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ACKNOWLEDGEMENTS
With immense please I, Mr. Rao Muhammad Wasim presenting internship report as part of the
curriculum of “Master’s in supply chain & Operations Management”. I wish to thank all the
people who gave me unending support.
I express my profound thanks to Manager Hosam Arabasy and all those who have indirectly
guided and helped me in preparation of this report.
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Executive summary
Abdulla Fouad medical supplies and services has been established in 1983. Since that time, they
have been at the forefront of Saudi Arabia’s healthcare vendors, helping the origin by providing
best medical facilities to its citizens.
Our mission is to maintain our fundamental values and to provide the best quality being the
premier supplier of healthcare cases in the Kingdom of Saudi Arabia and other important
markets in the Middle East and Africa.
This report will cover operations and supply chain management in one of the leading
organizations. It consists of planning, strategies and quality policies during the production line,
ways to improve customer satisfaction.
This report briefly discusses the Abdullah Fouad medical supplies and services. The first chapter
of this report talks about the company, scope of company and the competitors of this
organization. Second chapter of this reports puts a glance on the company management structure
which helps the reader to understand the company’s hierarchy and management staff such as the
manager, general manager, assistant manager, and coordinators.
The third chapter of this report contains the data about my internship plan which contains the
starting and ending dates of my report and also contains the tasks which were assigned to me
during my internship duration in three different departments.
The leftover last chapters of this report briefly discuss about the supply chain management as
well as the productive future plans of the company.
In the end of this report some critical points are written which I have observed in the company’s
working during my internship duration.
The last portion of this report talks about some recommendations to increase the supply chain
visibility.
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Contents
1. Overview Of The Organization........................................................................................................8
Introduction:............................................................................................................................................8
Product Lines:..........................................................................................................................................8
Competitors:............................................................................................................................................8
Address....................................................................................................................................................8
2. Organizational structure...................................................................................................................9
3. Internship Activity Plan..................................................................................................................13
Procurement Department: (4-12-2022 till 15-12-2022).........................................................................13
Logistics Department: (18-12-2022 till 29-12-2022).............................................................................13
Healthcare Customer Service Department: (1-01-2023 till 15-01-2023)...............................................13
4. Training Program............................................................................................................................14
Procurement Department.......................................................................................................................14
Logistics Department.............................................................................................................................14
Healthcare Customer Service Department.............................................................................................15
5. Analysis Of Production/ Operations Functions Of The Organization.........................................16
Production Planning............................................................................................................................16
Production Process..............................................................................................................................16
Production Strategies.........................................................................................................................17
Objectives..........................................................................................................................................19
Management of Quality.......................................................................................................................19
Aggregate Planning and Master Production Scheduling..................................................................20
Master Production Scheduling Process..............................................................................................21
Supply Chain Management................................................................................................................22
Material requirement planning (MRP)...............................................................................................22
Distribution requirement planning (DRP)..........................................................................................22
Vendors and distributors selection and management.........................................................................23
Coordination in SC and ERP systems................................................................................................23
Warehousing........................................................................................................................................24
Ordering Procedure Of Warehouse....................................................................................................25
Inventory Strategy And Policy...........................................................................................................26
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6. Critical Analysis...............................................................................................................................29
7. Conclusion........................................................................................................................................31
8. Recommendations............................................................................................................................32
Increase Supply chain visibility.............................................................................................................32
Eco-Friendly SCM.................................................................................................................................32
9. References........................................................................................................................................33
10. Annexes.........................................................................................................................................34
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Chapter # 01
Overview of the Organization
Introduction:
Abdulla Fouad Organization (AFG), a vibrant and varied business group that was one of Saudi
Arabia's early and most well-known success stories. It plays a vital role in the development of
the Kingdom today.
AFG was founded in Ras Tanura, a small-scale firm, 75 years ago, now it has been expanded
into a large number of new industries and discovered a variety of goods and services. Now it
serves in the field of Oil & Gas, Energy, Healthcare, Logistics, Information Technology, and
Construction sectors. It is a well-known business in all the segments for its excellence.
It’s head quarter is situated in Dammam, and regional offices in Riyadh, Jeddah, and many
satellite workplaces in KSA & GCC. AFG has well established associations with many
customers across the district which includes both public & private organizations.
