Central Control

Co-op Islami was established shortly after a media expose on the malpractice of meat exports in the Middle East. The controversy managed to raise eyebrows throughout the region and created genuine concern over the legitimacy of halal products being imported from non-Islamic countries such as Australia, Brazil and India. To tackle this problem, Co-op Islami obtained permits allowing the company to hire Muslim slaughterers and supervisors in these countries, to ensure the meat was being produced according to Islamic teachings.

The company started business by offering a range of frozen chicken products, which proved successful in the Middle East. Within a short period of time, it had expanded its product offering to include various frozen and canned meat, seafood items, frozen vegetarian items and a range of different cheeses. In addition, it complimented the frozen product line by introducing a range of fresh chicken and meat, which will be expanded further in the future.

“All Co-op Islami branded products must be completely halal in all respects, including processed food such as burgers and kebabs,” says Hasan Rimawi, productivity process manager, Co-op Islami. “The ingredients used whilst making these products never contain non-halal substances like blood, fat or any other animal rennet that is derived from pork sources. Even the cheese is produced from vegetable rennet to comply with Islamic rites.”

Co-op Islami has employed personnel in countries such as Australia and Brazil to oversee the whole operation and make sure procedures are followed. Everything from animal feeding to slaughtering to transportation is supervised. The overseas employees are also responsible for maintaining good relationships with the suppliers. “We consider the suppliers as partners, so it’s essential we have good working relationships with them,” says Rimawi. “The sourcing has to be very balanced and the suppliers we choose must have high standards. In this way, I think our operations are very unique because it’s very specifically focused on the quality halal aspect. Nobody in the world has the same operations as Co-op Islami.”

Co-op Islami transports meat using air and sea, depending on whether the consignment contains fresh or frozen goods. “The fresh mutton and lamb is imported by air from countries such as Australia, Brazil and India,” explains Rimawi. “We ensure the time between slaughter and transportation by plane is very short. Once the meat arrives at the airport, it is dispersed straight away and distributed. On the other hand, fresh poultry is mainly produced locally in the UAE and other Middle East countries, so air travel is not necessary.”

Co-op Islami also imports chilled and frozen goods from abroad. The products are transported by sea on a daily basis and strict temperature control is maintained throughout the journey. For chilled products, the temperature range is between zero and plus two degrees, depending on the product. For frozen goods, the temperature must remain below –18 degrees.
“We make sure the frozen products are sent through a strong, reliable shipper,” says Rimawi. “This means we have no concerns about whether the correct, pre-assigned temperature was maintained during the journey. Therefore, we take this partnership very seriously.”

Initially, Co-op Islami manufactured its range of processed food abroad too, using external companies. However, as demand soared, the company established a meat processing plant in 1991, located in Dubai’s Jebel Ali Free Zone. The facility, which is built on a large 6900m2 plot of land, has a daily meat production capacity of 25 tons. It also includes a laboratory to carry out hygienic tests on both locally produced food products and those imported from abroad.

In addition to the Jebel Ali facility, Co-op Islami had a number of different distribution hubs throughout the UAE. However, as part of the company’s growth plans, it started to actively seek ways to improve efficiencies. A major component of this strategy was taking more control of the logistics process and centralising operations by creating one major hub instead of multiple smaller hubs located throughout the country.

“We had distribution facilities located in different emirates such as Abu Dhabi, Fujairah and Umm Al Quwain,” says Rimawi. “Also, a third party previously handled all logistics for the company. This made the logistics very complex, so we sought ways to improve efficiency and make operation improvements. Therefore, we decided to create centralised operations and bring everything together under one roof.”

The company closed its various distribution hubs in June 2005 and moved into a new AED 15million facility, based in Dubai Investment Park, near Jebel Ali. It also decreased the use of third parties and introduced an in-house logistics department. “We took control of the logistics,” says Rimawi. “It became crucial to increase speed. The new facility allowed us to improve product turnover and distribution compared to previous arrangements. The move was very successful.”

The centralised location accommodates over 250 employees and contributes to lower transportation costs and enhanced inventory storage levels. “We moved into the facility towards the end of last year,” says Rimawi. “The warehouse itself is divided into different rooms. There are eight freezer areas and three chiller areas, each measuring 15 metres deep and 15 metres wide. There is also an area for packaging. The rooms give us better control over the lines of products that we produce,” says Rimawi.

Once the products arrive in the new facility, they are unloaded onto pallets, shrink-wrapped, barcoded and stored in a pre-assigned area. The movement of stock is controlled through handheld terminals. Due to the harsh temperature conditions in the warehouse, the company uses a rugged solution produced by Psion Teklogix.

“We evaluated a variety of different companies but the product offered by Psion Teklogix suited our needs the best,” says Rimawi. “The handhelds control the entire movement of stock. After the products arrive in the warehouse, they are unloaded onto pallets, shrink-wrapped and barcoded. They are then placed in a pre-assigned section of the warehouse, ready for picking.”

