Sustainability
Rework and Localized Supply Chains Key to Gulf Megaproject Success
As megaprojects continue to redefine the skyline of the Gulf region, the construction industry faces significant challenges in managing costs and timelines. A substantial portion of these challenges stems from rework, which accounts for an estimated 30% of construction costs globally. In the United States alone, this translates to a staggering $177 billion, highlighting the critical impact of rework on the construction industry.
Adoption of AI and Smart Logistics
In response to these challenges, the Gulf region's construction sector is increasingly turning to artificial intelligence (AI) and smart logistics to streamline operations and enhance efficiency. A notable 60% of firms in the region are either adopting or planning to adopt AI technologies. These technologies promise smarter builds and faster timelines, minimizing the unpredictability associated with rework and its disruptions to procurement, warehousing, and last-mile delivery.
In a move towards smarter and more sustainable logistics, localized supply chains are being emphasized as critical tools to cut waste and reduce delays. The Versatile Construction Pulse Survey highlights local sourcing and the smart use of digital tools as vital strategies for building the Middle East's next wave of infrastructure efficiently and cost-effectively.
Involving Logistics and Supply Chain Teams
Logistics and supply chain teams are now more involved than ever in project planning within the Gulf's construction sector. This shift underscores the importance of integrating sustainable building practices and smart procurement strategies to improve supply chain resilience. As the sector evolves, these teams are leveraging advanced technologies to build more resilient and sustainable supply chains.
In line with these developments, a fashion supply chain startup has made strides in the sector, showcasing the relevance of smart supply chain strategies across industries. With $30 million raised from Mars Growth Capital and Liquidity Group, the startup, Fashinza, is poised to expand into the US, Gulf, and Europe. Fashinza currently operates over 250 factories serving more than 200 brands globally, providing logistics, fintech, and payment support on its B2B platform.
New Zealand's Supply Chain Challenges and Innovations
While the Gulf region addresses its construction sector challenges, New Zealand faces its own unique supply chain dilemmas. Highly reliant on trade, particularly via maritime routes, key sectors such as agriculture, construction, and wholesale and retail trade depend heavily on the global supply chain network. External events like natural disasters, geopolitical tensions, and global health crises can severely disrupt the flow of goods, delay deliveries, or damage critical infrastructure.
Crises such as the COVID pandemic have tested New Zealand's business commitments to sustainability goals, such as reducing carbon emissions, minimizing waste, and improving resource efficiency. However, companies like Fonterra, Zespri, and Air New Zealand have introduced sustainability measures into their operations over the past decade.
A recent research study reviewed 287 studies on supply chains, identifying key tensions between efficiency and sustainability. The study underscores the role of technology, such as radio frequency identification and blockchain, in tracking goods and enhancing supply chain sustainability.
Building Resilient and Sustainable Supply Chains
Integrating circular economy principles into supply chain management can help businesses create buffers and build more resilient and sustainable supply chains. By focusing on reusing materials and creating closed-loop systems with regional partners, companies can reduce their reliance on external supply chains.
Building resilient supply chains requires investing in advanced technologies such as blockchain and AI. In New Zealand, the future of supply chains hinges on greater collaboration between businesses, policymakers, and communities. By integrating circular economy principles, leveraging advanced technologies, and fostering regional collaboration, New Zealand can build supply chains that are both resilient and sustainable.
As the Gulf region's construction sector and New Zealand's diverse industries navigate the complexities of modern supply chains, the focus remains on collaboration, innovation, and sustainable practices. By addressing rework and adopting localized supply chains, both regions are poised to overcome challenges and achieve success in their respective sectors.