certain warehouse that I visited recently in the region had all the criteria for a WMS. It was a large facility, full to the rim with stock, operating three shifts a day and it was well racked. So it has all the reasons to be a prime candidate for a WMS solution. During the site visit, our team noticed the unorganised operations and confusion of how the warehouse tasks were being handled. We asked to meet the warehouse manager and to our surprise we found they did not have one. This massive facility along with the millions of dollars of stock was being run by very hard working supervisors that had no director or logistics manager to guide, organise and improve things (they were reporting to the CFO). The state inside that warehouse reminded me of the expression “running around like headless chicken”. Our fi rst recommendation was that we will help them by putting in place a management structure and then we would talk WMS.

What are some problems faced with clients utilising WMS for the fi rst time? A common misconception that we often face is end users believing that any WMS solution will help them resolve the operation’s problems and that it will make running a warehouse a simple and accurate activity. The reality is that warehouse tasks are still human intensive operations and are prone to operator error. We are frequently asked to investigate why an operation is still facing

the same level of missed orders, misplaced items or shipping errors even after deploying a WMS. Our fi ndings always point to the fact that not all WMSs are equal. There is one place where all of them look equal and that is on the marketing brochures and literature. The reality is that the WMS market is classifi ed into tier 1, 2 and 3. Tier 1 solutions are those that have gone through many years of implementations with various customers worldwide (in excess of 1000 installations) and have been upgraded, enhanced, and stabilised over the years to the point that they not only optimise operations but also help minimise operator errors and provide better control. The other tier solutions are still working on incorporating the ‘checks and balances’ required in order to keep errors at a minimum.

What technological advancements would you expect or like to see in the future?For the past few years there was a lot of hype on running the WMS via the web and hosting the solution remotely, as well as the buzz on RFID. These did not pick up, especially in our part of the world, where internet stability and connectivity still does not exist to the levels required to ensure that a mission critical system like the WMS is up 100% of the time without any interruptions. A WMS is an activity-based solution and users cannot wait minutes nor seconds for instructions; things have to happen in milliseconds to ensure full productivity. It is clear that best of breed WMS providers will continue to invest signifi cant portions of their income on product enhancement and R&D to ensure they remain ahead of the other players.


WMS CASE STUDY

A pioneer of technology advancements in the Middle East, Global Shipping & Logistics (GSL) details its success story with the Manhattan Associates warehouse management system.

DIGITALDELIVERY


WMS CASE STUDY

stablished in 2006, Global Shipping and Logistics (GSL) had a bold, almost grandiose vision for its future direction. Quite simply, admits the

Dubai-based company’s IT manager Arun Kumar, it wanted to become the leading player in controlled storage.

With the goal of becoming the number one warehousing operation in the United Arab Emirates - in terms of physical size and inventory handling services - GSL invested in a state-of-the-art warehousing complex within a massive one million square foot plot at Dubai Investment Park. At the same time, the company wanted to arm itself with the most advanced supply chain solutions available on the market, to help attract blue-chip clients from sectors as diverse as frozen food to furniture.

“For historical reasons, the number of supply chain solution vendors operating in the region has been very limited and so we saw an opportunity here to really diff erentiate ourselves,” explains Kumar.

Believing that the partner companies within their supply chain should be able to exchange critical supply chain data at any time, GSL sought a series of integrated browser-based solutions that would capably and reliably facilitate the order fulfi lment process through eff ective inter-enterprise communication across suppliers, manufacturers, distributors and end-users. Equally important was identifying a supply chain platform that was functionally rich and highly confi gurable, as well as easy to use and implement.

After a detailed evaluation of various solutions on the market, GSL decided to go with Manhattan Associate’s Supply Chain Architected Logistics Execution (SCALE) system. In reviewing WMS providers, Kumar says budget wasn’t so much the issue. He was looking more towards confi gurability, while not being heavily consultant dependent.

“We ended up choosing a product that was priced 20-25% higher than the market average. However, although it required more of an upfront cost, we received a superior product in the long run,” continues Kumar. “We were impressed with the track record of Manhattan Associates in the region, with a number of industry market-leaders in their respective sectors already using Manhattan’s solutions.”

In examining the capability of the new facility, Kumar was pleased with the relatively effi cient WMS implementation. “For a typical install, it can take a week

Eor two to set up process fl ows and item masters, but we did it in a single day,” he says. “One of the great benefi ts of SCALE was its confi gurability, which really comes into its own when you’ve just signed a new client. We are continually signing up clients of all sizes and demands. Yet we’ve never had an inventory control issue.”

GSL also realised diff erentiation as a competitive advantage. “In addition to the core warehousing functionality, the dynamic market trend of the Middle East requires service providers to be fl exible and provide complete visibility on not just warehousing but billing as well, which we have achieved. Furthermore, the billing management module is integrated to GSL’s Oracle eBusiness Suite for accurate and timely billing information for our customers, completing the full integration from service to cash,” he adds.

“With our Trading Partner Management module, clients can access detailed reports on stock levels, transaction status and item master information, amongst other things, via the web, which minimises the number of enquiries we receive from clients. Our clients can additionally place and then track orders through real-time system updates, which is another advantage.”

