Introduction
Global exports and indicated as a percentage of GDP (gross domestic product), the direction of the strong growth of the mid-1980s of the last century and until the beginning of 2008. However, since then, it is scheduled to stop this increase. Macroeconomic shifts and changes have a direct impact on the global economy of supply chains. They provide challenges as well as opportunities (Mangan & Lalwani, 2016).
Growth in the sea port transport and logistics industry is no longer mainly due to exports, which originated from Asia to Europe or North America. It is experienced growth of other areas also become more volatile, unpredictable and fragmented. Population and economic growth is concentrated increasingly in the major cities with the infrastructure has become a major factor in any growth in (Bookbinder, 2011).
International emerging economies and mature markets have become an important part of the core business expansion for many of the organizations strategy. To the world is expected to the latest standards and logistics solutions providers established to facilitate this trend. However, as labor costs in Asia and the increased cost of transportation, and more industrial activities and get positioned closer to the end user of the product (Mangan & Lalwani, 2016).
End consumers have also adopted the practice of tension products through many channels, which may range from traditional brick mortar stores to e-commerce over the Internet. It is therefore expected of modern logistics providers to support multi-channel strategies to suit the changing tastes of its customers. Customers’ products that have been made and the sources of the right way, as preferred. Reduce social, economic and trade and business as well as the environmental impact on the wider society and promote any positive effects that might arise. Supply chains have become increasingly complex and dynamic with the primary sources sites that are changed quickly and the usual purchase orders grow smaller (Bookbinder, 2011).
Company under investigation is logistics arm of the conglomerate, Al-Futtaim companies. It is part of the most modern and progressive companies that are located in the lower Gulf region, based in Dubai (See Appendix A for SWOT analysis). Established in 1930, an organization working together more than 85 companies that carry brand-Futtaim include sectors such as trade, industry and services (Al-Futtaim Logistics, 2016). Al-Futtaim logistics, which is based in Jebel Ali in the United Arab Emirates and provides full connectivity of the state-of-the-art facilities, which occupies a strategic position in a number of the most important shipping centers in the region (Al-Futtaim Logistics, 2016).
The Al-Futtaim duly certified by ISO 9001 2008 since 2012. The organization provides a wide range of modern supply chain solutions. Capabilities and extensive extends to: Warehousing and contract logistics services. Transportation companies; the distribution of goods and transport; and contract warehousing and logistics (Al-Futtaim Logistics, 2016). Logistics Company has many years of experience in a number of key sectors and has in-depth understanding of the various complexities involved in providing solutions for: logistics for retail sale. Logistics vehicles. Military logistics and humanitarian; industrial and international solutions to move and move on. And the public transport (Al-Futtaim Logistics, 2016).
Al-Futtaim is presented to issues that touch on quality imperfections and issues. Fabricating forms can’t be regarded to be considered to point out implying that the logistics business ordinarily acknowledges a specific level of value level for the vast majority of the items that it handles. Variability and also many-sided quality are a vital part of any generation procedure. This implies some new sources may not completely stick to abandon levels that are worthy in a specific purview. The United States. Along these lines, utilizing a non-U.S. based source may open up inquiries or question about which of the included gatherings is at risk for any imperfection rates that may transcend the worthy standard.
Therefore, the objective of this research will be to examine the risks faced by the company when it comes to malfunction of quality in the distribution process across the various jurisdictions it operates in. It is justified by the necessity of recommendations on how to minimize such risks to ensure the company continues to remain profitable in the long run. To achieve research objectives, the following questions will be addressed:
- What is the impact of malfunction of quality on the distribution processes at Al-Futtaim Logistics?
- How common are malfunction of quality in the distribution process at Al-Futtaim Logistics?
- What can be done to address the issue of malfunction of quality at Al-Futtaim Logistics?
Literature Review
Introduction
In the modern society where business is conducted at a global level, logistics has become very critical for firms as they try to ensure that they acquire raw materials in time and deliver their manufactured products to the market as per the expectations of the customers. According to Nikolaidis (2013), the role of logistics in a company’s success is immense and that is why scholars and practitioners have spent a lot of time conducting research in this field.
