Got juice?

National Food Products Company ensures the movement of its water, milk and juice flows like-well-water, milk and juice.

Judging from his office, it is hard to believe that Ian Buckingham manages the supply chain of one of the UAE’s most popular beverage companies. You would expect stacks of papers on his desk waiting for approval, reminders and schedules pinned to his walls and frantic employees’ running back and forth through his door.

But rather, his space at the National Food Products Company (NFPC) headquarters in Jebel Ali is sparse, quiet and calm.

“I’m here to work, not to show,” says the UK native, jokingly, when asked about this.

Actually, he admits, he is in this office too little to make a mess. “Because of the number of facilities we have across the UAE, I don’t spend too much time in one location. We have four production facilities and seven regional distribution centres (RDCs) within the UAE, and a further four RDCs in Oman. Plus, we export to approximately 20 countries.”

While Buckingham’s office maybe minimalist, his operations certainly are not. NFPC manufactures Oasis water, Lacnor juice and Milco milk products.

The company says it is the market leader in five gallon water jugs and yoghurt; and judging from the prominence of its other products in grocery stores, you can guess it comes close to leading in its other categories as well.

That is a lot of liquid. “If you take the Lacnor full cream milk, for example, we produce 130,000 litres a minimum of once per week,” says Buckingham.

“If you take the Milco drinks, we’re producing approximately 180,000 litres of orange and 180,000 litres of mango. With Oasis water, we’re doing over a million five gallon units per month.”

The company ills its ive gallon water jugs at its Abu Dhabi and Dubai facilities. It produces Milco in Abu Dhabi at the same facility it produces Oasis, and Lacnor in Sharjah, where it has a factory and three warehouses.

NFPC also has a sister company, Milco Plastic, based in Abu Dhabi, which produces a large part of its packaging. “We can bring in a lot of our requirements such as the five gallon bottles we use for Oasis and the plastic cups that we use for Milco yoghurt,” says Buckingham.

He says NFPC co-packs for Saudi milk company Al Marai in the UAE. “We pack their products and then they distribute it,” he says. “At Lacnor we’ve co-packed for other brands as well. It depends on the time of year, our availability and whether we’ve got capacity on our production lines.”

Other kinds of packaging come mostly from the GCC. “We have our locally sourced products, of which you have the labels, the cartons, the trays,” says Buckingham. “The majority of our tetrapaper comes from Saudi Arabia. We try to bring in as much as we can from the GCC, predominantly the UAE. Obviously, that assists us with transportation costs.”

NFPC tanks in fresh milk for Milco by road from Saudi Arabia and ships milk powder mostly from Australia and New Zealand. Tomato paste comes from either Al Ain or Turkey, and sugar, as well, is purchased locally.

“Concentrates for juices usually come from America, specifically for grapefruit, cranberry and orange; but also from Brazil, Spain, Holland, Egypt and South Africa,” adds Buckingham.

“The majority comes in by sea,” he continues. “We receive product into Jebel Ali, Abu Dhabi and Sharjah.”

On rare occasions, they do ship by air. “Only if we’re looking at additional volume requirements because we’ve oversold the budget, or if we’re bringing in small quantities of raw materials for product development,” says Buckingham.

And, as many of us may wonder when we are drinking it, where does Oasis water come from? “The water comes from the Dubal plant and then it is treated,” says Buckingham.

Ian Buckingham, Supply Chain Manager, National Foods Product

Dubal, or Dubai Aluminum, sits adjacent to the Oasis plant in Jebel Ali. The company explained the water treatment process in an emailed statement, “In its original form the water is semi-pure and upon reaching the Oasis facility it undergoes further purification and filtration. The final stage is reverse osmosis which results in pure water which has been 100 per cent stripped of all its content. Oasis then adds back its proprietary and unique blend of minerals which gives Oasis its distinct taste and mouth feel.”

NFPC stressed that this was the method used by all UAE bottle water companies, and that their water was more than healthy to drink. “The Oasis plant is ISO and HACCP approved and in addition is strictly regulated and audited by government bodies to ensure we only supply the highest quality of safe drinking water,” said the statement. The company also washes and sanitises all five gallon bottles before reusing them.

While the company uses its own five gallon containers, it purchases performs for the smaller water bottles from outside suppliers. These forms come in the size of test tubes and expand to full size when blown out at the Oasis factory. Buckingham says this process helps them cut back on shipping and storage.

“Imagine trying to store five million empty bottles,” he says. “That’s a hell of a lot of space.”

Buckingham says all products are kept in temperature-controlled environments.

“Everything is perishable,” he says. “Everything has a shelf life, whether it is 12 months or 24 months. Milk powder, for example, has a 12 month shelf life. Even the tetrapaper we bring in will have a shelf life to it.”

Planning ahead

According to Buckingham, his team’s greatest challenge is accurate forecasting, which requires both long-term and short-term purchasing, due to the nature of their raw materials. “If you take oranges, for example, they are harvested once a year. So we’re actually buying between 12 and 18 months into the future. That means we have to

do our long term procurement based on business objectives and the budgets determined by management. The delivery schedules will then be amended to meet with the rolling forecast,” he says.

They use short-term forecasts, on the other hand, for locally sourced materials such as packaging.

“We operate a four month rolling forecast for all three business units, and that’s obviously so we can monitor and track our raw material consumption, bring forward or delay scheduled shipments, or go and source additional materials if they are required.”

Buckingham says surges in demand come from competitors falling out of the market or experiencing shortages.

“That is when our ability to react because of our size greatly assists us,” he says. “Being the predominant manufacturer in the UAE gives us the flexibility that smaller companies do not have.”

While the company is currently using a spreadsheet to forecast demand, he says they are moving towards software for the purpose. “We are implementing JD Edwards forecasting module, which is tied in with the manufacturing module,” he says.

JD Edwards is a history-based system, which predicts sales by using algorithms.

“We can improve upon the accuracy,” he says. “Given the tools that are available, moving into JD Edwards will give us a bigger, more powerful tool.”

On their own

NFPC currently manages its own transportation. “Everything is in-house at the moment,” says Buckingham. “Outsourcing is something that I will look at in the future to see if it is cost-effective for us, and we will make a decision probably later this year.”

He says transport falls into two areas trailer logistics and sales-guided logistics. “With trailer logistics, 75 per cent is on a fixed route. Every day the trailer drivers know where they’re going and what time they are going to be there. We have to allow the additional 25 per cent flexibility for volume increases, seasonality and changes within the market.” The company operates 21 trailers (either 40 or 50 feet) mostly to transport the Oasis five gallon jugs. “These trucks are working 24 hours a day, seven days a week,” says Buckingham.

The sales team manages the company’s other vehicles, ensuring that their customers receive the correct quantities at the correct times. “Each production facility works as a distribution centre for our sales teams as well,” explains Buckingham.

“We are currently operating 460 3.5 tonne sales units. That will increase to 510 by the end of the first quarter of 2009.”

He says the sales team’s activities ensure the company delivers to even the smallest stores. “We deliver directly,” he says proudly.

In store

Buckingham says NFPC is looking to expand its warehouse capacity and improve its standards. “We are HACCP and ISO accredited and we have to maintain that,” he says.

And he expects the company will need more capacity. “Since the company was started in the early 1970’s by Fadi Antonios it has grown year-on-year,” says Buckingham. “Even though times are hard for most, we are still planning growth within the local region and with our export opportunities. The demand is still there.”