GSL wanted to deploy the most advanced supply chain solution available on the market

GSL aimed to become the number one warehousing solutions provider in the Middle East in size and inventory-handling services

GSL wanted a fl exible solution with full visibility and integrated billing management, eventually selecting Manhattan Associates

Products for 40+ blue-chip clients fi lled two new warehouses at Dubai Investment Park within seven months of going live, leading to an average inventory accuracy of 99.8%

Result:

Goal:

Challenge:

Solutions:


WMS CASE STUDY

Having used Manhattan Associates’ software to manage both warehouses since they were commissioned in 2006, GSL recently made the decision to upgrade to a more recent version of Manhattan ILS, in order to take advantage of the provided features. According to Kumar, twenty of GSL’s customers are already using Manhattan’s Trading Partner Management module to track their orders, and GSL can accurately measure the use and cost of manpower through the integration of the solution’s labour management and billing management capabilities. Furthermore, performance ‘dashboards’ provide GSL’s managers with a view of the entire operation in real time.

Kumar points out that SCALE remains extremely upgrade-friendly, and though the past two years have been sluggish for WMS providers, Manhattan Associates has continued to reinvest upwards 10% of net revenue into research and development. Th e provided benefi ts, he says, are then passed

on to SCALE’s end-users. “Th e decision to upgrade was a major step for us,” explains Kumar, “We were running both distribution centres at full capacity, so we could not aff ord any downtime. At

fi rst there was some reluctance to take the risk of a software upgrade, but Manhattan Associates introduced us to

other customers who convinced us that all would be well – and they were right. Th e entire upgrade was completed in less than two months, with support throughout from Manhattan’s consultants. We now have a system that is faster, more effi cient in operations, and allows us to off er an improved

service to our customers.”In what could best be described as pow-wow

sessions, Kumar has come to appreciate the open discourse off ered to clients, as Manhattan Associates

is keen on knowing what its customers are expecting in future upgrades. “Manhattan Associates hosts seminars called Product Councils in which clients fl y out and talk to product managers, the guys actually creating the hardware, to give opinions of what the system needs or they would like to see. It allows for a very interactive platform with the supplier, as well as gives us an opportunity to meet other Manhattan clients.”

From an IT perspective, Kumar states the decision to implement the warehouse management system has been pivotal in helping GSL establish its reputation as a quality logistics provider and represents a growing trend towards digital supply chains for the Middle East logistics industry.

Headquarters: Dubai, United Arab Emirates Distribution centre: Four temperature-controlled warehouse facilities located in Dubai Investment Park WMS solution: Manhattan Associates’ Supply Chain Architected for Logistics Execution (SCALE)

GLOBAL SHIPPING AND LOGISTICS (GSL)

One of Global Shipping & Logistics warehouses in Dubai Investment Park maintains sub-freezing temperatures and is predominantly used to store ice creams and frozen foods

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HAZARDOUS CARGO

n this increasingly dangerous world, would you believe that aerosols, perfumes and concentrated food fl avours are deemed hazardous cargo?

It’s true, and there is an entire profession dedicated to handling these and other hazardous materials properly. Th is includes managing and advising other managers on hazardous materials, as well as process planning and development of new products through manufacturing, distribution, use, disposal and cleanup.

“Any item or substance that places the public, animals and the environment at risk when it’s being transported or moved is considered a hazardous product,” explains Omar Abdullah Al Shamsi, logistics and trading manager at Emarat. “Our company transports and trades mainly jet fuel, gas oil, gasoline, fuel oil, lube oil and LPG. Every one of these products is offi cially classifi ed as hazardous cargo.”

Although the contents of hazardous cargo shipments can vary, most often they remain liquid or gaseous in nature, and are shipped or stored in bulk to reduce associated costs.

I

Dangerous DispatchWith demands to implement a regional blacklist in the hazardous cargo sector, how can warehousing and transportation companies in the Middle East remain ahead of the game?

Th e consignments are often more expensive to insure and require specialised handlers and logistics support. “Most of the products we deal with are relatively low in value and high in quantity,” explains Sumesh Nair, general manager of Dubai-based Globelink West Star Shipping. “Th e majority are chemicals. However it is often not cost-eff ective to transport or store because of the segregation that must be provided. As well as restraints imposed on the quantities handled. We would like to see this policy changed. ”

As there are many laws and regulations that defi ne and govern hazardous cargo, the regulations are generally administered by environmental agencies, safety and health administrations, and transportation departments. “Transporting by road tankers must comply with civil defence rules and regulations,” says Waddah Ghanem Bani Hashim, group EHSQ compliance manager at Emirates National Oil Company (ENOC), which deals with a number of hazardous

products in Dubai. On the international side, there are additional rules that govern hazardous product transportation, whether by sea or by road or sometimes by air. “Th e main regulations related to transporting such cargo by sea are MARPOL Annex 2 (Marine Pollution), the IBC code (International Code

for the Construction and Equipment of ships Carrying Dangerous

Chemical in Bulk), and the IMDG code (International

Marine Dangerous Goods),” states Ashita Khanna, chemical tanker analyst at the UK-based Drewry Shipping Consultants.

Whenever a hazardous shipment is transported,

containers are appropriately labelled to identify the hazard that

could result from the product, should anything happen. Th ere are many dangers involved if these shipments are not labelled or packaged correctly. “If such products are in direct contact with environment, they are going to cause harm; at the very least, the hydrocarbon gas emissions damage the

30 JULY 2010 | www.arabiansupplychain.com

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DID YOU KNOW?

31

HAZARDOUS CARGO


ozone layer and enhance global warming,” warns Hashim.

Some within the industry, including Emarat’s Al Shamsi, are lobbying for a blacklist of those who are caught not following the strict procedures that have been put into place. “In the worst-case scenario, if a company fails to comply with industry standards, the business must be closed

Some offi cials would like to see a greater crackdown on habitual violators of hazardous cargo regulations and are calling for implementation of a black-list in the Middle East

immediately by the concerned authority and persons in charge should be black-listed from handling any business related to hazardous cargo,” demands a vehement Al Shamsi.

