You might be forgiven for thinking that a global leader in the tobacco industry had been built on a foundation stretching back several generations. For Al Fakher Tobacco however, the rise to the world’s most renowned tobacco molasses company has been a rapid one.
Formed in 1999 and owned by Jordanian parent Al Eqbal Investment Company, the UAE-based organisation is now present in 150 countries with a team of 550-plus staff of 20-plus different nationalities.
Othman Tahboub is Al Fakher Tobacco’s Senior Director of Supply Chain. With more than 15 years’ experience in the procurement industry, he joined the company in 2007 as a Commercial Manager before heading up the supply chain operation in June of 2015.
His intricate knowledge of the wider business strategy is critical in the way supply chain operations are approached, allowing the company differentiate itself from the competition in all of its markets.
“Al Fakher differentiates itself in many markets through quality,” he says. It’s a very competitive market out there, that’s why we always need to provide our sales teams with the best quality and best priced products possible to become more competitive.
“We also need to be flexible in order to meet sudden peaks in demand, while at the same time offering consistency in our product quality. All of this helps the company to become more competitive in our markets.”
Al Fakher’s product range consists of more than 100 flavours across standard, gold and special edition ranges, with accessories such as high quality glass shisha also sold worldwide. “We have also entered the vapour market which is massively popular in the UK and the USA, which makes it crucial that we are flexible to meet ever-changing customer demands with new products and variations,” Tahboub adds.
Al Fakher Tobacco’s supply chain landscape is made up of two world-class manufacturing facilities in the UAE, one dedicated to the local market and the other, larger site producing for export. The company also hosts a network of warehouses across the country containing tailored storage systems for particular products and materials used. And it is the suppliers of such materials, and having visibility over the entire network, that is the number one priority for Tahboub.
“The most important part of our supply chain operations is choosing the right suppliers,” he explains. “If you choose a good one your life will become much easier. Al Fakher is risk certified and we work with top risk management providers in the world to identify,assess, and mitigate risks.
“We have to diversify our supply base, that’s why we work with multiple suppliers around the world to minimise supply risk. Our suppliers are the best in their fields, profitable and add value to what we do.
“Supply chains are more complex than ever and we need visibility of the whole chain to make sure we comply with regulations across borders, for example with sustainability and CSR. We have regular meetings with suppliers and get to know them inside out.”
Shipping providers handle the inbound logistics operations, with 85 distributors making sure the products reach wholesalers and retailers in the 150 different national markets. Al Fakher’s team of marketing and sales managers frequently touch ground in these different territories, acting as a vital point of direct communication and scouts for new business opportunities.
Suppliers and partners aside, Al Fakher is also embarking on its own internal continuous improvement programme in order to achieve supply chain excellence.
For example, it is investing in a new warehouse management system to enhance analysis of inventory data, a move which should result in quicker issuing and movement of goods and an improved cash conversion cycle.
The most significant continuous improvement project, and what the whole of Al Fakher’s supply chain operation is aiming to reach, is platinum standards.
“We are aiming is to achieve platinum standards within three years, which would recognise us as being on a par with the procurement departments in” in the biggest multinationals Tahboub says. “Such a standards are very efficient and strategically aligned. There are more than 20 criteria to achieve this, five of which are leadership and organisation; strategy; people management; processes, procedures and systems and performance, measurement and management. Even within these there are many more subcategories. This is very focussed way for us to improve.”
Crucial to attaining excellence, and indeed crucial to the company’s success to date, is Al Fakher’s loyal employee base. Across all business departments employees benefit from a range of incentives and initiatives, resulting in a 99.5 percent retention rate.
These policies are grouped into a triangle, at the top of which is a positive, safe and comfortable working environment. The second sector is competitive packages, from salaries to benefits like accommodation, transport and profit sharing.
“The third part is development and training, and this is why we have a high retention rate,” Tahboub adds. “The company invests a lot in internal and external training, case studies, site visits, active learning, and experiential learning. We never look at this as a cost but an investment – if you can’t develop people then how can you develop a business forward?”
As well as looking after its people, Al Fakher is also increasingly becoming a custodian of the local environment in which it operates. “We are also working on a waste management programme to make sure we are known as a sustainable producer as well as a world-class one,” says Tahboub. “
The waste management programme involves a new water treatment facility which cleans water before it reaches sewage works. Other initiatives include a tobacco dust capturing system and a rubbish compressing systems to cut down on waste output.
Al Fakher Tobacco’s strategy revolves around maintaining its position as a global industry leader through maximising its competitive advantage, namely quality of product in vast array of guises and flavours costed at competitive prices.
“In our strategy framework, every department has a goal,” Tahboub says. “We know the molasses industry will continue to grow, as opposed to cigarettes industry which is a declining sector. Whether its quality management, operations, HR or supply chain management, the target is to achieve excellence and sustain our competitive advantages and core competencies by providing customers with the best products possible. Achieving competitive advantage is difficult, but sustaining it is even harder and we cannot stop at where we are now.”
Tahboub is also passionate about encouraging more talent to pursue a career in the supply chain sector at large, especially given how complex supply chain processes have become at global companies such as Al Fakher.
He concludes: “For anyone looking to pursue a career in supply chain I would emphasise the importance of being an effective communicator, a change catalyst and a positive thinker. It is a stressful world but you really have to keep spirits high and motivate yourself and others because we deal with many stakeholders in this business.
“I would also stress the need to aim high with certifications and executive education and to also get involved with other areas of the business, as this will help to understand the requirements of the supply chain even more. This is what is happening at Al Fakher Tobacco.”