December 2016 Issue 32
ENHANCING THE BUSINESS OF LOGISTICS
MEDICINES WHAT A SUPPLIER SHOULD KNOW
Order picking by vision
IATA boosts AME team New RVP for region
Best Solution in Petrochemical Logistics
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The industry experiencing tumultuous times, and long term low margins on the horizon, cost management is more important to industry professionals than ever before. All of this points to an increased pressure on the supply chain. Navigating change of this scale requires smart, strategic judgment on the part of O&G company leaders. They must tackle cost and investment concerns in the short term, while readying themselves to respond to the future impact of inevitable external environmental pressures. Another big area of focus for oil and gas executives has been operational excellence. As oil prices continue to stay down, this is the perfect time for the industry to address and correct their shortcomings. Page 26 and 40. Structural transformation in Africa’s economies remains the highest priority, and industrialisation is the top strategy for achieving it in practice. Achieving the African Union’s Agenda 2063 and fulfilling the Sustainable Development Goals will demand a major re-design of growth strategies across the continent. Africa, a latecomer to industrialisation, needs to adopt alternative economic pathways to industrialisation. This requires governments to take on-board the drivers, challenges, and trade-offs in pushing for a greening of industrialisation - and to build them into the vision and route-map for action. Seizing the momentum of the Paris Climate Agreement and the SDGs provides the ideal timing for such a shift in economic strategy. Report on page 16. Hope this edition was full of information and expertise for you, dear reader. From the team behind Global Supply Chain we wish you a very happy festive season and a prosperous new year. See you in January 2017, InshaAllah!
Munawar Shariff Managing Editor email@example.com
DECEMBER 2016 3
December 2016 Issue 32
ENHANCING THE BUSINESS OF LOGISTICS
26 06 News 16 Country report – Africa Greening Africa’s industrialisation Structural transformation in Africa’s economies remains the highest priority
24 IATA boosts AME team
Muhammad Ali Albakri has been appointed as IATA’s Regional Vice President for Africa and the Middle East (AME)
26 Cover Top 10 questions for a cold chain supplier Life saving drugs need to be handled in the right way
33 Sugar manufacturer – Egypt
Construction of Al Nouran’s mega plant, intended to reshape the region’s sugar landscape, is on in full swing 4 DECEMBER 2016
34 Industry-wide tech penetration
A game-changing influence of technology in the automotive and healthcare sectors
36 Managing multiple service providers
A report on the first ever forum for the industry organised by Top Management Resources (TMR)
40 Operational excellence As oil prices continue to stay down, this is the perfect time for the industry to address and correct their shortcomings
44 Improving environmental performance
DP World continues to make great strides on all fronts, winning recognition for their Carbon Disclosure Project, and for their HR policies and programmes
48 Are we there yet? Governance trends in the global Islamic finance industry
52 Guest column Data security Protecting the supply chain network from cyber attacks
54 Tackling tough terrain There’s more to the new Ford Trucks line-up than ever before
58 Sharing knowledge RTA inks agreement with Deutsche Bahn to share knowledge and expertise
60 Order picking by vision Arvato’s SCM solutions has launched a unique order-picking system using smart glasses
DHL Express awarded AEO certification
DHL Express is set to offer its customers faster and more efficient shipment services, thanks to Dubai Customs’ certifying them as the only
Building and construction sector in JAFZA registers 14 per cent growth
Jafza head office
Ibrahim Mohamed Aljanahi, Deputy CEO and Chief Commercial Officer
6 DECEMBER 2016
Authorised Economic Operator (AEO) Express logistics company in the UAE. Dubai Customs’ adoption of the AEO programme will give DHL Express a number of added benefits, including priority and preferential treatment by customs officials. The AEO certification announcement comes as DHL Express is celebrating its 40th anniversary in the UAE. This will enable an even closer partnership with the UAE’s customs department as trade and shipments to the country continue to grow in preparation for Expo 2020. The AEO certification system in the UAE was recently officially launched at GITEX 2016 by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of the Executive Council. It means that DHL Express will also now benefit from being part of a global supply chain that connects AEO certified companies with each other, further decreasing shipment time.
The building and construction sector in Dubai’s Jebel Ali Free Zone (Jafza) posted 14 per cent growth in the number of registered companies, from June 2015 to June 2016. The growth is largely driven by the continued focus of GCC countries on developing infrastructure, and by the economic stimulus generated by Expo 2020 projects. The construction and building material sector in Jafza is among the country’s leading employment generators with a workforce of over 18,800 occupying an area of 3.56 million sq metres of combined facilities. According to a recent industry report by BMI Research, the construction sector in the MENA region is expected to accelerate over the next 10 years, propelling regional industry from an estimated US$ 215 billion (AED 790 billion) in 2016 to US$ 313 billion (AED 1,150 billion) by 2020 and US$ 467 billion (AED 1,715 billion) by 2025.
1.9 million passengers at Abu Dhabi International Airport in October ADT celebrates milestone at Khalifa Port Abu Dhabi Terminals (ADT) announced that on October 28, 2016, it set a new record by handling five million containers, representing a milestone achievement for Khalifa Port Container Terminal (KPCT). The record number was achieved serving the CMA CGM, a vessel belonging to ADT’s long-term customer, CMA CGM Pegasus. The new throughput milestone follows terminal operator ADT’s success in the first half of 2016, which saw Khalifa Port handle 11 per cent more containers than the same period in 2015. Notable and consistent year-on-year growth since KPTC’s inauguration in 2012 represents its increasing role as a crucial logistics hub, connecting local and regional trade to global markets. It also represents the success of ADT’s significant investments in KPCT’s infrastructure and facilities to create the Middle East’s first semi-automated and most technologically advanced container terminal.
Abu Dhabi International Airport (AUH) welcomed 1.9 million passengers in October. More than 20 million passengers have passed through the airport so far this year, with the total passengers numbered 1,903,556 in October 2016. The total number of travellers between January 1st and October 31st reached 20,432,279 — an increase of 5.4 per cent for the same period in 2015. Passenger
traffic to and from Mumbai, India, saw a 19 per cent increase on the 52,604 passengers in October 2015, totalling 62,415 this month. The number of passengers traveling to Doha from AUH increased by eight per cent from 55,209 in October last year, to 59,535 in October this year. London, Bangkok, and Mumbai were the top three passenger destinations for October.
October Traffic Summary: Traffic
October This Year
Year to date per cent Var
per cent Var
Total Aircraft Movements
Cargo (metric tons)
DECEMBER 2016 7
Abu Dhabi Ports hosts the 2nd Maritime Standard Ship Finance and Trade conference Abu Dhabi Ports hosted the second edition of The Maritime Standard Ship Finance and Trade Conference in Abu Dhabi last month, which featured engaging discussions aiming to chart a course for the future of the shipping and maritime sectors. The event brought together high profile executives and industry professionals from local, regional and international markets, including HE Dr Abdullah Salem Al Katheeri, Director General, Federal Transport Authority- Land and Maritime, who delivered the Keynote address, and HE Sheikh Talal Al Khaled Al Sabah, Chairman of Kuwait Oil Tanker Company. CEO of Abu Dhabi Ports, Captain Mohamed Juma Al Shamisi, commented, “Our participation and hosting of the Maritime Standard Ship Finance and Trade Conference in Abu Dhabi for the second consecutive year is testament to our commitment to finding solutions for sustained growth and development. We are confident this event has served as a platform that connects key players and decision makers together and creates rewarding opportunities.”
8 DECEMBER 2016
The first session covered the changing global economic environment, assessing the main challenges and opportunities that lie ahead. The audience was then treated to an Up Close session with well-known banker and financier Sanjay Mehta, of S One Capital, who has over 25 years’ experience in fund management, investment banking and structuring mergers and acquisitions.
The afternoon sessions, which looked at developing strategies, and the right financial tools to meet the needs of challenging market condition, were also wide ranging and stimulating. There was plenty of discussion, and a general consensus that the banking and finance sectors need to work closely together to further boost the maritime sector.
Abu Dhabi Ports and Emiroll sign Musataha agreement Abu Dhabi Ports has signed a 50-year Musataha Agreement with Emirates Aluminium Rolling (Emiroll), a joint venture between DUBAL Holding, Dubai Investment Industries (a subsidiary of Dubai Investments PJSC) and Madar Aluminum Rolling Singapore (MARS), to set up a manufacturing plant with a total investment of AED 440 million (US$ 119788204.80) on an 83,554.58 sq metre plot in Khalifa Industrial Zone’s downstream aluminium cluster. Emirates Global Aluminium (EGA), an existing investor in Khalifa Industrial Zone, will provide Emiroll with raw molten
aluminium to produce aluminium rolled products, further boosting the UAE’s aluminium downstream industries to meet global demand and contribute to Abu Dhabi’s economic diversification plan. Expected to go on-stream by the third quarter of 2017, the new plant will produce 65,000 tonnes of aluminium coils per annum, including 45,000 tonnes of cold-rolled and 20,000 tonnes of hot-rolled aluminium for applications in downstream industries, such as automotive body parts, roller-shutters, garage castings, container trays, cans and aerosols.
Consultancy Linesight targets 15 per cent growth in ME with launch of new services
Swisslog supports companies in future growth
Construction consultancy Linesight (formerly known as Bruce Shaw) is targetting 15 per cent growth in the Middle East and North Africa over the next five years, with the launch of a set of new services aimed at helping the industry consolidate costs and simplify project execution. Linesight will add programme management, new construction sector specialised consultancy, and procurement to its core competencies of project, cost, and supply chain management. The new services – launched immediately – respond to a shifting market dynamic in the region, as major construction companies look to streamline operations against a backdrop of oil market uncertainty and a regional economic slowdown. Linesight’s new capabilities will deliver economies of scale whilst increasing control over budgets, schedules and project delivery.
Swisslog Warehouse & Distribution Solutions (WDS) has been selected to automate a new distribution centre for tyre manufacturer Michelin in North America. In addition, Swisslog has been awarded an additional large-scale contract from an Asian corporation. With Swisslog solutions supporting the companies in their future business growth, the order value of the two projects amounts to around Euro 150 million (AED 580 million) in total.
Michelin North America, Inc, a division of the Michelin Group, will see its new distribution centre supplying passenger and truck tyres throughout North America, allowing the company to meet its ambitions for responsible logistics. Swisslog has been engaged to automate the warehouse operation, including receiving, tyre selection and sequencing, shipping, Warehouse Management Software, and controls software. The project is expected to be fully operational in 2019.
Etihad Cargo expands freighter services in Europe Etihad Cargo, the freight division of Etihad Airways, has announced three new freighter services from Europe. Last month Etihad Cargo started operating Boeing 777 freighters from East Midlands and Stansted airports in the UK and from Copenhagen in Denmark. Said David Kerr, Senior Vice President of Etihad
Cargo,“These three new services will connect producers with consumers halfway around the world. Manufacturers in the UK and Denmark can now get their merchandise to their customers in the Middle East even faster, in as little as 24 hours in some cases.” The new routes bring the number of freighter
destinations in Europe to nine. The European Union is one of the UAE’s biggest trading partners, whereas in 2015, the UAE was the eighth largest destination of European exports and the EU’s 13th largest trading partner overall.* * Source: Eurostat, the statistical office of the European Union. Figures exclude intra-EU trade.
DECEMBER 2016 9
ACTS has been leading the way in raising the quality standards for the construction industry, becoming the preferred thirdparty provider in the region for geotechnical engineering, materials testing, and consulting.
Engr Khaled Awad, Chairman of Advanced Construction Technology Services (ACTS)
ACTS opens new branch in Lebanon In line with its ongoing growth strategy and its continuing commitment to meet client needs, Advanced Construction Technology Services (ACTS) has opened a new branch in Tripoli, Lebanon. With this development, ACTS now has three main laboratories and five engineering offices in Lebanon. Located in Al-Qalamoun, Tripoli, the new facility features a state-of-the-art laboratory fully equipped to perform various field sampling and materials testing procedures, covering asphalt, concrete, soil and various other construction materials. ACTS’ new facility in Al-Qalamoun, Tripoli features a state-of-the-art laboratory fully equipped to perform various field sampling and materials testing procedures.
