Logistics and Outsourcing: Almarai Corporation 3P's Service Case Study

This report presents a case study on Almarai Corporation's implementation of 3P's service models to improve its logistics and supply chain operations. It begins with an introduction to the concept of innovative outsourcing and the benefits it offers to logistics companies, including improved process effectiveness and reduced costs. The report then focuses on Almarai Corporation's collaboration with Swisslog, highlighting how this partnership has automated logistics services, improved warehouse efficiency, and enhanced customer service. The analysis emphasizes the positive impact of these value-added services on Almarai's relationships with its business customers, fostering collaboration and enabling the company to expand its operations in the Middle East. The report concludes by summarizing the advantages of 3P's service in enhancing operational effectiveness and achieving strategic goals within the logistics industry.

3p’s service
case study of almarai corporation
Student details
JANUARY 1, 2020

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Table of Contents
Introduction................................................................................................................................2
Benefits of Innovative Outsourcing Models..............................................................................2
The benefit of Innovative Models to Almarai Corporation.......................................................3
Conclusion..................................................................................................................................4
References..................................................................................................................................5

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Introduction
The logistics companies are focusing on the adoption of innovative outsourcing models to
improve process effectiveness and efficiency. As with the changing customer requirements
within the industry, it is required that the organisation’s focus on the adaption of the
technological changes within the industry, so that their overall effectiveness can be improved
and can provide customers with required services. the report is focused on analysing the
benefits of the outsourcing to the logistics companies and effectively focus on the Almarai
collaboration with the Swisslog and analysing the impact of the collaboration on the
operations of the organisation.
Benefits of Innovative Outsourcing Models
The logistics companies are shifting towards adapting innovative models so that the
customers can be provided with value-added and satisfying services. The logistics companies
are focusing towards adapting third-party logistics (3Ps) services so that their process
effectiveness can be improved, as outsourcing warehouse and fulfilment centre has a great
and positive impact on the growth of the logistics organisation. The benefit of preferring for
the 3Ps results in no requirements of the staff, as the organisation is not dealing with the
fulfilment and dispatch of the orders, therefore the organisation is not required to focus on the
hiring of staff within the organisation (Hughes, 2018).
The logistic organisation focus on 3P’s providers results in improving the effectiveness of the
process, as it results in the reduction of fixed cost, also the management is not required to
focus on the fulfilment. Therefore, the management can effectively focus on the analysing
new opportunities within the industry and can identify new markets to expand the business
operations. Along with identifying new opportunities becomes easy as the organisation is not
required to develop infrastructure at the identified location, they can prefer adapting 3Ps
outsourcing services (Robinson, 2018).
3P’s service providers are professional and effectively trained in the service that is being
provided by them, the logistics companies make use of such expertise to improve their
business performance and to provide improved and satisfying services to its customers, hence
developing a competitive factor within the industry. Such innovative outsourcing models also
provide the traditional logistics company open access to the technology advancements and an

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opportunity to utilise the innovative technology within the business operations without
investing heavily on their establishment within the organisation (Martins, et al., 2018).
The benefit of Innovative Models to Almarai Corporation
Almarai Corporation effectively deals with dairy products and operates globally across
nations. The organisation focuses on providing its customers with quality products and
services. Almarai effectively focuses on maintaining quality within the business process
along with ensuring quality to the customers, as to maintain quality within the organisation
results in improving the business performance and efficiency in the management process. The
organisation has effectively established the largest logistics network in the Middle East in
terms of qualities delivered by the Almarai’s logistics or the distance covered. Almarai
effectively focuses on the needs and requirements of the customers within the industry and
accordingly adapts innovative and advanced technologies at the organisation (ACS, 2015).
Almarai has effectively partnered with Swisslog, in order to automate its logistic services and
the management at Almarai is focused on ensuring the smooth operations at the warehouse,
also to improve the operational effectiveness of the organisation. Swisslog is an organisation
focusing on introducing automation and technological changes within the transportation and
logistics industry and changing the way the industry operates. Depending upon the nature of
the business and after effective analysis of the industry, Swisslog develops an automation
program for the organisation and a complete concept which includes technology up-
gradation, maintenance of the service and ensuring that the needs and requirements are
fulfilled (Swisslog, 2020).
Almarai’s collaboration with Swisslog will help the organisation in improving the services
that are being provided to the customers, also will provide an effective framework through
which the organisation will be able to manage its logistics and distribution network that has
been expanded globally. The utilisation of the AI and the robotics will improve material
handling, resulting in reducing the operational cost and improving the warehouse efficiency.
Also, Swisslog provides consulting services to the organisation to overcome the challenges
within the distribution and logistics network, such services will help the Almarai in
effectively expanding its business operations and eliminating the challenges within the
industry (KUKA, 2017).

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The organisations are effectively focusing on the Middle-East region as the demand for the
dairy products in increasing heavily within the region. Therefore, to improve the
organisational presence within the region and to cater the needs and requirements of the
customers, Almarai has focused on improving the effectiveness of its logistics services, so
that their reach within the industry can be improved and the effectiveness of the service can
be improved. Adopting such automated technologies within the operational activities result in
a reduced working capital requirement for the organisation, along with improved
management of the warehouses. As such dynamic automation results in the management at
the warehouses and fulfilment centres through centrally located systems (ITJ, 2015).
Conclusion
The logistics companies are effectively able to improve their operational effectiveness by
utilising the 3P’s services and their expertise within the organisational operations. Such 3P’s
provides the organisations with advanced technological changes and the requirements
through which the organisation can focus upon providing its customers with quality and
value-added services. Almarai has effectively collaborated with Swisslog to improve its
organisational effectiveness and to achieve the strategic goals of the organisation to provide
its customer with quality services. Swisslog provides organisations with various
technological as well as consulting services through which the management can focus upon
identifying effective opportunities through which the customers within the industry can be
provided with required services and a competitive edge can be achieved.

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References
ACS, 2015. Swisslog to automate Almarai distribution logistics. [Online]
Available at: https://www.logisticsmiddleeast.com/article-12112-swisslog-to-automate-
almarai-distribution-logistics
[Accessed 24 March 2020].
Hughes, A., 2018. Outsourcing The Logistics Function - A Theoretical Overview. [Online]
Available at: https://www.cleo.com/blog/knowledge-base-3pl-third-party-logistics
[Accessed 24 March 2020].
ITJ, 2015. Almarai enhancing efficiency with Swisslog. [Online]
Available at: https://www.transportjournal.com/en/home/news/artikeldetail/almarai-
enhancing-efficiency-with-swisslog.html
[Accessed 24 March 2020].
KUKA, 2017. Swisslog and KUKA automate flow of goods in Saudi Arabian logistics centre.
[Online]
Available at: https://www.kuka.com/en-de/press/news/2017/08/almarai
[Accessed 24 March 2020].
Martins, R. S., Wanke, P. F. & Rodrigues, A. C., 2018. Efficiency of specialized 3PL
providers in an emerging economy. International Journal of Production Economics, Volume
205, pp. 163-178.
Robinson, A., 2018. 5 Advantages of Hiring a 3PL Provider for Outsourced Logistics.
[Online]
Available at: https://cerasis.com/3pl-provider/
[Accessed 24 March 2020].
Swisslog, 2020. Swisslog Logistics Automation. [Online]
Available at: https://www.swisslog.com/
[Accessed 24 March 2020].