ECOM 402 SEU Almarai Challenges Faced in Logistics and Transportation Case Study 5 Questions to be answered on a case study on large company. Case study about challenges faced in logistics and transportation Case study and questions are attached. Case Study -Almarai
About the Company
Almarai is an integrated organization spanning its food and beverage products from dairy farms
through to retail stores.The other brands are known as “ALMARAI”, “ALYOUM”, “SMOOTHY”
and “ZADY”. Almarai company limited, a dairy company, provides nutritious food and beverages
in Saudi Arabia. It provides dairy liquids, including flavored milks and lactose-free milk; yoghurts
and desserts; food products, such as cheese spreads, cheese slices, butter, ghee, cream, and
mozzarella; fruit juices; bakery products, including breads, ready-to-eat pastries, and biscuits; and
poultry products.
Almarai is the largest integrated dairy foods company in the world, with a reputation for
quality that is unmatched within the gulf countries. Almarai began in 1976 under the leadership of
HH Prince Sultan bin Mohammed bin Saud Al Kabeer, as it remains to this day. The company’s
headquarters are based in Riyadh, the capital of the Kingdom of Saudi Arabia, and the Almarai
company extends throughout the Arabian Peninsula, leading and influencing the agricultural, dairy
processing and food distribution industries.
Logistics
In terms of the scale of asserts, the miles cover, and the quantities deliver, Almarai’s
transport and logistics division is larger than any logistics company in the Middle East. The
division comprises over 1,300 trucks and 1,400 cold trailers. The farming division runs 600 trucks
as well. This wholly -Owned logistics operation ensures that products are delivered on time and in
perfect condition.
Over 3.000 T&L employees look after transport, warehousing, maintenance and planning. Our
logistics team remains committed to improving road safety. It is imperative that our products are
delivered to consumers fresh and within a very tight timeframe, and so our attention to detail when
it comes to scheduling and temperature control is unrivalled.
Managing supply chain
Vertical integration requires Almarai’s stringent quality standards to be met or surpassed
at every stage. First-class ingredients are sourced from around the world before passing through
industry leading manufacturing facilities in Saudi Arabia, Egypt and Jordan. Almarai import 1.5
million tons of animal feed annually, an increasing proportion of which is supplied from our own
arable farming assets around the world. These are managed according to international best practice
principles, ensuring that that our dairy and poultry farms consume only the highest quality feed.
Supply chain design
Supply chain design process is helpful to enhance the profitability and the shareholder
valuation. The management of Almarai requires to follow the market and the sourcing strategies.
This will generate the optimum financial performance. Supply chain design needs to manage the
constraints and margins. By following these regulations and practices in their business, the
management of the organisation can earn higher profitability. It is argued that there is uncertainty
as well as risk in demand and supply and these are required to the organisation during the designing
of supply chain. On the other hand, Almarai needs to balance the short term and longterm plans
and objectives. Therefore, it can be inferred that supply chain design requires to provide the
organisation a detailed insights, which would shows how the demand can achieve the business
profitability. In addition, with the help of supply chain designs, opportunities to increase the profit
can be identified. Moreover, supply chain cost can reduce the consumer responsiveness.
Figure : Supply chain design
Responding to rapid business growth, food and beverage producer Almarai Company
expanded its workforce to more than 20,000 employees. Yet the company’s paper-based, manual
HR processes caused inefficiencies, inaccurate data, and excessive delays in handling employee
and manager requests. By deploying SAP® software, Saudi Arabia–based Almarai automated its
HR processes, helping to reduce cycle times and costs and increase employee satisfaction.
Identification of major operation areas and the competitive advantage
It is stated that the operation areas are critical to the competitive advantage of an
organisation. There are five major operational areas, which can gain the competitive advantage of
Almarai. These operational areas are such as quality, speed, dependability, flexibility and cost.
It is mentioned that quality can enhance the competitive advantage of the organisation. As
a result, it can be stated that the organisation can set out their targeted consumers. In addition,
Almarai can reduce the price of their manufacturing goods. However, the speed aspect can deliver
their products to the consumers more quickly. This aspect can also offer superior consumer
services, which focus to the after sales services. Hence, it can be mentioned that the organisational
risks can be reduced.
Dependability is helpful to identify the level of stocks of the organisation. In order to
measure the level of stock of the organisation, Almarai requires to improve the working conditions
as well as the internal maintaining facilities. This would in turn save the money of the organisation
due to the lack of disruption. The workplace flexibility can be categorised into four sections such
as product, mix of the goods, quantity and the delivery.Almarai has focused to the quantity and
the time of delivery in order to satisfy the consumers’ needs. This will improve the product
development approach for the development of new products.
Evaluate the performance of each area
In order to measure the performance of quality, speed, flexibility, dependability and cost
for gaining the competitive advantage, the organisation has used some specific tools such as
capacity planning, inventory management, supply chain design and the quality management.
Capacity planning is helpful to forecast the budget of a business in order to meet the present
operations and can meet the business objectives. As a result, based on the predicted budget,
Almarai can set out the price of the products and the quality aspect can be improved. Moreover,
capacity planning is helpful to identify the future capacity needs. This will in turn increase the
production of an organisation. It can monitor the cost structure of the manufactured goods.
Supply chain management is a network, which can move the product from one stage to
another. In addition, this can increase the customer service of the organisation. Therefore, it can
be mentioned that Almarai aimed to improve the customer service of the organisation by delivering
the products to the customers within the proposed date. Therefore, the speed aspect can perform
successfully in order to gain the competitive advantage of an organisation.
It can be recommended that Almarai requires to follow some relevant marketing dynamics
such as speed, dependability, flexibility, cost and quality, which can gain the competitive
advantage of the business. In this respect, it can be stated that if Almarai would not be able to
deliver the products to the consumers, then the good will of the organisation towards the consumers
would be declined. The dairy farm has planned to set out the price of the product affordable. They
used modern technology and updated techniques in the manufacturing process. As a result, it can
be inferred that the quality of products would be improved. This would be helpful to gain the
competitive advantage of the organisation. In this respect, it can be stated that Almarai has the
competitive advantage in the manufacturing of dairy products based on the level of stock. Capacity
management can efficiently estimate this level of stock of an organisation. Therefore, it can be
mentioned that the productivity and service quality of the organisation will be increased.
Questions
1. What are the challenges faced in logistics and transportation?
2. How the supply chain design helps to manage the constraints and margins?
3. What are the dynamics followed to satisfy the customer needs?
4. Which is focused to reduce the organizational risk?
5. What are the recommendations for gaining competitive advantage of the business?
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