10 DECEMBER 2016
RTA bags American’s international award in rail safety environment RTA’s Rail Agency has been named the winner of Stevie Awards’ bronze category in the field of Health, Safety and Environment (HSE) for 2016. Sponsored by an Americanbased international organisation under the same name, Stevie Awards attract intense participations from 3,500 global entities or more, competing for top accolades. Abdul Mohsen Ibrahim Younes, CEO of RTA Rail Agency, expressed deep delight with the winning of this prestigious award, especially as the field of transport is hotly contested and judged by a panel of 150 top executives, business leaders and innovators in various categories of the Awards.“The rail industry commands considerable attention all over the globe in view of the steady increase in the number of population, and the growing need for affordable transit means that enable people to cope with the requirements of life and business. The Dubai Metro, both Red and Green Lines, as well as the Dubai Tram echo the visionary and realistic policy of our government towards addressing the needs of various community segments,” he stated.
Representatives from the Freshness from Europe project at WOP Dubai.
AURAK hosts workshop on innovation in petroleum industry The American University of Ras Al Khaimah (AURAK) hosted a workshop titled ‘The Role of Innovation in Sustainability of Petroleum and Petrochemical Industries.’The workshop, which was organised by the School of Engineering, addressed the issue of energy sustainability, including the latest trends and developments within the field of oil and gas production. Launching the workshop with his opening remarks, Professor Hassan Hamdan Al Alkim, AURAK president, praised the initiative, commenting on the importance of innovation within the field bearing in mind the finite resources. He also highlighted the ‘zero-energy house’, which is being produced by the School of Engineering. HE Engineer Ahmed Al Kaabi, OPEC governor of the UAE and Assistant Undersecretary for Petroleum Gas and Mineral Resources at the Ministry of Energy, was one of several guest speakers at the workshop. Mark Scarbrough, a senior petroleum engineer at RAK Gas, focused on the rapid change that the industry has experienced throughout his 35 years of involvement. Other speakers included Dr Marc Durandeau, senior vice president of research and development at the Abu Dhabi Petroleum Institute’s research centre, and Dr Christopher Fredd, manager of Schlumberger Unconventional Resources Technology Integration.
‘Freshness from Europe’ project comes to WOP Dubai 2016 The ‘Freshness from Europe’ project, a three-year, Euro five million (AED 19 million) campaign to promote trade and consumption of fresh produce from Italy in the UAE, North America, China, and Japan, participating in the Middle East’s most important trade fair for the fresh produce industry, WOP Dubai. Held last month at the Dubai World Trade Centre, WOP Dubai, the International Perishables Expo in the Middle East, attracted 7,000 delegates, making it the ideal platform for Freshness from Europe to target the UAE market during the second year of the
campaign. Participating Italian producers at WOP Dubai include Alegra, Apofruit, Oranfrizer, Origine Group and MAAP. Exports of Italian produce to the UAE have registered constant growth in the last five years. The best performing products are kiwis, melons and cherries, but when it comes to vegetables, although exports are up significantly, CSO Italy reported that there is room for substantial growth. Freshness from Europe is financed by the European Union, the Italian Government and the members of CSO Italy.
SOHAR Freezone receives fDi Award for investments
In its annual search for the best free zones, fDi Magazine, a part of the UK’s Financial Times newspaper group, has selected SOHAR Freezone as winner of the New Investments Award in the 2016 fDi Magazine Free Zones of TheYear Awards. SOHAR is the only winner in this category in the Middle East region. Editor Courtney Fingar congratulated SOHAR on this significant achievement as she presented the Award to SOHAR Executive Commercial Manager, Marc Evertse. The prospects for continued strong
growth at SOHAR Freezone look positive, with its prime location next door to one of the world’s fastest growing ports, handling over 2,500 ships a year and an abundant supply of feedstock. Combined with excellent landside connectivity, boasting new and uncongested highways to the UAE, Saudi Arabia and the other Gulf States, reasonable energy rates and a supportive legal and regulatory framework, SOHAR Freezone is well on track for more success in the years ahead as planning commences to develop phase two.
DECEMBER 2016 11
Emirates SkyCargo launches Emirates SkyWheels Emirates SkyCargo, the freight division of Emirates airline, has launched Emirates SkyWheels - a specialised transportation product for high value automobiles. Through its latest offering Emirates SkyCargo will provide customers a complete transportation solution for vehicles such as classic, luxury and sports cars, across its network. Customers who would like to have their cars transported can choose between Emirates SkyWheels Premium and Emirates SkyWheels Advanced. The customisable Premium product package covers door-to-door transportation of the vehicle from select origins and destinations. It includes collection of the vehicle from its home and
12 DECEMBER 2016
delivery overseas, in addition to export and import customs clearance processes for the vehicle at both ends of the journey. Additional road and transport insurance is also available under the Premium option. Emirates SkyWheels Advanced will offer seamless airport-to-airport transportation for automobiles. Emirates SkyCargo offers complete round trip handling of vehicles under both Premium and Advanced products.
Super cars fly First Class Emirates SkyCargo is no stranger to transporting high value cars, both on its passenger flights as well as on its freighter aircraft. Emirates SkyWheels is backed by the expertise of highly qualified staff
across Emirates SkyCargo’s global network of over 150 destinations in 6 continents, who are specifically trained on loading and unloading vehicles from aircraft with the utmost attention to care and safety. Emirates SkyCargo also recently transported an exclusive Pagani Zonda F super car from Dubai back to the Pagani factory near Bologna, Italy for a service. Emirates SkyCargo recently sponsored the inaugural Gulf Concours event last month in Dubai. Part of the international Concours d’Elegance car competitions, the Gulf Concours is a prestigious platform that brought together a combination of rare classic cars and modern bespoke luxury and supercars, which were on display for the first time in the region. Emirates SkyCargo transported a collection of rare classic Ferrari cars to Dubai for the event. One of the cars that was flown into Dubai was a classic 1962 Ferrari 250 GTO estimated to be worth over US$ 40 million. The car has a successful race history (27 races and 17 podium finishes) and was also one of the handful of cars used by Scuderia Ferrari for testing. Some of the other cars transported by Emirates SkyCargo for Gulf Concours included a 1955 Ferrari 250 GT Competizione Berlinetta Sport Speciale and a rare 1965 Ferrari 275 GTB Competizione. Cars participating in Concours d’Elegance events across the world are normally not driven on a day to day basis and are meticulously maintained by collectors to ensure a perfect appearance for display in private collections, museums or competition events. This, combined with the high value and uniqueness of the cars, meant that the Emirates SkyCargo team had to ensure that the vehicles were transported with the utmost of care, safety and security.
IRENA/ADFD open fifth round of funding for renewable energy projects The International Renewable Energy Agency (IRENA) and the Abu Dhabi Fund for Development (ADFD) have officially opened the fifth round of funding for renewable energy projects in developing countries. The funding round of approximately US$ 50 million (AED 184 million) is part of ADFD’s US$ 350 million (AED 1,285 billion) commitment offering concessional loans to renewable energy projects endorsed by IRENA. Since 2012, the IRENA/ADFD Project Facility has enabled US$ 333 million (AED 1,223 million) in loans to 15 renewable energy projects in 14 developing countries. Selected projects thus far have included off-grid, mini-grid and on-grid projects using wind, solar, hydro, geothermal and biomass sources. Thanks to the first three cycles, more than 68 megawatts of renewable energy capacity will be brought online, improving the livelihoods of 760,000 people. Only projects located in IRENA Member States, Signatories of the Statute, or States in Accession are eligible to apply. Applications are evaluated by an international panel of experts who review the projects based on technical feasibility, economic/commercial viability and socio-economic and environmental benefits. The deadline for applications for the fifth cycle is February 15th, 2017. Results will be announced in January 2018.
Driverless electric vehicle featured at 2016 Future Mobility Conference NERVE caused a stir at this year’s 2nd International Conference on Future Mobility, where they participated as Gold Sponsors, by showcasing some of the company’s very latest in electric and driverless vehicle technology, set to completely disrupt urban transportation models the world over. NERVE’s Smart Cruiser, a next-generation and multifunctional public transport solution, is smart, green and multifunctional - an intelligent electric vehicle with flawless suspension and robot technology, giving it unmatched high-speed, all-terrain capability. Already being piloted for roll out in Copenhagen, the bus can ferry people from
A to B, distribute goods, clean the streets and even double as civil defence tool. In some versions, it also boasts a pair of touch sensitive robotic arms, directed by a control center, and capable of helping children, the elderly and the visually impaired to get on and off with safely and with ease. Also on display at Future Mobility this year is NERVE’s renowned Autonomous Street Racer motorcycle, currently the world-record holder for the quickest electric motorcycle in the world. The motorcycle is expected to play an important role in the future of traffic management, police mobility and even emergency response infrastructure.
Dubai Airports awards Serco Middle East as key partner for Integrated Facilities Management Serco Middle East has been awarded a six year Facilities Management (FM) contract with Dubai Airports to maintain and support a large part of Dubai Airport buildings and infrastructure. The contract award covers a full range of Facility Management Services for Terminal 1 and 2, as well as other cargo and ancillary buildings at Dubai International. The Dubai Airports and Serco Middle East contract builds on Serco Middle East’s existing Facilities Management relationship in the education, energy, healthcare and public sectors.
DECEMBER 2016 13
CEB Group’s 2016 net income grows twofold The Philippines’ airline, Cebu Pacific, and its wholly owned subsidiary Cebgo, generated a net income of US$ 145.2 million (AED 533 million) from January to September 2016, equating to a 99.6per cent increase from the US$ 73.6 million (AED 270 million) earned in the same period last year. “Our current numbers testify to the
ever growing market we cater to. We are affirmative that CEB’s network will only continue expanding from here on out. We look forward to offering our trademark low fares to even more passengers in the years to come,” says Atty JR Mantaring, CEB Vice President for Corporate Affairs. CEB is now preparing to launch three
new domestic routes out of Cebu, to provide to the increasing inter-island travel demand in the Visayas region. Beginning November 19th, 2016, the airline will be operating daily flights between Cebu and Ormoc (Leyte) and Cebu and Roxas (Capiz); and four times weekly flights between Cebu and Calbayog (Samar).
Oil demand growth could fall below one per cent by 2018 Impact investment firm Wermuth Asset Management (WAM) has said that regardless of whether oil prices rise around potential OPEC production-capping news, there is no longterm future for the hydrocarbon sector. Solar power is now available at US$ three cent/kWh, which is equivalent to oil at US$ five (AED 18)/ barrel. According to WAM research, continued investment in Oil and Gas exploration would only make sense if oil majors and oil producing countries were to develop new projects that could output at less than US$ five (AED 18)/barrel. OPEC expects demand growth to slow from 1.3 per cent this year to 1.2 per cent next year. WAM’s research indicates that while oil supply might not peak in the next few years, peak oil demand and negative demand growth is likely to occur. WAM believes this will happen more quickly than the oil
14 DECEMBER 2016
industry expects it to, with demand growth falling below one per cent by 2018, and becoming negative by 2020. WAM highlights the competitive pricing of renewable energy without subsidies as a likely growth driver for the sector. The sustained oil price slump has led to a major decline in investment in the hydrocarbon industry, with capital flows increasingly directed elsewhere. According to the International Energy Agency, renewable power installations around the world have outpaced fossil fuel installations for at least the last two years. The lower oil price environment has reinforced that trend, with at least 95 US oil companies going bankrupt. This has made the financial community wary of investing in fossil fuel exploration and production.
Honeywell provides next-generation insulation solutions Honeywell has announced the availability of next-generation solutions for thermal insulation that can help Middle Eastern countries meet energy efficiency requirements. It gathered regulators, contractors, foam insulation manufacturers, regional stakeholders and global industry experts in an exclusive workshop to review how environmentally preferable foamblowing agents like Honeywell’s Solstice Liquid Blowing Agent (LBA) can help the Middle East meet its Montreal Protocol commitments and also energy efficiency requirements. Solstice LBA is non-ozonedepleting and has a GWP of 1, which is 99.9 per cent lower than the HCFC and HFC blowing agents it replaces, and equal to carbon dioxide.
Farnek achieves international standard for asset management
Markus Oberlin, CEO, Farnek
Worldwide adoption of Solstice has resulted in the reduction of more than 32 million metric tons of greenhouse gases to-date, equal to eliminating emissions from more than six million cars. Solstice LBA is nonflammable (ASTM E-681) and is not a volatile organic compound per U.S. Environmental Protection Agency (EPA). It is listed under the US EPA’s Significant New Alternatives Policy (SNAP) Program and is also registered under the European Union’s REACH program. Honeywell’s new world-scale production capacity manufacturing plant for Solstice LBA started up in May 2014.
