< PreviousSaudi Arabia is already the key driver of logistics and transportation in the MENA region. As they weigh in on the current situation, industry experts emphasise the “complex” state of the supply chain management in Saudi Arabia. The increase in fuel prices, the Covid-19 related intermittent lockdowns and unexpected decline in global demand have led to an imbalance in supply and demand, particularly in the construction and energy sectors, which has led to changing consumer attitudes and difficult demand forecasting. Talking about the current state of the industry, Nader Emile, director and regional manager at HKA says: “Contractors and suppliers have been trying to adapt to the changing rules and regulations the kingdom imposed as part of its economic growth and in response to the challenges caused by the pandemic.” The current global political instabilities have further impacted the supply chain and have resulted in higher import costs from the key suppliers to the kingdom. Considering that Russia and Ukraine are the largest steel exporters globally, the impact has been significant. Highlighting the factors impacting supply chain in the kingdom, Adham Kotb associate director at HKA notes: “The significant impact on the supply chain in the Saudi construction market was mainly due to the suspension of construction activities and port shutdowns during 2020, as well as extended closure of factories, mainly in China, which substantially reduced manufacturing and caused supply shortages of materials and goods.” According to Kothb, the impact of the historic Covid-19 related precautionary measures (PCR tests, mandatory vaccination requirements, social distancing, required passes, etc), continues to be felt across the construction industry and throughout the supply chain. He further adds: “In addition, the imposed travel restrictions have affected labour and material movements into the kingdom, which has had a significant impact mainly due to the high proportion of migrant workers involved in construction in Saudi Arabia” The resulting lack of supply and drastic price increase of raw materials have negatively affected the material procurement and fabrication phases in construction projects. These issues caused a remarkable decrease in productivity and, in the process, caused major delays to projects and substantial cost increases. In response, contractors are currently reluctant to rely on too few suppliers with the view of diversifying their supply chains and strengthening their procurement planning – an instigated change across the construction sector. Analysing the bigger picture, HKA experts emphasised the effect KSA has on the overall construction supply chain ecosystem. Kotb says: “Whilst it is currently seeking to diversify its economy, the main industry in Saudi Arabia is still petroleum and its associated industries.” Saudi Arabia ranks the first internationally with respect to oil reserve. The continuing importance of oil & gas industries, along with Saudi Arabia’s strategic geographical location, place the kingdom in a unique position with respect to the international supply chain. Saudi Arabia is already the key driver of logistics and transportation in the MENA region. “In addition, the scale of the mega projects and huge volume of work coming from the Vision 2030 programme is significantly global in terms of construction supply chain. This is expected to add value to the national economy by establishing various supply networks across different sectors,” notes Emile. He adds: “Furthermore, Saudi Arabia’s supply chain ambitions, including the adoption of the new technologies, is a significant factor in improving delivery time and process efficiency in the region.” The kingdom is currently more attractive than ever for construction organisations to expand their businesses given its growing economy at a time when many other countries are facing difficulties and | SUPPLY CHAIN | 60 The kingdom is currently more attractive than ever for construction stakeholders. considering the various megaprojects that are now taking place. According to Emile, the situation creates strong willingness to win work in the kingdom for both domestic and international suppliers. “Two factors must however be noted as they at times adversely affect the supply chain,” he says. “First, restricted cashflow remains a risk which contractors and suppliers need to consider. Second, the benefits of open market and competition are not often fully achieved. One of the reasons is the lack of easy access routes for new suppliers to get involved. Addressing these two factors can lead to further strengthening and growth of the construction supply chain in the kingdom.” Discussing the issues stakeholders face with liquidity, experts note that restricted cashflow and liquidity issues often occur in construction projects, not only in KSA but globally, due to two main reasons: a pre- contract failure in planning and budgeting, and post-contract disputes regarding contractual entitlement that results in withholding cash. “Sometimes a party simply stifles payment to enhance its own cash flow at the cost of those downstream the contractual chain, overlooking its own losses from such behavior, e.g., losing out on future discounts and having to pay more for contingencies,” Emile adds. Restricted cashflow can result in unnecessary additional costs and is detrimental to the parties’ business relationship and spirit of collaboration. However, the experts said that developers such as The Red Sea Development Company are investing in proper planning, partnering with its supply chain, and employing personnel with the necessary skill and expertise. The maturity of the Saudi market has been on the rise. More employers have developed an appreciation for the importance of their supplier’s technical and financial capabilities, as opposed to undergoing a simple selection process of the lowest