Product Lines:
Oil & Gas
Industrial
Construction
Information Technology
Health care
Logistics
Consumer & Real state
Competitors:
Al-Jeel Group
Tamer Group
AL Ghosaibi Group of Companies
Address:
Abdulla Fouad Building
Dammam Khobar Highway-31411
P.O. Box 257, Dammam, Saudi Arabia
Tel: (+966) 013 814 1414
Fax: (+966) 013 810 2100
Email: info@abdulla-fouad.com
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Chapter # 02
Organizational structure
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Figure 2: Customer Service Dept Hierarchy
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Figure 3: Communication Outline
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Figure 4: Technical FSE Structure
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Chapter # 03
Internship Activity Plan
Scope
Core Laboratory and diagnostics
o Hematology
o Clinical Chemistry
o Microbiology & Virology
o Serology
o Immunology
o Histopathology
Medical & Surgical Devices
o Endoscopy
o Infection prevention
o Surgical instruments
o Respiratory consumables
Molecular Diagnostics
Point of Care
Nuclear Medicine
Blood Bank & Transfusion Medicine
Research and Life Sciences
Calibration Center
Our growing AFMS team of more than 300 employees are available to provide:
o Customer Support
o Sales and Marketing
o Business Operations
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o Regulatory Affairs
o Procurement
o Finance and Admins
The logistics process consists of the process of integration of several aspects such as material
handling, warehousing, information, transportation, packaging and inventory. Company has
logistics department in Head office while it has 4 warehouses in all provinces of Saudi Arabia.
The department has 90 employees including logistics manager. I learned some of the importance
functions like order processing, inventory management, transportation, packaging, demand
forecasting, material handling and fleet management.
Customer service creates a bridge between the customers and organization. AFMS has 40 field
service engineers, 30 sales specialists, 15 application specialists, 8 regional managers, 1
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customer support manager, 1 General Manager. I learned some of the important functions like
answering questions about a company’s products or services, processing orders and transactions,
resolving issues and troubleshooting technical problems, delivering information about a
company’s products, providing proactive customer outreach, handling customer complaints,
collecting and analyzing customer feedback, responding to customer reviews, tracking customer
service KPIs and metrics.
Chapter # 04
Training Program
Procurement Department
I have given tasks to compare different vendors in sourcing. I started to qualify suppliers as per
required data to ensure that selected supplier will comply company’s policies and standards. Best
suppliers are selected by assessing supplier qualifications, risk factors, and policy compliance.
One of the significant factors for controlling costs is finding the best and reliable vendor.
Secondly is to negotiate with selected supplier. I had to procure the highest quality product from
the suppliers at the best possible price. This function is very vital for the organization`s
profitability because if purchasing costs are high, an organization can end up spending well over
half of its revenue in this area thereby affecting its bottom line.
I have given a task to make competitor analysis. Competitor analysis enables the team to
understand the market scenario, quality, and price details. Procuring the best items at a
competitive price is the ultimate objective of the procurement department and it could be done
with an effective analysis of the market competitions.
Logistics Department
Some tasks were assigned to me during my stay in logistics like fleet management. As per the
shipment need the transportation was selected. It totally depended on the shipment volume and
delivery destination. Fleet management includes management of commercial or private motor
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vehicle, ships or rail cars. It can include various functions such as vehicle financing and leasing,
licensing and compliance, vehicle maintenance, accident management and supply chain
management.
I also tried to handle materials. It is the movement of goods or materials within a warehouse or
storage area. It involves the use of manual, semi-automated and automated systems and
equipment. It's important to consider the storage, protection and control of goods throughout
their manufacturing, warehousing and distribution phases.
I also participated in inventory management tasks. It is a critical component of the supply chain,
tracks inventory from a company's manufacturing plant to the warehouse and from these
facilities to the point of sale. The main goal is to have the right goods or materials. This entails
inventory visibility, including determining when to order, how much to order and where to store
the items.
In this department, I have allocated some of major tasks by supervisor. It includes updating
salesforce information regularly. The information like installation of equipment, status, customer
feedback and review, monitor all the KPIs related to salesforce.
NPS (Net promoter Score) to check how frequently customers are recommending your
company or service to others.
CSAT (Customer Satisfaction Score) to measure customer satisfaction.
FCR (The First Contact Resolution Score) to measure the number of cases resolved at the
very first attempt.
ART (The Average Resolution Time) to observe how long on average the support agents
take to solve the customer issues.
Collecting and analyzing the customer feedback is necessary for the company. I was directly
engaged with the customers for getting their feedback regarding the products, or during live chat
sessions, I ask customers to rate the service. After collecting feedback, I must analyze and take
notes of the suggestions if required, on what are the areas of further improvement. I had to pass
this information to the service supervisor.
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1. Analysis Of Production/ Operations Functions Of The
Organization
Production Planning
Production planning is the process of deciding how a product or service will be manufactured
before the manufacturing process begins. In other words, it is how company plans to manage
supply chain, raw materials, employees and the physical space where the manufacturing process
takes place.
