Global Supply Chain September 2018 Issue

September 2018 Issue 51

ENHANCING THE BUSINESS OF LOGISTICS

MATERIAL HANDLING In the digital factory

Who run the world? Girls!

Heléne Mellquist, Volvo Trucks

Sourcing the Ruby A look at the supply chain

Women drivers Now in Saudi Arabia

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Parts that take Parts that take Parts that you further you youfurther further Keeping your truck on the road, that’s what it’s all about. And Genuine Volvo Parts are vital to maximise your uptime and achieve the most profitable ownership possible. They are designed to fit and function Keeping on the road, that’s whatit’s it’sallallabout. about.And And Genuine Genuine Keeping youryour trucktruck on truck. the road, that’s what perfectly with your are vital to maximise your uptimeand andachieve achievethe the most most VolvoVolvo PartsParts are vital to maximise your uptime That’s whyownership we offer apossible. full 2 years fitted parts warranty when fitted by profitable They designed and function profitable ownership possible.

They areare designed totofitfitand function an authorized Volvotruck. workshop. It covers repair or replacement of parts. perfectly with your perfectly with your truck.

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It coversRead repair or replacement of parts. an authorized Volvo workshop.

It covers repair or replacement of parts.

And even consequential damages.

And even consequential damages.

See it as a warranty on your business. Read more on volvotrucks.com

See it as a warranty on your business. Read more on volvotrucks.com

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2fitted years parts 2fitted years 2warranty years parts fitted parts warranty warranty

                                                                  

         

Bespoke Logistics Project of the Year 2017

Domestic Logistics Service Provider of the Year KSA 2017

GCC Supplier Of The Year 2017 KSA Supplier Of The Year 2017

Warehouse or digital factory?

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With changing consumer buying behaviour and subsequent expectations which basically really is a lack of patience in today’s ‘now’ generation, should warehouses be rewired to meet the demand of same day or (soon, I’m sure) even instant delivery and not to your home or office location but to where you may be at that moment.

How is this going to be supported at the back end? More, smaller, warehouses perhaps at popular locations around town? Larger warehouses? A combination of both? What is not a question here is the fact that any of this can only be achieved by advanced automation and better communication between systems to achieve success. And a higher need within warehouses of robotics to do the job also alleviating the need of finding, training and retaining a workforce. More on page 27.

Another article of impact, this issue has multiple, however, is my literally five to seven minute chat on a very hectic day with Volvo Truck’s extremely warm, amiable and forthcoming Senior Vice President Sales Area International, Heléne Mellquist. She’s a dynamic, impactful lady. Full of knowledge and very easy to talk to. You can learn a lot about improving your career and being a winner at life and work just by reading her interview on page 38.

Also fabulous reads are - page 32 the supply chain of rubies, page 44 the fate of the shopping mall and page 58 women driving in Saudi Arabia (you could even just read that as women driving Saudi Arabia!)

Until October, hope you have a great month.

Munawar Shariff Managing Editor munawar@signaturemediame.com

SEPTEMBER 2018 3

September 2018 Issue 51

ENHANCING THE BUSINESS OF LOGISTICS

27 06 News 16 Country report Russia and CIS Regional growth holds up well in Q2

27 Cover Material handling in the digital factory: a look ahead Material handling is playing a vital role in the emergence of the digital factory, as data analytics reshapes the workforce

30 Tyres for port vehicles With the huge ports and subsequent port operations that happen in and around the UAE, Continental tyres is introducing next generation, new compound tyres specifically for use on ports

32 Rubies are red Here we focus more closely on the breathtaking red jewel’s supply chain 4 SEPTEMBER 2018

in this chat with Jack Cunningham, Sustainability, Policy and Risk Director at Gemfields

38 Who run the world? Girls!

Munawar Shariff spoke to Heléne Mellquist, Senior Vice President of Volvo Trucks Sales Area International about her career path

44 What’s to become of the shopping mall?

As the e-commerce revolution conquers more and more cities worldwide, shopping malls are losing their appeal

48 Oman expands maritime capacity Oman is strengthening its maritime cargo-handling capacity

38

52 Air cargo - steady growth As per IATA’s data, global air freight continues its steady, if slow, growth

54 Digital transformation starts with content and communications Digital transformation (DX) is at the forefront of many business agendas

50 Middle East factories 58 Women drivers to touted to be ‘world’s best’ transform auto market Middle East factories could be some in Saudi Arabia of the most advanced in the world in the coming years

Women can now drive in Saudi Arabia

Julphar and Becton, Dickinson and Company to supply disposable insulin pens

DAFZA announces strong 2018 H1 results HH Sheikh Ahmed bin Saeed

Dubai Airport Freezone Authority (DAFZA) has announced strong business results for the first half of 2018, showing an 11 per cent growth in the EBID in comparison with the same period of 2017 and a growth of new rental revenues by 27 per cent. The results include a 10 per cent increase in licensing revenues and a 31 per cent increase in revenues from government services, resulting in a total revenue growth of eight per cent in comparison to 2017 H1.

Key results include: o 11 per cent growth in operational profit o 8 per cent growth in total revenues o 15 per cent growth in number of registered companies o 43 per cent increase in leasable area The positive figures have been delivered as a result of DAFZA’s strategic plan set in early 2017, which comes in line with the ambitious objectives of the Dubai Plan 2021. One of the key elements of the plan is to support Dubai in becoming one of the most innovative and progressive cities that hosts world-class free zones across the globe.

The success witnessed by DAFZA came with a steady increase in leasable area reaching 43 per cent compared to 2017, with a 63 per cent growth in warehouses and 29 per cent increase in office space. This is a result of DAFZA’s wide range of services and facilities along with its strategic location, linking it to local, regional and global markets. As for DAFZA Industrial Park, the first expansion project outside DAFZA’s boundaries located in Al Qusais Industrial Area, it witnessed an occupancy rate of 82 per cent during the first half of this year.

6 SEPTEMBER 2018

Dr. Mohammed Al Zarooni

DAFZA achieved a solid 15 per cent growth in the number of registered companies over the same period in 2017, providing the ideal environment for attracting more foreign investors, long-term investment, business activity and development as well as world-class infrastructure, services and logistics facilities.

Julphar has signed an agreement with leading global medical technology company, BD (Becton, Dickinson and Company), to supply disposable insulin pens in the UAE. BD develops innovative technology, services and solutions that help advance both clinical process for healthcare providers and clinical therapy for patients, including a wide variety of insulin delivery devices for diabetics.

Through this agreement, Julphar’s human insulin formulations including Jusline R, Jusline N and Jusline 30/70 will be available for administration through BD’s portfolio of BD Vystra™ disposable pens. In addition, the same device will be used for insulin analogues (insulin glargine and insulin lispro), which are still under development.

Insulin pens are small, disposable, lightweight plastic handheld devices containing prefilled insulin cartridges that are convenient and more versatile than some traditional methods for insulin injection.

The disposable insulin pens are now in the final stages of the approval process and are due to be launched as soon as they have been officially registered by the Ministry Of Health.

Zaitoun Green Shipping initiates maritime consortium with global players Dubai based Zaitoun Green Shipping L.L.C has initiated, together with world leading companies in smart technology and solutions, a consortium to collaborate on radically improving performance of container ships and forming a new business model for this market. The consortium consists of the top international industry key players such as MacGregor, Mitsubishi Heavy Industries Marine Machinery & Equipment, Wärtsilä, Winterthur Gas & Diesel Ltd, Gaztransport & Technigaz (GTT), WIN GD, CargoTech and Carinafour.

Global container shipping business is suffering from weak economic and ecological performance. One of the main reasons for this is that the expertise is fragmented into networks and the industry’s general operating models hinder utilization

of best practices in new building projects and designing of new containerships. The ecological footprint of shipping industry as a whole is substantial and International Maritime Organization (IMO) and many local authorities have enforced several new rules and regulations in last years to restrict emissions. At the same time the investments are mostly driven by capital expenditure rather than considering ship operations and earning capability over lifecycle.

Identifying new concept for container ships business Eng.Mohammed Zaitoun, President and CEO of Zaitoun Green Shipping explained, “Collaboration and sharing is the future. We welcome all the interested parties worldwide to work with us through our collaborative consortium seeking together a smarter and greener shipping future. One of our main goals is to establish a competitive fleet of efficient and economical vessels that will ensure better profitability.”

Honeywell provides safety management and risk reduction solution Honeywell recently announced the launch of Process Safety Suite, which centralizes and synchronizes disparate process safety data to eliminate errors and inconsistencies.

The software platform creates a complete, real-time view of safety risk for all levels of an organization. The new solution integrates aeSolutions’ aeShield process safety software with Honeywell’s S`afety Builder, Process Safety Analyzer and Trace solutions, enabling large industrial facilities to efficiently monitor process safety while helping to reduce operational costs.

Honeywell signed a reseller agreement for aeShield with the software products division of aeSolutions, a consulting, engineering and

system integration company that provides industrial process safety, cybersecurity and automation lifecycle solutions and tools. Process Safety Suite is a response to the time-intensive, manual procedures that most large industrial facilities use to manage process safety today.

Process Safety Suite allows safety personnel to monitor process conditions by comparing actual performance from the plant historian with pre-defined hazard conditions from the risk analysis, and take immediate action to minimize risk. It also facilitates analyses such as Process Hazard Analysis (PHA), Layer of Protection Analysis (LOPA), Safety Requirements Specification (SRS), and Safety Integrity Level (SIL) calculations and classifications.

SEPTEMBER 2018 7

FedEx gives greater access to Vietnam with new flight to Hanoi FedEx Express is enhancing its services into and out of the Vietnamese capital, Hanoi, with the introduction of a new flight connecting the city to the FedEx Hub in Guangzhou, China. This new route will significantly improve transit times to two business days between the UAE and Vietnam.

“FedEx has served Vietnam since 1994 and was the first international express transportation company to operate its own flights into and out of the country.

As one of the world’s fastest-growing economies, Vietnam is experiencing rapid development of manufacturing and hightech industries, a surge in e-commerce, and a growing demand for healthcare services and products. This new flight will give our customers quicker, more convenient service between the UAE and Vietnam,”said Jack Muhs, Regional President, FedEx Express Middle East, Indian Subcontinent and Africa (MEISA).

FedEx - UAE Superbrand for fifth consecutive year FedEx Express was named one of the top brands in the UAE for the fifth consecutive year by the Superbrand organization, an independent authority of branding excellence.

The FedEx brand was carefully created more than four decades ago to represent the company’s values as they engage with customers and team members.

Their values constitute an integral part of the FedEx brand.

From being the first express company in the Middle East to introduce an Arabic logo and offer its online services in Arabic, to providing customized health care and aerospace solutions to its customers worldwide, FedEx always strives to provide innovative ways to go above and beyond in delivering an outstanding experience to its customers.

Aramex expands Saudi presence, signs strategic partnership with Al-Dawaa Medical Services Co. Aramex recently announced that its Saudi division is entering into a strategic partnership with Al-Dawaa Medical Services Co. (DMSCO), the exclusive owner of AlDawaa Pharmacies.

The agreement will look to expand the logistics provider’s presence in the Saudi market, provide a new and unique service to the e-commerce sector, and extend additional services to Al-Dawaa Pharmacies’ clientele.

The first phase of the partnership will enable Aramex to launch service centers within 20 branches of Al-Dawaa Pharmacies distributed across the Kingdom. The second phase will see Aramex expand to hundreds of branches within the Al-Dawaa Pharmacies’ pharmaceutical network.

The collaboration is part of Aramex’s commitment to enhancing its accessibility and allowing customers to receive their shipments and parcels with ease. In addition, the agreement will allow customers to return e-commerce shipments by delivering them to service centers located across the pharmacy’s network. The arrangement will also serve AlDawaa Pharmacies’ strategy, which focuses on offering new and innovative solutions to its customers and partners.

