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Dina Farms (ICDP) logistics problem

 Abstract

This research document its main focus to show the problem of logistics
(products distribution) problem in Dina Farms (ICDP) the milk
production company a subsidiary of Qalaa holdings group. Dina Farms
(ICDP), milk products are consumer proven high quality, fresh and
organic products. Thou, they have a high demand across the Egyptian
markets, the products are available in the big retailers (hypermarkets)
especially in Cairo and Alexandria, but the small ones & other
governorates lacks the products as it can be sometimes not available
for a week or more due the high demand and the distribution shortage.

 Introduction & Facts

Dina Farms was founded in 1987 as a family business with one sole
owner, then turned into a corporate and has become Egypt’s and
Africa’s largest private integrated dairy farm with more than 15,000
head of cattle of which over 8,000 are milking cows due to the
accusation and investments are done by Qalaa Holdings.

1987 The company was established and started operations with 377
pregnant heifers imported from USA, 1994 A Skimmed Milk Powder
(SMP) factory strategically built, to compliment the company's dairy
farm. It remains to be the only SMP plant in Egypt, 2007 Qalaa acquires
Dina Farms, which at the time had a total herd count of 8,781 and 6
milking units (3,780 milking cow). The company upgraded five milking
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stations with DeLavalI later acquires 235 acres located within the
company's land, with herd count 654 and a milking unit, 2009 The
company takes receipt of 1,897 heifers. In addition to the completing,
the construction of two new milking units.
2010 The Company installs Korral Kool cooling system on all dairy
units to help overcome heat stress in summer. The Company takes
receipt of an additional 807 heifers and completes the construction of
an additional unit Dina Farms as the first farm in Egypt to be ISO
certified.
A premium line of fresh milks products gets rolled out centered on a
new PET fresh pasteurized milk plant inaugurated in February of that
year, 2011 The company launched the single serve packets in addition
to its leading 1-liter flagship Launch of additional SKUs New Branding
& face lifting for Dina Farms; supported by a strong marketing
campaign, 2012 Purchase additional 995 heifers, 2013 The company
takes receipt of 1,897 heifers, in addition to completing the construction
of two new milking stations, 2014 The Company replaces 16 pivots,
and an additional milking station inaugurated (Dina Farms Company,
2018).

Dina Farms produces its own branded pasteurized fresh milk, yogurt,
cheese, butter and skimmed milk powder in addition to selling raw milk
to other local and international dairy producers in Egypt. The farm
established over an area of 10,000 acres strategically located on the
busy Cairo-Alexandria Desert road close to the major local
consumption markets and the coastal city of Alexandria. Dina farms
(ICDP) a great potential company that gain a respective share in the
dairy products market and the leader in fresh milk production in Egypt.

Dina farms ICDP has a CEO and board members, the operations team
consist of CFO, supply chain manager, planning manager, HR
manager, R&D manager, Planet Manager, legal affairs manager,
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marketing manager, and information technology manager, ICDP has

the capacity of 600 employees.

Government future trends can be additional transparent; serving to

corporations not politically connected with the government secure
contracts. Following the new General Agreement on Tariffs and Trade
pact, opportunities can increase hugely for the export of agricultural
product normally and dairy farm product specifically, Dina Farms the
most important producer of raw milk and powder milk in Egypt, thus we
have a tendency to merchandising milk to all or any the dairy
production firms in Egypt, giving us the power increase our returns and
profits and with a population of ninety million, Egypt has the biggest
market within the Arab world growth at a pair of is taken into account
high compared to developed countries. Nearly forty-five of the
population is beneath the age eighteen that creates a large shopper
base.
The enlargement of the middle class segment, economic openness
better higher living standards with improved health consciousness
across growing segments of the Egyptian population, Dina Farms
(ICDP) is using the social media channels intensively like AN
informative internet and other different social media platforms. The use
of automatic systems are taking over; it helps such a lot in reducing
time of production whereas increasing the capability of production.
Example: the semiconductor device injected in cow to observe &
ensure that each one the herd has been milked.

Dina farms ICDP, closed the year with a 17% y-o-y growth in revenues
to EGP 181.6 million in FY17. Revenue growth was (Qalaa Holdings,
2018)price-driven, with volumes declining 11% y-o-y to 13.0 thousand
tons on the back of an overall slowdown in the juice and milk markets.
The fourth quarter of the year
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Saw ICDP record a similar 17% y-o-y increase in revenues to EGP

48.6 million despite a 10% y-o-y drop in volumes sold. The company
posted a 5% y-o-y increase in 4Q17 EBITDA to EGP 7.8 million;
however, lower volumes throughout the year weighed down full-year
profitability, with EBITDA posting a 60% y-o-y decline to EGP 9.1
million in FY17 (Qalaa Holdings, 2018).

