Business Report Al Ain Dairy Farm Marketing Essay

Business Report Al Ain Dairy Farm Marketing Essay Al Ain Dairy, first established dairy farm in United Arab Emirates is a leading producer of dairy products. Al Ain Dairy began its business in 1981 and with time it now has three cattle farms with more than 3,000 head of milking steers and one camel farm with more than 200 dairy animals. With significant investment in dairy production technology, packaging machines and testing equipments, Al Ain Dairy farms were able to achieve hazard analysis and critical control point (HACCP) certification in 2009 (an ISO 22000:2005 certificate) which means they can supply products to the UAE and export the same for the international market. Al Ain Dairy aim is to be the preferred choice of dairy and poultry products of households in UAE. Dairy have range of beverages and dairy products such as fruit yoghurts, Benecol yoghurts, coffee drinks, drinking yoghurt, potted cheese, crà ¨me caramel, custards, fruit desserts and cream for his customers. The dairy also provides variety in milk from normal to flavors like strawberry, banana and chocolate. The company also supplies fresh fruit juice in six flavors produced from fresh juice concentrate. With the increased demand of camel dairy products since early 2008, company has also involved himself in production and supply of camel milk and camel milk ice cream. Retail Presence of Al Ain Diary Products According to a recent study by the Department of Economic Development (DED) UHT juices and UHT milk as products that have great potential for export. In line with this, Al Ain Dairy, the first established dairy farm in the UAE and a leading producer of dairy products, has become one of the few dairy farms in the region to fully depend on its own herds of cows after it has launched a project, among its many activities, to minimize importing and boost local cow breeding with aims to increase milk production and further strengthen its leading position in the highly competitive market. Al Ain has more than 3000 milk producing cows and 2500 young stocks that are supplying the raw milk products to various outlets in country. According to one of the press report in UAE, in Q1 of 2009, the company saw an 18% increase in sales campared to the same period in 2008. In January 2010, the company have increased its total output by 23% compared to the same period in 2009. Al Ain Diary has its own retail chain of stores named Farm Fresh. Best of Al Ain Dairy and Al Ain Poultry products which have be known to be of high quality, healthy and fresh and specially their nutritious products such as Camel Milk, Max Calcium, Benecol, Optimil, Slim are available in all farm fresh outlets. Eng. Abdullah Al Darmaki, CEO, Al Ain Dairy, said: Our aim is to promote our Retail Concept and Exclusivity by introducing Convenience Shopping for our customers. According to one of the press realease in UAE, The dairy and fruit juices industry is expanding at a rate of 10% annually and currently meets 56% of the demand in the UAE, Despite of the current 26 operating cattle farms in the country which contain 15,000 cows producing 167,000 tonnes of fresh milk annually, the local markets needs are still being covered by imported products. Highlighting the huge demand for dairy products in the UAE, the local market faces an essential need to expand according to recent studies which have further recommended that dairy industry should research and develop new and differentiated products designed to meet specific needs and tastes of the local consumers as imports do not completely satisfy the demand. Commenting on this subject, Eng. Abdullah Al Darmaki, CEO, Al Ain Dairy, said: The decision to grow our own cattle has been derived from Al Ain Dairys vision to be recognized as the preferred choice of dairy products for all customers and to become a self-sufficient plant that provides a 100% locally manufactured products Current level of maturity of the companys supply chain of its beverage products The objective of every supply chain should be to maximize the overall value generated. The value of as supply chain generates is the difference between what the final product is worth to the customer and the costs the supply chain incures in filling the customers request.(Chopra, Meindl 2006) The diary currently have 26 operating cattle farms in the country which contain 15,000 cows producing 167,000 tones of milk annually. It is important that fresh and safe milk should be reach to consumer. For this Al Ain Diary farms have eight step critical procedure name cold chain to supply of milk from cow to consumer The cold chain procedure ensures the supply of fresh and safe milk to consumer. Firstly the cows are milked under hygienic conditions, then the raw milk output is examined by technicians at the processing plant to ensures that the milk is of the required quality and standards. The milk is then stored in silos at a constant temperature of +4 °C before starting pasteurisation. The milk is then goes under pasteurisation and homogenisation. Before storing milk from diary to sales depots it is packaged or formulated into other dairy products Al Ain Dairy has its own fleet of vechicles which is fitted with cooling units to ensure that