How do you maintain distribution centres? Do they require a significant investment?
We invest in our distribution centres heavily in terms of the technology, people, equipment handling and compliance with the regulatory bodies. Since we have no compromise as far as our clients’ requirements are concerned, we ensure that our facilities conform with international best practices in logistics.
Are there drastic changes taking place in the logistics industry today?
As consumer preferences are changing rapidly and individual requirements are evolving, we see consistent patterns emerging. In the old days, logistics firms would execute a fixed delivery schedule from point A to point B. Today, we have to pick smaller quantities, move them faster and engage in more frequent drops. This is seen as a drastic shift in the way we do business. Traditionally, Al-Futtaim Logistics has adopted a DC concept, whereby our team would be required to move a multi-product line to one single location. For instance, in the fashion sector, we move multiple apparels based on season, style & size to a single store. Today, we are expected to deliver single units to a wide network of addresses. This is quite challenging because we have to adapt to the change in processes as we now touch the end consumer. Individual order picking, packing, VAS and distribution direct to consumers require more storage space than retail distribution. It is important to note as well that, in some cases, the point of sale has shifted from the store to the logistics provider especially in the case of online purchasing. Retailers and logistics service providers are more collaborative than ever before to keep up with the increasing demands of the consumer preferences.
Is innovation an important aspect that should be taken into account in the logistics industry?
Innovation is of the essence in our industry as we are always looking for ways to do conduct our business more productively. Our ultimate goal is to ensure that we have a seamless process automation which leads to a quick and efficient service delivery to the consumer.
What is the secret to success?
We have built our business performance based on a culture of innovation and continual improvement. Innovation and utilising the right technology and knowledge of industry are very important factors that lead a logistics provider towards success. We engage in new ways of doing business by keeping up-to-date with market volatility and customers’ changing needs and we constantly adapt to new trends in the logistics sector as this is what maintains our leadership in a very competitive marketplace. Recently Al-Futtaim Logistics commissioned a 30,000 sq. m distribution centre for our home delivery fleet. This facility offers a centralised platform for customer deliveries with real time management and efficient route optimisation. We introduced these new features as part of our 2014 strategy to meet customers’ requirements in the fast moving retail division. Customers are looking for solutions dedicated to minimizing handling and faster lead times. Once you learn what the customer wants, you have to find new supply chain solutions to service the client, which is what we have done. These days, the end user is more vocal about requirements, meaning that customers work with us to help them grow.
How do you ensure that the right resources are allocated?
Understanding the customer is key. First, we assess the needs of the customer and then work backwards up to the time in which the goods are in our hands in order to make the entire process seamless. Once we have a refined process, we create touch points along the supply chain which act as a trigger if there is a need to reallocate resources to meet service standards.
Does talent play a very important role in the success of your business?
Al-Futtaim considers its human capital as its biggest asset. With this objective in mind Al-Futtaim is on path to develop its associates to create a culture of innovation, continuous improvement and success recognition. This drives Al-Futtaim Logistics to create a unique operating culture that delivers results consistently that meet & exceed our customers’ expectations. Al-Futtaim Group has also invested in academies thus allowing associates to choose the courses they need for their personal growth. Based on our rapid expansion, we have career progression in mind for all associates which helps them to aspire for growth within our organization. Since customer engagement is of the essence, our company conducts surveys to determine to what level each associate is engaged with his clients. We have seen a positive correlation between engaged employees and happy customers.
What kind of challenges do you face within Al-Futtaim Logistics?
Our challenges include shifting consumer trends and keeping up with the pace of technological advancement. Companies that adapt quicker to change are able to deliver very positive results. Talent acquisition is another very challenging area.
What are the expansion plans for Al-Futtaim Logistics?
The GCC logistics sector consists of major players that hail from Saudi Arabia, the UAE and Oman. In the UAE, we have an air-sea concept, whereby a company that brings a product by sea can warehouse on location. In the second leg of the journey, the product is air freighted to other destinations in Europe and the rest of the world. Sea-air shipment is growing in the region at a rapid pace due to the lead time and efficiency gains and Al-Futtaim Logistics is able to contribute to this requirement with our local presence in key ports and airport locations in the UAE. Our facilities in Jebel Ali give us an edge to extend our offering and expand regionally into Qatar, Oman, Saudi Arabia, East Africa, and Egypt. In terms of our expansion in the UAE, we are focused on vertical growth into Food, Fashion & Records Management.
Source: Retail Middle East magazine, Logistics Middle East Magazine, Global Supply Chain Magazine