And while some companies specialise in hazardous cargo, most do not. It remains something they are willing to handle on behalf of their customers, although it is rarely the core aspect of their business.

“We handle hazardous freight for several major companies in the region, including petrochemical and oil and gas companies. Some of the products are very toxic and require special handling,” comments Peter Richards, group director and general manager at the Sharjah-based logistics specialist Gulftainer, which operates more than 180 trucks from its network of shipping ports.


HAZARDOUS CARGO

equipped with fi re fi ghting equipment, to allow for immediate intervention, should the worst case scenario actually become a reality.”

Nair says while oversight, especially in this sector, is a good thing, he would prefer an easing in limits, as profi t margins are too slim to justify housing or transport. “Regarding regulation, we welcome it. However, some would like permission to actually handle greater quantities, so as to make it more cost eff ective for us to handle such dangerous and precarious goods,” he says. “We recommend every provider to follow established regulations, including using protective gear and always having knowledgeable staff on hand.”

While choosing to remain anonymous, one source believes there is currently an issue with quality storage facilities within the UAE, and some companies are failing to take measures

to ensure the safety of workers as well as cargo. “Right now there is a

serious shortage of hazardous cargo storage. Th is presents a problem because some companies are choosing not to declare their freight, and keeping it in unregulated

conditions. Consumers in this market are relatively limited in

their knowledge of requirements for HAZMAT and some companies

are taking advantage, undercutting the market and degrading the industry’s reputation. We can only hope that they will be fl ushed out in due course.”

Th e majority of hazardous cargo friendly companies, including Gulftainer, use their own transport fl eet and need to ensure that their drivers are aware of safety requirements when transporting hazardous cargo.

“Currently we are handling all products through our own road tankers and have chartered a ship for one year for sea transport, which puts all responsibility of the carriage of the cargo during sea passage on the ship operators,” says Al Shamsi. “Additionally, every truck utilised during the transport of hazardous cargo should be

The world’s largest man-made accidental explosion occurred in 1917 in Halifax Harbour, Nova Scotia, Canada. An estimated 2000 people were killed and 9000 injured when a French cargo ship laden with explosives collided with a Norwegian livestock carrier. The explosion caused a tsunami in the harbour and a pressure wave of air that snapped trees, bent iron rails, demolished buildings, grounded vessels and carried fragments for kilometres.

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AGILITY LOGISTICS TOP 10 MIDDLE EAST WAREHOUSES


35



With a network of 90 warehouse facilities in 12 locations across the Middle East and Africa, Agility profi les its top ten storage centres in countries such as the UAE, Bahrain, Oman, Kuwait and Saudi Arabia.

Agility’s fl agship warehouse in Dubai is located

at Jebel Ali Free Zone and operates as a central

hub for the company’s regional operations.

Th e facility can store a large variety of cargo,

off ering 22,608m2 of temperature controlled

storage, 4172m2 of dedicated pharmaceutical

storage and 30,405m2 of ambient storage.

Th e turnaround times for vessels at the

nearby Jebel Ali Port are some of the quickest

in the world and Agility’s proximity to the main

container terminal and customs authorities

provides an ideal location to operate a

regional distribution centre. Th e warehouse

is also integrated to the company’s road and

airfreight systems, being just 40 minutes away

from Dubai International Airport, 15 minutes

from the new Al Maktoum International

Airport and a central hub for Agility’s Middle

East road network. Th is allows for goods to

be delivered in a secure and effi cient manner

wherever the destination.

One of four facilities in Dubai, Agility’s

Dubai warehouses provide specialised

services to a variety of prestigious clients from

diff erent industries, including the automotive,

life sciences, electronics, and fast moving

consumer goods (FMCG) sectors.

In addition to serving its own domestic

market, Bahrain is considered a popular

gateway to the Kingdom of Saudi Arabia, with

a direct connection through the King Fahad

Causeway. In addition, the country will soon

be linked to another of its close neighbours -

Qatar - with the opening of a similar bridge

within the next ten years. Agility’s facilities

are planned with this in mind, off ering

clients full integration with its broader GCC

distribution and logistics network.

Th e logistics company operates a facility in

the Al Hidd industrial area, which is relatively

close to both Bahrain’s seaport and airport.

In addition, bonded facilities are available at

the Mina Salman port and Bahrain Airport

Free Zone. Th e main warehouse off ers

fully air conditioned dry storage with over

16,250 pallet positions. A chilled and freezer

section is also available with nearly 7000

pallet positions. Th ese facilities service a

number of industries, including life sciences,

biotechnology, manufacturing, retail and

information technology. Th e warehouses are

supported by over 70 transport assets, which

have been purchased to continuously enable

local and regional distribution.

DUBAI BAHRAIN



Agility believes its Qatar operations are a

perfect representation of the company’s

diverse service portfolio, with much of the

work focused on the country’s oil and gas,

FMCG, retail and banking sectors. In addition,

Agility off ers specialised solutions, such

as records and information management,

international moving and relocation services,

and a dedicated chemicals storage facility.

QATARServicing these various markets while

complementing Agility’s growing logistics

capabilities in Qatar is a 30,000m2 warehouse

in Doha, where over 600 staff and 150 trucks

and trailers work to provide solutions to over

200 customers throughout the country. Th e

warehouse off ers 32,000 pallet positions, with

a combination of temperature-controlled,

refrigerated and open yard facilities.

Located in close proximity to Muscat’s main

commercial centre, together with the city’s

shipping and airport, Agility has designed

its Oman headquarters in Ghala to integrate

within a national logistics system. Th is spans

the entire country, with warehousing centres

in primary locations such as Nizwa, Sohar

and Salalah. In total Agility off ers 19,000m2

of warehousing and 26,000 pallet positions,

as well as 139,000m2 of open yard storage.

