logistics management

Effectiveness of Logistics Management in KOJ, Dubai

CHAPTER 1 INTRODUCTION

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Effectiveness of Logistics Management in KOJ, Dubai

1.1 INDUSTRY PROFILE Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involve the integration of information, transportation, and inventory, warehousing, material-handling and packaging. The importance of logistics as an enabler of trade and economic growth is worth mentioning. Massive improvement in infrastructure for transportation leads to present and future development in trade, resulting in the economic growth of the nation. On the positive point of view, new opportunities are opening up for the sector. Trade volumes both overseas and inland are growing very fast. The pace of growth in the specialized sectors like Liquid Natural Gas (LNG), Containers, Goods, Electronic Equipments etc. are comparatively much higher. Integrated logistics and multimode transportation are opening up new business for logistics/ shipping companies. Logistics Management and Logistics Management Software Logistics management is that part of the supply chain which 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 customers' requirements. A professional working in the field of logistics management is called a logistician. Software is used for automating logistics activities which helps the supply chain industry in automating the work flow as well as management of the system. Very few generalized software are only available in the new market in the said topology. This is because there is no common rule to generalize the system as well as work flow even though the practice is more or less the same. Most of the commercial companies do use one or the other custom solution. There is various software that is being used within the departments of logistics mainly in Conventional Departments and for Container Trucking.

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Effectiveness of Logistics Management in KOJ, Dubai A, Business Logistics Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one's business with materials and shipping out products in an increasingly globalize supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time at the right place for the right price and it is the science of process having its presence in all sectors of the industry. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine the professional knowledge of each of these functions so that there is a coordination of resources in an organization. There are two fundamentally different forms of logistics. One optimizes a steady flow of material through a network of transport links and storage nodes. The other coordinates a sequence of resources to carry out some project. B, Production Logistics The term is used for describing logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time. The issue is not the transportation itself, but to streamline and control the flow through the value adding processes and eliminate non-value adding ones. Production logistics can be applied in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency. Production logistics is getting more and more important with the decreasing batch sizes. Even a single customer demand can be fulfilled in an efficient way. Track and tracing, 3

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Effectiveness of Logistics Management in KOJ, Dubai which is an essential part of production logistics - due to product safety and product reliability issues - is also gaining importance especially in the automotive and the medical industry.

1.2 COMPANY PROFILE Kamal Osman Jamjoom Trading LLC is a multi-channel retail group or one of the leading retailers in the Middle East and they mainly concentrated on Kids toys, Arabic ladies lingerie’s & fashion, Cosmetics, Perfumes and Fragrances, that has operational headquarters in Dubai, United Arab Emirates and a Financial Regional Office in Jeddah, Saudi Arabia. The company was established in 1987 and operates four leading International and regional brands, being The Body Shop, Early Learning Centre, Nayomi and Mikyajy. The company has a retail footprint of 500 stores in the Middle East, with regional offices and representation in Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Qatar and Oman. There are mainly seven brands dealing by KOJ, in which five of them are franchisee brands and two of them are own brands. The five franchisee brands include ELC (Early Learning Centre), BEBE, ULLEPOPKEN, LIST and BODYSHOP, and the two own brands include MIKYAJY and NAYOMI. All these brands have a strong presence in Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Qatar, Oman and Libya. They are also expanding to new markets like Egypt and Lebanon in the near future. Over the next few years, there are plans to expand in the Gulf region with 100 to 120 new stores. The company is looking at reaching out to new customers in other regions such as Egypt, the Levant, East Asia, Eastern and Central and Western Europe.

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Effectiveness of Logistics Management in KOJ, Dubai

1.2.1 ORGANIZATIONAL CHART OF SUPPLY & DISTRIBUTION

Fig. 1

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Effectiveness of Logistics Management in KOJ, Dubai

1.2.2 GLOBAL LEVEL VIEW OF KOJ ORGANIZATIONAL STRUCTURE

Fig. 2 6

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Effectiveness of Logistics Management in KOJ, Dubai

1.2.3 SHIPPING PROCESS IN KOJ Shipping through importing is a thirteen step process: 1. Shipment Information / readiness date / required date etc. 2. Shipment forwarders 3. Shipment FDC 4. Shipment Nomination & Rate negotiation 5. Document arrangements 6. ETD/ETA 7. PO tracker update 8. Clearance status 9. Delivery Arrangements 10. Shipping Notification 11. Freight invoice reconciliation 12. Invoice submission to the finance 13. FDC reports 1. Shipment Information / readiness date / required: This is the shipment readiness date from the supplier. Required date is when the goods should be available in the destination warehouse in order to distribute the goods to the stores. 2. Shipment forwarders: Forwarders are the external service providers who is handling directly dealing with airlines, shipping lines, customs & have a tie up different agents & own offices at the origins. 3. Shipment FDC: Shipment FDC includes Freight, duty & clearance charges, these are the additional “Expenses” to bring the shipment from origin to destination.

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Effectiveness of Logistics Management in KOJ, Dubai 4. Shipment Nomination & Rate negotiation: Nominations is customer (KOJ) will nominate the shipments to X, Y, Forwarders to handle the shipments. Rate negotiation is customer will negotiate the freight rate based the volumes in order to reduce the expenses (Freight Charges). 5. Document arrangements: It is the documents requirements for doing the shipment clearance at origin. In order to prove that the imported goods belongs to the exporting country with whom the trade agreement has been entered into, the importer has to present to customs authorities a certificate called the ‘Certificate of origin’. This document certifies the name of the country in which the goods manufactured. 6. ETD/ETA: The term ETD is the estimated or expected time of departure from the port or point of origin; it applies to all modes of transportation. ETD is shipment on or about. The term ETS is the estimated or expected time of sailing from the port of origin; it applies to ocean freight. ETS is sailing on or about. The term ETA is the estimated or expected time of arrival at the port or point of destination; it applies to all modes of transportation. 7. PO Tracker Update: Updating the shipments movements based on the ETD/ETA in the tracking file by PO wise. PO represents purchasing order. 8. Clearance status: It represents Shipment customs clearance at origin. 9.Delivery Arrangements: After the shipment clearance at destination, shipment has to be delivered to customer’s warehouse. This step should be done by so carefully by the external partners. 10. Shipping Notification: Once the shipment is delivered to customers (KOJ) warehouse, KOJ Shipping will notify to all the relevant people regarding the delivery. 11. Freight invoice reconciliation:

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Effectiveness of Logistics Management in KOJ, Dubai Verifying the invoices from forwarders against the agreed contract rate for freight & customs clearance charges. 12. Invoice submission to the finance: KOJ Shipping will submit the freight forwarders invoices to finance dept for arranging the payment to forwarders. 13.FDC reports: It the expenses & lead time reports for a particular month for all the shipments which are delivered to KOJ & It will be shared to all the relevant teams to KOJ. It also includes other reports such as insurance report, damage, shortage and overage report.

