Course/Unit Information

Course

Postgraduate Diploma in Supply Chain Management and

Logistics.

Awarding Body

The Association of Business Practitioners

Batch

SCML - 1406

Instructor Information
Name

LeenaWanganoo

Phone

+971501139849

Skype

Leena.wanganoo@gmail.com

Email

Leena.westford@gmail.com

Assignment Information
Full/ Part Assignment

Part Task 1( LO1, LO2)

Date Assignment Issued

4.07.2014

Date Assignment Due

25.07.2014

Student Information
(To be filled by the student prior submitting the assignment)
Name

Siji Sundaran Manalikkattil

Email

sijisundaran@ymail.com

Date of Submission

19th July 2014

Student Assignment covering form is an integral part of the assignment document and should be
submitted along with all submissions.

Page 1 of 24

Student Declaration

I, Siji Sundaran Manalikkattil hereby confirm that this assignment is my own work and not copied or
plagiarized. It has not previously been submitted as part of any assessment for this qualification. All the
sources, from which information has been obtained for this assignment, have been referenced as per
Harvard Referencing format. I further confirm that I have read and understood the Westford School of
Management rules and regulations about plagiarism and copying and agree to be bound by them.

Students Signature

: Siji

Student Name

: Siji Sundaran Manalikkattil

Date

: 19th July 2014

Learning Outcomes and Assessment Feedback

Name of the Assessor

LeenaWanganoo

Learning Outcomes

Assessment Criteria (AC)

Page 2 of 24

Assessor Feedback

LO 1
Understand the

1.1

Explain the importance of effective

supply chain management in
achieving organizational objective .

1.2

Explain the link between supply

chain management and business
functions in an organization.

importance of supply
chain management and
logistics.

1.3

Discuss the key drivers for achieving

an integrated supply chain strategy in
an organization.

AC MET

AC MET

AC MET

LO 2
Know the structure of a
robust supply chain.

2.1 Explain the role of logistics in supply

chain management in an organisation.
2.2 Evaluate procurement practices in an
organisation.
2.3 Discuss the factors that must be
considered when improving logistics and
procurement practices in an organisation

AC MET

AC MET

AC MET

Over All Result/Grade

Internal Verification Report

Internal Verification

Done By

Date

Assignment Brief
Assessors Decision

Case Study Scenario

Choose an organization of your choice preferably where you are currently working or have worked for
and understand its supply chain process, procurement, logistics and their operations to get an insight of
the organizational process
The organization can be any one from the following :
a.
b.

Local
Domestic

Page 3 of 24

c.
d.
e.

International
Multinational
Global

Give a brief introduction about the organization, its area of business and then proceed to answer the
questions. :

1.1 Explain the importance of effective supply chain management in achieving organizational objectives
of the chosen Organization .( AC 1.1 : Explain the importance of effective supply chain management
in achieving organizational objectives).
1.2 Explain the link between supply chain management and business functions of the chosen
Organization .(AC 1.2 : Explain the link between supply chain management and business functions
in an organization).
1.3 Discuss the key drivers for achieving an integrated supply chain strategy of the chosen Organization
( AC 1.3 : Discuss the key drivers for achieving an integrated supply chain strategy in an
organization).
2.1 Explain the role of logistics in supply chain management of the chosen Organization.
(AC 2.1 : Explain the role f logistics in supply chain management in an organization).

2.2 Evaluate procurement practices of the chosen Organization (AC 2.2: Evaluate procurement practices
in an organization).

2.3 Discuss the factors that must be considered when improving logistics and procurement practices of
the chosen Organization (AC 2.3 : Discuss the factors that must be considered when improving
logistics and procurement practices an organization).

Note :
Use Harvard referencing system
Use font style Times New Roman and font size 12.

Page 4 of 24

Indicate references both books and websites with links.

The submission deadline is 11.59 p.m. of 25th July 2014.
Late submission will not be accepted.
Do your original work.
Do not indulge in plagiarism.
Fill in the necessary details in the cover page and grading sheet.
The name of the file should be of the following format :

Yourname_PGDSCM_Task1_June2014.

