Al Jomaih Bottling Company (ABP) Strategic Decision And Risk Analysis And Recommendations

Executive Summary

In this report, an exploration of the strategic decision and risk analysis within Al Jomaih Bottling Plant Buraidah (ABP) a premier franchise bottler of PEPSI in Saudi Arabia has been carried out. The rationale of this has been informed by the fact that a risk represent probability and consequence of uncertain future events. Also, it is identified as undesirable outcome. Hence, for the organisation success in manufacturing of carbonated drinks, risk analysis for improving their decision making is important. From the risk analysis, the decisions which are made improve the establishment of an effective business strategy and operation. Through a focus on the production and quality processes, the organisation has already invested in HACCP system for avoiding risks, Good Laboratory Practice (GLP) and Good Manufacturing practice (GMP). Through a review and evaluation of these approaches, the best recommendations have been generated for ABP improvement of their risk analysis. This has been informed by use of different tools and techniques to identify any prevalent challenge and best practice in risks analysis.

Table of Contents

1.0 Background of Organisation Strategic Activities. 3

1.1 Background of Al Jomaih Bottling Plant Buraidah (ABP. 3

1.2 ABP Strategic Activities. 3

2.0 Managing Risks in Food Industry. 5

2.1 Overview of risks. 5

2.2 Internal Factors Analysis (SWOT) 7

2.3 External Analysis. 8

3.0 Risks in Food Industry. 9

3.1 Food Handling and Processing. 9

3.2 Storage and Transportation. 11

3.3 Food Supply Chain. 11

4.0 Risk Assessment 12

4.1 Hazard Identification. 12

4.1.1 Microbiological 13

4.1.2 Chemicals. 14

4.2 Hazard Characterisation. 16

4.3 Exposure Assessment 16

4.4 Risk Characterisation. 17

5.0 Food/Beverages Safety Management 17

5.1 Risk Communication Approach. 18

5.2 Hazard Analysis Critical Control Point (HACCP) 19

5.3 Good Manufacturing Practice and Good Hygiene Practice (GMP and GHP) 21

5.4 International Food Standards. 22

6.0 Conclusions and Recommendations. 23

References. 25

1.0 Background of Organisation Strategic Activities

1.1 Background of Al Jomaih Bottling Plant Buraidah (ABP)

Al Jomaih Bottling Plant Buraidah (ABP) has been in active operations since 1936 established as a small trading establishment by Abdul Aziz and Mohamed Abdullah Al Jomaih brothers. Over the years, as evidenced in ABP (2022) the organisation has significantly grown through a dynamic entrepreneurial spirit and high-level commitment to quality and clients satisfaction. Before partnering with PEPSI, ABP was actively operating in different industrial sectors such as automotive, heavy equipment, oil and gas, real estate and more. In 1957, the organisation partnered with PEPSI company and ventured in the beverage industry. In specific, the organisation was broadly known as the first processor of locally made carbonated beverages. Currently, operating a fully integrated bottling company, manufacturing and distribution operations in Central and Northern regions of Saudi Arabia. The organisation currently engages upward of 2,0000 employees. Currently, the organisation is the major producer of beverages in Middle East and Africa region. This is supported by the SGS (2021) food manufacturing Audit Report which note that the organisation process 200,000 liters of bottled water every day. This is with 600,000 liters every day of carbonated soft drinks leading to receiving a global bottler of the year award for the third time from PepsiCo in 2012. This was an acknowledgement of excellence and leadership crowning their 55 years of relentless commitment to perfection.

1.2 ABP Strategic Activities

ABP strategic activities are anchored on operating a highly-developed manufacturing systems. As evidenced in ABP (2022a) the systems are for manufacturing of their carbonated and non-carbonated beverages including purified bottled water. To achieve this, the organisation leverage on embrace of innovativeness and new technologies. As a result, their activities efficiency have managed to harness the water use efficiency by cost savings of approximately 10% in every unit of production and lowering plastic use by 1,665 tons as at 2015. Hence, the organisation can be identified as being abreast with world class standards evidenced by the investments already made on cutting-edge technologies, advancing manufacturing equipment, quality monitoring systems and processes.  Considering the organisation structure, since Al Jomaih Bottling Plant Buraidah (ABP) a premier franchise bottler of PEPSI in Saudi Arabia, PEPSI organisation structure can be considered (see figure 1);

Figure 1: Summary of ABP Organisation structure

Hence, as evidenced in figure 1, since ABP is a franchise of PEPSI, the organisation structure is based on the system set from the organisation. This ensures there is a close coordination of all their activities. The strategic activities which are pursued by the organisation are directly managed by PEPSI company. For instance, in Qassim Plant, they produces 50 SKUs of various packages (335ml), PET (1L & 2.25L), NRB (330ml) and BIB (2.5 & 5 gallon). This is an evidence of the organisation ability to link with the PEPSI organisation operation as a franchise for their successful practice. In regard to business conduct, in a report of food manufacturing audit report (GP4162), their business conduct is grounded on operating an effective food management system ensuring customer complaints are reduced while adhering to the set legislations. To their employees, the report identified the organisation business conduct is informed on offering a safety and healthy work environment, recognition and rewards, promoting job safety and opportunities for continuous skill upgrading.  The outcome of this is a win-win principle of their business relations with external providers.