Production managers take decision based on historical production trends with new, potentially
relevant trends in the market. Manager selects the use of resources that is the least costly and
most time efficient. As the plan is carried out, manager monitors the plan and evaluate the
differences in production. Managers alter the plans to meet the customer goals more efficiently
and more successful in the execution.
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Production Process
Production Strategies
To develop strategies, Senior managers must evaluate present position and forecast how it will
change during planning period. Such forecasts guide in specifying strategic objectives, and the
validity of strategy depends on the accuracy of forecasting. Depending on the type of strategy
for developing, managers must choose the forecasting techniques that will best allow them to
predict how the business will evolve.
Qualitative
A qualitative approach is excellent for initial guidance and is based on the judgment of those
closest to the markets. Start by asking sales and marketing employees for their opinions on
how the markets will change. Input from suppliers and customers is also useful. When
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managers assemble the information from different sources and find that it is consistent, they
have a good qualitative forecast.
Historical
To check company’s qualitative forecast and increase its accuracy managers need objective
information. An accurate and simple method of quantitative forecasting is to extrapolate
historical data. This forecasting is used in stable conditions only.
Patterns
Sometimes company needs monthly forecasting, but the historical data varies irregularly
monthly. Many business variables depend on annual or seasonal influences that are predictable
and make variable historical data relevant.
If there has been a major change in business situation, managers may have to adjust in
historical data. For example, if a new competitor enters market, company may forecast reduced
profits. If company introduce a new product, it will have product launch costs that will initially
depress its profits but eventually increase sales. If managers can identify the cause for a
variation in historical data, managers must include the effect in their forecasts to make them
reflect the changed situation of company in the market.
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Figure 6: Production Strategy
Objectives
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The overall objectives of production planning are mentioned below
Management of Quality
Abdulla Fouad is following ISO 9001:2015 standards. Organizations use the standard to
demonstrate the ability to consistently provide products and services that meet customer and
regulatory requirements. It is the most popular standard in the ISO 9000 series and the only
standard in the series to which organizations can certify.
Organize processes
Improve the efficiency of processes
Continually improve
Some of the key updates in ISO 9001:2015 include:
The introduction of new terminology
Restructuring some of the information
An emphasis on risk-based thinking to enhance the application of the process approach
Improved applicability for services
Increased leadership requirements
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Figure 7: The Seven Principles of ISO 9001:2015
The goal of aggregate planning is to achieve a production plan that will effectively utilize the
organization’s resources to match expected demand. Aggregate planning decisions are strategic
decisions that define the framework within which operating decisions will be made. The demand
of any product is not constant. It may change according to market conditions.
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Master Production Scheduling Process
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Supply Chain Management
Material requirement planning (MRP)
What is needed?
How much is needed?
When is it needed by?
The MRP process can be broken down into four major steps:
Identifying requirements to meet demand.
Checking inventory and allocating resources.
Scheduling production
Identifying issues and making recommendations
In addition, the material requirements planning system (MRP) helps company to maintain low
inventory levels by controlling manufacturing, purchasing, and delivery activities.
It is utilized by the firms to ensure the availability of right number of materials at the right time
and right place. It uses time phased schedule so that it can ensure the timely production of
product.
Demands
Current Inventory levels
Target safety stock
Quantities
Replenishment lead times.
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The DRP process can either use a push or pull method. First, the pull method involves demands
for finished goods shifting upward throughout the system to fulfil customer orders. The push
method is the opposite of the pull method - instead, goods are sent downward through the
system.
Supplier selection is the process by which firms identify, evaluate, and contract with suppliers.
The supplier selection process deploys an enormous amount of a firm’s financial resources and
plays crucial role for the success of any organization. The main objective of supplier selection
process is to reduce purchase risk, maximize overall value to the purchaser, and develop
closeness and long-term relationships between buyers and suppliers.
With strong Requirements Documentation and Vendor Selection Criteria in place, the process of
researching and selecting vendors begin. After locating potential vendors, company will send out
a “Request for Information” (RFI) to gather basic information from each vendor and then
compare them against pre-established selection criteria. From there “Request for Proposal” or
RFP (a highly detailed breakdown of each vendor’s services) is carefully reviewed and finally
selects the vendor as per requirement.
SCM is a cumbersome and challenging process for any organization. ERP solutions consolidate
all activities into a single dashboard instead of managing SCM and other business operations on
separate systems. In addition, the role of ERP in supply chain management is to achieve
operational efficiency by automating the SCM process. From resource management to sales,
ERP streamlines SCM by integrating workflows, finance, and information for your long-term
business success.