Page 5 of 24

INTRODUCTION:
AL FARIS EQUIPMENT RENTALS (L.L.C) was established in Dubai, UAE, in 1992 to provide
lifting and transportation services to the Oil & Gas Industry; these services were then extended to Oil
Refineries, Power Plants and the Construction Industry.
Al Faris has grown since its inception to one of the largest crane and transportation Rental Company in
the United Arab Emirates.
THE CRANE RENTAL DIVISION has been the core business of the group, with mobile cranes
ranging from 7Ton to 1200Ton and Crawler Cranes up to 600tons. The forklifts range from 2 Tons to
52Ton capacity and test weights ranging from 25kg to 1200Tons.
They have a large fleet of trailers that are maintained to the highest quality and comprises of flatbed
trailers and low-bed trailers with varying lengths and capacities to suit clients requirements. Al Faris
continues to invest highly in new technology cranes to serve their customers efficiently.
JACKING & SKIDDING:-There has been a rise in demand for lifting and shifting of loads in areas
where the use of machines is not entirely possible. Al Faris has extended its services and solutions for
jacking and skidding operations. This type of operation is required in extremely confined areas where
cranes and other lifting equipment cannot operate or reach. Al Faris has devised its very own in-house
system for lifting and shifting of loads in restrictive environments. They offer assistance using highly
skilled personnel for handling material and equipment for such laborious and tedious jobs.
.
Over the course of time and largely due to increasing demand in the market, Al Faris has branched out
by setting up an Energy Division and a Heavy Transport Division.
THE ENERGY DIVISION provides turnkey solutions for mobile power generation. Al Faris Energy
Rentals has been powering UAE from its center of Excellence in Jebel Ali, providing Rental Services of
Diesel Generator Sets and associated products. Their fleet consist of Super-Sound Attenuated, fuel
efficient and Low emission Generator Units in the range of 50kW to 1200kW, High Voltage
Transformers, Ring Main Units for 6.6 or 33kV, flexible Power Cables, Distribution Boards, Light
towers, Welding Sets, Fuel Management including Bulk fuel Tanks and other accessories. Al Fariscan
provide Multi-megawatt power packages and the capability of synchronizing their generators with the
utility grid.
AL FARIS HEAVY TRANSPORT DIVISION was set up to provide specialised transportation
services for abnormally sized and extra heavy loads. They havetheir fleet Modular Multi-axle Hydraulic
trailers from Goldhofer, Germany which can transport loads weighing in excess of 1200 tons. In addition
to hydraulic bolster & hydraulic dropdeck trailers they also have a variety of Dolly and extendable
trailers for transportation of super long loads.
Al Faris has branches all over the United Arab Emirates. In Dubai, they operate as Al Faris Equipment
Rentals LLC & in Abu Dhabi, as Al Faris Intl Heavy Equipment Rental. They have recently opened a
branch in KSA under Al Faris Saudi.

Page 6 of 24

Al Faris with its versatile services that it has in stock to offer to its customers claims to be Your Lift,
Shift & Energy Partner.
REFERENCES:
Overview: Al Faris Company Profile
Pictures: Al Faris Company websitehttp://www.alfarisuae.com/?cat=3

Page 7 of 24

1.1

Explain the importance of effective supply chain management in achieving Al Fariss

organizational objective:
Supply Chain Management (SCM) is an activity which integrates all activities involved in
supplying goods and products to end customer and ensures that they are satisfied to the core.
Ultimately customers satisfaction is directly proportional to company bottom-line and more the
number of satisfied customer a company has greater would be the profit. SCM also ensures that
all activities involved in providing the goods or services to the customer is carried out in the
most cost effective manner thereby again having positive impact on companys profit margin.
Hence any company in order to achieve their mission and objectives in a profitable way will
have to have proper, functional and effective SCM.
In case of Al Faris their mission statement states Our Mission is to provide the industry best
lifting and temporary power supply solution, irrelevant of complexity and demand, in the
most satisfying, safe and sustainable manner possible. (2014,Mission and Vision Statement,
AFER/OHSE/MS/Mar 14-07)
In order to be industry leader in their area of operations disregarding complexity and demand in
the most satisfying and environment friendly manner is a big task and would need SCM to play a
major role in achieving these objectives.
For further analysis of role of SCM in achieving the organization objective of Al Faris we would
split their mission statement into separate parts and analyse each part in correlation with SCM.
-

Industry Best
o They aspire to be industry best in their area of operation which is rentals of cranes,
trailers, generators and their accessories and management of the activities involved in
reaching these capital equipment to the customers hiring them which includes
Sourcing, Storing, Supplying and Satisfying which as a whole are SCM activities.
Therefore in order to reach Industry leadership they will have to ensure that their
SCM is immaculate and flawless. A missing or broken link in any of the nodes would
be catastrophic.