Logistics as a topic has attracted attention of many scholars over the recent past as they try to find ways through which firms can move their products from the point of manufacturing to the market within the required time and in the best way possible. Firms are aware that cost reduction is just one aspect of improving logistical processes and enhancing their success. It is equally important to ensure that the products reach the desired destination in the right condition. Whether it is raw materials moved from the suppliers to the company’s premises or finished goods being delivered to the market, the issue of quality is increasingly becoming a major concern (Mangan & Lalwani, 2016).
At Al Fattaim Logistics, there has been a deliberate effort to ensure that quality is maintained during logistical processes. In this section, the researcher will focus on reviewing the existing literatures to determine what other scholars are saying about malfunction of quality in the distribution process. As Dangelmaier (2010) notes, a research project is meant to enhance the existing bodies of knowledge. To avoid duplication of existing knowledge, it is important to conduct a review of the literatures, which is why this section was considered an integral part of the project. It will provide information that will form the basis of our research.
Review of Literature
According to Mangan and Lalwani (2016), global logistics and supply chain management is taking a new direction as firms struggle to compete for the global market share. The growing international trade has created a huge demand for logistical solutions at the global level. Sea, air, and land transports have become very important and this has attracted a massive number of firms into the industry.
The market is growing at unprecedented rates both at local and global levels. Developed economies such as United States, Germany, and Japan export their processed products such as automobiles and electronics to other nations. On the other hand, the developing nations are exporting raw materials such as minerals and agricultural products to the developed countries. This international trade has been made possible due to the expanding logistics industry. At the local level, logistics is the bedrock of trade. Firms must ensure that their products are delivered to the market at the right time, in the right quality, and using the minimal resources possible.
For some firms, the only way of achieving logistical success is to have their own departments that are responsible for all the transport activities. This is possible in cases where the physical location between the firm and the market is fairly small. This in-house approach to managing logistics is critical for firms that want to have full control of their transport activities. However, Mangan and Lalwani (2016) say that most firms are considering outsourcing these services so that they can focus more on activities of their specialization.
Prajogoa and Olhager (2012) focused their study on the effect of information technology and maintaining long-term relationship between logistical companies and their clients. As stated above, it is critical for firms to ensure that raw materials and finished products reach the desired destination as per the plan. Given that some firms are now outsourcing these activities, the need to develop close relationship between the logistics company and their clients is becoming very important.
The clients want logistic firms that they trust. They want firms that they can rely on to deliver the best value in logistics. Maintaining close relationships ensures that these clients have some form of control in the logistical activities of the firm they hire. The use of information technology enhances this relationship between logistics companies and their clients. This is particularly important when products are moving from one country to the other either through land, sea, or air transport. It is now possible for firms to monitor movement of their goods across the sea, thanks to the emerging technologies in the field of communication.
It is even possible for the client to check the condition of their products which are in the high seas without having to be in the ship that is ferrying the products. Clients are now choosing logistics companies that have invested in these advanced technologies to allow them monitor the movement of their products which are on transit. This emerging trend cannot be ignored by the companies in this industry as the level of competition is expected to be on the rise.
A research by Grabara, Kolcun, and Kot (2014) further emphasizes on the need to use information system in transport system. In their research, they found out that information system plays a critical role in enhancing security of products when they are on transit. Some of the modern sea vessels have been fitted with radios that can detect any oncoming vessels miles away. Using such systems, a ship captain and the entire cabin crew can detect any suspicious movements that may pose potential threat to their security.
They can easily send a signal to security forces so that the suspicious vessel can be monitored in order to ensure that any threat is neutralized before it can expose the ship to any danger. Information systems can also help in creating trust between a shipping company and the clients. By making the client able to visually monitor their goods which are on transit is an enough assurance that there is no any form of interference with their products during transportation.
The same case applies to goods when are transported by road or by air. For the vessels in the high seas, there is also the threat of possible storms that may be very destructive. It is almost impossible to precisely determine when a storm would strike. However, sometimes getting to know about weather forecasts can help in making proper preparations in case of a storm. Information system may also make it possible for such troubled ships to ask for urgent help in cases of emergencies.
