Emirates Post: Strategic Supply Chain Management

Business Purpose

Supply Chain Management and Competitive Strategy

Emirates Post’s Background

Emirates Post is an official postal operation in the United Arab Emirates that aims at managing several long-term and medium-term planning operations and postal and non-postal services and providing the citizen of the UAE with the required portion of orders through more than 100 post offices (Emirates post group: About us, 2016). The current postal market of the country is stable indeed. The UAE citizens do not observe several mailmen walking outside and delivering packages in the summer heat (The mail delivery and postal system of Dubai, 2016).

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Much work is performed by a special federal post office and other companies like Emirates Post Group. The company is located in Dubai, and its subsidiaries (Emirate Post, Empost, Wall Street Exchange Center, and Electronic Documents Center) could be found in Dubai, London, Hong Kong, and Abu Dhabi (Emirates post group: About us, 2016).

Company’s Environment

The environmental issues of the company could influence corporate policy as well as strategic supply chain decisions considerably. Emirates Post aims at promoting leadership and creativity at two types of levels: international and local. On the one hand, the company has to develop a strong and sophisticated infrastructure using hiring qualified employees and supportive leader (Emirates post group: Vision and mission, 2016). On the other hand, there is a need for appropriate postal, logistic, and financial services that could promote innovation, creativity, and excellence. In general, the strategy to improve team building to promote customer satisfaction is the main decision made by the company several years ago.

Supply Chain for Emirates Post

The supply chain of Emirates Post is not too complicated because almost all services are closely connected and have to be directed to one goal: customer satisfaction. The following chain shows the number of services offered by the company under analysis.

Supply Chain.
Table 1: Supply Chain.
Supply Chain Flows.
Table 2: Supply Chain Flows.

Customer Fulfillment and Environmental Scanning

Value for Customers

The development of an effective supply chain management system is a crucial task for the company because it helps to identify and create appropriate competitive positions in the market, understand the main participants of a working process, and take the steps that promote the development of services. There is the Strategy and Communications department in the company that aims at analyzing information and product flows and developing a powerful value chain. The latest achievement of Emirates Post is the creation of value for its customers by considering the importance of quality, flexibility, and delivery issues in the form of P.O. Box options like My Home service, My Zone services, My Building options, etc. (Simpson, 2011).

Satisfaction Monitoring

There are more than 80 strategic partners of Emirates Post Group. As an integral part of the group, Emirates Post develops several such relations with different companies to improve the quality and variety of the services offered and to increase the level of satisfaction among customers. For example, Emirates Post has the Automobile and Touring Club of the UAE as their partners to drive home the messages of their customers (EPG 2012 annual report, 2012).

The satisfaction of customers could be improved because this partnership promotes the legalization of all activities and decisions of the company. Abu Dhabi Customs is another partner of Emirates Post with which the company has already established the electronic link. That link helped to improve the quality of public services, organize the information exchange process and track parcels from different parts of the world (EPG 2012 annual report, 2012). The satisfaction of customers is monitored using calculating the number of clients and the number of positive feedbacks left online.

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Customer Segmentation

The UAE postal companies have to understand their market better to deal with the potential growth of a variety of alternative sources and meet the needs of their customers. Taking into consideration the nature and location of services offered by the company and the communication with the citizens of the UAE, the following conclusions could be made. Female and male customers of Dubai and other Arab emirates including students, employees, and unemployed people, who could need postal services and do not want to spend their time and efforts on delivering goods, are interested in the services offered by Emirates Post.

