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Logistics and Supply Chain Management
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Logistics and Supply Chain Management
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Executive summary
Logistics can be defined as the process of moving supplies from their concentrated area of origin
to areas where demand is high through the easiest transportation method possible (Gupta et al.,
2019). Within logistics are several activities such as raw material acquisition, storage of products,
transportation, and delivery to retailers, packaging, and even carrying out customer services. From
manufacturers to both the sellers or retailers and the supplier are involved in logistic work. Nonprofit organizations and military agencies are also involved in logistic work. Some other parties
like business organizations and state agencies are also entitled to maintain profitability from their
operations. For organizations to realize profits, logistic measures have to be deployed.
To effectively apply logistics in their operations, enterprises resort to carrying out in-depth
financial calculations that reveal where and how every organization's coin has been spent. The
concept of logistics demands that businesses weigh losses and profits accrued after sales are made.
The cost is drafted from the expenses resulting from the storage of products, terms of business,
shipping cost, and any other relevant logistic measure. Superior logistic performance is realized
when the expenses incurred are way lower than the profit made from such transactions (Hong et
al., 2018).
Depending on the cost of businesses transaction, organizations may reset their goals. Goals setting
occurs as a reaction plan to realizing that there is no profit accumulating from the business activity.
Losses that occur as a result of logistic shortfalls call for goal setting. The goals set are exposed to
thorough research and conclusions drawn from the logistic process. Goals setting is based on
observed shortcomings within the whole process service provision, starting from securing raw
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materials to manufacturing, supply up to retailing of the final product. Organizations can use wit
and provide incentives to workers who dedicate themselves to realizing the firm's goals.
In the process of supplying, organizations have their objective as; minimizing the cost of
transportation of products while preserving the high-quality supply services within the least
possible time. For the transfer of products to happen, several processes have to come in and ensure
the success of the supply. The stages of product movement involve planning, scheduling,
managing, and finally implementing strategies within the supply chain.
Background information
Albaik is a fast food restaurant located in Saudi Arabia. The restaurant has its headquarters in
Jeddah, Hejaz. The restaurant is famous for its spiced chicken meals, be it fried or roasted. The
restaurant stands out because of the secret spice used in saucing the chicken and other seafood. In
Saudi Arabia, the chain is the largest and most famous restaurant known to rival other food chains
like McDonald's. At the moment, the chain has expanded its trade name into at least eighty
countries worldwide.
The founder of Albaik is called Shakour Abu Ghazalah who is an entrepreneur based in Saudi
Arabia. Ghazalah has been selling fried chicken from the year 1974, and the initial location of his
restaurant was in Jeddah, along Od Airport Road. In the year 1986, the restaurant was registered
as Saudi's trademark. The restaurant made huge steps by opening two branches in Bahrain. The
opening of the chains in December 2020 records the first attempt of Albaik to open a chain outside
its country of establishment, Saudi Arabia.
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Since Saudi is a Muslim nation, Albaik has popularized chicken, and the food is viewed as halal
or permissible. The restaurant is a popular fast food industry with several branches in the city
where it all started. Specifically, Albaik has ten branches in Mecca, forty in Jeddah, and at least
one in Taif, Medina, Al Qunfudhah, Buraydhah, Al-Kharj Al Lith, and Yanbu. The restaurant's
stakeholders have plans of expanding the restaurant by opening other chains in the cities of Saudi,
for example, in Buraidah.
Like any other business, Albaik also fights for the market with its rival service providers,
specifically McDonald's and KFC. The restaurant boasts for classy and delicious deep-fried and
broasted chicken. What makes each of the restaurants stand out is their different unique secret
spices. Albaik specifically has its delicacies prepared using eighteen spices, excluding the garlic
and the chicken. The popularization of Albaik is owned to its delicious taste, good customer
service, and affordability. (Bakhari, 2015).
Problem description and objectives
The eruption of the COVID-19 pandemic has affected all sectors of the economy. The measures
put in place by governments to prevent the spread of the virus have seen many businesses plunge
into losses and ultimately closure. Food delivery has been a challenge due to compromised
logistics. The supply of raw materials, the processing challenges, disruption of distribution, and
even interrupted income have affected the logistic of most businesses, including fast-food
restaurants, specifically Albaik.
Albaik restaurant is very dependent on raw materials like chicken and secret spices to serve its
customers. The supplies of both the chicken and spices are from foreign countries. Brazil produces
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the raw materials transported to the restaurant's chains for processing into the finished broasted
chicken. The lockdown measures in the supplier counties saw the unforgiving effects of the virus.
The flights ferrying cargo are not allowed access or departure; therefore, only small cargo can be
ferried by passenger planes.
The restriction on air and sea freight has limited the supply of chicken and spices, and therefore
Albaik cannot keep up with the customer demand for fast food. The inconveniences have been
heightened by the many health inspections that can cause delays by even days. The delay can make
the chicken go bad, resulting in financial loss for both the suppliers and Albaik restaurant
Transportation by land has been hit by COVID-19 measures, making the transportation of even
the local chicken a hard task to accomplish. The track drivers that transport chicken and spices are
required to have permits before making any supplies. Since the supply-demand is overstretched,
the drivers are overworked and still do not meet the supply demands. The transportation works
bilaterally; the supply of raw materials and the delivery of ordered food. Both ways are affected
by measures put in place to prevent COVID-19.
Closed borders, shortage of workforce, lockdown measures, and social distancing rules are among
the many challenges that have adversely affected Albaik restaurants. Brazil, which is the major
supplier of chicken to the restaurant, is marked as a red zone area, and therefore, supplies are no
longer possible. Social distancing makes it impossible for restaurants to accommodate their full
capacity. The shortage of workforce has led to complications on logistics of the restaurant that
prepare and supply chicken as demanded. The objective is to reduce the cost of importing chicken
and spices. The cost of supplying broasted chicken is also under the radar. Lastly, the cost incurred
during the preparation process is also be reduced.
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Logistics and supply management concepts/tools.
Albaik stakeholders need to re-evaluate their strategies to meet the high demands from customers
and the low supply of chicken and spices. The ultimate strategy should yield profit to the restaurant
and effortlessly supply broasted chicken to the customers. The supply chain requires an in-depth
inspection from those who rear the chicken to transport them to the restaurants. There should also
be an inspection into the number of workers available in the restaurant at any given time, the
number of available suppliers, alternatives of supplying the already fried and broasted chicken,
and the number of customers making orders daily.
Demand forecasting
Albaik stakeholders can analyze the projection of their output, demand, and supply so that large
quantities of chicken source can be identified and transportation means secured. This tool will ease
the transaction of both the restaurant and the chicken and spices supplier.
Supplier management
The supplier management tool is needed to understand what it takes for the chicken and spices
suppliers to deliver the raw materials to the restaurant's premises. The knowledge is important
since it allows room for the arrangement of any other local chicken supplier. The supplier
management tool allows room for correction or adjustments, depending on th...