Outward Bound

Leading UAE electronics retailer Jacky’s is laying the foundation of future growth by expanding its logistics facilities in Dubai, explains Manohar Punjabi.

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By  Robeel Haq Published  January 1, 2006

Outward Bound|~|jackys2.jpg|~|Manohar Punjabi, executive director, Jacky’s.|~|From small beginnings as a mail order company, Jacky's has emerged as a heavyweight electronics retailer in the UAE, with outlets throughout the country. On the global level, the company also has a successful exporting business, which sends electronic products to locations throughout the world. The logistics of running both a large retail operation and a global distribution company present a number of challenges, but Jacky's has gained strong experience in running its operations smoothly. Jacky's began trading in 1970 as a mail order company based in Hong Kong. The service catered to the home and office requirements of diplomats, mainly working in India. After considerable success, the company started appointing agents to cover Africa, as well as the South Asian sector, including Pakistan, Bangladesh and Sri Lanka. The expansion proved successful and volumes increased rapidly. However, providing competitive pricing in these areas proved difficult, because of excessive freight rates. Jacky's therefore opened a base in Dubai in 1985 to reduce its costs and gain a price advantage. The Dubai office, which was located in downtown Nasr Square, started modestly, with a couple of staff co-ordinating shipments for the mail order service. Volumes quickly grew and within two years Jacky's started increasing its workforce to cope with demand. The office also included a vacant showroom, which gave management an idea. “Instead of having goods sitting in the warehouse, we decided to place them in the showroom,” says Manohar Punjabi, executive director, Jacky’s. “This was our first foray into retail and the local sales gave the company a boost.” Whilst the retail activities started to flourish, Jacky's core business remained exporting. “There is a free economy in Dubai, which means growth in the area is easier,” says Punjabi. “We are planning further growth and diversification here. However, the population is not very large, so concentrating on exporting to other areas, such as Africa, is important. Dubai is a perfect location in terms of logistics for the export business.” In particular, the benefits of trading in the Jebel Ali free zone attracted Jacky's in 1990. The company decided to hire a facility from the authorities and base its exports division there. “We started by using sheds provided by the free zone authorities,” says Punjabi. “We wanted to take advantage of the free zone benefits and utilise shipments for exporting, basically to destinations in Africa, rather than local sales.” The export division of Jacky's takes the role of intermediary between manufacturer and retailer. Instead of placing bulk orders directly with the overseas manufacturer, companies can order smaller quantities of a variety of products from Jacky's. “If a company in Africa wanted to purchase directly from manufacturers, it would be required to import full containers of specific models from the factory,” says Punjabi. “Instead, we are able to provide more flexible options. Customers can purchase a combination of different brands and products.” The 'mix and match' service allows a customer to place orders consisting of various personal and office electronic products. The combination, for example, could include plasma televisions, blenders and fax machines. The demand for such services is strong and continues to grow. In fact, to cope with high volumes of interest, Jacky's decided to create a bigger Jebel Ali facility in 1997. The entire export division was relocated to the new warehouse, where it has remained ever since. In addition, further land was available next to the facility, which the company managed to utilise through a recently completed expansion programme. The expanded facility provides Jacky's with 3600 pallet positions in total, which is almost 150% bigger than the previous set-up. The number of loading and unloading bays has also doubled to eight. In total, the facility now includes six bays with dock levellers and two with truck ramps. The warehouse also includes a new temperature-controlled area to store sensitive items, such as photographic goods. “Any products that require cold storage are placed here,” says Punjabi. “This part of the facility is fairly large because we predict a lot of growth in goods requiring temperature control in the future.” The expanded Jebel Ali facility stores a variety of products, which are produced by major global manufacturers, such as Sony, JVC and Panasonic. A large percentage of space is also dedicated to Venus products, which is the home brand created by Jacky's. The various manufacturers mainly supply their products by sea, from a number of locations throughout the world. In addition, the regional warehousing facilities of many manufacturers are also located in Jebel Ali. As such, receiving goods from nearby distribution centres is also possible, which helps to simplify the operations. Within the warehouse, goods are transported using either Crown reach trucks or Caterpillar forklifts. In terms of storage, the expanded facility also features a new racking system, consisting of both pushback and selective racking, which are produced by Dexion. The pushback racking is used for the bulk storage of items. This is particularly effective in maximising storage capacity and eliminating honeycombing, or half-unused pallet position, especially when the loads are identical in size. “With the pushback racking, each load is stored on a sloping cart,” explains Punjabi. “Whenever a