Executive summary
The purpose of this report is to provide an analysis of the operations management system of Aramex in relation to the company’s business goals and objectives. In addition to the company’s brief history, the mission and business strategy of Aramex is described. Factual data includes figures related to the company’s scope and operational strategy. A literature review is provided to describe related management concepts. Based on the information available, recommendations are provided to achieve improvement in meeting the business goals.
Introduction
Aramex is a global provider of logistics and transportation services, which unique features such as its worldwide presence and multi-product offering make it an interesting case study on the implementation of the operation management concepts in real-world conditions. Although Aramex is already a globally recognized brand, the continuous growth of its network and the expansion of the company’s operational capabilities highlights the need to evaluate the efficacy of current management systems and reorient them if it can lead to an improvement in meeting the business goals.
Aramex aims to provide the best logistics and express transportation services; however, customer reviews suggest that the company has a long way to go to provide high-quality services. Authoritative review sites such as Trusted Pilot show that more than 80% of Aramex customers are not satisfied with the quality of their services, and the company has a total rating of 2 out of 10 (Aramex reviews 2016). The purpose of this report is to analyze the current operations management system of Aramex and suggest implementable changes to improve the quality of their services and the value of their business.
Aramex brief history, business goals, and objectives
Aramex, an abbreviation of Arab American Express, was founded as an express delivery company in 1982 in Dubai, UAE (Overview of Aramex n.d., p. 1). Aramex was one of the first companies to offer several logistics and freight forwarding services under one brand, and it was the first company to trade its shares on the NASDAQ. The company took a course on the expansion of its operations beyond the Middle East in the 1990s and focused on establishing its presence in emerging markets.
By 2001, Aramex offered transportation and logistics services in 33 countries by 2001 (Aramex: Delivering the Future 2009). As part of the company’s expansion plans, Aramex founded the Global Distribution Alliance (GDA), which unites over 40 transport and logistics providers all over the world; Aramex also developed a proprietary shipment management system, used by the GDA (Overview of Aramex, n.d., p. 1). The company continues to expand its network and increase its shipment volume by acquiring express delivery companies.
Aramex official site claims its mission is “to be recognized as one of the top five global logistics and express transportation service providers” (About Aramex n.d., para. 2). The company’s purpose is “to enable and facilitate regional and global trade and commerce responsibly” (About Aramex n.d., para. 3). Currently, Aramex offers international and domestic express delivery services, freight forwarding, logistics and supply chain services, e-business solutions, and online shopping services. Aramex operates in more than 60 countries worldwide and serves more than 50000 companies globally.
Literature review of operations management concepts
The logistics and transportation industry is a highly competitive industry with many companies offering the same or similar services locally and globally. The primary goal of any business in a competitive industry such as logistics and transportation is finding a competitive advantage and establishing it through operations. This fact necessitates the understanding of the operations and supply chain functions (Jacobs and Chase 2014, xiv).
Operations management is a concept that describes the processes between the production of a product and its delivery to the customer (Boyer and Verma 2009, xvii). Service operations management addresses the same processes in the service industry. Supply chain management refers to the organization of all supply chain activities, with the goal of creating the best customer value and competitive advantage (Boyer and Verma 2009, xvii). A supply chain is “the means by which a company brings its products or services to the marketplace” (Straus 2012, par. 1).
The management of the company is responsible for the creation of a corporate strategy, a broad set of policies, and plans which coordinate operational goals. The corporate strategy includes developing an operations strategy and an efficient supply chain strategy in order to achieve certain strategic or competitive priorities. Blinding an effective network of partners is necessary for companies operating globally, and one of the business models used by global brands in franchising. Franchising is a type of a partnership in which a company, a franchisor, offers its branding and resources such as the company’s system of operation to the franchisee for a regular fee (Franchising n.d.).
Aramex current operations management system
In its essence, the business of Aramex is built around the delivery of goods from one place to another through its network of logistics facilities. Aramex operates in a competitive industry of logistics and transportation, in which the service offered by one company can be substituted with a similar service from another company. In the delivery service industry, several major players such as DHL offer express delivery service alongside many smaller, local companies.
Since this industry is competitive, the price of express delivery services is defined by the intersection of supply and demand, and all companies, including Aramex, accept the price, rather than define it. Thus, the long-term profit of Aramex is close to marginal costs. In order to succeed in a competitive market, a company has to differentiate itself from its competitors, and Aramex uses brand equity, superior customer service and an effective supply chain management system as a competitive advantage. Aramex is pursuing a profitable growth strategy and aims to create and sustain value by:
- Expansion by small and medium-scale acquisitions in fast-developing economies of Asia, MENA and Sub-Saharan Africa. The expansion to the main areas of global trade will secure the company’s position as a global leader of logistic services and provide sources for growth.
