Operation Management Practice of Al Rawabi Dairy - Case Study Example

INTRODUCTION.

The Al Rawabi Dairy Company, established in 1989 majorly focusing on the dairy industry, which was a growing segment in the United Arab Emirates. The company headquarters is based in Dubai, the most significant business district in the United Arab Emirates. The society began with a herd of merely five hundred imported cattle from Germany and ten trails for the dispersion of the dairy products.

The company has proliferated over the recent years, and it has become one of the leading players in the dairy sector. The firm became the first in the United Arab Emirates to introduce the usage of plastic bottles in the packaging of merchandise. Innovation is the primary core of the company; therefore it has incorporated the use of technology in the production sector. In 1995, the firm became the first in GCC to introduce fresh juice in the market, so it made a milestone over its rivals in the marketplace. Moreover, it boasts of being a pioneer company that embraced the usage of technology since it is accredited for introducing pasteurized juices in the securities industry.

The dairy company has penetrated the Qatari and Omani markets in the period in which it has been operating in the dairy markets and fresh juices. In addition to that, the firm has diversified its products into other dairy products such as Nutree Boost and Super Milk. The company has received several accolades and certifications concerning their product-delivery. The unveiling of the new state-of-the-art juice and dairy plant in 2003 acted as a game-changer since the society was bringing out high caliber merchandise as compared to its rivals.

THE STRATEGY OF THE COMPANY

The company was established with a mission to develop quality juice and dairy products that promote a healthy lifestyle. The firm has adhered to its mission and purpose since it has invested heavily in machinery and equipment that will enable it to produce high-quality products to the consumers. It is, therefore, a leader in the refreshment market. The imagination of the company puts forward that the society aspires to become a dominant producer of dairy and fresh juice products in the marketplace and to create a performance-based environment where the consumers will maximize their potency. The goal is achievable since the company has made various significant steps that will enable it to achieve its full goals. The visual sensation and the mission of the company are only doable if the firm adheres to its core values.

The human resource section in the company plays a critical role since it will enable the firm to achieve its potential to the broadest. The human resource network of the company is expansive since the dairy company has been split up into various sectors such as dairy farming, processing division, administration and the logistics division. The company is of high standards; therefore it hires employees with the best qualifications are endorsed. Besides, the company has embraced the use of technology; thus the employees apply and are vetted online.

The company awards, most performing employees tokens and bonuses for the work performed. Its core values instill a feeling of teamwork and hard work thus the employees are prompted. Moreover, the recognition of the employees enables the employees to feel respected by the management. AlRawabi Company is indeed a market leader regarding employee appreciation.

3. FORECASTING

Hirschmann (2008), defines forecasting as the use of data from the past to determine future trends in the consumer markets. The company has taken up this policy to determine its consumer patterns and take precautions against economic shocks. The company data for prediction is inaccurate, so it should apply techniques such as the qualitative and the judgmental methods. The two methods will help the company in anticipation of consumer purchasing patterns and desires.

1. Qualitative methods

Involves the combination of analysis and opinions of consumers, directors, managers, and experts in areas where less historical data exist (Fildes, 2011). The technique is desirable for the company since the company products are numerous and encompass a vast marketplace where competition is stiff, and the dangers involved are numerous. The method has two approaches, namely the Historical Data method and the Delphi method.

2. Judgmental methods

The method incorporates the application of probability through the use of opinions and judgments. The method is suitable in areas where there is less historical data and during unique market conditions(Fildes, 2011). In the case of Al Rawabi Dairy Company, the method is suitable for it especially since it has penetrated into new markets. Therefore, it will enable it to determine the probability of the losses and profit margins the company will experience in case of incidents like the economic shocks(Forecasting, 2011). Moreover, the company can make estimations of the consumption patterns and therefore it will be able to make plans depending on

the outcomes of the findings. The Al Rawabi Dairy Company should, therefore, implement this approach(A career in the dairy industry, 2009)

4. CAPACITY PLANNING

Capacity planning is defined as the evaluation of the production capacity required by an organization to meet the changing demands of its products (Lam, 2014) Al Rawabi requires this concept since the demand for its products are high, hence it will enable the organization to make prior plans in the determination of the production capacity. Al Rawabi should apply the lag strategy in capacity planning and thus should be implemented fully. The strategy calls for adding capacity due to increased demand for a product (Kejariwal&Allspaw, n.d.) The foundation of the company is in the heart of the desert. Therefore, the uptake of the dairy products and the fresh juice is high and will tend to vary especially in the summer period. Moreover, the lag strategy has reduced risks, mainly when the company upgrades its dairy and fresh juice plants. The reduced risks of over-building will contribute to the company utilizing all its resources to the utmost. In accession to that, the products of the establishment will be cost-sensitive and mature therefore it will be able to fulfill the client desires.

The firm alone cannot satisfy the needs of the market since the market is broad. The GCC’s climate is hot and dry, but technology and innovation have earned it one of the most sought-after tourist destinations in the world. The bulk of the tourists are from Europe and the USA where the winter climate is experienced every year. The tourists will, therefore, eat up more refreshments and dairy products in a bid to appease their thirst due to the hot weather in the countries The influx of tourists will increase the uptake points of Al Rawabi products, therefore, making the need for the company’s products to develop quickly.