Local operations have a focus on the oil and

gas, FMCG, retail and telecoms sectors. Many

of these customers are served by the Ghala

warehouse facility, which off ers 15,000m2 of

multi-temperature storage and has a total

capacity of 12,500 pallet positions.

Agility has long-believed that its warehouse

capabilities are second-to-none in Kuwait and

epitomise the company’s regional strengths in

storage assets. In total, there are 52 facilities

in the country, of which 40 are situated

in the Sulaibiya area. Other warehouse

locations include Mina Abdullah, Doha and

Shuwaikh, which service a diverse spectrum

of clients from every industry sector. Th ese

range from FMCG to pharmaceutical and

from perishable cargo to hi-tech goods.

OMAN

KUWAITTh e company’s ambient, temperature

controlled, chilled and frozen warehousing

is supported by a local team of over 1024

employees and integrates into Agility’s

domestic and international distribution

network. Th e Kuwait facilities comprise of

254,000m2 in covered, temperature controlled

warehousing, with a further 170,000m2 of

open yard storage, and a total of 230,000 pallet

positions. Th ese facilities are also supported

by over 5800 transport assets.

37



Located next to Riyadh dry port and situated

within a Government specifi ed warehouse

district, Agility’s Saudi Arabia warehouse

off ers direct access to the Jeddah and

Dammam highways, with near and easy

access to the city’s industrial areas. Th e

warehouse off ers multiple temperature zones

and tailored logistics solutions to many top

brands from the FMCG, high tech, oil and gas,

pharmaceutical and retail sectors. Servicing

the largest consumer market in the GCC, the

Riyadh warehouse has 40,000m2 warehousing

space and 59,000 pallet positions.

With over 400 employees across three

offi ces, the Riyadh warehouse is the fi rst step

in Agility’s strategy for an integrated logistics

network of warehousing and transportation

facilities across the Kingdom, capable of

off ering local, regional and global solutions.

Strategically located in the heart of Beirut’s

commercial centre, Agility’s warehouse is

only fi ve minutes from Lebanon’s major

port and about twenty minutes from Beirut

International Airport. Situated between two

major highways, it provides for convenient

and easy access throughout the country.

Th e 30,000m2 facility off ers 22,000 pallet

positions, multiple temperature zones, and a

range of value added services, supported by

the latest technology and security systems.

Th e Beirut warehouse provides services to

a broad client base include major multi-

nationals in the fast moving consumer

goods (FMCG) sector, as well as retail and

hi-tech companies. In order to meet demand,

Agility is currently developing a state-of-the-

art 23,000m2 warehouse located within 15

minutes of central Beirut.

KINGDOM OF SAUDI ARABIA LEBANON




Agility’s Abu Dhabi facility off ers a total of

400,000m2 in air conditioned, dry, chilled and

open areas. Th is consists of 9000m2 of closed

warehousing space and 375,000m2 of open

yard storage. Th e company’s open yard space

also includes a custom bonded storage area

that measures 10,000m2 for transit storage

purposes, in addition to a resident customs

offi cer and a customs clearance facility.

Th e Abu Dhabi facility also has a dedicated

humidity and temperature controlled records

management area, providing specialist

solutions for customer documents storage.

Agility is currently developing a new 40,000m2

facility in Abu Dhabi to capitalise on growing

demand in the UAE capital.

Agility’s main Jordan warehouse is situated

in close proximity to the Aqaba Container

Port and has been marketed as a state-of-

the-art distribution hub for Jordan and the

wider region. Covering 15,000m2 in total, and

with over 15,000 pallet positions, the Aqaba

facility is complimented by three additional

warehouses in Jordan, totalling 29,000m2

and 36,000 pallet positions. Th ese facilities

are served by almost 400 transport assets,

ensuring a seamless distribution network

throughout the country. Off ering multiple

temperature zones, suitable for an array of

industries, Agility serves various clients in

Jordan, mainly from the automotive, hi-tech,

retail and FMCG industries.

One of the most important markets in the

Middle East, Agility’s warehouse in Egypt

includes 154,000m2 of space, with 43,000m2

in covered storage and 35,000m2 in open yard

storage. Th e Cairo warehouse is strategically

located with direct access to the major

transport roads that feed Cairo, Alexandria,

the Nile delta and Upper Egypt, making it well

positioned for a domestic distribution centre,

while utilising Agility’s complete supply chain

solutions to import, warehouse and deliver

goods throughout Egypt. Th is facility was

opened in 2006 to meet the needs of a broad

range of multi-national and local companies.

Marketed as one of the few state-of-the-art

facilities in Egypt, the Cairo facility off ers

the latest technology and control systems,

supported by a team of 330 dedicated

employees in offi ces throughout Egypt.

ABU DHABI JORDAN

EGYPT


ASK THE EXPERT

WHY THE LOGISTICS SECTOR HAS INCREASED ITS FOCUS ON FLOORING Following the growth of the Middle East logistics industry, and the corresponding increase in demand for warehouse space, companies are exploring a variety of diff erent measures to ensure their supply chain operations are effi cient. An area that has increased in importance over the years is fl ooring, especially with the installation of heavier and higher racking systems, which require concrete fl oors with greater tolerance standards. Damaged or unlevel fl oors can have dramatic implications on the transportation and storage of stock, including product damage, costly repairs and delayed deliveries. MAKING THE RIGHT DECISIONS AT THE INITIAL PLANNING STAGESWhen building a storage facility, the fi rst thing that companies should consider is fl ooring, especially in terms of which treatments and materials to use for maximum durability and longevity. It is not as simple as just laying concrete. Adequate attention has to be paid to the surface of the fl oor, where coatings and sealants should be applied to increase protection. Additionally, there are other techniques that can be applied to further increase durability. One is vacuum dewatering, which removes the surplus water from the concrete and reduces the overall water content by 15-20%. Other benefi ts include a super fl at surface, less crack formation, less maintenance and minimum dusting.

