AGTHIA GROUP:

DISTRIBUTION - SUPPLY CHAIN RISK MANAGEMENT

SCM540: OPERATIONS AND SUPPLY CHAIN MANAGEMENT

Instructor: Dr. Kamran Chatha

Submitted by: 
Amna Almemari 1079298 - Hamad Thoban 1082571
Hazza AlShamsi 1085197 - Sara AlMansoori 1076995
Maitha AlShamsi 1085182 - Mariam AlKetbi 1081444
Content:

■ Introduction
■ SCRM Practices in Agthia’s Distribution Process
■ Challenges in Practicing SCRM in Agthia’s Distribution Process
■ Literature Review
■ Recommendations
■ References
 Introduction- Background Information:

■ A supply chain allows a company to understand its target market and establish the business
goals.
■ The supply chain network
– includes various processes, resources, entities, people, and information.
– follows a series of steps including manufacturing or processing products, transporting
them, and distributing them to the consumer.

Receiving Product
Operations Finance Distribution
orders development

Customer
service
Introduction- Background Information:

■ The most critical steps is the distribution system. (it determines the
profitability of a business.)
■ The supply chains in distribution advance, more risks emerge threatening
safety, quality, reputation, and business continuity.
■ Supply chain distribution risks are measured by determining the probability
of risk existence as well as using risk scores in different areas like
operations, finances, and flexibility.
 Introduction- Background Information:

Supply chain risks in distribution are mainly caused by disruption of:

Internal Changes in business processes
Activities Lack of cybersecurity policies
Non-compliance with laws and regulations
Failure to address customers’ needs

External Unpredictable customer trends

Factors Natural Disasters
Political Factors
Economic, and Social Factors.
Agthia Group - Background :

■ Agthia Group is a public joint-stock food and beverage firm established on 20th
October 2004 in Abu Dhabi.

■ Import and export products to more than 30 countries.

■ Agribusiness, manufacturing, distribution, and consumer business division.

■ It is recognized in the Abu Dhabi Securities Exchange (ADX).

■ Shareholders include Senaat General Holding Corporation.
■ Government entity owning 51% history and the other share divided between
institutional and individual investors
Agthia Group - Size & Organogram :
■ Over 5900 employees. Sales worth $561.26 million annually.
■ Assets were worth AED 3.1 billion and equity AED 1.9 billion as of
(31/12/2020).
Agthia Group - Products and Services:
■ The company's products are ethically processed and sold under different brands
in various categories:
Importance of supply chain risk management
distribution channel:

■ The firm’s distribution networks mainly involve inventories, equipment handling,

transportation, and communication.

■ The benefit from approving SCRM in distribution:

– help in predicting uncertainties.
– understands the customer perspective.
– enable the monitoring of real-time data of various distribution channels using advanced
information systems.
– constant flow of information between the client and the company, ensuring timely delivery.
SCRM Practices in the Company’s Distribution
Process:

■ Agthia Group mainly deals with sensitive and fresh goods requiring various storage conditions
during distribution.

■ Existing supply chain risk management strategies:

– Trucks with varying temperature conditions.
– Developing a sales and operations planning strategy that allows visibility of the entire year.
– Avoids the compromise of the distribution process.
– Spare vehicles and allowing rerouting of deliveries in case the presented resolution fails.
– Daily check to ensure the products are stored in their correct conditions.
SCRM Practices in the Company’s Distribution
Process:

■ Use of technology:
– helping restructure and optimize distribution systems to achieve increased
service levels and low inventory and costs.
– enables the management and tracking of products during shipment by having
trucks fitted with data logging devices.

■ Selecting the best suppliers:

– reviews the supplier history, supplier audit, sample analysis, commitment to
customer service, supplier scalability, procurement price negotiation, lead
time, delivery data, contract, and agreed service level.
 Challenges in Practicing SCRM in the Company’s
Distribution Process:

• Low-quality supplies.
Supplier Failure • Suppliers (farmers) face challenges at the farm level like pests and diseases, low
yields, chemical overuse, soil problems, etc.
• Risks of cyberattacks.
IT Security • Hacking of the company’s confidential information.
Machine and • Handling by unskilled workers, inconsistent maintenance, and inaccurate data coding.
Equipment Failure
• Restrictive measures.
Government • Hefty import and export costs increasing the production costs.
Policies • High tax rates and currency fluctuations.
• Caused by political instability, currency crisis, debts, and pandemics.
Economic Crisis • Covid-19 pandemic.
 Challenges in Practicing SCRM in the Company’s
Distribution Process:

• Ability of the firm to perform thorough planning of product distribution due to the
Demand Fluctuation
possibility of demand uncertainties.

• Failure to present the expected materials causes the company to

Gaps in the supply
compromise other operations in order to cover the gap caused.

Inaccurate or • Caused the distribution, failing to meet customer specifications.

insufficient supply • Leading to scattered information that cannot be used to make decisions regarding
chain data product distribution.

Lack of an • Agthia Group focuses on long-term action plans.

emergency action • Challenge in handling risks that require a short-term response and that cause
plan unexpected delays, and product spoilage.
Literature Review :

■ Practicing SCRM in distribution operations faces various challenges that affect its
efficiency in businesses activities.

■ Many firms experience challenges in practicing SCRM in distribution due to the

inability to understand the importance of risk management in supply chain operations.

■ Many firms formulate risk management strategies for distribution operations but fail
to assign relevant personnel to oversee the implementation.

■ Lack of a comprehensive risk assessment procedure.

Literature Review :

■ Management strategy does not address the existing events but instead addresses predictions.

■ Lack of a clearly defined value proposition.

■ Lack the agility to adapt to the changing trends in the supply chain process.