Abdulaziz bin Abdullah Alnowaiser (Left) and Mohammad bin Saad Al Faraj (Right) at signing ceremony

8 SEPTEMBER 2018

Air Arabia signs agreement with SAP for cloud-based HR system

50 Nissan vehicles for shared mobility Arabian Automobiles delivered 50 Nissan KICKS to Udrive, the leading car sharing provider in the Middle East that offers car rentals by the minute.

Contributing to the ‘Shared Mobility’ initiative, this encourages commuters to carpool or utilise alternative transportation methods with the aim to decrease the number of cars on the roads. Such an enterprise is also in line with the Dubai Green Mobility Initiative which hopes to encourage the use of sustainable transport and electric vehicles. The concept of shared mobility is on the rise and through its association with Udrive, Arabian Automobiles Nissan looks to improve upon the reach and visibility for KICKS, its

technologically endowed crossover.

The KICKS embodies the concept of Nissan Intelligent Mobility (NIM), which redefines the way Nissan powers, drives and integrates its cars into society. NIM aims at making the ride more confident every day and transforms the crossover from a car into a responsive partner that is always on the lookout for drivers, passengers and pedestrians through its Around View Monitor and Moving Object Detection system.

Present at the handover ceremony were Hasib Khan, Founder and CEO of Udrive; Charl Timms, Fleet General Manager at Nissan Middle East; and Nicolas Oswald, General Manager at Arabian Automobiles Company.

UAE businesses opt for flexible workplaces to mitigate financial risks UAE business leaders and risk managers are adopting flexible real estate strategies to grow their company and mitigate against risk, according to a new study

by International Workplace Group (IWG), the parent group of leading workspace companies including Regus.

The UAE study, which was part of a comprehensive global study based on the insights of over 18,000 business people across 96 companies, found that 91 per cent believe flexible working helps them to grow their business and maximise profits, while 84 per cent

of UAE business leaders recognise that flexible working helps to mitigate against risk including financial and strategic risks.

The study also found that 84 per cent believe flexible working enable them to manage volatile markets, while 87 per cent believe it help them to optimise costs.

Flexible working is not simply about personal employee productivity, it is also about ensuring that businesses of all sizes have the agility to seize an opportunity in new territories. It allows businesses to expand

Air Arabia has signed an agreement with SAP for a new cloud-based Human Resources system. The new system “SAP SuccessFactors”will provide Air Arabia with advanced capabilities across all HR functions using some of the latest technologies and human capital management software solutions.

Adel Al Ali, Group Chief Executive Officer, Air Arabia, said: “In our new agreement with SAP we look forward to working together to make this project a success.”

Julien Bertin, Managing Director, SAP said: “We have developed the SAP Model Company for Human Resources service to support digital HR transformation. We are confident that Air Arabia’S human capital function will considerably benefit from a ready-to-run, preconfigured SAP SuccessFactors solution based on leading practices for end-to-end HR business processes.”

Through this agreement, Air Arabia will acquire advanced capabilities across all its Human Capital functions via the use of the latest technologies provided by SAP SuccessFactors scope, which include core employee management functions, the payroll system, employee self-service, recruitment and onboarding, performance and goal management, learning management, manpower planning and many additional features.

in a smart and safe way without getting tied down in long-leases or overheads.

The survey results showed that 93 per cent of UAE businesses believe that flexible working allows businesses to create a presence in new markets.

SEPTEMBER 2018 9

Emirates SkyCargo transports flood relief cargo for Kerala Emirates SkyCargo carried relief cargo of over 175 tonnes to Kerala, India, joining the UAE community in their support of the people of Kerala. The air cargo operator transported relief goods which were donated by various UAE-based businesses and organisations, to Thiruvananthapuram the nearest online Emirates station to the areas most affected by the flood. The goods, including lifesaving boats, blankets and dry food items, were handed over to the local flood relief and aid organisations for distribution.

Emirates SkyCargo launches Emirates Pets Emirates SkyCargo has launched Emirates Pets - a new and improved air transportation product developed by a team of experts to offer a convenient and comfortable air transportation experience for domestic pets.

The product builds on Emirates SkyCargo’s existing capabilities to transport pet animals on its flights and offers new features such as door to door transportation as well as booking return flights for pets.

10 SEPTEMBER 2018

With Emirates Pets, the entry level solution, Emirates SkyCargo will offer airport to airport transportation for pets across the carrier’s network of over 160 destinations. The owner of the pet will be responsible for completing all the required paperwork and clearances needed for the transport of the pet from one country to another.

In addition, Emirates SkyCargo has also entered into a partnership with Snoopy Pets, a leading pet relocation service provider

based out of Dubai, to offer a new premium door to door transportation service, Emirates Pets Plus, across 16 markets. Under its premium service, the complete logistics of transporting the pet, including filing all the required documentation, taking the pet for any required veterinary checks and transporting the pet to and from the airport, will be managed by Snoopy Pets on behalf of the customer and Emirates SkyCargo. The markets where this service is available are Bahrain, Brazil, Cyprus, France, Germany, Ireland, Italy, Malaysia, Netherlands, Portugal, Singapore, South Africa, Spain, Switzerland, UAE and UK. Emirates Pets has been designed keeping in mind the safety and comfort of the pet and offers special features including track and trace of the shipment, late cut-off time for pet acceptance at origin, dedicated animal care areas at Emirates SkyCargo’s hubs in Dubai International Airport (DXB) and Dubai World Central (DWC), temperature protected transportation on the ramp, special handling facilities worldwide as well as availability of veterinary care on a 24*7 basis.

DHL Global Forwarding makes key appointments in Bahrain, Kuwait and Morocco DHL Global Forwarding has appointed Christelle Fadel, Rob Kennaugh and Fadi Bastoni to lead its business in Morocco, Bahrain and Kuwait respectively.

“The wealth of experience that Christelle, Rob and Fadi have amassed throughout the years in the logistics industry strengthens our existing business in the respective countries, helping us to fully capitalize on key sectors,” said Amadou Diallo, CEO, DHL Global Forwarding Middle East and Africa.“We have high hopes for growth within our region: The Middle East is projected to grow by 3.7 per cent this year while a similar upward trend is predicted for Africa. With these three leaders taking the helm, their respective countries will benefit from their deep local and regional logistics expertise, as well as individual visions to improve business results.”

Rob Kennaugh officially assumes role of Country Manager in Bahrain A veteran of DHL, Rob has been with the company for 25 years, taking on various roles across Australia, China, Oman, Germany, Spain and the UK. Most recently, he was the Head of Lead Logistics Partnerships (LLP) for DHL Global Forwarding in Abu Dhabi, where he has been based since 2015.

As Country Manager, he will oversee DHL Global Forwarding’s business in the country, as well as lead the region’s Integrated Warehouse Solutions (IWS) and a Global Shared Service Center.

Fadi Bastoni appointed as Country Manager to oversee operations in Kuwait Fadi first joined DHL Express Saudi Arabia in 2000 where he was, over the years, responsible for various functions including air freight as well as global customer solutions.

In 2009, he left the company to pursue another role in the industry, but returned to DHL in 2012 as Country Manager for DHL Global Forwarding Bahrain. During his tenure, Fadi grew the business by achieving double digit growth for shipments handled and revenue.

Gulf Air becomes the first national carrier to fly the A320neo in the region

Christelle Fadel takes the lead for the business in Morocco Christelle has been with DHL since 2014 and brings with her almost 20 years experience in supply chain and freight forwarding in Germany, France and Morocco. She was most recently Head of Product and Customer Service for DHL Global Forwarding in Morocco. Christelle holds a degree specializing in International and Wholesale Trade from the Cologne Chamber of Commerce and Industry (IHK) in Germany.

Gulf Air took delivery of its first A320neo recently. The aircraft, powered

by CFM LEAP-1A engines, made its maiden journey from Toulouse to Bahrain, landing at the Bahrain International Airport at 16:00 local time.

The aircraft is the first of the 29 A320neo Family aircraft ordered during the 2016 Bahrain International Airshow.

This delivery also makes Gulf Air the first Middle Eastern national carrier to fly the A320neo.

Gulf Air currently operates 28 Airbus aircraft. The new addition complements the airline’s existing fleet and thanks to

Airbus’ overall fleet commonality, the airline will benefit from low operating costs, optimum fuel efficiency and seamless, best-in-class passenger comfort of any single aisle aircraft.

Featuring the widest single aisle cabin in the sky, the A320neo Family incorporates the very latest technologies including new generation engines and Sharklets, which together deliver at least 15 percent fuel savings at delivery and 20 percent by 2020. self-service, recruitment and onboarding, performance and goal management, learning management, manpower planning and many additional features.

SEPTEMBER JUNE 2018 11

Hapag-Lloyd invests in growing East African market Hapag-Lloyd is continuing to focus on the growing market in East Africa. With annual growth rates of approximately six percent, the region tops the list on the African continent.

Kenya, in particular, is developing with significantly rising import and export figures as well as massive investments in public infrastructure.

In April 2018 Hapag-Lloyd launched the East Africa Service (EAS), its first dedicated service to East Africa. The weekly service sails from Jeddah to Mombasa, and from there

to Dar es Salaam, in Tanzania, and directly back to Jeddah. After a successful start this service will be expanded in September with a weekly connection to and from Nhava Sheva, Mundra, Khor Fakkan, Jebel Ali, Mombasa and Dar es Salaam. The so called EAS2 will replace the current EAS service and directly link the Arabian Gulf and the West Coast of India with East Africa.

Hapag-Lloyd also offers inland transportation to and from East African hinterland locations of Bujumbura (Burundi),

Kigali (Rwanda), Lubumbashi (Democratic Republic of Congo), Lusaka (Zambia) and Kampala (Uganda).

“I am delighted that our East Africa Service from and to Kenya is developing so positively.

After only four months in operation, we have significantly expanded our business with overall vessel utilization beyond our expectations,”said Dheeraj Bhatia, Managing Director Africa, Middle East and Indian Subcontinent for Hapag-Lloyd AG.

purpose-built racking, a viewing area and open spaces for large sculptures. It also offers a first-class temperature-controlled environment with 24-hour guardsurveillance and infra-red CCTV.”

This facility will be Crown’s second in the region, and the free zone location means that duty and VAT is deferred on import – saving collectors who buy from auction and then ship to another country, five per cent VAT.

Crown Fine Art opens specialist warehouse in JAFZA Crown Fine Art has opened an advanced, highly secure facility in Dubai’s much sought-after tax-free zone, featuring firstclass temperature control and 24-hour surveillance.

Conveniently located in Jebel Ali Free Zone, a midway point between Dubai and Abu Dhabi, Crown Fine Art’s new warehouse will also be home to collections of the British auction house Christie’s, a key Crown customer who specializes in the sale of fine art, antiques and jewelry.

Crown Fine Art’s facilities exceed the region’s strict security requirements and incorporate ‘best-in-class’ safety measures and access standards.

Commenting on the new facilities, Gus VanGeijtenbeek, Regional Manager for Crown Fine Art Dubai said,“ Our new warehouse facility is furnished with

12 SEPTEMBER 2018

RSA Global to offer virtual warehousing solution Immensa Technology Labs (Immensa) announced that it will provide 3rd party logistics providers RSA Global with its revolutionary ‘Digital Inventory’ and ‘Virtual Warehouse’ solutions via an exclusive strategic partnership. The agreement consolidates Immensa’s reputation as the leader in applying AM - Additive Manufacturing (AM or 3D printing) - to the logistics industry and also singles out RSA Global as an early adopter and leader in its sector when it comes to implementing the game-changing technology.