MAN POWER PROFILE IN SHIPPING

Fig. 3

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Effectiveness of Logistics Management in KOJ, Dubai

1.2.4 WAREHOUSING PROCESS IN KOJ A set of guidelines, procedures and policies are established for KOJ’s distribution centre operations in order to establish control, measure, responsibility and accountability in the organization. INBOUND OPERATIONS: Receiving, Return to Vendors, Put away and storage constitutes the inbound operations in KOJ. 1. Receiving: Receiving procedure framed by the KOJ should be strictly followed by all warehouse personnel. Incoming stocks upon unloading shall be palletized squarely to avoid damage during handling. Purchase Order (PO), Delivery Receipt (DR), or Sales Invoice should be properly maintained. Samples should be taken from each receipt by Quality Control Staff for quality control check. The items which are rejected by QC will be marked as ON HOLD.. 2. Return to Vendor (RTV): If any QC rejection found, it shall be marked as Return to Vendor. The KOJ Shipping department shall be informed the details of RTV to be processed, so that appropriate documentation and transportation can be arranged. 3. Put away: Put away procedure framed by the KOJ should be strictly followed by all warehouse personnel. Receiving supervisor who receives the container will immediately handover it to the Put away and Replenishment Supervisor. He will endorse it to formalize the ownership of the container. 4. Storage: All merchandise in the warehouse is tracked by its Container ID (CID) barcode. All information regarding the product, such as, Item ID, Item Description, quantity, date of receipt, date of put away, expiry date, etc, are contained in the CID barcode.

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Effectiveness of Logistics Management in KOJ, Dubai OUTBOUND OPERATIONS: 1 Distribution planning: Distribution planning procedure framed by the KOJ should be strictly followed by all warehouse personnel, relevant Supervisors and Team Leaders. The Picking Schedule shall be prepared by the Distribution Planning Supervisor, with inputs from and coordination with the Warehouse Management and Merchandise Planning Department.. 2. Picking: Upon receiving of Picking Labels from the Team Leaders or Distribution Planning Supervisor, the Pickers shall proceed to the zone indicated in the Zone header and check for the type of picking indicated in the picking label header. The Pickers need to completely finish the pick directives in the wave before staging the picked stocks in the sorting area. 3. Dispatch: Firstly ensure that all the containers endorsed by the Pickers are properly labeled with Container ID barcodes. A Delivery Note, containing details regarding the number of pallets being shipped shall be prepared by the Dispatch In-charge to accompany the shipment. The Delivery Note and Container Manifest shall go together with the shipment to the shops, where they will be signed-off by the Receiver at destination. The container that is scheduled to be loaded only should be stored near shipping door. It should be clean, dry, odor free etc. Logbook of the dispatched truck should be maintained. 4. Delivery schedule: Products must reach stores in time. If it is delayed it means lost sales. Every day except Friday products are delivered from warehouse to stores. Delivery schedules & timings may change according to season, and to accommodate new shops in new areas as well. Warehouse operations timings may change depending upon operational requirements, so it should consider while framing delivery schedule. Any changes in the delivery schedule should be properly communicated to everyone.

ABOUT THE WAREHOUSE IN KOJ The warehouse size is 1500 square meters. Three brands – Nayomi, Mikyajy, and ELC can be stored in this warehouse. There is also a third party warehouse in Jabel Ali Free SJCET School of Management, Palai 11

Effectiveness of Logistics Management in KOJ, Dubai Zone. Jabela Ali is used to save space inside the warehouse because excess items will move to this warehouse. .

Fig. 4 MANPOWER PROFILE IN WAREHOUSING

Fig. 5 12

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Effectiveness of Logistics Management in KOJ, Dubai

1.2.5 MISSION OF KAMAL OSMAN JAMJOOM KOJ’S mission statement stand s mainly on three pillars, they are… 1. GOOD PEOPLE FIRST KOJ people are people with character - this means they practice honesty, commitment, respect, trust and passion. We are the people who turn ideas into sales, profit, and sustainable growth. Good people are the heart of our business. We embrace teamwork and believe that none of us is better than all of us together. 2. START AND END WITH CUSTOMER SERVICE Everything we do is aimed for our customer's hands, their hearts and their minds. The good people at KOJ start every task with the customer in mind. All of our business activities start with passionate front-liners who give our customers a great total shopping experience. 3. ENSURE PROFITABILITY FOR ALL STAKEHOLDERS KOJ Trading LLC was created to improve the quality of life for everyone who belongs to it. This includes our shareholders, our suppliers, our lawyers, our contracts, and us - the employees! We endeavor to achieve mutual benefits and profits for everyone and continuously strive to find ways to enhance our bottom line. Our philosophy is that we all own the bottom line. This is our company!

1.2.6 SUCCESS STORY OF KAMAL OSMAN JAMJOOM Kamal Osman Jamjoom Group (KOJ) is one of the leading retailer in the middle east which offers successful and innovative brands in the beauty, fashion, healthcare and children's learning and development sectors. They have an unshakeable commitment to product excellence and customer satisfaction, which is expressed in our portfolio of brands.

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Effectiveness of Logistics Management in KOJ, Dubai In 1987, the Body Shop franchisee is acquired and the first store is opened. In 1992, The Nayomi brand is launched. In 1994, Early Learning Centre franchise agreement for Middle East is signed. In 1999 The Mikyajy brand is launched. In 2002 Corporate Head Office of KOJ is established in Dubai. In 2003 Nayomi launches its award-winning website. In 2006 Mikyajy launches its website and KOJ reaches the 300 store benchmark. In 2007, European regional office is established and Egypt regional office is established. In 2008, Mikyajy opens first store in Greece and KOJ reaches the 400-store benchmark. Also Nayomi is currently the largest lingerie chain in the Middle East. Mikyajy is the largest single cosmetics brand in the Middle East with the largest single-brand market share. The Body Shop franchise is the largest in the Middle East, and 2nd largest in Europe, Middle East and Africa, and has the largest Average Transaction Value globally for the brand.KOJ innovated The Body Shop trolley concept. The Early Learning Centre in the Middle East is the largest sales contributor globally. KOJ partnered with three additional international brands in 2009-2011..

BENEFITS OF KOJ 1. KOJ Values its people, through mission statement "Good people first". They therefore reward them competitively. 2. They attract and retain the people responsible for the company's long-term growth and profitability. 3. All employees are provided with the opportunity to contribute to its success by offering a great working environment. 4. No one is discriminated on the basis of their background. They value Diversity. Employment and Development is primarily on merit. By this KOJ provide equal opportunity employment.

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Effectiveness of Logistics Management in KOJ, Dubai

5. For going the extra mile or having a brilliant suggestion, they reward their employees through recognition and excellence awards

1.2.7 MILESTONES OF KOJ A remarkable journey of success: 1978

The Body Shop franchise is acquired and the first store is opened

1992

The Nayomi brand is launched

1994

Early Learning Centre franchise agreement for Middle East is signed

1999

The Mikyajy brand is launched

2002

Corporate Head Office is established in Dubai

2003

Nayomi launches its award-winning website

2006

Mikyajy launches its website KOJ reaches the 300-store benchmark

2007

European regional office and Egypt regional office is established

2008

Mikyajy opens first store in Greece KOJ reaches the 400-store benchmark Table 1

The company was formed as one of the earliest Body Shop franchises internationally and remains one of the most successful. Over the years the company has now become a franchisee, franchisor and own brand channel organization. This depth of skills and knowledge allows for rapid deployment of strategies and tactical initiatives. The group employs over 2000 staff through seven countries. The staff represents a true global index of nationalities from more than 50 countries worldwide.

