How Cloud Helps DP World Run its Logistics Business Smoothly During Pandemic
Even a year ago, Mohamed Absar, Chief of Staff for Logistics and Technology, at Dubai Ports World (popularly called DP World) was a worried man. Sipping his favorite tea and looking outside the window at the magnificent Dubai skyline from his uber smart office, Absar seems preoccupied. Too many questions running in his mind; the most important one being: how he can keep the business running safely and smoothly during the pandemic.
The COVID-19 induced lockdowns has started to impact global logistics sector causing disruptions in supply chains and trade flow and this may worsen in the subsequent months. However, Absar is an optimistic man and his CEO Sultan Ahmed bin Sulayem have always acknowledged that organizations that are higher up in their use of digital technology adoption curve have always been a winner.
In fact, the multinational logistics company that operates ports and terminals and provides logistics services in 60 countries worldwide, including India, has been at the forefront of this transformation. Hence, as part of its digitization drive, Absar and his team created a sustainable and future-ready supply chain during the early months of the pandemic and is reaping the positive outcomes.
In a interaction with CXOToday, Mohamed Absar, who also heads the projects and solutions at DP World, shares some details on how the logistics company faced enormous challenges with legacy systems and finally did overcome the same by leveraging cloud-based applications and other digital technologies.
Challenges with legacy software
The company with over 53,000 employees that runs 128 logistics businesses, including 90 shipping terminals and ports around the world, needed to support daily business operations—remotely—as cargo shipping volumes in DP World ports stayed strong even as passenger ferry traffic dipped due to the COVID-19 impact. Absar informs that its legacy software system created unwanted slowdowns and costs.
According to him, “In the ever-changing digital landscape, speed in making business decisions is critical. And to make meaningful decisions, it needs to be backed up with real-time data. The challenge with legacy systems is such that it takes time to consolidate and present the data in a unified format from all the different regional entities and business units. We decided to stop mixing and matching applications from multiple providers, as we were facing issues in integrating all those systems together.
The company’s back office needed rewiring, moving the global shipping and logistics company from a patchwork of 160 on-premises systems to a unified global suite in the cloud that would allow real-time access to key performance indicators and also support its growth plans,” he says.
It was then that DP World decided to transition to Oracle Fusion Cloud Applications in the first half of 2020 and they did adhere to the timeline despite the pandemic. In three months, IT staff and other employees launched cloud-based applications and switched to working from home, while continuing with business as usual.
“We were able to run the whole operation without anybody in the office,” says Absar, referring to back-office support such as finance and HR. “We never thought we’d be able to run the company without employees on site.”
Opting for a Unified cloud system
For our Digital Transformation journey, the main criteria were to select a dynamic system which can cater to our businesses spread across the globe. We evaluated multiple alternatives and after due diligence, we decided to move forward with Oracle Cloud applications. The main reason was Oracle’s breadth of offerings and a history of partnerships between the two companies. Our history with Oracle goes back to 2005, when we deployed Oracle E-Business Suite in its home UAE region.
As majority of our organization was already using the Oracle solution, it would be easy for them to switch from on-premises to the cloud. That was also one of the major decision factors for choosing Oracle. Other than that, Oracle also was more cost-effective, offered an overall better solution than competitors, had positive recommendations and it also maintains a steady innovation cadence, with quarterly updates.
For DP World, the transition to the cloud has provided us with a robust foundation for, what we call, “One Strategy” initiative that includes financial systems, human resources, customer relations and operations. The single source of truth has streamlined the data and gave us an audit trail for compliance.
In line with DP World’s vision of creating a group-wide unified Back-Office enterprise system, DP World partnered with Oracle, which provides a single, unified cloud-based ERP system, with upgrades managed by Oracle and with no customization.
“Our aim was to bring the process time for going live on an entity with new ERP significantly down and ensure that there is no downtime. In the supply chain modules, we have been able to integrate disconnected supply chain processes onto a single platform to eliminate customizations and reduce IT and infrastructure costs,” says Absar.
