Professional Documents
Culture Documents
BZU
Sub Campus Dera Ghazi Khan
1
ACKNOWLEDGEMENT
We would like to offer our humble gratitude to
Allah Almighty,
the most Gracious and the most Merciful, who gave us strength and enabled us to achieve our goals. The main purpose of the project is to know about the Practical implementation of all the concepts we studied in the Supply Chain Management course. All the material that has been included in this report is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and caution has been taken to compile this report but the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. We are heartily thankful to our SCM knowledge Bank teacher; Mr. Aamir Abbas Malik whose constant guidance and support enabled us to develop an understanding of the subject which ultimately helped us in making of this project. At Engro Foods Limited, we would like to mention the names of
ABSTRACT
BACKGROUND:
To critically examine, understand & analyze the practical implications of supply chain management course.
METHODS:
Analytical examination conducted through interview with EFL head of supply chain & detailed study of internet articles on Olpers, Product of Engro Foods LTD.
RESULTS:
Engro Foods LTD continues to experience strong growth due to many reasons in which above all is its Brand Equity. Olpers, EFLS Flagship Brand is at its growth stage & it made its place in the current competitive market due to many factors one of which is EFLS effective supply chain management.
CONCLUSIONS:
Given the highly competitive nature of the Dairy Products market, need of having smooth & flawless supply chain have traditionally been on the high side & Engro Foods LTD are on the right track.
ENGRO CORPORATION
Engro stands for energy for growth. From inception, Engro is a legacy of continuous growth,
new challenges and fulfilled promises. From fertilizers to dairy products, business solutions to PVC resin, power generation to commodity trade, at Engro their ambition is to become the premier Pakistani enterprise with a global reach.
Engro Corporation is one of the leading Pakistani business conglomerates with stakes in the
fertilizer, food, power generation, petrochemicals, automation and terminal storage industries. Having had undergone an employee led buy out in 1992 it has expanded phenomenal in the past two decades. As a holding company its subsidiaries include:
Engro Fertilizers Limited Engro Foods Limited Avanceon Limited Engro PowerGen Limited Engro Polymers and Chemicals Limited Engro Vopak Limited
Founded in March 2006, Engro Foods Limited is a producer and marketer of dairy products. The companys brands include Olpers Milk, Omore ice cream, and Tarang, Olwell, and Olpers cream. To support these brands and their highest standards of quality, Engro Foods has invested heavily in milk processing and milk collection infrastructure. Headquartered in Karachi, Pakistan, it has offices in seven cities across the country, as well as processing plants at Sukkur and Sahiwal. Engro Foods is a subsidiary of Engro Corporation Limited, one of Pakistans most
5
respected enterprises with more than 40 years of business in the fertilizer and chemicals industry. In the five years since its launch, Engro Foods has seen a rapid growth in sales and market share. ENGRO FOODS LIMITED is the 100% owned subsidiary of ENGRO. The company's milk production capacity is 700k litters per day. Moreover an investment plan of $ 3.4 billion in Engro Foods has been approved by the board for: expanding UHT capacity to 900k liter per day, expanding milk powder capacity to 70 kilo per day, import of 1000 cows and an ice cream plant. The company is all set for growth as the milk business profitability is increasing due to increasing consumption of milk and increasing prices of dairy products. Besides selling milk, the company also sells the company also sells related products such as creams and unbranded products such as ghee, and recently introduced a milk whitener; namely "Tarang". The value of the ENGRO FOODS LIMITED is Rs.36 in total subsidiaries value of 63.4.
LOCATION OF PLANT:
The dairy processing plant is situated at Rohri & Sahiwaal & now in Punjab aswell The office of Engro foods is situated in Sukkur.
LOCATION OF OFFICES:
The head office of Engro Foods is located near Sea View , karachi. There regional head offices are in : Karachi located in Business Avenue Shahrah e - Faisal Lahore Multan Rawalpindi Peshawar Gujranwala
They believe that there recent successes will take them to there goal which is To be one of the biggest players in the food business by dominating the food business, and to achieve this they will settle for nothing less than the cream.
GEA TDS has recently completed a Euro 3 million milk processing plant for Engro Foods in Pakistan. It is one of the biggest plants of its kind in Pakistan and the first ever in the Sahiwal region. The commissioning of the plant was completed in just 2 months and operation started by end December 2007.