UAE-based total facilities management (FM) company Farnek, has successfully completed the certification assessment for its asset management system complying with ISO 55001:2014, according to international external auditor Bureau Veritas. ISO 55001 provides a framework for an asset management system that will help Farnek to pro-actively manage the lifecycle of its assets, from initial acquisition to retirement. The system will also reduce the risks and the costs associated with owning assets, in a structured and efficient way, that will sustain continual improvement and create further value moving forward. Bureau Veritas, a global leader in certification, guided Farnek through the certification process and conducted the final assessment. The ISO achievement comes only weeks after Farnek announced that it would build a new staff accommodation centre, close to Al Maktoum International Airport-Dubai World Central, at a cost of AED 150 million (US$ 41 million), which once complete, will house 8,000 employees. This 100,000 sq feet facility should be complete by December 2018, and will raise the bar for intelligent buildings through total efficiency and connectivity and will be a model for waste management and smart energy concepts.
TSSC UAE selects Honeywell’s low-globalwarming insulating material for metal panels Technical Supplies & Services Co (TSSC) has developed and launched a new, environmentally preferable, insulating foam panel made with Honeywell’s Solstice Liquid Blowing Agent (LBA). TSSC’s adoption of Solstice LBA reflects the commitment of the Middle East foam industry to transition to lower-global-warming-potential (GWP) materials, as demonstrated by the Kigali meetings that resulted in an amendment to the Montreal Protocol that would phase down the use of hydrofluorocarbons (HFCs) for the first time. The Estidama programme outlines methodologies for sustainable building development in the UAE. It is a key component of the Abu Dhabi Vision 2030 plan. The plan rewards developers for using insulating materials with a GWP of <5.
Air Arabia posts strong third quarter net profit of AED 297 million, up 26 per cent Air Arabia announced its financial results for the third quarter ending September 30, 2016, as the success of the company’s expansion strategy continued to be reflected in strong performance figures. Air Arabia’s net profit for the third quarter of 2016 was up 26 per cent in the corresponding period of 2015. For the three months ending September 30, 2016, the airline posted a turnover of AED 1.12 billion, in line with the revenue generated in the same period of 2015. Air Arabia served over 2.27 million passengers in the third quarter of 2016, a 14 per cent increase compared to two million passengers in the same period of last year. The average seat load factor – or passengers carried as a percentage of available seats – for the same quarter stood at an impressive 81 per cent. Air Arabia completed 13 years last month, maintaining its continuous record of profitability since its first year of operations. The carrier added five new routes to its global network during the first nine months of 2016 from its operating hubs in the UAE, Morocco and Jordan.
DECEMBER 2016 15
COUNTRY REPORT - AFRICA
Greening Africa’s industrialisation
he big opportunity for Africa in 2016, as a latecomer to industrialisation, is in adopting alternative economic pathways to industrialisation. This requires governments to take on-board the drivers, challenges, and trade-offs in pushing for a greening of industrialisation - and to build them into the vision and route-map for action. Seizing the momentum of the Paris Climate Agreement and the SDGs provides the ideal timing for such a shift in economic strategy. Dispelling the myths currently surrounding green growth will promote the re-shaping of Africa’s economic growth in favour of sustainable development. Investing in
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environmental standards should be seen not as an obstacle to competitive manufacturing, but as underpinning competitiveness, making more efficient use of energy, and decoupling resource use from output growth. While some individual countries have taken the lead, there would be far greater benefits from a regional approach to greening the essential infrastructure, industrial structures, and major trade flows that span each region. Africa’s growth has been characterized by heavy reliance on natural resources and low productivity across most sectors. It has been accompanied by high energy and material intensities, as well as waste generation. These factors drive the resource scarcity and contribute to the high production costs that
Structural transformation in Africa’s economies remains the highest priority, and industrialisation is the top strategy for achieving it
undermine the global competitiveness of Africa’s industrial sector. Greening industrialisation is an opportunity for Africa to achieve the type of structural transformation that yields sustainable and inclusive growth, creating jobs while safeguarding the productivity of natural resource assets. Growth in the region has been largely jobless and associated with the degradation of Africa’s valuable natural capital. Structural transformation through industrialisation will inevitably and justifiably increase the uptake of resources. But a strategy for greening this process, in its many dimensions, will deliver a more competitive and resource-efficient industrial sector - one that provides employment, is climate resilient
COUNTRY REPORT - AFRICA
in practice. Achieving the African Unionâ€™s Agenda 2063 and fulfilling the Sustainable Development Goals will
demand a major re-design of growth strategies across the continent. This excerpt from the United Nations Economic
Safari game drive with the wildebeest Masai Mara Reserve in Kenya, Africa
Commission for Africa takes a thorough look at how the continent is prepping it industries for a overall greener future
and is decoupled from environmental degradation. There is now a growing commitment among African countries to pursue inclusive green development. A collective commitment from across the African Union would strengthen the speed and effectiveness of such a strategic shift. Governments are central in mapping out the pathway to green industrialisation. Long term, consistent, and clear directions are required of policy makers to provide the institutional design and credible incentives at the heart of this structural transformation. Such a shift in economic strategy requires not a marginal tweaking of current policy tools, but a step-change in direction. Leadership at the highest level of government is needed
DECEMBER 2016 17
Waterfront Harbor, Cape Town, South Africa
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COUNTRY REPORT - AFRICA
to confirm this step-change. In addition to the adoption of effective inclusive green economy policies and strategies, greening industrialisation will need relevant measures to create a policy environment characterized by good governance and institutions, available financial resources and technologies, and high quality human capacities. But this is not just a task for government. Indeed, it will be achieved only by a partnership between government, business, civil society, producer groups, neighbourhood organizations, municipal government, researchers and technical experts. Greening industrialisation provides the impetus for turning current supply chains linking natural resources to markets, into value chains that diversify Africaâ€™s economies and ensure Seizing the greater value added. In an era of growing momentum scarcity, resourcerich of the Paris Africa must shift away from being a Climate marginal supplier of Agreement raw commodities, and the SDGs to harness the full potential of provides natural resources by diversification into the ideal greater value addition, timing for through processing and marketing. The such a shift Africa Mining Vision offers a good example in economic for making this stepstrategy change. Taking stock of current economic trends, global economic growth slowed in 2015, reflecting a range of problems in the euro area, China, Brazil, and the Russian Federation, combined with the collapse of oil prices. This slowdown among Africaâ€™s largest trading partners has inevitably hit economic performance on the continent, with growth moderating from 3.9 per cent in 2014 to 3.7 per cent in 2015. Africaâ€™s reliance on exports of raw materials to other regions of the world has led to falling revenues for government and a decline in investment. Growth in many African countries has been underpinned by increased private consumption over the last
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COUNTRY REPORT - AFRICA
development would promote regional few years, due to rising domestic demand, integration, cooperation and the growth stemming from increased government of continent-wide innovation capabilities, spending in infrastructure projects and putting Africa’s development on a more growing incomes among the middle class. robust, technologically smart and sustainable An increase in inward investment has also foundation. spurred growth, thanks to improvements The time has never been better for African in the commercial environment and countries to follow this route to development. lower costs of doing business. But falling The past year has seen three landmark global commodity prices now mean that most agreements that align well with Africa’s countries are experiencing growing fiscal deficits, especially those reliant on oil and gas need to industrialize, by generating greener and more inclusive growth. The first was exports, and will have to revise government the 21st annual Conference of spending plans. the Parties (COP21) during the Africa’s vulnerability to United Nations Climate Change these external shocks calls for Africa’s Conference in Paris in December a rethink of its growth and 2015. At COP21 all nations broader development strategy growth signed an agreement that - if along four critical dimensions. has been the terms are carried out - will First, economic growth in to a worldwide low-carbon Africa has not been inclusive: characterised lead economy and a shift away from the number of Africans in fossil fuels. The agreement puts absolute poverty has risen, by heavy the global economy on course for and inequality remains a reliance transforming its energy systems. major concern. All countries have pledged Second, growth has been on natural “to keep a global temperature associated with increased resources rise this century well below exploitation of non-renewable 2°C and to drive efforts to limit natural resources, incurring and low the temperature increase even heavy costs to the soils, water, productivity further to 1.5°C, above preforests and biodiversity which industrial levels”(UNFCCC, make up Africa’s rich and across most 2015). All countries of the world diverse natural resource base. sectors have submitted plans laying Third, the structures of out their intended contribution African economies have to achieving the global target remained largely based on of less than 2°C, and those plans will be raw material extraction, with very little value addition and limited employment generation. subject to five-year review to ratchet up the ambition gradually. The second agreement Fourth, Africa trades more with other – on the Sustainable Development Goals parts of the world than within the continent. (SDGs), in September 2015 – places A strategic re-think across Africa’s regions equality, sustainability and universal basic could build much stronger domestic and needs at the heart of our common global regional linkages - reducing large and economic strategy. The Addis Ababa Action growing food imports, greatly improving the use of renewable resources, particularly water Agenda, the outcome of the Financing for Development summit in Addis Ababa in July and energy, and establishing competitive 2015, offers a comprehensive framework industrial activity. for financing Africa’s industrialisation and The challenge facing African leaders is to structural transformation, with an emphasis transform their patterns of production, and on domestic resource mobilization. to build system-wide infrastructure in order Properly aligned, these global agreements to ensure secure supplies of water, food and set the stage for international and regional energy. Green and inclusive industrialisation partnerships that can transform Africa’s provides a pathway to attain such goals. And growth prospects. They confirm a shift in since most African countries share common the direction of the global economy towards environmental challenges, greening Africa’s
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a sustainable, low-carbon future based on green and inclusive growth. Africa is blessed with abundant land, water and energy sources and with a young and increasingly better educated population. Such abundance, when combined with capital investment, can generate the prosperity, employment and sustainability needed to achieve the promise laid out in the African Union’s Vision 2063. Some African countries are making good progress, with a focus on water, energy and agriculture, systematically building lowcarbon development and climate resilience into their plans and decision-making. But many countries have yet to focus on how best to harness the post-2015 momentum in climate and sustainability and use it to accelerate their own plans for growth, structural transformation and sustainable industrialisation. The year 2016 is the ideal time to redesign long-term growth plans to deliver green and inclusive industrialisation. A low-carbon economic pathway must be followed worldwide if the world is to keep the mean global temperature increase to less than 2°C. A perspective to 2050 and beyond means that all countries should plan their routes to deep de-carbonization to achieve 80 per cent emission cuts by 2050 and net zero carbon by 2070. African nations have contributed very little to global greenhouse gas emissions, and perhaps should not, therefore, be expected to take the lead on low-carbon development. African countries can stand back and watch others take the lead in building a green economy – or they can benefit from their current low-carbon position and leapfrog the process. Following the latter strategy means that many African economies can get it right the first time; infrastructure does not have to be retrofitted to make it climate resilient, and high dependence on volatile fossil fuels can be avoided, bringing significant co-benefits for health and energy security. Africa’s move to greener industrialisation is not just a step towards meeting global carbon emission targets - it is a precondition for sustainable and inclusive growth. The Intended Nationally Determined Contributions, prepared by each country in advance of COP21, offer the ideal framework
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COUNTRY REPORT - AFRICA
Teacher reading a book with a class of preschool children
large enterprises. And while for practical steps over the Taking stock of government must take next 5 to 10 years, aligning current economic the lead, it cannot hope to with long-term goals of dedesign, fund and achieve carbonizing, building climate trends, global a green and inclusive resilience and delivering economic growth economy on its own. Strong, sustainable development. long-term partnerships Africa can explore many slowed in 2015, are needed with business, ways to achieve green reflecting a range civil society organizations, industrialisation - starting with community groups, existing enterprises. Because of problems in municipal government, of current high levels of waste finance and research sectors. and inefficiency at the plant the euro area, Each one brings its own level, supporting business China, Brazil, skills, networks and interests to become more resourceefficient provides multiple and the Russian to construct a shared vision for an inclusive green opportunities for win-wins. Federation, economy. And working at the systems Africa has a bright future level offers big opportunities combined with that is within reach. The for greening supply chains, the collapse of continent is a ‘gold mine,’ infrastructure and, above all, a world region with very energy generation. oil prices significant natural resource Government has the central assets, and significant role in taking the long view growth and industrialisation opportunities. - out to 2030 and beyond. Policy stability, Building on previous editions, this report effective pubic institutions and consistent emphasizes effective policy frameworks and implementation make all the difference actions that will enable Africa to leapfrog in creating credible incentives to unlock in the industrialisation process, particularly private investment by small, medium and
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through good resource use and governance and the construction of green infrastructure. This report’s work on alternative scenarios makes this starkly clear. Africa is also fortunate to have excellent examples of what bold, informed decisions about green industrialisation can achieve. How best to stimulate growth and ensure it is both inclusive and environmentally sustainable? Africa cannot continue on a business-as-usual (BAU) trajectory if it truly wishes to industrialize and scale up broad-based development. Looking forward to 2050, and using a set of green agenda policy tools, many of the supply-demand gaps in energy close considerably if major investments tap into Africa’s vast renewable energy resources. Even water scarcity becomes manageable, largely as a result of improved governance, regional integration and green infrastructure. Critically, urban populations generate big dividends where investment is made in green infrastructure, and enhanced skills and innovation. African governments have clear policy options to follow. First, they need leadership at the highest level to achieve this structural change. This
COUNTRY REPORT - AFRICA
Colored Beach Huts, Cape Town, South Africa
leadership needs to translate a broad vision into strategy and policies. A credible and long-term plan is vital, which is shared and communicated clearly. Second, while current capacity may be limited, steps should be taken to build the ability to deliver. This means investing in domestic resources and learning lessons on greening industrialisation from elsewhere. Many other governments are pursuing similar challenges – so there is much to be learned. Third, if governments really seek a stepchange in economic strategy, some interests are bound to block progress. Inevitably, such a shift in strategy will not please everyone, and government needs to be ready for this. Fourth, the enormous size of the informal sector means it cannot be wished away. Instead, government needs to find ways of engaging and bringing its energy and innovative capacity on board. Fifth, it can sometimes be tempting to consider large-scale initiatives as the only ones that really count. But in practice, lots of small initiatives add up to a big impact. A decentralized pattern of economic innovation can also be more resilient to shocks than a small number of large enterprises.