Co-op Islami also recently implemented SAP’s enterprise resource planning (ERP) solution ECC 5.0 to improve efficiencies across its supply chain and business operations. “The ERP solution controls helps to make sure the warehouse operations run smoothly,” explains Rimawi. “We use the ‘first in – first out’ system for our products due to expiry dates and shelf life issues. The ERP solution organises the picking and putaway of products in a more effective and consistent way, compared to the old manual basis.”

The system allows Co-op Islami to track its performance and monitor KPIs set by the logistics department. In addition, Psion Teklogix is a SAP complementary software partner, which means the ERP solution integrates with the Psion Teklogix handhelds used in Co-op Islami’s warehouse. “We used consultants to handle the implementation of the ERP solution. We have found that Psion Teklogix and SAP integrate very well together and this will help us reach world class standards,” says Rimawi.

Inside the warehouse, Co-op Islami uses high density racking and selective racking systems, which are provided by SPAN Supply Network Solutions (SNS). Selective racking generally results in lower storage density, but it is ideal for faster moving products that require quick access. “The high density racking helps to utilise the space to the maximum. The selective racking results in quicker putaway and picking, which makes us faster,” says Rimawi. “We are looking to increase the number of picks per person, so it is essential that all aspects of the warehouse are working very efficiently. We want the fulfilment of orders to happen as fast as possible. At present we can fulfil orders for some clients within five hours on a daily basis, but we want to improve further.”

Co-op Islami also uses a combination of reach trucks and forklifts. “We use forklifts in the loading area and reach trucks are used for picking purposes in the rooms. They were bought through Famco,” continues Rimawi.

The warehouse includes ten loading and unloading bays. Six of these are allocated for smaller vehicles, weighing between one ton and 3.5 tons. The rest are allocated for containers and can be utilised for high pick-up trucks weighing ten tons and above.

The deliveries conducted by Co-op Islami can be split into three different categories: major retailers, independent retailers, and the food services industry.

In terms of major retailers, Co-op Islami products are sold by the likes of Carrefour and Co-operative Society. Orders are delivered on a daily basis, using Co-op’s own fleet of temperature-controlled trucks, which meet the stringent safety measures and standards of the company. The vehicles have state-of-the-art freezing facilities, mobile partitions and cooling systems that preserve the taste and image of the food products. Co-op Islami also owns Emdad Provision Company, a subsidiary that caters to the food services industry, including hotels, restaurants and other food serving outlets. A dedicated fleet of vehicles deals with these deliveries too.

Due to increasing demand, Co-op Islami recently updated its fleet of vehicles and introduced a number of new trucks to ensure that products are delivered to customers throughout the UAE. “The fleet varies between one ton refrigerated vans for fresh chickens, to 12 ton trucks for bigger deliveries. The range of vehicles gives us more flexibility and more reach,” says Rimawi.

For smaller retailers, Co-op Islami has opted to use a third party to handle deliveries. “We can handle the deliveries to major retailers efficiently,” says Rimawi. “However the logistics of delivering to smaller sized grocery stores is quite different and requires different competencies. Therefore, we opted to choose a company with more specialist knowledge to handle deliveries and ensure the task is completed effectively. This allows us to focus our energies on delivering products to the major retailers instead.”

In addition to deliveries in the UAE, Co-op Islami products are available throughout the region. It has distributors placed in various Middle East locations, such as Kuwait, Bahrain, Qatar, and Oman. In addition, the company has brand managers to oversee the whole market.

“If the goods are coming from abroad, the distributors will receive their order directly. For example, in Qatar, the distributor may receive the meat directly from Australia and they then become accountable for the order,” continues Rimawi. “It is their responsibility to store the products in their own freezers at a temperature pre-assigned by Co-op Islami.”
In addition, the locally produced products are distributed through the Jebel Ali manufacturing plant by truck. If the goods are transported outside the UAE, then a third party is contracted for the journey. “Although we have reduced the amount of work outsourced to third parties, there are still some instances when this makes business sense. At this stage it is more viable to use a third party for truck deliveries from Jebel Ali to other Middle East locations, although we are regularly reviewing the situation,” says Rimawi.

Indeed, Co-Op Islami is constantly evaluating its logistics operations. In addition to the current plans to centralise the logistics, more changes and improvements are planned in the future, to improve efficiencies and increase order fulfilment. “The recent logistical changes we have introduced in the company have proved very beneficial and will help spurn future growth,” concludes Rimawi. “In fact, we look at the logistics department as a separate entity to the company. It aims to serve the needs of Co-op Islami and must meet world-class standards to ensure fast order fulfilment. Although I feel we currently excel in warehousing and logistics, the company will keep striving to improve in the future.”||**||