Table of Contents
Letter of Transmittal 2
Inventory Policies and Demand Management 3
Capacity Management and Utilization Policy. 4
Quality Practices. 5
Deemah Supply Chain. 6
Quality Management System- Supply Chain. 7
Characterization of the Supply Chain. 8
To the University Professor
School of Business
Dear Sir/ Madam
REF: United Food Industries Corporation Ltd.-Deemah
In relation to the field trip to Daheem Company, I present to you an elaborate paper of the issues that I learned on that eventful day.
This report has focused on four main issues that I aimed at learning in the trip; the company’s inventory policies and demand management decision, the capacity management and utilization policies, the quality practices, and lastly, the characterization of its supply chain. The information that I have presented in this paper with regards to the mentioned topics was directly obtained from the company’s managers.
In conformity with the school’s policies, I confirm that this paper is my genuine work and the information in it is accurate to the best of my knowledge.
United Food Industries Corporation Ltd.-Deemah
My field trip to United Food Industries Corporation Ltd.-Deemah aimed at identifying the entire production process in the company, and how the company’s management ensures that it is competitive in all production processes. In this case, I was interested in identifying Deemah’s inventory policies, capacity management and utilization policy, quality management practices, and the company’s supply chain.
Deemah was established in 1984 and has progressively grown to become a multinational company and a leader in the manufacture and sale of biscuits in the Middle East. Deemah’s headquarters are in Saudi Arabia. However, it has a market presence in many countries besides Saudi Arabia such as Lebanon, United Arab Emirates, and Bahrain. The company has many subsidiaries that specialize in the food industry. To elaborate, the company has a biscuit making company, a beverage company, a candy manufacturing factory, and a cake and pastries company.
The inventory policies and demand management of the company are done by its procurement department. This department ensures that the company purchases the right quality of raw material when they are needed. Moreover, it ensures that these items are purchased in the right quantity. On the same note, the procurement department ensures that all miscellaneous materials needed to fully produce a required item are available. In order to purchase the right quantity of inventories, the company uses a 1-year forecast to estimate the demand levels in the market, and according to the needed raw material inputs needed to sustain those demand levels. For example, in the production of biscuits, the department ensures that besides wheat and oil needed for baking, there is an adequate inventory of packaging materials needed for the product. Most of the items needed by the company are sourced locally. For example, between 90 and 95% of packaging material is from Saudi Arabia and all wheat is from Saudi Arabia. Nonetheless, some products are imported, such as cooking oil.
In terms of demand management, the company has an elaborate supply chain which ensures that the right quantity of materials reaches the target market in the desired time. To ensure that its products reach the customers in time, the company has 370 trucks that are used in the delivery of purchases. Once the company’s items are manufactured, they are transferred to the finished goods warehouse. Later they are transferred to the central distribution unit so that they can be transferred to local distribution centers or for export. Generally, the company’s distribution centers enable it to quickly supply retailers when they need more inventories.
Currently, Daheem has excess capacity than the one it is using. Its biscuit company has a capacity of 120,000 tons per annum. Its upcoming cake company will have a capacity of 19,000 tons per annum. When compared to other companies in the same industry, Daheem is the third largest company. It is the second largest in the manufacture of powder milk and in the manufacture of biscuits. Finally, it is the third favorite brand among kids in the Middle East.
- Daheem Company ensures that it has adequate capacity to supply all its customers.
- The company plans for major festivals, such as Ramadhan, in advance in order to have adequate inventories for this period.
- The excess capacity makes the company have the excess cost of having idle capital.
- The excess capacity of the company’s trucks, such as when the company is carrying damaged products from a consumer, makes it have high logistics costs.
Daheem Company ensures that it continuously produces and sells high-quality products. As a result, the company is ISO certified. It has ISO 22000 and ISO 9001 which shows that the company is the leader in the manufacture of safe quality foods. In order to ensure that it manufactures high-quality products, the company has a quality management system.
In this system, it has policies aimed at ensuring it continuously offered quality products,
- The company identifies the consumers’ expectations
- The company works towards fulfilling these expectations. Importantly, the research and development (R&D) department assist in ensuring that the company always produces high-quality
- Daheem always analyzes all the food manufacturing processes
- It adopts good manufacturing practices
- It ensures that all its manufacturing items are clean and properly sanitized.
- Finally, it ensures that all packets are properly labeled in a manner that the ingredients used in the products are legible so that consumers can be aware of the products they are consuming.
Daheem Supply Chain Model
In conclusion, the Deemah supply chain model has enabled the company to become competitive in its operations. In particular, the company’s distribution centers enables it to quick respond to the needs of its clients. In addition, the company’s continual production of high-quality products, which has enabled it to be ISO 22000 and ISO 9001 certified have improved its brand. Nonetheless, the company should ensure that it fully utilizes its capacity to avoid losses associated with excess unused capacity, in particular, such as high unused resource has a large opportunity cost.