ICDP is facing a hard time supplying the demand to all Egypt like its
competitors, especially in the holy season of Ramadan, they have three
lines of milk production and three lines of yogurt production, but those
production lines not fully utilized, and they have a very humble fleet
that can barely handle the distribution to Cairo, Alexandria, and some
governorates but not all of them, they decided to do something about
it and starting to give license of distribution to individuals, whom will be
subjected to some mandatory terms and conditions, but that doesn’t
solve the problem as we got a few individuals who have the financial
ability to earn such license and something else they didn’t promote the
idea, as we have a little number of distributors.

 Stakeholders’ analysis

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 Major research question

 Can logistics increase the market share?

 Minor research question

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 Product shelf life?

 Claim

Dina farms (ICDP) is facing hard times and a shortage of logistics, they
cannot supply the demand to all Egypt governorates by them own,
and the problem maximized during the seasons.
The product shelf life is a constraint as pasteurized milk has only
seven days as shelf life, but other flavored and yogurt products have
fifteen days as shelf life, but I believe that the problem can be solved;
through implementing, a strategic solution that can benefit the
company growth and future.

 Literature Review

The increasing competitive pressure characterizing mature industries,

wherever products are perceived by customers as virtually similar from
a technical purpose of reading, has drastically magnified the
importance of the service that competitors are ready to deliver to their
customers. Within the new millennium, corporations increase the
perceived price of the product, retain clients and gain new market
shares primarily through customer service. Since in supplying‐
intensive mature fields client service stems from logistics and flows
coordination on the supply chain, leading‐edge corporations add price
to their product through associate economical and effective supplying
and integrated offer chain management, providing their customers with
the simplest category service at all-time low total price, Most firms are
competitive with comparatively similar machines, technology, and

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experience. Consequently, time compression methods are getting the

cornerstone to establishing the planet category enterprise. Today time
is on the leading edge of competitive advantage. The ways that leading
firms manage time … and in distribution, are the foremost powerful
sources of competitive advantage.
Customers need tailored merchandise and services, and perpetually
rummage around for lower lead times and better frequency of delivery.
Additionally, customers are continually able to address competitors if
their desires cannot be consummated virtually in a flash. So provide
chains are expected to reply speedily, effectively and expeditiously to
their customers, achieving world category service levels not to mention
minimum inventories and prices.

From the on top of, it's clear that the effectiveness and therefore the
potency of the supply method, along with a coordinated and integrated
provide chain management, plays a key strategic role in an exceedingly
time‐shrunk, worldwide marketplace. During this competitive state of
affairs, wherever monetary resources are restricted, several makers
have additionally understood that their core competences do not seem
to be within the logistics‐field, and have so increasingly wanted to shop
for supply services and functions from third party service suppliers. The
outsourcing of non-core processes and activities makes it attainable to
specialize in core producing activities, while, at the identical time, 3PL
suppliers have specific supply core competences, and that they will
manage supply processes additional expeditiously than their
customers.

In this context, 3PL outsourcing ought to be thought-about to be one

thing additional complicated than the straightforward distance
outsourcing of supply activities, like deposition or transportation.
whereas many ironed relations between distance relationships to true

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partnership will exists, once speaking concerning 3PL outsourcing, a

real partnership condition is typically assumed.
The reason is twofold: initial, a real partnership needed due to the
strategic nature of the services purchased. As already remarked in
several industries, supplying is being progressively viewed as a driver
of differentiation and competitive advantage. At the identical time
supplying processes are outsourced because of the client
acknowledges that competitive benefits will be reached by exploiting
synergies and investing the supplying supplier distinct competencies.
Once supplying service is outsourced, the 3PL service supplier
becomes a significant player within the provide chain method that
brings product and services to finish customers, and thus it has to
integrate corporations share values, goals and company ways for
mutual edges.