RSA Global is a UAE-based 3PL provider.

With the exclusive partnership with Immensa, RSA Global can now provide customers on-demand inventory production capability, substantially reducing raw material costs and lead times. Customers who are ordinarily saddled with expensive manufacturing costs for parts, long lead times, and high transportation expenses can expect further convenience with greater scope for customisation in their production line, and a favourable impact to cash flow.

Fahmi Al Shawwa, CEO of Immensa, commented,“This technology is catching the attention of logistics companies on a global level, with companies like UPS, FEDEX and

many others taking steps to integrate it into their business.”

Abhishek Ajay Shah, Co-Founder and Group CEO at RSA Global said: “Immensa is a leader in its field and we are delighted to have this exclusive partnership with them as it comes to support our vision of being a third party supplier with the ability to offer customers a complete and seamless, integrated solution. As an agile company, we are constantly assessing how technology can

Nokian Tyres introduces a new on and off-road product line for trucks Nokian Tyres, celebrating its 120 years in business, has been systematically broadening its product portfolio for trucks and buses in the past few years.

The latest addition is the Nokian R-Truck product range for demanding on and off-road use – such as earthmoving and forestry applications.

Tires for two worlds “On and off-road use puts special, even conflicting demands on a truck tire”, says Nokian Heavy Tyres Product Manager Teppo Siltanen.“It’s like two different worlds – the smooth highway and the rocky earthmoving site or the muddy forest road. The Nokian R-Truck product line strikes an excellent compromise between the two worlds.”

Starting with the off-road world, all Nokian R-Truck tires have open pattern and wide grooves that ensure good self-cleaning on soft surfaces such as mud, sand and snow. This improves both grip and reliability. They feature a special rubber compound that is highly resistant to cuts and cracks.

This reduces the risk of tire damage on rough surfaces. The tires also have stone ejectors in their main grooves, increasing the tire operating life.

further simplify our customers’ supply chains and how we can support their growth.”

Immensa is one of the few companies in the world that offers full ‘Inventory Digitisation’ and ‘Virtual Warehousing’ services to companies, Immensa is leading the move toward a more streamlined global supply chain that is supported and strengthened by AM technology.

Nokian R-Truck Steer Designed for year-round use on steer axles on on and off-road trucks, Nokian R-Truck Steer excels in tough conditions. The stone ejectors in its main grooves prolong the operating life especially on rough surfaces.

Nokian R-Truck Drive An all-season drive axle tire designed for on and off-road trucks operating in demanding conditions and various surfaces. Its tread has large blocks that offer durability and reduce cuts and tears in challenging environments.

Nokian R-Truck Trailer A reliable choice for demanding yearround trailer use, Nokian R-Truck Trailer is optimized for demanding on and off-road and timber trailer use. Its main grooves have stone ejectors that reduce the risk of tire damage.

Innovative design The Nokian R-Truck series consists of three models:

JULY/AUGUST SEPTEMBER 2018 13

Schneider Electric’s new F&B application With evolving distribution systems and consumer needs, food and beverage manufacturers are looking for solutions to improve the organization, management and security of their product data in a shared system. Schneider Electric’s new tool, PIM Powered by Agena3000, is capable of centralizing, standardizing and distributing all updated product data with complete security. For this solution, Schneider Electric is drawing on the expertise of Agena3000, a French specialist in food and beverage product information management (PIM).

Manufacturers faced with an exponential rise in data With the global trend for digitization and growing consumer demand for trusted, transparent access to more relevant, reliable information on their choices, mass retailers and e-tailers are using innovative technologies, such as connected objects (IoT) and mobile apps, to meet their customers’ needs.

Benjamin Jude, Food and Beverage Segment Solution Architect at Schneider Electric, explained:“Production information

management (PIM) is a system of reference that centralizes all end-product data and makes it available to stakeholders internally and externally, from e-commerce platforms to stores.”All the data handled by PIM Powered by Agena3000 will be constantly updated and comply with GS1, the global standard for encoding information produced by the food and beverage industry (product codes, ingredients, additives, consumer information, composition, allergens, etc.) adopted by all major retailers and e-tailers.

To develop this offering, Schneider Electric has partnered with French software provider Agena3000, which has 30 years of experience in standardizing product information managed by manufacturers for major retailers. Stéphane Lopez, channel director at Agena300, commented:“The GS1 standard is a mark of trust and security for distributors We bring our expertise in data standardization and ensure updates, especially local adaptations of GS1 from one country to another.”The company is also able to address specific requests by a distributor, such as a specific format and definition for product photos.

dnata launches passenger services at New York-JFK Airport Dnata has launched passenger handling operations at New YorkJFK Airport. Already providing ground handling to over 50 airlines in the United States, this is a natural portfolio extension for dnata in New York.

The launch customer is Copa Airlines, the flag carrier of Panama, which operates four daily flights with an annual capacity of 364,000 passengers between New York and Panama City using the Boeing 737 aircraft.

Copa Airlines’ choice underlines the demand for dnata’s reliable and quality services and dedicated team. Having been awarded with over 40 new contracts in the United States in the past 12 months, dnata continues to win new business with its attention to meeting customers’ requirements, and its commitment to maintaining the integrity of airline schedules.

Including Copa Airlines, dnata’s global ground handling operations now serve over 270 airlines at 75 airports in 13 countries.

Genavo-Crown success story with HRU Logistics, Dubai Crown Equipment is growing its footprint in the UAE market.

HRU Logistics comes under the Giant Lals Group of companies.

Crown and HRU Logistics first started working together in 2014 with approximately 13 machines.

In 2017, with sizable increase in business volume, HRU logistics

14 SEPTEMBER 2018

expanded its operations with a state-of-the-art facility in Technopark. This purpose-built, Crown TSP 7000 Series, VNA operated warehouse is designed to be the largest VNA operated facility in UAE with a storage capacity of more than 105,000 pallet positions. The facility is in

operation since May 2018. For this facility, Crown delivered the first of its kind purpose built VNA machines for furniture handling with 13.5 m lift height. In 2012, Crown delivered VNA’s with more than 17m lift height. A first for any equipment manufacturer in UAE market. This was for RHS

Logistics, another key account for Crown Equipment.

With the new lot of machines delivered to HRU, their fleet size is now 20 machines. The machines are maintained by Genavco through its comprehensive service program ensuring maximum uptime for the fleet.

Bryan Thompson appointed CEO of Abu Dhabi Airports Bryan Thompson has been appointed Chief Executive Officer (CEO) of Abu Dhabi Airports. Thompson brings with him more than 25 years of international experience in various areas of airport management and operations, including ANS, terminal operations, strategy and planning, in addition to infrastructure and corporate development.

In his previous role as Senior Vice President – Development at Dubai Airports, Thompson led the development of Dubai International Airport as well as Dubai World Central. In addition, he was involved in the strategic planning of Dubai 2020 and 2050.

Prior to joining Dubai Airports he served in a number of key executive roles across the Asia and Pacific regions. He was the CEOof Launceston Airport, General Manager of Strategy, Planning and Development and General Manager of Assets and Infrastructure Planning at Melbourne International Airport.

Prior to this, he held positions of Director of Airport Operations and VP Terminal Management at Mumbai International Airport.

Thompson started his career in the aviation industry as a Principal Air Traffic Controller, and later on he was appointed

as Assistant GM for Airport Operations at Johannesburg International Airport.

He holds a Master’s Degree in Business Administration, Strategy and Finance from the University of South Africa.

His Excellency Abubaker Seddiq Al Khouri, Chairman of the Board of Directors of Abu Dhabi Airports, said,“We are delighted to announce the appointment of Bryan Thompson to lead to Abu Dhabi Airports at this critical stage in our journey to becoming the world’s leading airport group. I am confident that his vast experience and excellent leadership will take Abu Dhabi Airports beyond the delivery and opening of one of the region’s most ambitious infrastructure projects and on towards further establishing Abu Dhabi as a destination of choice for tourism, business travel and transit.”

Bryan Thompson said, “I feel honored to have been invited to join Abu Dhabi Airports at this remarkable time, as we prepare to unveil our ground breaking project to the world and further highlight everything our unique brand of Arabian hospitality has to offer. My focus will be to build on the strong foundations already in place, further cementing Abu Dhabi Aiports’ role as a leading world hub and ensuring the company’s growth in constructive partnership with all relevant stakeholders.”

Five endangered white rhinos fly Turkish Cargo Turkish Cargo recently transported five white rhinos to Shanghai from Johannesburg via Istanbul. Each rhino was born under special supervision and this supervision will continue until they reach the age of three as they are an endangered species. Each weighing a tonne, the five rhinos had a smooth trip accompanied by their specialist teams and keepers. While this species of white rhinos was once the most common species, they are now endangered due to illegal hunting of their horns.

Turkish Cargo flies live animals between only qualified zoos, private institutions or acknowledged preservation and rehabilitation centers in order to prevent animal trafficking.

SEPTEMBER 2018 15

COUNTRY REPORT - RUSSIA AND CIS

16 SEPTEMBER 2018

Growing and prospering

Incoming data for the economy of the Commonwealth of Independent States (CIS) suggests that regional growth held up well in Q2, after a sharp pick up in Q1.

Focus Economics has this report on the performance of the regional economic sector this year

C

St.Petersburg, Russia

IS economy keeps healthy pace in Q2. Regional GDP is expected to have grown 1.9 per cent annually in Q2, unchanged from the 1.9 per cent expansion recorded in the previous quarter. Higher oil prices, rising wages and a healthy labour market are supporting a recovery in Russia’s economy, which is, in turn, fueling solid remittances inflows and export demand in the neighboring economies. Although the region is clearly recovering after the slump produced by low commodities prices in 2015–2016, growth is still notably below the commodities boom years. Official national accounts data for Q2 is still outstanding for all CIS economies; however, preliminary figures for H1 revealed solid growth dynamics in Azerbaijan, Belarus and Kazakhstan. The non-oil sector led Azerbaijan to grow 1.3 per cent annually in the first two quarters of 2018, notably above last year’s meagre 0.1 per cent growth.

However, activity did lose steam from the 2.3 per cent expansion in Q1.

Likewise, Belarus’ economy held up well in H1, according to a preliminary estimate that revealed a robust 4.5 per cent expansion. Tailwinds from low

SEPTEMBER 2018 17

COUNTRY REPORT - RUSSIA AND CIS

St.Petersburg, Russia

Revived energy and mining sectors, along with inflation, falling unemployment and higher strong consumer demand, should lift growth oil prices fueled Kazakhstan’s economy this year and act as a buffer against geopolitical to grow 4.1 per cent in H1, matching Q1’s uncertainty. However, tougher international result. Growth dynamics are expected to sanctions on Russia and restricted foreign have been largely unchanged in Russia in investment continue to weigh on the region’s Q2, with solid household consumption and growth prospects. In contrast, higher-thanfirmer energy prices driving momentum. In expected commodity prices are an upside addition, the economy is expected to have risk to the region’s outlook, while the recent received a mild boost from hosting the World protectionist measures imposed by the U.S. Cup, thanks to buoyant tourist spending. are not expected to have a major Economic conditions are effect on regional growth given expected to have firmed The non-oil the region’s low trade exposure slightly in Ukraine, which to the U.S. is not included in the sector led The CIS economy is seen regional aggregate. Reviving Azerbaijan to expanding 2.1 per cent in 2018, household consumption which is unchanged from last and investment likely grow 1.3 per month’s forecast. The result will stoked activity, although cent annually mark the fastest growth rate in continued delays with five years if confirmed. Next year, IMF reforms and political in the first two growth is seen holding steady at uncertainty are preventing a quarters of 2.1 per cent. This month, the bulk stronger recovery. of the CIS economies – including 2018, notably that of Azerbaijan and Russia – Outlook above last year’s saw no changes to their growth Higher commodity prices projections for 2018. However, bolster regional growth meagre 0.1 per prospects were upgraded for prospects, but sanctionscent growth Armenia, Belarus and Kazakhstan. related risks remain.

