- Middle East manufacturers are well-prepared for a successful glocalisation journey given their access to world-class technologies.
- Companies urged to regionalise their footprint, increase the use of robotics for manufacturing and logistics, and change the cost model for production and sourcing.
Covid-19 has accelerated the shift to move from global to ‘glocal’ operations and companies need to regionalise their footprint, increase the use of robotics for manufacturing and logistics, and change the cost model for production and sourcing.
A report by consultancy firm PwC at the Global Manufacturing and Industrialisation Summit, states that pandemic has accelerated efforts by industrial companies to make inflexible global footprints more agile and responsive to demand.
Digitalisation and automation enable companies to go more local by taking labour out of the supply chain and manufacturing equation.
Furthermore, traditional supply chain approaches that focus narrowly on cost efficiency need to be broadened. Factoring in flexibility, resiliency, and customer experience can create differentiation in the marketplace and drive improved revenue growth.
Covid-19 encourages supply chain and wider operational collaboration between companies, with automation helping to solve bottlenecks with innovative, rapid solutions.
“In a post-pandemic world where reliable, real-time data is essential for both business and health and safety reasons, we anticipate an emerging trend for greater supply chain and operational collaboration between companies – whether through sharing automation technology to devise innovative, rapid solutions to bottlenecks or joint sourcing of protective equipment to shield employees from the virus,” Anil Khurana, Global Industrial Manufacturing and Automotive Leader & Principal at PwC, said.
Digital transformation is key
The Covid-19 crisis hit when global supply chains were already under pressure from new tariffs and restrictions resulting from trade disputes.
“We now realise that designing operations and supply chains based on cost optimisation alone can create risks, as the recent shortages in medical supplies, personal protective equipment (PPE), semiconductors, and others have shown us,” Khurana said.
How can future value chains deliver flexibility and resiliency while enhancing the customer experience, during many geopolitical concerns?
Khurana said that “glocalisation” balancing act may mean different things for different countries, but at its core, it relies upon agile and multi-location global operations, and use of technology and digitalisation to ensure data-driven insights and decisions, greater transparency and resiliency, and improved efficiencies even at less-than-global scale.
Badr Al-Olama, Head of the Organising Committee for the Global Manufacturing and Industrialisation Summit, said that digitalisation is critical to rolling out and implementing successful glocalisation strategies.
Companies that have used advanced supply chain technologies have achieved greater transparency, flexibility, and local asset utilisation, he said, in addition to seeing operational savings.
However, he said that if manufacturers fail to recognise the power of digitalisation, they will likely see their competitive edge erode.
“Across the Middle East, countries are prioritising the potential of the digital revolution, constantly seeking ways to support organisations – from the manufacturing sector and beyond – to develop their digital knowledge and capabilities,” he said.
Massive investment in technology
Bashar El-Jawhari, Partner and Leader of Industry 4.0, procurement and supply chain at PwC Middle East, said that despite challenges posed by the pandemic, the Middle East region is well-prepared for a successful ‘glocalisation’ journey in two respects.
Firstly, he said that major public and private sector companies have experience at building sustainable, flexible operations in a region afflicted by continuous challenges.
Secondly, in recent years, he said that Middle Eastern countries led by the UAE, Saudi Arabia and Qatar have made massive investments in information and communications technology (ICT) to reduce their dependence on oil revenues by creating dynamic, digitalised ‘knowledge economies’.
“As a result, manufacturers in the Middle East now have access to world-class technology to modernise and localise supply chains and production,” he said.