Secondly, the difficulties and therefore the dealing prices that burden
the looking out, choice and analysis method of the foremost viable
partner may become a major driver forcing supplying outsourcing
toward an extended time relationship
Basing on these premises, an identical definition of 3PL, that we'll
check with throughout this paper, is that the following “a non-
transactional partnership between a purchaser and a vendor of
supplying services, wherever bundled supplying activities, that may
cover the entire provide chain management, are outsourced from the
client to the seller”. The given definition is consistent, since it
encompasses the dual essence of 3PL: the non-transactional nature of
a partner relationship and therefore the outsourcing of bundled
supplying activities, entailing the next degree of quality and
management. As so much because the partnership issue is worried,
the definition given is according to that projected by poet, 1996, who,
advocating (Bowersox, 1990), discovered however “ … increasing
range of firms are going in long run relationships with fastidiously
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designated 3PL service provider” and “ … By change of integrity forces

the partners improve the potency of operations, figure out along to
require prices out of the supplying system, reciprocally boost
profitableness and improve service to finish client. Such partnership,
once roaring, offer each parties a competitive go up the marketplace”.

As mentioned up, the likelihood of concentrating on core activities is

one amongst the foremost often claimed drivers of supply outsourcing,
define and reference alternative vital outsourcing factors, like market
growth thanks to economic process and deregulating, trade‐off
between asset‐specificity and performance measurements, company
reconstructing programs, price reduction programs aimed toward
turning mounted prices into variable prices, the requirement for added
house, changes in labor problems, etc. of these drivers might play an
additional or lower role in initiating the supply outsourcing method.
However, the identification of the drivers is simply the primary step in
an exceedingly additional complicated method that, ranging from the
wants to source supply, results in the rationalization of a strategic
alliance between 2 parties, and to the continual auditing of the
performance achieved.

Here we will identify five main steps, which make up the logistics buying
process:
1. identification of the need to outsource logistics;
2. development of feasible alternatives;
3. evaluation of candidates and selection of the supplier;
4. implementation of services; and
5. Ongoing service evaluation.

Obviously, whereas these steps delineated as sequent, they will have

some overlapping. At identical time, some iteration between steps
could also be needed. In this document, we have a tendency to

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specialize in the third step of this shopping for framework: the analysis
of viable 3PL candidates and also the choice of the foremost
appropriate one. This stage begins with the definition of criteria that
must be thought-about within the choice method; it's followed by a
preliminary screening of candidates supported qualitative factors, and
ends with the choice of the foremost appropriate provider. The
literature review has indicated that the majority of the previous efforts
to produce tips for the choice method are either partial or qualitative,
for example, examine 2 main criteria for choosing third party supply
service supplier, however primarily focus their study on however a
firm's fight and external setting influence these criteria. Some choice
criteria may well be deduced. Solely depict the most phases that
represent the choice step, however don't formalize a quantitatively
structured methodology with that to perform it. Indeed, the most
objective of their work is to provide a structured framework for the
shopping for method as a full, instead of to analyze the main points of
the choice step. Finally, a number of the choice criteria that are typically
ta (Dina Farms Company, 2018)ken into consideration by supply
executives once possible 3PL service supplier candidates are close is
deduced from surveys (Bottani, 2006).

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 References
Bottani, E. (2006). HOME BROWSE JOURNALS & BOOKS SUPPLY CHAIN MANAGEMENT: AN
INTERNATIONAL JOURNAL VOLUME 11, ISSUE 4 A FUZZY TOPSIS METHODOLOGY TO SUPPORT
OUTSOURCING OF LOGISTICS SERVICES. Retrieved from Emerald insight:
https://doi.org/10.1108/13598540610671743

Dina Farms Company. (2018, Novamber). Our Story. Retrieved from Dina farms website:
http://www.dinafarms.com/

Qalaa Holdings. (2018, Novamber). publications#annual-reports. Retrieved from Qalaa Holdings:

http://www.qalaaholdings.com

Sankaran, J. K. (2003). Logistics in relation to strategy in dairying: The case of New Zealand dairy.
Retrieved from Emerald insights: https://doi.org/10.1108/01443570310471848

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Tian, Y. (2013). INTERNATIONAL JOURNAL OF PHYSICAL DISTRIBUTION & LOGISTICS MANAGEMENT

VOLUME 40, ISSUE 5 THIRD‐PARTY LOGISTICS PROVIDER CUSTOMER ORIENTATION AND
CUSTOMER FIRM LOGISTICS IMPROVEMENT IN CHINA. Retrieved from Emerald insights:
https://doi.org/10.1108/09600031011052822

Zeki Ayağ, F. S. (2012, April 10 ). A fuzzy QFD approach to determine supply chain management
strategies in the dairy industry. Retrieved from Link springer:
https://link.springer.com/article/10.1007%2Fs10845-012-0639-4

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