new load is deposited, the previous one is pushed back. Later, when the new load is picked, the original one gently moves to the front again.” The warehouse also features selective pallet racking for smaller ranges of products. These are laid out in back to back rows separated by access aisles for lift trucks, making it easier to pick and choose the items. “By having different types of racking, we have greater flexibility,” says Punjabi. “This means the turnaround time is shortened during the loading and unloading process.” Jacky's has appointed a logistics support team in the Jebel Ali warehouse to ensure the distribution process runs smoothly. The team handles a large amount of documentation, especially as stocktaking is done manually. However, Jacky's has implemented an enterprise resource planning (ERP) system to simplify the procedure and reduce the potential for mistakes. This helps to integrate all departments across the company onto a single computer system. It also allows the logistics staff to better plan deliveries and reduce inventory in the warehouse. “The logistics team is very strong,” says Punjabi. “A logistics manager heads the team and takes care of warehousing operations. They handle a variety of documentation. Our stocktaking is done manually, because the product range is so wide and varied, so working manually suits our needs.” Jacky's exports a limited range of product by air, such as laptops and photographic goods, which require temperature control. However, the majority are shipped from Dubai by sea into a number of different countries. “We have our own shipping manager,” says Punjabi. “This means we talk directly to the shipping lines without using intermediaries, which cuts down on costs.” If the goods are shipped to a country where Jacky's has a distribution hub, they can be stored locally and delivered. However, in other countries, customers receive the goods directly. “The shipments are being made to several countries in the Middle East and Africa,” explains Punjabi. “In some of the countries, like Kenya for example, we have a base. If the order is shipped to a country without a Jacky's base, like Ghana, the customers will collect the goods once it arrives in the country.” In addition to the export activities, Jacky's has increased the number of UAE retail outlets in its portfolio. The company is now one of the most prominent electronics retailers in the country, with outlets in a number of major shopping malls. To support its retail operations, Jacky's has a second warehouse facility in Dubai. “The retail warehouse is located in Al Aweer,” says Punjabi. “This is a fairly large warehouse, which includes a service centre as part of the aftersales service.” Unlike the export facility, where manufacturers supply their goods from abroad, Jacky's purchases goods from local distributors for the retail outlets. These products are delivered directly to the Al Aweer warehouse. The only exception is Jacky's own brand of electronics, Venus, which are transported directly from the Jebel Ali warehouse to the various outlets. “As part of the home delivery service, we deliver and install the products directly to customers,” says Punjabi. “The Al Aweer location is closer to residential areas, which means a faster delivery time, compared to Jebel Ali. The central location also means we avoid certain restrictions placed on heavy vehicles in certain areas.” Although Al Aweer is a suitable location for the retail warehouse, Jacky's is constantly looking to improve the delivery process, and a future relocation to Al Quoz is planned for 2006. “The location of Al Quoz is even better suited to our needs. The new warehousing unit should be completed this year,” explains Punjabi. As present, Jacky's dedicates over ten vehicles from its fleet of trucks for customer deliveries and installations. In addition, a further six vehicles are used by the service centre in the Al Quoz warehouse. This compares to six vehicles in Jebel Ali, which are used to deliver Venus products to Al Quoz, as well as for transporting goods between manufacturers’ local facilities and the Jacky's export centre. Jacky's is currently experiencing heavy demand for its export and retail services. The company is predicting high growth potential in both areas, which means additional space will become necessary in the future. “We feel that additional space will be required in Jebel Ali within the next couple of years,” says Punjabi. “Therefore, Jacky's has acquired around 10,000m2 of land in the South part of the free zone. The plans are being finalised and the construction should begin during February 2006.” Jacky's is also diversifying into other areas of business. For example, the company is thinking about utilising its experience in logistics by entering the 3PL market. The service will initially be aimed at existing partners and then expanded to a wider audience in the future. “After receiving the required licensing, we shall provide this service to existing partners,” says Punjabi. “The third party logistics service is suitable for companies wanting a Middle East logistics base to help increase their presence in the region. If their numbers are not large enough, we can help provide this service. Logistics is booming in this part of the world. It is a very appealing market.” The strategy of diversifying services and expanding locations has served Jacky's very well in the past. At present, there are also plans to break into the Libya market, which could prove very lucrative for the company. Regardless of the new countries or latest services featured in Jacky's ambitious global growth plans, the company has an impressive logistics infrastructure, which acts as a solid foundation to back things up.||**||

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