Further, the organisation strategic operations is related to their operational activities. As explained in ABP (2021), the operational activities of the organisation is ingraining environment sustainability in their culture. This is through eco-friendly solutions in their operations and overall supply chain operations. The organisation consistently embrace innovative approaches for optimising application of natural resources through energy and water conservation and lowering application of packaging materials. As evidenced in the organisation operations risk analysis report, the outcome of this is the organisation successfully gaining in executing their assigned roles and leveraging on competitive advantage in their industry of operations.

2.0 Managing Risks in Food Industry

2.1 Overview of risks

From a narrowed context of quality assurance, a risk is a potential for losses owing to quality which fail in meeting the set quality goals. From a general context, Penalba et al. (2021) define a risk as a chance or probability that an individual would be harmed or experience an adverse health effect when exposed to a hazard. The risks are also relevant in situations which property or equipment loss or harmful effects on the environment.

Prior providing an in-depth insights and analysis on managing risks in food industry, there is a need of establishing the internal, external factors. This guide in gathering relevant insights on risk analysis and their eventual management. Hence, considering the case of ABP company, ABP (2020) noted that the company has been affected by issues linked with food quality, employees workplace safety, food supply and regulations impacted by the multi-national business risk factors. Further, the health and safety issues, fluctuations in quality of food products as set by international regulations and cross-border food supply. A summary of the different contexts of the risks are as illustrated in figure 2;

Definition of Risk Management and Other Safety Definitions.

Figure 2: Summary of definitions of Risks

In the food industry, Ngemdjo Domche (2021) highlight that risks are majorly evidenced by contamination of food products. This occurs in the chain which starts from the production and distribution with the food producers playing an instrumental role. This is supported by Ayaz et al. (2018) research which focused on evaluating the food safety knowledge and practices among Saudi mothers. In the report, it hypothesised that foodborne illness also noted as food poisoning is normally as a result of consuming contaminated food products. Negligent meeting of Food safety standards lead to financial costs incurred in food-processing organisation. This is while causing critical health conditions for their consumers with a reputation damage suffered by an organisation leading to closure of such food processing structures. A case example is in ABP organisation which is a franchise of PEPSI where they could loose their licensing. Hence, Bahn et al. (2021) recommended that for managing the risks in the food industry, it is essential to harness disciplined handling, preparing and storing the food in a manner that manage types of food poisoning arising from such mishandling. This is appropriately executed by prioritising on risk management. This is a strategy of weighing policies alternatives for accepting, minimising or lowering assessed risks and selecting and implementing relevant options. Hence, considering ABP, as a best practice of implementing the success of risk management, the approach adopted is as summarised in figure 3;

Figure 3: Framework adopted in ABP Food risks management

2.2 Internal Factors Analysis (SWOT)

Adopting the definition of Benzaghta et al. (2021) the SWOT analysis represent a strategic planning and strategic management technique for assisting an individual/organisation in identifying Strengths, Weaknesses, Opportunities and Threats linked to competition and project planning. Similarly, in risk analysis, the SWOT analysis is relevant for implementing strategic and risk management planning for identifying risks and blind spots in their practices. Hence, considering ABP Company, a summary of their SWOT analysis is shown in table 1;

Strengths Using HACCP System in avoiding risksAdoption of Good Laboratory Practice (GLP) for efficiency of their operationsUse of Good Manufacturing Practice (GMP) in their operationsWeaknesses Lack of a specified risk analysis tool for every product offered in their marketLimited integration of technology in managing risks
Opportunities Increased awareness of food quality managementAvailability of technology in increasing food safety and quality controlsCustomers protection from the risks of health managementThreats Product safety and sanitationStorage of the beverages hence contaminationLaboratories contamination, conditioning and facilities planning

 Table 1: Summary of ABP Company strategic risks SWOT Analysis

Therefore, in line with the table 1 summary, it is relevant arguing that the internal factors influence the organisation approach on risk analysis and strategic decisions. For instance, for their strengths represent areas which the organisation has already managed to capitalise on in risks management. This is with the weaknesses being areas which need to be considered for improving their strengths. Specifically, customising their  HACCP system, GLP and GMP in the different departments of their operations would be instrumental for the organisation to harness the quality of their food products.

2.3 External Analysis

According to Sarwar et al. (2017) in risk analysis, there is a need for prioritising on aspects which relate to political/law, natural/environmental, technology and social factors. This is particularly the case for ABP which operates in the food industry whose production are primarily impacted by these factors. A summary of environment political/laws, environment, technology and social factors is as illustrated in table 2;

PESTLE FactorsExplanation
PoliticalPolitical conflicts leading to water and other raw materials used in beverages processingAttacks of manufacturing plants by ABP hence chemicals contamination
EnvironmentExistence of biological agents- bacteria, toxins and viruses in KSAChemical agents popular- pesticides, chemicals, heavy metals and poisonsRadioactive agents prevalent and other physical agents
TechnologyAdoption of food safety management systems-technology based to harness quality levelsUsing technologies in adhering to minimum required to maintain sterilityHACCP requiring an integration of storage technology
SocialDrinks majorly used for social refreshments end up being contaminated when being servedEnsuring that ABP is appropriately positioned in using best social measures of facilities and equipment operations

Table 2: PESTEL Analysis Summary

3.0 Risks in Food Industry

In learners Guide ‘Food Safety Systems Certification 22,000 Version…….

Please click the icon below to download this assessment in full