Analysis Of Present And Prospects Of Famco Supply Chain Management Business Essay

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Introduction to the company

FAMCO (Al-Futtaim Auto & Machinery Company) is a manufacturing company in UAE which provides wide variety of services and products to the customers which cover different sectors like transportation, commercial business, oil gas and marine sector. This company is well known for its material handling services. The company has a very fundamental supply chain management which makes the company's profile very high. This company is settled in various parts of UAE like Dubai, Abu Dhabi, Al Ain and Ras Al Khaimah. It is known for construction of marine engines, diesel generators. Company is known for its quality standards as well and is ISO 9001:2008 and ISO 14001:2004 certified.

We have taken this company for the analysis of present and prospects of its supply chain management, its competitive advantage and its quality standards.

Supply Chain Management of the company

The company has a very bright supply chain management. It is true that high tech and highly up grading companies have a supply chain management system which is considered to be the root of its growth. The same is considered for AL FUTTAIM AUTO & MACHINERY COMPANY. There is a link of interrelated technical aspects of the company which can be shown by the supply chain management of the company and it could seriously be one of the biggest assets for any company. The company received Material Handling Award, 2010 (FAMCO receives 'Material Handling Provider of the Year 2010' award, 2010). Supply chain management of AL FUTTAIM AUTO & MACHINERY COMPANY can be regarded as the technique which satisfies the customers with their right needs at right time with out any delay. There are various services associated with the company which come under supply chain management like designing, distributing and building of various assets for the company. AL FUTTAIM AUTO & MACHINERY COMPANY has various techniques which help the company play major role in producing high performance. This is the reason that supply chain management in AL FUTTAIM AUTO & MACHINERY COMPANY is highly appreciated. This is the reason why AL FUTTAIM AUTO & MACHINERY COMPANY is considered to be one of the best in the supply chain management system.

There are several specific supply chain management strategies which are being implemented by AL FUTTAIM AUTO & MACHINERY COMPANY in order to get the desired consequences of its services. These strategies are as follows:

Global Operation Strategy: This is one of the best supply chain strategies of AL FUTTAIM AUTO & MACHINERY COMPANY. Under this strategy, the company has decided to expand its network to various countries of the world so as to get the expanded version of its business. It is really helpful for the company to go global because of huge competition in the market. In the present times, every single company ha its branches all over the world. Due to globalization has taken place in almost every country, it has become mandatory for every company to go global. Hence as a strategy of supply chain management, it has been seen that AL FUTTAIM AUTO & MACHINERY COMPANY is getting global and this is its one of the biggest strategies of supply chain management.

Merger Integration which involves Performance Improvement: This is again an important strategy of AL FUTTAIM AUTO & MACHINERY COMPANY. In order to expand its business in various countries of the world, the company has started the strategies of integration with the other companies. This has resulted in some of the very wonderful points for the company which are as follows:

This has resulted in increase in the network of AL FUTTAIM AUTO & MACHINERY COMPANY in various countries of the world with out much expense as it would have incurred if managed alone and without much effort. Just the well settled company in the target country is approached and the deal is done

This has also resulted in lowering the completion in the market. When the company is integrating with the other company, then it is making it its partner not the competitor which is the best part of their supply chain strategy.

Strategy of Pricing: Pricing strategy of AL FUTTAIM AUTO & MACHINERY COMPANY has also been revised. This means that new and attractive prices are being set for the customers. The company ahs various number of clients which are availing the services. The company has to revise the rates to be charged from them time to time in order to get the feel of the market because of the huge competition. Pricing strategies are not only according to the competition in the market, it also accounts for the benefit to the company as well. New pricing for the company is done considering the inflation and recovering from the financial crisis.

Customer Experience: Customer Experience is yet again an important strategy which is a part of supply chain management of the company. Supply chain management of AL FUTTAIM AUTO & MACHINERY COMPANY is more customer's oriented. This is the reason that it is learning a lot from the customer's experiences. All the strategies of AL FUTTAIM AUTO & MACHINERY COMPANY are implemented taking in account the past customer experiences of the company. For example in the above paragraph, we have described that company is changing the rates of discount and rates of interest, this is all done keeping the experience of the customer in mind (FAMCO Supply Chain Services).

