Why artificial intelligence is the way forward for MENA’s supply chain

By: Marc Meyer, CCO at Transmetrics

The MENA region has seen a paradigm shift when it comes to online shopping and its delivery network—and the supply chain is now being asked to rise to the occasion. According to Christine Harb from the Global Brand Council at Visa, about 80% of consumers in the UAE have changed their spending habits and shifted towards online purchasing.

MENA has seen an average eCommerce annual growth rate of 25%—ahead of the already accelerated global average. As a set of continually developing nations, however, there is still some infrastructure missing to allow the region to truly embrace its new online delivery culture.

Let’s take a look at how the MENA region can adapt through AI to manage its skyrocketing supply chain.

The Current Reality of eCommerce in MENA

Although MENA is gungho about eCommerce, there are many caveats when it comes to the execution of deliveries. In general, the region is about 10 years behind the EU in eCommerce culture, and keeping this in mind can help understand the current state of operations in the supply chain.

MENA is just getting its footing in door delivery because of its limited infrastructure, with one of the most significant roadblocks being that there are no real addresses. Without zip codes, even in very well-known parts of town, delivery drivers have to approximate your address by the name of the building or a description.

This makes for a haphazard delivery system where drivers have to call recipients several times to ensure that they have the right details such as item, person, location, and time. Overall, incorrect addresses could affect more than $7.42 billion of eCommerce revenue in the region. This demonstrates a need for digitization in the MENA supply chain to make online trade feasible.

The East’s Open-Mindedness Towards Innovation

To its advantage, however, MENA is a region that not only accepts innovation but embraces it on a higher level than the more rigid Western world. Many companies have had to hit the ground running digitally, with only 8% of SMEs and 1.5% of retailers online in the wider MENA region before COVID-19, compared to 80% in the US.

For companies in the supply chain, this has meant moving from extremely antiquated methods at warp speed—starting with pen and paper as little as three years ago, to Microsoft Excel two years ago, to implementing AI into the whole system of operations within the past year. Although this is a drastic shift, MENA has demonstrated its capacity for adaptability—integrating digital innovations in a fragment of what took Western nations 2-3x’s the amount of time to implement.

MENA’s adaptive system of legislation helps to accelerate these efforts. The governments are generally receptive to strategically implementing change—tuning into the business world to know when to adapt laws and adopt new policies to bolster the economy. This includes monthly decision-making rounds with an advisory board of experts from the industry to keep a finger on the pulse. Allowing the region to embrace new initiatives in business quickly is a considerable advantage for constantly changing innovation that is high demand for the supply chain.

MENA’s Digitization to Help Manage Supply Chain

Digitization’s call to action in MENA needs to be broad because the infrastructure is still catching up. MENA has recognized this, and UAE appointed its first minister of AI after estimating that the technology might add $182 billion to the economy by 2035.

AI can fill in the gaps where information is lacking, mitigating the number of contact points that delivery drivers in the region must make and employing information already available. For example, let’s say a driver has the dimensions and pick-up date but doesn’t know the weight of an item for delivery. AI can glean context from different factors, drawing highly intelligent conclusions and helping to fill in the blanks.

This can ensure that delivery is of the utmost efficiency in terms of utilizing space in delivery trucks, optimizing routes, and ultimately evolving the efficiency of the supply chain and delivery in MENA as a whole.

Arabian eCommerce is here to stay, with analysts saying 50% of consumers surveyed will be sticking to their newly acquired habit of digital spending. Organizations such as Transmetrics, a company that optimizes cargo transport planning by leveraging the power of predictive analytics and AI, can help the industry smoothly transition into a new age. This will allow MENA to not only catch up to the Western world but also blaze past them in the international supply chain.

Transmetrics is a company that optimizes cargo transport planning by leveraging the power of predictive analytics and artificial intelligence.