THE POTENTIAL TO SAVE TIME AND MONEY WITH THE RIGHT CONCRETESuccessful concrete fl oors are the result of a detailed planning process, which focuses on the needs of the user to deliver the appropriate tolerances and quality required. Part of this process involves a design brief and establishing performance-based specifi cations. Th e fi nished concrete slab is then tested against this specifi cation to ensure the fi nal product will perform as designed. Th e basic steps of the process to reduce the hidden costs of remedial and maintenance repairs include the correct fl oor specifi cation, well-prepared ground work, proper reinforcement, well-planned joints appropriately spaced and the correct concrete mix.

OTHER IMPORTANT CONSIDERATIONS TO ENSURE THE BEST END RESULTOther steps in the process include a well-planned and managed site with an even fl ow of concrete, together with accurate placement and levelling using a combination

of skill and technology. Good fi nishing and joint cutting should also be considered, as should the appropriate time for curing the fl oor before loading. Each of these

steps remain interrelated and dependant upon each other. A

performance-based specifi cation drawn up at the very early

stages of a project’s development is the only

way to ensure success and ultimately, the

achievement of a quality concrete

fl oor in your facility that is fi t for the purpose intended.

HOW LASER LEVELLING CAN BOOST AUTOMATION AND EFFICIENCYAn unlevel storage facility fl oor will impact other handling systems in the facility, such as pallet racks, automated storage and retrieval systems, conveyors, horizontal carousels and narrow-aisle lift truck operations. Th erefore, it is vital that all measures are taken to ensure a completely fl at service. Traditional hand screed methods of construction, whether using a straight-edge or vibro-strike type tool, rely heavily on the skill of the team to set accurate wet pads and follow them precisely. Even amongst the most qualifi ed team, errors between reference points will inevitably occur. A laser screed machine can be utilised to off er precise fl atness and level maintenance, as the machine’s laser control system ensures an accurate fi nished level through the use of electro-hydraulic controls and allows for easier and fast construction. Laser receivers mounted on the screed head receive a signal from a transmitter providing automatic control to fi nished fl oor level.

UNDERSTANDING THE PERILS OF POORLY CONSTRUCTED FLOORING Excessive joints, unexpected cracks and uneven fl oors are at the very least unsightly and at the worst debilitating. Badly positioned joints or large open cracks in aisles or free movement areas can slow down materials handling equipment movement, cause unnecessary wear to tyres, wheels and bearings, and potentially cause instability with loads. Uneven fl oors can have the same negative eff ect, slowing production and adding cost. A poorly designed and improperly constructed fl oor may have problems such as cracking, inadequate joint performance and poor surface tolerance. Various repairs can often rectify many of these defects, but at a great cost of time and money.

QUESTION: How can companies benefi t from effi cient industry fl ooring in their regional storage facilities?

KEEPING GROUNDED

This month’s column was written by Joachim Nyberg, managing director of Fars Al Mazrooei


FACTS & FIGURESAir Cargo Regional & International Statistics

Knowledge of cargo statistics is essential to supporting your supply chain operations. Every month,

Logistics Middle East provides its readers with three pages of the latest information from a variety of trusted

sources, including Emirates SkyCargo, Airports Council International (ACI) and Saudi Ports Authority.

*Monthly cargo statistics for international airports, with data provided by Airports Council International (ACI). Cargo is defi ned as loaded and unloaded freight and mail (in tonnes).

INDUSTRY STATISTICS

EMIRATES SKYCARGO FUEL PRICE INDEX

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FUEL PRICE INDEXThe fuel index is based on the average price of aviation

fuel in fi ve key spot markets (Rotterdam, Singapore,New York, US Gulf and US West Coast).

INDEX100 = 53.5 US cents per US gallon

CARGO STATISTICSThis graph represents the cargo volumes handled at Dubai International Airport over twelve months. Cargo is measured as loaded and unloaded freight and mail in tonnes (Source: Airports Council International)

