Optimization of the Delivery Process of the Machinery Leasing Logistics

Optimization of the Delivery Process of the Machinery Leasing Logistics
A CASE STUDY OF JOHNSON ARABIA COMPANY, UNITED ARAB EMIRATES
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PREFACE
This research initially emerged from my passion for exploring supply chain problems and
creating better strategies for shipment departments. I would not have achieved and completed the
research without the help of a hardworking and valuable group of individuals such as the one at
Johnson Arabia.
Firstly, I would like to thank my supervisor at Johnson Arabia, Siddhi Mulaokar, who provided
me with reliable information that helped me formulate a recommendation for this research.
Moreover, a special thanks to my mentor, Oscar Peters, for his feedback and encouragement
throughout the thesis period.
Lastly, I would like to thank my family and friends for all their motivation, support, and
appreciation during this time.
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Table of Content
s
Optimization of the Delivery Process of the Machinery Leasing Logistics....................................1
A CASE STUDY OF JOHNSON ARABIA COMPANY, UNITED ARAB EMIRATES............1
PREFACE........................................................................................................................................2
Table of Contents.............................................................................................................................3
ABBREVIATIONS AND ACRONYMS........................................................................................4
EXPLANATION OF TERMINOLOGY.........................................................................................5
1. INTRODUCTION.......................................................................................................................8
1.1 Johnson Arabia.......................................................................................................................8
1.2 Research Problem..................................................................................................................8
1.3 Research Objective and Main Research Questions................................................................9
2. RESEARCH METHODOLOGY............................................................................................11
3. LITERATURE REVIEW.........................................................................................................19
3.1Theoretical Framework.........................................................................................................19
3.2 External Factors Contributing to Delivery Delays...............................................................20
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3.2.1 Quay Crane................................................................................................................20
3.2.2 Dwell Time..................................................................................................................21
3.2.3 Cargo Storage and Handling Infrastructure at Port..............................................21
3.2.4 Custom Clearance.....................................................................................................22
3.3 Internal Factors Contributing to Delivery Delays................................................................23
3.3.1 Management...............................................................................................................23
3.3.2 Technology.................................................................................................................24
Chapter4: ANALYS/ result...........................................................................................................24
Analysis of first interview:.........................................................................................................24
1. General details about the interviewer and the interviewee that are based on the
conversation between them...................................................................................................24
2. Evaluation and analysis in detail of the company service shipment...........................25
3. Identification and evaluation of the working schedule of the employees that are
working in the company and their welfare...........................................................................25
4. Elaborating the challenges and the reasons for the downfall of the delivery system
in the company.........................................................................................................................26
5. Analysis of the equipments that the firm possess.........................................................26
Analysis of second interview:....................................................................................................26
Analysis of third interview:........................................................................................................26
Analysis of Fourth Interview:....................................................................................................26
Analysis of fifth interview:........................................................................................................28
BIBLIOGRAPHY..........................................................................................................................32
Appendix1: Certifications..............................................................................................................35
Appendix2: Interview request by email.........................................................................................36
Appendix3: interview transcript....................................................................................................37
ABBREVIATIONS AND ACRONYMS
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Abbreviatio
n
Meaning
UAE United Arab Emirates
JA Johnson Arabia
UNCTAD United Nations Conference and Trade and Development
ICT Information and Communication Technology
IT Information Technology
AWP Aerial Work Platform
MC Mobile Crane
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EXPLANATION OF TERMINOLOGY
Dry port: This is a port where the provision of essential services are carried out in dealing
with the storage of containers for a short period of time, with cargoes that arrive
and depart from the port by several means such as roads, railways, airports or
waterways (Roso & Lumsden, 2010).
Dwell time: This refers to the duration of elapsed time from when the cargo arrives, to the
time products depart from the port facilities after being issued with licenses and
permits (Huynh, 2008).
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1. INTRODUCTION
1.1 Johnson Arabia
Johnson Arabia (JA) is a global company that specializes in Mobile Crane and Aerial Work
Platforms (AWP). The company was established in the United Arab Emirates (UAE) in 1999,
with the headquarters situated in Dubai. The company provides the leasing of construction
machinery and equipment, such as cost-efficient and versatile lift engineering solutions (Johnson
Arabia, n.d). These are provided to the following industries: petrochemical, civil engineering,
construction, industrial, utilities, aviation, and marine. Johnson Arabia currently operates its own
fleet of approximately 250 Mobile Cranes and 700 Aerial Work Platforms (AWP) (Daniel,
2019).