Ghiani, Musmanno, and Laporte (2013) focused on the relevance of information system in logistics distribution. In their study, they looked at how firms are trying to improve their distribution strategies using information technology as a way of dealing with stiff market competition. To achieve success under such contexts, firms must come up with unique ways of meeting their clients’ expectations. The study focused on determining what companies are doing with the emerging technologies to enhance quality of products. The aim was to determine if there is a direct relationship between having quality information system and delivering quality services in logistics companies.
The research revealed that some of the best logistics companies in Dubai and around the world have automated their systems. This was specifically meant to avoid cases of confusion when addressing customer needs. It was determined that customers often get dissatisfied when they inquire about their products which are in transit and they are given unsatisfactory response. Through automation, such unfortunate scenarios are eliminated. Automation also helps in enhancing in improving coordination in logistics companies. Improved communication among various stakeholders within the company makes it easy to plan various activities. It has an overall impact of improving the process of distribution.
In a study by Caunhyea, Niea, and Pokharel (2012), it emerged that planning for emergencies is critical when logistical firms try to deliver high value for the clients. Emergencies often arise when goods are on transit or in temporary storage. The emergency may arise due to accident when goods are on transit. It may be due to an attack by robbers along the highways or pirates in the high seas. It may also arise from malfunction of the transport equipment or natural calamity such as floods or cyclones. Irrespective of the cause of the emergency, these scholars emphasizes on the need to have a model of responding to such emergencies.
Primary interest of a logistics company is to ensure that goods are safely delivered at the desired destination within a reasonable time. Having a response plan may have save the situation and prevent loss of property and in some cases loss of life. For instance, piracy in Indian Ocean is common due to the activities of the Al Shabab of Somalia. When a ship uses this route, there must be a clearly defined model of responding to such emergencies to ensure that loss of property and lives is eliminated. The employees must be trained on how to respond when faced with such cases to avoid loss of lives and that of property. They should have the capacity to ask for help before the criminals can get full control of their vessel.
Nikolaidis (2013) looked at quality management in supply chains. When transporting goods from one place to another, it is important to ensure that their quality is maintained as much as possible. In this book, the focus was on perishable products. Most of the transport vessels that transport perishable products are effectively equipped with systems that will help in prolonging their lives during the time of moving them from one location to the other.
For instance, ships ferrying fish have special containers which are refrigerated to ensure that fish remains fresh for a long time during the long trip at the sea. Failure to make regular checks and maintenance of these containers or the entire vessel may result into incidents where the products end up perishing before they reach their destination. Delivering already perished product may strain the relationship between the shipping company and the client. Based on the agreement that was made between the logistics company and the client, it is possible that the logistics company may be forced to pay the client for the destroyed items.
Such instances may not only lead to financial losses but also hurt the image of the firm, making it difficult to win more customers. As such, the scholar says that quality management in logistics starts by ensuring that the transport equipment and containers properly maintained to avoid such incidents. Being responsible at all times is utmost important, especially those who tasked to maintain the vessels in the right status. After every successful trip, the ships, planes, or trucks must be thoroughly checked and necessary repairs made before they can be allowed to make another trip for the purpose of enhancing safety of the cargo and crew members.
Benmoussa, Charkaoui, Achraf, and Marouane (2015) conducted a study on how companies can enhance distribution processes. Their research specifically focused on how to ensure that perishable products reach the market within the shortest time possible using least cost. In this report, it was established that integrating the entire system of supply chain was one of the ways of reducing cases of malfunction and enhancing success in service delivery.
The nature of the products demanded for speed and efficiency in transporting the products from the point of processing to the market. Any delay may have devastating impact on the quality of products being delivered to the market. Integration was determined to be critical in supply chain management. For instance, before slaughtering a given number of animals, the slaughterhouse must have a clear knowledge about the demand. This is so because after processing the meat, it must be delivered to the market as soon as possible to ensure that it is fresh by the time clients purchase it at the retail stores. Lacking the right information may be a cause of malfunction in the supply chain process. The product may either be delivered in less quantity or in excess, and that may lead to some form of dissatisfaction.
