Economics // Comprehending the Importance of Logistics and Supply Chain
Comprehending the Importance of Logistics and Supply Chain
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Abstract
This paper attempted to analyze the financial feasibility of environmental friendly procurement and logistics policies in the United Arab Emirates (UAE). It wanted to survey if UAE had its capability to sustain its business and management operations on a global scale. Considering the snowballing worldwide market plus the rise of China and India and the dominance of Hong Kong and Singapore and other western countries, UAE managed to deliver transparent protocols on how it became the topped country in the Middle Eastern territories. Additionally, the current literature has placed the value and efficacy of humanitarian supply chains within practical procurement and logistics practices in the United Arab Emirates. It diversified its operations in the procurement and logistics in agribusinesses in the UAE. In other words, it began to set apart its petroleum oil products and moved to commercial and transportation plus agribusinesses. In addition, this paper aimed at analyzing the supply chain management practices between family and non-family small businesses in the UAE since family businesses are common in the country. Based on the findings, this paper revealed the results that UAE gained its financial feasibility and environmental friendly procurement and logistics policies. As a result, this paper proved that UAE’s economic viability of environmentally friendly procurement and logistics guidelines, supply chains within useful procurement and logistics practices particularly in agribusinesses, and supply chain management practices between family and non-family small businesses made its strong presence in the global market.
Executive Summary
The involvement of the United Arab Emirates in the global and open business allowed the country to grow its Gross Domestic Product (GDP). With its GDP at US$382.6 billion, the UAE’s spot in the global market pledged to grow and magnify. His Highness Sheikh Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi and the new President of the United Arab Emirates, maintained his remarkable status as the thriving leader of innovation and progress. Since UAE became open to the public and adopted Western policies, UAE’s economic standing in the world ensured its government to succeed. The country started to streamline its bus scheduling system, to adopt a new transportation procedure, to build more infrastructures for businesses and growing populations, and other services. The UAE government adopted new business and court policies to suit the changing business and economic environments. However, the commercial viability of environmentally friendly procurement and logistics rules competency in the UAE has engrossed more attention by foreign investors. Its government has sustained its management operations on an international scale to top country in the Middle Eastern grounds. Moreover, UAE’s businesses continued to heighten the efficacy of humanitarian supply chains within practical procurement and logistics practices by varying its processes in the procurement and logistics especially in the agribusiness sector. Diversification of goods and services aside from the petroleum oil products could be a wise decision to move to other profitmaking and shipping services, as well as the focus on the agribusinesses. Consequently, this paper substantiated that UAE’s financial viability of environmentally friendly procurement and logistics guidelines especially in agribusiness, and supply chain management practices between family and non-family small trades made its robust manifestation in the worldwide market.
Table of Contents
Title Page ………………………………………………………………………………. 1
Abstract ………………………………………………………………………………… 2
Executive Summary ……………………………………………………………………. 3
Table of Contents ………………………………………………………………………. 4
Initial Thoughts ………………………………………………………………………… 5
UAE’s Financial Viability of Environmentally Friendly Procurement Policies ………… 5
UAE’s Financial Viability of Logistics Policies ……………………………………….. 7
Value and Efficacy of Humanitarian Supply Chains …………………………………… 7
Procurement and Logistics in Agribusinesses ………………………………………….. 9
Supply Chain Management Practices of Family Small Businesses ……..……………… 10
Final Thoughts …………………………………………………………………………… 10
References ……………………………………………………………………………….. 12
Comprehending the Importance of Logistics and Supply Chain
Initial Thoughts
Among the nations in the Middle East, United Arab Emirates (UAE) has topped itself to advance in business and innovation. It has echoed its business operations and logistics with the growing air, maritime, and road transport movements. Over the years, His Highness Sheikh Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi and the new President of the United Arab Emirates has propelled of a plan for the emirate’s transport trade. In fact, Dubai’s status to be the key transport center in the Middle East has sustained its position to grow. With the commercial influence of UAE from the naval freight division and other transport and logistics-related zones, UAE tossed the Roads and Transport Authority and propelled 29 initiatives to turn Dubai into a global center in terms of innovation and technology. UAE’s strengths in terms of transport renovations, such as new taxi fleets, elevated buildings, and environmentally friendly public transportation networks made UAE survive. Although the depressing conditions of the world economy threatened the world including UAE in terms of worldwide economic slowdown, inactive movement of oil in the market, and gas price growth, UAE’s recent influence continued to dominate in the Middle Eastern countries and to compete with other affluent nations. Therefore, UAE had the financial viability of environmentally friendly procurement and logistics plans mainly in the agricultural business, as well as the supply chain management practices between family and non-family small trades to make its strong expression in the global market.