- Offering branding, IT systems, global network, quality control and business intelligence to local companies through franchising. Franchising will help the company expand its network with minimal capital investment.
- Leveraging infrastructure to facilitate organic growth and develop new services using existing infrastructure. Supply chain management and data storage are being expanded to various Aramex locations (Strategic Direction 2011; Aramex Annual Report 2008, p. 25).
The brand of Aramex is well known in its category and helps when promoting new products among existing clients. In addition, brand helps group together all the company’s real or perceived unique features under one brand name. In the case of the logistics industry, the success of any company is defined by the quality of its customer service, including on-time delivery, customer convenience, customer support, etc.
Aramex is a franchise operated company and has franchisees and partnership outlets in 60 countries all over the world. This business model proves to be an advantage and a disadvantage at the same time. On the one hand, the global network of partnership outlets under the operation of Aramex shares a wide IT and physical infrastructure and relies on a set of policies, which help provide the best customer service.
In addition, Aramex business model means that new acquisitions are not as expensive as they could be since part of the investment is done by the franchisee. On the other hand, the sheer scale of operations means that it is more difficult to consistently provide high-quality customer service across different countries.
In order to improve the efficiency of the company’s daily operations and maintain a consistent, high-quality customer service, Aramex developed a proprietary documented quality management system (DQMS) called InfoHub, which is the foundation of the company’s management system (About Aramex n.d., para. 7). The company’s DQMS outlines “all processes that affect the quality of services provided to the customers have related procedures, policies and standards” (Management Systems 2008, p. 28). DQMS was developed in accordance with ISO 9001:2000 and is certified by the British Standards Institute (Management Systems 2008, p. 28). The company’s DQMS is regularly updated to reflect the changes in the industry. The company’s DQMS solution was created to achieve several objectives, including:
- policy objectives: the implementation of standards that apply to the whole company;
- quality performance objectives: the documentation and semi-annual monitoring of operational performance through performance appraisal;
- service and product quality objectives: maintaining a consistent customer service quality and verifying its quality through the Qualified Security Assessor (QSA) audits;
- quality system objectives: improving the performance of the quality system (Management Systems 2008, p. 29).
In order to achieve these objectives, the company trained Quality Representatives, well-qualified professionals who help to maintain the policies and standards, established by the organization, in remote locations. Quality Representatives work in stations all over the world and monitor the performance of the company’s franchisees in different countries. Aramex motivates its workers to contribute to the success of the company by establishing awards for the most innovative individuals. In addition, the company’s management outlines quality system objectives for each department in order to improve the quality systems.
There are other management systems at work in Aramex, designed for specific needs. These systems include a Vehicle Tracking System, HR management system, and a number of customized IT solutions that support management operations (Management Systems 2008, p. 30). The company built an integrated communication technology network which provides relevant information both to Aramex franchisees, GDA partners and customers, and provides training to their staff on operating of these solutions (Management Systems 2008, p. 29). In addition, a proprietary Code of Conduct was created and revised by the company’s management (Management Systems 2008, p. 29).
Aramex does not limit the improvement if its operations by implementing company-wide management systems. The company supported several anti-corruption initiatives and worked with major anti-corruption groups. The company’s stance against corruption and bribery is outlined in its Code of Conduct (Management Approach 2009, p. 27).
Supply chain management is a part of service operations management, and due to the company’s global presence, Aramex possesses sophisticated supply chain systems not available to smaller, local companies. Aramex supply chain includes an expansive infrastructure, which is leveraged to develop new services using existing logistics and IT solutions and immediately affects the company’s operating and financial performance. Aramex expands its supply chain management to various existing locations as part of its Leveraging Existing Infrastructure strategy. The company focuses on the Middle East and South Asia and invests in the infrastructure in this region (Aramex Annual Report 2008, p. 25).
Although Aramex in not committed to certification of its management practices, the company made a commitment to certain labor, environmental and health and safety standards. These include ISO14001 and OHSAS18001 certification of the company’s European operations, OHSAS18001 certification for Jordan operations, and the certification of Aramex Stations in Jeddah, Beirut and Dubai (Management Systems 2008, p. 29). Across the company, the policies regarding labor conditions were based upon the SA8000 standard, and AA1000 Stakeholder Engagement Standard is used to assist stakeholder engagement processes (Management Systems 2008, p. 29). Several of the company’s facilities were certified by Transport Asset Protection Association (TAPA), and Aramex aims to certify the rest of its facilities.