18 SEPTEMBER 2018

There were not any countries for which the outlook was downgraded this month. As for the three countries that are not included in the regional GDP aggregate, forecasts for Turkmenistan and Ukraine were unchanged, while Georgia’s GDP forecast was revised up.

Tajikistan and Uzbekistan are projected to be the region’s fastest growing economies, both expanding over 5.5 per cent. Turkmenistan’s economy is seen growing a buoyant 5.9 per cent this year. Azerbaijan and Russia are, meanwhile, expected to be the slowest growing economies with expansions of below 2.0 per cent. Among the region’s larger economies, Kazakhstan will outpace the rest, growing 3.7 per cent, followed by Belarus (3.3 per cent).

Russia Retirement age increase sparks protests Incoming data suggests that economic momentum held up in the second quarter, after GDP growth accelerated at the start of the year. Higher oil prices are buttressing the all-important energy sector, and export growth was firm in April and May. In addition, the unemployment rate remained at a multi-year low in June and retail sales

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COUNTRY REPORT - RUSSIA AND CIS

growth picked up in the same month, buoyed

by World Cup-related spending. On the political front, President Vladimir Putin stated on 20 July that a planned increase in the retirement age would be reviewed.

The legislation had provoked widespread protests earlier in the month, although analysts argue it is necessary to combat the effects of an ageing workforce and improve the sustainability of the pension system.

Growth is expected to pick up this year, thanks to strengthening private consumption and firmer oil prices. An improving labor market and low inflation should buoy household spending, while higher commodity prices will support export growth.

That said, high geopolitical uncertainty and the possibility of further economic sanctions remain key risks to the outlook. GDP is

20 SEPTEMBER 2018

expected to expand to 1.7 per cent in 2018, which is unchanged from last month’s forecast. In 2019, growth is seen steady at 1.7 per cent.

Kazakhstan - Oil price boost helps correct external imbalances According to an estimate from the Ministry of Economy, economic growth picked up in the January – June period, growing 4.1 per cent year-on-year following a 3.9 per cent expansion in the January–May period, as higher-than-forecast oil prices encouraged a further boost to oil production. The strong growth momentum was corroborated by a rise in the short-term economic activity indicator throughout the second quarter. As well as encouraging higher production, the upsurge in global oil prices has helped reduce the current

account deficit, which more than halved in the first quarter compared to a year ago.

Meanwhile, retail sales surged in June amid falling inflation and unemployment, growing at a markedly faster pace than in May. In early July, President Nazarbayev approved stricter controls over capital outflow from local banks in a move aimed at restraining capital flight and preventing the tenge from plunging. The economy is expected to grow at a solid pace again this year, supported by increased investment in the oil sector, higher oil prices, and an upturn in domestic demand amid weaker inflationary pressures. Growth is expected to moderate from last year, however, as export growth is seen losing steam and the government’s fiscal consolidation drive curbs activity. Challenges to the outlook stem from a still-struggling banking sector, overdependence

Astana, Kazakhstan

Growth dynamics are expected to have been largely unchanged in Russia in Q2, with solid household consumption and firmer energy prices driving momentum

on oil, and political uncertainty surrounding the transition of power if President Nazarbayev, who has been at the helm since 1991, decides not to contend in the 2020 presidential race. GDP is expec ted to grow 3.7 per cent in 2018, which is up 0.1 percentage points from last month’s forecast, and 3.5 per cent in 2019.

Ukraine - Government makes mixed progress with IMF mandated reforms Ukraine’s recovery appears to have persisted in the second quarter, after growth picked up at the outset of the year. Domestic demand is expected to have remained in the driver’s seat in Q2: The sustained easing of inflationary pressures, coupled with improving labor market dynamics and

strong remittance inflows, likely buttressed private consumption. In addition, household lending surged in the first half of the year against an increasingly stable banking sector.

Meanwhile, the IMF has backed the country’s revised plans for an anti-corruption court after the amended law was approved by the Rada on 12 July.

On a less positive note, in a move likely influenced by next year’s presidential and parliamentary elections, the government recently extended the gas-price freeze until the beginning of September, once again failing to fulfill one of the Fund’s key conditions and thereby reducing the prospects of receiving another tranche of funding in the coming months. Domestic demand should remain healthy and lead the sustained recovery this year amid heavy

SEPTEMBER JUNE 2018 21

COUNTRY REPORT - RUSSIA AND CIS

22 SEPTEMBER 2018

COUNTRY REPORT - SHARJAH, UAE

investment activity and robust household consumption growth. Nevertheless, downside risks are significant and stem from mounting political tensions domestically and slow reform momentum. FocusEconomics panelists see GDP rising 3.1 per cent in 2018, unchanged from last month’s forecast, and 3.1 per cent again in 2019.

Belarus - Activity remains solid in Q2 Growth was robust in the first half of the year, although the pace of expansion moderated somewhat in the second quarter after an impressive first-quarter outturn.

Sturdy retail sales growth throughout the period was bolstered by tight labor market conditions and dwindling inflationary pressures, hinting that private consumption was likely in the driver’s seat in the second quarter. On the external front, however, momentum appeared to wane further: Exports decelerated in May, dropping to a near one-and-a-half year low, weighed down by weak agricultural exports. Industrial production growth also slipped to a fresh yearto-date low in June; more than halving from February’s high, the moderation was led by a notable fall in extractives output.

Although GDP growth is set to moderate in the second half of the year, it should stay robust, driven by healthy private consumption growth against the backdrop of easing inflationary pressures and favorable labor market dynamics. Export growth, meanwhile, is projected to slow somewhat this year.

The economy is expected to expand 3.3 per cent in 2018, which is up 0.1 percentage points from last month’s forecast, and 2.9 per cent in 2019.

Monetary sector - Regional inflation falls for second consecutive month in June

Savannah, Georgia

A preliminary estimate of regional inflation revealed that price pressures continued to subside in June. Inflation in the CIS region inched down to 2.6 per cent from May’s 2.7 per cent. Softer inflation was recorded in six of the region’s economies, including in Russia, and inflation is at a historically-low level. Despite low price pressures, policymakers held monetary policy unchanged in recent weeks.

SEPTEMBER 2018 23

Russia’s Central Bank kept the key rate steady, as government plans to raise the VAT in 2019 along with a weak ruble have increased upside risks to the inflation outlook. In addition, the Central Bank of Kazakhstan held its policy rate unchanged in July, as tighter global financial conditions have reduced space for easing, while an expected rise in inflation in Russia, should push up price pressures going forward.

Inflation is seen rising by the end of 2018 and is projected to come in at 4.2 per cent, which is down Economic 0.1 percentage points from last month’s forecast. In 2019, conditions are inflation is expected to edge up to 4.5 per cent by yearend. expected to

Giorgia

have firmed

Available indicators point to slightly in stronger activity in the second Ukraine, which quarter, following a robust expansion at the outset of is not included the year. Growth is estimated in the regional to have accelerated in May, coming in well above the aggregate average reading for the first quarter. Momentum appears to have carried over into June on the strength of the external sector; merchandise exports surged on greater base-metal exports and buoyant demand from Georgia’s key trading partners—particularly Turkey and Azerbaijan.

On the domestic front, inflation sunk to a nearly two-year low in the second quarter, likely supporting household spending.

Meanwhile, on the political scene, the country’s parliament approved a restructured cabinet on 15 July. The new government’s manifesto could alleviate decades-long tensions between Georgia and Russia.

• Domestic demand should drive growth this year, bolstered by tight labor market conditions and the sustained easing of inflationary pressures. In addition, export growth is expected to keep pace through year-end. FocusEconomics panelists expect the economy to grow 4.8 per cent in 2018, Tajikistan up 0.2 percentage points from last month’s In the first quarter of this year, the forecast, and 4.6 per cent in 2019. economy was buoyed by growing inflows • Inflation moderated to 2.2 per cent in of remittances from Russia and a robust June (May: 2.5 per cent). Our panelists see mining sector. The positive economic inflation averaging 3.8 per cent in 2018 and performance, together with targeted 3.6 per cent in 2019. measures by the Central Bank, have

24 SEPTEMBER 2018

contributed to a decline in the stock of non-performing loans; however, the percentage of bad loans remains remarkably high. Available data for Q2 points to another quarter of sustained growth: Industrial production continued to increase robustly in April–May, and exports

COUNTRY REPORT - RUSSIA AND CIS

Odessa port, Odessa, Ukraine

rose at a solid rate in the same period.

However, imports outpaced exports, as capital spending surged in annual terms, leading to a wider trade deficit.

Rising remittance inflows and contained inflation should buttress consumer spending this year. Along with healthy

private consumption growth, higher public infrastructure spending is also seen underpinning the economy. Growth will, however, likely moderate, as export growth is expected to slow from last year’s outstanding performance. FocusEconomics panelists see the economy growing 5.9 per

cent in 2018, which is unchanged from last month’s forecast, and 5.8 per cent in 2019.

Inflation inched down to 1.6 per cent in June (May: 1.7 per cent). Inflation is expected to average at 7.2 per cent in 2018 and 6.7 per cent in 2019. www.focuseconomics.com

SEPTEMBER 2018 25

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COVER

Material handling in the digital factory:

a look ahead Material handling is playing a vital role in the emergence of the digital factory, as data analytics reshapes the workforce.

Bill Henderson, John Ryan, authors at www.mhlnews.com talk about how the growing market fuels this new element

T

he material handling market is growing as consumer demand and expectations increase. It wasn’t long ago that shipping and handling charges with four-to-six-week delivery were part of any “mail order”transaction. Then, along came the Internet and with it came free shipping, within a week. Then, it was a couple of days. Now, same day. Soon, within an hour and to your current location- not just your house or office!

All of this rapid evolution requires considerable distribution infrastructure to support it. What’s needed is either very much larger warehouses or a number of small warehouses strategically located near consumer demand or, most likely, some combination of these facilities, feeding each other. The scalable nature of automation solutions allows for easier deployment of small, medium or large systems to support this kind of infrastructure.

A key driver in this scenario is the ease of communicating between the systems that your vendor offers in order to allow for efficient operation strategies.

A critical shortage of workers is also prevalent in the material handling market

SEPTEMBER 2018 27

COVER

28 JUNE SEPTEMBER 2018 2018

COVER

today. It is generally a low skilled job, picking items from a warehouse to fulfill orders. There are simply not many people who want to work a third shift or in a freezer or both, moving boxes of material. Because of this fact, there is a big trend in the market today toward robotics, working alongside people to make the job of fulfilling orders easier and less physically demanding. There are many developments currently ongoing to replace workers with automated picking robots, especially in the e-commerce markets. Automation thus offers one way to help alleviate the challenges of finding, training and retaining a workforce.

The rise of big data Training and retaining workers is a big challenge for the supply chain/ material handling industry. As automation increases, the further challenge becomes acquiring a different workforce with the skill to be able to maintain the automation solutions deployed. The efforts of various companies through partnerships with technical schools and continuing education training are helping to develop the next generation of workers who have the skills needed to work with complex automation systems and to keep them running and optimized.

Numerous material handling solutions and capabilities have been well known and used in the industry for a long time. So long, in fact, that a lot of the current solutions from OEMs and integrators still are based on established PLC systems. Getting those solutions migrated to the newest innovations in the PLC world and all of the capabilities that they bring will help improve the ability to solve the flexible scalable changing system needs of end users in the future.