Becker, Fronia, Nyhuis (2015) focused on malfunction in the distribution process and the role played by negligence in such malfunctions. Their study established that negligence is one of the reasons why some logistics companies fail to deliver value to their customers. Negligence can occur at various levels and may have varying magnitude on the cargo on board. Sometimes malfunction of the transport vessels take place because of negligence.
For instance, when cargo is loaded into a ship or a truck, there is a specific manner in which they should be arranged to ensure that they can withstand the rocky seas or rough roads. Failure to follow the standard procedure when loading the cargo may lead to malfunction when goods are on transit. The cargo may fall off the sea or along the roads causing serious damage or loss. Some of the accidents witnessed on the roads are caused by such acts of negligence.
The cost of malfunction, especially those attributed to negligence may be very high. Sometimes it is not just the goods on transit that is lost or damaged but the entire transport vessels. Such occurrences may have massive economic impact on a company. If not taken seriously, it may drive a company to bankruptcy or cause other major problems that may not be easy to deal with effectively.
Amy and Rossetti (2006) wanted to find ways of improving distribution processes within a company. They looked at lean distribution as a way of addressing the problem of regular malfunction among logistics companies. In this study, the scholar argues that to deal with the problem of malfunction, this scholar strongly supports the need to fight negligence within these logistics companies. They found out that one of the main causes of malfunction is negligence on the part of the employees or management.
On the part of the management, sometimes they fail to conduct proper supervision on their employees and how they deliver their services in their respective areas of work. It leads to cases of complacency among these employees. The scholars strongly recommend a hand-on management approach where those in supervisory positions closely monitor activities of the employees. Their study also blamed management for trying to limit expenditure in cases which such expenses are unavoidable.
The vessels should be maintained in the best positions possible, and the management should release funds to that effect. Failing to budget for repairs and maintenance may result into increased cases of malfunction hence more losses. They also suggested that employees should be made more responsible for their actions. Taking punitive measures when incidents or accidents occur is not the only way of making these employees responsible. They should be taken through regular training to enhance their skills and to help them appreciate the need to be responsible. The lean approach to distribution also helps in eliminating unnecessary wastes.
In their study, Anbuudayasankar, Ganesh, and Mohapatra (2014) looked at the models of addressing malfunction among logistics companies. They noted that technology is changing and with it comes new ways of managing logistics problems. As such, they argue that companies should embrace dynamism when dealing with these problems. Sticking with one model for a very long time may not be advisable. Sticking with one model for a very long time may not be advisable.
These scholars strongly recommend the use of emerging technologies in addressing cases of malfunction and other problems in logistics to enhance quality of service delivery. Being slow in embracing change may be the difference between a successful and a non-successful logistics companies. Having new solutions to existing or new problems is very critical and that calls for innovativeness. A logistics firm must maintain a team of highly creative and innovative employees who are able to come up with various ways of addressing logistical problems. In their study, they also found out that benchmarking may be important for local firms trying to compete at global level. It is not wrong to embrace best practices within the industry, especially those of the industry leaders or those registering impressive growth.
Conclusion
In this review of literatures, it is evident that coming up with an effective approach of addressing malfunctions is critical for a logistics company that intends to offer its clients high quality products. For a company such as Al-Futtaim which has gone global in its operations, maintaining quality in its distribution processes is the only way of surviving the stiff competition at the global level. The review of literatures proposes a number of ways this company can ensure that it addresses the issue of malfunction to enhance delivering quality services. They include embracing the emerging technologies in the field of logistics, having a responsible management unit and employees, and embracing best practices within the industry.
Research Methodology
Survey Methods
Data was collected through survey methods. Al-Futtaim Logistics is one of the fastest growing logistical firms in the Middle East. It has served various customers in different capacities and, therefore, these customers are capable of stating whether they have enjoyed the services of the company and whether or not they detected malfunctioning in its distribution processes. It was not easy to identify these customers. That is why the researcher considered using online surveys.