Irrelevant of Complexities of the job

o To tackle and cater to any complexities in the job they will need to have competent
and well informed and trained personals which again emphasizes the importance of
SCM which will communicate and integrate with HR and ensure that quality people
are hired and trained adequately before they take on their job responsibilities to
enable them to be in a position to meet any complex situation that the job would
require them to tackle.

Irrelevant of Demand for the product

o Al Faris aims to achieve 100% quotation to win rate and not to lose job due to
unavailability. This would need SCMs communication and integration with their
stores and workshop and ensure that there is no delay in repair and maintenance of
the standby equipment due to unavailability of spare parts and stock.

Page 8 of 24

o SCM in coordination with marketing and sales will put forth the sales forecast to the
management informing them well in advance of any capital investment decision to be
made analyzing the forecast.
-

Customer Satisfaction
o SCM through well managed logistics will ensure that right product reaches right
customer at right time and right place thereby ensuring that the customers is not
dissatisfied due to delivery issues.
o Afterensuring delivery satisfaction to the customer is met SCM also ensure that they
constantly communicates with the customer for their feedback on the service of the
equipment rented and to check if they are facing any operational difficulties. SCM
also communicates ensure that any complain from the customer is immediately
looked into by the concerned department to ensure that they dont lose customer
satisfaction and thereby business.

Safety
o Al Fariss operation being highly technical and requires involvement of high capital
equipment with their operators, there is very high compliance to safety required at
each stage of operation. The suppliers of Al Faris has to ensure compliance to Al
Fariss QHSE standards and Al Faris also has to ensure that they meet the QHSE
standards of the customers that they deal with. SCM in coordination and
communication with the customers, suppliers and their QHSE department ensures
that every safety aspects of the operation are effectively met thereby minimizing the
Lost Time Injury (LTI).
o SCM through constant touch with the QHSE department and employees ensures that
the safety policies of the customers they would be working for are properly
understood and complied by them.

Sustainability
o To achieve social, environmental and economic sustainability would require lot of
efforts from the Al Faris Management with lot of strategic decisions to be taken and
policies to be implemented.
Achieving social sustainability is a major task as negligence of this might
have reputational damages. Al Faris will have to ensure that their suppliers are
reputed ones and their suppliers employees are working in hygienic and good
working environment and not in a substandard condition. Big companies like
Apple was once criticized heavily when it was claimed that the workers in a
Chinese factory which manufactured some of the companys products were
working in substandard conditions. Al Faris will have to ensure that all their
stakeholders are reputed ones and strategies plans to identify wolf in the pack
of sheep.
Achieving progress keeping environmental sustainability in check is another
daunting task. Al Faris, involved in rental of equipment where various types of
fuels and oils are used to run their equipment, ensuring that the carbon
footprint left by its operation is minimal would need lot of efforts. Similarly
disposal of used oils and other metal and plastic scraps from their workshop in
an environment friendly manner would require lot of R & D.

Page 9 of 24

Al Faris if aims to achieve sustainability in their operations cannot undermine

the importance of economic sustainability. The resources and capital at their
disposal to conduct business will have to be utilized in sustainable manner to
ensure profitability in their operations in the years to come.
o SCM through its communication channels will coordinate with various stakeholders
of Al Faris to ensure that they achieve their objective of sustainable operations.