Sixth, if government policy is to be credible, some fundamental institutions have to be in strengthened - among them, local government administration, land and property rights, and access to law. Seventh, it is important to decentralize economic activity across the country to avoid having everything happen in the capital city. In practice, much of the innovation is likely to be at the local level, since this is the arena where people, enterprise and the government administration have the closest connection. Eighth, if policy is to adjust to circumstance, there must be means to assess progress through regular data collection, review and adjustment to the strategy. Central in all this is an approach focused on decoupling energy. Many industrial energy decoupling programmes in Africa show the scale of savings achievable in energy use. In Tunisia and South Africa big savings offer profitable opportunities to industries, and broader targets for greening in government strategies. At the heart of green industrialisation is infrastructure investment. Greening Africa’s infrastructure enables leapfrogging in the green industrialisation process. Decisions
today will have long-lasting impacts on patterns of growth and consumption. So getting it right the first time is vital to avoid retro-fits, which are always more expensive. It is also a no-regret investment option under any scenario or growth pathway for Africa, since at a minimum it will build Africa’s resilience to climate change. Bold expansion of renewable energy can help resolve Africa’s energy deficit, providing a cornerstone for Africa’s industrialisation. Greening African cities is another cornerstone of Africa’s green industrialisation and another opportunity to leapfrog the green industrialisation process. Cities bring together social innovation, skills, infrastructure, and energy, food and water security, making them a natural focal point for fueling green industrialisation while making urbanization inclusive. The year 2016 offers a valuable opportunity for a step-change in the direction taken by any African economies, in favour of structural transformation which delivers green, inclusive growth which builds industrial capacity, value added and quality employment. -http://www.uneca.org/
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IATA boosts AME team Muhammad Ali Albakri has been appointed as IATA’s Regional Vice President for Africa and the Middle East (AME)
24 DECEMBER 2016
he International Air Transport Association (IATA) has a new member on its team. Muhammad Ali Albakri will join IATA as Regional Vice President for Africa and the Middle East (AME), with effect from January 1st, 2017, and will be based in the IATA regional office in Amman, Jordan. “Albakri is stepping into a critical role at IATA. Africa and the Middle East are among the fastest growing markets for air transport. While the region has tremendous potential, it also faces some big challenges. Infrastructure, regulation,
and taxation must align to support the social and economic benefits of a successful aviation sector. I am confident that Albakri’s solid aviation background will deliver great value to our members, and aviation in general across AME,” said Alexandre de Juniac, IATA’s Director General and CEO. De Juniac’s confidence comes from Albakri’s professional profile. A Saudi national and aviation veteran, Albakri has, since the beginning of this year, served as Executive Vice President for Strategic Projects and Transformation at Saudi Arabian Airlines. In that role, he was
Muhammad Ali Albakri
charged with delivering various initiatives as part of a broad transformation strategy, devised to strengthen the competitiveness of the airline, as it aims to double its size by 2020. Under Albakri’s leadership, Saudia successfully moved its second largest domestic hub operation into the new Terminal 5 at Riyadh’s King Khalid International Airport in May of this year. He is also leading similar relocations of the airline’s operations to new facilities in Jeddah and Cairo. Albakri’s career at Saudia spanned some 26 years. He rose through the ranks of the airline’s IT Division, eventually being appointed as Vice President of Information Technology (2009-2016), concurrent to holding the responsibility of Chief Financial Officer (2012-2016). In these roles, Albakri led the strengthening of the
carrier’s technology infrastructure, and the modernisation of its financial practices and processes. “I am tremendously excited to take-up this challenging role. IATA has made critical contributions to the development of aviation around the world. That work is especially evident in Africa and the Middle East, where the industry is rapidly changing. I have seen first-hand the transformational power of IATA’s global standards, such as Fast Travel, e-freight, and New Distribution Capability. These boost competitiveness, and please customers at the same time. In my new role, I am excited to be responsible for the full suite of IATA’s activities, and shall be a tireless advocate for aviation’s success in the AME region,” said Albakri. Albakri will lead IATA’s Regional Office for AME, where a total of 124 employees
are responsible for IATA’s operations across 68 countries. This includes the operation of IATA’s settlement systems, which efficiently handle some US$ 23 billion (AED 84.4 billion) of industry money, annually, across 38 countries. The fast growing AME region is home to 58 of IATA’s 265 member airlines, and accounts for 11.6 per cent and 15.5 per cent of global traffic in terms of RPKs and FTK, respectively. Aviation support some nine million jobs, and US$ 130 billion (AED 477 billion) of GDP across Africa and the Middle East. Albakri succeeds Hussein Dabbas, who led IATA in the region from 2012 until June, 2016. Among Dabbas’s many leadership contributions during his tenure at IATA was the successful integration of IATA’s activities in the Middle East and Africa into one region.
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questions Life saving drugs need to be handled in the right way. So what do suppliers and materials handling specialists need to know to provide the right service to get medicines to their destination in their optimum condition. This white paper by Fisher Clinical Services discusses the importance of using the correct handling procedures 26 DECEMBER 2016
1. Do you specialise in investigational medicines?
Supplying investigational medicine differs greatly to supplying commercial, approved medicines. There are many unique nuances that apply to supplying investigational medicine. For this reason, most supply/logistics companies do either one or the other. Supplying IMPs involves keeping track of who gets what, manufacturing and placing labels that specify different doses in a â€˜blindedâ€™ way so neither the patient nor physician knows which patient received which dose, yet it can be tracked.
for a cold chain supplier The stakes are a lot higher too for supplying IMPs. Quantities are more precious as there are not typically large amounts of drug made for a clinical trial. Also, if mistakes are made in labeling or if a batch of IMP ‘spoils’ by being out of its temperature range for too long, the whole trial can be affected since interpretation of the data is based on a certain number of patients receiving specific doses of the medicine. It is important to understand not only a cold-chain supplier’s capability to manage a cold product, but at what stage of the process they help. If they provide cold storage and distribution, do they also provide packaging and labeling services, and can those services be conducted in
a variety of temperature controlled settings? It is preferable to minimize the number of handoff and transitions the product needs to make. It is also critically important to ensure that the supplier is well versed and compliant in good manufacturing practices (GMP) regulations and certifications. 2. How do you plan the cold chain logistics?
A vendor that specializes in cold-chain clinical supply needs information to plan how the IMPs should be packaged and transported. They should be asking the client these basic questions: • Allowable excursion
range – how long can the IMP be outside of its temperature range? • Where are the clinical trial sites/final destinations? • What is the range of materials available to ship the product, based on budget and location of final destinations and who are the shippers? • Does the client have a preference for cold chain specialty shippers? • How large are the shipments? • Is re-icing an option if there are expected delays along the supply chain? 3. Do you have any new technologies that help the process?
Temperature Monitors One of the main tasks in cold chain supply of pharmaceutical
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the risk of a user error is products is to have ways Biologics typically reduced or eliminated. For to monitor and assure need to stay within example, sometimes the that a product remains clock read-out is effective within its prescribed 2-8°C, which means but the user requirements temperature range and in refrigeration is are not that simple, the case of any deviation, resulting in some false to understand how long a required. Inactivate alerts where it may appear product has been outside of vaccines need to be as though the product its prescribed temperature was out of range and is no range. Biologics typically maintained 2-8°C or longer usable when in fact need to stay within 2-8°C, which means refrigeration live vaccines at -20°C, it was simply incorrectly disabled at the investigative is required. Inactivate which is usually site. The company has vaccines need to be also worked to develop maintained 2-8°C or live accomplished by real time read-outs of the vaccines at -20°C, which special packaging transit temperature history, is usually accomplished by allowing the product to be special packaging or storing or storing in special used immediately. in special freezers. There freezers This saves the clinical are various devices that trial site a few days in track if a bottle/vial/syringe getting the trial started. In the past, the site has left its cold environment. Typically, they had to send the monitor back to their vendor include a ‘clock’ that ‘ticks’ when the product is so they could extract and analyze the data to out of its cold location and provides a read-out of when and how long the IMP was out of its temperature range. The ticking clock is well suited to working with material that is unstable or where the stability is unknown. It allows the packaging and distribution team to understand the limited time that is available to work with the material outside of its stable environment. The drawback to the ticking clock, however, is that it limits what can be done with the material outside of a specified range – making material handling overall a more complex process. Some of the newer technologies enable easier access to the read-out of the clock. The personnel at the clinical trial site can determine right away whether an IMP has remained cold and is ready to use or whether it has been out of its temperature range and needs further analysis to determine if it is still effective. Fisher Clinical Services has worked to leverage such leading technology and to simplify the instructions and requirements so that
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get the IMP’s temperature tale and then send it back to the clinical trial site to let them know if the IMP could be used or if it needed further investigation. Probe Monitors/ RFID Logic Tags Another innovation allows the clinical site to see the temperature tale monitor without opening the box. In the past, all monitors were placed inside the box with the IMP. Often upon arriving at the clinical trial site, the box was opened to transfer the Investigative Medical Product into the site’s controlled storage, but the monitor was not turned off. That led to mistakenly thinking an IMP was ‘spoiled’ because its monitor was not turned off when it should have been. More recent designs place the probe and monitor outside the box, providing ease of access and reducing the chance of an accidental reading. Though usage of Radio Frequency ID (RFID) has yet to gain widespread adoption within clinical trial sites, its growth has been substantial in the commercial market. Radiofrequency identification (RFID) is the wireless use of electromagnetic
fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. According to a recent market study, the RFID pharmaceutical and biomedical cold chain segment earned total revenue of $78.5 million in 2012 and grew 37.2% over the previous year4. This segment is likely to have a CAGR of 43.1% and become a $471.6 million market by the end of 2017. Phase Change Materials Typically some vaccines that need to be kept below -20C would be shipped on dry ice in Styrofoam containers. However, recent developments in phase change materials provide several significant advantages over dry ice shipping5 . First, systems using these materials are lightweight, often using plastic polymers as insulation, meaning that they can cut the weight of the overall shipment. Secondly, these systems last longer than dry ice, with some phase change materials able to maintain temperature for up to 120 hours. In terms of clinical trials, this means that clinical materials can be delivered to more remote trial sites with lower risk of a temperature excursion. Pharmaceutical companies will be better able to access rural patients in both developed and emerging markets with these temperature control systems. In addition, avoiding dry ice saves on shipping costs because dry ice is considered a hazardous material. Finally, using phase change materials enables reusable boxes to be used rather than Styrofoam. 4. Do you have staff that specialises in cold-chain supply?
