Red Sea Global’s Journey to Supply Chain Sustainability

Red Sea Global, a wholly owned subsidiary of Saudi Arabia's Public Investment Fund, is a true pioneer in sustainable tourism development. 

Established in 2018, the company is developing and creating luxury destinations along Saudi Arabia's west coast, employing a regenerative approach along the way.

Michael Stockdale, Group Head of Supply Chain and Logistics at Red Sea Global, explains: “Our vision is to deliver regenerative tourism and luxury residential destinations that actively enhance the islands, nature, cultural heritage and lives of those living in surrounding communities.”

Red Sea Global’s ambitious, everyday activities encompass not only the creation of luxury resorts, but also extensive infrastructure development. 

As his title suggests, Michael is the man responsible for ensuring such projects take place without delay and disruption from a supply chain perspective

Progress thus far has been remarkable and Red Sea Global is showing little sign of slowing down. 

“We've designed, built and operationalised five new luxury resorts, an international airport, the world's largest solar farm and battery and extensive support infrastructure,” Michael continues. 

“The tens of thousands of support staff required to serve the 80-plus resorts under development, as well as the associated leisure activity offerings, will require housing and community infrastructure including schools, hospitals, supermarkets and so on. This means that Red Sea Global – while developing a hospitality sector as its core economic pillar – is in effect developing and operating active city communities in Saudi Arabia.”

Integrating sustainable technology 

It is increasingly well documented that integrating sustainable practices into supply chain activities is beneficial not only for environmental reasons, but also for the enhanced efficiency and cost savings it can bring.

Michael is a prominent stakeholder at Red Sea Global when it comes to assessing the extent to which adopting new and exciting technologies can benefit the organisation from a supply chain sustainability perspective. 

Shedding light on the company’s recent activities in this area, Michael reveals Red Sea Global is in the midst of developing a fully-integrated SMART technology ecosystem that is instrumented, interconnected and intelligent. 

Using materials handling equipment such as RFID enabled returnable plastic crates, all goods are tracked along the supply chain, with supply chain data generated by sensors, RFID tags, meters, actuators, GPS and other devices.

This comprehensive approach allows for real-time tracking and decision-making, resulting in a highly-responsive and efficient supply chain.

“Our systems integrate multiple platforms, connecting customers, suppliers and materials along with demand signals and other critical data,” Michael says. 

“The systems allow us to continuously assess multiple constraints and alternatives, allowing decision makers to select the best course of action for every scenario.”

Red Sea Global’s sustainability journey

Michael admits that conceptualising, developing and implementing a supply chain to address the needs of the Red Sea Global project – alongside its sustainability ambitions – is a major challenge.

“Establishing a supply chain network of this scale and scope requires exhaustive planning, prioritisation of key components and then operationalisation,” he notes.

However, Red Sea Global has emerged in admirable fashion, opening several hotels and the RSI international airport in the space of a mere few years.

Even at this relatively early stage, its global supply chain has achieved significant success in the sustainability arena, with technology playing a key role.

Achievements include: 

• Implementation of the first fully sustainably-fuelled logistics fleet in the Gulf Cooperation Council (GCC) region
• Design and construction of all distribution centres under LEED Gold specifications
• A collaboration programme with Tamala to develop local farms and producers
• Sourcing of a third of its materials demand from local Saudi Arabian production (Sept 2024).

Michael says: “Red Sea Global is blessed with having the very best of the best people, who have made the journey a great success.”

Adoption considerations 

When considering the adoption of sustainable technologies in supply chains, Michael emphasises the importance of taking a holistic approach.

"Sustainability should be considered in both the organisation's materials sourcing and procurement and also in its physical logistics," he says.

The first step, according to Michael, is understanding customer needs and expectations, including the product range and service levels needed to satisfy them. 

Then, he advises mapping the end-to-end supply chain in detail, from upstream to downstream – even if each stage is outside the direct scope or influence of the organisation.

This comprehensive mapping should take into account stages from product design and raw material extraction, all the way through to product use and disposal or recycling. 

Michael goes on to stress that technologies should be considered for addressing a number of  purposes:

• Collection, storage and interrogation of data for informed decision making
• Instrumentation along the supply chain to monitor supply chain activities and harvest data
• Clean and renewable energy sources for powering vehicles, facilities and automation
• Automation and energy-efficient vehicles, facilities, materials handling equipment, plants and machinery
• Intelligent systems to continuously analyse performance and monitor efficiency of processes such as vehicle routing, vehicle capacity utilisation, warehouse cooling and heating and production planning.

Red Sea Global’s supply chain lead points out, however, that the adoption of sustainable technologies requires careful change management if it is to be successful. 

“Often, new technologies require the collaboration of multiple internal silos as well as external stakeholders,” Michael says. 

“Commitment and support from the most senior levels of leadership are critical to ensure the necessary resources, time and funds are provided, stakeholders are aligned and informed, and risks managed.”

Measuring supply chain sustainability

Adopting new technologies with sustainability in mind is one thing, but what about assessing and evaluating their performance. 

Michael describes supply chains as “complex, expansive networks” which are extremely difficult to measure as ‘sustainable’ in their own right. 

Sustainability, he says, is not a binary condition, but rather a spectrum ranging between “extremely unsustainable” and “regenerative”. A business or supply chain’s position along this spectrum is often subjectively determined, rather than evidence based.

One potentially ideal solution at an individual product level is carrying out a lifecycle analysis, from raw material extraction to end of life, but Michael highlights that this requires significant resources – and may not be possible at all. 

Red Sea Global has instead developed an innovative solution, separating the supply chain into clusters such as transport, warehousing and materials procurement.

“This allows us to monitor, measure and manage transport sustainability by focusing on minimising emissions, utilising renewable fuels and optimising routes and capacity,” Michael says. 

“Warehouse activities are focused on developing LEED-certified facilities and minimising energy and waste; materials procurement focuses on local sourcing, ethically-produced materials, environmentally-friendly production processes and finally reducing transport miles, inventory levels and waste.”

To read the full story in the magazine click HERE

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