As explained in the points discussed above, effectiveness of SCM would play a very vital role for
Al Faris in achieving all the objectives discussed along with profitability. Effective SCM will
also help Al Faris in identifying their key competencies and restructure their entire operations by
outsourcing processes that are not within their key competencies. The strategy on applying
effective SCM will positively have an impact on their market positioning and would assist them
in achieving their very first objective of being market leaders. It would also help them in
choosing right partners, resources and manpower thereby ensuring that all these key stakeholders
play equal role in making their Mission Statement a successful one.

Page 10 of 24

1.2

Explain the link between supply chain management and business functions of the Al Faris
Equipment Rentals LLC:
Supply Chain Management as described by Dr. Douglas Lambert, (Director of Global Supply
Chain Forum in his interview to University of Auckland Business Review, Spring 2008) Supply
Chain Management (SCM) is an integrated business model that takes a process-based view
of how all of the business functions need to work together and how a business relates to its
suppliers and customers.
As inferred from above definition SCM is a process that connects all the business functions.Al
Faris like any other company if has to pursue its objective will have to have a very well defined
business function and effective supply chain to manage the business functions. As the name
suggests supply chain is the link which assists any organization in its core business operation
which is rendering goods or services to its end customers. Al Faris is not different and in order to
elaborate on the link between SCM and business functions of Al Faris we will draw aSupply
Chain Diagram of Al Faris supply chain which will enable us to understand the complexities
involved in Al Faris SCM.Supply Chain of Al Faris has following nodes:
1. Capital Suppliers Al Faris purchases all its equipment from recognized suppliers.Al Faris
purchases only new equipment and does not deal in second hand ones. This being a
monopoly market these suppliers has long term relationship with Al Faris.
2. Central Capital Purchase This procurement department deals with the capital suppliers and
maintains and builds relationship with them, they being the major supplier of Al Faris.
3. Central Capital Warehouse All the equipment purchased are moved to capital warehouse
where it is inducted and distributed to various depots as per their market requirement.
4. Depot Capital Warehouses All the equipment are stored in yards at each depot called as
capital storage yard or warehouse.
5. Depot Customers (C1, C2, C3) Each depot has their own set of customers with whom
they deal individually.
6. Depot Workshop Each depot has their own workshop where the equipment are brought
back from customer sites and maintained and serviced and then sent back to Depot Capital
Warehouse for storing.
7. Central Spares Purchase This procurement department deals with the spares, parts and
other sundry requirements. All purchase requests are received from various depot workshops
to this purchase department and they arrange for procurement and disbursement accordingly.
8. Spares Suppliers There are many spares suppliers who are in constant competition with
each other to cater to Al Fariss requirements. This being sundry items its a perfectly
competitive market with lot of suppliers and the price is highly negotiable.

Page 11 of 24

AL FARIS EQUIPMENT RENTALS LLC SUPPLY CHAIN DIAGRAM

Spare
Supplier

Spare
Supplier

Central
Spare
Purchase

Dubai
Worksho
p

C1,2,3,

Abu
Dhabi
Worksho

C1,2,3,

Saudi
Worksho
p

C1,2,3,

Capital
Supplier

Capital
Supplier

Capital
Purchase

Central
Capital
Warehouse

Dubai
Capital
Warehouse
Abu Dhabi
Capital
Warehouse

Saudi
Capital
Warehouse

Capital
Supplier

Page 12 of 24

SCM and its role played to integrate the business functions of Al Faris are explained in following
points:
1. Sales and Marketing
Sales & Marketing has to present their budget for next year by the end of each year
whereby they are supposed to put forward their sales forecasts which is presented to the
management and subsequent approval is sought. After approval of the forecast its
presented to SCM who has to calculate and estimate in coordination with operations if
available fleet would be enough to meet the estimated demand by sales or would there be
additional capital investment required. They in turn put up a capital budget in
coordination with Finance.
2. Finance
SCM in coordination with Finance prepares the Capital Budget and approaches the
management for approval to seek further investment. SCM also coordinates with Finance
to finalise the payment terms for various capital suppliers.
3. Operations
SCM on receipt of the sales forecast coordinates with Operations to check if the existing
labour force would suffice the manpower requirement to meet the sales budget and if
additional hiring is required than estimates the additional requirements. SCM also
coordinates with operation to estimate the fleet requirements and initiates additional
purchase. SCM also ensures that in coordination with operations right equipment, reaches
right place at right time.
4. Human Resource
On estimation of additional manpower requirement SCM coordinates with HR for
recruitment and also in the training needs of the new employees. SCM also coordinates
with HR in relation to various QHSE requirements at various customer sites.