The main controls suppliers in the material handling industry are large integrators, bringing together

large pieces of equipment as well as other support systems such as warehouse management software solutions. Large projects often involve several companies, with one taking the lead. One current trend is the pairing of product lifecycle management with the digital twin concept and simulation capabilities.

Digital flows are becoming as important as the physical flow of goods. Educating the systems suppliers on capabilities in this arena is a major strategic point, moving forward. Be sure you are asking the right questions.

There has been a general level of interest in the concept of digitalization today, as many of the large and mid-sized end users are talking about this mega-trend in the industry. Already a number of companies are recognizing the benefits associated with a digital twin of their machine and their process. The ability to completely test their system without building it has significant advantages for them.

Some companies are simulating and emulating their logistics and supply chain systems to optimize them, before they build or purchase anything.

The material handling industry already has a well-defined installed base of warehouse management software (WMS) solutions and we’ll continue to see Big Data analytics driving the industry to amazing new levels.

ABOUT Bill Henderson and John Ryan are business development managers for material handling at Siemens Digital Factory, which offers a portfolio of integrated hardware, software and technology-based services in order to support manufacturing companies in enhancing the flexibility and efficiency of their manufacturing processes and reducing the time to market of their products.

SEPTEMBER 2018 29

Tyres for

port vehicles

The ContainerMaster+ is well suited for the typical operating conditions in most ports

With the huge ports and subsequent port operations that happen in and around the UAE, Continental tyres is introducing next generation, new compound tyres specifically for use on ports.

These will be available from next year

B

igger, faster, safer, greener, smarter; based on the five major trends for the future of ports, Continental has announced its latest developments for the port industry, unveiling new Port Plus compound for V.ply tyres. With this advancement, Continental is expanding its port tyre portfolio which already includes innovative solutions ContiConnect and ContiPressureCheck digital tyre monitoring platforms for commercial fleets. In addition to the V.ply tyres, Continental’s radial tyres for port applications and ContiConnect will be available in the Middle East by 2019.

Continental’s port tyre and solutions portfolio has been specifically engineered to meet the safety standards, weather, road,

30 SEPTEMBER 2018

payload and driving requirements in the Middle East. One of the causes of tyre failure in this region is the build-up of heat in tyres due to lack of maintenance. Ambient temperatures in the region often exceed 45°C in the summer, increasing wear and reducing durability of standard tyres.

Jose Luis de la Fuente, Managing Director of Continental Middle East commented on the new product offerings which will launch in the region next year,“In the Middle East, over half of measured trucks and trailers are under-inflated, resulting in road safety risks and unpredictable costs for fleets. We believe that the new port radial tyres coming to the region next year, combined with new digital technology, ContiPressureCheck and ContiConnect, will contribute to enhancing tyre safety in the Middle East.”

Pick-and-Stack applications: New Port Plus compound for longer life of the V.ply tyre portfolio This tyre reduces heat generation and abrasion, the two primary causes of tyre wear, to significantly extend tyre life.

In ports, there is a distinction between central tasks - pick and stack applications on the one hand and load-and-carry applications on the other - where all tasks require different vehicles, each with specific demands. In pick-and-stack applications, vehicles are not only used to load and unload containers, but have also to do a lot of short distance driving that require a high frequency of turning on the spot. The focus of the tyre development, therefore, needs to be the reduction of abrasion and the subsequent tyre wear it causes.

Load-and-Carry Applications: Radial tyres will complete the port portfolio from mid-2019 The radial tyre portfolio will be available with integrated tyre sensor in preparation for the digital solutions ContiPressureCheckTM and ContiConnectTM, which will be launched in the region mid-2019. Other than picking

TYRES - PORT VEHICLES

Continental’s port tyre and solutions portfolio has been specifically engineered to meet the safety standards, weather, road, payload and driving requirements in the Middle East

and stacking containers, vehicles in ports may also operate in applications that involve driving over longer distances and at higher constant speeds. Heat build-up is the biggest challenge and the main reason for high maintenance costs and vehicle downtime.

Digital solutions: ContiPressureCheck and ContiConnect for efficiency and safety in the port industry Safety and efficiency are the key success factors in the port business. However, tyres with low air pressure are still a common cause of breakdowns. To ensure the correct tyre pressure and temperature, Continental has developed the digital tyre pressure monitoring systems ContiPressureCheck for individual vehicles and ContiConnect for fleets. Continental tyre sensors are at the core of both systems. The intelligent sensors constantly measure temperature and pressure from inside the tyre and provide data which is then displayed on a handheld tool, on a screen in the driver’s cabin or on a web portal overseeing the fleet. The alerts and notifications let the fleet operators know which tyres need immediate attention.

New radial tyres expand Continental’s port tyre portfolio from mid-2019

SEPTEMBER 2018 31

SUPPLY CHAIN

Gemfields own mines that have responsibly sourced rubies which are of immense value to their eventual owners as well as the seller who acquires the gem from Gemfields. Here we focus more closely on the breathtaking red jewel’s supply chain in this chat with Jack Cunningham, Sustainability, Policy and Risk Director at Gemfields

Rubies are

red

R

esponsible sourcing and transparency are incredibly important these days as many consumers want to know where their products and materials have come from. Coloured gemstones are no different. Responsible sourcing for Gemfields means operating in a way that contributes positively to national economies, takes a leading role in modernising the coloured gemstone sector and building lasting,

SUPPLY CHAIN

sustainable livelihoods for the communities around their mines.

Topics such as ethical sourcing and transparency in the supply chain are foremost when it comes to the end to end value chain of colored precious stones.

What is your opinion on this?

Jack Cunningham: We believe that coloured gemstones should be mined and marketed by championing three key values - legitimacy,

transparency and integrity. Legitimacy: We go over and above accepted practices operating in a way that not only meets international and national laws, but that also challenges the sector by setting new benchmarks around sustainability. Transparency: To lead we must be transparent. As well as leading with our own standards and initiatives through our downstream supply chain, we are working with partners to standardise strong, transparent practices across the industry.

SEPTEMBER 2018 33

Trucks.MercedesBenzMENA.com

Your success is what drives us.

Mercedes-Benz ServiceSolutions are customized to fit your needs.

Your truck is what drives your success. If it‘s moving, then so is your business. To give you additional peace of mind on the road, you can purchase a service contract from Mercedes-Benz, they offer varying levels of cover and are tailored specifically to your needs as a business customer.

Mercedes-Benz ServiceSolutions is offering three attractive packages to choose from: BestMaintenance: Transparent and plannable maintenance costs.

SelectPlus: Convenient maintenance and extensive protection against unexpected costs.

Complete: A complete service solution for utter peace of mind.

With Mercedes-Benz ServiceSolutions your truck is serviced at optimized maintenance intervals, therefore enables you to achieve lower service and repair costs, more uptime and increased vehicle resale value.

Find out more about the different Mercedes-Benz ServiceSolutions for your Actros and Arocs on our website or contact your nearest authorized Mercedes-Benz General Distributor.

SUPPLY CHAIN

Integrity: We are committed to embedding tangible operational actions from the mines onwards, to support sales and marketing of our product. Our proprietary grading system provides our partners with trusted evaluation and declaration of treatment.

What is the nature of the companies you are dealing with when it comes to the supply chain and their operations?

JC: As well as leading with our own standards and initiatives through our downstream supply chain, we are working with partners to standardise strong, transparent practices across the industry. For instance, as far back as 2015, we were discussing issues around transparency and labour standards with our customers.

We knew back then that jewellery companies would want to know that the gemstones they buy had come from factories that have good conditions. So we helped them first by carrying out audits of their factories, and then recommending improvements. We know that if you can help companies in the middle of the supply chain continuously improve then the whole sector can eventually improve, but if you don’t explain why, they have no incentive because they can’t see the benefit.

Coloured gemstones usually come from small scale artisanal mines, how does this present a challenge when it comes to the supply chain and logistics side of things?

It’s no challenge for us, because we mine, export and sell transparently and responsibly.

But for buyers of gemstone material in the wholesale market this is a huge issue. With no mass-market way of physically tracing coloured gemstones back to their source, buyers are in the dark about where they come

from and therefore how they were mined and who they were traded by. The sector as a whole is ancient and opaque to transparency.

It is really a case of ‘opening a pandora’s box’ – many people don’t want to look inside.

Why is the colored gemstones supply chain so complicated?

It is an ancient and opaque industry that stretches back hundreds of years. The mining of gemstones goes back thousands, but as coloured gemstones are so rare the industry has just evolved in accordance with this rarity; there has been no consistent supply and so where there is inconsistency of supply it creates a market based largely on secrecy, rumour, intrepidness and artisanship.

Being a mining and marketing company what ground rules have you set for the partners you work with in order to ensure the authenticity of the mine to market terminology?

We repeatedly use the words above; legitimacy, transparency, integrity to create consistent messaging. We tend to avoid using the word ‘ethical’ because it is a rather loose word that is open to interpretation.

In the absence of defined, industry-wide standards, we prefer to use the words ‘responsibly sourced’.

Could you take us through the steps of the coloured gemstones supply chain as it happens till you have possession of the stones?

For Gemfields, the process is rather simple.

We mine the stones first; in Zambia this involves extracting emeralds from within the hard rock using experts with chisels and later

SEPTEMBER 2018 35

We have extensive internal and externally contracted security at our mining operations to create safe and secure working environments for our employees with a crushing, washing and sorting plant.

In Mozambique, the ruby-bearing gravel is scooped up and is washed thoroughly first.

Sorting of stones is conducted in a sorthouse, where emeralds and rubies are graded using Gemfields’ proprietary grading system.

From there some stones are sent to India for industry standard treatments (low quality rubies can be improved by slowly heating them, whilst emeralds are ‘oiled’ using baby oil). There is a further round of grading before the gemstones are sent for auctioning. At our auction, our ‘authorised partners’ (those that have been vetted via a Know Your Customer due diligence process) attend a week long inspection of our gemstones, during which time they make sealed bids based on a disclosed reserve price. At the end of the week, winning bids are announced and we handover

36 SEPTEMBER 2018

the gemstones to winning customers. The stones are then taken by customers and cut and polished ready for the jewellery sector to use. We also get commissioned by some jewellery companies to purchase cut and polished gemstones for them, and as we know which customers have certain inventories, we can buy back from them to supply the jewellers.

It is not a vertically integrated supply chain, but it is close to it, and we are constantly looking at ways of improving traceability. For instance, Gemfields is proud be a test partner for Gübelin Gem Lab’s“Paternity Test”, which enables proof of provenance and provides customers with peace of mind that their gemstone was sourced from a responsible mine. The Emerald Paternity Test is a true game-changer for the coloured gemstone

SUPPLY CHAIN

industry. This new technology uses customised synthetic DNA-based nanoparticles enabling traceability of gemstones back to the exact place of mining. This breakthrough technology is applied to rough emeralds directly at the mine and is developed specifically to survive the usual cleaning, cutting, polishing and setting procedures, which an emerald undergoes before reaching the end consumer.

Should an end consumer or jeweller wish to know if the gemstone contains the technology, they can take it to GĂźbelin for testing. This technology offers miners (both big corporates and cooperatives of small and artisanal miners), governments, trade organisations, industry watchdogs, jewellery brands and final customers a completely new level of transparency when sourcing emeralds, instilling confidence and creating trust.

What is the size of your operations in Dubai, Africa and from where your company originates (London)? How many employees do you have?

most significant recently discovered ruby deposits in the world), as well as active exploratory licences.

Our Kagem emerald mine is a concession of approximately 40 sq km whilst our Montepuez Ruby Mine is a concession of approximately 300 sq km. Globally we employ approximately 2,000 people.

What kind of security measures are a part of your supply chain and logistics operations when it comes to moving your rubies around the world?