price bidder. Explaining this further, Emile says: “Contractors and suppliers that possess the right technical expertise and that are financially sound will thus enjoy a strong bargaining power. But since the construction industry is naturally highly competitive in respect of most types of projects, offering a competitive price will continue to be a key factor in winning projects.” He continues: “A technically compliant bidder with a competitive price can have a good commercial leverage in negotiating “OFFERING A COMPETITIVE PRICE WILL CONTINUE TO BE A KEY FACTOR IN WINNING PROJECTS.” Nader Emile, director and regional manager at HKA | SUPPLY CHAIN | 61Saudi Arabia is investing into the development of its logistics industry. the contract terms and conditions, including the payment terms, change provisions and the like.” Having a strong localised supply chain proved invaluable at the time of the pandemic. More generally, it serves the local economy and supports the local community. The extensive job opportunities and sizable markets created by virtue of the new development projects for the local community means that the construction sector is at the forefront of supporting Saudi’s mandate for localisation of the supply chain. The supply chain industry plays a key role in achieving the Vision 2030 ambitions of the kingdom. Infrastructure, built environment, and touristic developments are integral elements of delivering this vision. These developments are not only required to be delivered in challenging timeframes, but also call for experienced supply chain in other aspects that lie at the heart of the vision, like sustainability and protection of the environment. Driven by the ambitious vision, the kingdom is living through an interesting era with remarkable transformation happening on the ground. The supply chain’s role has been, and will continue to be, pivotal in the success of the Vision 2030. Summarising their opinions, the experts share their predictions for the future of supply chain in KSA. According to them, given the huge changes Saudi Arabia is committed to in the construction sector to support its Vision 2030, and with the resulting rapid growth in the number of “THE SUPPLY CHAIN INDUSTRY PLAYS A KEY ROLE IN ACHIEVING THE SAUDI VISION 2030.” Nader Emile, director and regional manager at HKA megaprojects expected in the kingdom, the Saudi supply chain may experience more pressure due to the increasing requirements of Saudisation and other localisation measures. The challenge is compounded by rising levels of inflation compared to other GCC countries. To deal with the situation, Saudi Arabia is looking to upgrade its supply chain management and improve its planning capabilities by becoming more resilient and by adopting digital supply chain technologies that are based on Artificial Intelligence. The kingdom will also adopt the prefabricated building techniques including 3D printing using standard designs, which will increase productivity and reduce construction time. Additionally, Saudi Arabia is investing in the development of its logistics industry to transform the country into a vital transportation hub, relocating international supply chains into the nation. On a concluding note, Emile adds: “The strategic location of Saudi Arabia along with the development of new trade zones such as NEOM Airport, the Red Sea Gateway Terminal, and Jazan Economic City makes the kingdom well placed to attract more foreign investors into its industry to achieve the desired strategic and economic goals.” Having a strong localised supply chain proved invaluable during the pandemic. | SUPPLY CHAIN | 62 In an increasingly digital world, the construction industry seems to be falling behind when it comes to adopting and implementing technology. Most construction projects use manual processes or spreadsheets to manage takeoffs, estimating, collecting field data, and other paper-based methods. As the world moves at a faster, and digitised pace, many organisations have realised that they’re being left in the dust by not adapting to newer, more flexible systems. Implementing a digital construction management solution to centralise your data, document, monitor, and track your construction progress is one of the simplest (and most valuable) ways to begin developing your company’s construction management strategy. WhiteHelmet is an AI and computer vision solution for progress tracking, inspection, and digital documentation of construction sites. It enables all parties involved in construction projects to visit jobsites virtually from anywhere and at any time, track construction progress by generating a digital twin of the jobsite, and improves the communication and collaboration between all parties for smart construction management. The platform provides easy-to-use tools that enables digital archive, ticketing system, and traveling through time and comparing between visual reports. Digital archive Construction document management is a form of record-keeping used in the construction industry. It mainly involves stakeholders compiling and storing certain kinds of project information. These records provide an accurate ‘history’ of what happened during a project, how the team made decisions and why plans changed. Ticketing system With ticketing system, each defect ticket can contain photos, videos, and text added directly from your mobile device for easy, Saudi: “We strive to improve on what our customers share with us in order to be the best and most user-friendly 360 reality capture solution. “Overall, we’re proud to be working with unique projects such as King Salman Park with Elseif Company as well as Tanajeeb Project with Saudi Aramco.” quick, transparent and traceable assigning and coordination of all project activities. Traveling through time and comparing between visual reports Replace reports with real-time insights and 360-degree complete view of the construction