■ Poor reporting systems influence the implementation and practice of distribution risk
management strategies

■ The failure of the senior management to include its employees in the decision-making
process also contributes to the inability of the SCRM in the distribution process.
Recommendations:

■ The company should perform a goal-oriented risk assessment that considers both short-
term and long-term goals as well as operational requirements.

■ Agthia Group should improve existing risk management strategies to incorporate

emerging trends in distribution networks.

■ Using automated software to manage supply chain risks to centralize workflow and give a
competitive advantage in the crowded market.

■ Advanced analytics and artificial intelligence provide accurate forecasts about the supply
chain in distribution by monitoring real-time data about infrastructure and weather.
Recommendations:

■ Agthia Group should instill cybercrime awareness among employees.

■ Risk managers should ensure their firms are up to date with the recent employment
regulations and legislations.

■ The management team should practice effective communication about risk

management in supply chain distribution operations to ensure the employees and other
stakeholders understand its importance and adhere to the stipulated guidelines.

■ Agthia Group can hire a reputable business advisor in the food manufacturing
industry.
 Recommendations:
■ The company should also adapt to become risk resilient to enable it to recover from
uncertain changes and recover from risk events.

■ The firm may respond or mitigate the risks through heavy investment in technologies
that propel fast recovery from risk events through the smart grid technique.

■ The firm should conduct a thorough risk analysis to identify the quantitative and
qualitative probability of risk.

■ Risk governance mainly employs a chief risk officer, who is mandated to oversee and
control the risk management process and present reports to the audit committee.
 Recommendations Implementation plan:

Steps:
The company’s risk management committee to review the existing risk
management policy
Prepare an enterprise risk management (ERM) implementation structure
Establish requirements for roles and responsibilities of risk management in
the distribution supply chain process
Reevaluate the fraud detection and action plan
• Create awareness and conduct management training including employees,
officials, audit committee team, and risk management committee.
Resources:
• Human resources, financial resources, and information technology
systems.
 Recommendations Implementation plan:

Timeline:
• The annual timeline allows us to implement and review each step of the
risk management to ensure it meets the expected functionality standards.

Strategies:
• Mitigation: reducing the impact of potential risks or the probability of occurrence.
• Avoidance: eliminating the operations that are likely to attract risks.
• Acceptance: accept risks by not using any risk management response.
• Prevention: applying measures that prevent the advancement of a risk to a risk
event.
• Transfer or sharing: involves the sharing or transferring part of a risk to mitigate
or prevent it.
 Conclusion:
■ The distribution phase of the supply chain process is crucial in the overall company
performance due to its scope of direct interaction with the clients.

■ There is a need to develop solid supply chain risk management (SCRM) guidelines to
counteract threats to process efficiency.

■ Identified the SCRM practices adopted by the company and the challenges faced
while practicing them.

■ Provides a comprehensive perspective of handling SCRM in the supply chain

distribution operations for business to refer in making major company decisions.
 Resources:
■ Ashraf, S., Saleem, S., Chohan, A. H., Aslam, Z., & Raza, A. (2020). Challenging strategic trends in green supply chain management. Int.
J. Res. Eng. Appl. Sci. JREAS, 5(2), 71-74.
https://www.academia.edu/download/63798956/__Data_Issues_AdminPdf_202_CHALLENGING_STRATEGIC_TRENDS20200701-16
180-19j8dgu.pdf
 
■ Baryannis, G., Validi, S., Dani, S., & Antoniou, G. (2019). Supply chain risk management and artificial intelligence: state of the art and
future research directions. International Journal of Production Research, 57(7), 2179-2202.
https://doi.org/10.1080/00207543.2018.1530476 
■ Behzadi, G., O’Sullivan, M. J., Olsen, T. L., & Zhang, A. (2018). Agribusiness supply chain risk management: A review of quantitative
decision models. Omega, 79, 21-42. https://doi.org/10.1016/j.omega.2017.07.005 
■ Brindley, C. (Ed.). (2017). Supply chain risk. Taylor & Francis.
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■ Fan, Y., & Stevenson, M. (2018). A review of supply chain risk management: definition, theory, and research agenda. International
Journal of Physical Distribution & Logistics Management.
https://www.emerald.com/insight/content/doi/10.1108/IJPDLM-01-2017-0043/full/html 
■ Henderson, C. (2021). The rise of Arab Gulf agro-capital: continuity and change in the corporate food regime. The Journal of Peasant
Studies, 1-22. https://doi.org/10.1080/03066150.2021.1888723 
■ Investors. (n.d). Agthia Group. https://www.agthia.com/investors/ 
■ Ivanov, D., Dolgui, A., Sokolov, B., & Ivanova, M. (2017). Literature review on disruption recovery in the supply chain. International
Journal of Production Research, 55(20), 6158-6174. https://doi.org/10.1080/00207543.2017.1330572 
 Resources:
■ Nakandala, D., Lau, H., & Zhao, L. (2017). Development of a hybrid fresh food supply chain risk assessment model.
International Journal of Production Research, 55(14), 4180-4195. https://doi.org/10.1080/00207543.2016.1267413 
■ Our Brands. (n.d). Agthia Group. https://www.agthia.com/our-brands/ 
■ Our Journey. (n.d). Our Story. Agthia Group. https://www.agthia.com/our-story/ 
■ Prakash, S., Soni, G., & Rathore, A. P. S. (2017). A critical analysis of supply chain risk management content: a structured
literature review. Journal of Advances in Management Research.
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■ Rostamzadeh, R., Ghorabaee, M. K., Govindan, K., Esmaeili, A., & Nobar, H. B. K. (2018). Evaluation of sustainable supply
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