SWOT Analysis

Strengths
  • Government support
  • Possibilities to reach remote places and reach the required locations in a short period
  • Capacity as a national postal services’ provider
  • Promote internal delivery in the UAE market
Opportunities
  • Availability to reforms
  • Improvement of management systems
  • Service variety
  • Activities to train employees
  • Communication with customers
Weaknesses
  • Lack of experienced employees
  • Cost accounting
  • Strategies are focused on customer satisfaction only
Threats
  • The presence of local companies
  • The easy entrance of new companies
  • Current technological development

Force of Changes

The five forces analysis developed by Porter is the possibility to understand the nature of competitions in the postal market and the possibilities of the company regarding the internal and external environment (Crew & Kleindorfer, 2012). The most important forces of changes that could influence Emirates Post’s supply chain strategies include the bargaining power of buyers, threats of new entrants, and substitutes. Such forces as the bargaining power of suppliers and rivalry are less dangerous for the company comparing to the previous three forces because Emirates Post could identify the existing competitors and develop partnerships with suppliers to improve their services.

Supply Chain Processes Thinking and Order Fulfillment

Company’s Strategies

Emirates Post is the company that is trying to review and improve its strategies constantly because of the existing technological growth, new solutions, and the necessity to meet customers’ expectations. According to Porter, there are three generic strategies (focus, differentiation, and cost leadership) that are used as the main tools to make appropriate strategic choices (Magretta, 2012).

Emirates Post is good at “focus” strategies due to its possibilities to offer specialized services in the market and meet the needs of customers. The company understands the market and identifies the expectations of its customers. Besides, Emirates Post trains its employees and formulates the teams so that they could cooperate with customers and clarify how to increase the level of their satisfaction. The creation of a strong culture and promotion of customers’ loyalty make Emirates Post unique and interesting for people.

SCOR Model and Primary SC Processes

The supply chain operations reference model (SCOR) helps to clarify the primary SC processes of the company and understand the visions supported by its employees. For example, the main plan processes that help to balance the demand and supply include the creation of annual reports and reviews of plans that cover the targets, indicators, and operational plans of the company. Source processes like the evaluation of the services that could meet the needs of the UAE citizens help to meet demand. Make and deliver processes help to transform the ideas into products. Emirates Post organizes team meetings during which the preparation of plans and training of employees occurs.

SCOR Model and Order Fulfillment Processes

Order fulfillment is the process that includes such steps as receiving, processing, and delivering the required portion of services to customers. Emirates Post takes all these steps in a certain order and hires specialized employees to complete their functions. First, the company receives a product, checks the information for delivery, inspect the inventory, add the product to the database (to track order status), and apply for the required numbers. Order processing makes the team choose each order separately and investigate the details to promote its delivery in time. Finally, the delivery process makes the order fulfilled as soon as a customer gets their products, sign papers, and prove the success of a deal.

Sourcing Processes

Sourcing processes consist of an appropriate choice of supplier selection (ships, airplanes, or local transport), transactional management (the company points out a team that takes responsibility for tracking orders), relationship management (Emirates Post develops partnerships with different companies and promotes its services by a variety of means), and communication management (all employees communicate to make sure that the progress of every product and order is successful, communication between employee and customers is developed, and communication between leaders and employees occurs to clarify the latest achievements, challenges, and contributions).

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Operations Management and Logistics Decisions

Operations management and logistics decisions affect Emirates Post’s supply chain in two ways. On the one hand, as soon as a portion of the control is gained over the orders and products offered by the company, there is no need to worry about poor awareness of customers or the inabilities to provide people with the required portion of information. On the other hand, the quality of logistics decisions defines the quality of the process and its speed. In case some mistakes or wrong decisions take place, customers become dissatisfied and unable to get their products and services in time.

Functional Goals

The functional goals of the company include the importance to ensure the sustainability and development of Emirates Post’s financial resources, the necessity to provide customers with high-quality services and use innovative ways to find the solutions, the obligation to increase customer loyalty, and the possibility to develop human resources and innovative culture within the chosen working environment (Emirates post group: vision and mission, 2016). All of them could be aligned with the strategy chosen by the company that is to increase customer satisfaction using hiring skilled employees and promoting team building.