Having dedicated cold-chain personnel who know how to work in refrigerated conditions, know how to handle IMPs and label them in the cold, and know the specifications of the pack-out material, helps reduce errors and increases speed. Whilst adequate training is imperative, experience comes with the volume of orders.
keeps it in its warehouse until it is ready to be sent to a clinical trial site. It labels and packages the IMP at this warehouse or at a depot closer to the trial site right before it is ready to be sent to the site. Size matters when it comes to the storage facilities. Throughout its company owned manufacturing sites and depots, Fisher Clinical Services maintains more than 1.4 million cubic feet of refrigerated and frozen storage space. Storing vaccines in ultra low or deep freeze/cryogenic conditions requires stand up freezers. Most of Fisher Clinical Services’ warehouses and facilities can accommodate large volumes of refrigerated and frozen drugs. In the biologics cold chain, having space for walk-in fridges is desirable because that enables the labeling to be done in the cold, so the IMP does not have a temperature excursion during the process. It is also important for the facility to have spare capacity. That way it can handle fluctuations in demand. If, for example, a local site loses power and the IMP needs to be kept at the warehouse longer, or if the clinical trial protocol ramps up at the last minute, then the capacity is available. The storage facilities also need the following: Back-up power source Fire protection systems – each location/rack in the walk-in fridge should have sprinkler protection GMP compliance – check how frequently they are audited and by whom. 6. Do you have specialised labels?
5. What are your storage facilities like?
When the IMP leaves the pharma/biotech manufacturing site, the cold-chain supplier
Cold-chain IMPs need specialized labels – for example, the adhesive has to adhere in the cold. Special consideration needs to be paid
to design, stock and type of label. Inks and/ or toner used for the label also play a pivotal part in the cold chain packaging model. Some IMPs require frozen or ultra low (cryogenic) storage conditions. Extreme storage conditions have the ability to create numerous label failures – from toner or inks that disintegrate to paper label stocks that shatter from the extreme cold. In addition, the label stocks need to be approved by the FDA to ensure that the adhesives are safe. It is also helpful if the labeling is completed in walk-in fridges. For all IMPs, labeling involves making sure the right IMP gets the right label because the same medicine can be dispensed in many different ways (different doses, different languages on the label depending on which country it is going to, etc.). 7. What are your green shipping options?
The advent of phase change materials and less need for dry ice has enabled the industry to reduce the use of Styrofoam boxes. The phase change materials can be put in boxes that can be reused or sent back to the supplier with pre-paid bills. The Styrofoam may be cheaper initially, but if the client can consider the long term budget implications, the reusable boxes lead to cost savings within a few years and of course lead to a healthier planet. 8. How far is your global reach? Do you partner with any third party networks?
Because clinical trials are so global nowadays, often the end destination is far from the original warehouse where the IMP is packaged and labeled. A clinical supply vendor that has company owned facilities in many countries will have more control over ensuring the product remains cold
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Biologics typically need to stay within 2-8Â°C, destination. In many cases, a which means customized plan by region is refrigeration is the best way to go. required 9. Do you have flexibility
in case of any unexpected delays or occurrences. If the supply company does not have a facility close to the final destination of the IMP, does it have relationships with 3rd party networks that it knows to be GMP compliant? How frequently have they worked with those 3rd parties, and have they audited them? As noted above, fewer handoffs in the entire clinical supply chain help prevent temperature excursions. Having a local presence is important so that your supplier can send trained, known staff to locations to trouble shoot in case of emergencies (for example, a shipment that is held up at a loading dock during a power failure). Familiarity with local country regulations and customs requirements will help you to plan in advance for potential delays, to appreciate the overall transit time and to ensure that the shippers selected can maintain the integrity of your product for the duration of transport from point of origin to
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in how to partner?
Some pharma/biotech clients already have a relationship with a certain courier such as FedEx or UPS and refer all clinical shipments through that vendor. However, using a clinical supply company that works with a variety of shipping vendors and can custom design a distribution plan may be helpful. Custom-designed plans can end up providing the best outcomes and help you manage your budgets more effectively. If the client does not require a specific shipping vendor to be used, the clinical supply company should be able to provide a recommendation on an optimized distribution plan based on regional or country specific performance experience. Check that your supplier can build a plan based on actual performance data in prior distribution experience of temperature sensitive products.
10. How well do you know the regulations of the destination countries?
Each country has its own import/export regulations. Knowledge of the specific requirements in these countries has grown more significant given that 45% of all clinical trials take place exclusively outside of the United States. A good clinical supply cold chain company will be up-to-date on specific country regulations. They will also have people at the destination countries to call if it is necessary to facilitate the materials getting through customs while having their cold conditions maintained When conducting trials of biologics, the number of considerations to evaluate within the clinical trial supply chain can be daunting. Keeping investigational products at the right temperature and environmental conditions takes careful coordination of resources and, when required, tight integration with an experienced vendor. But the investment of time and energy pays dividends that are expected to deliver a high return long into the future.
A new vision for Egypt: Redefining the sugar landscape
Sugar manufacturer – Egypt Construction of Al Nouran’s mega plant, intended to reshape the region’s sugar landscape, is on in full swing
gypt has long consumed more sugar than it produces, plugging the gap through imports. With nationwide shortages of the country’s main staple, white sugar has become somewhat of a must-have luxury item. But life in Egypt’s sugar industry is soon destined to become much sweeter, thanks to Egypt’s Al Sharkiya Sugar Manufacturing SAE – Al Nouran - and the sector’s dynamics are about to change. True to its characteristic low-key and strategic forward-looking approach, Al Nouran is addressing the country’s deficit by building the largest sugar plant in the MENA region, with the objective of filling the country’s sugar gap, in various stages. Al Nouran’s US$360 million (AED 1,322 million) sugar plant will begin operating its first of four production lines of 14,000-tonne beet per day, by Spring 2017. Sprawled over an area of 1.8 million sq metres in Al
Sharkiya governorate, the plant is masterplanned to include four production lines, closing the current one million sugar deficit in Egypt, and venturing into exports. “Al Nouran’s plant will reduce Egypt’s reliance of imported sugar by up to 25 per cent from the first production line, and 100 per cent with the completion of our fourth line,” says M Ashraf Mahmoud, Chairman and CEO, adding,“This is unprecedented, both in Egypt and the region.” The company also plans to expand with sugar-integrated industries, such as bioethanol from molasses – a by-product of sugar production, which is currently an export product in Egypt – as well as other high value products such as yeast and vinegar. Al Nouran is staged to be a regional leader in sugar production and trade. True to its low-key and forward-looking approach, the company is redefining investment and stability in a global climate that is in dire need of sweet optimism.
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Industry-wide tech penetration The Biometrics in the Global Automotive Industry, 2016–2025 analysis, and Vision 2025 – Future of Healthcare, conducted by Frost & Sullivan, indicate a game-changing influence of technology in the automotive and healthcare sectors 34 DECEMBER 2016
dvancements in biometrics will radically transform the driving experience, health, wellness and wellbeing (HWW), and security of vehicles by 2025. Already, about one in three new passenger vehicles have started to feature fingerprint recognition, iris recognition, voice recognition, gesture recognition, heart beat monitoring, brain wave monitoring, stress detection, fatigue monitoring, eyelid monitoring, facial monitoring and pulse detection. As these will be driven by built-in, brought-in, and cloud enabled technologies, the automotive biometrics ecosystem will surge ahead. Major automotive original equipment manufacturers (OEMs) and Tier 1
suppliers must stay abreast of technologies, business models and regulations shaping this dynamic space. “Partnerships between automotive OEMs and wearable companies will result in faster penetration of biometrics within the automotive industry, allowing OEM’s to save on biometrics related R&D expenditure, while creating growth avenues for wearables companies,”says Frost & Sullivan’s Intelligent Mobility Analyst, adding,“New business models such as device as a service and health as a service will also emerge.” The Biometrics in the Global Automotive Industry, 2016–2025 analysis, a part of Frost & Sullivan’s Automotive & Transportation Growth Partnership Service programme,
the safety of the sensitive data collected through biometrics will compel suppliers to also invest in cybersecurity measures to build credibility and increase growth.” Some emerging innovators in the automotive biometrics space currently include: Empatica – a watch to monitor the vitals of drivers with history of epilepsy and predict an attack before it happens Gestigon –a software system to interpret a multitude of driver movements and draw actionable insights Optalert – eye glasses which that infrared rays to monitor the eyes of the driver to detect the onset of drowsiness Sober Steering – sensors that can be embedded in the steering wheel to check if the driver is drunk, and whether the alcohol level is within permissible limits Vigo – smart headsets that can monitor head movements to monitor driver distraction, slouching posture and drowsiness By 2025, the healthcare ecosystem is also expected to look drastically different from today. Growing at a CAGR of 5.6 per cent, the global healthcare industry is likely to reach revenue of US$ 2.69 trillion (AED 9.9 trillion) by 2025. However, the regions and sectors generating this revenue will change significantly. While currently, Europe is the secondlargest healthcare market in the world, Asia is set to replace it by 2025. North America should be the largest healthcare market until finds that OEMs and suppliers are investing in advanced biometrics based on human machine interaction (HMI) concepts, such as natural language and gesture recognition. They are also vertically integrating and funding relevant start-ups to build a stronger portfolio. “Urbanisation will continue to fuel emphasis on biometrics-driven, advanced driver assistance system (ADAS) features to navigate heavy traffic, while ensuring, safety and comfort,” noted the analyst, adding,“However, customer concerns surrounding
about 2028, when Asia will probably become the largest market. Asia-Pacific’s growth in healthcare expenditure (as percentage of GDP) is set to be higher than that of North America and Europe, supporting the market’s high growth. By 2025, Latin America is set to overtake Japan to become the fourth-largest healthcare market globally. Aging populations worldwide will challenge existing healthcare systems financially, and require improved healthcare outcomes. This will cause a shift towards value-based care and require national policies to change dramatically. The rise of consumerisation as well will lead to patient-centric healthcare. Technological advances will unlock values and previously inaccessible segments. Among others, brain-computer interfaces, digital avatars, wearables, and precision medicine will emerge as leading technologies. The healthcare IT sector will experience the fastest growth in the industry, growing at a phenomenal rate of 16.1 per cent until 2025. The new analysis, Vision 2025 - Future of Healthcare, which is part of Frost & Sullivan’s Advanced Medical Technologies Growth Partnership Service programme, explores how the healthcare landscape is expected to evolve. It also identifies 18 technologies impacting the industry heavily, highlights the key areas of growth within each sector, and focuses on challenges that different regions will experience in achieving better healthcare futures. “With aging population and increasing chronic disease prevalence, the focus on prevention and monitoring will be enforced. This is reflected in rising shares of healthcare expenditure for prevention, monitoring and diagnosis, while the share for treatment will decline,”notes Frost & Sullivan Transformational Health Research Analyst Siddharth Shah, adding,“Emerging technological advances to help alleviate the situation will enable several new, billion-dollar opportunities to arise in all sectors. The combined effect of transformational shifts and new opportunities will facilitate the emergence of new business models in the industry.”
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Ingo Kloepper, CEO MEA - Damco
Nick Glenville, CCO MEA - Damco
Managing multiple service providers Global Supply Chain magazine is pleased to be the official media partner for an ongoing series of exclusive, invitation only Supply Chain and Logistics Leadership Forums (sponsored by Damco) which have been launched by Brian Cartwright, Founder and Managing Director of Top Management Resources (TMR) Group
36 DECEMBER 2016
ast month, Global Supply Chain participated in the Supply Chain and Logistics Leadership Forum, sponsored by Damco, and launched by Brian Cartwright, Founder and Managing Director of Top Management Resources (TMR) Group, as media sponsor. The forum was enlightening for all participants, with the main goal being helping organisations to improve efficiencies within their supply chains, by providing a neutral platform for Senior Executives to share ideas, best practices, and knowledge, in a relaxed, but business-focused environment. This was the first forum of its kind, and was attended by Supply Chain and
TMR SUPPLY CHAIN LEADERSHIP FORUM
Logistics VPâ€™s and Directors from various multinational and local organisations, which included Beiersdorf, Goodyear, Air Liquide, Borouge, Richemont Group, Ahmed Seddiqi & Sons, and more. The key topics discussed during this forum included the management of multiple service providers within an end-to-end supply chain, and key trends and perceived challenges in shaping the supply chain of the future. One of the outcomes was an agreement that there needs to be a procurement and sourcing strategy for service providers â€“ depending on the category/objectives (for example, long term vs short term). Contracts and partnerships should be different, depending on oneâ€™s needs and/or
requirements. For example, for shipping lines, it could be of six months duration, longer terms for ports, and short term for trucking, maybe in places like China. It was also agreed that it is critical to align the organisations expectation and vision with that of the service providers. End users often feel that the service providers need to add more value to the business/brand owner. The questions to consider here are: Are they bringing new ideas/innovations to their customers? Do they operate with a partnership mentality? Do they bring collaborative / improvement suggestions? At times, some service providers over-promise to win contracts.