There is a very highly technical device used for the implementation of Supply Chain Management. This device is known as Carrier OEM. There are few steps which are taken into account for the implementation of Supply Chain Management in the company. These steps are as follows:

At the very beginning the device and OEM(Original Equipment Manufacturer) for the supply chain strategies are selected

After the selection of OEM, TCO is analyzed

Then a specific unit of supply chain management called Service and Device Launch Management is taken into account

Replenishment strategies are stored after that and systems in the company are processed

Then Reverse logistic in the company takes place in which the repair and the return strategies are taken into account

After that an automatic vendor selection takes place in which vendor is given the chance to select according to his choice

Finally the operational optimization in the company takes place in which the company applies it manufacturing process in the operational activities

Hence, supply chain management of AL FUTTAIM AUTO & MACHINERY COMPANY is considered to be cone of the most important parts of its business which means that company is highly recognized by its supply chain management strategies.

Sustainable Competitive Advantage of the company

Competitive advantage is necessary for any company to grow. FAMCO being one of the biggest in its field had a lot of work to do to come at the position where it is right now. This is obvious that company has surpassed various competitive advantages because of which the company has got such a level in the industry at present. In this we are going to take into account various strategies implemented by the company in order to get the competitive advantage in the industry.

Sustaining Competitive Advantage through Customer Experience: Customer Experience for the company has always been a boon which has given it a pace to grow. FAMCO always keeps in mind that it is necessary for the company to take care of its performance and this is the reason that it is creating a high performance competitive advantage in the industry in the uncertain times. There are several things which give it an edge over the other companies and the first important thing is its employees. The company has very high level employees which are very much dedicated towards their work and do the best in something given to them.

There are different prospects which are seen by the company in order to get the competitive advantage through the customer experience.

In order to purchase an item from any provider or the seller there are different prospects which the company see and from this likelihood company get into the result. The following graphical representation shows the likelihood of the customer to consider purchase from the seller when seen as compared to the industry (How to survive against your competition over a long period of time). This shows that there is continuous decrease in the customer likelihood as taken as their quartile. We can see that first quartile of the customer experience is 6 % more than the industry average, the next quartile of the customer experience is 2.1 % more than the industry level, then the third quartile of the customer is 3 % less than the industry level and the fourth quartile of the customer is 8.9% less than the industry level which means that the customer likelihood is continuously decreasing if the industry average is considered.

The next factor which is considered by the company in order to get the analysis of sustainable competitive advantage through customer experience is the analysis of the customer experience quartile of the customers of FAMCO for switching away the business from the provider. This approach of competitive advantage gives the same result as compared to the order results. The below diagram shows the reluctant of customer in case of switching the business away from the provider as compared to the average of the industry. The first quartile of the customer shows 6 percent increase in the customer experience as compared to the industry. The second quarter of the customer experience has 1.1 percent mark above the industry level, the third quarter is 4 percent below the industry level and the fourth quarter of customer experience is 11.2 percent lower than the industry level (Customer Acquisition and Retention Using Customer Experience for Competitive Advantage in Uncertain Times).

There are some other factors which lead to the development in the competitive advantage. This is also connected to the customer experience. The downturn in the financial activities of the company has given an edge to the company in case of attained customer experience. This has been suggested by the FAMCO research work. The cyclic nature of the financial downturn in the country has given an improvement to the customer experience which result in the high performance nature of the company which has given it a competitive advantage in the industry.

In order to get the competitive advantage, it has also been necessary for the company to increase its brand value as well. In the following diagram we can see that change in the brand value of the company. Financial downturn has an absolutely opposite impact on the company's profile which means that company is company has a competitive advantage at an industry level. Brand value of the company has continuously increased even after the economic downturn of the market. The research of the company has shown that there are different types of affects which are attained by the company.

The customer experience has shown that there is an increase in the competitive advantage of the company. This customer experience not only deal with the brand value of the company but it also deals with the company's performance

The customer advantage has also been attained by delivering the right amount of customer experience. There are several strategies which are implemented. These strategies show different types of customer experience for example:

Service Standard of the company

Treatment of the Experience of various customers of the company

Delivering a road map which deals with the customer experience and brand value

The entire system of customer experience is shown by the change management system of the company which means that these strategic goals and guidelines may affect the company's performance

There are several key success factors which lead to creating a profitable profile in the customer experience which means that company's performance in sustaining the competitive advantage has grown in the recent years. There are different factors which lead to the development of competitive advantage. These factors are as follows:

Ownership and alignment of leadership

Wins of the customers

Engagement of stakeholders in the business prosecutions

Fast pace of the company and highly increasing scope

Quick wins by the company

The above are some of the important key success factors of the company which lead to its growth and development which means that company has a huge investment in the customer development and customer experience. There are several factors which may give it a huge break though and give it a huge competitive benefit over the other companies in the market.