As-Is Supply Chain

Strategic Supply Chain Costing and Performance Measurement

Strategic Cost Management Principles

Cost management has to be effective to ensure success (Benge, 2014). This process consists of the implementation of an effective strategy and the provision of resources and processes. Besides, principles have to be properly established. First, the company has to create clear and effective objectives. Emirates Post aims at promoting team building and using sophisticated employees to cooperate with customers and increase their satisfaction. Another important principle is the attention to contracts and resources with the help of which control over costs is possible (Benge, 2014). The company understands its true costs and takes steps such as low-cost advertising or low-cost transfer system to help customers adapt to pricing policies.

Strategic Cost Management Support

The major cost analysis tools used by the company to support strategic cost management are benchmarking (understanding of cost processes is required), target costing (product development promotes understanding of customers’ needs), and should-cost analysis (regarding the fact if a supplier quotation is reasonable or not, appropriate relations could be developed with suppliers).

Measurement of Sourcing, Operations, and Logistic Processes

Sustainable sourcing is important for Emirates Post. The company is a leader in postal services available for the UAE citizens and has to take responsibility for high-quality services, trustful relations with partners, and effective cooperation with customers. The main measuring ideas for sourcing, operations, and logistics processes should cover such areas as safe services, social responsibility, and environment protection. The main tools include surveys, pinpoint specifics, understanding of expectations, and loyalty measurement. Emirates Post should investigate if people want to work at the company and if customers want to cooperate with the company.

SCM Performance Measurement

The results mentioned in the current annual reports of the company show that the majority of orders are complete regarding the deadlines and expectations of the customers. For example, SCM performance could be measured with the help of the Perfect Order Fulfillment procedure when the percentage of orders that have to be delivered to the right place with the right products in the right conditions and quantities and at the right time corresponds with the customer information provided. At this moment, the company does not register significant failures and consider its measurements that include 72-hour delivery to over 200 destinations worldwide (EPG 2012 annual report, 2012).

Competencies and Outsourcing

Core Competencies

Core competencies are the behaviors demonstrated by employees in their jobs. They are based on workers’ knowledge, motivations, skills, and traits people possess. Besides, competencies are connected with core values established by the company. Regarding the fact that Emirates Post focuses on customer service importance, teamwork, loyalty, honesty, and responsibility, the main competencies of the company are the establishment of focus (when the company ensures that its employees understand it missions and opportunities), motivation (when employees recognize the importance of rewards), and teamwork promotion (when people want to cooperate and demonstrate their abilities in groups).

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Outsourcing

Emirates Post outsources because of the nature of services that have to be introduced to customers. The company cooperates with several other companies at the local and international levels. Postal services could be organized within a country or include several countries at the same time. Emirates Post outsources to meet the expectations of its customers, clarify core competencies, cut costs, and improve efficiency. Outside experts and suppliers help to comprehend the living principles and cultural peculiarities of different people and create the services that meet their expectations. Still, Emirates Post should consider the risks when it chooses to outsource including the possibility to lose control over some business processes, low realization, and lingual challenges.

Make-or-Buy Analysis

The make-or-buy analysis helps to investigate the current situation of the company, analyze its possibilities, and clarify the opportunities available with external suppliers. Emirates Post has to be ready to make a strategic decision and clarify if it is effective to rely on in-house services and source or pay attention to external services and cooperate with outside suppliers. It is too expensive and even impossible for Emirates Post to build its ships, airplanes, and cars to promote transport services in the company. Therefore, cooperation with companies that could offer transport services cannot be avoided. Partnership agreements promote diversification of postal services as well. Therefore, outsourcing is an integral decision for Emirates Post to create the required portion of services for customers.

Supply chain rationalization

Supply-Base Optimization

Supply-base optimization is one of the new techniques developed by different companies to maximize their revenues, gain competitive advantage, and minimize operations costs. Emirates Post succeeds in this process because it focuses on audit conduction (the analysis of its functional aspects), the development of action plans (the steps to be taken in the nearest future), the analysis of violations (the mistakes and challenges the company faces), and the evaluation of the activities that have or could be developed that are defined as the main steps of the supply-base optimization process.