Abdulla Fouad uses SAP for SCM. SAP allows organizations to plan and execute logistics
within supply networks and to perform workflow management. SAP SCM can vastly improve
overall efficiency and productively streamlines network logistics.
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Following are the benefits of SAP SCM,
Increase visibility of the shipping process to help reduce the day’s sales outstanding
Effectively manage forecasting and planning in demand and supply process
Optimize inventory, order fulfillment and shipping of goods
Distribute key information to all stakeholders across the network
Improve communication and increase collaboration between business lines to manage
supply and demand process
Improve production efficiency and reduce production quality issues, therefore reducing
cost of goods sold
Enforce contract compliance for supply-side and supplier-side requirements
Reduce transportation duties and taxes; and increases rebates and incentives
Warehousing
Abdulla Fouad owns private warehouse as a storage facility rather than rented from a third-party
provider. This type of warehousing arrangement allows company to have more control over their
inventory and shipping operations. Abdulla Fouad has private warehouses in all the regions like
southern, western, eastern, and central to cover the whole country.
Increased Flexibility.
Improved Inventory Control.
Reduced Shipping Costs.
Greater Security.
Enhanced Branding Opportunities.
Private warehouses give companies the ability to tailor their storage and shipping processes to
meet their specific needs. This increased flexibility can lead to improved efficiency and cost
savings. In addition, private warehouses offer better security for inventory as well as enhanced
branding opportunities through custom labeling and packaging.
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Ordering Procedure Of Warehouse
The warehouse management process is composed of six major steps that are highly dependent on
each other.
Receiving
Warehouse receiving is the first and one of the most important processes of warehouse
management. This step requires receivers to check incoming items and make sure that they are of
the right quantity, are functioning properly, and are received promptly.
Put-away
Put-away is the second warehouse management process where the items received will be moved
from the receiving docks onto their most ideal storage locations. An efficient and accurate put-
away process ensures the safety of employees and the safe storage of items. It also helps
maximize space allocation, eases tracking of items, and minimizes traveling time of products—
which all ultimately enhance the whole warehouse experience.
Storage
In the storage process, it is important to keep items in their most appropriate location throughout
the warehouse. Considerations include safety, space, and efficiency.
Picking
Picking, as the name suggests, is the warehouse management process where employees locate
and pick up individual items across the warehouse to fulfill orders. This is one of the most
crucial steps in the whole process because it is directly tied to customer satisfaction.
Packing
Next, we have the process of packing or packaging. This is the part where all the picked items
for a specific customer are consolidated and prepared to be delivered. Considerations that have to
be observed include components such as accurate packing slip, appropriate packaging materials
(especially for fragile items), and the ideal packaging weight.
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Shipping
Shipping or delivery is the culmination of all the previously mentioned steps of warehouse
management. With this process, relevant staff sends out the finalized orders while ensuring that
the appropriate transportation mode is utilized to bring the items to the customers.
Shipping is only considered successful if the items are delivered with the correct documentation,
at the right time, and according to the expected quality.
The company follows multiple inventory strategies to manage the supply chain in kingdom.
Using SAP and QAD software help company to automate the logistics. Some of the strategies are
mentioned below
ABC Analysis:
The ABC analysis of stock is a method of separatin products into 3 classes to determine their
importance.
Class A: 10 to 20% of products representing 80% of the total revenues. These are the
most important products. Breakage is not an option and inventory monitoring must be
rigorous and regular.
Class B: 30 to 40% of the products which represent 15% of the total revenues. These are
intermediate products, and it is advisable to monitor these regularly, to always ensure a
products are available.
Class C: 50% of products that represent 5% of the total revenues. These products require
less frequent replenishment. Replenishment is only needed when all the stock has been
sold, to minimize storage costs.
First In, First Out (FIFO):
First in First out (FIFO) is a supply chain best practice that specifically refers to the sequence in
which inventory is booked and subsequently dispatched. FIFO inventory method allows
company to align the cost of inventory more accurately with the current market value, reducing
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the impact of inflation. More specifically, company’s most recently acquired stock can be sold at
a price that better reflects this market value.
In terms of business profitability, FIFO also ensures that the older inventory cost is applied to the
cost of goods sold, which in turn results in a lower expense on company’s income statement and
a higher profit.