It was believed that in the online platform, clients who have once used the services of Al-Futtaim Logistics may be interested in rating it in terms of quality that it offers. According to Grabara, Kolcun and Kot (2014), a customer who is thrilled by the services of a company may try to find ways of giving approval of the company as a way of appreciating the value generated from the service. On the other hand, clients who are infuriated by the services of a company because of the low quality offered is likely to look for platforms of expressing their anger by trying to warn friends, family, and the general public against the firm. Using the internet survey, it was possible to reach out to these customers and allow them to express their views about the products of the company.
Employees who are currently working at Al-Futtaim Logistics are also in a very good position to understand issues about malfunction of quality in the distribution processes at the company. In fact, the employees working in the logistics department such as drivers, loaders, and supervisors are forced to deal with these malfunctions on a regular basis. Sometimes they deal with these issues so well that the management or even the clients may not realize that there was a problem encountered when delivering an item from one point to the other. The researcher was not able to reach out for the management to get the permission to interview these employees.
As such, the online survey was considered the only way of reaching those who would voluntarily be interested in providing information about the quality of services. Survey Monkey was considered a very important website for collecting data. It allows respondents to answer questions in the questionnaire irrespective of their geographic location around the world.
The designed survey included the following questions:
- How would you rate Al-Futtaim Logistics in terms of quality assurance in the current operations?
- How concerned is the management of Al-Futtaim Logistics about malfunction of quality in logistical operations?
- How common are the issues of malfunction of quality common within the logistics industry in the UAE
- How often is this company using total quality management to enhance logistical services?
Sampling
Sampling is a very important stage when dealing with a relatively large population. Sometimes the study population may be too large to be handled in a single study given the financial and time constraints. As such, sampling becomes necessary. The researcher was interested in a specific group of participants. It is important to understand their demographical factor of the respondents. The study included both men and women who were interested in participating in the research. The participant had to be over 18 years of age to qualify for this research. The level of education was another issue.
The researcher was interested in collecting data from participants who have at least college diploma. According to Prajogoa and Olhager (2012), sampling enables a researcher come up with a small manageable number of participants that represents the entire population. If done properly, sampling makes it possible to collect accurate data from the entire population using just a representative of the population.
Population of interest
As mentioned above, there are two different groups of population sample. The first population of interest is the group of clients who have once used the services of the company. If there is malfunction of quality in the distribution process of this company, then it is likely that these clients have been affected in one way or the other. If malfunction is a rare thing in this company, then it is likely that these customers have had good experience with the company. Whichever way, this population will have something to say about the quality of services at Al Futtain Logistics. The second group of interest is the employees of this firm. As mentioned above, they have experience working at this firm hence have a good understanding of the issues about malfunction of quality.
Sampling method
Sampling would be appropriate for this data and the researcher would have preferred using sampling by convenience. However, the study relied on online survey where no one was pressured to participate in the study. The researcher targeted a sample of 50 respondents. However, the turnout was slightly below the expectation because only 38 respondents participated in the study. The study relied on the 38 participants to provide primary data from this research. As such, sampling was of little use because the number of those who were willing to be part of the study was below the set limit.
Questionnaire design
According to Caunhyea, Niea, and Pokharel, (2012), questionnaire is very important when it comes to collecting primary data from the respondents. In this study, the researcher used a questionnaire that was posted in the Survey Monkey website to collect the needed data. The questionnaire was structured not only to capture the questions that needed to be answered but also the demographical factors of the respondents.
The first sections of the research focused on determining whether the respondents were employees of Al-Futtaim Logistics or customers. It was necessary to help the researcher know whether the respondent was talking from the perspective of an employee or a client. The questionnaire also focused on determining gender and age of the respondents. The academic background and the experience of the participants (for the employees of this firm) were also important.
Sometimes the response given by an individual is often affected by their level of experience in a given field. The level of education also defines their level of knowledge on issues about quality malfunctions. The rest of the questions focused on issues about malfunction of quality in the distribution process at Al-Futtaim Logistics. The questions used were closed-ended because of the desire to have responses that could be coded and analyzed using mathematical methods. The researcher used rank order scaling approach when developing the questionnaires.
