Analysis of Operations Management at Almarai Company: Report

This report examines the operations management of Almarai, a Saudi Arabian dairy company. It begins with an executive summary and introduction, providing company background and identifying the input, output, and transformation operations. The report identifies critical operational areas for competitive advantage, including quality, speed, dependability, flexibility, and cost. It then critically evaluates the performance of these areas, using a supply chain model to pinpoint issues. The report recommends improvements, such as implementing a food safety program, improving milk storage, supervising employee activities, and adopting lean working solutions and new technologies. The conclusion summarizes the findings, highlighting Almarai's operations management, competitive advantages, and challenges, along with recommendations for improvement. The report uses various sources to support its findings.

operations management
[Document subtitle]
Mohammad Attia
London School of Business and Finance
Executive summary

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It has been observed that the operations management is referred to the administration of the
practices of business in order to develop the greatest level of effectiveness and efficiency which
are possible in an organization. The management of the operations is concerned in transforming
the materials and the labor to the products and the services in an effective and efficient way in
order to maximize the profitability and attain the sustainability to a great extent by offering
products to the customers according to their needs. Further, the company Almarai of Saudi
Arabia has been taken in order to understand and analyze the management of the operations.

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Contents
Introduction.................................................................................................................................................3
Company background..................................................................................................................................3
Identification of the overall input, output and transformation operations.................................................5
Identification of the major operation areas which are critical to the competitive edge..............................6
Critically evaluating the performance of the identified area.......................................................................7
Recommendation for the identified issues..................................................................................................8
Conclusion...................................................................................................................................................9
REFERENCES..............................................................................................................................................11

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Introduction
The Almarai organization includes the products which are being manufactured and this company
will help in giving more knowledge about the management of the operations to a great extent.
The organization is being chosen as it is medium sized and it includes the production of the
products according to the needs of the customers. Further, the report will discuss about the major
operational areas of the company which are critical for the business in order to attain the
sustainable competitive advantage. Also, the report will discuss about the evaluation of the
performance of the areas of operations which are being identified by using the design of supply
chain management. Then, the recommendations will be given as the appropriate solution to the
problems which are being identified within the area of operations. Then, the report will be
concluded by highlighting the main learnings which are being learnt while analyzing the
management of operations.
Company background
The company Almarai belongs to the food industry which specializes in the manufacturing of
dairy products. This organization was established in the year of 1977. The company is
headquartered at the Kingdom of Saudi Arabia. Initially, the organization had a partnership with
Irish agro foods pioneer Alastair McGuckian. In 2005, Almarai incorporated a new cheese plant.
In 2007, Almarai had started their bakery business. In this connection, Almarai had also started
the construction of new bakery facility in Al Kharj (Almarai. 2016). This organization had
received several awards for its operations and its management. In the year of 2009, Almarai has
acquired HADCO. After that, Almarai had launched a new poultry brand named as Alyoum. In
addition, it is being observed that Almarai collaborated with Pepsico in the year 2009. After the

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partnership, they came up with the new joint venture (juice) along with the International Dairy. It
can be seen that the major products of Almarai are dairy, Yogurt, Juices, poultry, bakeries and
infant formula.
Identification of the overall input, output and transformation operations
Figure 1: process of input transformation output.
From the above figure, it can be observed that the overall production approach of Almarai can be
performed by following three definite steps such as input, transformation and the output method.
These three steps are being follows by every organization who are managing the operations and
similarly, Almarai is also using these steps in order to manage the operations effectively and
efficiently. It is stated that Almarai uses milk, colostrums, liquid milk products, fresh cream and

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also the thickened cream, butter ghee, whey, butter milk powdered as the input materials to
manufacture the best qualities dairy products (Helleno et al., 2015). Further, the information is
collected from the management of the organization. The company uses only the best quality
products in their process of production. Moreover, it has increased the productivity of the dairy
manufacturing organization along with the maximization of the profitability. It can be stated that
the location of Almarai is appropriate for getting the raw materials, which are required for the
dairy manufacturing products. Also, it is mentioned that the sustainability of the organization is
the key element for making a business successful. The transformation stage of the dairy
production, Almarai has aimed to the food safety hazards program. The last stage of the
production process is considered as the output. Almarai has aimed to the packaging of the
products. Further, the organization requires to focus to the weighing, sealing as well as on the
labelling of the products. Furthermore, the organization keeps the manufactured goods in the
storage room for preventing the products from damage.
Identification of the major operation areas which are critical to the
competitive edge
It can be stated that operation areas are critical to the competitive advantage of an organization.
There are five major operational areas, which can gain the competitive advantage of Almarai.
These operational areas are such as quality, speed, dependability, flexibility and cost. Further, the
quality can enhance the competitive advantage of the organization. As a result, it can be stated
that the organization can set out their targeted consumers. In addition, Almarai can reduce the
price of their manufacturing goods (Sel, Ç. and Bilgen, B., 2015). However, the speed aspect can