Building relationships with service providers is critical, as they are a vital part of the supply chain. Some logistics service providers, for example, seem to have a preference towards servicing larger and more lucrative, or regular areas of the business, as opposed to less consistent or smaller consignments, whereas customers need them to take care of the entire supply chain. On the flip side, using logistics services providers as an example, end users are often operating with tightly budgeted contracts. With such low margins, and high expectations, how can service providers innovate? With the emerging trend of E-Auctions, some customers believe they are reducing
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TMR SUPPLY CHAIN LEADERSHIP FORUM
Robert McCaffrey, Director Supply Chain Management – Ahmed Seddiqi & Sons
Sanjay Chandwani, Regional Logistics Director – Richemont Group
cost; whereas others in the group highlighted that these auctions fail to capture the additional value service providers can bring. Furthermore, some service providers may end up quoting fees without having a full understanding of what is required, and they then fail to deliver during implementation, which leads to disruption in the supply chain, and potentially, added costs. Having multiple service providers ensures you don’t keep all your eggs in one basket. The principal company also has more flexibility to move volumes around, based on the performance against KPIs. Some examples were given, where both customers and service providers where spending much of their time fighting fires instead of focusing on long term improvements. A best practice shared by a member of the group was to use a RASCI (Responsible, Accountable, Supportive, Consulted, and
Informed) matrix with service providers, to help focus on longer term objectives. Other ideas that were raised during the forum involved industry service providers offering free process mapping, and sharing any savings where improvements are identified and realised. At the forum, end-to-end visibility in supply chain was cited as one of the most important elements where improvements or new innovations are drastically needed. Visibility requirements depend on which part of the supply chain the cargo is at, as some parts require more frequent updates than others. There is a rise in companies that want to collate and manually integrate data from various sources, which has been of major help to the Supply Chain Directors, as the integration/transfer of, for example, shipping line data to ERP/ SAP, did not work in many cases.
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Charles Contamine, Supply Chain Director - Air Liquide
Standardised reports and dashboards are required to monitor supply chain, especially in the Middle East. In this, data source is of utmost importance: • Is it reliable? • Is it verified? • Is it manual, or direct/live from the source? In case of shipping line data, it is sometimes ‘garbage in, garbage out’. In such scenarios, intermediaries are required to validate and update data. Supply chain visibility platforms are expensive though, and often, companies simply hire additional people to manage data requirements. It was also discussed that it would benefit shippers if they could have access to port and customs information direct from source instead of relying on data from shipping lines only. It was also mentioned that it is difficult to measure the impact of not having visibility on the overall supply chain. Some shippers
TMR SUPPLY CHAIN LEADERSHIP FORUM
About Top Management Resources Group
Mick Fuellenbach, Supply Chain Director MEA - Goodyear
Fredrik Pramle, Supply Chain Director MENA - Beiersdorff
are also not aware if they are affected, because they may lack a view on the impact of lost sales, demurrage and detention spend, etc. In short, having visibility can save endusers a lot of money. Some service providers are taking steps to address this. Damco, for example, recently launched their own solution, which enables companies to work with multiple service providers on a single platform. Going forward, another key topic of discussion is that there is a huge need for supply chain training and skill development. Lack of professional qualifications means that most of the people in the industry are learning on the job, and continuing to do what has been going on for years. In the past, a supply chain and logistics career was often seen a last resort, very non-glamorous. As this is no longer the case, the industry is seeing an overlap
between a generation of professionals with experience on practical aspects, and new blood with education and theoretical understanding, but not sufficient hands-on, practical experience. As a logistics hub, Dubai, in particular, needs more facilities for supply chain skills training and professional qualifications. Industry players need to take the initiative of setting up 3PL / Supply Chain Academy. All also agreed that digitisation is the future. • End-to-end visibility will be critical – Information flowing back from sale at shelf, back to raw material purchase order requisition. • ‘Supply chain lake’ – where big data from various sources will be pooled and fed into various automation logic based triggers for supply chain. • Tech vs mindset / cultural – Although
Brian Cartwright, a respected thought leader, recently launched the Top Management Resources Group. The group is meant to be an international management consulting network and executive services platform, based in Dubai, UAE, with business interests, partners and clients across the globe. The organisation has developed a suite of valueadded services and strategic partnerships, designed to support business owners and senior executives in developing and enhancing their businesses, careers, and ultimately, their lifestyles. The services and advice focus on three specific areas - Talent, Trade, and Transformation, and are delivered through an established network of specialist advisors and industry experts. For further information visit: www. TopManagementResources. com, or contact Brian Cartwright on BrianC@ TopManagementResources.com
there is talk about adopting technology, implementation is dependent on cultural backgrounds, especially in the context of Middle East. To summarise, sharing of information between departments is still a challenge, and this silo mentality prevents end-to-end visibility. Technology is a great enabler. But to use it efficiently, a good deal of homework and alignment on supply chain strategies and processes are key. - Photo Credits: Luke Garlick Photography
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excellence As oil prices continue to stay down, this is the perfect time for the industry to address and correct their shortcomings. Tim HaĂŻdar, Editor-inChief, Oil & Gas IQ, talks to Phil Murray, CEO, Petrotechnics, about Operational Excellence
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OIL AND GAS
here is no doubt that 2016 has been one of the hardest years in living memory for the oil and gas industry, with stunted oil prices, project postponements and worldwide employee triage and attrition.
excellence practices actually outlast the oil price downturn?
Now, more than ever, the hydrocarbons sector is looking to the tenets of operational excellence to streamline working practices, and make profits in a climate that is adverse to gainful revenues. But will the lip service given to operational
TH: Phil, what would you say the state of oil and gas operations is today?
An industry veteran and ‘survivor’ of several oil price depressions, talks about how he believes the next few years will unfold. Tim Haïdar, Editor In Chief, Oil & Gas IQ, interviews Phil Murray, CEO, Petrotechnics.
PM: Upstream oil and gas is facing some of its biggest challenges ever. A number of us have been through oil price crashes before, but this one has been lower for longer. It’s happened at a time when mature basins like the North Sea have felt an acute impact. It is also happening against a background of stakeholders demanding better performance from companies in hazardous industries.
It’s almost a perfect storm of stakeholder expectations, increasing risk, and cost pressures. To overcome these challenges, oil and gas operators need to manage risk, productivity, and cost in a much more effective way. TH: How would you say this rates with regards to the previous oil price crashes?
PM: Typically, oil price crashes conclude with a correction in the market, and the price bounces back. This has not been the case this time around. Eight years ago, the oil price dropped to US$ 40 (AED 147) a barrel. I was invited to a Cost and Efficiency seminar when, by the time the seminar took place, the oil price had risen to US$ 60 (AED 220) a barrel, and continued to rise for the next five - six years. What also makes this price crash particularly acute is that it followed a time of serious cost escalation in the industry. It is this dramatic combination of oil price lows,
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OIL AND GAS
mature assets, mature people, and increasing stakeholder expectation, which is driving oil companies to recognise that Operational Excellence has to be a key part of a highperforming international oil company. TH: Going into 2017, what do you deem to be the biggest challenges that the oil and gas industry is currently facing?
PM: The industry must manage the simultaneous pressures on risk, cost, and productivity. If companies are able to manage risk effectively, and improve effectiveness and inefficiency, reduced cost will be an outcome. The interesting challenge the oil industry has is that, unlike other industries, it isn’t in competition. There is no customer who’s the final arbiter of whether costs are right, or the product quality is right. Because of that, innovation cycles tend to be slower. Digital technology has transformed other businesses - from transport, to finance, to hotels, to retail. We’ve yet to see that level of transformation in oil and gas. Combining the need to transform the way companies manage their operations, with the opportunities digital technology can bring, could provide answers to some of the industry’s critical challenges. TH: So, it’s been used as a buzzword throughout the industries for a very long time, but what do you deem operational excellence to be?
Excellence. I think there’s a realisation that companies can’t just cut costs to get to better performance. I think why Operational Excellence is now getting increased focus is that we just need to run the operational parts of our business more effectively, more efficiently, with inherently less risk. Operational Excellence is the umbrella that pulls all of that activity together. The other aspect that’s interesting is that as organisations grow, no matter how we structure them, they inevitably become siloed. Although we’re able to address individual aspects of our operation, whether it’s maintenance, inspection, or process safety management, we struggle to pull it all together at the sharp end. The pump doesn’t care which function you work for, it just needs to be well-maintained and operated. Operational Excellence is the banner that allows the crossfunctional collaboration necessary to have more effective, and less risky operations. TH: Do you think that if the oil price did go up suddenly, a lot of people that had been giving real credence to the idea of operational excellence, suddenly might back out and revert to previous behaviour?
PM: That’s always a danger. Historically, a rise in oil price seems to let people off the hook. A rise in oil price contributes to the problem, PM: Managing operations in hazardous because then, there’s cost industries is about making escalation within the the right decisions to balance business. So, not only were cost, risk, and productivity. The you not making as much industry describes Operational The operations hay as you should, it masked Excellence as the unrelenting on the plant do some of the underlying pursuit of world-class operational performance. For not look anything inefficiencies in the business. I think this time those me, Operational Excellence like the original inefficiencies are plain for is where everybody from everybody to see, and there’s the boardroom to the front schedule – so an appetite to change it. line is making the smartest simply, they’re My hope is companies will operational decisions. use this as an opportunity not ready to to address the underlying TH: So why is this elusive inefficiencies, and that when operational excellence more accept the the price comes back up, necessary now than ever? equipment as it we have a fit-for-purpose PM: We have seen an increasing industry going forward. focus in the area of Operational was scheduled 42 DECEMBER 2016
TH: I think the industry will treat operational excellence differently this time, because we are dealing with an ageing workforce, ageing assets, and levels of extant digitisation that we didn’t have before. There will be a demographic reason and a technological reason at the root of it all.
PM: Exactly. But in addition, as exploration becomes more difficult, more expensive, and access to resources becomes tighter, being a more efficient operator could become an industry differentiator. I know some oil companies are beginning to look at themselves in that way. TH: How is operational excellence achievable? Is this a culture play?
PM: Although an adage, Operational Excellence is about people, process, and technology. We’ve talked about the opportunity that digital technology provides. We’ve talked about some of the people challenges, as well as some of the cultural issues. What’s been missing is the definition of what an Operational Excellence process really is. Culture is absolutely important, but if it is not underpinned by process and supported by technology, any cultural shift is often very fragile. Research firm, Aberdeen Group, says an operational excellence won’t happen overnight. Proper implementation requires systems or technology to be tightly woven into day-today business operations. In the oil and gas industry, even regulators are saying that organisations need to better handle risk everywhere, from the front line to the boardroom. We’re seeing some of the biggest oil companies in the world talking in these sorts of terms, telling their organisations that they need to understand the impact every operational decision may have on the barriers that protect them from a major incident. There is an appetite for Operational
OIL AND GAS
TH: Is this where interface management comes in?
Excellence that spans the business, but organisations must be better connected to make this a reality. We have executive dashboards which prompt the ‘so-what’ questions from executives. For example, if you’re five per cent behind in the maintenance of your safetycritical equipment, what does this really mean? Indeed, KPIs, and the information our senior executives use to manage operations, is based on lots of data, but very little insight. We need to allow everybody in the organisation to better understand the reality of operations. To date, their systems haven’t been able to do this.
PM: Yes, I think it is. People talk about the potential of big data, but it isn’t just about data integration. We need to give people a picture of their operational reality, and let them share that picture. Senior executives have now stopped making requests for more data because they were drowning in it, and gasping for meaningful insight. We’re often in a blizzard of uncertainty when we’re trying to manage operations and risk on our facilities. We need a simpler, more elegant way of expressing risk, and managing operations across our organisations. TH: Can you give us some examples of the tangible benefits from getting operational excellence right?
