Urgent reforms are needed in Fleet Operations if product freshness is to be improved while costs are reduced, says Phil Showering, COO of Mohebi Logistics
As the pre-eminent supply chain logistics hub in the Middle East, the UAE sees huge volumes of goods flowing in every day. All these goods must make their way into shops, work places and finally consumer homes. What are the challenges in getting products from ‘Port-to-Table’ and how is the process evolving?
Over 90 percent of the goods we use everyday are transported to us by road either in container or trailer from the MENA region. These vehicles are then off-loaded into regional warehouses where they are checked and stored. Often they are then sent to another warehouse by truck to be stored for a further period before finally being sent to the consumer. This process is inherently inefficient, expensive and can affect the product’s freshness.
The way to achieve change is to closely examine all links in the existing supply chain and to work towards an improved supply chain that’s adaptable, fast and cost effective.
Reasons for the present situation
Most of the existing FMCG supply chains in the UAE are rigid, slow and expensive. This is due largely to a lack of investment and vision. We’ve all seen very old trailers from all over the world falling apart and they seem to come here to see out their final days. You may have seen fresh food in vehicles open to the elements. We also see long queues of trucks all trying to deliver or pick up at the same time.
Need to regulate and standardize
The UAE government and the RTA (Road and Transport Authority) have made huge efforts trying to guide truck operators into improving vehicle standards. But we must regulate and set our own standards at a far higher level.
A primary issue is improving speed to market. Currently fleets are managed by the individual’s knowledge which is used to plan the fill of the vehicles, schedule the drivers and plan the route in a rigid bus-stop schedule generally with very few targets set. This delivers higher costs and does not allow for tactical changes during the process.
Creating a model Supply Chain
We need to invest in planning systems, vehicle location systems and KPIs (key performance indicators) as well as challenge our current practices.
Let’s take the example of delivering to large supermarkets in the UAE. Most want everything between 8:00am and 1:00pm, as many deliveries arrive at the same time and queues form. A number of solutions already exist in other parts of the world with centralized distribution arrangements. Here, all suppliers go to the supermarket distribution centre. Deliveries are then made to stores by one vehicle with the goods of many suppliers loaded on it.
The solution for smaller supermarkets is to work within broader delivery windows or have secure drop-off points which can be accessed 24 hours a day. This lowers everyone’s costs, allowing a single vehicle to be used in a planned route structure two or three times a day.
Clients who use collaborative partners can receive their goods at a lower cost. The saving can be passed on to consumers or contribute to the bottom line as extra profit.
The appeal of working smarter
Our cities are getting busier and more congested by the day. If we all continue to work in solo mode our costs will escalate and be passed on to customers, reducing our competitiveness.
On the other hand, if we invest in collaboration, multi-user vehicles, multi-temperature fleets, planning software and hardware, then our ROI (return on investment) will improve. We’ll have happier customers, lower our costs and deliver higher levels of satisfaction for everyone.