EXECUTIVE SUMMARY:
This report will analyze the Supply Chain and Logistics Industry in the United Arab Emirates during the last five years. The tools and techniques used for this analysis shall be PESTEL and PORTER’S 5 forces. Further this report shall discuss about the Industry type based on the competition existing in the market and its current phase in the Industry cycle.
This report shall be considering the Industrial study conducted by major players in the Supply Chain and Logistics Industry in UAE and Logistics Reports issued by various government departments and other Logistics companies existing in the market, to discuss the critical success factors and identify the strategic groups existing.
Industry Sector:
Supply Chain and
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The decline of global trade in 2009 led to a dip of 8% but picked up in the following years. The World Bank’s logistics performance index issued in 2010 rated Dubai as the best for its logistics infrastructure in Middle East.
Added, an increase in globalization has demanded for improved industrial efficiency. Other infrastructural developments such as the Al Maktoum Airport and Dubai Logistics City have provided a multi model logistics hub. Supply chain and Logistics industry in Dubai has contributed towards 14% of UAE’s GDP in the year 2012.
Further infrastructural developments in the future includes Khalifa port in Abu Dhabi, expansion of Port Khalid in Sharjah, extensive goods rail networks connecting the GCC countries and other Airport and Port expansions. This vigorous investment in the sector is essential due to same trend prevailing among other GCC countries. This would further improve the market size and continue growth in sector.
Socio-cultural:
Social factors do have a profound influence in the industry and the market. Industries have to evolve with the change in living standards and income level of the consumers. As per the World Bank specification, UAE is classified as a ‘High income and Mid-sized populated ' country. The local market has not grown to the required level compared to the other high income group economies, which attracts a substantial percent of expatriates to invest in the local market. High Standards of
(Bowersox, D.J., Closs, D.J., and Cooper, M.B. (2010). Supply Chain Logistics Management. (3rd Edition) New York, NY: McGraw-Hill/Irwin.
Lonsdale, C, (2013),”SP&SM Lectures Notes Week 1 to Week 10”, University of Birmingham Business School
Following the paradigm shift on the role of logistics management in the recent decades, there has been a wide recognition of this as a very important aspect a business strategy in general. However due to the numerous factors promoting complexity of logistics management companies have adopted the idea of outsourcing their logistic activities to Third Party Logistics (3PL) providers. Hence, 3PLs have taken a critical role towards supply chains of heir customers.
Geographically, Emirates is very well positioned in Dubai, which it also uses as a strategic point due to the access that the region creates in reaching other countries including Europe, Southeast Asia, the Middle East, Oceanic and part of Africa. Being knowledgeable of global trends, it also began to compete in rising BRICS countries. (Pg. 3) It has managed to effectively penetrate into major European markets such as France, Germany, the United States, and the United Kingdom where it directly
THIS DISSERTATION IS SUBMITTED IN PART FULFILMENT OF THE REQUIRMENTS FOR THE CILT DIPLOMA IN LOGISTICS AND SUPPLY CHAIN MANAGMENT
In less than two decades National Logistics Management has already become one of the most successful and fast growing logistics companies of the USA. Despite increasing competition in logistics, NLM continues to adapt itself to the changing environment. Suffice to state just one fact: two years in a row ( in 2004 and 2005 respectively) - two reputable and well-known magazines- Inc. magazine and Start magazine recognized NLM as one of the most innovative and fast growing companies. Undoubtedly, the innovative strategy of providing cost-effective way to facilitate and expedite premium freight is behind the success of the company. However, will NLM be able to maintain and enhance its profitable business in the new era of increased competition
To sum up, the UAE exports to KSA are increasing dramatically, while the UAE imports from KSA starts showing a decrease pattern. Thus, it is expected that the trade balance is heading toward a surplus in the near future. To reach this trade surplus, the UAE economics decision maker should consider the factors affecting the trade balance. The exchange rates are one of those factors. Therefore, the UAE should observe the dollar performance in the market. If the dollar keeps going down, they should reconsider pegging the dollar to the emirate dirham. It is suggested that they change from fixed pegging to move pegging like China. Another factor is the trade agreement and trade barriers. It is suggested that both KSA and UAE agree on reducing the barriers of entry to the market. However, at immature industries such as the petrochemical and plastic industry, it is better to keep entering Saudi 's firms into UAE market restricted because UAE is new to the plastic industry "Borouge established in 1998" . This restriction will protect domestic producers. On the other hand, UAE should convince the Saudis to open their market for UAE firms that are well experienced like communication firms such as
The ISOL + Group produces and sells a series of insulating products for the construction industry, sheathing for pipes, and rigid boards blanket insulation. The firm’s subsidiary has its own production plant and increases its own production capacity through buying from another of the Group’s plants those products it cannot manufacture due to technical reasons or in situations when it is operating at full capacity. The company’s production department is in charge of logistics in addition to other functions such as end-product distribution. The subsidiary, ISOL + FRANCE has initiated an extensive rethinking of logistics matters in the Group. This process was geared towards evaluating the situation
26 Conclusion ............................................................................................................................................................. 28 Appendix 1 – 4PL Definition .......................................................................................................................................... 30 Appendix 2 – Main GCC Logistics Players...................................................................................................................... 36 Appendix 3 – Key GCC Logistics Hubs ........................................................................................................................... 54 Appendix 4: Map of the Arabian Gulf Countries (GCC) ................................................................................................. 55
In developed countries the portion of revenues from logistics sector is about 13-14%, while in Kazakhstan the number is only 8%. The number can be much higher since our country lies in the heart of Eurasia and many trade roads are passing through Kazakhstan. This opportunity can be used for generating wealth for the country and getting more trade partners. The development of logistics will also cut the costs of the production of domestic producers which will lead the Republic to the new stage of competitiveness in the world market.
The UAE has one of the most diversified economies in the region. Abu Dhabi holds 90% of the Federation’s hydrocarbon reserves. A down side of that is that now the UAE is dependent on the revenues Abu Dhabi can obtain from the reserves. On the other hand, the service industry in Dubai has been booming, as Dubai has the 7th largest port in the world and has become the largest business center in the region. Additionally, there seems to be political stability across the Federation, which increases the chances of people doing business. There have been reports of the lack of transparency of para-public entities and businesses, which is something
With a high per capital income and very profitable enterprises, the UAE a prime trading destination in the Eastern market The UAE welcome foreign investors to enter their territory as they offer complete ownership of enterprises and no taxes
Education and labour skills are essential for a fully functioning logistics and supply management system. In Southern Africa there is a lack of education and skills within the logistics system, which means unskilled labour and less effectiveness and efficiency. Education is the single most important aspect in order for a country to achieve success and wealth, the more educated people are, the more people can make intelligent and effective decisions about the economy and the logistics and supply chain management functions. Southern Africa does not have a strong education system in comparison to the global market in which Southern Africa compete in, which limits its full potential that it has to be a functioning logistic powerhouse which
Transportation was and still one of the most dynamic sectors of the Iraqi economy since the 1980s; it has been allocated a large share of the budget of the local development because it is important for the Government for several reasons. Logistics has become a critical factor in product
With all this exponential development comes the funds required to subsidize it. UAE possesses approximately 10% of the world’s petroleum and natural gas reserves. Which makes trading with UAE a necessity since the world uses around 85 million barrels of oil each day. Dubai utilizes an international airport for exporting but additionally uses the ports in the Persian Gulf. This is a potential hazard because hostilities within the gulf could eradicate the commerce exchange routes. Even with perilousness,