Supply Chain Management has integrated all the above business functions of Al Faris in its ERP
system in coordination with RAMCO (ERP provider). SCM has also worked in close
coordination with its ERP providers & its major capital supplier to integrate RAMCO ERP with
the platform they are using. This enables them to understand the stock position of the suppliers
immediately and accordingly can arrange for order placement.
SCM plays a key role in integration of the business functions of Al Faris and as explained above
every activity has some chain linked to supply chain where either initiation is done by SCM or
SCM is involved at a later part or at the end. A pictorial representation of this linkage is
presented below for better understanding.

Page 13 of 24

As it appears from the diagram above SCM is at the center of all business functions in Al Faris
and all activity related to customers or suppliers revolve around SCM thereby ensuring that each
function operates smoothly both individually and in coordination with each other.

Page 14 of 24

1.3 Discuss the key drivers for achieving an integrated supply chain strategy in Al Faris
Equipment Rentals LLC.
With the development of Electronic Data Interchange (EDI) in the sixties and Enterprise
Resource Planning (ERP) in the nineties and through 21 st century with further development of
internet based collaborative systems the dream of integration of business processes became easy
and possible thereby making business more transparent and customer friendly. However these
cannot be achieved unless proper strategy & planning to implement such a process to integrate
the business functions are ministered.
Some of the important external and internal drivers to have an integrated supply chain strategy in
Al Faris are illustrated below.
1. Customer Relationship Management
a. Customers can be provided with real time information about product availability,
order statuses and delivery scheduling thereby providing better transparency and
information to the customers resulting in customer satisfaction and repeat orders.
b. Customer complaints can be addressed and rectified within very less lead time.
c. Customer orders can be processed immediately.
2. Supplier Relationship Management
a. Suppliers can check the stock statuses and arrange for replenishments well in advance
anticipating orders well in advance.
b. Suppliers can informed of the failures and goods return immediately thereby giving
enough space to the suppliers to arrange for delivery taking and replacements.
c. Al Faris can have real time information on the status of their order processing and
delivery scheduling thereby plan for logistics and storages accordingly.
3. Sustainability
a. To achieve this major objective of Al Faris they have to ensure that they have
effective and integrated SCM in place as explained in case study 1.1.
Some of the external factors which drive the integrated supply chain strategy of Al Faris are
explained above. Some of the internal drivers are explained below:
1. Cost effectiveness
With integration there is better communication resulting in minimal errors ultimately
saving valuable cost to the company.
2. Service quality improvement
With better integration supply chain ensures the after sales is properly informed of the
customer requirements and complaints thereby resulting in better services.
3. Time management
Better integration will result in shorter delivery and collection lead time.
4. Reducing wastage
Better communication will also ensure that only what is needed is procured or used
resulting in reducing wastage.
5. Reducing sales returns
Page 15 of 24

With better quality and proper time management sales returns can be reduced effectively.
6. Focus on key competencies by outsourcing
With proper integration effective supply chain can figure out activities in which Al Faris
is not competent enough and can decide on outsourcing them.
7. To achieve their organisational objectives
In order to achieve the organisational objective of Al Faris they need to have an effective
supply chain and which should be properly integrated with various business functions.
8. Ultimately improving profitability
Final aim of any commercial company existence is to earn profit and Al Faris is no
different and with experience even they have realised that effective supply chain with
proper integration with their other business function is the need of the day to maximise
their profit.
All the above discussed external and internal factors influences Al Fariss drive to achieve an
integrated supply chain strategy.

2.1

Explain the role of logistics in supply chain management in Al Faris.

