Better stock accuracy and planning can be achieved with AI, in the Gulf and elsewhere, writes Trevor Stamp (pictured below), Head of Contract Logistics, GAC Dubai.
The Middle East has rapidly grown in prominence as a key distribution hub in response to global boom in online retail and e-commerce sparked by the pandemic.
Consumer habits were permanently changed by lockdown, prompting greater demand for warehousing, fulfilment and cargo processing capacity in a region that sits strategically at the crossroads of key trade routes linking Asia to Europe. That trend shows no signs of slowing. Just in the last six month, we have witnessed an increase in trade of almost 20% in the e-commerce sector, owing to an earlier than expected peak season for the holiday period as many sought earlier deliveries to avoid the risks associated with a potentially disruptive supply chain.
To help retailers meet higher consumer expectations, the Middle East’s logistics sector is investing in core infrastructure and processes to handle growing volumes of cargo and increasingly complex supply chains.
Greater use is being made of AI-based technologies as the sector moves beyond a ‘pallet in, pallet out’ business model and towards a future that focuses on the cross-docking setups that are more suited to e-commerce. This approach becomes even more important when you consider the scale of modern logistics operations in the region.
AI-phobia
In Dubai, for example, GAC’s contract logistics operation has grown to be able to process enough throughput to fill its 4,300 m³ base, which includes more than 250,000 pallet locations and 300,000 pick faces. Handling such a volume of cargo on a daily basis demands a digital structure that incorporates modern agile processes, including automation, Artificial Intelligence (AI), Blockchain and the Internet of Things.
GAC’s recent adoption of the Manhattan SCALE platform for some of its contract logistics operations is a clear example of that next step. By embracing AI into day-to-day operations, our teams have more access to greater planning capabilities, labour management tools and forecasting elements – all critical ingredients for success in a booming e-commerce market.
Already, the advantages of using AI to facilitate better stock accuracy and planning capabilities are clear – throughput at our Dubai hub by more than 15%. To thrive in this new era, the Middle East logistics sector must embrace technology and new digital ways of working. But we must also be wary of the potential risks and obstacles.
Some apprehension – or even suspicion – is inevitable when adopting new software, particularly when AI is involved. Workforces that have been working a certain way for an extended period time will likely push back on major changes to their day-to-day working processes. Such ‘AI phobia’ is linked to misunderstanding the benefits it offers for efficiency, data security and reliability.
This is something we have experienced firsthand at GAC. Some of our tenured professionals have been working in a certain way at our warehouse for more than 25 years, so a major shakeup was bound to be met with some uncertainty. We helped ease our people through that emotional curve by switching on functions slowly, reallocating resources and personnel accordingly, and continuously educating our teams on how the system works to their advantage. Adopting AI-based software at GAC Dubai has been the biggest shake-up in contract logistics operation in more than two decades, but we have been able slowly upskill our team, bringing benefits to both our workforce and our customers.
Despite some initial skepticism and AI-phobia, the transition has been welcomed and the long-term competitive benefits have already begun bearing fruit. If the Middle East is to remain at the epicentre of modern logistics, change is a must to ensure the region’s long-term competitiveness in a constantly evolving market.
similar news
