Gulf Cooperation Council Urged to Develop Supply Chain Resilience Strategies
Countries in the Gulf Cooperation Council region are advised to focus on developing supply chain resilience strategies as they move towards large-scale industrialization of their economies, according to a report.
Current Risk Levels in Logistics Sector Need to Be Addressed
The management consulting company Oliver Wyman highlighted the importance of mitigating current risk levels in the logistics sector, especially for countries like Saudi Arabia and the UAE. These countries heavily rely on high-criticality products such as transformers and minerals, which play a crucial role in industrial growth.
Potential Impact of Disruptions in Transformer Supply
The report pointed out that in Saudi Arabia, 75 percent of transformer imports come from only three countries. Any potential disruption in transformer supply could have a significant impact on sectors like power, manufacturing, transportation, and healthcare.
Ensuring Smooth Functioning of All Sectors
As GCC countries expand their economic diversification plans, including their industrial sectors, it is essential to double down on initiatives to enhance supply chain resilience. This will ensure the smooth functioning of all sectors and aspects of society in the face of unexpected supply chain disruptions.
Global Supply Chain Vulnerabilities Under Scrutiny
The report noted that vulnerabilities in global supply chains have been under greater scrutiny in recent years due to the pandemic, climate-change-induced disasters, cybersecurity threats, logistics challenges, and geopolitical issues. Industries have faced production delays, shortages, and price increases, emphasizing the critical importance of resilient logistical chains.
Efforts to Ensure Supply Chain Resilience in Saudi Arabia
Saudi Arabia has taken steps to ensure a healthy logistics sector in the Kingdom and the region. The Global Supply Chain Resilience Initiative launched in 2022 aims to position the Kingdom as a preferred location for leading global industrial companies and attract investments in supply chains to mitigate global disruptions.
Key Actions to Strengthen Supply Chain Resilience in the GCC
Governments in the GCC region should develop supply chain resilience strategies aligned with their national industrialization programs. Enablers such as governance, private sector involvement, capabilities, and technology are crucial to supporting these strategies.
Leveraging the Private Sector for Supply Chain Resilience
GCC countries should incentivize logistical resilience initiatives among the private sector and implement inspection and corrective actions to ensure supply chain durability. Specialized teams within ministries of industry can also help build up the logistics network.
Adopting Advanced Technology and Manufacturing Policies
Encouraging the adoption of technology through advanced manufacturing policies, such as 3D printing, robotics, and automation, can enhance supply chain resilience. Industrial cybersecurity requirements should also be considered to safeguard connectivity and data sharing within factories.
Ensuring Sustainability of Industrial Sectors
Supply chain resilience is not just an option for GCC nations but a necessity to guarantee the sustainability of their industrial sectors. By adopting a holistic approach that combines localization with other resilience levers, these nations can safeguard their industrial growth.