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Effectiveness of Logistics Management in KOJ, Dubai

1.3 INTRODUCTION TO THE TOPIC & JUSTIFICATION FOR CHOOSING THE TOPIC A. Introduction to Logistics Management Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and information between the point of origin and the point of consumption in order to meet customers' requirements. A professional working in the field of logistics management is called a logistician. Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one's business with materials and shipping out products in an increasingly globalize supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time at the right place for the right price and it is the science of process having its presence in all sectors of the industry. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. B. Origin and Definition of Logistics: The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio, word, calculation, reason, speech, oration"). Logistics is considered to have originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and distribution of supplies. The Oxford English dictionary defines logistics as: “The branch of military science having to do with procuring, maintaining and transporting material, personnel and facilities.” Another dictionary definition is: "The time related positioning of resources." As such, logistics is commonly seen as a branch of engineering which creates "people systems" rather than "machine systems"....

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Effectiveness of Logistics Management in KOJ, Dubai What is Logistics? Logistics involves getting the right goods to the right place, at the time, at the right cost, in the right condition, and with due care and attention to the environment. The Institute of Logistics defines logistics as ‘the time related positioning of resources’ within the supply chain. Academics define it as ‘the management of the chain from source of procurement to the final user’ A few other definitions: Logistics is “a set of distribution-activities,” that make products available to customers when and where they need them. The council of Logistics Management defines it as: “The process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point-of-orgin to point-of-consumption for the purpose of informing to customer requirements.” Logistics commonly includes: •

Transportation

•

Warehousing

•

Inventory/Stock control

•

Communication/Information systems

•

Packaging

•

Manufacturing management

In business, logistics is fundamental to: •

Retailing

•

Production management & control

•

Forecasting

•

Purchasing & supply

•

Materials management

•

Packaging

•

Installation & servicing

•

Property 17

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Effectiveness of Logistics Management in KOJ, Dubai •

Quality

•

Order processing

•

Project management

•

Re-use & recycling

•

Information technology

•

Importing & exporting.

Logistics is also fundamental to: •

Governments

•

The armed forces

•

Welfare agencies

1.4 NEED FOR THE STUDY In years gone by, the traditional warehousing and logistics facility was located by railroad tracks, a water port, and/or freeways, usually in the least desirable parts of cities or large towns. This stereotype then faded as gigantic, state-of-the-art facilities began to sprout in more rural areas on the outskirts of transportation and population hubs. The World started beginning to see such facilities showing up in even less "traditional" areas. Modern warehouses now are being located in carefully manicured industrial parks that are sprouting as fast as the corn and wheat once did in these open spaces-often in out-of-theway places. Why the emphasis on such locations for logistics companies? Much of it is due to the great flux that the logistics industry has been undergoing in the first three years of the 21st century. Most of these changes are being driven by a growing trend in the manufacturing and retail sectors to form partnerships with companies to which they can outsource non-core logistics competencies-3PL providers. In turn, 3PL providers are continually looking to provide innovative supply chain solutions to customers by focusing on value-added capabilities, differentiating themselves from the competition. They focus on key objectives, such as implementing information technologies, instituting effective management processes, integrating services and

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Effectiveness of Logistics Management in KOJ, Dubai

technologies globally, and delivering comprehensive solutions that create value for 3PL users and their supply chains. This need to partner with customers and become more integrated into their supply chain processes has created the ancillary need to locate close to these customers. That isn't to say the need for easy access to transportation hubs and different modes of transportation won't continue to be important. But the above shift in business strategy, along with the advances in technology and enhanced communication, has opened the door for logistics facilities to operate effortlessly in a myriad of locations. Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals, painful layoffs and great geopolitical uncertainties can sweep away even the most comprehensive logistics strategies – and that’s despite outstanding management over many years. These are exceptionally difficult times and it has never been more important to connect logistics and freight planning to executive board thinking than now. It’s easy to lose sight of the bigger picture in the rush to cut infrastructure cost and conserve cash. Hopefully organization succeed in protecting the business, satisfying shareholders and analysts, but what about capacity and flexibility, morale and momentum? To be a logistics winner in the coming years organizations need to use the downturn to reshape for growth, propelled by an unshakeable conviction that the mission is still important, that more prosperous times lie ahead, and that in some way the company infrastructure is helping to build a better kind of world. Logistics is inevitable in the future and essentially the management policy also has a significant role in the future of world. Generally the study is being featured with all aspects of management in Logistics and Freight areas. (Logistics include Transportation, Warehousing, Network Design, Cross docking, and Value Adding).

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Effectiveness of Logistics Management in KOJ, Dubai

1.5 OBJECTIVES OF THE STUDY •

To find out the Effectiveness of logistics management in KOJ.

•

To know how the logistics is done in KOJ.

•

To have a thorough understanding of how logistics and freight industries work.

•

To study the various brands that the company deals with.

•

To find out how the brands of KOJ reach from manufacturer to the distribution centre

•

To find out the importing & re-exporting process of KOJ.

•

To know the warehouse management system of KOJ.

•

To know whether the customers are satisfied with the existing range of service pattern

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Effectiveness of Logistics Management in KOJ, Dubai

CHAPTER 2 THEORECTICAL ASPECTS OF THE TOPIC

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Effectiveness of Logistics Management in KOJ, Dubai

2.1 THEORECTICAL ASPECTS OF THE TOPIC AND REVIEW OF LITERATURE Logistics is the management of the storage and movement of goods and information. Good logistics cuts costs; speeds work, and improves customer service. Logistics also involves the coordinated management of material and information flows throughout your organization. Supply Chain Management deals with the same issues throughout the chain from your sources to your customers. Its objective is to simplify the supply chain to control total cost, improve total quality, maximize customer service, and increase profit. Comparing Logistics and Supply Chain Management Supply chain management is about getting a smooth and efficient flow from raw material to finished goods in your customer’s hands. It is a concept, which is increasingly replacing traditional fragmented management approaches to buying, storing and moving goods. Traditionally, the management of material flows has centered on stocks of product: on trains and boats and trucks; in warehouses and stores and factory-floor queues. Managing those stocks meant buying enough goods far enough in advance to ensure that long, steady production runs were seldom jeopardized by shortages of components. Tougher competition has brought shorter product life cycles and made that approach increasingly expensive. Replacing these ‘inventory-driven systems’ are ‘service-driven systems’. This type of system, ‘pulled’ by customer demand rather than ‘pushed’ by a supply system, is long-familiar in retailing and over the last decade has become a necessity in many manufacturing sectors.

2.2 REVIEW OF LITERATURE A. Demand Chain Management Understanding demand requires a comprehensive knowledge of your customers, you should know what products / services are demanded by your customers; how do them make their purchases, how often they order and what constraints they face on the purchasing process. Very few companies have mastered this concept. KOJ was able to 22

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Effectiveness of Logistics Management in KOJ, Dubai know all the above concepts through considerable focus into customer needs and grievances. B. Achieving Competitiveness in Logistics, Freight, Supply Chain

Fig. 6 Reduced lead time, inventories, lower operating costs, product availability and customer satisfaction are the benefits which grow out of effective logistics and supply chain management. The decisions usually carried on by KOJ, cover both the long term and short term. Strategic decisions deal with the corporate policies, and look at overall design and logistic chain structure. Tactical, Operational decisions are those dealing with everyday activities and problems of the organization. Change is the inevitable factor for each and every day situation within and outside the organization. The decisions must take into account the strategic decisions already in place. Therefore organization must structure the logistics ideas through long term analysis and at the same time focus on every time situations. Furthermore, market demands, customer needs, transport considerations and pricing constraints are the factors in order to structure the logistics,

