Countries in the Gulf Cooperation Council (GCC) region are advised to develop strategies for enhancing supply chain resilience as they undertake significant industrialization efforts, according to a report.
Oliver Wyman, a management consulting company, highlighted the need to mitigate current risk levels in the logistics sector, particularly for countries like Saudi Arabia and the UAE, which rely heavily on critical products such as transformers and minerals essential for industrial growth.
The report emphasized the potential impact of disruptions in the supply of transformers, which could significantly affect various sectors including power, manufacturing, transportation, and healthcare in Saudi Arabia, where 75 percent of transformer imports originate from only three countries.
As the GCC countries expand their economic diversification plans, including industrial sectors, the report stressed the importance of doubling efforts to enhance supply chain resilience to ensure the smooth operation of all sectors in the event of unexpected disruptions.
Oliver Wyman underscored the increased scrutiny on vulnerabilities in global supply chains in recent years due to factors like the pandemic, climate change-induced disasters, cybersecurity threats, logistics challenges, and geopolitical issues.
The report pointed out that various sectors are directly dependent on industrial supply chains, and any disruptions could have cascading effects on vital sectors important for health, safety, and security.
To bolster supply chain resilience, the report recommended that GCC governments align their strategies with national industrialization programs and establish collaborative governance frameworks between different countries in the region.
Moreover, governments should leverage the private sector as a crucial partner in supply chain strategies, incentivize logistical resilience initiatives, and establish specialized teams within ministries of industry to enhance logistics capabilities.
Technological adoption, including advanced manufacturing policies and industrial cybersecurity measures, was also highlighted as essential for enhancing supply chain resilience in the GCC region.
In conclusion, the report emphasized the need for a holistic approach combining localization with other supply chain resilience measures to safeguard industrial growth in GCC countries.