How important is it to have a presence in the region? Which country is your biggest market in this region?

Gemfields is the operator and 75 per cent owner of both Kagem emerald mine in Zambia (believed to be the world’s single largest emerald producing mine) and 75 per cent owner of the Montepuez ruby mine in Mozambique (one of the

We have extensive internal and externally contracted security at our mining operations to create safe and secure working environments for our employees. We also have to ensure we protect the gemstone assets from theft by our employees and also to minimise the loss of gemstones by unlicensed or illegal miners operating on our concessions. Within the supply chain we use dedicated security and logistics companies to move our gemstones from location to location.

SEPTEMBER 2018 37

MANAGEMENT

38 SEPTEMBER 2018

MANAGEMENT

Who run the world?

Girls!

Being a transport giant in the world doesn’t only mean making the most advanced, safe and secure trucks, buses and cars. It also means nurturing and encouraging the people that make it a successful business.

Munawar Shariff spoke to Heléne Mellquist, Senior Vice President of Volvo Trucks Sales Area International in Gothenburg, Sweden about her career path and how important the organisation is when it comes to a successful day at work everyday

I

t was a rainy day in Gothenburg - Sweden’s second largest city and home to Volvo Trucks headquarters - in the last days of June this year. Volvo Trucks were in the midst of their mega event - Innovation Days 2018.

After a number of press conferences; where members of the company’s management team talked about the vehicle giant’s business updates by region, newest innovations in the industry led by Volvo, the role of new technology in the enhancement of workflows in all major industries; I managed to get a few minutes with Heléne Mellquist, Senior Vice President of Volvo Trucks Sales Area International.

SEPTEMBER 2018 39

MANAGEMENT

Our chat centred on her role, her experience working as top management of one of the largest companies in the world, diversification in the workforce and equal opportunities for women. Volvo happens to be on number 180 in the Forbes Best Employers for Women list as of June 2018.

Here are a few excerpts of our very short chat.

40 SEPTEMBER 2018

You have been in this role for sometime, how has your career progressed from the time you started at the company till date?

I’ve been with Volvo for actually a really long time, I have been in this position (Senior Vice President of Volvo Trucks Sales Area International) since March 2016. Prior to this, I was the CEO of

TransAtlantic AB, a shipping company based in Gothenburg with 400 employees.

And before that, I was involved with Volvo Group for 23 years. I worked with Volvo Trucks, selling some myself, too. I worked with Volvo Buses, Volvo Construction Equipment. You can say I have done everything in Volvo.

MANAGEMENT

And during that time I thought I have spent too long here and I felt I needed a change. Being in the company for so long also made me think if I could get another important role elsewhere, since I had been here almost my entire working life. But then I got offered the CEO position at the shipping company I mentioned earlier. It

was the biggest shipping company in the region and I held the CEO role for five years.

It was a refreshing change of business, with new people, new organisation, products, everything. It was good while it lasted.

And then I was offered this position at Volvo, which when I was offered it, I usually think I need two seconds to think about

something and honestly this was a role for which I didn’t even need those two seconds.

This is the most fun I can have at work, with the responsibility of overseeing all these dynamic countries, cultures, products.

Also what we can do for society, the environment. These are all of the things that drive me personally, so it’s very fun.

SEPTEMBER 2018 41

MANAGEMENT

How important is the company environment for a woman to progress in her career?

I think it’s very important. Volvo is a company that is pro diversity and sees diversity as one of their pillars in developing their people and also in promoting their products and services across customers.

There is flexibility here. For me it is essential that a company harbours this philosophy. I do not believe an organisation that only has one type of people - a pale male above 50 can be truly successful.

What kind of challenges did you face all through your career path to be able to break barriers and get to where you are today?

I’ve never thought about the barriers. I have had a lot of great opportunities, I’ve always been interested in what I’m doing, working very hard is a part of my DNA, I love to take responsibility and also to drive change and to grow people. I’m very results driven, I can hardly climb stairs without competing with the people climbing with me.

Sweden is also a country with a very progressive thought process, that makes it easier for women to kind of have this attitude that I do. And being a sparsely populated, very cold country, with a harsh

42 SEPTEMBER 2018

geographical landscape, we have to engage everyone. So everyone gets an important role to play. We all have to be equally abled in mind and body to think we can and are able to do all kinds of jobs. I think this is what Sweden is as a society when we talk about opportunities for women.

Did you have any mentors through your early journey? How important/significant is the role of the mentor in lighting up the way forward?

I never had one or two mentors, I had a lot of people that I studied with, that I shared things with. So there have never been only one or two people that I actually looked at. I have followed people who I admire professionally in their career journey and tried to learn from their challenges and adopt their good qualities. I think this is an easy way of making your profile better.

I think it’s essential to have a role model and that you don’t need to invent something yourself. It’s important to be aware of your peers and to read about how things can be improved in your area of interest. To have an idea of solving issues and knowing how things have been done before. And you can really make an impact in your role. You can also never do everything yourself. A person

who learns from others bounces back sooner than those who don’t. And lastly it is also essential to be a good role model.

How are you paying it forward? What are important points in your opinion to encourage and empower young leaders?

You have to get them out there, put them in charge and not be afraid of actually letting them make mistakes. And even if they do, you keep them up and let them rest a bit and then continue with the process. You should also put them outside their comfort zone, put them on the hot seat and see how they do in the spotlight. This is how I encourage them.

And how are you encouraging young women to be in top positions at top companies?

In my management team, 40 per cent are women. I feel diversity is very important for the development of any team. Also we have a very effective talent review process: every year as an organisation, we look at our diversity figures in terms of gender, age, nationality, different professional backgrounds etc. This is our process for all our teams worldwide - Korea, Dubai etc. We try to drive this as much as possible.

We believe success doesn’t come as a coincidence.

It comes with vision, grit and teamwork.

- Eng. Khalid Al Khatib

E-COMMERCE

Ferrari World, Abu Dhabi, UAE 44 SEPTEMBER 2018

E-COMMERCE

What’s to become of the

shopping

mall?

As the e-commerce revolution conquers more and more cities worldwide, shopping malls are losing their appeal. In some cities more than others. Ken Lyon shares his experience

O

n a recent trip to the the US, a couple of colleagues and myself went to a nearby shopping mall in an attempt to get some lunch. Without doubt, it was one of the most depressing experiences I have had for a long time. Of the three main ‘anchor’ department stores, all were going through the motions of final sales, as two were held by companies that were being closed down completely and the other was about to close due to parent ‘restructuring’ – translation, there was another store in a nearby mall and not enough business for both.

SEPTEMBER 2018 45

Of the remaining 80 or so retail units, only 20 were open and of these, three were ‘pop-up’ craft shops, the rest were a mix of unknown apparel and sports goods stores and a couple of food and coffee outlets. The only people in the mall were of retirement age and congregated around tables in the food outlets, talking or playing dominoes. It is located in a middle class suburb very close to one of America’s major cities, so it’s not as if the catchment area is impoverished.

It caused me to muse on the likely future of these once great edifices to the American dream. More to the point, what is the outlook for established shopping malls generally, as the spread of e-commerce has disrupted the retail shopping landscape globally?

Given the ability to buy products almost anywhere via the internet, the necessity to visit a store in order to buy something has reduced considerably. In the past, mail order catalogue companies provided a similar service, but this aspect of the general retail picture was a small percentage of the overall retail landscape.

There have been numerous surveys and reports as to how and why e-commerce has established such a stranglehold on the shopping experience and I have no wish to repeat them. But it is very clear that the way the retail ‘conversation’ with the customer took place has gone for good. How many of us now go to retail shops to have a physical interaction with a product, compare the in-store price with the online price, and then place the order online? In many cases, myself included, the only time I buy in a store is either on impulse, or because I simply cannot wait for a delivery in the following few days.

This fundamental challenge to the retail model must inform the future design of shopping malls. I believe that they must provide a reason for potential customers to go to them and it must present a compelling experience, over and above anything that technology may be able to deliver to them in their own homes.

The physical layout of the malls themselves must reflect the variety of different vendors that might be interested in interacting with potential (or existing) customers in a specific location. Many major brands are rethinking how they offer their products to customers.

This also has implications for their supply chain and fulfilment processes. Inditex S.A., the parent of Zara, recently announced that they are exploring the use of existing stores as mini fulfilment centres or DC’s. This strategy

46 SEPTEMBER 2018

allows them to fulfil customer orders from the closest store, in the event the item is not available in a central DC. If a customer visits a store and a particular item is not available, the store can find any other store where it is available and have it shipped directly to the customers address from the other store.

While this may seem an obvious and useful process, do not underestimate the complexity of the inventory management systems required to make this happen. It also impacts the layout of the stores as more space is required for the fulfilment activities, reducing the amount of retail space available in any given unit. But for retailers locked into long leases with landlords, it may be a path to more profitable operations.

In many malls, there has been a sharp increase in so called ‘pop-up’ retailers. It’s a way for the mall operation to rent unused stores, albeit for a short period. The run up to Christmas is an especially active time. My suspicion is that this business model will become the norm, as retailers are now very wary of any kind of long term retail property commitments. Therefore mall operators should consider rethinking how a mall is designed and how it operates.

I believe that malls will need to be designed to be completely reconfigurable, probably within hours or a least a couple of days. They should be able to accommodate any kind of business to consumer experience and at the same time, be capable of hosting complimentary partners and

E-COMMERCE

About

Ken Lyon is Managing Director of Virtual Partners Ltd and has over 30 years of experience in the transportation industry.

Ken specialises in the use of advanced information systems to manage the operations of 3PL (Third Party Logistics), 4PL and Lead Logistics Providers and their trading partner networks. Over the past few years he has helped start-ups concerned with supply chain technologies and before that, he spent 10 years as a Director and VP of information services at UPS, helping to establish its Logistics and supply chain services Group. Ken was recently appointed Chairman of the Board for an international logistics software group and also sits on the board of Ti. During the past 25 years, he has participated in conferences and conventions for the US Department of Defense, Government of Singapore, The JOC, Nikkei and many others. Ken is a Fellow of the Chartered Institute of Logistics & Transport and a member of the US OSD sponsored Highlands Forum.

Mall of the Emirates, Dubai

experiences. Some of the massive malls found in Asia or the UAE have examples of this where they have partnered with major brands (such as Ferrari) to extend the customer experience beyond just shopping.

Reconfigurable units are not new, as hotels have had their conference facilities designed in this way for years. Some new hospitals have borrowed this approach to reconfigure their operating suites and intensive care units. They have movable walls, state of the art communications, flexible lighting and sophisticated air conditioning infrastructure, enabling them to cope with almost any kind of requirement. Related processes for cleaning, maintenance and repair have all been upgraded to cope with such a variable

landscape, with the sole aim being to provide the capability in first class condition on a 24/7 basis, reconfigurable based on demand.

The related logistics infrastructure will also look rather different, with probably a smaller number of parking spaces, due to the increasing use of autonomous taxi and ride sharing journeys. But the requirement for more frequent deliveries will mean changes to the storage areas and greater use cross docking. If customisation of garments produced using local ‘sewbots’ and 3D printing continues to grow, dedicated collection and delivery points will need to be expanded. These are just some of the areas they might change is my assumptions are roughly correct.

It is clear that over the past 10 years consumer behaviour has changed in many unexpected ways. Primarily this has been as a result of online access to products. Many manufacturers and retailers have responded by trying to change how they can adapt within their existing business processes. They have probably reached the limit of what is capable and efficient and so any further evolution will require more fundamental change. In the same way that companies can now obtain information services via a standardised ondemand business proposition, brands and retailers will be seeking similar facilities for customer engagement.