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Effectiveness of Logistics Management in KOJ, Dubai freight. KOJ realized the fact and are prepared to face any unexpected situations like inflation/ deflation in the economy, price factors, climatic problems etc. C. Operational Fleet Routing & Loading The organization derives routes in transportation are mainly long-haul (Optimization). For short haul deliveries, there are ready solutions that are tightly integrated to warehouse management systems (outsourced facility), to efficiently route fleets of vehicles and vessels and plan picking and loading. Stipulated time windows for pick-ups and deliveries and vehicular weight and spatial capacities would be used, as will constraints such as delivery within specified period minutes upon pickup (useful for perishable goods). Time required at various stops - in terms of fixed time to park and variable time dependent on amount to be loaded or off-loaded - can be specified. Travel speeds along various types/zones of roads can be stipulated by traffic information services. The organization schedules arrival and departure times for each stop can thus be worked out quite accurately. Routes can be generated dynamically and ad hoc backhaul or other opportunities can also be assigned to the most suitable vehicle. The benefits of operational fleet routing include considerable reduction in fleet operating cost and improved customer service with better estimated arrival time. D. Vendor Managed Inventory Vendor managed inventory, coordinated by an integrated logistics system, allows inventory to be optimized together with transportation. KOJ try to know the product value as well as storage capacity (mainly warehouse – how much to outsource). As a routine job the company collects information on consumption rate, current inventory levels, forecasted demand and status of shipments. Thus the system can optimize the right quantities of replenishments to be sent at the right time to ensure that service levels are maintained while minimizing cost of inventory and transportation.

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Effectiveness of Logistics Management in KOJ, Dubai E. Mode of Transportation Transportation generally is movement of product, goods, raw materials to different stages in supply chain. Essentially in supply chain logistics plays a major role, the manner in which product is moved from one location to another is through road, rail, truck, air, sea. KOJ logistics essentially uses only 2 modes for their operation they are air and sea. The goods being delivered to end customer is brought to port or to the place through containers or other methods like wagons, or cold enclosures like frozen storage. As in UAE rail transport does not exist, so it has got a relevant drawback for the company, as company has to stick on road for short routes and even routes between states of UAE and which is very much expensive and increases the operational cost. KOJ strategically manage the procurement, movement, and storage of materials, parts and finished inventory through the organization and its marketing channels. Essentially from companies’ angle, there are two categories, initially inbound logistics, i.e., handling goods that are brought into the company, through road transport and storing and making them available. Another main phase is the outbound logistics, taking the cargo or the goods through channels, and is being done with considerable effort to various parts of the world as per the customer requirements. F. The Challenge Faced by Organizations In today’s world, competence is taking on new dimensions. The ability to compete is being determined by the degree of responsiveness to customers and key issues handling. How fast you deliver the goods/ products, what the price paid by customers and what value customer is getting throughout the service is considered in a schematic and ordered way. Markets are quick demanding and customization of each logistics activities is essential for each customer, and has become the essential factor in logistics management.

KOJ faces lot of ups and downs in each operation and improves operation on each situation while dealing with each customer. KOJ dominant improvement methods used are: i. What are the customer expectations? 25

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Effectiveness of Logistics Management in KOJ, Dubai ii. How are your competitors performing in each aspect of operations? iii. Determining the gaps in each phase and try to fill it. G. Economic Ordering Quantity (EOQ) Efficient order quantities consider the Purchase Order Cost (POC), the Annual Demand rate (AD), the Inventory Carrying Rate (ICR), and Unit Inventory Volume (UIV). Large Order Quantities yield high inventory levels and high inventory carrying costs but fewer orders and lower ordering costs. High ordering costs and demand rates suggest large order quantities. High ICRs and high unit inventory values suggest small order quantities. Generally during research the analysis shows, few organizations believe EOQ analysis is outdated and quite few with enhanced focus on it. There is relevant need for EOQ in this era. EOQ analysis should be completed as a part of any inventory strategy. The analysis suggests appropriate reordering intervals for all items each organization is handling. Competitors focus on reducing the costs of placing purchase orders. The lower the purchase order cost, the more economical it becomes to order in small increments and the less inventory will be there in the system. The purchase order costs is typically dominated by the labour and paperwork costs of planning, negotiating, executing and tracking purchase orders. Large number of organization extent to which these functions can be automated via automated purchase order planning, e-procurement, online catalogs, online bidding and online exchanges, is the extent to which inventory levels and lost sales costs may be reduced in the supply chain and there to the efficiency of logistic operations.

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Effectiveness of Logistics Management in KOJ, Dubai

2.3 STUDIES ON INVENTORY, BACK ORDER, LOST SALES, STOCK OUTS, PACKAGING & PACKAGING MATERIALS, DOCUMENTATION FROM KOJ A. Inventory Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory are held in order to manage and hide from the customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials. There are three basic reasons for keeping an inventory: i.

Time - The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amount of inventory to use in this "lead time"

ii.

Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.

iii.

Economies of scale - Ideal condition of "one unit at a time at a place where user needs it, when he needs it" principle tends to incur lots of costs in terms of logistics. So Bulk buying, movement and storing brings in economies of scale, thus inventory.

B. Back Order A company having to back order an item that is out of stock will incur expenses for special order processing and transportation. The extra order processing traces the back orders movement, in addition to the normal processing for regular replenishments. The customer usually incurs extra transportation charges because a back order is typically a smaller shipment and often incurs higher rates. The seller may need to ship the back ordered item a longer distance. The seller may need to ship the back order by a faster and more expensive means of transportation. We could estimate the back order cost by analyzing the additional order processing and additional transportation expense. If customers always back ordered out of stock items, the seller could use this analysis to

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Effectiveness of Logistics Management in KOJ, Dubai estimate the cost of stock outs. The seller could then compare this cost with the cost of carrying excess inventory. C. Lost Sales Most companies have competitors who produce substitute products, and when one source does not have an item available, the customer will order from another source. In such cases the stock out has caused a lost sale. The seller’s direct loss is the loss of profit on the item that was unavailable when the customer wanted it. Thus, a seller can determine the direct loss by calculating profit on one item and multiplying it by the number the customer ordered. E.g.: If the order was 100 units and the profit is 10$, the loss is 1000$. If the effort is made by a sales man and if the effort is wasted and in that sense it is an opportunity loss. Whether including such a cost is valid would depend upon whether the company uses sales people in its marketing effort. Another aspect is determining the amount of a lost sale may be different and difficult in certain circumstances. Numerous companies customarily take orders by telephone. A customer may initially just enquire about items availability without specifying how much is desired. If an item is out of stock, the customer may never indicate a quantity and the seller will not know the amount of the loss. D. Stock out Cost incurred to a firm when current inventory is exhausted for one or more items. Lost sales revenue costs are incurred when the firm is unable to meet current orders because of a stock out condition. E. Packaging and Packaging Materials Mainly this is a main division in warehouses. Packaging interacts with the logistics system in number of different and important ways. The size of and protection afforded by the package affect the type of materials handling equipment used and the level of product

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SJCET School of Management, Palai