The plant supplies the region around Sahiwal with 250,000 liters of low fat milk a day, thats 1 million servings, and 10 million servings of Tarang (tea whitener). The plant provides a processing outlet for the local farmers who rear dairy herds of cows and, especially in the smaller farms, buffalo.
7
The Engro plant also contributes to the local economy by employing some 200 people throughout the factory. The GEA TDS project was to supply equipment and engineering services throughout the process. This included milk reception; milk processing; UHT processing; powder mixing; cream handling and processing; Clean in Place (CIP) equipment such as trucks, process and filling machines; detailed engineering and project management; automation for both the process and CIP equipment; and commissioning.
Raw milk reception handles up to 40,000 lit/hr of both cow (20%) and buffalo
(80%) milk from the surrounding regions farmers cooling it from approximately 15C to 4C for storage in the two 125m3 storage tanks.
The process can pasteurize milk to 85C at the rate of 25,000 lit/hr and includes milk clarification and skimming; standardization for milk, cream, SNF and butter oil; butter oil dosing; a refurbished homogenizer; and degassing.
The CIP system covers the whole process from the delivery trucks through to the
filling machines. Acid and caustic concentrates are stored on site in two tanks each with a capacity of 15m3.
The whole process is controlled using PLCs supplied by Allen Bradley. PLCs are located in cooled cabinets installed on the base-frame unit of each module. All were delivered wired and I/O tested. Although Engro has only been in the food and dairy sector since 2006 the company has already carved out a significant market share and is growing quickly. In such a short time its already well on the way to achieving its goal to be one of the biggest players in Pakistans food industry
Board of Directors
Asad Umar Afnan Ahsan Ruhail Mohammed Isar Ahmed Shahzada Dawood Mujahid Hamid Muhammed Amin Ms. Spenta Kandawalla Abdul Samad Khan Chairman Chief Executive Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director
Departments
Administration
Marketing
Milk Procurement
Human Resource
Quality Assurance
Supply Chain
Manager Plant
Manager procurement
Manager Q.C
Manager Purchase
Logistics Officer
10
The annual milk production of 33.6 billion liters in Pakistan is shared between a 71.1% share for the rural economy and A much smaller urban share of 29%.
Only 3% of the total production of milk is processed and marketed through formal channels. For the other 97%, a multi-layered distribution system of middlemen has evolved to supply milk. Despite only a small percentage (3%) of milk being processed, the (UHT) market is growing at a steady rate of 20% a year.
11
Over all consumption of milk per day is 400,000 liters in Karachi only
Due to rising inflation and high poverty levels, the majority of Pakistani consumers are price conscious. Therefore, demand for open, raw milk is high compared to processed milk. Hence, raw milk is the primary dairy product marketed in the country. The supply of milk to meet domestic demand has usually lagged. To meet this gap, powdered milk is imported every year.
12
Livestock Population:
Cattle
207 257 987 415 1,195 627
Buffalo
407 400 1,450 850 1,909 496
13
14
EFL Aim:
Dominate the food business and to achieve this we will settle for nothing less than the cream
EFL Vision:
To become fast growing mega Food Company & also to elevate Consumer Delight Worldwide. The Company aims to generate a significant portion of its revenue from foreign operations.
Mission of EFL:
Our mission is to provide satisfaction at a competitive cost, growth in diversity, and continue to contribute to the growth of industrialization in Pakistan by being the market leader". We believe our success depends on our customers. Thus, our primary value is fulfillment of our customer's needs. Our manner of achieving this success is to include value for money
Core Values:
1. 2. 3. 4. 5. 6. 7. Leadership Innovation Diversity and International focus Quality and continuous Improvement Candid and open communications Individual growth and development Enthusiastic pursuit of profit
15
8. Ethics and integrity 9. Safety, Health and Environment 10. Team Work & Partnership.
16
3.Leadership:
We have leaders of high integrity, energy and enthusiasm who have the necessary managerial, professional and people skills to inspire a group or organization to set high goals and achieve them willingly. We believe that leadership skills need to be strengthened at all levels within our organizations and that managerial and professionalism is a necessary foundation.