Page 16 of 24

Logistics management is that part of SCM that plans, implements and controls the efficient,
effective, forward and reverse flow and storage of goods, services and related information
between the point of origin and the point of consumption in order to meet customer requirement.
Logistics involves getting in the right way, the right product, in the right quantity and right
quality, in the right place at the right time, for the right customer at the right cost.
Getting some of these 'Rs' right may be easy for many, but getting all correct can be quite a
challenge. For example, in both retail distribution and in high-value manufacturing, it is now
quite common to offer suppliers quite specific and narrow time windows within which to deliver
freight. (article in http://healthcare.financialexpress.com/200905/scmspecial03.shtml by R
Jeyakumar General Manager KG Hospital and Post Graduate Medical Institute Coimbatore)

Al Faris has its own in-house Logistics and warehousing for easy facilitation of the movement of
its capital goods and services. Al Faris depend heavily on its logistics department for not just
movement of their equipment namely cranes, generators, manlift, dozers etc. but also movement
of their workforce to various customer sites. Considering the complexity of Al Faris supply chain
which was explained vide diagram in case study 1.2, logistics as understood plays a very key role
in transporting varied equipment to different spatial points in Al Faris supply chain.

Supply chain of movement of equipment from capital warehouse of Al Faris situated in Head
Office at Jebel Ali Dubai to their depot warehouses in Abu Dhabi and Saudi and finally to their
respective customers is illustrated above.
Page 17 of 24

Similarly there is movement of equipment back from customer to various depot workshop and
back to depot warehouse which is illustrated below.

Smooth movement of equipment in this supply chain of Al Faris is facilitated by its logistics
department, without which they cannot even dream of stepping one foot forward. Logistics
ensure that the right equipment are picked from each location and delivered to the next one at
right time to ensure smooth transition to the next location.
Jacking and skidding operations of Al Faris needs manpower to be transported along with
equipment to various customer sites. Logistics ensures that in coordination with customer and
operations department equipment and manpower is transported toright place and at right time.
This confidence of having a very strong logistics team, Al Faris sales and marketing ensures that
they catch up on each opportunity to flaunt it in their marketing and sales strategy and has
derived a sales caption which says Your Lift, Shift and Energy Partner where the word
SHIFT is directed towards their logistics department. All these key factors points out the
importance of Logistics in the supply chain strategy of Al Faris.

Page 18 of 24

2.2

Evaluate procurement practices in Al Faris Equipment Rentals LLC.

The process of buying of goods, services or works from an outside external source is
procurement. In todays competitive business environment sourcing strategies are more a part of
anorganisationssuccess than the yesteryears. Use of technology has given an edge to
procurement to make it more efficient and inexpensive.
Before discussing the Al Faris procurement practices I would like to discuss the procurement
process at Al Faris with the help of flow chart below
Start process with
receipt of Purchase
Request