Effectiveness of Logistics Management in KOJ, Dubai damage incurred. The package has an impact on the stacking height of the product in the warehouse and thereby on the utilization and cost of the warehouse. Packaging is quite important for effective damage protection, not only in the warehouse but also during transportation. Packaging may contribute nothing to a products value but its influence on logistics costs is considerable. Packaging size may affect a company’s ability to use pallets or shelving or different types of materials handling equipment. Many companies design packages that are too wide or too high for efficient use of either a warehouse or transportation carrier. So, coordinating packaging with warehousing and with transportation is quite important. We need to note, poor packaging can contribute to higher handling charges and result in lower future sales if the goods arrived damaged. Two types of packing exist: consumer packaging and industrial packaging. Consumer packaging provides information important in selling the product. i.e. giving the product most visibility when it comes with others on the retail shelf. On the other hand industrial packaging is of primary concern to the logistics. The packaging protects goods that a company will move to store in the warehouse and also permits the company the effective use of transportation vehicle space. Materials generally used in previous years was wood and other harder materials for no breakage, but it added considerable shipping weight to the transport and it further increased transportation cost. Generally new era has come up with efficient packaging materials, organization nowadays use most cost effective packaging with focus on security and minimizing cost. Cushioning materials protect the product from shock, vibration, and surface damage during handling. Cushioning materials include shrink wrap, air bubble cushioning, cellulose wadding, and plastics. Companies often use shrink wrap for consumer packaged goods. Packaging also helped reduce pilferage and product tampering in warehouse and during transport. Air bubble cushioning is made of plastic sheets that contain air pockets.

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CHAPTER 3 RESEARCH METHODOLOGY

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3.1 RESEARCH Research means search for knowledge. It aims at discovering the truth. It is the search for knowledge through objective and systematic method of find solution to problems. Therefore research is a process of systematic and in-depth study or search of any particular topic, subject or area of investigation backed by collection, computation, presentation and interpretation of relevant data. Research is necessary to examine the extent of the validity of the old conclusions or to find out some new facts and generating new ideas in connection with the existing ones. A research finding may give rise to new problems which may require further research. So a research leads to another research.

3.2 MAIN OBJECTIVE OF THE RESEARCH The main objective is to find the effectiveness of logistic management in Kamal Osman Jamjoom and also to find how the employees do their work in KOJ.

3.3 RESEARCH PROBLEM The need for the study was to assess the effectiveness of Logistics Management in the KOJ. The organization also needs relevant data as to how it can improve its management policies in order to gain future market share.

3.4 RESEARCH METHODOLOGY Research methodology is a method that can be used to solve the research problem. It provides various steps that can be adopted by the researcher in studying his research problems. It includes not only the research but also considers the logic behind those methods. Research methodology deals with the objectives of a research study, the method

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Effectiveness of Logistics Management in KOJ, Dubai of defining the research problem, the type of hypothesis formulated, the type of data collected, methods used for collecting the and analyzing the data etc.

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3.5 CENSUS SURVEY All items in any field of inquiry constitute a universe or population. A complete enumeration of all items in the population is known as Census Enquiry or Census Survey. It can be presumed that in such an inquiry, when all the items are covered, no element of chance is left and highest accuracy is obtained. This type of inquiry involves a great deal of time, money and energy. Kamal Osman Jamjoom Trading LLC is a multi-channel retail group or one of the leading retailers in the Middle East consists of more than 500 retail stores and more than 1000 of employees. But in order to find the effectiveness of logistics management in KOJ, we want to take the information’s only from the employees of logistics department. So I think Census enquiry will be the most appropriate method of finding a solution to my research problem. So, I used Census Inquiry for the study, as I am interested in getting an inexpensive method to find out the truth. Logistics Department in KOJ Consists of 45 employees. So I took the opinions of all the employees in this department with the help of a questionnaire. In this way I can clearly state that the Effectiveness of logistics management in KOJ is excellent or not.

3.6 METHOD OF DATA COLLECTION Primary Data: The major tool used was interview with logistic manager, supervisor and a questionnaire was developed focusing various aspect. Secondary Data: Various books of Logistics Management for literature reference, Internet Web Portals, Websites of the firm, Company shipping and warehousing manual.

3.7 QUESTIONNAIRE METHOD This is an important and very popular method of data collection. This is adopted by individuals, organizations and Government. In this method a questionnaire is prepared and sent to respondents. The questionnaire when sent to the respondents, a request is 33

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Effectiveness of Logistics Management in KOJ, Dubai made that the questions should be answered and returned. The success of this method largely depends on the proper drafting of questions. Drafting questionnaire required a great deal of skill and experience. 3.7.1 CONSTRUCTION OF QUESTIONNAIRE Following steps are to be followed in constructing a questionnaire. 1. Explaining the model and specifying the variables to be measured. 2. Framing of a questionnaire 1. Form of a questionnaire 2. Question sequence 3. Question formulation and wording 3. Pilot survey or Pre-testing 4. Printing of the questionnaire 5. Methods for administering questionnaire 3.7.2 ESSENTIALS OF A GOOD QUESTIONNAIRE 1.

The person conducting the survey must introduce himself and the objects of the survey. There must be a covering letter along with the questionnaire. The letter should state the purpose of enquiry. It should assure the respondent that these answers will be kept in strict confidence of questions.

2.

The number of questions should be kept to the minimum. The number of questions should be limited to the object and scope of the investigation.

3.

The questions should be as short as possible and be simple to understand. If the number of questions is too large, informants choose not to fill up the questionnaire. The questions requiring calculations should be avoided.

4.

The questions must be arranged in a logical order so that a natural and spontaneous reply follows.

5.

The question should be clear. As far as possible simple words should be used.

6.

As far as possible personal questions should be avoided. 34

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7.

As far as possible the questions should be such a nature that they can answered easily in ‘Yes’ or ‘No’ or in a number.

8.

Questions which are unduly inquisitorial should be avoided.

9.

The questions should be such that they elicit the information required for the study of the problem.

10.

Instructions in regard to the filing up of the form must be given in the

questionnaire itself. 11.

The questionnaire must be of convenient size and easy to handle.

12.

Questionnaire should look attractive.

3.7.3 ADVANTAGES 1.

There is low cost even when the field of enquiry is very large.

Therefore for covering vast area this method can be applied. 2.

Answers are furnished by the respondents directly. So the

personal bias of the interviewer is absent. 3.

Saves time because many respondents can be approached

simultaneously. 4.

The questionnaire method is useful for collecting information

about a particular type of problem since in the questionnaire various points can be included. 3.7.4 DISADVANTAGES 1. Most of the respondents are lazy and so they do not care to answer and return the questionnaire. 2. The method will be successful only if the respondents are educated and cooperative. 35

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Effectiveness of Logistics Management in KOJ, Dubai 3. The respondent’s answers may not be adequate. The replies will be ambiguous and there may be many omissions of replies. 4. The respondents may take much time to return the questionnaires.

3.8 TYPES OF ANALYSIS a) Descriptive Analysis Descriptive analysis is largely the study of distributions of variables. The variables are associated with the characteristics of items under study. In such analysis, there is the study of one variable, two variables or more than two variables, but largely of one variable. b) Inferential Analysis This is concerned with drawing inferences and conclusions from the findings of the study. It enables us to make decisions and draw conclusions from studies which could otherwise be not feasible, because of large size of the universe or of high costs of a census survey.

3. 9 STATISTICAL TOOLS  Percentage Analysis The purpose of using ratio or percentage is to simplify the problem of comparison. Percentages reduce two distributions to a common base, thus make comparison simple.  Bar Diagrams A bar chart or bar graph is a chart with rectangular bars with lengths proportional to the values that they represent. The bars can be plotted vertically or horizontally.  Pie Charts 36

SJCET School of Management, Palai

Effectiveness of Logistics Management in KOJ, Dubai A pie chart (or a circle graph) is a circular chart divided into sectors, illustrating proportion. In a pie chart, the arc length of each sector (and consequently its central angle and area), is proportional to the quantity it represents. When angles are measured with 1 turn as unit then a number of percent is identified with the same number of centiturns.