site for faster decision making and accurate updates. At WhiteHelmet, we work on two fronts: 1) to ease the construction operations and ease its implementation, and 2) to add more functionality and have continuous developments on the data. The company told Construction Week | PARTNER CONTENT | 63 PROMOTING DIGITAL CONSTRUCTION MANAGEMENT SOLUTION WhiteHelmet on how its platform helps to centralise, document, and monitor data as well as track construction progress across project sites WhiteHelmet enables stakeholders to visit jobsites virtually. [Image: Supplied]A DIGITAL JOURNEY AHEAD OF ITS TIME | DIGITALISATION | 64 | DIGITALISATION | 64The Kingdom of Saudi Arabia is set to become a global leader in the digital economy through the full deployment of emerging technologies such as the internet of things, artificial intelligence, 5G across public and private sectors, as well as robotics. The kingdom maintains a robust digital infrastructure, accelerating its digital transformation. This structure has enabled KSA to ensure business continuity and development, enhance educational operations, while improving resident lives and wellbeing. According to Saudi Arabia’s National Unified Portal for Government Services, the kingdom was named the “Top Digital Riser” among the G20 nations due to comprehensive government support for digital transformation in the kingdom, as part of Vision 2030. Additionally, KSA provided 100% of households with basic telecommunication services, covering over 576,000 homes in remote areas with broadband services, as well as improved the quality of digital services by partnering with the private sector. The National Transformation Programme aims to develop the necessary infrastructure and create an environment that enables the public, private and non-profit sectors to achieve the kingdom’s Vision 2030. Earlier this year, Construction Week Saudi’s sister title, Construction Week Middle East spoke with Nasser Al Shawaf, member of the board of Al Bawani Holding Company. Al Shawaf highlighted the kingdom’s progression towards a new and improved method of accelerating the stages of development related to digital transformation in Saudi Arabia. He said: “When it comes to digitalisation and digital economy, Saudi is one of the top players, particularly in the sectors of electronic government and services, which is truly fascinating as 15 years ago we were really lagging behind. We have come a long way as everything is digital, even the government transactions.” According to Al Shawaf, the government has made efforts to improving private sector participation helping the sector “risen up to the challenge”. He said: “They [government] have opened up the market and invited all kinds of multinational companies, to come and participate in the growth. We at Al Bawani, as well as other players, whether it is design, supervising companies, or contractors need to work together to deliver, and I believe contract conditions need to be looked at more carefully.” How Saudi Arabia has maintained a robust digital infrastructure while accelerating digital transformation to ensure business continuity and development Words by: Mina Vucic | Images: Shutterstock | DIGITALISATION | 65 | DIGITALISATION | 65Saudi Arabia’s massive digital transformation goal will require innovation and investment. The world is changing rapidly and embracing all things digital, which is how countries stay competitive and excel into the future. Saudi Arabia has become a global leader in this space, making the move to digital a key strategic component of their wider economic vision. Construction Week Saudi sat down with Nathan Doughty, CEO and co- founder of Asite as well as Paul Mansell, partner at HKA and Sarah Keyte, associate technical director at HKA to discuss the growing digital trends in Saudi’s construction industry. Doughty initiated the discussion, saying: “Ambitious and forward- thinking. These two words spring to mind when discussing Saudi Arabia’s digital transformation.” He added: “The kingdom is embarking on an impressive digital transformation journey across all sectors, which is critical to achieving their Vision 2030 objectives. This massive digital transformation agenda will require both innovation and investment. “Next-generation digital tools will push the limits to help meet the engineering and construction needs of the mega projects taking shape in the region.” Its clear that KSA has a vision for what the global economy will look like beyond the 2020s. Its efforts to empower its leaders to be future-ready shows that its digital transformation journey is ahead of its time. Putting the digital foundations in place today will allow KSA to reap massive future rewards as they increase efficiencies, boost productivity, and drive down costs. The construction industry and the wider built environment are just one of the areas currently benefitting from this digital-first approach. According to HKA experts Mansell and Keyte, Vision 2030 is an ambitious strategy to transform and reform KSA and includes a significant pipeline of infrastructure projects. These cover ground-breaking gigaprojects like NEOM and the creation of new tourist destinations, such as Al-Ula. There are new energy developments, ports, railways and the supporting infrastructure and utilities for towns and cities to function. A global and increasingly connected supply-chain will be required to provide the skills, capabilities, and capacity to deliver the projects, digital transformation is one of the key driving forces of how KSA intends to achieve its ambitious targets. Through Vision 2030, there is real commitment to deliver mega- “THE KINGDOM OF SAUDI ARABIA IS EMBARKING ON AN IMPRESSIVE DIGITAL TRANSFORMATION JOURNEY.” Paul Mansell, partner at HKA | DIGITALISATION | 66Saudi Arabia’s massive digital transformation goal will require innovation and investment. | DIGITALISATION | 67projects to