Secondary Research
Secondary data was also important because it provided the basis upon which this study was developed. Secondary data came from various sources. Peer-reviewed journals were the main sources of secondary data collected from HTC library. Additional secondary data was collected within the organization’s website and other online resources in support of the research topic.
Research limitations and constraints
When conducting research, it is important to look at the limitations and constraints and how they may affect the process of collecting data from the respondents. Analyzing these limitations helps in coming up with ways of dealing with them effectively.
Budgetary constraints
The budget meant for this project was limited. That is primarily why the researcher considered it appropriate to conducting online survey using Survey Monkey instead of in-person interviews. This approach of collecting data solved the budgetary constraint that was considered a major issue in data collection.
Time constraints
Time was another factor that the researcher had to consider. There was a time limit within which the entire project had to be completed. Each part of the research project was assigned specific time and as such, it limited the size of the primary data that could be collected from the respondents. The researcher could not wait for more respondents to answer the questions because of this constraint.
Legal and ethical constraint
Legal and ethical constraint was also an issue that had to be dealt with in this study. The researcher knew that it was a legal and ethical requirement to seek for permission from the management of this company for it to collect data from its employees. Time was an issue and as such, the researcher could not engage the employees directly on a face-to-face interview. Online survey helped in solving this problem.
Reliability of data
The issue of reliability of the data was also taken into consideration. That is why although the respondents remained anonymous, it was expected of them to provide their background. That was necessary to help in determining the level of knowledge and experience of the respondents when answering different questions. Reliability was enhanced by the use of peer-reviewed journals.
Bias
The Researcher knew that that the issue of bias may affect the outcome of the study. The researcher may deliberately ignore some of the quality issues at this company because of the admiration for the firm. To manage this problem, the researcher ensured that he did not influence the process of collecting both primary and secondary data.
Data Analysis
Data analysis was conducted using mathematical methods and data presented using chart and graphs for the purpose of clarity. This section will focus on the analysis of data that was collected from the primary sources. As mentioned above, this data was collected from Survey Monkey. The following question focused on the quality assurance ratings at Al-Futtaim Logistics.
How would you rate Al-Futtaim Logistics in terms of quality assurance in the current operations?
From the analysis above, it is clear that majority of the respondents felt that ratings of Al-Futtaim Logistics’ quality assurance are either good or great. Over 80% of the respondents approved of the quality that this firm offers. It was only s small fraction (5.26%) of the entire population that stated that they felt the services were not very good. A total of 38 participants responded to the questions in the manner shown in the table below.
Table 1: Respondents.
The question below focused on determining how the management of this company is concerned with the issue of malfunction of quality in its logistical operations. The figure below shows the response that was obtained from the participants.
How concerned is the management of Al-Futtaim Logistics about malfunction of quality in logistical operations?
As shown in the graph above, almost 80% of the respondents felt that the management of this firm is concerned about the issue of quality management and is determined to do something about it. Another 11% rated the level of concern as fair while less than 3% felt that the management is unconcerned. A total of 38 respondents took part in this study as shown in the table below.
Table 2: Participants.
In the next question, the focus of malfunction of quality was broadened to the national level. The question wanted the respondents to gauge how common the issue is in the industry within the United Arab Emirates. The following response was obtained from the participants.
How common are the issues of malfunction of quality common within the logistics industry in the UAE
As shown in the figure above, majority of the respondents (about 60%) stated that the issue of malfunction in the country is common. In fact, many feel that it is highly common within the industry. Of all the respondents, only one person felt that this is a highly uncommon issue in the country as shown in the table below. A total of 37 participants responded to the questions as shown below.
Table 3: Respondents.
After determining that the issue of malfunctioning of quality is common within the industry, the focus was changed to determine what the company is doing to address the issue. One of the best tools of addressing such a problem is total quality management. The question wanted to determine if this firm is using the tool to address this problem. The graph below shows the response obtained from the customers.
How often is this company using total quality management to enhance logistical services?