CHAPTER 4 ANALYSIS AND INFERENCES

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DATA ANALYSIS AND INFERENCES The data collected through the questionnaire are analyzed to know about the respondents opinions about various particulars asked in the questionnaire. The data collected from the questionnaire was entered into spread sheet and the data has been interpreted. The questionnaire comprises of fourteen questions with subparts for each. The topics covered are with decisions of each operational area, employee numbers of each firm, profitable area in operation, catering location, service offering, organizational effectiveness, inventory, location, product availability and customer satisfaction. Analysis of data is considered to be highly skilled and technical job which should be carried out only by the researcher himself or under his close supervision. It is through systematic analysis that the underlying features of the data are revealed and valid generalizations are arrived at. Facts and figures never speak for themselves. Only by means of organizing, analyzing and interpreting the research data, their salient features, inter-relationship, cause and connection are brought out. Analysis of data therefore means critical examination of the data for studying the characteristics of the object under study and for determining the patterns of relationships among the variables relating to it using both quantitative and qualitative methods.

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Effectiveness of Logistics Management in KOJ, Dubai 1. The various Logistics Services offered.

Sl. No.

Service

Percentage

1.

Freight

11.11

2.

Warehousing

33.34

3.

Shipping

40.00

4.

Network design

11.11

5.

Other value adding services

4.44

Table 2

S e r v ic e s o ffe r e d

11.11

4.44

1 1.1 1 F re ig h t W a re h o u s in g S h ip p in g 3 3 .3 4

N e t w o rk d e s ig n O t h e r va lu e a d d in g s e rvic e s

40

Fig. 7

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Effectiveness of Logistics Management in KOJ, Dubai The pie chart above shows the service offer of the organization. The chart shows that about 40% of the service offered belongs to Shipping and next place is for Warehousing. Its main services is Shipping and Warehousing. Both Freight and Network design contribute only 11 % respectively. Other service includes value adding, which represents 4% of the sample. It includes packaging, labeling etc.

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Effectiveness of Logistics Management in KOJ, Dubai 2. The brand which makes KOJ, more profitable.

Sl. No.

Brands

Percentage

1.

Early Learning Centre

8.89

2.

Mikyajy

42.22

3.

Ulle popken

4.

Nayomi

37.78

5.

The Body Shop

4.44

6.

List

0

7.

Bebe

0

8.

All of these

0

6.67

Table 3

P ro fita b le B ra n d s 0 0 4.44

6.67

E arly Learning C entre

8.89

M ik y ajy U lle popk en N ay om i The B ody S hop

37.78

42.22

Lis t B ebe

0

A ll of thes e

Fig. 8

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Effectiveness of Logistics Management in KOJ, Dubai According to the above pie chart, the most profitable brand in KOJ is Mikyajy followed by Nayomi. The majority of the company’s profit is from both these brands. These brands are KOJ’s own brands. But Ulle Popken, List and Bebe are the least performing brands. Out of 7 major brands only 2 brands are performing well.

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Effectiveness of Logistics Management in KOJ, Dubai 3. Company receives the most number of shipments/consignments from different countries.

Sl. No.

Countries

Percentage

1. 2.

United States of America United Kingdom

0 28.89

3.

Russia

4.

Germany

2.22

5.

Italy

17.78

6.

France

17.78

7.

China

33.33

8.

Philippines

0

9.

Srilanka

0

10

All of these

0

0

Table 4

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United S tates of A m eric a United K ingdom

0

Rus s ia

28.89

33.33

G erm any Italy F ranc e

17.78

17.78

0

China

2.22

P hilippines S rilank a A ll of thes e

Fig. 9 The pie chart above shows KOJ’s catering location in the world. Locations mentioned as other is company catering frequently with repeat orders of customers. Around 33% of the shipment is from China and from United Kingdom. Chart shows KOJ can enter European markets and other favorable market is Africa. This can be looked into very seriously in future business.

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Effectiveness of Logistics Management in KOJ, Dubai 4. a) The area of activity KOJ felt the best

Sl. No.

Service

Percentage

1.

Freight

11.11

2.

Warehousing

33.34

3.

Shipping

40.00

4.

Network design

11.11

5.

Other value adding services

4.44

Table 5

1 1.1 1

4.4 4

1 1.1 1 F re igh t W a re h o u s in g S hip p ing 3 3 .3 4

N etw o rk d e s ig n O the r va lu e ad d ing s e rvic e s

40

Fig. 10

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SJCET School of Management, Palai

Effectiveness of Logistics Management in KOJ, Dubai The pie chart above shows the best activity which organization feels in their operations. The pie chart shows 40% of employees in the organizations have chosen shipping in the predominant area, followed by 33% of warehousing. Another significant area is freight and network design with the support of 11% of employees. Most of the organizations have a mixture of all the activities in their day to day activities bring in more revenue and the best of their activities, which includes packaging, labeling etc.

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Effectiveness of Logistics Management in KOJ, Dubai b) The division of logistical activity earns the maximum rate of profit.

Rate Freight

5

Warehousing

7

Shipping

8

Network Design

3

Any Other (specify)___________

1

Table 6

R ate 9 8 7 6 5 4 3 2 1 0 Any Other (specify)________ ___

Network Design

Shipping

Warehousing

Freight

R a te

Fig. 11

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Effectiveness of Logistics Management in KOJ, Dubai The shipping division earns the maximum profit followed by warehousing. Both shipping and warehousing are the key functional areas in KOJ. The company concentrates more on shipping and warehousing. The rate assigned to shipping and warehousing is 8 and 7 respectively. Network design got least rate only 3. If the company concentrates more on freight and network design the profitability of the company will increase.

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Effectiveness of Logistics Management in KOJ, Dubai 5. a) The locations to which the company caters the service. Sl. No.

Country

Percentage

1.

Asia

0

2.

Kingdom of Saudi Arabia

3.

Dubai

40

4.

Quatar

4.44

5.

Africa

0

6.

Abu Dhabi

7.

State if any other location

44.44

11.12 0

Table 7

C o u n try

1 2 3 4 5 6 7

Fig. 12

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Effectiveness of Logistics Management in KOJ, Dubai Out of its total business about 44% is from Kingdom of Saudi Arabia and 40% from Dubai. That is KOJ concentrates more in Gulf countries. If KOJ concentrate also in European countries the profitability and market share will increase. The market in Asian and European countries is vast and KOJ can easily enter into these countries.

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Effectiveness of Logistics Management in KOJ, Dubai b) Rating of the service offered by the organization.

Excellent Ease of Service Client handling Customer Service Website Information Employee Efficiency

Good

Fair

Poor

5

8

32

0

Very Poor 0

Total

4

16

20

5

0

45

3

22

20

0

0

45

2

25

13

5

0

45

3

30

12

0

0

45

45

Table 8

120 100 E m p lo y e e E ffic ie n c y

80

W e b s ite In fo rm a tio n 60

C u s to m e r S e rvic e C lie n t h a n d lin g

40

E a s e o f S e rvic e

20 0 E x c e llen t

G ood

F a ir

P oor

V e ry P o o r

Fig. 13

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Majority of the employees is in the opinion that ease of service in the company is fair. They also rate client handling as fair. But the company is good at customer service, for providing website information and also in employee efficiency. The overall performance of the company is good..