milk should be reach to reatilers at required temperature. Al Ain Dairy salesmen coordinate with retailers regulary to monitor the temperature of cold storage units used to display products. The cold chain process ultimately gives assurance to consumer that they are purchasing the freshest milk that has been produced, stored and distributed under the most hygienic and controlled conditions possible, said Al Darmaki. Objectives Zero stock-outs Stock out is when business run out of stock; and zero stock out is when this condition never occurs. But it does not mean that business to hold too much buffer stock. It is to ensure that a business has exactly the correct amount of stock at any one time. On-time delivery of orders On time delivery is to measure the efficiency of supply chain which in turn measures the amount of finished product or service delivered to customer on time and in required quantity. It helps determine how efficiently we are meeting our customers or agreed deadlines Operational Decision And Analysis Company takes decision on the basis of individual customer needs. The aim of supply chain operations is to fulfill customers needs in the best possible way. There are six key elements to a supply chain: Production Supply Inventory Location Transportation, and Information Company needs to take decision at all these levels to achieve the objectives of zero stock out and on time delivery. Production Our aim is to meet customer demand and satisfaction for this company need to work on capacity, quality and volume of products. We need to focus on what are customers requirements and the market demands to take strategic decisions for production. On the other hand, operational decisions will focus on scheduling workloads, maintenance of equipment and meeting immediate market demands. Supply While keeping the quality high company needs to determine what facilities they are able to produce. Company can also go for outsourcing if required, but company should be careful to select the same. Inventory It is a critical issue in effective supply chain management. Operational inventory decisions should ensure the optimal levels of stock at each location. Company need to focus on how much product should be in storage and need to balance the same to meet market demands as market demands fluctuate. Location Decision regarding location should consider that facilities should be located near to consumer. Production plant should be close to raw material; and distribution and stocking facilities should be placed to prime location to the dedicated market Transportation Transportation encompassed 30% of the cost of product, so using correct transport mode is critical decision. Here company has its own fleet of vehicles to ensure smooth delivery of products under hygienic and controlled conditions. Information In todays competitive world astounding paper work and discordant computer system are unacceptable. Decision should be taken to obtain information from the point of end use. Need to have good coordination throughout the whole supply chain. For this network of computer and internet should be used to streamline the flow of information. Some software can also be used over LAN for account management and communication. Al Ain Dairy Farms provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. According to one the press realease in UAE, Al Ain Dairy has expanded its quality control system at local farms and processing plant through the establishment of two new technologies; a Food Lab System and Somatic Cell Counter. The voluntary testing equipment, which is adopted to ensure that all the companys dairy products meet international quality standards in accordance with the companys recent ISO certification. According to Mr. Abdullah Saif Al Darmaki, CEO of Al Ain Dairy, the continued growth of the UAE dairy industry will depend on the ability of large-scale producers to maintain international health standards as operations become more complex and geographically fragmented. The farms supplied raw milk must also go through additional screening procedures at the laboratory, using a Swedish-made Somatic Cell Counter. Somatic cells are white blood cells secreted by the cow and are one of the key indicators of whether raw milk is suitable for refinement. While this screening is a common test at dairy farms, few companies also implement the practice at their processing facilities. Recently Al Ain Dairy, has increased its juices product line by introducing two new juice flavours, guava and pineapple, to complement its existing range of six fruit juice products. Commenting on the introduction of the new flavours, Abdullah Saif Saeed Al Darmaki, CEO of Al Ain Dairy said: Growing our consumer base has been an important goal for us. With increasing demand in the market, we wanted to reinvest a significant portion of our profits in expanding our product lines and raising our production capacity. So far we are happy with the results. The company have also installed a High Efficiency Particulate Air Filter (HEPA) to filter the facilitys air and ensure a sterile working environment. According to one company report, better efficiencies and cost saving plans during a year also encouraged the growth of gross operating profits by almost 23%.