Check in database
for purchase history
of the items in PR

Check RAMCO ERP

Database

Past Purchase
history

Yes

N
o

`````

Page 19 of 24

Check the purchase history

for date of purchase

Recent Purchase
history
Send enquiries and
No
arrange for quotes
from minimum 3
suppliers

Y
E
S

Check for Total Cost

of Ownership (TCO)
and identify the best
supplier

Forward quote for

approval

Release Purchase
Order to approved
suppliers

Follow up for
deliveries

End the Process with

receipt of delivery

Above flow chart is simplified illustration of procurement process of Al Faris. This process is based on
few best procurement practices laid down by the management over the period of time some of which are
stated below.
1. Focus on Total Cost of Ownership than on price of the product
Al Faris has abandoned the traditional method of selecting the best supplier based on price of the
product they supply, rather they consider the other costs that would be associated with the
Page 20 of 24

ownership of the product e.g. transportation, warehousing, training, maintenance, operating as

well as the salvage cost of the product later on to finalise the supplier.
2. Establish strategic alliances with key suppliers
Al Faris emphasis on establishing close relationship with its key suppliers by encouraging them
to participate in decisions regarding product enhancement, new product introduction, problem
resolution thereby developing continuous improvement goals with objective of achieving value
for both the parties.
3. Monitor EOQ for each inventory items
Economic Order Quantity is the order quantity that minimises total inventory holding cost and
ordering cost.
4. Full compliance to corporate ethics
Al Faris has zero tolerance towards bribe and services of culprit if proved will be terminated
immediately. Procurement activity involves lot of coordination with suppliers who can be easily
tempted to bribe the procurement personals for business and vice versa, this department is
always under management scanner.
5. Confidentiality
Al Faris emphasis on confidentiality of information especially bid information.
6. Avoid sole sourcing
Except capital suppliers Al Faris procurement professionals should always avail for multiple
(minimum 3) quotes before finalizing order placement.
7. Full adherence to procurement process
Procurement professionals at Al Faris are mandatorily required to adhere to the well set
procurement process and they are by no chance allowed to bypass any of the process.
Above Illustrated are some of the well-defined procurement practices which every procurement
professional at Al Faris should adhere to mandatorily. Any deviation to these practices without
management approval might result in receipt of memo with disciplinary action.

Page 21 of 24

2.3

Discuss the factors that must be considered when improving logistics and procurement
practices in Al Faris Equipment Rentals LLC
No business function is perfect and always there is room for improvement provided we think out
of the box and try new ideas and processes. Al Faris logistics and procurement is no different and
there can be lot of improvement that can be implemented in these supply chain functions.
However there are various factors that Al Faris management will have to consider when
improving these practices some of which are discussed below.
1. Flexibility
Al Faris being an autocratic management they are too rigid and does not encourage ideas of
change or improvement fearing failure. They want their employees to follow already set and
defined practices and deviations are not encouraged.
The first factor that they will have to consider if they want improvement in any of their practices
is be more flexible to encourage and try new ideas.
2. Outsourcing
Al Fariss core business is rental of lift and energy equipment and their core competency is in
lifting and power rental operations.
According to me they can consider alternate option of outsourcing their logistics operations
involved in transportation of their equipment to various customer sites and check its viability.
3. ERP Customisation for logistics
Al Faris should consider better customisation in RAMCO ERP for logistics module. Although all
procurement functions are well addressed through ERP,logistics functions like equipment
tracking, vehicle monitoring, drivers database are not effectively customised in RAMCO ERP to
suite Al Fariss logistics departmental requirements and so they are still using Microsoft Excel
and Microsoft Access to keep a track of these details.
Proper customization in coordination with ERP team is required to make logistics more efficient
and have centralised logistics database.
4. Vertical Integration
Al Faris has lot of small scale suppliers of similar products and in case of shortage they cross
hire equipment from these small suppliers.
Al Faris in order to reduce cost and improve efficiency by decreasing transportation expenses for
logistics and reducing turnaround time for procurement can think of integrating these suppliers
within Al Faris Group banner either by merger or by acquisition or JV.

5. Off-the-job Training
Page 22 of 24

Al Faris does not have system of giving off the job training to its employees and because of
which not much improvements are noticed in the already implemented system and the same
procedure is continued over the years without any change.
I would suggest off the job training for both procurement and logistics employees at Al Faris so
that they can learn new skills and knowledge that they can implement for bringing improvement
in existing systems and procedures.
6. Reverse logistics
Al Faris warehouses have some equipment returned back from site which are damaged and
cannot be put into use in present condition. Similarly there are some spares in the warehouse
stores which are dead stock thereby unnecessarily occupying lot of space resulting in shortage of
storage space for supply chain.
Damaged equipment can be dismantled and sold off in parts market or can be refurbished and put
back in use. This will release lot of storage space in ware house for logistics and purchase to
store new or standby equipment.
Similarly the dead stock can be sorted out from the stores and can be sold back to the supplier at
lower price if mutually agreed. These stock items can also be sold to scrap purchasers if potential
buyers are not identified.
7. Disaster procurement process
It is noticed in Al Faris for emergency procurement requirement also procurement department
has to follow the legacy system.
There should be emergency procurement procedure to be implemented in case of disaster and
can be wrapped up in least processes which starts on disaster occurrence:
- Need identification
- Specification
- Sourcing, awarding and placing order
- Supplier management to facilitate timely delivery
This can be explained in the diagram below:

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http://log.logcluster.org/mobile/response/procurement/index.html
Although Al Faris will consider its procurement and logistics practices to be best in the industry
and competitors of Al Faris benchmarks Al Fariss procedures to bring improvement into their
respective procurement and logistics functions, the ground reality is there are many
improvements to be taken care of by Al Faris to achieve this objective as discussed above.

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