The company is guided by a strong mission that seeks to be a premium shipping company with
international and local legislation in addition to industry practices. It is the most valuable market
leader around the region that sets records and trends with a dedicated and professional staff
committed to excellence in safety, maintenance, availability, reliability, and total cost-
effectiveness (Johnson Arabia, n.d).
Johnson Arabia employs approximately 400 employees and the company has expanded its
operations in other countries such as Oman, Saudi Arabia, Kuwait, and Bahrain (Zawya, 2020).
The company, however, primarily offers its products in three different locations: Dubai Industrial
City (Dubai, UAE), Musaffah Industrial Area (Abu Dhabi, UAE), and Flagi Al Qabali (Sohar,
Oman). Johnson Arabia has played a major role in construction projects in several areas such as
the Abu Dhabi International Airport, Dubai Expo 2020, and Duqm refinery in Al Duqm, Oman
(Johnson Arabia, n.d).
1.2 Research Problem
The shipment process is an issue that has seen numerous delays at Johnson Arabia. The company
is experiencing a large problem concerning the equipment rental in recent years (Johnson Arabia,
n.d). Mobile Crane and Aerial Work Platforms are exported from the United Arab Emirates to
Oman; they are passed through several procedures, department processes, and shipment and
boarding processes. Within this, however, there are external as well as internal causes for the
delay in the shipments (Johnson Arabia, n.d).
The external causes can include many issues concerning different aspects and points of the
deliveries. Firstly, the presence of strict custom checks and custom inspections can create
problems. Additionally, issues related to customs such as incomplete documentation and
information can be found. Moreover, the misplacement of crucial documents such as the original
bill of lading and overweight cargo – which leads to delays, unexpected closures, etc. – can
cause several issues along the way. Therefore, the containers (Mobile Crane and Aerial Work
Platforms) can be considered as not as timely, compared to other shipments, when moving from
Oman to the United Arab Emirates. The move between these particular companies can, in fact,
typically cause the delay (Johnson Arabia, n.d).
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These obstacles lead to the delay in the shipment process of the containers to Oman at Johnson
Arabia, adding to the internal causes for the delay. For example, the company has various
maintenance plans to monitor all units, however, employees may not be able to oversee these
plans and service programs due to their inconsistent work hours, making them unavailable.
(Middle East construction news, n.d). These issues were considerably less in the past, but it has
increased rapidly in recent years. One of the reasons for this could be the rise in the thorough
searches and checks at customs for security reasons. It is vital to recognize and overcome these
obstacles as they can lead to several negative repercussions for the company. The delay in
shipment can cause a setback in the delivery of the product to the customer and this will reflect
negatively on the company. Over time, customers, in response, may not stay loyal. The extreme
and unfortunate result of this can lead to a major decline in sales and profitability for the
company. Consequently, delay charges such as demurrage, detention, and per diem may arise.
Therefore, it is essential to address this issue in Johnson Arabia which can be done by putting the
right policies in place such as strategies, and practices to be able to curb this situation (Johnson
Arabia, n.d).
1.3 Research Objective and Main Research Questions
The objective of this research was to submit an advisory report to Mrs, Siddhi Mulaokar, the
Marketing officer at Johnson Arabia. The report has identified and discussed the potential
obstacles leading to the delay in the shipment process of goods to Oman at Johnson Arabia, as
aforementioned. The final product of this research was to deliver a set of new shipment policies
for the company and a recommendation of the possible solutions to these obstacles.
This study had a main research question that was as follows:
Which strategy should Johnson Arabia apply to optimize the delivery time of the
shipments of rental Mobile Crane and Aerial Work Platforms to its target customers
in Oman?
Following the main research questions and the sub questions of this research paper, the sub
questions are essentially the main research question broken down into smaller portions to
provide a more concise answer.
1. What is the current shipment process of rental Mobile Crane and Aerial Work Platforms?
1.1 Which activities are included in the shipment process?
1.1.1 Which steps can be identified within the process?
1.2 Who is involved in the shipment process?
1.3 How does the company measure the effectiveness of its shipment process?
2. What are the goals of the company regarding its shipment process?
2.1 What is the ideal shipment process for the company?
2.2 What are the possible challenges regarding the goal?
3. What are internal bottlenecks regarding the delivery process of rental Mobile Crane and
Aerial Work Platforms to target customers in Oman?
3.1 What are the perceived internal bottlenecks?
3.2 Which possible factors might disrupt the shipment process to target customers in Oman?
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