17
7.Innovation:
Success requires us to continually strive to produce break through ideas that result in improved solutions and services to customers. We encourage challenges to the status and seek organizational environment in which ideas are generated.
MAJOR COMPETITORS:
Engro Foods Limited is fully aware of its competitors. The company had to consider the areas including (product design, segmentation, target market, advertising, time to launch a new product, time for necessary changes & constant over view). The major competitors in case of offering the UHT milk are:
18
Other than the brand mentioned above Olpers also faces an indirect competition from the local milkman the GAWALA.
EFL Brands:
1. 2. 3. 4. 5. 6. 7. OLPERS MILK. OLPERS CREAM TARANG OMORE OLFRUTE Olwell Hi-Cal Lo-Fat (HCFL) Milk OLPERS OWNSUM
19
20
OLPERS MILK:
The flagship brand of Engro Foods is OLPERs Milk. Launched on March 20, 2006, Olpers milk is EFLs standardized and homogenized pure UHT (Ultra heat treated) milk with 3.5 % fat and 8.9 % solid non-fats. It is collected from 3000 plus villages & 10000 plus farmers
It is EFLs premier brand, and the choice of quality-conscious consumers who only go for the best. It is available in easy-to-open, 6-layered Tetra Pak Brick Aseptic red packaging and comes with approx 71days shelf life.
TAG LINE:
The unique selling proposition for Olpers is: Subah Bakhair Zindagi, but recently the company changed the USP to Jo dil khol kay jeetay hain unheen kay liyay hai
Olpers
Both the tag lines have a very positive impact on Olpers image because of their drect emotional positioning & relation with its customers.
21
Olpers Cream :
The premium cream processed hygienically from pure fresh milk, Olpers Cream is luxuriously rich in its thickness & nutritional value. It promises the richest & scrumptious assortment of tempting toppings, delicious desserts and creamiest coffee with its unique taste, also great for eating with bread etc. It was launched on September, 2006. and comes in 6-layered Tetra Pak Brick aseptic purple color packaging with 6 months shelf life.
22
SAFETY STOCK
For olpers hardly 6-7 days safety stock is kept because of its low shelf life. Time to time forecasting is done in short intervals to meet the level of demand.
OLPERS LIFECYCLE
Source: Mr Salman Goheer, Head of Supply Chain Dept, Engro Foods LTD.
Flush Season: (1st Jan to 15th April): During this season there is maximum production of milk in the country.
23
Lean Season (16th April to 30th July): Minimum production of milk in the country due to high environmental temperature, less green fodder availability and natural reproduction cycle of animals. Semi-flush season (1st Aug to 31st Dec): In this season about 70-80 % milk production in the country.
The above chart depicts the overall supply chain management process at Engro Foods (Pvt) Ltd. These activities can be divided into three all encompassing categories as well:
Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required. Operations: the processes of transforming inputs into finished products and services. Outbound Logistics: the warehousing and distribution of finished goods..
24
The infrastructure of Engro: organizational structure, control systems, company culture, etc. Human resource management: employee recruiting, hiring, training, development, and compensation. Technology development: technologies to support value-creating activities.
25
RAW MATERIAL:
The various kinds of raw materials required for the milk and cream production at Engro foods include: Raw Milk Other ingredients like SNF and fats Packaging material
RAW MILK
The raw milk which is further processed in the manufacturing plants at Sahiwal and Sukkur is the core raw material at Engro Foods because their product portfolio encompasses all dairy based products. The raw milk which is mainly the buffalo milk is obtained from the various dairy farms across the country with most of these dairy farms being located in Sindh and Punjab region.
OTHER INGREDIENTS
There are several other ingredients that are added at the various stages of the production process at Engro Foods and their respective quantities depend on the recipes of the products being manufactured. These include SNF that are solids not fats and fats which are adjusted to achieve the desired levels. For instance, the Olpers milk consists of 3.5% fat whereas, Tarang milk which is the tea whitener and more creamy in nature has 7% fat, therefore, during the production process, more fat is added to the milk to produce Tarang. Furthermore, SNF in milk is to be maintained at 8.9% which is also adjusted during the process depending on the quality of milk. Another product of Engro Foods, Olwell milk which is high calcium and low fat milk targeting the health conscious segment, requires high calcium level that is modified during the process.