Source: www.transportintelligence.com Author: Ken Lyon

SEPTEMBER 2018 47

SHIPPING

n a Om

expands maritime capacity Oman is strengthening its maritime cargo-handling capacity and support services through a series of new investments, reinforcing its credentials as a regional logistics hub. This Oxford Business Group explains further

48 SEPTEMBER 2018

SHIPPING

I

n late July Marafi, a subsidiary of stateowned transport holding company Asyad, announced it had signed a memorandum of understanding to develop and operate a new dry cargo port at Khazaen Economic City (KEC), 60 km north of the capital Muscat.

Marafi will establish a special purpose vehicle with various private sector logistics firms to develop and operate the port, which in turn will help ease congestion and increase the flow of cargo between ships and major land transport networks.

While it is not yet clear when the project will break ground, Marafi and KEC have agreed to complete due diligence and obtain official approval for the project by the end of this year.

KEC will be the first location in the country to host dry port facilities. The 51m-sq-km site, which is being developed as an integrated logistics hub, has already built up an extensive transport network, including road, rail and aviation links, to serve the port.

In addition to port and storage infrastructure, KEC will host light and medium industry, and residential, retail and hospitality facilities.

The port is the second major project announced by Marafi recently. In late May the company unveiled plans to develop and operate a mineral aggregate terminal at Sohar Port, on the Gulf of Oman, in the country’s north.

Working in partnership with Sohar Port and Free Zone, Marafi will develop the terminal and associated stockpile areas, which will cover 200,000 sq metres, with the facility to be operational by early 2020.

As a temporary measure, a 100,000-sqmetre aggregate storage and loading facility will be established at an existing terminal, with mobile loading capacity of 750 tonnes per hour.

Shipping is due to begin later this year.

Salalah port to build agri-products terminal Cargo-handling capacity is also being increased and diversified at the Port of Salalah, in the south of the country. The port, which currently serves as the main container transshipment facility, is opening up to bulk freight handling via the commissioning of a new agri-products terminal. Being developed by Arabian Sea Port Services, a joint venture of Spanish logistics firm Algeposa, and local firms Oasis Development and Al Thabat Holding, the terminal has a grain-handling capacity of 15,000 tonnes per day and storage facilities for 60,000 tonnes of grain.

The second phase of the project, currently in the planning stage, foresees a doubling of throughput capacity. The Salalah expansion process is offering opportunities for equipment and services providers. In June port authorities awarded a $6.5m contract to Northern Ireland firm Telestack for the provision of multipurpose ship-loading equipment. In particular, the equipment will be used to transfer limestone and gypsum, key products of Oman’s mining sector, with the machinery scheduled to be operational by the fourth quarter.

Expanding maritime support services network Oman is also moving to increase the scope of its shipping support services segment in order to strengthen its appeal as a maritime and logistics hub, through additional handling, technical and supply links.

In late July the Oman Drydock Company, a Duqm-based maritime repair, maintenance and construction firm, announced a major long-term expansion programme. The range of activities undertaken by the company will be expanded from three to 11 by 2040, the company’s CEO, Said bin Hamoud al Ma’awali, told local media, potentially lifting turnover to $500m a year.

Working in partnership with the private sector, Oman Drydock will move beyond its core repair and maintenance operations, and into the construction and repair of offshore oil platforms, shipbuilding and conversion, production of steel structures for use in the energy industry and specialised repair of naval vessels.

In the shorter term, the company intends to start building both ships and oil platforms by 2020, while also ramping up its repair and maintenance operations, with a view to servicing up to 200 vessels annually by 2021.

The maritime services segment will also be boosted by the development of a liquefied natural gas (LNG) bunkering facility at Sohar, a project announced in mid-May by French energy firm Total.

As part of a broader agreement between the government and partner Shell to develop several natural gas discoveries in the Greater Barik area of northern Oman, Total issued a statement saying it would use its equity gas entitlement as feedstock for a project to help make Oman a regional centre for LNG bunkering for marine vessels. The energy major plans to build a small-scale modular liquefaction plant in Sohar Port comprising a train of around 1m tonnes per year. www.oxfordbusinessgroup.com

SEPTEMBER 2018 49

AUTOMATION

Middle East factories touted to be ‘world’s best’

G

erman-headquartered Indu-Sol, Japanese-based Mitsubishi Electric, and Cannon Automata from Italy, are among the latest global corporations commenting on the opportunities in GCC’s industrial and building automation market that’s projected to be worth US$10.3 billion in 2023.

Indu-Sol, which ensures the proper function of industrial automation systems, serves direct requests from the Middle East, and works closely with PI (PROFIBUS and PROFINET International) to help regional companies set up manufacturing plants with the latest industrial and data communication technologies.

Stefanie Schulze, who manages International Sales and Marketing at Indu-Sol, said by investing in the right technology, Middle East plants could become the most modern in the world.“IIoT (Industrial Internet of Things), AI and Industry 4.0 stand for long-term processes

50 SEPTEMBER 2018

involving many different kinds of innovations and new solutions in automation,”said Schulze.

“The most important thing is to be open to new concepts.”

Schulze said implementing new technology and processes takes time and costs resources but manufacturers will benefit in the long run.“In Germany, it took some years to optimise production plants and develop efficient concepts for industrial fieldbuses like PROFIBUS (Process Field Bus), PROFINET (Process Field Net) or ASi,” she added.

“The newer Middle East productions can benefit from this knowledge by directly setting up optimised and permanently monitored networks implementing the latest solutions. By doing so, with the high financial power, Middle East plants could become the world’s best automated plants, and play a key role in world-wide production.”

Indu-Sol, along with Mitsubishi Electric and Cannon Automata will be among more

IIoT (Industrial Internet of Things), AI and Industry 4.0 stand for long-term processes involving many different kinds of innovations and new solutions in automation - Stefanie Schulze, International Sales and Marketing at Indu-Sol

AUTOMATION

Middle East factories could be some of the most advanced in the world in the coming years, with global automation suppliers saying regional government investment in new technologies and Industry 4.0 could play a key role in the future of world-wide production than 20 global solutions providers taking part in the inaugural SPS Automation Middle East conference and exhibition, which takes place from 18-19 September 2018 at Dubai’s Festival Arena.

Mitsubishi Electric’s main products and services in the Middle East comprise factory automation, air conditioning, elevators and escalators, power systems for heavy electrical machinery, and video wall display systems. Şevket Saraçoğlu, President of Mitsubishi Electric Turkey, said automation technologies in the UAE and Gulf Cooperation Council (GCC) have only recently established a presence, however the region is open to technological developments and is deeply interested in the subject.

“There’s huge potential, mainly in the UAE and Saudi Arabia, and these two countries have set their focus towards the industrial automation industry,” said Saraçoğlu.

“In recent years Dubai received attention with its robot cops and was widely talked

about with its autonomous police vehicles. The first drone taxi test drive was performed there in 2017 as well. All these things are achieved by connecting them to each other via IoT which is an essential part of Industry 4.0.”

Saraçoğlu added,“Apart from Dubai, innovation is also supported by Saudi Arabia’s willingness to break its dependence on oil, and the Kingdom places emphasis on big data analysis for this purpose. These countries that aim to boost production will make considerable investments on automation technologies in the following years.”

Meanwhile, Alessandro Mancini, Cannon Automata’s General Manager, said the UAE could become the world-leader in Industry 4.0, which merges automation and data exchange in manufacturing technologies, combining cyber-physical systems, IoT and cloud computing.“Industrialisation has generated great opportunities in the UAE,” said Mancini.“Being a relative newcomer in world production and engineering,

the UAE has the advantage of being able to quickly embrace and more easily incorporate new technology inputs and build skills at a very high speed compared to other countries. Digitisation technologies are a differentiation and there are many possibilities that the UAE can become the world leader in the 4.0 industry.”

Mancini, said the future of production in the UAE will involve advanced technologies, allowing the country to position itself as a high quality producer at low cost, and without the need for expensive machines, tools and time.

“The UAE is the major contributor in the GCC for adopting automation technologies,” added Mancini.“This country is among the top global markets for 2016-2017 in industrial automation, focusing on sensors and instruments, electric motors and actuators, electrical relay and industrial control equipment, materials handling and industrial robots.”

SEPTEMBER 2018 51

AIR FREIGHT UPDATE

Air cargo - steady growth

As per IATA’s data, global air freight continues its steady, if slow, growth.

The percentage of growth for this time of year is definitely very slow as compared to the same time in the last two years but at least there is growth

T

he International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 2.1 per cent in July 2018, compared to the same period the year before.

This was the slowest pace of growth seen since May 2016 and well below the five-year average growth rate of 5.1 per cent.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 3.8 per cent year-on-year in July 2018. This was the fourth time in five months that capacity growth outstripped demand growth.

While the temporary grounding of the Nippon Cargo Airlines fleet may have exaggerated a slowdown in growth at the beginning of July, there are three indications that slower growth will continue: The inventory re-stocking cycle, which

52 SEPTEMBER 2018

requires quick delivery to meet customer needs, ended at the beginning of the year.

There has been a broad-based weakening in manufacturing firms’ export order books.

Specifically, export order books in Europe started weakening in February and have fallen in China and Japan in recent months.

Longer supplier delivery times are being reported by manufacturers in Asia and Europe, the top two global trading areas by volume. This typically means that they have less need for the speed afforded by air freight.

“July demand for air cargo grew at its slowest pace since 2016. We still expect 4 per cent growth over the course of the year, however the downside risk has increased.

The tariff war and increasingly volatile trade talks between the world’s two largest trading nations – China and the US - are rippling across the global economy putting a drag on both business and investor sentiment. Trade

wars only produce losers,”said Alexandre de Juniac, IATA’s Director General and CEO.

Regional performance All regions reported year-on-year demand growth in July 2018, except Africa which contracted. All regions, except Africa and Latin America, reported that capacity growth exceeded growth in demand.

Asia-Pacific airlines saw demand for freight lose momentum in July 2018. Growth slowed to 0.9 per cent compared to the same period last year. Capacity increased by 3.9 per cent. As the largest freight-flying region, carrying one-third of the total, the risks from protectionist measures impacting the region are disproportionately high.

North American airlines’ freight volumes expanded 2.6 per cent in July 2018 compared to the same period a year earlier. Capacity increased by 4.0 per cent. The recent

AIR FREIGHT UPDATE

Middle Eastern carriers’ carriers posted the fastest growth of any region in July 2018 with an increase in demand of 5.4 per cent compared to the same period a year earlier

momentum of the US economy and the US dollar has helped strengthen demand for air imports. A sharp pick-up in supply chain bottlenecks, which is typically alleviated by the speed of air freight, may also be benefiting the demand.

European airlines posted a 2.6 per cent increase in freight volumes in July 2018.

This is a significant slowdown from the five-year average annual growth rate of 5.6 per cent. Despite this and the weakening of manufacturers’ order books, seasonallyadjusted air freight volumes have resumed their upward trend in recent months.

Capacity increased 4.4 per cent.

Middle Eastern carriers’ carriers posted the fastest growth of any region in July 2018 with an increase in demand of 5.4 per cent compared to the same period a year earlier.

Capacity increased 6.3 per cent. Seasonallyadjusted freight volumes continue to trend

upwards, however, at a comparatively modest pace by the region’s standards.

Latin American airlines experienced a slowdown in freight demand growth in July 2018 to 3.0 per cent. This was only a quarter of the growth rate seen in June 2018 (11.4 per cent) but still above the 5-year average pace of 2.1 per cent. Capacity decreased 7.8 per cent.

African carriers saw freight demand contract by 8.3 per cent in July 2018, compared to the same month last year. This was the fourth time in five months that demand contracted. Capacity decreased by 0.7 per cent. After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have now trended downwards at an annualized pace of 18 per cent over the past six months. This reflects a softening in demand on markets to/ from Asia and the Middle East.