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deliver their products to the consumers more quickly. This aspect can also offer superior
consumer services, which focus to the after sales services. Moreover, it is essential to reduce the
risk of the organization. Dependability is helpful to identify the level of stocks of the
organization. In order to measure the level of sock of the organization, Almarai requires to
improve the working conditions as well as the internal maintaining facilities. This would in turn
save the money of the organization due to the lack of disruption. Furthermore, the flexibility is
being questioned that product flexibility actually convert the rigid mass production towards the
mass customization in order to achieve the global requirements (Glover, J.L., Champion, D.,
Daniels, K.J. and Dainty, A.J.D., 2014). Therefore, Almarai has focused to the quantity and the
time of delivery in order to satisfy the consumers’ needs. This will improve the product
development approach for the development of new products in future as well. Lastly, cost
structure is the key measurement for the improvement of a business.
Critically evaluating the performance of the identified area
In order to measure the performance of quality, speed, flexibility, dependability and cost for
gaining the competitive advantage, the organization uses various tools and one of them is the
supply chain design on which we will be focusing in order to analyze the management of the
operations. The most important area of the operations which is believed that plays the essential
role in attaining the competitiveness is the quality (Reiner, G., Teller, C. and Kotzab, H., 2013).
It is necessary for this particular organization to improve the quality by implementing various
programs or the software like total quality management in order to identify the areas of
improvement and take the corrective actions accordingly. Further, the supply chain design
process of the company is being analyzed in order to identify the issues in the quality.

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Figure 2: supply chain model
By looking the supply chain model of the Almarai it can be stated the company is facing various
issues in managing and maintain the quality to a great extent. The company is not able to change
the traditional way of working according to the change in time and technology which is
impacting the quality of the products (Jin et al., 2015). The company is not able to ensure the
quality of the product during the process of production. It has also been observed that the
company is working on the concept of lean but it is not actually working on the solution of lean
which is essential.
Recommendation for the identified issues
It can be suggested that the organization needs to control the food safety hazards by formulating
the documented food safety program. In addition, it is also required to follow several supporting

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programs. Almarai requires to keep the environment clean. It can be stated that the pests can be
reduced in the manufacturing process. On the other hand, the organization should ensure that
milk should be stored at the cool temperature and it should be checked timely. This can prevent
or can also reduce the growth of the microbiological hazards. Further, Almarai requires to
supervise the activities of the employees (Flint, D.J., Signori, P. and Golicic, S.L., 2016). The
organization should aim to improve the food safety and hygiene matters within the organization.
Moreover, it can be recommended that a dairy manufacturing business requires to focus to the
controlling of time and temperature. Also, the company should start following the lean working
solution as it is following the concept (Arslankaya, S. and Atay, H., 2015). Furthermore, the
company should start implementing the new technology in order to be effective enough and
attain sustainability. The company should use the technique of total quality management in order
to identify the issues in the quality and further take the corrective measures immediately.
Therefore, company should consider these suggestions in order to be more effective.
Conclusion
This report has highlighted the operation management of Almarai organization of Saudi Arabia.
This report has discussed the overall input, transformation and the output operation of the
organization. As a result, it can be understood that what materials are being used for the
manufacturing process of the dairy products. On the other hand, this report has identified the
competitive advantage. In this context, this study has mentioned how Almarai has achieved the
competitive advantage through the operation management. Moreover, this study has described
some quantitative techniques such as supply chain management in order to solve the operation
management challenges within the business. Therefore, it is being analyzed that the company is

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facing issues in the quality of the products during the process of the manufacturing and various
recommendations are being given as the solution to the identified issue.

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REFERENCES
Almarai. (2016). Almarai - About Almarai Company. Available at:
https://www.almarai.com/en/about [Accessed 27 Dec. 2016]
Arslankaya, S. and Atay, H., 2015. Maintenance management and lean manufacturing practices
in a firm which produces dairy products. Procedia-Social and Behavioral Sciences, 207, pp.214-
224.
Flint, D.J., Signori, P. and Golicic, S.L., 2016. Supply Chain Design. In Contemporary Wine
Marketing and Supply Chain Management (pp. 117-129). Palgrave Macmillan US.
Glover, J.L., Champion, D., Daniels, K.J. and Dainty, A.J.D., 2014. An Institutional Theory
perspective on sustainable practices across the dairy supply chain. International Journal of
Production Economics, 152, pp.102-111.
Helleno, A. L., Pimentel, C. A., Ferro, R., Santos, P. F., Oliveira, M. C., & Simon, A. T. 2015.
Integrating value stream mapping and discrete events simulation as decision making tools in
operation management. The International Journal of Advanced Manufacturing
Technology, 80(5-8), 1059-1066.
Jin, C., Djurdjanovic, D., Ardakani, H.D., Wang, K., Buzza, M., Begheri, B., Brown, P. and Lee,
J., 2015, August. A comprehensive framework of factory-to-factory dynamic fleet-level

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prognostics and operation management for geographically distributed assets. In 2015 IEEE
International Conference on Automation Science and Engineering (CASE) (pp. 225-230). IEEE.
Reiner, G., Teller, C. and Kotzab, H., 2013. Analyzing the Efficient Execution of In‐Store
Logistics Processes in Grocery Retailing—The Case of Dairy Products. Production and
Operations Management, 22(4), pp.924-939.
Sel, Ç. and Bilgen, B., 2015. Quantitative models for supply chain management within dairy
industry: a review and discussion. European Journal of Industrial Engineering, 9(5), pp.561-
594.