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Effectiveness of Logistics Management in KOJ, Dubai 6. a) The average elapsed time between the time of receiving order from the customer to the firm to release the item from the ware house and the time the item is ready for moving from the ware house with proper documentation. 2009-10 5

Elapsed time

2010-11 3

Table 9

E la p s e d T im e

5 4 3 E l a p s e d ti m e 2 1 0

1

2 Ye a r Fig. 14

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The above chart shows the physical verification check and average elapsed time between order receiving and delivery of the service. Average elapsed time between order receiving and delivery of service has an average of 3 days. In 2009-10 average time between the time of receiving order from the customer to your firm to release the item from the ware house and the time the item is ready for moving from the ware house with proper documentation is 5 days and in 2010 -11 its reduced to 3 days. Even though there is shortage of stock, it meets its demand in time. It shows the efficiency of the company.

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Effectiveness of Logistics Management in KOJ, Dubai b) Any shortage / excess of stocks noted, in the last verification done. KOJ faces shortage of stocks. They are not able to meet demand for their products. Every organization have to know what to buy, when to buy it and how much to buy and also need to track your inventory--whether manually or by computer--and use that knowledge to hone your purchasing process. Business's basic stock should provide a reasonable assortment of products and should be big enough to cover the normal sales demands of your business. When calculating basic stock, consider lead time--the length of time between reordering and receiving a product. Insufficient inventory means lost sales and costly, time-consuming back orders. In some situations, you could even end up buying emergency inventory at high prices. One way to protect from such shortfalls is by building a safety margin into basic inventory figures. To figure out the right safety margin for your business, try to think of all the outside factors that could contribute to delays, such as suppliers who tend to be late or goods being shipped from overseas. Avoiding excess inventory is especially important for owners of companies with seasonal product lines, such as clothing, home accessories, and holiday and gift items. These products have a short "shelf life" and are hard to sell once they're no longer in fashion.

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Effectiveness of Logistics Management in KOJ, Dubai 7. a) Preference for customer complaints given by the organization.

Percentage

Yes

No

84.44

15.56

Table 10

1 2

Fig. 15

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Effectiveness of Logistics Management in KOJ, Dubai The above chart shows average number of complaints. KOJ give more importance to customer complaints. 84% of the employees supporting this argument. Hence organization should try to reduce the complaints arising. This can be achieved by increasing new modern methods and facilities to customers. Organization need to heavily focus onto the issue to reduce number of complaints arising in operations, customer satisfaction and other similar areas. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.

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Effectiveness of Logistics Management in KOJ, Dubai b) The organizations follow up to retain the customers Sl. No.

Method

Rating

1

Phone Call

10

2

New Service Intimation to Customers

10

3

Gifts

3

4

Email

10

5

Fax

5

6

Other methods if any ________________

4

Table 11

Customer Retention 12

Rating

10

8 6

Series1

4

2 0 1

2

3

4

5

6

Method

Fig. 16

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Effectiveness of Logistics Management in KOJ, Dubai The above chart shows preference of complaints and how organization follow up to retain customers. There are no guarantees, but one of the best customer retention strategies is to provide superior customer service. And that means listening to the customers. Its been noted that cent percent of organization follow up with customers for customer complaints. Most of the preferable methods for contacting customers for new service intimation and customer realtionship are telephone, email and other methods like marketing / sales, customer office visit etc. The least preferred are gifts and fax with 3 and 5 in rating. A company’s ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace.

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Effectiveness of Logistics Management in KOJ, Dubai c) Proper system of handling customer complaints?

Percentage

Yes

No

100

0

Table 12 KOJ follows a proper system of handling customer complaints. The company always tries to reduce the number of complaints. If any complaints arise it solves within a minimum time. Listening to the voice of the customer and making process improvements based on that feedback so that the same complaints don’t recur. A complaint is any measure of dissatisfaction with your product or service, even if it’s unfair, untrue, or painful to hear! Complaints may be about: •

Service Content, Delivery or Quality

•

Personnel

•

Requests

•

Communication

•

Response Time

•

Documentation

•

Billing

•

Follow Up

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Effectiveness of Logistics Management in KOJ, Dubai d) The system of contacting customers after completing all the formalities of an order, to enquire whether they have any complaint and to ascertain the level of satisfaction the customer enjoyed.

Percentage

Yes

No

100

0

Table 13

Customer satisfaction is very important for the success of any organization. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Organizations need to retain existing customers while targeting non-customers. Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. In KOJ they give preference to handling customer complaints. They try to reduce the number of customer complaints. They always contact the customers and check whether they are satisfied or not.

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Effectiveness of Logistics Management in KOJ, Dubai e) Number of customers who done business with KOJ last year. The number of customers availed the services repeatedly. The customers who avail same services from others (competitors) as well. According to past records available in the Shipping section number of customers is 485 and in warehousing its 130. Shipping and Warehousing are the two major services which help to earn more profits in KOJ. They gave preference to customer satisfaction by providing quality services. All the customers that is 485 in shipping and 130 in warehousing all are repeatedly avail the services from KOJ. And also no one avail the same service from its competitors. It shows the level of customer satisfaction in KOJ. They can easily attract more and more customers as the existing customers are satisfied with their services. Because satisfied customers are considered to be brand ambassador of every organization.

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CHAPTER 5 FINDINGS

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FINDINGS 

The quality of service as rated is above average in the case of KOJ compared to industry. But the organization should continuously try to improve the quality aspect as is being done by other players in the field. This is quite a necessity as otherwise the figures may fall down. Continuous improvement is a must so that the customers or the distributors will prefer Kamal Osman Jamjoom LLC as their first choice in Logistics industry category. This can be achieved with more modern equipments and proper guidance to employees and the rating can go high to excellent service.



There is a good relation between management and employees and they are always trying to maintain that relation.



Pricing of service is satisfactory, which organization can further enhance with proper management. Present employee strength is satisfactory compared to other organization but more focus should be made to documentation areas where the firm has lesser employees compared to other organizations.



The company deals with branded and quality products so that it increases the company’s profit and reputation.



Network Design is an area that the organization should not start immediately due to low rate of returns is recorded as the industrial average. Design of new warehouse areas and proper allocation of work with more sophisticated software facility can be done through outsourced way during implementation.



KOJ follows Just in Time concept or Zero warehousing concept to eliminate waste, improve quality, improve efficiency and improve company’s Return on Investment. 64

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

Decision making is excellent for organization and the employees done it very well.



Operation with other logistical providers should be given more preference to achieve cost effectiveness.



The Organization is well occupied with advanced technologies.



The management is always trying to keep environment clean and also take quality check to meet the standard fixed.



The organization client handling, ease of service and customer service is having remarkable difference from the industry standards. The main focus need to be on the ease of website and employee efficiency. From the data we can infer that areas which need to be improved are Website and employee efficiency. Employee efficiency can be improved with a proper Human Resource department.



Merchandise planning in KOJ is making sure the right merchandise at the right place at the right time.



The management is always keen to appoint efficient and knowledgeable persons.



Service offer presently has good impact with other organizations service offers. The remarkable areas are Freight, Cross docking, and Value Adding. Company can further enhance operations of Value Adding through proper methods.

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

Tactical decisions are mostly followed by organizations followed by operational and a few strategically.