The response shows that the management of this firm is doing something to solve this problem. About 73% of the participants felt that total quality management is a tool that this firm uses quit often to help it address issues relating to quality management. A total of 38 participants answered this question as shown in the table below.
Table 4: Respondents.
Only one of the participants stated that he had never seen this firm use total quality management to address quality concerns. The analysis above demonstrates that this firm is doing everything within its powers to ensure that quality issues are effectively addressed.
Conclusion
It is clear from the above analysis that the issue of quality management is taken seriously at Al-Futtaim Logistics. The company is one of the leading logistical firms in the United Arab Emirates. The analysis has shown that this firm is doing everything within its capacity to ensure that it continuously offers the clients very high quality service at all times. It is very likely that the effort it has put in managing quality will enable it achieve the much needed success in the local and regional market.
Research Findings
In the analysis conducted in the analysis section, it is clear that the management of Al-Futtaim Logistics is taking the issue of quality management very seriously. As shown in the first graph, the primary data analyzed in the section demonstrates that the management of this company has been doing everything within its capacity to ensure that it continuously delivers high quality products to its clients.
The majority of the clients (about 83%) rated the quality offered by this firm as either great or good. It is an indication that the company has been focused on offering its clients high quality products. In fact, Al-Futtaim Logistics is one of the logistics companies proven to offer high quality products to its clients in the market. It is trusted by the customers because it delivers on its promise. It may experience some challenges in terms of product delivery, but it has avoided cases where it disappoints its clients because of issues that can be addressed by the management. It is clear at this stage that the findings from primary data confirmed what was found in the literature review.
It has been determined that malfunction of quality is a common problem in many logistics firms in the region. The primary and secondary data confirm that if proper care is not taken, quality malfunction may sometimes lead to major financial losses both to the client and to the logistics firm. There are cases where the logistics firm is forced to spend a lot of resources to correct mistakes when goods are on transit. The desire not to disappoint the client may force a firm to have extra expenses when issues arise in the operations. Such extra expenses can easily be avoided if the company has measures in place to deal with the issue of malfunction of quality.
The management of this company is aware of the need to ensure that it delivers high value to its clients at all times and its strategic plans have been aligned with this vision. In the review of literature, it was established that the management of a firm determines how well the issue of malfunction is addressed. Tools such as Total Quality Management are important in addressing quality concerns, but they can only be applied if the management is willing and ready to do so.
The management must be ready to deal with change as and when it arises. The findings from the literature were confirmed by the primary data collected from the respondents. It was established that Al-Futtaim Logistics is one of the logistics firms whose performance is higher than that of industry average in terms of delivery of quality. It is a sign that the management has understood the need to maintain high quality services and is doing everything possible to ensure that its customers remain satisfied with its services. The flexibility of the management and ability to work closely with junior employees are factors that directly affect the value delivered by a firm.
This project has created new knowledge in the field of quality management in the distribution process. Most of the existing literature focuses on foreign markets, especially in North America and parts of Europe. However, the study made it possible to have a detailed focus of how local logistical firms manage the issue of quality in their operations. The study has revealed that many logistical companies in the Middle East face a number of challenges when it comes to managing quality. Future scholars will find this study very instrumental when trying to understand the logistics industry in this region, especially when it comes to the issue of quality management.
Discussion
Al-Futtaim Logistics is has registered impressive performance in terms of quality of its distribution processes based on the analysis of primary data. The information obtained from the respondents show that the firm understands what should be done to improve quality of its services. It also understands that its competitiveness in the market directly depends on the level of customer satisfaction based on the services offered to them.
That is why it has been doing everything to enhance quality of its products in the market. In analyzing the operations of this company in the market, the researcher conducted a SWOT analysis to understand how it is coping with internal environmental factors and immediate external environmental problems. The management has created an internal environment that cherishes change and embraces emerging technologies. It is clear that Al-Futtaim Logistics is interested in and capable of improving quality in its distribution processes. The firm will need to develop measures that will make its operations more effective hence competitive.
