Landmark Store Chain-Dubai Business Profile - Assignment Example

Student’s Name Professor’s Name Course Name Date Logistics Case Study Analysis: Landmark Group, Dubai Question 1: Executive Summary Business Profile Having been founded in the early 1970s, Landmark Group has grown to be one of the most successful retail ventures within the Middle East. It boasts of 900 stores; employing more than 31,000 employees that are positioned in such other countries like India, Pakistan and Egypt. The retail Group has diversified operations that have been directed towards meeting different market needs. These diversified business segments have all been a greater contributing factor to the Group’s market-leading position with portfolios covering areas like footwear and accessories; fashion; children’s clothing furniture and home décor and, also furniture. Of particular interest, the Group has also certain distinctive interests in indoor entertainment centers especially for children and provision of specialty good offerings as well as budget hotels. The significant level of growth within the numerous segments and thus, the Group has a whole can be noted by the 25% annual growth as well as the numerous trophies and awards bagged by the company. Current Supply Chain & Issues at Hand The present supply chain of this company is characterized by different number of transportation models that include; sea freight; air freights for high-priority movements and critical nature of the underlying shipment; and, use of roads networks depending on the feasibility and nature of cargo involved like in the case where fragile cargo should be moved in order to make sure that there is less in-transmit damages. After arriving from different sections of the world and into the regions, the Group’s products are moved to one of the most notable Landmark’s logistic facilities that involve regional and central distribution centers in Jebel Ali Free Zone as well as origin consolidated freight stations (CFS). In essence, the Group has adopted a combination of 3PL model and in-house to effectively manage its overall supply chain operations. The aspect of transportation is outsourced and the service providers are tasked with the responsibility of handling transportation and border-clearances. Warehousing activities are however; conducted in house given that there are already set up infrastructure and skills. However; the challenges within this supply chain include; inefficient development of right infrastructure at the right time in order to handle the underlying growth in business and volumes; there are also issues related to inefficiency in meeting country specific regulations as well as requirements on both product standards and documentation procedures thereby resulting to significant impact of lead times of product delivery process; issues attributed to both port and boarder congestion; and, inflationary pressures that contributes to enormous increase in the overall total cost of the supply chain. Possible Remedies Adopted to Offset Supply Issues To make sure that the aforementioned issues does not result to a halt in supply chain operations and reduce possible lead times and cost, Landmark Group’s management has ensured to constantly re-modify their existing network designs; incorporate top notch IT systems for purposes of achieving high efficiency and effectiveness; and, also adopted a supply chain process improvement cell that evaluates world’s best supply chain activities and later adopting it. Question 3 To ensure that the Landmark Store Chain-Dubai was efficient in product delivery thus ensuring to satisfy its current existing customer base; then it would be compelled to adopt a store restocking system through a model that allows direct store delivery from the manufacturers themselves. It is important to note that the current model only receives the stocks from different manufacturers into the region and transported to a single logic facility that include; regional and central distribution centre in Jebel Ali Free Zone as well as consolidated freight stations. It is from this region that the products are delivered to different store positioned in different countries where problems arises as a result of port and border congestions as the transportation service providers try to clear with border issues and regulations. This, in turn, results to increased lead time and costs as inter-border stores fail to receive and shelf products on time. However, in the event that these stores are allowed to be replenished by direct manufacturers will result to reduced costs especially in terms of lead times and transportation fuel expenses. Certainly, the store chain in Dubai can increase the level of existing responsiveness by; first adopting a local capacity strategy so that the store can provide locally-manufactured products while also; ordering for other foreign-made products on demand-basis. It is important to note that this strategy allows for some of the products being stored as raw materials and assembled whenever an order is placed. However; the fundamental risks associated with this strategy lies in the fact that capacity is indeed decentralized resulting to possible inefficient utilization process. Secondly, the store can opt for local inventory approach where most, if not all, of the inventories are made available and accessible at the store within any given moment in time. This, in effect, will permit the aspect of centralization of product delivery capacity hence satisfying customers’ demand almost immediately. However, the major risk attributed to this approach rests with obsoleteness of inventories and the need for expanding the store’s space in order to accommodate storage needs at any given moment in time, which in fact is a costly affair as it entails increasing the expenses paid out as rent. Consequently, the Dubai store chain can opt for the rapid replenishment option; which ensures that a rapid storage facility is created in order to supply products to the store whenever they are needed. The strategy is seen to foster the aspect of centralization of the product delivery capacity and maintain low-levels of inventory at the chain however; the major risk associated with this approach rest with enormous increase in the cost of replenishing and receiving products. Question 3: Enhancing Landmark Store Chain –Dubai’s Supply Chain Strategy Facilities Location: the store chain can adopt two-level facilities that should be composed of distribution centers and now the store chain. This way, the distribution centers will be sued to serve the store in Dubai and thereby increase its efficiency rtes in relation to its responsiveness. These distribution centers should be relatively fewer in number in order to cut down on possible operational costs and they should at not particular moment in time hold inventories. Consequently, the number of stores in Dubai should be increased in order to keep the inventories at their respective shelves in order to be more responsive to customer’s immediate demands. Inventory Management: should also be executed at the two-levels mentioned. The store chain management should ensure that at the distribution centers there are no inventory storage spaces, which will result to its being highly efficient in ensuring to move them to the store chains. At the store chain, the level of inventories should be maintained on a daily routine while still making sure that there is always low level of inventories at any given moment in time. This can be achieved by embracing efficient marketing strategies like engaging in aggressive advertising as well as selling products at an affordable price and at a discount to trigger sales figures. Transportation; should be conducted at two-levels. The network should involve the first model that involves movement of stock from vendor to the distribution centre and, later from this distribution center to the store chain. It is important that the overall transportation network design should ensures to adopt road transport and that each of the outsourced trucks is replenished at the distribution center and used to deliver these stocks to more than store chain in Dubai at any given moment. Information Infrastructure; should consists of at least these components that include; a graphical order terminal (GOT) at every Dubai store; scanner terminals (ST) at each store and used for the purpose of conducting rapid inventory checks; POS register; and, store computers that should be utilized for processing information from the GOT, ST and different point of sales(POS). These store computers should be always connected to the chain’s network platform. It is crucial to note that adopting this design mechanism allows for easier and automatic data transmission to different places that include; suppliers, headquarters and distribution centers. Notably, this information infrastructure fosters a high degree of efficiency in operations and responsiveness to customers’ product delivery requirements. Works Cited http://www.arabiansupplychain.com/article-4003-logistics-case-study-landmark-group-dubai Read More