Role Shifting in Competitiveness

Emirates Post has to succeed in role shifting because it helps each member of a team to clarify and understand their specified roles and responsibilities. Role shifting influences value proposition and the abilities of people to understand the worth of such a proposition. In competitiveness, role shifting is a good idea for Emirates Post because it deprives the competitors of the possibilities to predict the actions and decisions of the company. However, suppliers and partners have to be informed about this decision to avoid misunderstandings and concerns.

To-Be Supply Chain

Supply Chain Relationships

Relationships with SC Members

Emirates Post has to develop two types of relations according to its supply chain. On the one hand, Emirates Post has to cooperate with suppliers, who could help to succeed in transportation services, information exchange, and organizational improvement. On the other hand, Emirates Post should have a good portion of relations with its customers and promote their loyalty.

Practices for Successful Alliance Creation and Management

Alliance helps to encompass a variety of relations that could be developed by an organization. The promotion of successful alliance creation and management in the company is one of the main tasks established by Emirates Post. Such practices as the creation of mutual goals, the identification of value proposition, and the identification of expectations could be offered to the company. Emirates Post may cooperate with other subsidiaries of the Emirates Post Group and share the mutual goals to increase the level of customer satisfaction.

Negotiation Strategy Elements

Emirates Post has to develop relations with customers and suppliers properly. Negotiation strategies are crucial for the company because they help to create strong and effective relations and partnerships. The best practices are information sharing, priorities’ recognition, and target price recognition. Besides, Emirates Post should be ready to take the first steps and make first orders to demonstrate its wisdom and intentions to cooperate.

Sharing Information across the Supply Chain

SC-Related Information Technologies

Emirates Post has access to several software applications in its supply chain process. The most successful examples are customer relations management, Internet-based software, and electronic data interchange. ITs in SC provide transportation, inventory, sourcing, and facility. These technologies help the company to create a product and make sure customers could follow the progress of the order and the location of a product they expect to get. The essence of all technologies used by Emirates Post is to promote the exchange of information using the available tools and applications.

Internet and E-Commerce in Supply Chain Management

In supply change management, the role of the Internet and e-commerce remains to be crucial. First, Emirates Post offers its services via the Internet so that customers could learn what they can get with the company. Second, Emirates Post could search for new suppliers online and discuss the nature of services to be promoted. Finally, online communication and the introduction of annual reports help the company to demonstrate its current success and achievement, invite new people for cooperation, and analyze its strengths and weaknesses taking into consideration the opinions of people around the whole world.

The Supply Chain Road Map

Supply Chain Mapping

  • Who We Are?: Emirates Post is a leading UAE company that offers postal and non-postal services for Emirates’ citizens. Its main purpose is to develop postal, logistic, and financial services in regards to global standards and customers’ expectations.
  • How Do We Fit?: Emirates Post focuses on teambuilding and improvement of employees’ skills and abilities to meet the needs of their customers.
  • How Should We Fit?: Emirates Post has to understand the importance of information technologies and concentrate on the supply chain processes.

Conclusions and Recommendations

In general, Emirates Post has already achieved success in the identification of its core competencies and values. Besides, it is good at outsourcing practices and fulfilling customers’ needs. Still, the analysis of its activities and the recognition of its abilities prove that Emirates Post could improve its supply chain in case the exchange of information is promoted at a high level, and new SC costing practices are implemented.

References

Benge, D.P. (2014). NRM 1cost management handbook. New York, NY: Routledge.

Crew, M.A., & Kleindorfer, P.R. (2012). Competitive transformation of the postal and delivery sector. New York, NY: Springer Science & Business Media.

Emirates post group: About us. (2016). Web.

Emirates post group: Vision and mission. (2016). Web.

EPG 2012 annual report. (2012). Web.

Magretta, J. (2012). Understanding Michael Porter: The essential guide to competition and strategy. Boston, MA: Harvard Business Press.

Simpson, C. (2011). Mail to be delivered to doorstep under the new postal scheme. The National. Web.

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