DUBAI INTERNATIONAL AIRPORT: CARGO STATISTICS

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09

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09

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09

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09

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09

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09

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10

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35,000

70,000

105,000

140,000

175,000

210,000

21 May373

14 May406

4 June385

11 June382

25 June401

2 July382

MONTHLY AIR CARGO REPORT: EUROPE REGION*

AIRPORT/COUNTRYAPRIL 2010/2009 YEAR-TO-DATE 2010/2009

Cargo (tonnes) % CHG Cargo (tonnes) % CHG

Amsterdam (Netherlands) 112,326 12.2 472,155 18.5

Brussels (Belgium) 33,600 0.6 147,436 3.7

Cologne (Germany) 43,071 -2.4 187,643 8.8

Frankfurt (Germany) 169,463 21.2 704,768 28.9

Istanbul (Turkey) 36,790 26.7 147,110 38.8

Leipzig (Germany) 43,939 10.7 187,706 26.2

London Heathrow (UK) 105,701 7.3 476,181 18.1

Luxembourg (Luxembourg) 54,971 11.2 219,612 9.4

Paris (France) 158,020 11.3 643,770 12.1

Vienna (Austria) 19,793 34.1 76,141 34.4

Warsaw (Poland) 4263 22.8 17,369 10.7

Zurich (Switzerland) 23,678 8.4 101,554 15.7

MONTHLY AIR CARGO REPORT: AFRICA REGION*



Accra (Ghana) 3116 -21.8 14,019 -13.6

Addis Ababa (Ethiopia) 3645 -23.0 13,796 -36.0

Algiers (Algeria) 1493 -38.8 5926 -25.3

Antananarivo (Madagascar) 892 1.2 3708 2.5

Cairo (Egypt) 24,715 9.3 107,492 11.3

Casablanca (Morocco) 4454 -20.6 17,032 -17.6

Dar Es Salaam (Tanzania) 1238 -26.2 4972 -16.8

Djibouti (Djibouti) 414 n/a 2191 -29.2

Harare (Zimbabwe) 1787 14.5 6992 10.4

Johannesburg (South Africa) 23,137 25.3 94,171 15.8

Libreville (Gabon) 1330 -22.5 5848 -12.4

Saint-Denis (Reunion) 2515 2.3 10,942 14.0

Tunis (Tunisia) 1896 12.0 6869 18.9


*Monthly cargo statistics for international airports, with data provided by global trade association Airports Council International (ACI). Cargo is defi ned as loaded and unloaded freight and mail (in tonnes).

INDUSTRY STATISTICS

For up-to-datefi gures, visit:

MONTHLY AIR CARGO REPORT: MIDDLE EAST REGION*



Abu Dhabi (UAE) 34,151 21.1 135,508 22.2

Amman (Jordan) 7072 14.1 27,922 13.2

Bahrain (Bahrain) 27,626 -2.9 111,925 -0.5

Beirut (Lebanon) 6114 4.0 24,506 8.1

Dubai (UAE) 178,357 19.6 723,107 25.9

Fujairah (UAE) 2594 6.4 11,604 2.5

Kuwait (Kuwait) 22,083 41.4 69,745 18.8

Muscat (Oman) 8191 67.9 30,844 65.0

Ras Al Khaimah (UAE) 63 n/a 968 26.0

Sharjah (UAE) 33,013 10.5 144,805 28.0

MONTHLY AIR CARGO REPORT: NORTH & SOUTH AMERICA*



Anchorage (USA) 258,107 190.8 789,369 68.7

Buenos Aires (Argentina) 16,476 48.2 59,570 33.2

Chicago (USA) 115,638 45.7 427,555 36.8

Los Angeles (USA) 147,145 27.5 552,112 25.8

Memphis (USA) 323,519 8.1 1,275,321 8.6

Mexico City (Mexico) 30,849 23.9 120,658 23.0

MONTHLY AIR CARGO REPORT: ASIA PACIFIC REGION*



Ahmedabad (India) 2352 47.6 8916 35.9

Bangalore (India) 17,004 43.5 66,047 34.4

Bangkok (Thailand) 105,063 36.4 414,117 41.3

Calcutta (India) 9128 26.0 37,326 30.4

Colombo (Sri Lanka) 13,159 26.7 54,015 30.0

Fukuoka (Japan) 21,184 8.9 81,739 9.1

Hong Kong (China) 356,915 37.6 1,271,060 34.8

Jakarta (Indonesia) 41,553 20.2 169,555 20.1

Kuala Lumpur (Malaysia) 57,877 30.0 220,179 28.9

Manila (Philippines) 34,956 51.6 135,470 57.3

Mumbai (India) 51,103 14.8 212,215 23.4

Osaka (Japan) 64,914 42.2 236,661 38.1

Seoul (Korea) 11,928 -1.9 50,445 -6.9

Shanghai (China) 286,274 45.6 1,026,214 55.0

Singapore (Singapore) 148,884 15.9 583,971 17.6

Taipei (Taiwan) 152,309 53.6 564,564 65.5

Tokyo (Japan) 190,583 35.3 706,456 40.1


FUJAIRAH BUNKER FUEL PRICE INDEX

12 A

ug 0

9

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FACTS & FIGURESSea Freight Regional & International Statistics

INDUSTRY STATISTICS

BUNKER FUEL PRICE INDEX*

PORT / COUNTRY IFO380 IFO180 MGO MDO

Busan (South Korea) 475 483 713 704

Cape Town (South Korea) n/a 553 736 n/a

Fujairah (UAE) 450 460 725 n/a

Hamburg (Germanry) 443 443 660 640

Houston (USA) 432 452 n/a n/a

Istanbul (Turkey) n/a n/a n/a n/a

New Orleans (USA) 438 458 n/a 675

Piraeus (Greece) 657 470 667 n/a

Rio de Janeiro (Brazil) 449 467.5 711 n/a

Rotterdam (Netherlands) 431.5 450 657 n/a

Shanghai (China) 476 486 719 n/a

Singapore (Singapore) 443.5 450 634 n/a

*Information on the bunker fuel price at port facilities in the Middle East, North and South Europe, North and South America, and Asia, featuring data from 12th July 2010. The prices are quoted in US$ per metric tonne and split into four categories: 380 centistoke (IFO380), 180 centistoke (IFO180), Marine Gas Oil (MGO) and Marine Diesel Oil (MDO).

TOTAL THROUGHOUT FOR SAUDI PORTS IN TONNES

CARGO TYPEMAY 2010 YEAR-TO-DATE

Discharged Loaded Discharged Loaded

Bulk cargo (solid) 1,892,982 736,295 8,811,398 2,764,408

Bulk cargo (liquid)* 298,062 4,510,946 1,779,841 20,854,240

General cargo 940,627 54,163 3,223,278 242,258

Containers (in tonnes) 2,603,667 1,911,453 11,444,893 8,724,782

Ro-Ro and vehicles 139,109 16,258 672,398 69,786

Livestock 4,814 n/a 51,445 n/a

TOTAL 5,879,261 7,229,115 25,983,253 32,655,474

TOTAL PORT THROUGHPUT 13,108,376 58,638,727

Summary of cargo throughput for majorSaudi Arabian ports - Saudi Ports Authority

Source: Saudi Ports Authority (SPA). The statistics cover all major Saudi Arabian ports (dead weight in tonnes).*Bulk cargo (liquid) excluding crude oil.