Freight and Value Adding is considered to be the best service which organizations offer in industry. Another major observation is about Network Design, it has low value and no organization feels it to be lucrative area in industry.



Organization profit is good compared to industry standards for warehousing. This shows a difference of 2 points from industry standards. Whereas for Cross Docking it shows same as to industry standards.



Commenting on ease of service, website and employee efficiency, the organization needs to further improve.



The efficient methods for retaining customers are Phone, Email, Sales Agents and least preferred methods are Fax and Gifts.



KOJ implemented consolidation of shipments from different suppliers in a country in order to save cost and reduce delay.

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CHAPTER 6 RECOMMENDATIONS

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RECOMMENDATIONS  Workers Participation in Management (WPM) helps to increase the commitment of employees towards the organization.  Organization can initiate Human Resource Department to further enhance employee motivation. This will have favourable impact for the operational as well as total strenghtening of organization.  Organization can further strenghten the employee strength in the documentation department. This can lead to further rapidity for operations.  Implement new brands in the market.  Better work environment like training, clarify doubts, air conditioner, recreation facility etc. should be provided for every class of employees.  The performance of employee should be appraised in order to formulate proper promotional policies and also to increase the scale of salaries and wages.  Increase the number of stores in accordance with the population.  In order to attract more customers’ new advertisement strategies should be implemented

for each brand.  Extend the size of warehouse in order to keep more products.  Additional funds can be allocated for the R&D activities.

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Effectiveness of Logistics Management in KOJ, Dubai  Decision making is quite effective and can be followed for future operations.

 Operations with other logistical providers need to be enhanced further for operational effectiveness, more focus should be given to customer delight and cost effectiveness.

 Client handling and service need to be followed in the same way and can be

further enhanced with more support. This can be achieved by proper guiding of employees and other workers in the logistical area.  Quality of service can be further enhanced to increase customer delight.

 KOJ can enter other markets into like kuwait,Behrain,Oman etc where the

potential of market is very high for Logistics industries and can even diversify to other areas in logistics.

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CHAPTER 7 CONCLUSION

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Logistics is a process which interfaces and interacts with the entire company and with external companies, vendors, customers, carriers and more. Logistics is responsible for the movement of products from your vendor’s right through to the delivery at your customer's door, including moves through manufacturing facilities, warehouses, and third-parties, such as re packagers or distributors. It is not shipping and receiving, nor is it traffic or warehousing. It is more. Logistics must make work effectively. This is required by the customers and, in turn, by the company. For effective logistics, there are five key issues— 1. Movement of product. This is often the way that logistics is viewed in many companies. Products moves should complement the corporate strategy. If the emphasis is on cost reduction, lower inventories, customer service or whatever, then products must move in a way that is consistent with the emphasis. Product must also flow, not just move, from, to, between and among vendors, manufacturing sites, warehouses and customers. If it does not flow, then there is not a supply pipeline. Instead there are imbalances in inventories with components and finished goods not being where they should be.The movement may be extremely broad in geographical scope. 2.Movement of information. It is not enough to move product and materials. We must know where they are. We must know what inventories are where and if critical action is required. We must know what orders are coming in and when they must be delivered. Information--timely and accurate-- is vital for sound decision-making.The information must flow between the company and its suppliers, carriers, forwarders, warehouses and customers. It must also move internally among purchasing, customer service, logistics, manufacturing, sales, marketing and accounting. And doing this goes beyond Email, faxes and phone calls.

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Effectiveness of Logistics Management in KOJ, Dubai 3. Time/service. The ability to respond to the dynamics of the global marketplace--changing forecasts, customer requirements, new product introductions, new sourcing, and how to manage all these changes--must be done quickly. Raw materials and components must be ordered and arrive completely, accurately and quickly. Orders must be filled completely, accurately and quickly. It is no longer months or weeks for lead times. It may not even be days. Hours may decide customer service, competitiveness and value-added. Back orders are not tolerated. If your company cannot properly respond, your customers will look for those who can. And the more diverse the geographical scope of vendors, manufacturing, warehouses and customers, the more critical is time. Distance means time. Yet time delays are not acceptable. Movement of product and movement of information show their impact here. 4. Cost: Cost is the key measure by which logistics effectiveness is often measured. Freight, warehouse labor, public warehouse charges and other items on the P&L. Or inventory, a balance sheet item. Cost control, containment, and management is important for corporate profitability. Fiscal stewardship is a duty of all managers. The highest price does not mean the best service, and it may not be the service you need. Nor does the lowest price necessarily meet your needs. Cost has a relation to service. They go hand in hand. As you define your service against your costs or costs against service, the give and take develops into your operating costs and budgets. Then you have to make sure that the cost can be managed. Otherwise costs can go out of control, or seem to.Air freight is quoted in the currency of the origin country. Ocean terminal and other accessorial origin charges are also in origin country currency. Warehouses in other countries will invoice in origin currencies. 5. Integration. Within the company, between company and their customers and between company and thier vendors. Integration--bringing it all together--within the company is vital. Logistics is a process. Effectiveness requires that each relevant element of the organization do its 72

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Effectiveness of Logistics Management in KOJ, Dubai part. However there is a problem with doing this. The company must share their logistics vision and plan with them. This sharing and understanding will better enable them to cooperate with and assist . They may be able to offer ideas and gain sharing to further improve the logistics effectiveness and the key issues with it. Integration with customers is important. Logistics is a process which runs from the vendor's door through to the customer's. It interacts with almost every group within the company and with many companies outside the company, including its customers. Effective logistics revolves around five key issues--movement of product, movement of information, time/service, cost and integration. Each of this is critical to the success of logistics and to creating value-added to the company and improving competiveness. The universe everyday is witnessing unimaginable growth in majority of the industries. The logistics and freight industry is one such industry that is rapidly growing. Worldwide logistics industry is distinguished by fast technological advances and is growing rapidly than most other industries over the past years. With stiff competition around, the company is likely to reduce the profitability but with proper management of operations and by proper customer desired services and also effectively utilizing its alliances it can maintain and improve the performance. Joint operational ventures for developing the customized services for its steady growth. The organization has enormous opportunities to grow beyond the expectations.

Conclusion By doing this research, I am concluding that Kamal Osman Jamjoom, one of the leading retailers in the Middle East is taking forward their logistics department in the most efficient way resulting in cost effective modes and distribution of their brands to their respective regions and stores. Employees are treated professionally which is motivating them their by resulting in increase in productivity.

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BIBLIOGRAPHY •

Logistics and supply chain management , cases and concepts-by G Raghuram, N Rang raj

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Logistics Management An Australian framework - by peter Gilmour

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Building competitive operations planning and logistics -by APICS ,Association of Operations Management

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Operations Management -by Norman Gaither, and Greg Frazier

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The geography of logistics, Logistics management distribution report- by Gooley TB

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Strategic Management an integrated approach-by Charles w Hill and Gareth r Jones

WEBSITES •

http://www.kojhr.com

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http://www.kojamjoom.ae/

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http://en.wikipedia.org/wiki/Kamal_Osman_Jamjoom

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http://www.youtube.com/watch?v=SKU7Qq0RJj0

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http://www.kojfranchise.com/

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www.wikipedia.com

INTERVIEWS •

With Anil Alex, Logistics Manager (UAE &GULF).

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With Edwin Cenedoza, Asst.Warehouse Manager.

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With Shanmugham Sasikumar, Supply & Distribution Supervisor.

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ANNEXURE-1

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