26
PACKAGING MATERIAL
The packaging material used by Engro Foods is supplied from Tetra Pak Ltd. It is in the form of rolled sheets of aseptic packaging arriving at the manufacturing plant directly from the supplier. The aseptic packages are sterilised prior to filling of UHT (Ultra Heat Treated) milk, resulting in a 6-layered Tetra Pak Brick Aseptic packaging, with a 3 months shelf life.
Direct Sources:
The method of milk collection through direct sources can be defined as milk collection done through various dairy farmers residing in different villages. A villager called Dhoti is responsible for collecting milk from his respective area and delivers milk every morning and evening to the Milk Collection Centre. The volume of milk supplied by the dairy farmers varies immensely depending on both the size of the are covered by the dairy farmer and the availability of milk and at times could be as low as two litres a day.
The method of milk collection from direct sources is the most preferred one by Engro Foods mainly because of the low probability of adulteration of the milk by dairy farmers. The reason accounting for this is that it is easier to identify adulteration in low volumes of milk as opposed to high volume provided by the other method. However, the overall quantity of milk collected through this method is very limited.
The main objective of Milk Collection Centre is to deal with small quantities of milk provided by the village dairy farmers. On one hand, it has proved a regular source of income for farmers through an assured and growing income resulting from the sale of their milk, and on the other, it has enabled Engro Foods to collect better quality milk in the quantities it needs. At the Milk Collection Centre a trained milk collection agent who tests and records every supply for quality and fat content collects the milk and rejects the milk that does not conform to their quality standards or is adulterated.
28
Planning
Purchasing
Warehousing
Logistics
Outbound Logistics
Dispatches
29
PR WITH FARMERS :
According to Mr. Ali Akbar, Director Marketing EFL, In order to succeed, you should ALWAYS capitalize on your STRENGHTS and NEVER on your COMPETITORS WEAKNESS! ENGROs Strength was their fellowship with farmers for a long time. Engro has been interacting with the farmers for fertilizers and has gained quite a good reputation over the years. It has led to
30
a strong bond and long term relationship with the farmers who are willing to supply milk to the company. This is an added advantage and strength for the company because it will never be short of milk production. The farmers also wont have to look elsewhere to sell their milk.
THIRD-GENERATION PLANT:
EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene.
Milk procurement department of EFL provides a value-added service to all their milk producers, ensuring that milk of the correct quality is produced and that sufficient raw milk is always available to satisfy companys needs, through the use of strategies, processes, projects, systems and policy. Procurement teams of EFL manage a number of Milk Procurement responsibilities including: 1. Ensuring that the producers are paid promptly and accurately. 2. Purchasing raw milk from producers and transporting it to factories effectively and efficiently. 3. Successful clean milk route development in various new identified areas. 4. Installation of bulk coolers in the area. 5. Milk yield improved.
31
6. 7. 8. 9.
Hygiene practices improvement at all levels of milk production and procurement Reduction of Bacterial Count of milk. Advanced training to drivers in the handling of mass milk in case of emergencies. Trainings to field staff for handling of sample and client.
32
PUSH-PULL POINT:
Every supply chain is almost always a combination of both push and pull, where the interface between the push-based stages and the pull-based stages is sometimes known as the pushpull boundary & so is ours. Upstream is push based while downstream relies on pull based systems. Said by Mr. Salman Goheer, Head of supply chain, Engro Foods LTD.
PLANNING:
Engro do planning on short term and long term basis simultaneously. Engro is mostly having long term plans and for achieving these long term plans it gains support of short term plans. Words of Mr Salman Goheer, Head Of Supply Chain, EFL.
MIS:
The MIS department at Engro Foods ensures that all automation is running error-free at all times. Regularly modifying and updating the Company's accounting software is also the MIS team's responsibility.
33
34
3. PASTEURIZATION:
Pasteurization can be defined as "The heating of every particle of milk or milk product to a specific temperature for a specified period of time without allowing recontamination of that milk or milk product during the heat treatment process."
4. HOMOGENIZATION:
It is a mechanical treatment of the fat globules in milk brought about by passing milk under high pressure through a tiny orifice, which results in a decrease in the average diameter and an increase in number and surface area, of the fat globules. The net result, from a practical view, is a much-reduced tendency for creaming of fat globules. Other advantages of homogenization include a richer flavor and possibly increased digestibility.