12 Jan480

12 Mar459.5

12 Jun442

12 Apr486

12 Sept435

CONTAINERS (TEU) 2010 2009

May Year-to-Date May Year-to-Date

Discharged 227,629 1,014,313 200,627 867,825

Loaded 213,243 975,061 180,123 879,334

TOTAL 440,872 1,989,374 380,750 1,256,903

Our sea freight data includes information on bunker fuel

prices at major port facilities in the Middle East, North and

South Europe, North and South America, and Asia. More

specifi c cargo statistics are also provided from the Saudi

Ports Authority, covering the major ports in the Kingdom.

Jun

09

Jul 0

9

Aug

09

Sep

09

Oct

09

Nov

09

Dec

09

Jan

10

Feb

10

Mar

10

Apr 1

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6 million

9 million

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15 million

01 02030405

1116212627282930

2223242517 18 19 2012 13 14 15

06 070809 10011 02203TRADE EVENTS


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EVENTS CALENDARA listing of trade shows, conferences and seminars relating to the Middle East logistics industry

26th – 28th October 2010SEATRADE MIDDLE EASTHeld under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of UAE and ruler of Dubai, Sea Trade Middle East Maritime 2010 will take place at Dubai International Convention and Exhibition Centre in October. Th e exhibition and conference is expected to bring together the global ship-owning community with businesses that specialise in international ship equipment, in addition to product and service suppliers in the Middle East.VENUE: Dubai Convention & Exhibition CentreEMAIL: [email protected]: www.seatrade-middleeast.com

30th November 2010AVIATION BUSINESS AWARDSHundreds of fi gureheads from the Middle East aviation industry will gather at the Emirates Palace hotel in Abu Dhabi this year for the annual Aviation Business Awards. Inaugurated in 2007, the ceremony has established itself as the ultimate celebration of achievements within the region’s booming aerospace sector over the past 12 months. Th is year’s awards will include 15 categories in total, covering the airline, airport and cargo sectors, together with a variety of supporting niches. VENUE: Emirates Palace, Abu DhabiEMAIL: [email protected]: www.arabiansupplychain.com

10th – 12th October 2010TRANSOMANTransOman, the Sultanate’s leading event for shipping, transportation and logistics companies, will provide a three-day forum for local industry professionals to discuss the latest issues that are eff ecting the domestic market’s development. Both previous and new participants alike will fi nd even more opportunities to discuss industry issues. In addition, delegates will be provided with the opportunity to network with their colleagues, exchange valuable information and predict the newest opportunities expected to arise.VENUE: Oman International Exhibition CentreEMAIL: [email protected]: www.trans-oman.com

23rd – 24th November 2010TRANS MIDDLE EASTTh e historical maritime city of Alexandria in Egypt has been selected as the host city for this year’s Trans Middle East exhibition and conference. Billed as the largest annual ports, shipping and logistics exhibition and conference in the Middle East, the event is expected to attract around 70 exhibitors from around the world, with a target audience of 500 senior executives from Europe, the Middle East and Africa (EMEA). Topics will include logistics, shipping and container ports, and ongoing market challenges.VENUE: Hilton Alexandria, EgyptEMAIL: [email protected]: www.transportevents.com

18th May 2011GLOBAL LOGISTICS AND SUPPLY CHAIN MANAGEMENT SUMMIT Th e Supply Chain and Logistics Group (SCLG) has announced plans to host its fourth annual Global Logistics and Supply Chain Management Summit in May 2011. Th e Dubai-based trade association is hoping to break its record from this year’s summit, which attracted more than 200 delegates from various Middle Eastern countries, in addition to Singapore, India and the United Kingdom. VENUE: Dubai, United Arab EmiratesEMAIL: [email protected] WEBSITE: www.sclgme.org

24th October 2010CILT NETWORKING EVENT Following the success of its previous seminar in April, the Chartered Institute of Logistics and Transportation (CILT) has confi rmed plans to host a follow-up event at Emirates Aviation College in Dubai on 24th October 2010. Th e session is aimed at trade professionals from across the regional industry, in addition to students that have enrolled on a supply chain programme. A variety of topical issues will be tackled by speakers from the Middle East, in addition to countries such as the UK and Holland.VENUE: Emirates Aviation College, DubaiEMAIL: [email protected]: www.ciltuae.org

25th – 28th November 2010HANDLING EXPOMarketed as the largest annual material handling event in the Middle East, Handling Expo makes a return to Cairo International Convention Centre in November, bringing together buyers, sellers and end-users from across the region to interact and collaborate. Attendees at the four-day exhibition will fi nd the newest technologies and applications to make their operations leaner and more productive. Last year’s exhibitors included the likes of Landoll, Crown, Yale, Nissan Forklift, Interroll and Hyster.VENUE: Cairo International Convention CentreEMAIL: [email protected]: www.handlingexpo.com

5th – 7th June 2011SITL DUBAIHosted by Reed Exhibitions, the second SITL Dubai exhibition will take place at Dubai International Convention and Exhibition Centre in June 2011, with a predicted 250 exhibitors from the supply chain and transportation sector. Th e event, which has been organised in co-location with the Airport Show exhibition and conference, is being marketed as a leading platform to connect the key markets in the East with their counterparts in the West.VENUE: Dubai Convention & Exhibition CentreEMAIL: [email protected] WEBSITE: www.sitldubai.com