Suggested improvements to Aramex operations management
Aramex implemented a variety of operations management systems with a goal of improving both the operational performance and the quality of its services. However, online forums and high domain authority review sites suggest that Aramex customers are completely dissatisfied with the company’s performance. Customers list the following as the negative aspects of Aramex services:
- poor customer support;
- severe delays and failure to deliver parcels on time;
- unsupervised staff that does not follow the company’s procedures;
- lost and misplaced parcels (Aramex Complaints and Reviews n.d.).
Currently, Aramex has a 1.3 rating out of 5 at aramex.pissedconsumer.com and a total rating of 2 out of 10 at trustedreviews.com. In addition to customer complaints, further evidence of the inefficiency of Aramex operations management is provided on Aramex official website. Customer Support page at aramex.com offers online customer support services. However, in an attempt to find a customer support number, upon choosing certain countries the visitors often see the following contact information: phone (Customer Service): +000 (000) 000000, fax: +000 (000) 000000.
It should be noted that Aramex does operate in these countries through its franchisees. In addition, the company does not have a toll-free number. This fact leads to many customers submitting their questions through an online form on their website, and according to customer reviews, customer service representatives are overwhelmed with emails and are not able to respond in days or weeks. This fact means that dissatisfied customers take their concerns to online forums and review sites, which damages Aramex brand.
Certain improvements are suggested to eliminate bottlenecks and improve the effectiveness of Aramex operations management:
- Provide a toll-free customer support number to assist customers with urgent issues. Customer support representatives should be well trained in dealing with difficult situations, have a thorough understanding of Aramex policies and work on minimizing damages. Customer representatives should have access to the company’s tracking solutions and have the ability to provide special offers to customers affected by the delay.
- Expand logistics facilities in order for them to cope with the number of parcels and improve delivery times. If the facility does not cope with the number of parcels due to it being understaffed, more personnel must be employed, or the responsibilities of current employees revised.
- Adjust estimated delivery times to reflect real-world conditions.
- Provide basic training or educational materials to all company workers to ensure the high standards outlined in company’s policies are met.
- Toughen company’s policies on employee theft to reduce the number of lost parcels.
- Conduct quarterly or semi-annual revisions of all Aramex facilities to ensure that the policies and standards, established by the company, are maintained.
- Employ a PR agency to conduct a social media campaign. This is necessary to minimize damages already brought by the huge number of negative customer reviews online.
The implementation of these changes will require the revision of current company’s policies. The performance of individual franchisees should be evaluated. If the franchisee fails to commit to the company’s delivery standards, it does not help the company achieve its business goals and should be removed from the network. In addition, some of the well-trained personnel should be relocated to provide training to customer support representatives. Internal guides and assessment tools must be developed to educate and monitor all of the company’s personnel and improve the quality of services. Social media marketing has proven to be an effective tool to increase consumer trust (Olenski 2014).
It can be used to build a relationship with customers, gather feedback and improve the efficiency of the company’s operations through forums, social media, and review sites. It can be used to spread a positive message of innovation and customer-centric approach. Qualified personnel should be hired to handle social media interaction to fix the current negative perception of Aramex. Customer feedback and complaints should be regularly analyzed and reported. If these changes are implemented, it will reorient the operations management system to meet the business goals. This change will enhance the quality of customer service, increase efficiency in day-to-day operations and make the business more efficient and profitable.
Conclusion
Aramex saw the growth opportunity in the Middle East, a region of the world largely ignored by bigger delivery companies due to political and economic challenges. The devotion of the Aramex management to creating a sustainable, global delivery company has paid off, and now Aramex is a global logistics and transportation service provider which offers its services in many countries all over the world. After three decades of building and expanding Aramex multinational network of facilities, the company’s management came up with a number of management systems that support every part of its business activities, from HR management to parcel and vehicle trackers.
Aramex implemented a proprietary documented quality management system to monitor operational performance and maintain a consisted customer service quality. Now that the expansion part is largely done, Aramex has to consider the quality of its service and embrace a customer-centric approach. Current customer feedback suggests that there is a lot to be done to perfect service excellence. A large number of negative reviews are damaging to the globally recognized brand and highlight the weaknesses in the current operations management system. A number of changes to operations management systems were suggested in this paper, which, if implemented accordingly, would realign the business towards its goals, and provide the foundation for better customer satisfaction and the company’s improved financial performance.
References
About Aramex. n.d. Web.
Aramex reviews. 2016. Web.
Aramex: Delivering the Future 2009. Web.
Boyer, K & Verma, R 2009, Operations and Supply Chain Management for the 21st Century, Cengage Learning, Boston.
Franchising. n.d. Web.
Management Approach. 2009. Web.
Management Systems. 2008. Web.
Olenski, S. 2014. 4 Things Marketers May Not Know About Social Media Marketing. Web.
Overview of Aramex. n.d. Web.
Strategic Direction. 2011. Web.