PM: If Operational Excellence is done
correctly, the operational supervisor will know the best way of managing tomorrow’s activity - in terms of effectiveness, efficiency, and risk. If we’re able to give him that view, and allow him to visualise that on his plant, he can make better decisions. Abstracting this data, and then presenting it to more senior levels in the organisation, provides a common view of operation reality. We’ve got examples of vice presidents saying “Hang on. I can see a growing level of risk here. What’s underpinning that? Is it a lack of competency? Is it maintenance backlog? Is it inadequate procedures? Where do I invest to actually reduce my risk and increase productivity?”That ability to visualise risk and activity throughout the organisation is the bedrock to enable people in the organisation to make better operational decisions, wherever they are in their organisations. The same is true in identifying the underlying causes off inefficiency. It is a sobering fact that 40 per cent of everything that goes onto a supply vessel comes back unused. That’s because the people who are loading the vessel don’t understand the operational reality of the plant. The operations on the plant do not look anything like the original schedule – so simply, they’re not ready to accept the equipment as it was scheduled. If we look around our businesses, there are multiple sources of inefficiencies that result from disconnected operations. We need to have a common view of what’s happening, where it’s happening, and what’s the risk involved with it happening. On a good offshore platform, only 20 per cent of the available manpower was actually recorded during planned work, and, in the past, people have questioned this data. I think what’s different now is that people can no longer deny the inefficiencies. There’s nowhere to hide, and there’s an appetite to do something about it. Change Management theory says everybody initially goes into denial. During the last oil price crash, just as we were coming out of denial, the oil price saved us. That is not happening, so, now it’s time to turn things around.
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PORT REPORT - DP WORLD
Improving environmental performance DP World continues to make great strides on all fronts, winning recognition for their Carbon Disclosure Project, and for their HR policies and programmes
lobal trade enabler DP World has been awarded a leadership A- score by the UK-based Carbon Disclosure Project (CDP), highlighting its role in the Water Transportation - Ports and Services category, in implementing best practice in greenhouse gas emissions, and improving environmental performance. In 2010, DP World was the first international marine and inland trade services provider to join the renowned CDP, which holds the most comprehensive set of global corporate environmental data. Through its climate change programme, thousands of the world’s largest companies disclose information on their greenhouse-gas emissions, energy use, and climate change risks. DP World’s Global Safety & Environment team has since been reporting action plans across its portfolio, monitoring energy use, making terminal operations more efficient, embracing renewable energy projects, and investing in low-carbon technologies. A recent example is the company’s ‘Go Green Week’, a collaboration in its third year with the world’s leading port operators to address three main ecological areas – Reuse and Recycle, Climate Change and Community. Different
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PORT REPORT - DP WORLD
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PORT REPORT - DP WORLD
GCC Government HR Award
DP World Human Capital Senior Vice President Robin Windley (left) and DP World Director of Recruitment and Human Capital Services Mohammed Omar Al Qedrah (right) accepting the GCC Government HR Team of the Year Award at the 4th Annual GOV HR Summit 2016
activities take place each year, often with neighbouring ports, across DP World’s global portfolio of 77 operating marine and inland terminals in 40 countries. Each business unit chooses one or more of several activities, including reusing waste materials from the port, food waste composting, clean-up of terminal and surrounding areas, energy saving drives, tree planting, volunteering at local wildlife parks, and supporting environmental education for local communities. Another example is the DP Worldcommissioned installation of 88,000 rooftop solar panels on its Dubai facilities, making it the largest distributed solar rooftop project in the Middle East. The panels will produce enough clean power for 3,000 homes a year, and supports the UAE Vision 2021 for a sustainable environment. Such programmes help the company achieve significant energy savings, evident in CDP results that show substantial year-on-year improvement. In 2013, DP World achieved a C score, meaning that the company has knowledge or “awareness”of climate change issues. It improved in 2014, scoring a B, demonstrating coordinated action through their“management”. In 2015, and again this year, DP World has achieved a“leadership”score of A-, proving that it is now implementing best practice in the transport industry. In other CDP scoring categories, such as governance and strategy, risk and opportunity management, and emissions
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management, DP World also did very well, clocking numbers much higher than sector and region averages. DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem, said,“I am delighted with the tremendous improvements in our environmental performance, which is key in helping us build a legacy for future generations. We strive to ensure everything we do leaves long-term benefits for the world we live in, and reducing our carbon emissions is a top priority.” DP World Global Safety and Environment Director Nabil Battal, added,“Being able to measure and monitor our progress in reducing greenhouse-gas emissions is necessary to benchmark our efforts against those of other stakeholders with common goals. It ensures we all work together to improving our environmental performance and a combined effort is essential to make a meaningful difference. So while reporting on our efforts transparently and clearly through CDP will spur further improvements in our own performance, it can also help improve decision-making on climate change for investors, business and policy-makers.” Bin Sulayem also highlighted their progress on other fronts.“Our collaboration with United for Wildlife to prevent trade in endangered species is just one example of a range of sustainability programmes on the environment, in education and support for communities across the world where we operate,” he said.
Closer to home, the Corporate Head Office Human Capital team of DP World has won the GCC Government HR Team of the Year Award at the 4th Annual GOV HR Summit 2016. The award recognises the department’s efforts for driving programmes that innovate and enable knowledge and collaboration. With a global workforce of over 37,000 employees, the team is continually developing action plans and programmes to attract, and grow a diverse and talented workforce in pursuit of the company’s vision to become a leader of world trade. Under the umbrella project entitled ‘Going from Good to Great’ that began in 2015, a number of new employee initiatives have been implemented over the past 12 months. They included an Occupational Health and Safety Day; a Total Rewards statement, in which individuals can see details of their benefits, terms, and conditions; and a new ‘AskHC’App, enabling staff to review their own records, ask questions, and submit requests. In September 2016, DP World collaborated with the Chartered Institute of Personnel and Development (CIPD), making it the first organisation in the GCC to forge such a partnership. Said Bin Sulayem,“The award highlights our commitment to employees, and I am pleased we have such a strong and active team of professionals building the development of our most important asset – our people. By attracting the best of local and international talent, while grooming future generations of Emirati leaders, we are building the strongest resource a country can have. The ability of the people of the UAE has led us to the success we enjoy today, and they will enable the growth envisioned by our country’s leaders.” DP World Human Capital Senior Vice President Robin Windley added,“Our initiatives are aimed at helping our employees achieve their full potential, both in their professional and personal development. Building skills, career paths, and leadership ability are vital to the future of any business, especially across different geographical backgrounds and cultures. The key to doing that is through the involvement of employees in the future direction of the business, and engagement in a range of programmes to help them increase their skills and expertise.”
Sustainability in relation to transport of goods and people. MAN Truck and Bus are constantly developing products and innovative solutions to provide operators of commercial vehicles and passenger transport services with sustainable transport systems. They are designed and engineered to make a positive contribution to the environmental, social and economic sustainability of the area they serve. Sustainability in transportation is predominantly measured by the effectiveness of the unit to move the load or people in an efficient, environmentally friendly manner thus reducing the impact on the climate. In short term, the improvements in fuel efficiency and reduction in vehicle emissions are contributing to an increase in air quality and the environment in which we live. MAN Truck and Bus do not just focus on the vehicle, it also focuses on ProfiDrive training and educating the driver to use the vehicle correctly which contributes to the achievement of highest levels of fuel efficiency. Therefore, a key element to sustainable transport is the training and professional ability of the driver of the vehicle. www.man-middleeast.com
yet? Are we there
This S&P Global Ratings’ report on governance trends in the global Islamic finance industry provides insights into how Sharia governance could safeguard the future of Islamic finance
hen it comes to Islamic Finance, it is essential for institutions to comply with Islamic Law, or Sharia. In view of the industry’s strong growth over the past decade, S&P Global Ratings believes Sharia governance will become even more important to Islamic finance authorities. The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) have already made significant strides in this area. What’s more, local regulators have been quite active in implementing frameworks to ensure the proper conduct of Islamic finance in their respective jurisdictions, and some have created a central Sharia authority. Yet, the current governance framework shows room for improvement. The industry stands to benefit from increased disclosure, as well as clear, standardised Sharia principles and interpretation. In that sense, the IFSB’s recent proposals to tighten disclosure requirements are a step in the right direction. Well-defined standards could also help the industry become more integrated, thereby unlocking new growth opportunities.
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Stronger Sharia governance could address conflict of interest issues The Islamic finance industry is expanding, especially in core markets. As it grows, key stakeholders will seek to preserve its stability through enhanced Sharia governance. A stronger governance framework could address risks related to conflicts of interest, which can emerge in several Islamic finance activities.
Profit-sharing investment accounts (PSIAs) In theory, holders of Islamic banks’ PSIAs are entitled to share not only the profits related to activities their deposits finance, but also the losses. However, it seems that this principle has not been applied consistently in the past, and no Islamic bank has transferred losses to customers over the past 30 years. But there is steady progress toward its implementation in recent years. An example of this is the Malaysian authorities’ decision to make such accounts truly loss absorbent from June 2016, by giving customers the option of choosing between loss-absorbent accounts and non-loss absorbent accounts. Furthermore, profit and loss sharing might result in a conflict
DECEMBER 2016 49
of interest if shareholders are able to use depositors’ funds to minimise losses on their own investments, hence the importance of checks and balances to mitigate this risk. In addition, only a handful of Islamic banks disclose their profit and loss sharing formulas, profit equalisation reserves, or investment risk reserves. The latter were created by the industry to help smooth the return on PSIAs during economic downturns, and reduce liquidity risks inherent to profit and loss sharing.
Post-transaction Sharia surveillance Generally, internal Sharia auditors have the task of checking whether an Islamic bank’s activity was performed according to the rules set by the institution’s Sharia board. While this model has provided an additional layer of control, strengthened by local regulations regarding the independence of the audit function, actions requested by internal auditors are typically not disclosed to the public. So far, only the authorities in Oman and Pakistan have asked Islamic banks to submit themselves to an external Sharia audit.
Review of completed sukuk transactions Generally speaking, Sukuk are not generally subject to post-transaction Sharia review, except when they are issued by an Islamic financial institution, whose overall activities are subject to ex-post Sharia surveillance. For sukuk issued by Islamic financial institutions, the ex-post surveillance is generally conducted by internal Sharia auditors, resulting in risks from non-disclosure of audit actions. For sukuk issued by corporate entities or governments, in most cases, there is no post-transaction Sharia audit. This situation creates the risk that the sponsor of a sukuk could go beyond its contractual obligations to avoid triggering the sukuk’s early dissolution when required under Sharia. Thus, the IFSB’s proposals to enhance disclosures related to sukuk, in its exposure draft 19 on disclosure requirements for Islamic capital market products, may be a positive move.
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External Audits could become the way of the future As a means of preserving the stability of Islamic finance markets, the industry could eventually see widespread adoption of external Sharia audits. However, this would require a clear definition of the standards external auditors would need to measure. Although the AAOIFI has published numerous standards, Sharia boards appear to have significant leeway in making decisions regarding compliance. This has resulted in variations in Sharia requirements across the industry, with Malaysia being seen by market participants as the least conservative jurisdiction, and Saudi Arabia as the most conservative. But it has not hindered the industry’s sustained growth over the past few years. Given the current slowdown of Islamic finance activity, some standardisation could help reposition the industry for future growth, increase its attractiveness to new players, and support the integration of economies where Islamic finance is prevalent. Decision makers would need to choose between trying to establish a truly global industry, or optimising the current structure of a collection of small industries. Greater integration could enhance growth prospects, and result from: Clear global definitions of Sharia standards and interpretation. Some market participants’ feel that the AAOIFI or other bodies, such as the Islamic Development Bank, could take the lead in developing such definitions. These two organisations’ Sharia boards have representation from a significant number of countries in the Organisation of the Islamic Cooperation, which could facilitate agreement among these parties. Wide acceptance of external Sharia audits. Although pre-transaction Sharia validation typically rests with internal Sharia boards, an external Sharia audit (required in Oman and Pakistan) could strengthen the industry’s credibility. Similar to international financial reporting standards, and external audit exercises at conventional banks, an external Sharia audit could help reassure Islamic finance stakeholders. Local standards and the creation of local Sharia audit organisations. Regulators may envisage such a move in countries where
Islamic finance is regarded as systemic. In September 2016, Bahrain started investigating whether such a solution could help improve the industry’s standing. Other countries may follow suit in the short to medium term.