SEPTEMBER 2018 53

GUEST COLUMN

Digital transformation starts with content and communications Digital transformation (DX) is at the forefront of many business agendas.

It’s essential to how companies organise, share and create value from their content and communications. Hervé Lesage, Senior Global Marketing Manager Communications, Xerox Worldwide, shares his expertise

D

igital transformation (DX) is at the forefront of many business agendas. It’s essential to how companies organise, share and create value from their content and communications. But that’s not easy when outdated systems, lack of strategy, and poor communications hold organizations back.

To maximize potential in core operating models, organizations must connect business processes, workflows, content and communications for a more streamlined approach.

Enterprise content management (ECM) content evolving into content services None of these platforms solve the issue of building a streamlined process in its entirety. The route to holistic business transformation depends on the integration of all solutions and processes — from improving employee and customer experience to enhancing information governance. As the saying goes, “you’re only as strong as your weakest link,” and in digital transformation, every link matters.

Business evolution

Where it’s crucial to sync back-end processes with front-end customer engagement, redesigns of content, communications and workflow increase productivity and enhance customer experience (CX). This is where robotic process automation (RPA), artificial intelligence (AI), and machine learning create differentiation through more efficient operations.

Many vertical industry processes need end-to-end solutions. For instance, when the research process in life sciences relies on outdated platforms, it hinders team productivity and jeopardizes collaboration across the wider ecosystem, specifically in record management and data compliance.

Claims processes in insurance also fall victim, when legacy systems create poor communication and documentation, causing gaps in how clients engage.

In manufacturing, processes should be structured to decrease reaction time or downtime and improve service delivery by accelerating information sharing

Gartner describes the evolution of content management into a broader category known as content services. This new trend is illustrated by how companies set priorities and promote business transformation to: Engage employees, partners and customers to drive growth through digitalization Create new ways to influence business operations along end-to-end processes Improve employee experience when interacting with customers Enhance information governance across digital channels, mobile workflow, data volume, and regulations (security, privacy, compliance) Solutions are also evolving, such as: Web content management for customer engagement now morphing into digital experience Enterprise file sync and share quickly transforming to content collaboration platforms

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Where to streamline content and communications

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between teams and systems. This is especially true for production information management, field service activities, and maintenance, repair and operations (MRO).

In retail, supply chain management is imperative to reduce labor costs, streamline invoice reconciliation and improve fill rates. So, there’s no room for a costly, error-ridden inventory management system.

In retail banking, process efficiency affects compliance and records management. It’s crucial to automate document retention and disposition for consistency and gather compliance and audit information to satisfy internal and external standards.

In horizontal business processes, specifically customer communications, a streamlined approach improves everything from content creation to delivery, storage and retrieval. The same goes for marketing communications, demand generation campaigns, invoice notifications, accounts payable processing, and customer service activities.

For each process, whether it’s internal operations or customerfacing activities, better-managed content, communications and workflows create end-to-end efficiency. The challenge is superseding a legacy structure that uses dozens of systems and assets scattered across silos, and processes that are disconnected and unsecure.

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1) Focus on what your customers want, not what you make

Six ways to growth In the age of digital disruption, every company needs to think differently about their business – both to grow beyond their core markets, and to head off competition from new entrants. But often the exact skills that helped companies succeed in the past prevent them from finding success in the future. At Xerox we have reinvented the

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company multiple times as technologies and markets change over time.

While today’s chapter in our history is still being written, we have found several ways to think differently about our business.

These six insights may be helpful to other companies with a similar need to transform and grow beyond their core business.

Your customers buy from you for a variety of reasons, the most important is that you help them achieve the outcomes they want. But it’s all too easy to lose sight of that and focus only on improving your product or service to keep up with competitors. This tunnel vision can prevent you from helping your customers achieve their outcomes in new and better ways and exposes you to new entrants that have figured this out.

With this mindset, you focus on how to deliver your core value to your customers in new ways. For instance, auto manufacturers will still be around in the future, but they are starting to define themselves as “mobility services companies.”They will increasingly deliver transportation as a service that meets the needs of young people who have little interest in car ownership.

2) Innovate in business models, not just technologies It’s also important to create business models that make it easier for your customers to adopt

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with Amazon, Netflix, Uber or Lyft.

Digital natives, who now make up a large percentage of our customers and employees, demand these types of experiences in their personal and work lives.

In every industry, companies have to rethink competitive strategy. Formerly, we were forced to think in binary terms of either high quality or low cost. Digitalization means these tradeoffs no longer exist, because digitization adds the “and”to our strategies, i.e. high quality AND low production costs; personalization AND efficiency. Researchers (and marketers) have to rethink how we deliver on the“and”promise.

6) Adopt agile and open innovation

All of your employees want your company to grow through innovation, and they all have ideas on how best to do it. It can be helpful to create a unifying and directional vision of the future to focus your employees’ ideas and energy. By defining a high-level but actionable vision that is aligned to your strategy, you can harness the creative energy of your employees with greater productivity.

capabilities in new adjacent markets, and “outside in”to identify new digital disruption opportunities sparked by new technologies.

Many companies stop with the“inside out” analysis. But it’s also important to understand how the world is changing to identify emerging, non-obvious market opportunities from the“outside in.”In our analysis, we believe the next major technology revolution is the convergence of the physical and digital worlds. This creates massive opportunities to transform how work gets done.

Our world has reached a critical mass of connected devices, collectively known as“the Internet of Things (IoT).”Sensors and electronics allow machines to perceive the physical world. Now enter machine intelligence, or what some call“narrow AI”, in which machines can understand and make decisions in domains that we have modeled with a high level of fidelity. Now you have a feedback loop that enables real world, real-time optimization. Add to that loop the machine’s ability to work collaboratively with people in knowledge-intensive workflows and learn from us. This area will be a very fertile ground for innovation over the next decade.

4) Look both “inside out” and “outside in” for new opportunities

5) Break traditional tradeoffs to deliver greater value

There are always many potential directions for innovation, and it can be difficult to evaluate and prioritize a large opportunity space. We have found that one effective approach is to look both“inside out”to apply your core

With the emergence of digitalization in the age of the Internet of Things and Machine Intelligence, our customers have grown accustomed to personalized experiences that are also low cost. Consider your experience

new products faster. The original growth story of Xerox with the plain paper copier was as much a business model innovation as it was a new technology. Xerox launched the product with a leasing model to make it easier for customers to buy an expensive piece of office equipment that was unknown at the time. This is an especially important consideration with new technologies, because they are often expensive to produce until they can gain economies of scale. In mature markets, a business model innovation can also change the value proposition, and competitive dynamics, in an industry that has shifted focus from features to outcomes.

3) Create a unifying vision of the future

Inherent in the act of pursuing new markets is a lack of historical data to plan for the future. Innovation for new markets requires a human-centered, agile process that focuses on rapid learning and iteration, with explicit hypotheses and experiments to create new business options.

In addition, companies will likely not have all of the required technical expertise, so it’s important to look outside for innovation.

However, when you pursue new markets, it’s a mistake to equate open innovation with technology sourcing. When there is high uncertainty, you can’t treat innovation partners like vendors. You need to share more information and manage intellectual property (IP) rights with a longer-term strategic view.

Focus on what you really need to protect.

Allow your partners to have sufficient IP rights and opportunities that will generate the return they need. These focal points allow them to share the risk with you.

Conclusion There is never a one-size-fits-all approach to growth, so these ideas are meant to be a starting point for you to think about ways you can mix and match to suit your specific situation and goals.

Expanding into new markets is hard because it requires investment trade-offs from your core business into new, uncertain opportunities.

These practices can help you produce a greater volume of new growth opportunities that excite your employees, fit with your abilities to deliver them, and are aligned to important growth trends in the world.

-Lawrence Lee, Vice President, Incubation and Strategy at Xerox

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Women drivers to transform auto market in

Saudi Arabia Women can now drive in Saudi Arabia. That’s a whole bunch of new opportunities opening up for a number of businesses in the country most prominent the automobile and mobility businesses. YouGov’s Kerry McLaren, Head of Omnibus - MENA has this report 58 SEPTEMBER 2018

T

he lifting of the ban on women driving in Saudi Arabia is nothing less than a historical milestone.

Close to a quarter (24 per cent) of women have already applied for a driving license since the country started issuing licenses to female motorists in June 2018.

Although the majority have not applied yet, 61 per cent of those say they intend to apply for a driving license in the future.

For those who have not and do not intend to apply for a driving license, fear of driving

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Saudi women who do not intend to apply for a license Please select why do you not plan to drive. (%)

A quarter of women in Saudi Arabia have already applied for a driving license and of those who have not, three in five intend to apply

and safety concerns are the top reasons for not wanting to do so. Despite the country recently launching a campaign to educate women on driving and create awareness about safety regulations, this still remains a barrier for women trying to get behind the wheel.

1 in 5 women do not think they would be a good driver 27 per cent feel it is dangerous and fear car accidents, 24 per cent do not know how to drive and 23 per cent believe their

husbands/ family members would not allow them to drive.

The lifting of the ban is not just a reason to rejoice for women but has opened a host of incremental opportunities within the auto market. Over three-quarters of women who intend to drive (78 per cent) plan to buy a car. A majority (84 per cent) say the decision of which car to buy rests in their hands.

For those who are not the primary decision maker, almost half (48 per cent) indicated their husbands will be making the decision and a fourth said their father-in-laws (25 per cent) have the final say in the matter.

While carmakers in the region are gearing up to rev up sales with the influx of additional drivers, this is a valuable insight for brands who want to target potential women purchasers and align their advertising and marketing campaigns to target the key decision makers.

Although safety remains a dominant concern for females in the region, women who are embracing the opportunity seem most comfortable starting out with small cars. When women were asked which type of car they would like to drive, the largest proportion said small sized sedans (16 per cent), followed by medium sized sedans (13 per cent) and then medium SUVs (11 per cent). Small cars are not just easy to park in high traffic areas but are also low on fuel consumption.

3 in 5 women pointed out back cameras and reverse sensing systems are the most desired features in a car In terms of car features, once again the underlying fear factor is reinforced with safety topping the list of high priority features for women.

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Interestingly, for those who have already applied for a license, smartphone compatibility with calls, music, etc., was the feature which came out on top, suggesting these women are most likely early adopters of technology and confident to be the first in the market.

Top car brands for women in Saudi Arabia Looking at the time period since the ban was lifted, YouGov BrandIndex data reveals Toyota is the top car brand for women in Saudi Arabia with an Index score of 27.1, followed

by Mercedes (26.7) and Lexus (24.2).

Toyota is the market leader in the region.

The brand has dedicated areas in the showroom to all female staff and set up women run call centres for enquiries.

In addition, Attention (which measures the volume of respondents who have heard anything about the brand) for the same time period also shows Toyota to be in the top spot. Mercedes and Ford are in the second and third place respectively, suggesting these are the three brands which have achieved the

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Top 5 car features for women What are the most important features of the car to you? (%)

greatest cut through among females in Saudi Arabia since the ban was lifted.

Speaking about this, Kerry McLaren, Head of Omnibus - MENA, said “The lifting of the driving ban signifies independence for women and is also a great occasion for the automotive industry to further foray into Middle East’s biggest economy. It seems safety is a prime concern for women and they are more comfortable to start with a small car. The leading car makers thus have a great opportunity to appeal to these women with the right product offering and a carefully chalked out marketing approach.”

Top 10 car brands with the highest index scores among women in Saudi Arabia YouGov’s index score is the average of six brand health metrics: quality, satisfaction, impression, reputation and willingness to recommend. (Index scores range from -100 to +100)