Quality Management of the company

Quality Management of the company is its biggest source of operation management. There are different standards which are taken into account for quality management of the company.

ISO Standards

FAMCO uses the quality standard of ISO Standards which includes various standards like ISO® 9001. There are different types of requirements of these standards. The specific requirements are as follows:

ISO 9001® mainly requires the quality management system for the company. FAMCO is a company which is certified from ISO 9001®. This was the company among the very few from all over the world which has started this segment of quality management system (Quality Standards). It was one of the first few companies which were certified by ISO 9001®

ISO® 14001 is considered to be a standard for the environment. This involves the quality management system for the company with wonderful environment practices. This includes various practices like management of power system of the company or recycling of the products as well. The company is very much involved in the green technology system for which it has started its business management in the similar ways. FAMCO has its certification by ISO® 14001 in different locations all around the world. FAMCO is also certified by ISO® 14001

There is another quality standard for the company known as ISO® 27001. This is a replacement of BS7799. This mainly specifies various requirements which mainly deal with the information security system of the company. Information security management is another field in which the company is very much specialized as well as certified. There is another certification used by the company known as ISO® 27002 which is a replacement of ISO® 17799. This also deals with the security management system of the company. It helps in the Global Delivery Network.

Lean Six Sigma®

This is again a quality management approach by the company in which the company mainly works for reducing waste. This is one of the important quality standards of the company. This helps in increasing quality of the company. It also affects the servicing speed as well. The main help which AL FUTTAIM AUTO & MACHINERY COMPANY get from Lean Six Sigma is that it helps in Global Delivery Network which helps in improving the performance of the company.

Internal Quality Control Criteria

There are some standards which are bit different from the industry standard. This is known as Internal Quality Control Criteria in which there is a continuous phenomenon for the company to improve the performance. There is an internal quality assurance provided by the company before delivering every project which means that company is very much towards maintaining quality of the services which it provided to its customers. All the internal quality checks are done in order to satisfy the customers so that they can get the best possible products.

Total Quality Management

Standard of Total Quality Management (TQM) has become one of the necessities in this organization as this approach tries to minimize the errors taking place during manufacturing. This approach laid its emphasis over reducing errors to 1 in 1 million by making certain internal structuring, which makes it different from Six Sigma. There is a high end need for FAMCO to implement this strategy in its operations as without this particular tactic, it would not be able to utilize its inner strengths to tackle external competitive scenario in an efficient manner. This strategy is applied at various steps in the production procedure so as to ensure that at every possible echelon adequate quality product is obtained.

Gap Model

Gap model is one of those techniques that are considered to be mandatory if productive and long term relationship has to be established with the customers. Three basic entities that derive functioning of this model are word of mouth communications, personal needs, and past experience. All these factors are associated in such a manner at FAMCO that they act in a positive way to meet with the expected product in quality standard. Gap model try to shrink the gap between perceived service and expected service by raising the standards of the product and manufacturing process.


In this project we have taken FAMCO as a part of our analysis. This company is chosen because of the fact that it has a very good record in its operational activities. For company's performance analysis, quality management system, sustainable competitive advantage and supply chain management is taken into consideration. These three are the main part of operation management of any company.

From the above analysis of the company's operational management, it can be concluded that company has a wonderful record in its operational activities. Be it quality management where the company has almost all the certifications of improving quality, be it competitive advantage where the company has a huge competitive advantage over the other, especially in the situation when there was a financial downturn in the market. Company's performance has always grown and has seen wonderful hikes. Company has a wonderful record in the supply chain management system as well where the company has formulated various strategies which have helped the company to grow and flourish in the industry. FAMCO always see the quality of the people and has a wonderful record in the quality management. This company has implemented various strategies which can be regarded as one of the bests in the field of management.