“We also implemented a HR Cloud module which provided us with visibility into all our employees globally. Taking advantage of one system being the single source of truth, our entities in SCO Region have moved to shared services for back-office support and similar structure is being followed for MEA Region as well,” he says.
The time spent on core HR processes such as onboarding, offboarding, and calculating compensation has reduced significantly. Identifying talent and transferring employees from one location to another has also been simplified. Overall, the migration to a unified Cloud solution makes business smoother.
Winning over global markets
Absar believes in the age of global business, for a good customer experience, all information must be available at the click of a button else we will lose out on customer centricity.
“The core strength of any business or industry must be its ability to adapt to environmental changes and with the supply chain industry being the backbone; it becomes even more relevant to practice and lead on this tenet. COVID-19 has brought forward the inadequacies and the need of change for the supply chain of many businesses – transforming to digital supply networks – improving visibility across the chain, increased collaboration between stakeholders and optimizing the chain.
With this increased visibility into the supply chain, business should be able to make informed decisions about the restrictions across market segment,” he mentions.
For example, Absar states that India is a key strategic market for DP World. As one of the largest logistics players in the country, DP World handles a quarter of the country’s total container trade volumes.
The company has created an extensive network of logistics assets in India including express and third-party logistics services, rail, port terminal, container freight station, cold chain, and feeder services. DP World provides integrated logistics solutions and caters to end-to-end supply chain needs of customers across all kinds of storage, all modes of transportation and all types of bulk, domestic, EXIM, and temperature-controlled cargoes.
The company is also building Free Trade Zones at strategic locations in Nhava Sheva, Chennai and Cochin which will help in establishing India as a major trade and manufacturing hub.
Creating a better, safer ‘digital’ future
A report published by Allied Market Research forecasts that the global logistics market that’s pegged at $7.64 billion in 2017, is likely to reach $12.97 billion by 2027, registering a CAGR of 6.5% from 2020 to 2027 and companies, riding on technologies such as AI/ML, big data, cloud, IoT and blockchain, among others.
As a global trade enabler, DP World provides a world class level of automation and customer service bringing a new era of technology and efficiency in container terminal operations. The ease of connectivity between container vessels, barges, road, and rail is a vision of how the future can look in our industry together with data driven logistics that add value across the supply chain.
“Leveraging Big Data and AI tools, we have been developing novel solutions to optimize Yard planning at our Terminals. Reducing unproductive shuffle moves on containers and increased efficiency on Equipment handling could drive cost down costs significantly as per initial estimates,” says Absar.
In line with the vision of increasing efficiency in Trade, DP World has invested in technology solutions to analyze historical and real-time data and develop prediction models which can issue exception notification in case a shipment is delayed in its journey. “This will enable Supply Chain managers to plan their shipments effectively factoring in any delays,” he informs.
The logistics major has also decided to implement the emerging technology of Blockchain to enable ocean carrier, shippers, authorities, and other stakeholders to exchange information on supply chain events and documents between distributed heterogeneous systems, independently of standards and formats.
These technologies he believes will bring a single trusted view on shipping related documents, help companies store data in “distributed ledger” and finally eliminate the complexities of peer-to-peer messaging
The company is looking to enable smarter trade to create a better future and Absar believes this can be made possible only by leveraging the existing technologies in the market while working on the innovative breakthroughs to deliver on its purpose. He says, “We believe in strengthening operations to deliver seamless solution to our customers – whether it is gate operations at the port, quay cranes at the yard or in-land warehousing solutions – all developments have been done keeping customer at the core.”
“We are already supporting innovation in the supply chain and logistics industry – the latest examples being development of BoxBay in Dubai – container high bay storage solution at the ports and Virgin Hyperloop in Las Vegas – high speed vacuum train for delivery of people and cargo,” he adds.
Absar believes that the commitment of top management to ensure DP World is at the helm of technological advancements for benefit of our valued customers has made all the progress possible.