35
M.Sc.(Hons) Food Technology, MS Total Quality Management Manager Quality Control-MPD, Engro Foods Limited
INBOUND LOGISTICS:
For inbound logistics dedicated long vehicles are used. Inbound logistics concerns raw milk transportation to the plant. Raw milk comes from the dairy farms to the milk collections centers which are 40 in total & are located in different villages where some quality checks are conducted to ensure the milk quality, if its up to the mark than it is stored, till it reaches the 9,000 liter capacity which is than collected by dedicated specialized vehicles to transport it to the plant for production. Once the vehicle reaches the plant premises, once again a quality check is repeated before emptying the container.
OUTBOUND LOGISTICS:
On average, every alternate day Olpers Milk truck arrives at each ware house from Sukkur and Sahiwaal factories, and is distributed in the same amount to the distributors all over the Pakistan.
36
For outbound logistics trucks are used. They have 80% dedicated fleets & 20% open trucking especially for the northern areas of Pakistan. Outbound logistics concerns finished milk movement from manufacturing plant to the warehouse & to distributors. There are 3 warehouses of olpers: Sukkur (Mother ware house) Sahiwaal (Mother ware house) Rawalpindi (Central ware house)
Sukkur:
Adjacent to the manufacturing plant which covers whole of the south i.e. Sindh & Baluchistan, the logistics usually take 1 day to arrive at olpers warehouses in Karachi from their manufacturing factory at Sukkur.
Sahiwaal:
Adjacent to the manufacturing plant which covers whole of the of the central.
Rawalpindi:
It is a satellite warehouse with a covered area of 30,000 sq ft which is on rental basis & it costs 600,000/month. Its responsibility includes fulfilling the orders of the northern region
In addition to Karachi:
The transportation of finished goods from Sukkur to Karachi is done through a dedicated truck which can easily carry a 50 feet container, which is done by Naulakha Transport agency. There responsibility is to pick the goods from Sukkur and deliver it to Karachi warehouse and on average there are 15 round trips in a month. From Karachi warehouse it is delivered to the respective distributors according to there required orders in terms of quantities and size of packets, it is done through dedicated fleets which is on a monthly rental basis.
37
The cost of downward logistics (Sukkur) for the company is cheaper in comparison to the upward logistics (Karachi). Since open trucks return empty once the product reaches the Karachi warehouse.
WAREHOUSING
The company has three warehouses out of which two are located within the production plant i.e. in Sukkur & Sahiwaal and the other being the central warehouse located in Rawalpindi. Sukkur warehouse having a capacity of 1.6 million liters with a daily average dispatch of 350,000 liters & a pallet capacity of 2000. Sahiwaal warehouse having a capacity of 4 million liters with a daily average dispatch of 400,000 liters & having a pallet capacity of 5000. They are having a cross dock warehousing system at Maripur and it is being operated by transporter him self. Using pallets to stock the cartons. Each pallet has a capacity of 800 liters. Fork lifters are used to stock the pallets to the desired dock The temperature of the warehouse should be maintained at 25-28 degrees in order to keep milk in its fresh condition. Because of its perishable nature they are using the FIFO inventory system. There is a climate control system in there warehouses as the temperature of Sukkur & Sahiwaal shoots up to 45 degrees in summers. They are maintaining 6-7 days safety stock. Once the packaging is done the milk is stored in equibator for three more days in a warehouse before loading it on the truck to make sure that the quality of the milk is up to the standard.
38
ORDER PROCESSING
The ordering process at the warehouse starts with generation of suggested order list (SOL) triggered through the system, SOL is done to determine the future demand forecast, determination of items to be ordered and how much to reorder
MATERIAL HANDLING
Material handling is a process of handling the material in a proper way so that the rate of losses & damages can be minimized for good. Olpers manage their materials very efficiently by using latest equipment for raw materials & finished goods. They use specialized milk tanks as mentioned above for the inbound of raw milk & for finished goods they use proper palletization, then fork lifters are used to put the pallets in the right place in the warehouse which is then cross docked.