UAE’s Financial Viability of Environmentally Friendly Procurement Policies
United Arab Emirates’ open market has pushed success in the world.The directives of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, the Vice-President, Prime Minister of the UAE, and Ruler of Dubai, have improved the policies to be transparent in the government. Based on the National Agenda, UAE deepened the status of infrastructures, such as airports, ports, road infrastructure, and electricity, to be the best in the world. The Prime Minister confirmed to be environmentally friendly in terms of its procurement policies (Ashai, El Dahshan, Kubba, Talati, and Youssefi 9). This plan to achieve the comfort of the people in society by concentrating on six fundamental segments, that is, health, education, economy, environment and infrastructure and society, and safety and courts gained more foreign investors to build businesses in the country (Ashai, El Dahshan, Kubba, Talati, and Youssefi 9). It was because the UAE government did not have strict policies on foreign investments. For example, the country did not have corporate tax for those foreign investors as long as these business owners should conform to the rules (Ashai, El Dahshan, Kubba, Talati, and Youssefi 7). In doing so, the UAE’s improvement in terms of its logistics performance index proved the country’s financial viability of environmentally friendly tracking down strategies.
UAE’s economic standing inspired others to stay productive and prosperous. Based on UAE’s logistics performance index, it positioned 27th rank internationally, and it suited to be the first in the Arab region. Its business operations and transport services, which catered local and foreign tourists and investors, provided ease of delivery at competitive charges, a competence and superiority of logistics services, a capability to track and trace freight, and an influx of shipment to endpoints on time (Ashai, El Dahshan, Kubba, Talati, and Youssefi 9). According to the authors, nothing could beat UAE in business operations to attract foreign investors. Since UAE became open to the foreign investors and to the world public, many opportunities and plans for innovations rose (Ashai, El Dahshan, Kubba, Talati, and Youssefi 12). Considering its GDP yet with small residents, UAE had financial viability of environmentally friendly procurement policies since its government was even more supportive of the most vital sectors in the country. Despite the global recession, UAE’s strategic geographic position to engage in an economic diversification drove success. In fact, the transport and logistics sectors embrace a wide range of activities, such as transport services, transport infrastructure services, and logistical services, which generated money to the country (Ashai, El Dahshan, Kubba, Talati, and Youssefi 10). Therefore, UAE’s financial standing enthused other leaders to stay thriving.
UAE’s Financial Viability of Logistics Policies
The United Arab of Emirates proved to be viable in logistic policies in terms of business and transportation services. Its decision to open the country to the global public permitted its government to create more opportunities among the local and foreign investors. These local and foreign investors could effortlessly build varied businesses because of the favorable business regulations. These local and foreign investors could transact their businesses transparently and grew together. Aside from lack of corporate taxes, local and foreign venture capitalists could find the country promising for expatriation and tourist destinations. Indeed, the business market in UAE continued to be busy to accommodate small-scale firms run by families and non-families. Since UAE became famous for its high-rise buildings, recreation alternatives, and outstanding business operations, it attracted tourists and investors, which made the country top the Middle Eastern nations. With its small population and high GDP, UAE managed to follow the pattern of effective supply chain management in both commercial and humanitarian supply chains. As a result, UAE’s supply chain management for transport logistics thrived.
Value and Efficacy of Humanitarian Supply Chains
Humanitarian supply chains differed from commercial supply chains. The former focused on reducing the loss of lives and on lessening the misery of vulnerable people because of their financial constraints; whereas, the latter concentrated on producing high quality goods at low cost, making the most of profit and to bring financial returns to stockholders, and satiating customer demands. Indeed, UAE succeeded to perform well in the supply chains with both the commercial and humanitarian concerns. UAE’s humanitarian supply chains as the charitable logistics adopted the process of planning, implementing, and controlling the efficient, cost effective flow and storage of goods and materials, as well as related information (Cozzolino, 2012, p. 26). It worked the same way as the commercial supply chain, which concentrated on the process of development, execution, and control. Definitely, the UAE’s humanitarian supply chains reacted closely to assist the needs of those victims in the calamities. This humanitarian supply chain differed slightly with the commercial supply chain he government officials then ensured that the humanitarian aid would go directly to the affected individuals from the point of origin to point of consumption to pacify the agony of vulnerable persons. The UAE government incorporates a series of activities, including planning, preparation, procurement, transport, warehousing, tracking and tracing, and customs clearance.
Procurement and Logistics in Agribusinesses
UAE’s agribusiness logistics performed well. Business leaders in the public and private entities had to inform their members to ensure that the agribusiness logistics would undertake the active process of forecasting, executing and directing the well-organized, actual flow and stowage of agronomic products, services and related information. The UAE government, for example, concentrated on the flow sectors, such as wholesale and retail merchandized, in the procurement of company and cooperative logistics in agribusiness.
