Question 1

1. Assume that Lulu has decided to work with supplier Barakat in the long-term. They have decided to develop a new fridge for storing fruit. Explain the activities you will be doing with Barakat from Concept Formation to the Production Phase. In each phase give one example of what Lulu will do and one example of what Barakat will do. (4x5 )

Question 2

2. What are the different costs of quality? Apply your answer to Firm Lulu. Explain how they will incur costs to increase quality. ()

CASE STUDY: Inside Lulu Hypermarkot's supply chain Lulu Hypemarket already operales one of the Largest supely chains in the region with more than 100.000 SKUs in each store, but it has its sights set ruch tigher, as Namitha Madhu reports... Lutu is also one of the UAEis tastest growing beandu at presant. What began as a small supemarket in Abu Dhabi in 1985 is now one of the lagest recail chains in the Midcle East. With the parent company EMkE Group headquartered in Abu Dhabi, Lulu Hypermarket has over 120 cutiots worltiwide, of wtich 50 are in the URE. In spile of the volume of goods handied and fee number of outets in the distrituition chain, the growp has boen atile to rua lis sopply chain managemeet in the country ske a well-oled machine, and most of it comes down lo a well thought out datebution channel and warehouse managensent syttem. For ease of operations. Lulu group has divided the UAE region into three parts: Dubai and Northem Emizates. Abu Doabi and A Ais, Manci, ahs taies care of the logistic operasers in Dubai and Northern Emirales, takes us through the goupls supply chain process: Lulu has four warehouses in the UAE. The one in Abu Doabi being the largest with fimn is f. followed by the warehouse in Dubail Investments Park aith 400.000 se t. At the warehouses, goods are managed with the help of a warehouse managerment system. Ordering from store to warehouse is coerpletaly antomated. Wh practice corricuterised recedering of products for the stome everyday degeoding on sales data from point of saite. sebsenal changes. achull invertary leveis. product sectiges and acceptabie safety stock levels. Inventory data integrity is maintained by cycle-courting." says Manol. The benefis of aute crdering incluse lower outel-docks and higher sales, lower imentery oosts and higher margins, and lower labor costs by cycle-cturing. The Wias also alerts us about goods that are going to expise two meetes in actuance, so that we ean take the necessary steps to sell off our stocks, " says Mandi. In the beginning of 2015, the congam/s fent transt wasehouse in Jebel Al Free Zone (Jatza) began operations, erchanting the group's import and euport opecations. The warehoute covers an area of 200,000 sy ft and currenty handles around 702 shipping containers a month. "Thanics to the nere warehouse at Jatza. we have been able to increase our frecuency of shipments," Manoy explains. The warehouse a debel Al, which mainly houses iterts such as textles, home furnishing and elecironics, employs around too staft, while those at Abci Dhabi and Dubal employ 700 and 500 tespectevely Pertuses the greup's bigzest supply chain chalienge less in its distribution system. All Lulu outlets have back stores, albeit with lizited tpace as the majonty of the stock is held at the warehouse. Because we have a big warehouse with anple space we donit need large back stores. Our warehouses always hold stock tor 15 to 20 dwys. Even if the suppler nuns eut of an item, it is stall available at our watehouse. And suppose an item does go out of shock at a suore. it is reglenished withil tree hours." Lulu currently souroes ifems from about 400 iocal mupplens and sources 75% of is fruits and vegetables trrough direct imports from more than 25 countries. We import around 275 containers of fruits and vegetabies a month." The group has atso signed centacts witt local facts as part of a CSR initiative so supeort local organic famers. Products with a short shell ille, such as tresh juice, chicken, fish mik, yoghurt and other bervecages afe directly sent to the stores by the sucplers. "They are sent twice a day, in the momings and eveninga." The group's tetail warehouse in Dubai has another specialty of sorts, says Manci. Tt is the only one with a kischen. Wo have over 100 chefs, and we produce around 3 tomes of food every day." "They are sent twice a day, in the momings and evenings." The group's retail warehouse in Dubai has another specialty of sorts, says Manoj. It is the only one with a kitchen. We have over 100 chefs, and we produce around 3 tonnes of food every day." Keeping up with the times, Lulu expanded into online shopping in the first quarter of 2016. Lulu's e-commerce division (we. products. z) currently sells groceries and department Stuart Davidge, head of e-commerce, Lulu Group, said, 'While e-commerce offers a world of opportunity, success is defined by how well customers are satisfied. Our logistics team places umpteen importance on the quality of the delivery process to ensure that Lulu meets the expectations of our customers. All our delivery vehicles have special compartments for challed and frozen food as well as groceries to ensure that their quality is maintained during the delivery process," The group has ambitions plans for the future, focusing on expansion in Asia and the GCC. The company recently opened hypermarkets in Malaysia and Indonesia. We plan to open around 35 now stores in the region in the next threo years, "Manoj tells Logistics Middle East. Suppliers One of Lulu's suppliers is Barakat. Barakat Vegetables \& Fruits Co (BVFC) supplies whole fresh fruits \& vegetables to premium establishments while Barakat Quality Plus (BQP). produces freshly squeezed juices, cut fruits & vegetables, salads, ice cream & ice pops and a variety of hot kitchen items - all with no additives or preservatives - to hotels, airlines, restaurants and retail. In 2018, Barakat introduced barakattresh.ae, an online ordering & home delivery portal bringing together all the fresh Barakat Group propositions under one umbrella. With just a few clicks, consumers can have their Barakat fresh produce delivered straight to their doorsteps in as little as 3 hours from placing the order. In addition, Barakat has over 100 vending machines and 5 Barakat-manned kiosks, all serving convenient fresh produce in multiple locations within the UAE. Source: Accessed [DOA: 9/5/2019] Based on the case study and theory learned during our session, answer the following questions: (the application to the case is very important otherwise points are deducted) 1. Assume that Lulu has decided to work with supplier Barakat in the long-term. They have decided to develop a new fridge for storing fruit. Explain the activities you will be doing with Barakat from Concept Formation to the Production Phase. In each phase give one example of what Lulu will do and one example of what Barakat will do. ( 45=20 marks) 2. What are the different costs of quality? Apply your answer to Firm Lulu. Explain how they will incur costs to increase quality. (10 marks)