1000m2

25th - 27th September 2011MATERIALS HANDLING MIDDLE EASTEstablished in 2001, Materials Handling Middle East is marketed as the leading trade exhibition and conference for the regional logistics industry. Th e fi fth edition of the show attracted around 175 industry leaders from 27 countries, who showcased their products and services to around 7000 key purchasers from 82 countries around the world. Exhibitors included the likes of SSI Schafer, FAMCO, SPAN Group, Ehrhardt + Partner Solutions, Exactus and Loc8.VENUE: Dubai Convention & Exhibition CentreEMAIL: [email protected]: www.materials-handling-dubai.com

FACE TO FACE


Congratulations on your appointment as DHL’s country manager in the UAE. When did you actually start a career in logistics?As they say, it runs in the family. My father was a passionate freight forwarder and I inherited his zeal for the industry. As a young boy I helped in my parent’s small forwarding business and after school and college, I could often be found offl oading trucks and rail wagons or actually driving a van to deliver goods. Naturally I chose an education in transportation studies and learned this business from scratch.

Can you summarise how your career has developed since these early years?Well, I worked for some years in freight forwarding, focusing both on road and

airfreight, before joining a cargo airline for 12 years. I was

fortunate to work for a company that highly values people development. Once my potential was observed I embarked on a career path that allowed me to constantly grow into roles with more responsibility. Geographically I have

moved between various parts of the world, from Germany

to Russia onto China, and then back to Russia, until I

eventually joined DHL. My roles have

been focused on sales or general management.

What prompted the move to your current position as DHL’s UAE country manager?I believe my knowledge and track record has brought me to this country. In particular, I look forward to applying my experience in developing new growth strategies across countries and regions as DHL Express UAE country manager. Th is is a great opportunity for me as the UAE is a fascinating market and I am arriving at a time when the crisis seems to be loosening its grip on the economy.

What are your main responsibilities and objectives in this new role? In essence, I believe my role is to make our customers more successful. Th is will be achieved by off ering an outstanding customer experience with highly engaged staff , which translates accordingly to customer satisfaction and loyalty.

How do you plan to achieve your goals, both personal and corporate?Th e ethos of our CEO is knowing your customers, knowing your numbers and knowing your people. Th is combined with motivation through achievement, ownership and accountability are the fundamentals of success. We also have to be superior in the basics and processes of business, whether that be the marketing mix, operations or eff ective commercial processes. With great people everything is possible and our customers will experience it.

How has DHL maintained its market position in the United Arab Emirates? We are the leader in the UAE’s international express market, but market share does not entirely mirror a company’s strengths. Th e real strength can only be determined by our customers, which we measure through customer retention and satisfaction. We are well positioned, but as usual we can and will look for further improvements.

In what ways does the United Arab Emirates differ from other markets? Each region is unique and every market has diff erent dynamics and logistics challenges to take into consideration. With its strategic position in the Middle East, the UAE can essentially be divided into two logistics segments that shape the express industry in the emirates. Firstly, there is the local UAE market, which has held its own in the economic downturn and is continuing on a strong growth path. Secondly, the UAE is considered an ideal intercontinental transit hub given its geographical location, serving as a gateway into the Gulf for many businesses. In mid-July, the statistics department at Dubai Customs released data that Dubai has registered a growth of 16% in non-oil international trade in the fi rst fi ve months of 2010, while re-export activity recorded a growth exceeding 17%.

What is your take on what is happening right now in the express logistics sector? Th e impact of the economic downturn reached the UAE later than other global markets and we observed that the eff ects were also less dramatic. In our industry, we saw signs of a slowdown starting at the end of the fi rst quarter last year. We also picked up the fi rst signs of a potential recovery as early as the fourth quarter of 2009. However, given the recent commercial climate, many businesses are reviewing their entire supply chain processes in an eff ort to drive cost effi ciencies and reduce waste. Actions taken include stock and inventory reduction, improved forecasting, migration of goods to free zones and re-thinking of supply chain distribution routes and fl ow management. We see this as a good thing. All of these require the logistics industry to adapt and respond to varying customer requirements. We must continually seek evolvement in this fast-paced, ever-changing business.

DAILY DELIVERYAs the latest addition to DHL’s Middle East management team, UAE country manager Frank-Uwe Ungerer highlights his strategy to develop the company’s local operations.

FACE TO FACE INTERVIEW

P.O. Box 2022, Dubai Investment Park, Dubai, United Arab EmiratesTel: +971-4-8851566, Fax: +971-4-8851577, E-mail: [email protected]: www.gsldubai.com

Global Shipping & Logistics (GSL) offers a complete suite of supply chain solutions for different business verticals and temperature ranges from a single location.

With its world-class infrastructure, systems, operations and quality processes, GSL is home to many leading brands. Speak to us and see why clients have outsourced their supply chain to us.

State-of-the-art Warehousing Infrastructure

Fully Automated Material Handling Systems

Integrated Warehouse Management Systems (WMS)

Real Time Inventory visibility

Web Based Order Management

Cold Storage (-25ºC to 8ºC)

Temperature Controlled Storage (+18ºC to 25ºC)

24 hours Security and Trained Personnel

Transportation Services (Refrigerated & Dry)

Fast & Efficient Custom Clearance &

Documentations (C&F)

Direct to Store Distribution

Co-Packing and Value Added Services (VAS)

logistics middle east - august 2010

Documents

logistics facility

dubai logistics city

sicd logistics scholarships

supply chain efficiency

open logistics village

yoursupply chain

supply chain consultancy

al maktoum dhl