Nevertheless, the company’s main drive is innovation; thus the application of applied science has gained the firm to be up to standard. For example, the AlKhaweneej farm is situated in the heart of the desert but manages to get 250000 liters of milk daily. The dairy cows are maintained under controlled cool temperatures that favor them. Moreover, a team of experienced veterinarians has been engaged to supervise the wellness of the animals closely, therefore, ensuring a regular provision of dairy products in the market (Daher, 2007)

PROCESS SELECTION AND FACILITY LAYOUT

6. MERCHANDISE AND SERVICE PATTERN

The Al RawabiDairy Company majorly operates in the United Arab Emirates, where it boasts of being the greatest manufacturer of dairy products and refreshing juices. The society has numerous products in the market, so it offers the consumers a variety of goods. For example, its dairy and juice plant produces long-life merchandise, usable products, and juices. Therefore., the standards of living of people have been bettered. Moreover, the products undergo several steps before they are launched into the marketplace.

Moreover, the products undergo several steps before they are launched into the marketplace. The cows, for instance, are fed and injected with feeds that are genetically modified. The cows are not fed with natural feeds such as grass; hence they are somehow unfit for the human health. Moreover, chemicals such as additives are added to the juices and dairy products. Too much consumption of the substances may lead to cancer, which is one of the deadliest killer diseases(Mooney, 2007). The United Arab Emirates is located deep in the heart of the desert. Therefore, the primary challenge is the unavailability of fresh water. The country is thus forced to adopt the process of desalination of water, which is very costly and harmful to the atmosphere. The company, therefore, relies on the desalinated water for its operations (Arezki, Quintyn&Toscani, 2012)

7. LOCATION

The company operates in the GCC with an emphasis on the UAE, Qatari and the Omani markets and it is a leading producer in the rich oil-producing nations. The decision to establish the company in the nations has paid off since the region sustains a rich GDP. Therefore, the bulk of the population can yield the products without financial restraints. The financial markets of the three nations are one of the richest places on earth. Therefore the demand for commodities tends to be high. Moreover, the governments support entrepreneurship since they offer incentives, tax-free holidays and subsidies to willing investors. The government involvement in business has led to a rise in the number of investments, thus the area has become a home to many billionaires(Easby-Smith, 2011).

The harsh sunlight in the desert has caused the rate of dehydration to be high therefore people will always drink liquids, exceptionally clean water, juices and dairy products for them to sustain their bodies healthy and firm. The company along its part has exploited the harsh conditions to their advantage and has espoused the use of technology to improve the efficiency in production. Besides, the oil-rich countries have run to stiff competition, and then the company is prevented on its toes to produce trade goods that are of high quality hence the consumers are not short-changed. The firm, in the beginning, operated only in the United Arab Emirates but it later spread its wings to Oman and Qatar since they were emerging markets. The spread of the branches has made the firm to become a profit-making venture since it has developed into a multi-billion company. This is evident since it began with only five hundred cattle and ten trucks to its name, but today it has over 12500 head of cattle. The embracing of technology is the key driver of the company and should continue with the same spirit for it to become one of the most successful companies in the world.

8. QUALITY MANAGEMENT

It is the art of overseeing tasks and activities of an organization to maintain the excellence of its products and services(Gitlow, 2008). The organization has to maintain producing high-quality products to fulfill its mission of becoming the leading producer of dairy and fresh juices in the GCC countries.

The determinants of quality in the dairy and fresh juice sector

Healthy competition is the major determinant of quality in the sector. The rival firms will tend to develop a unique feature as compared to other competing products in the market. The increase of products in the market will provide an avenue where the firms will compete fairly, and the best will emerge as the leading producer(Tamime, 2009). New technology has established the firm to evolve efficient methods of production; therefore the consumers are not bothered. The new technology has led to the practice of dairy farming in an area that cannot sustain both plant and animal life. The technological know-how has made Al Rawabi own over 12500 head of cattle, despite being located in an area that the climate is sweltering and dry.

The government has developed policies that require the AlRawabi company to produce trade goods that are of high standards and are attested to be fit for human ingestion. The latter is backed by the licenses the company held to meet before being permitted to work. The factors of production determine the quality since the firm has a high number of personnel, so the labor is readily available. The company owns large components of land which boosts the output capability.

Inspection

LANE (2016), Defines it as the supervision of the process of production and the examination of the products. Al Rawabi uses this method to cover the loopholes and to prevent errors that might cause big losses to the company.

RECOMMENDATIONS

The company should partner with giants such as Nestle to acquire fresh ideas, and this will enable it to hold a competitive advantage over other rival companies.

CONCLUSION

The company’s innovative ideas cannot be neglected since it has made what people reckon to be a dream to become a reality. The firm has grown a pacemaker in the dairy and the refreshment industry through its transformation from a mid-sized company to a large company with a large network of assets and a workforce. However, the company should improve in a few areas, especially in Corporate social responsibility projects. It should improve in this for it to boost its reputation and become appealing to the consumers. Moreover, the CSR activities enable the company to fulfill its dreams of becoming the leading dairy farm in the world.

The products of the company are of high standards since it has been awarded several marks of quality from the standardization company. It is credited with ISO 9001:2008 for quality management, ISO 22000: 2005 of the best enterprise and ISO 14000 for environmental management. Indeed, the company is a force to reckon in the dairy and refreshment sector. The administration should, therefore, be flexible for the company to maintain its position as a mover and shaker in the industry. The paper indeed has illustrated facts about the Middle East-based company.