SCM Practices of Small Family and Non-family Businesses
Family businesses, small-scale or large-scale, gained more public discussions. Along with the oil products, family businesses served as the spinal column of the Arab economies. In fact, the majority of family companies in the Middle East transferred to the second generation. It meant that business leaders in that country should have some succession plans to ensure the survival of the businesses and their operations. The public interest of this topic came from the idea whether or not family and non-family relationships mattered toward success (Ho, Zheng, Yildiz, & Talluri, (2015, p. 5036). Economists and business experts would like to know if family or non-family businesses from the Arab and the Western World had parallel views of family business relationships. For example, a single-family organization as a structure handles the financial and personal dealings of the wealthy family businesses. Indeed, family businesses did not follow standard procedures to execute the business activities since family businesses only had to agree on family concerns and meet the preferences of the fundamental family beliefs.
At some points, small family businesses in the United Arab Emirates and other countries experienced personal conflicts due to individual interests. Family business owners faced some struggles due to personal choices and preferences. It could be different from the small family businesses in UAE in which Emiratis did value and appreciate family affairs and business gatherings. It could be easy for them to apply the supply chain management since members of the family could easily get along with one another. The UAE family business firms focused on mutual relationships and trusts, and they helped one another to stand against the threats. However, these family business firms continued “to contribute to the progress of the country and maintained strong family presence in the regions” (Zain & Kassim, 2012, p. 148). The UAE government needed to distinguish the implication of family relationships toward the business operations for the success and the continued existence and development of family firms. As the family businesses in the UAE were common, their relationships including the characteristics, in the end, influenced the business backgrounds and prospered due to its effective supply chain management.
The supply chain management practices of small non-family businesses differed slightly from the family businesses relations. Firstly, the non-family businesses exhibited the sense of professionalism since the members of the companies did not have close relations. It needed rules to conduct businesses and transactions. Secondly, the non-family businesses had to obey certain guidelines to survive in UAE. Unlike the family businesses, non-family business affiliations exhibited customers’ strong values to be the center of all aspects of life. Abu Dhabi and UAE economies are high; however, business experts tried to realize if family businesses could sustain in the process. According to Rettab and Azzam (2011), “family businesses outperform nonfamily businesses in terms of trading and construction based on the four variables, such as construction, manufacturing, services, and trading” (p. 625). Based on the previous theoretical framework and applications, family businesses led due to the degree of influence to entitle a family business. It seems easy to perform the supply chain management practices of family businesses relations compared to the non-family businesses (Rettab & Azzam, 2011, p. 626). In the end, the result of globalization appears to be more significant to family businesses than the pressures to face. The accessibility of cooperative networks represented an opportunity for the family business owners to inflate their business operations overseas.
Final Thoughts
UAE demonstrated its financial viability of environmentally friendly procurement and logistics plans, as well as the supply chain management practices between family and non-family small trades. It surprised readers to construct newfangled and strong presence for the family to survive in the global market. It permitted the country to show the relevance of logistics or the management of goods, pieces of information, and resources. In fact, UAE surpassed other Middle Eastern countries since it opened Abu Dhabi and Dubai to the global public. The decision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi and the President of the United Arab Emirates to open UAE particularly Dubai made the country become successful. Family and non-family businesses grew, bourgeoning the business arenas. UAE’s government made certain to understand the trend of businesses by allowing investors and clients to interact with one another. Even though global recession endangered UAE’s economy, its leader sustained its agenda to compete with other Middle Eastern nations and rich states.
References
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AlFahim, A. A. J. (2011). Strategies for family businesses in Abu Dhabi to 2030. Coventry University: Unpublished Thesis,
Ashai, Z., El Dahshan, M., Kubba, J., Talati, H., & Youssefi, P. (2007). The transport and logistics cluster in the United Arab Emirates. Retrieved January 10, 2019, from https://www.isc.hbs.edu/resources/courses/moc-course-at-harvard/Documents/pdf/student-projects/UAE_TransportLogisticsCluster_2007.pdf
Cozzolino, A. (2012). Humanitarian logistics: Cross-sector cooperation in disaster relief management. New York, NY: Springer Science & Business Media.
Fathelrahman, E., Hussein, A., Muhammad, S., & Sherif, S. (2015). Supply and Demand for Fresh Locally Produced Poultry Products in United Arab Emirates. Journal of Food Distribution Research, 46(1).
Gulf News. (2016). UAE makes significant achievements in logistics and transport. Retrieved January 10, 2019, from https://gulfnews.com/uae/government/uae-makes-significant-achievements-in-logistics-and-transport-1.1949320
Rettab, B., & Azzam, A. (2011). Performance of family and non-family firms with self-selection: Evidence from Dubai. Modern Economy, 2(04), 625.
Rodman, W. K. (2004). Supply chain management in humanitarian relief logistics. Air Force Institute of Technology: Thesis.
Sauer, A. Humanitarian supply chain performance management: Development and evaluation of a comprehensive performance measurement framework based on the balanced scorecard. Munich Business School: Doctoral Dissertation, 2016.
Zain, M., & Kassim, N. M. (2012). Strategies of family businesses in a newly globalized developing economy. Journal of Family Business Management, 2(2), 147-165.
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