DISTRIBUTION NETWORKS
Olpers focus on every major city of Pakistan. All the transportation is outsourced. Olpers have 350 distributors across Pakistan. According to the distribution, Pakistan is divided into three geographical zones and then in further Regional Sales Offices. North Zone o Rawalpindi. o Peshawar. Central Zone o Lahore o Gujranwala o Multan South Zone o Karachi o Hub o Punjgur o Nawab shah
NEGOTIATION ON PRICE :
Olpers doesnt negotiate on price with distributors there is a fix Mark-up/Commission which is 4% for all distributors
CUSTOMERS FEEDBACK:
Customer feedback is required for further planning which is the responsibility of the distributor to provide to Olpers team.
PURCHASE ORDERS
Purchase order is an instrument given by the buyer to the seller mentioning the specification of goods, quantity & price in order to get the timely delivery of the goods from the customer. In the case of Olpers the distributor is the buyer who first submits the payment in advance and then gives the purchase order to the sales department via e-mail whenever he is low on inventory. These e-mails are then processed in the form of a proper purchase order, which is then send to the finance department for invoicing purpose. Whereas sales department is also responsible for the dispatch of the desired goods by the customer.
40
REVERSE LOGISTICS
SHELF LIFE OF OLPERS MILK:
71 days
Every carton and item has assigned a certain batch number. If any defect has found in item or carton (in small quantity) then the batch number of that item or carton is noted and disposes the defected item right on there and if it is large number than it will taken back by the same delivery truck who dispatches the orders to the distributors.
Once the large number of defected milk is back to the company, than it is drained. They have a normal losses rate of 0.40 % due to defected Milk.
PACKAGING
Engro Foods is committed of reducing the environmental impact of packaging, without jeopardizing the
safety, quality or consumer acceptance of its products. EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available to Olpers for packaging
41
because it is having monopoly in the packaging sector in Pakistan As far as milk is concerned packaging is very important. It is perishable item which requires special packaging to preserve it for few months. To meet this objective Olpers delivers fresh milk to its customer via using tetra Pak, without sacrificing in health measures.
Engro Foods have following objectives in mind regarding packaging of Olpers: Result in the lowest possible weight and volume of packages whilst still maintaining pack integrity. Take into account new packaging materials and processes that reduce the impact on the environment of unnecessary transportation. Avoid the use of substances that can adversely impact the environment during packaging production and disposal. Decrease packaging waste at all stages in the supply chain, including package manufacturing, utilization and disposal. Increase the use of recycled materials wherever possible, and increase the recyclables and compatibility of packages with existing waste management schemes. Packaging materials are Stored in a dry place away from manufacturing areas and it is used in a clean and sanitary manner which is non toxic Packaging is carried out in away that avoid contamination of processed products. And also protects the product against contamination until the product reaches the consumer.
Marketing Sales This Widespread intranet is also offering a platform for developing and deploying critical business applications to support business operations and management decision making across the Internet worked enterprise. Many customers application has been developed at ECPL, which helps in Order Processing Inventory Control Sale management & reporting executive information system These applications are designed to interface with, and access, existing company database and legacy system. This software for such uses has been then installed on intranet web Servers. Employees at regional offices including Head office can access and run applications using web browsers from anywhere on the network whenever needed.
43
Remember, Sales operation officer has mainly concerned with two modules of the Sales & distribution system i.e. Transactions; This module helps to process, distributors Payment information, Secondary Sales, Order processing and their Claims. Reports; The Report modules convert distributors transactional information into different types of reports like: 1. Regional Order Summary Report 2. Primary Sales Report both Invoice Based & order Based 3. Secondary Sales LPD Report 4. Primary & Secondary Day wise Report 5. Distributors detail Ledger 6. Distributors Payment Receipt Report 7. Stock Pending & Cancellation Report 8. Distributors Claim Summary Report 9. Logistics Reports 10. Distributor Account Statement Report All above-mentioned reports can generate from different angles like o Regional report o Area Wise Report o Territory Wise Report o Distributor wise o Day wise etc
For example Year to date 6444 / 5161 = 1.2485(its mean that they are 25% ahead of their target) Similarly we can find the Month to date volume wise and also value wise
Payment procedure:
Three instruments are considered for payment procedures: 1. Remittance plus. 2. Demand draft. 3. Pay orders. As a result payment receipt report is generated which shows us the name of all the distributors who made the payments and weather the payment was sent via remittance plus our demand draft etc and name of the branches through which the remittance was sent. After conducting the payment procedures another document is generated which is known as the Distributors Account statement summary. When distributor sends us the amount it is credited in our account as it becomes or liability that is because we have not delivered the stock yet.