world-class standards, drive collaboration across industries, and achieve operational excellence. Digital transformation is underway and underpins the objectives to drive innovation, promote collaboration, and modernise. Doughty commented: “Concepts like NEOM, with their ambitious plans for “The Line,” including having digital twins in the “metaverse” to allow future residents to experience how life will operate, are pushing the boundaries of sustainable living. “These projects are also transforming our traditional view of the construction industry and are demonstrating the true impact digital transformation can have on the sector.” Digital twins will form a considerable component of the transformation of the construction sector. Already part of KSA’s flagship NEOM project, digital twins bring many significant benefits to a project, including identifying inefficiencies in real-time, proactive maintenance, scenarios simulations, improving knowledge transfer, and ensuring a single source of truth. Sustainability is a key driver on NEOM, which is envisioned to be a net-zero smart city. In the last five years, many owners and contractors have increasingly utilised digital systems to improve their design, record keeping, planning and construction phases, according to HKA. For example, the use of BIM, offsite fabrication, augmented reality, satellites and drones, autonomous machines. The company is seeing benefits in BIM and Information Management, as they both help prevent disputes, and they minimise the impact of disputes should they arise. Mansell and Keyte explained how BIM could be used as a digital rehearsal in a project design phase. This ensures project stakeholders have consensus of what is to be built. They said: “BIM allows designers to clash detect their work, and ensure the designs produced by different stakeholders are coordinated. BIM and Virtual Reality (VR) can be used to ensure clients are happy with designs. These all help avoid disputes. “BIM can help project stakeholders plan and prepare their scope of works carefully. This can help ensure that the construction phase runs as smoothly as possible, minimising or eliminating waste from rework.” Sustainability has been at the heart of Vision 2030 since its inception. Saudi Arabia is now ushering in a new era as the kingdom aims to reach net-zero by 2060. With 40% of all carbon emissions globally coming from the built environment, sustainable construction practices and digital technology are at the forefront of helping the construction industry reduce its impact. Speaking on the importance of sustainability and how innovative methods support the greener mentality, Doughty said: “Data can play a huge part in helping the construction industry shed its image as one of the world’s biggest carbon emitters. But if this data is not harnessed properly—it becomes unstructured, uncoordinated, and inaccessible. Here, valuable insights are lost, errors pile up, time is wasted, and your bottom line takes a hit.” HKA experts Mansell and Keyte also added that as with any transformation, alignment is key and in supporting technology, there will also be “DATA CAN PLAY A HUGE PART IN HELPING THE CONSTRUCTION INDUSTRY SHED ITS IMAGE AS ONE OF THE WORLD’S BIGGEST CARBON EMITTERS.” Nathan Doughty , CEO and co-founder of Asite Digital twins will form a considerable component of the transformation of the construction sector. | DIGITALISATION | 68consideration of processes, systems, capability and appropriate governance requirements. These are all critical factors for organisations to take into account when developing and delivering projects.They said: “With the forecast growth of the construction industry in KSA, we anticipate that increasing use of digital technologies will be important to all project life cycle phases and may be used to incentivise contractor and supply chain performance. Arguably, there is no single influential digital technology which will best implement digital transformation. It is a combination of technologies, combined with a culture and mindset.” HKA has been involved in both advisory roles, claims consultants, and dispute resolution specialists. In a recent example for a client, their advisory team reformed the reporting process and developed a digitised dashboard to monitor project delivery in real-time. Data was used to inform discussion and decision making. This created a new standard for the organisation. From a claims and dispute resolution perspective, evidence from BIM and Common Data Environments in KSA, projects have helped HKA assess the causation and consequential effects of issues more effectively and often faster. Asite on the other hand established a team in Riyadh, growing their client base in KSA. Currently, several organisations use their customisable data platform to manage their complex projects. Doughty said: “With the opening of our in-country data centre in 2020, we took a huge step forward in expanding the digital engineering capacity in the local market. This ensures regional data compliance and security, improves the performance of data management processes for projects in the region, and provides the fastest possible response times when completing day- to-day project tasks.” Introducing technology and moving to a digital-first approach is not without its challenges. The construction industry is notoriously fragmented. Based on one-off projects, dispersed teams, and quick turnarounds, data sharing does not come naturally. On a concluding note, Asite’s Doughty said: “The construction industry needs to develop better data- sharing techniques over the next few years. There are many ways to achieve this—from introducing global data sharing standards to introducing a digital ecosystem. Even better, we can help ensure your software is integrated and interoperable.” Sustainability has been at the heart of Vision 2030 since its inception. | DIGITALISATION | 69Next >