Cost of goods sold = Cost of inventory at the beginning of the year + Additional inventory costs
(purchased during the year) - Cost of inventory at the end of the year
First Expired First Out (FEFO) ensures that the products with the most imminent expiration date
are shipped first. QAD software tracks the expiry date of each item code. Some of items have
short expiry, in new shipment. So, in this way the short and near expiry will be dispatch first.
Replenishment Method
This method consists of placing a regular restocking order, by defining a stock level status of
products. The quantity that constitutes the difference between the current stock and the optimal
stock level is defined beforehand.
This inventory and supply management method is particularly useful for expensive and
perishable products sold on a regular basis.
The reorder point method, or “just-in-time” method, is a supply chain management method that
requires defining a minimum stock level in advance.
As soon as this level is reached, a replenishment order is triggered. The timing of the order is
determined by stock levels and delivery times.
This method is particularly relevant for products whose frequency of sales is difficult to
anticipate. It is also used for products whose storage costs are high and must be optimized
wherever possible. It can be calculated by below method.
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Safety stock = (Maximum Sale x Maximum Delay) – (Average Sale x Average Delay)
Replenishment on Order
Restocking to order is advisable when it is not possible to know when or how many products the
company will sell. It makes it impossible to establish accurate sales forecasts.
This method consists of restocking products when the low stock number is reached. It is used
when the risk of stock shortage is better than overstocking.
By ordering variable quantities on variable dates, this method is responsive to changes in
consumption. It is vital to have a good grasp of what is always in stock. This method can result
in high delivery costs, due to the random nature of orders to suppliers.
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2. Critical Analysis
Supply chain management (SCM) is very important and effective to all companies. An improved
supply chain adds superior value to the organization’s operation which ultimately gives superior
value proposition to the end user for which efficient customer response (ECR) is crucial because
ECR deals with the demand management which is required for satisfying the demand of
customer by quickly and effectively applying product assortment strategies, rapid introduction of
the new product and marketing communication by reducing stocks and delivery time.
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To reduce transportation duties and taxes and increase rebates and incentives. It also
helps to reduce transportation errors.
Operations Management implements effective quality measures during production to
improve product quality. It ensures the products are of the highest quality standards to
meet the target customer’s expectations.
By continuously looking for new ways to improve and add new technologies, operations
management plays a crucial role in innovation and keeping a business competitive.
Great teamwork in all the departments
Operation management helps in motivating the employees towards their roles. Operation
managers guide all peoples in performing their roles and provide them with better
atmosphere. Employees are remunerated and rewarded according to their performance
level.
Operation management helps in improving the goodwill and presence of the organization.
It ensures that quality products are delivered to all customers that could provide them
better satisfaction and makes them happy.
Operation management improves the productivity of employees. It checks and measures
the performance of all people working in the organization. Operation manager trains and
educate their employees for better performance.
The company is trying to improve its operations and supply chain by regular audits and Quality
control certifications. The company is making good revenues after the implementation of SCM
automation software and strict QC protocols. All departments are trying to follow standard sops
given by management.
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3. Conclusion
In conclusion, the benefits can be seen in the form of improvement in SCM that includes reduced
cost resulting in cost efficiency, improved quality resulting in customer satisfaction, increased
capability of process and increased productivity and dependability. Ultimately these
improvements increase the profitability of the company.
An effective supply chains give businesses a competitive advantage in the marketplace and help
mitigate risks associated with acquiring raw materials and delivering products or services. By
implementing a supply chain management system, businesses are able reduce waste, overhead
costs, and shipping delays in a scientific way. The benefits of this systematic approach impacts
areas ranging from product quality to order turn-around times.
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4. Recommendations
Eco-Friendly SCM
Going green is business value that more companies these days are looking for. Customers are
becoming extremely aware of the steps that companies are taking (or not taking) to reduce their
carbon footprint, so it’s important to consider ways to reduce waste.
If company is looking to outsource fulfillment, partner with a 3PL that invest in eco-friendly
initiatives or allow company to use its own sustainable custom packaging.
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5. References
https://www.optessa.com/master-production-scheduling/
https://sjce.ac.in/wp-content/uploads/2022/01/Master-Scheduling.pdf
https://www.chegg.com/homework-help/definitions/strategies-to-meet-uneven-demand-
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https://www.netsuite.com/portal/resource/articles/inventory-management/material-
requirements-planning-mrp.shtml
https://www.geeksforgeeks.org/distribution-requirement-planning-drp/
https://www.planettogether.com/blog/distribution-requirements-planning-in-supply-chain
https://hartmanadvisors.com/it-management-consulting/vendor-selection-management/
https://blog.shiperp.com/sap-101-supply-chain-management-scm
https://scmedu.org/privatewarehouse/
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6. Annexes
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