Ask the expert: David Dronfield

Question: How can companies in the Middle East restructure their operations to maximise effectiveness?

Fighting for survival

In order to survive this period of economic uncertainty, it's essential for companies in the Middle East logistics industry to optimise their performance. While others are expanding their warehouse facilities or increasing their rental of storage space, it's actually a wiser idea to look inwards and restructure your existing supply chain operations to maximise effectiveness.

Take a look at how your assets are being utilised and research the true Return on Investment (ROI) for capital and human assets, whether it's land, buildings and equipment, or shift timings.

Getting the basics right

A number of common principles are traditionally utilised for the design and construction of warehouse facilities.

During a boom period, a concerning number of projects will suffer from unrealistic deadlines, without a suitable amount of time for efficient completion. This is particularly apparent in the design stage, when distribution centres are hastily conceptualised from the "outside in" and fail to take into consideration the intricate details of operations.

As such, the designs are not necessarily based on best practice. A simple example is the position of building columns, where the majority of column grids are not suitable for efficient storage design and will have a detrimental effect on efficiency. This could lead to a severe reduction in storage capacity and have a long-term impact on picking operations too.

A step-by-step approachThe correct planning for warehousing facilities is based on core principles, which can also be used to benchmark your existing operations and evaluate a path for increased efficiencies. There are four factors that should be considered. The first is key objectives for the warehouse facility. This is generally the fulfilment of customer orders, with a focus on getting the right product to the right customer in the right place at the right time, at the agreed cost.

Therefore, the primary objective of the warehouse operation should be fulfilling orders and secondly, ensuring sufficient stock to maintain this order fulfilment operation. The second factor to consider is inventory - in terms of what is required to ensure the picking operations are supported, and what reserve stock is sufficient to cover the stock criteria, such as order cycle times and re-supply. Remember, gaining efficiencies in manufacturing can be offset by forced inefficiencies in the supply chain.

The final considerations

The third factor is resources. What is needed to ensure the fulfilment of orders? Take a look at the capital resources that are available, such as land, building, material handling equipment, technology systems, and human resources. The fourth factor is customer specific criteria - each customer has criteria that often distinguishes it from the competition. This might be based on their unique business plan, brand values, customer base and mode of operation. These should later be tabled, questioned and incorporated into the solution requirements. One outcome, for example, could be a shorter order cycle lead time, which must be maintained to ensure the competitive edge.

Designing a new solution

Having completed the analysis, the information can be collected and analysed to determine the best layout and operation of the warehouse. An efficient solution will consist of multiple storage and handling solutions, with the operations managed by an effective warehouse management system (WMS) that is supported by appropriate technologies such as radio frequency. Understand that the modern warehouse is a "dynamic" operation, where the goods flow into, through and out of the centre in a seamless chain of integrated operations. Do not think "static". Always think of the best ways to move the goods and allow the efficient completion of orders.

Reaping the rewards

It's important to remember that storage systems are designed to be adjustable.

By making a small investment in the re-planning and re-arranging of systems, your company can benefit from long-term efficiency gains that will result in the more effective use of equipment and a better return on investment. For example, the upgrading of material handling equipment can result in faster order processing and resource optimisation. In addition, the implementation of a warehouse management system can help to ensure the fastest completion of tasks. Of course, never make changes without researching the market and questioning an expert in the field, whether it's a consultant or an experienced material handling specialist such as FAMCO.

Written by David Dronfield, divisional manager of storage and handling solutions, Al-Futtaim Auto & Machinery Company (FAMCO).

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM