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Sun 1 Apr 2007 12:00 AM

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Market explorers

Continuously exploring all of the niche markets that Dubai has to offer logistics companies, Al-Futtaim currently has a vast scope of industry interest. Centin Baxter, business development manager at Al-Futtaim, explains the benefits and challenges of always keeping an eye on upcoming opportunities.

Such is the role of complete supply chain providers, that often the variety of industries one can be involved with can seem a little overwhelming. This is most certainly the case for Al-Futtaim, who as one of the older 3PLs in Dubai, still very much has a modern eye on the ever evolving industry climate.

First establishing itself as a logistics provider in Jebel Ali in the 1980s, Al-Futtaim has monitored Dubai's commercial and industrial rise with vetted interest. With several facilities in Jebel Ali Free Zone, and operations also in Dubai Cargo Village, Dubai Investment Park, Rasidiaya, Ramool and Abu Dhabi, the company believes it has the resources to match the demand.

"In the last five years, I would say we have expanded rapidly due to customer demands. This growth has led to a number of challenges especially in terms of space and warehousing," says Centin Baxter, business development manager, Al-Futtaim. "We are growing our facilities very quickly and expanding all the time, which always poses a challenge. We now have total warehousing space of approximately one million square feet and over two million square feet of open space across the UAE."

However, Baxter is also quick to point out the importance in quality of service to match such facilities. The company perceives itself as supply chain specialists, able to offer customers end to end solutions. Starting with procurement figures, Al-Futtaim is able to organise the purchase order and manage the vendor from its origin, be it Europe or the Far East.

The company then provides customers with options of sea freight, airfreight or road transportation, also organising custom clearance for transportation to warehouses. Value added services can also be included at the end of this process, with the company able to cater for packaging, labelling, kitting and co-packing.

"We have expanded rapidly on these services and it has become more tailor made in the last five years. This is because as the market matures, the competitiveness of the market also increases and so does the demands of our customers. Supply chains need to become more sophisticated and we work alongside them to find the solutions," explains Baxter.

The demands of customers can prove particularly high when dealing with the automotive sector. Currently, Al-Futtaim boasts Toyota, Honda, Chrysler, Dodge, Lexus and MG as part of its growing clientele.

"We specialise in a few different sectors, including the automotive industry. We have a huge presence in automotive logistics and offer a number of very customised services for customers, including the ability to work with them on pre-delivery inspections (PDI)," confirms Baxter.

PDI inspections have become increasingly important for automotive companies and highlight Al-Futtaim's attentive approach towards fulfilling customer requirements.. The inspections ensure vehicles in storage are thoroughly examined before being sent to the showroom for purchase. This includes checking the tyres are inflated and the bodywork smooth from any scratches.

"For the UAE, especially in Jebel Ali, a hub for the automotive sector is essential. It reduces the distribution lead time for agents and partners in the different GCC countries," elaborates Baxter.

"This means automotive companies can focus on their core activity, which is servicing the vehicle. Rather than have little warehouses attached to service centres, they can reduce that space, put in more service bays and offer world class services to customers," he smiles.

Al-Futtaim also believes it has personalised storage solutions that are pioneering in the automotive sector. Faced with the delicate storage of car windscreens, for example, the company took it upon itself to limit potential breakages. "We have developed very specialised storage solutions for items such as windshields," says Baxter. "We created a firm clip around the windshield that ensures against breakages and it has had a fantastic response. Since its implication breakages have been down to 1%."

Turning from the automotive sector, Al-Futtaim has unique dealings with the hospitality industry. The high pace of construction for hotels in Dubai is visible to anybody who lives in the city. Yet, probably what is not so widely considered is the demand from new hotels for warehouse storage.

Having recently stored fittings for the Four Seasons hotel and Intercon, Al-Futtaim has received a number of other interests from existing and upcoming hotels, including the Crown Plaza. Fittings in storage can often include anything from furniture to kitchen appliances, TVs to beds and mattresses.

"It is becoming a strong source of business and a big business. You see how many hotels are coming up, and it is an end to end solution because we are insuring the procurement of the goods from origin," says Baxter.

"We store the fittings and deliver them to the location. Sometimes it is per room or per convention centre, or we have even in the past had to assemble everything for a particular floor of a hotel," he adds.

The period of this storage for hotels is dependent on the launch date, but of course construction does not always work to such a deadline. Flexibility is therefore a major requirement for Al-Futtaim. "Generally, a hotel will try to get everything ready and stored a month before the actual launch date, if there are any delays in the construction then they push it on longer. Trying to operate to a schedule doesn't always work because you do get delays."

The diversity in Al-Futtaim's warehouses can also be exemplified by its dealings in fast moving consumer goods, such as confectionary, and its large number of industrial related clients. This begs the question as to how such a range is provided for in the warehouses.

Al-Futtaim warehouses are equipped with VNA (very narrow aisle) racking, with options of secure areas for smaller more valuable items, such as spark plugs. The company implemented SAP 4.7 warehouse management system five years ago, which is RF enabled. Both of these are complemented with a combination of Lindi and Toyota forklift trucks. "Generally everything is palletised, no matter how big they are, they are all palletised which allows us to move the goods about," says Baxter.

A total of 4000 cool storage pallet positions are found in the Jebel Ali warehouse, a figure Al-Futtaim hopes to build on towards the middle of this year. Approximately 500 staff currently works for the company, primarily in Dubai although operations are found in Abu Dhabi as well.

"A transport division is also found in the company to support its GCC network. We have our own transport division responsible for transport across the GCC countries. It has a fleet of 40 odd lorry heads and a number of trailers on order," says Baxter.

It is in the growing trend currently occurring in Dubai of international brands wishing to have a base to cater for the regions' demands that Al-Futtaim has targeted for future developments.

"There is a shift in the way that people are operating in the Middle East. A lot of the big international brands have always set up a direct delivery system where they would actually order their goods from the factory in Europe and have them delivered directly to the Middle East," says Baxter. "Now they are looking at actually carrying inventory in Dubai to service the GCC market. This will increase their market share and it develops more sophisticated supply chains as well which we are very keen on working on. We are very happy to be a part of that."

Although coy to confirm exactly how Al-Futtaim plans to be a part of this, Baxter was willing to hint its Middle East network maybe undergoing strengthening. "We currently work with a partner network in the Middle East, but we are looking to develop that further," he says. "We do have future expansion plans on the cards, which are based outside the UAE. These are not set in stone yet, but the Al Futtaim group as such also has interest outside the UAE, and we are looking to working together with the group. There are also huge opportunities in the UAE that we still need to develop."

Fact file: Al-Futtaim


Headquarters: Dubai Jebel Ali Free Zone

Established: 1980s

Employees: 500

Coverage: Entire GCC region, plus global network

Services: Air freight, sea freight, land transport, custom broker, value added services, cold storage, and a range of personalised customer storage solutions

Technology: SAP 4.7 WMS, RF enabled

Current warehouse facilities: Dubai Jebel Ali Free Zone, Dubai Cargo Village, Dubai Investment Park, Rasidiaya, Ramool, Abu Dhabi

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