Limitations and Constraints
As Al-Futtaim struggles to achieve organizational success, it faces a number of challenges that may make it more complicated when it comes to addressing the issue of malfunction of quality in the distribution process. The following are some of the challenges that this firm often face when it comes to gathering data from the field that can help it transform its operations.
Budgetary constraints
The top management unit of Al-Futtaim Logistics, under the office of the chief finance officer, always prepares a budget for the entire financial year. The budget must meet developmental and recurrent needs of the company. As an organization that is trying to expand its operations beyond the MENA region, it has to invest a lot in development without ignoring recurrent expenditure. The budgetary constraints mean that it is not able to invest a lot in research.
According to Caunhyea, Niea, and Pokharel (2012), in order to improve quality, a firm needs to invest a lot in research to understand the emerging methods of improving its operations. This is one of the leading challenges that limit quality of services offered by this firm. To overcome this challenge, the management will need to come up with a regular budgetary allocation for research on a yearly basis.
Time constraints
Time is an important factor for a firm trying to offer high quality products to its clients. Al-Futtaim has to serve its customers as it engages in research on how to improve quality of its products. Sometimes this may involve setting aside some employees to work on research as others continue in other fields. Balancing of time between research and normal developmental activities may not be easy. Prajogoa and Olhager (2012) say that time can be a serious challenge if the employees have to be involved in it because it may force them to work for extra shifts.
They may need extra time to engage in research after meeting the needs of the clients. Working under such strenuous environment may be very challenging not only for the employees but also the management unit. To address this limitation, the management may be forced to hire consultants to help with research work. As employees continue with their normal duties, the consultants can spend time conducting research on issues mentioned in the study. It is an option that involves extra expenses, but it has better results because the normal operations of the firm are not affected in any way.
Reliability of data
It is important to ensure that when conducting important research, the issue of reliability and credibility of data is taken into serious consideration. Unreliable data may be caused by a number of factors, top of which is poor research skills. When the people trusted to conduct market research lacks proper skills, they may end up gathering inaccurate data. When respondents are provided with leading questions, they may end up giving responses which are not necessarily accurate.
Another problem may be unrepresentative sample. The sample collected must be an accurate representation of the entire population of study. When sampling is collected in a skewed manner, then the data will also be skewed and the information gathered will be inaccurate. Acting on recommendations made out of such skewed data may be dangerous. The same problem may be faced when the researchers are biased. Those trusted with the task of conducting market research must be skilled, unbiased, and keen on finding credible solutions to the problems affecting this company.
Legal and ethical constraints
According to Grabara, Kolcun, and Kot (2014), legal and ethical considerations may be a limitation for a researcher who is trying to collect primary data from the respondents. Data Protection Act of 1998 clearly spells out the manner in which a company can collect data from the public. The Market Research Society also has its own stipulations on how data focusing on market forces should be collected. These legal and ethical considerations tend to prolong the process of gathering data from the respondents. It also forces the firm to look for specific people who have the right qualifications to conduct market research.
Conclusion and Recommendations
Al-Futtaim Logistics is one of the fastest growing logistics firms in the MENA region. The review of literature and analysis of primary data collected from the respondents show that there is stiff market competition and firms are keen on protecting their market share. The issue of malfunction of quality in the distribution process was identified to be a major problem that affects so many firms in this industry within the region. In fact, the analysis demonstrates that Al-Futtaim Logistics – despite its own challenges in managing quality – is performing better than most of its market rivals. The management of this firm is aware of this problem and has been making efforts to address it. The following recommendations may help this firm as it works on ways in which it can manage logistics problems.
- The management of Al-Futtaim Logistics should maintain a regular research in order to understand emerging forces and ways of addressing the issue of quality in its operations.
- The firm should embrace a culture of creativity, innovativeness, and love for change in its operations.
- The department of marketing should have a team of experts that will regularly lead the process of conducting research.
- The management of Al-Futtaim Logistics should focus on quality malfunctions issues in order to maintain its dominance in the market and region.
- Regardless of current exceptional performance, the firm should pay specific attention to constant quality improvement in order to avoid being outperformed by competitors.
References
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Appendix A
Al-Futtaim Logistics SWOT Analysis