Successfully navigating supply chain management has become one of the global economy’s most pressing issues since the onset of the COVID-19 pandemic. Further exacerbated by the climate crisis and international conflicts, collaboration between countries will be crucial in order to avert food shortages caused by poor supply chain management.
Many countries are already tackling supply chain management head-on. Saudi Arabia has become one of the most successful countries to mitigate the risk of food insecurity by working with the private sector. In fact, the Kingdom has turned this challenge into an opportunity by implementing innovative solutions, as part of Vision 2030, to meet the increasing demands of its booming economy and support its agriculture sector.
Today, senior executives are increasingly having to manage international supply chains as part of their job roles. In the Kingdom, many C-Suite leaders have recognised the importance of secure supply chains to their businesses and the countries where their businesses operate. Take Al Othaim Investment Co., one of the largest operators of malls in KSA– the company aims to create unique mixed-use destinations that incorporates restaurants, tourist attraction sites, entertainment centres in line with Vision 2030. It has also recently prioritised further developing its supply chain management.
Meshaal Bin Omairh, the Group CEO of Al Othaim Investment Co. said that “successful supply chain management is absolutely central to the success of our business. Customers expect our malls to be well stocked and our restaurants to be full of their favourite foods at all times. Central to this is for governments to work hand-in-hand with the private sector”.
The shift of supply chain related issues to senior management’s remit reflects the growing importance of it to global business. The recent conflict in Ukraine has brought this issue into greater focus, as international markets rely on the country and Russia for significant supplies of food products and commodities. The crisis has also highlighted that food insecurity can emerge at different parts of the supply chain – from production, to processing, to delivery and onwards.
After all, in an increasingly globalised world, we have come accustomed to relying on goods to travel with ease from right across the world. There is no doubt that a reliable supply chain that handles movement of materials and goods at an efficient pace is essential for customers and business generally. As a result of this pressure, often felt acutely by the agricultural sector, many countries are placing greater emphasis on being self-sufficient, as well as being more conscious of the environmental implications of goods travelling vast distances.
Given this unprecedented uncertainty, it will be crucial to employ new strategies to overcome challenges posed by supply chain bottlenecks. Saudi Arabia succeeded in overcoming supply chain disruption that affected global food supply during the COVID-19 pandemic by implementing its Food Security Strategy. This states that cooperating with the private sector is of the utmost importance in order to be self-sufficient and grow the country’s agriculture sector.
For example, the Kingdom increased lending volume to the country’s farmers – SR1.9 billion ($506.67 million) in 2019, which has helped the sector prosper. As a result, Saudi Arabia has one of the largest storing capacities in the Middle East region for wheat and flour, with more than 3.3 million tons, and is largely self-sufficient. Additionally, there exist many opportunities for sustainable agribusiness investment towards food security in the KSA and globally. The Saudi Agricultural and Livestock Investment Company (SALIC), which was founded in 2012, recently supplied 355 tons of wheat to the country.
In addition, supply chain automation will play a crucial role in ensuring greater food security. As Information Week points out, supply chain management traditionally focused on speeding up delivery while containing cost. However, the COVID-19 pandemic shifted the focus to resilience – the ability of supply chains to spring back to normalcy each time they were disrupted by facing shutdowns and stuck shipments. Therefore, the automation of supply chains will play a key role in the future in order to maintain their resilience. In fact, the wave of digitization accelerated by the pandemic has been predicted to have fuelled the global market for supply chain management, from about $23 billion in 2020 to almost $42 billion in 2026. Digital disruption can unlock many of the solutions to supply chain management.
Furthermore, as Saudi Arabia continues to become a tech powerhouse, e-commerce will also play a crucial role in developing supply chains. While there may be issues with integrating e-commerce with traditional logistical methods, the Kingdom can capitalise on its high connectivity rates, advanced tech infrastructure and tech-savvy population. In fact, internet user penetration in Saudi Arabia looks to reach 92.5 percent by 2025, which makes the country ideally positioned to further digitize its supply chain.
Recent global uncertainty has demonstrated the need to strengthen supply chains, particularly in order to meet the demands of our ever-evolving food security needs. Looking to the future, other countries should follow Saudi Arabia’s lead – the Kingdom has shown the world how collaboration with the private sector and innovative solutions can mitigate supply chain issues and improve food security. This will create resilience, agile and accurate supply chains that enable manufacturers to meet challenges across the supply lifecycle, from planning, sourcing, and making to managing deliveries.