Why Sharia governance is relevant S&P Global Ratings doesn’t comment on Sharia compliance, and restricts its role to providing independent and objective credit opinions on rated Islamic finance institutions and issues. Nevertheless, Sharia compliance is important in their analysis, in that the effect of non-compliance could strain an issuer’s capacity to honour its financial obligations. For example, a bank that is perceived as non-Sharia compliant could lose some of its deposits, especially from corporate and retail clients that are sensitive to Sharia in their business dealings. This, in turn, could lead to significant pressure on the bank’s funding and liquidity profiles. To capture this risk, we need to look more carefully at Islamic banks’ funding structures, and whether they have set aside sufficient profit equalisation and investment risk reserves. We also look at the bank’s liquidity profile, and its access to central bank funding in a stress scenario. Although we use the same indicators as for conventional banks, we may make qualitative adjustments to our assessment. In the same vein, a sponsor might lose access to the sukuk market if it doesn’t respect a Sharia ruling on a specific transaction. In some circumstances, such a transaction might even experience repayment difficulties. For example, if in a Wakala transaction, without optional liquidity facility arrangements, the sponsor injects additional revenues to avoid acceleration of payment, Sharia scholars might require the sponsor to reverse that contribution. This would trigger the early dissolution of the transaction, which could pose the risk of a default. Generally, this risk is taken into account through analysis of the sponsor’s liquidity, which is particularly relevant for corporate sponsors, and less so for banks and sovereigns. These factors underscore the opinion that stronger Sharia governance could safeguard the future of Islamic finance. www.globalcreditportal.com
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Data security In this exclusive column, Mustapha Kawam, President and CEO, Globe Express Services, writes about protecting the supply chain network from cyber attacks. A daunting task, perhaps, but an important one nevertheless
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nformation technology, including the internet, mobile devices, smart apps and cloud computing, has completely revolutionised the way supply chain operates by enabling logistics companies and their suppliers to electronically share and download vital data. The seamless exchange of information among supply chain partners has provided flexibility and scalability to organisations, which has significantly reduced the operating cost and increased profits. While modern technology has been valuable to supply chain operators, it has also made them vulnerable to cyberattacks due to the risk of data theft. Cyberattacks
and hacking have become pervasive, and are growing at an alarming rate across the world. The UAE is among the countries that are experiencing this serious issue, with Kaspersky Lab stating that it is in the second highest risk group of five. It is noteworthy that, along with Fortune 500 companies and their supply chains, small businesses are equally targeted. Despite a serious risk of major security breach, many logistics companies continue to neglect the issue and fail to protect their assets, sensitive data, and private information. It is partly due to the fact that they are not aware of the severe threats, and lack the knowledge to protect their firms.
It is time to give due consideration to this threat in order to keep their proprietary information secure. Sharing information in an integrated system allows logistics companies to engage in fruitful partnership within and across the supply and value chains. While beneficial, it creates potential cyber security risks. Compromised credentials, distributed denial of service (DDoS) malware, and SQL injections are some of the many ways through which cybercriminals gain access to vital information. The risk and level of cyberattacks also varies for different types of supply chains. While a vertically integrated company with
upstream and downstream operations has a high-risk profile, it does not mean that a horizontally integrated business, with a focus on only one aspect of supply chain, is not prone to risks. Logistics companies should adopt stringent measures against such threats, as the impact of data breach is not short-term, and can be felt for years by supply chain companies. The key is to adopt extensive and proactive risk management measures, from basic monitoring of domains and credentials - including passwords, log-in IDs, and other security protocols - to following high standards in obtaining, using and updating credentials. Effective vendor management,
which includes identifying all partners, affiliates, and network participants, can help companies protect themselves from cyberattacks. Furthermore, a company should verify the cyber security practices of its supply chain partners, in order to further develop its IT capabilities, examine, and predict potential risks. Threat intelligence tools can be utilised for more active assessment, and detection of impending threats to a company’s information structure. While selecting its vendors, a company should give due importance to its security metrics, just like price and quality. Once a vendor’s cyber security measures are assessed, it should ensure that standardised security protocols are maintained across the supply chain. Here, the post of a Chief Security Officer or Chief Technology Officer becomes vital, as they will be responsible for data security management, strategy, and responsive action. Lastly, companies must hire neutral third party companies to regularly monitor, audit, and evaluate its vendors and supply chain. “It requires an additional investment to make a company completely secure from cyberattacks; however, its success cannot be measured in profits or revenues. An appropriate way will be follow an accounting approach, where security spend is quantified as a function of all total direct costs -- a highly transparent model to define cybersecurity’s return on investment (RoI). The integration of security metrics into a company’s key performance indicators (KPIs), balanced scorecards, and and/or executive dashboards ensure that KPIs were customised to limit exposure to cyberattack,” explains Mustapha Kawam, President & CEO - Globe Express Services. Information is a critical asset in a company’s supply chain, providing high efficiencies, but, at the same time, it increases the risk of data security, which needs to be protected. Logistics companies should understand that the threat is real, and that there will be further challenges in securing proprietary knowledge from cyberattacks. It may be a daunting task, but a strategic approach can go a long way in protecting key data from falling in the wrong hands.
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Thereâ€™s more to the new Ford Trucks line-up than ever before. With a high profile media launch in Bahrain as well as their presence at the Big 5 show, these trucks offer a better return on investment than their peers
ord Trucks, with its official importer-dealer in the UAE, Al Tayer Motors, showcased its 2017 line-up of the powerful Construction Series, including the 4143M and 3543M mixers alongside the 1843T tractor, at the Big 5 Exhibition in Dubai last month. Powered by the new Ford Ecotorq engine family, the 2017 Construction Series comes with greater power, and more efficiency than ever to ensure customers can continue with their daunting tasks. With over 55 years of manufacturing expertise, Ford Trucks are tailored to meet the specific requirements of the Middle East market.
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Having an ambitious growth strategy and team, the firm has also announced plans for establishing a new office in Riyadh to further strengthen its presence in the region. Currently, the headquarters of Ford Trucks for the Middle East region is based in Dubai. “Offering a balanced blend of features, Ford Trucks Construction Series lands on construction sites with a single purpose;
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to make your project more durable and efficient,” says Emrah Duman, International Markets Director, Ford Trucks, adding,“As a first step to expand our network, with a focus on retaining facility investments, we are thrilled about our upcoming office in Riyadh, which will help us in further improving our service, and reduce response time to our customers.”
2017 Ford trucks Construction Series Offering comfort and exceptional uphill traction on rugged terrain, the 2017 Ford Trucks Construction Series delivers a whopping 430
PS and 2.150 Nm of torque with the new Ecotorq engine, a significant improvement over the previous generation, which delivered 350 PS and 1.400 Nm of torque. The new 400 KW engine brake provides the driver with firm control while climbing steep slopes in earth-moving and cutting sites. The optional 600 KW Intarder option, offered for even tougher conditions, brings
the total braking capacity to 1.000 KW, ensuring that the heaviest loads can be safely carried on even the steepest slopes and hills. Designed for the most demanding construction site environments, with best-in-class sequence and efficiency, a new feature in the New Ford Trucks Construction Series is the Automated Transmission option. With Off-road,
Rocking and Economy modes, the Automated Transmission option assists drivers in keeping their vehicle sure-footed on virtually any terrain. A 22 per cent improvement in turning radius over the previous generation significantly reduces the number of manoeuvres in tight site conditions, turning narrow spaces into a playing field for drivers.
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Al Tayer and Grube signing the agreement
RTA inks agreement with Deutsche Bahn to share knowledge and expertise, and forge a mutually beneficial relationship 58 DECEMBER 2016
ringing better knowledge and experience into the country, the Roads and Transport Authority (RTA) in Dubai has signed an agreement with the German Deutsche Bahn AG, for the establishment of a specialised mobility and transport centre, and sharing expertise in the rail and transport sectors. HE Mattar Al Tayer, Director-General and Chairman of the Board of Executive Directors of the RTA, signed the agreement on behalf of RTA, and HE RĂźdiger Grube, Chairman of the Board and CEO of Deutsche Bahn AG, signed it on behalf of the German Company. A host of CEOs and Directors of both parties attended the signing ceremony.
The agreement provides for establishing a mobility and transport centre to run intensive training programmes to qualify and upgrade the competency of managers and engineers in the rail and transport sectors at RTA, with special emphasis on rail technologies and systems. Deutsche Bahn will contribute to establishing a fullyfledged training centre at RTA, such that it will be up-and-ready to hold the inaugural training course in the Q1 of 2017. Al Tayer expressed pleasure with the signing of the agreement with Deutsche Bahn, which is considered one of the biggest specialised companies in operating trains and railways in Europe. The Company
operates the German rail network, which extends more than 60 thousand kilometres, with services including transportation of goods and passengers. The company also provides services to more than 130 countries worldwide, and employs more than 300 thousand staff. “The two parties share many common objectives, and can exchange the best expertise in the field of rail operation and maintenance, as well as the planning, designing, and construction of rail projects. This agreement is a manifestation of the MoU signed between RTA and Deutsche Bahn last year. The MoU provided for boosting cooperation and
sharing expertise in the rail sector, and transferring transport knowledge to Emirati employees at RTA. It also provided for developing and implementing educational and training programmes periodically for RTA staff, generating opportunities for exchanging experts in various specialties of relevance between RTA and Deutsche Bahn, and facilitating deputising employees for 6-12 months to meet urgent needs for experts, and skills between the two parties,” said Al Tayer. HE Rüdiger Grube commended the cooperative relationships between the two parties, stating that they would look forward for further cooperation with RTA.
Deutsche Bahn has several subsidiary companies operating in three main sectors. The first sector is passenger transport, with two companies, namely DB Regio AG, which operates passenger trains within Germany, and DB Fernverkehr AG, which operates long-distance trains across Europe. The second sector is the tra nsportation of goods, also with two companies, namely DB Schenker Rail AG for transportation of goods across several European countries, and DB Schenker Logistics AG, which specialises in the transportation of goods by land, sea, and air worldwide. The third sector is the management of rail infrastructure in Germany, in which DB Netze AG operates.
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Aiming for perfect vision Arvato’s SCM solutions has launched a unique order-picking using smart glasses. With this pick-byvision solution, the pickers have both hands free, and their eyes on the current process steps at all times – in contrast to working with handheld devices
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n co-operation with technology supplier Picavi, Arvato SCM Solutions has successfully launched the innovation project ‘Pick-byVision’ for Sennheiser. Order-picking with smart glasses saves time, and ensures a smooth flow of materials – from the moment goods are received, until inventory is counted. A display integrated into the glasses gives warehouse employees all the necessary context-related information, and navigates them unerringly through the work process. For purposes of the project, a separate pick process was identified in advance, together with Sennheiser. This way, processes can be carried out in a controlled environment and evaluated with precise time measurements. The objective is to use the smart glasses to increase productivity and quality, and to identify the optimal process workflows for the new technology. Initial feedback from employees on the operational side of the business is positive: the new pick technology is easy to learn, and intuitive to use. Furthermore, the smart glasses are very comfortable to wear during the movementintensive work in the warehouse. “We set ourselves the task of providing the best possible support for supply chain management generally, and for warehouse employees in particular. With our pick-byvision solution, the pickers have both hands free, and their eyes on the current process steps at all times – in contrast to the work with hand-held devices. Instead of relying
on the tiring voice commands of pickby-voice systems, our system inserts data directly into the field of view of the worker in real time,” explains Dirk Franke, CEO of Picavi, adding,“We’re currently working with Arvato on additional, augmentedreality features that provide intelligent support to processes aside from classic order-picking.” In the coming weeks, the collected data will be carefully compared and evaluated. During this time, the Arvato employees will continue to wear the mobile WLAN smart glasses, in order to get used to them, and be as prepared as possible for the coming peak season of growing order volumes. Meanwhile, Arvato and Picavi are already working on an expansion of the system. They have now identified another field of application that could profit from the new technology: since the glasses allow warehouse employees to have their hands free when stacking the pallets, errors can be minimised when the outgoing goods are scanned, which leads to significant gains in productivity and quality.
The future of order-picking The project was initiated at Sennheiser in the framework of the current innovation strategy for the supply chain, which sees innovations as a key factor for success in products and services.“We’re very pleased to have a service provider like Arvato at our side, one that not only shares our point of view with regard to innovation and development, but also invests in the actual implementation,” says Günther Maaß, Global Logistics Manager at Sennheiser. The demand for new technologies and processes in the logistics sector is growing constantly – after all, they are the key to successfully managing future challenges. “Innovations are not ends in themselves; they are absolutely necessary to realise competitive advantages and further growth,” says Patrick Manders, VP Global Solution Design in the business unit Hightech & Entertainment at Arvato SCM Solutions, concluding,“Targeted innovation management helps companies increase their competitiveness, efficiency and sustainability.”
Published on Dec 12, 2016
Supply Chain, Supply chain management , logistics and supply chain segmentation, warehousing, RFID, healthcare logistics, 3PL, 4PL, six sigm...