WAREHOUSE WARRIORS: FAMCO Interview
Al-Futtaim Auto and Machinery Company (FAMCO) won the Materials Handling Provider of the Year Award at the annual Supply Chain and Transport Awards for a fourth time in a row this year. It is an achievement that leaves little doubt on the credentials of the firm and the impact it has made in the region. So Logistics Middle East sat down with FAMCO’s general manager David Dronfield to pick his brain on the industry and ask him to share the firm’s winning philosophies.
“At the SCATAs I may have gone onto the stage and received the award, but at the end of the day it takes a team to get the award,” says Dronfield, as he leads us into a boardroom at FAMCO’s new state-of-the-art facility at Dubai Investments Park.
“It’s a team presentation and the customer satisfaction that ultimately gets us recognition. We’re not manufacturing, we put solutions together and that takes a team effort: the drawing, the quotations, how it is installed, delivered, the logistics aspect; it is a whole supply chain effort.”
Dronfield removes his jacket and settles into a chair. He has just completed a photo shoot with the FAMCO team for our magazine and is pleased that they will be recognised for their efforts in helping the firm continually post year-on-year growth.
He explains the FAMCO brand image provides a strong sense of direction for the team, and that the firm’s solutions are more than just “selling forklifts”. Anyone can sell a forklift over the counter, he says.
“What we provide is a value-added solution. We look to consult with the client, we look to find a solution, provide an improvement in a client’s operation facility, and to do that, we use premium brands, premium components within the solution, and that is part of the FAMCO brand image,” says Dronfield.
“We don’t just buy and sell cheap things to fill a gap, so everything is based around quality - pure design, certified products. Part of the Al-Futtaim mandate is that everything we provide, we must be able to service and maintain. Whatever we put on the table is part of an end-to-end solution; a whole turn-key solution. All of those components, we have to be able to supply, follow-up and maintain for an indefinite period of time.”
It is the consulting part which allows FAMCO to delve into the different industry verticals of its clients, understand their areas of concern, and provide them solutions, that Dronfield finds interesting, and he says this keeps the team motivated.
“A customer can come to us without knowing anything. They can and ask us to look and say ‘we believe we have some opportunities, but we’re not sure how or what, can you give us some assistance’. And that is the enjoyable side to the business, rather than saying: ‘here you go; here are 10 of this for you’.
“You’re sitting with a client and understanding their business. So on any day, we can be in a different industry, learning about an industry ourselves. You asking a standard range of questions to try and formulate what’s happening, with the customer: what they’re receiving, what they’re shipping, what’s going out the door? Then we can say ‘OK we can do this’. That is the fun part of it and that’s why this industry is interesting,” he adds.
The FAMCO team deal with some 800 customer consultancies in a year. “With that much experience, there must be some common problems that are experienced by clients in their warehouse operations in the region?” I ask.
“In their distribution centre operations,” Dronfield corrects me. He adds: “People look at a warehouse and see it as a place where you store products, but it isn’t. It’s a distribution centre, and the first part you should identify is: what is being distributed? How many customers have you got? Where are they? What are you distributing to them every day? How often every day? It is not a matter of how big the warehouse is. It is a matter of what comes out of it, and what needs to come out of it.
“It’s only when something comes out and gets delivered that the operation can invoice it and makes money. It doesn’t make money on how big the warehouse is, or how tall it is or what’s coming in - it makes money on what goes out.
“That’s very often where the mistake starts in the first place. Where the customer wants the maximum, the biggest, 10 of these, 10 of that, but why? It’s what comes out of the facility that matters and the whole design and operation is meant to support what comes out.”
But, Dronfield believes the most people are at the stage where they are re-evaluating their operations, which was ignored in the rush to have projects up and running during the pre-recession period in Dubai. “It was all too rushed and too quick, a lot of facilities you see are cram-filled and, busy, but they were not necessarily designed for linking the supply chain. They were just built as fast as possible,” he says. “But I think the Middle East is starting to move towards the same stages of development which Europe and Australia has gone through.
“They’ve done a lot of this building here, but companies are now going to be looking at how they can get more efficient. How they gain an edge on our competitors? So they will start to re-evaluate what they’ve got and say: ‘how do we now make this better, not just bigger’. And maybe make the investment to do these changes now to make it the right solution for our customer base,” he says.
Dronfield, however, warns against the trend of companies just copying things directly from Europe and expecting them to work in the region. He says that a fresh analysis is needed.
“Some customers say: ‘Let’s go to Europe and look there. I like what they’re doing, that’s nice. That’s all whizzing around, nobody’s touching it. It’s all automated”. Then they come back to Dubai and say: ‘Oh, I want one of those’. That is totally the wrong starting point. The starting point for any of these solutions is: What’s your business? Who are your customers? What are you supplying? How many outlets are you supplying to? How many trips are you doing every day? And what do you need to drive that? And all that can be different here,” says Dronfield.
“The demographics of the UAE, MENA region, will drive what happens in the logistics side here. When you look at the pharmaceutical industry in a major city in Europe, they will be supplying 500 outlets every day. Here the pharmaceutical distribution centres might be supplying 20 or 30. So we can’t just copy what is there and drop it here and say it will work.”
To end off, Dronfield points to FAMCO’s new Dubai Investments Park facility as an example “We practice what we preach in this facility,” he says. So in the spare parts distribution, a client can walk in and say: ‘I need this for Volvo, I need this for Linde, etc.’ and we’ve got the trained specialists downstairs. We are right at the heart of the industrial land here where we have 70% of our customer base. It is not about selling a product and forgetting about it. It is about helping customers with a solution; improve a customer’s bottom line and supporting that,” he adds.