Global Logistics Industry: Al-Futtaim

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Table of Contents

Abstract
Background Information (Industry Description)
SWOT Analysis
Problem Statement
Proposed Research Activities and Methodology
Learning Outcomes
Reference List

Abstract

This research proposal will examine the global logistics industry with the U.A.E’S Al-Futtaim logistics as the selected organization as a microcosm of the entire industry. It examines the current operational environment as well as a brief SWOT analysis of Al-Futtaim. The last bit of the reported proposal outlines the timeline that will be required to complete the entire research

Background Information (Industry Description)

Global exports as a percentage of GDP indicated a robust growth trend from the mid-1980s of the previous century until the turn of 2008. However, since then, such impressive growth has ground to a halt. Macroeconomic shifts and changes have a direct impact on the global economy’s supply chains. They provide challenges as well as opportunities (Mangan & Lalwani, 2016). Growth witnessed in the shipping and logistics industry is no longer mainly due to exports that originate from the Asian region to Europe or to North America. Growth is being witnessed in other regions as well, becoming more volatile, unpredictable, and fragmented. Population and economic growth are increasingly concentrated in major cities, with infrastructure becoming a major factor in any growth that is witnessed (Bookbinder, 2011).

Mature international emerging economies and markets have become a crucial segment of the core business expansion strategy for many organizations. Going global is the latest standard, and established logistic solutions providers are expected to facilitate the trend. However, as labor costs in the Asian region and the cost of transport increase, more manufacturing activities are getting established closer to the product’s final user (Mangan & Lalwani, 2016).

The end consumers have also adopted a practice of souring their products through several channels that may range from traditional brick mortar shops to online e-commerce. Modern logistics service providers are thus expected to support multi-channel strategies to suit the changing tastes of their clients (Bookbinder, 2011). Customers also prefer products that have been made and sourced in the correct manner; minimizing social, business, economic as well as environmental impact on the wider society and enhancing any positive effects that may arise. Supply chains have become increasingly complex or dynamic, with core sourcing locations being changed swiftly, and usually purchase orders grow smaller (Bookbinder, 2011).

Company Profile

The logistics arm forms part of the Al-Futtaim conglomerate of companies. It is part of the most modern and progressive companies located in the lower gulf region with its headquarters in Dubai. Established in 1930, the organization operates collectively more than 85 firms that bear the Al-Futtaim brand and encompasses sectors such as commerce, services, and industry (“Our Profile,” 2016, para. 2). Al-Futtaim Logistics, based at Jebel Ali in the United Arab Emirates, provides full connectivity from the state of the art facilities that are strategically located at a number of the region’s most significant freight hubs (“Our Profile,” 2016, para. 3).

Al-Futtaim has been dully certified by DNV on ISO 9001 2008 since 2012. The organization offers a wide range of modern supply chain solutions. Its wide-ranging capabilities extend to Warehousing and contract logistics; Corporate Transportation; Goods distribution and transportation; and Contract and warehousing logistics (“Our Profile,” 2016, para. 4). The logistics company has several years’ experience in a number of key sectors and possesses an in-depth understanding of the various complexities that are involved in offering solutions for retail logistics; automotive logistics; military and humanitarian logistics; industrial solutions, international moving and relocation; and general people transport (“Our Profile,” 2016, para 4).

SWOT Analysis

Strengths

The company is located in a central location in terms of global trade. The UAE has a modern transportation infrastructure that links it to crucial markets across the world (Bookbinder, 2011).

Weaknesses

The global logistics market is punctuated by stiff competition from other established brands such as DHL. This makes it difficult for Al-Futtaim to spread its presence into new markets in Europe (Mangan & Lalwani, 2016).

Opportunities

The growing global economy during the post-recession era means that the demand for logistics services is bound to increase. This will translate into more profit. New markets are opening up, such as Iran and India presenting attractive expansion opportunities (Mangan & Lalwani, 2016).

Threats

Due to the international nature of its logistics operations, Al-Futtaim faces foreign currency exchange risks that could eat into its profits. The company is also exposed to regulatory risks in the numerous territories that it operates in (Mangan & Lalwani, 2016).

Problem Statement

Al-Futtaim is exposed to problems that touch on quality defects and problems. Manufacturing processes cannot be deemed to be perfect. This means that logistics industry players typically accept a certain quality level for most of the products that they handle. Variability, as well as complexity, are part and parcel of any production process. This means that some unfamiliar sources may not fully adhere to defect levels that are acceptable in a particular jurisdiction e.g., the United States. Therefore, choosing to use a non-U.S. based source may open up questions or disputes about which of the involved parties is liable for any defect percentages that may rise above the acceptable norm.

Research Objectives

The objective of this research will be to examine the risks faced by the company when it comes to a malfunction of quality in the distribution process across the various jurisdictions it operates in. It will make recommendations on how to minimize such risks to ensure the company continues to remain profitable in the long run.

The other objective will be to highlight what the company and other players in the international logistics industry can do to harmonize quality requirements between the various markets that they operate in. Such a step will go a long way in minimizing the risks associated with quality.

The final objective will be to examine how the firm’s reputation is affected in case it offers logistics solutions to manufacturers of substandard goods. The logistic firm’s exposure to legal suits will be looked at in the same breath.

Proposed Research Activities and Methodology

The ensuing research activity will employ the following methods of information and data gathering: interviews, questionnaires, and using information and data that is collected from secondary sources, mainly publications, journal articles, and company reports or documents. The approach will allow for the gathering of both qualitative and quantitative data on the research problem (Olsen, 2012). The questionnaires will include two main types of questions i.e. open-ended and closed-ended querie.

The open-ended queries will enable the respondents to answer the queries using their own words by narrating their unique experiences when it comes to quality control across diverse jurisdictions. The interviews and questionnaires will be conducted on phone and email respectively to cut down on the costs and allow the respondents to respond to them at their own convenience (Bocarnea, Reynolds & Baker, 2013).

Timetable.

Week	Methodology	Time/Date
Week 1 – 2 (primary sources)	Interviews Questionnaires	Between 9 AM and 5 PM Mondays to Fridays
Week 3 – 4 (Secondary Sources)	Publications Journals Other Online Sources
	Data Analysis
Week 5
Week 6	Presentation

Learning Outcomes

Quality Management Tools

The study will examine the status of appropriate quality management tools in the company compared with its suppliers or manufacturers. A comparison will highlight any discrepancies that lead to consumer quality complaints.

Supply Change

The document will carefully analyze the changes that occur in the preferences and tastes of the end consumers as well as manufacturers. These changes gravitate towards manufacturers and suppliers, reducing the distance between them for faster and cheaper goods.

ISO Standards and Excellence

The study will focus on the need to harmonize ISO certification across regions and jurisdictions to make it easier for multinational organizations to conduct business.

International Quality Management

The study will examine the significance of being abreast of the numerous quality regulatory requirements that are present in the jurisdictions that the company operates in. This will be attained through close scrutiny of any legislation that touches on the industry and having an effective lobby mechanism to unify the regulatory environment.

Reference List

Bocarnea, M. C., Reynolds, R. A., & Baker, J. D. (2013). Online instruments, data collection, and electronic measurements: Organizational advancements.

Hershey, Pennsylvania, Bookbinder, J. H. (2011). Global logistics Chapter IV. New York, NY: Springer.

Mangan, J., & Lalwani, C. (2016). Global logistics and supply chain management Chapter V. Hoboken:Wiley.

Olsen, W. K. (2012). Data collection: Key debates and methods in social research. Thousand Oaks, Calif.

Our Profile. (2016). Web.

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