Distribution claim:
The distribution has to process all the claims before 6th of every month on the given formats. These claims are verified by the TSOs and are sent to the regional office for verification after the verification at the regional office the claims are logged on to the system and are sent to the head office after verification from the head office the acknowledgement is sent to the distributor.
CRM AT EFL
Engro Foods Keeps Track of 60,000-Strong Consumer Base with On Demand CRM Solution. We are a commodity business, and it is vital for us to be on our toes. We run reports on the Oracle CRM system to find out which customers are loyal to our brands and which ones are also buying other brands. We can then look more closely at the reasons for the switch and work on winning these customers back. This is something we simply cannot do using spreadsheets. The ability to see and act on this type of information is a competitive advantage. Danish R. Syed, Head of Consumer Relationship & Manager Innovations, Engro Foods Limited
45
Information At Tips:
The Oracle CRM system has enabled Engro Foods to dispense with spreadsheets to record and track information. Customer data is now entered and stored in a central database, eliminating the need for repetitive manual entry and ensuring the accuracy and currency of information. The system also provides a single, complete customer history, where previously transaction and personal details were dispersed over multiple spreadsheets. The system tracks details such as birthdays and anniversaries, which allows us to interact with customers at those times that are meaningful to them, said Danish. It is a way for us to build strong relationships with our most important customers.
With Oracle looking after the system for us, the chances of errors are less and if any issues do come up, we know they can be resolved quickly, said Atif Muhammed Ali, manager, applications, Engro Foods. As we expand the use of the solution, we know we can count on Oracle to guide us through the process.
46
2. PR with farmers:
ENGRO has been interacting with the farmers for fertilizers and has gained quite a good reputation over the years. It has led to a strong bond and long term relationship with the farmers who are willing to supply milk to the company. This is an added advantage and strength for the company because it will never be short of milk production. The farmers also wont have to look elsewhere to sell their milk.
4. Its taste:
6.Third-Generation Plant:
EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene. Moreover, it is also setting up another milk processing plant in Central Punjab (Sahiwal) with an investment of Rs. 2 billion (US $ 33million).
naked people have been shown with tattoos of the same stripes in order to show that they are loyal consumers of Olwell. Also, the talent, situations and locations connects well with the ad to give Olwell a premium positioning. The brilliant marketing people at ENGRO Foods failed to analyze is that the market they are targeted the ad on, is Pakistan, where practicing Muslims reside, who have strong religious beliefs. When making the ad, the brand managers were focused on, making an ad that should give the brand the most premium look and feel amongst the target consumers but on the other hand they were least bothered about the ethics, religious beliefs and cultural values.
4. Packaging:
EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available to Olpers for packaging because it is having monopoly in the packaging sector in Pakistan. Due to this reason, Tetra Pak can charge them higher and it could increase the production costs.
OPPORTUNITIES
3. Awareness:
Growing dissatisfaction with loose milk and increasing awareness about health and Hygiene issues have led to increased processed milk consumption.
49
THREATS
1. Competition:
Competition may pose a threat because the company will have to maintain its leadership in an expanding market so that it doesnt lose its market share to its competitors. For Olpers it might be difficult to penetrate in a market where the loyalties exist for such brands as Nestle and Haleeb. These brands have been in the milk industry far too long and have left a mark in the minds of consumers in terms of quality. Competition seems to be getting tougher as a result of new players entering the dairy market.
50
Engro Foods is working with different NGOs to meet the Corporate Social Responsibility in country. They are working with UNDP to initiate womens veterinary workers program They also signing a micro financing model for dairy farming with Pakistan Poverty Alleviation Fund (PPAF)
51
Infrastructure Issues
The two plants are located in the interior areas of Punjab and Sindh and the villages from where the milk is procured, whether in adjacent or far-flung areas, mostly lack proper roads and highways that would enable milk to be transported easily and in lesser time. As a result, delays may occur which might disrupt the overall production process. But these problems are addressed by the maintenance of adequate supply at the premises at all times in the form of powdered milk in order to deal with any sort of contingency situation.
52
RECOMMENDATION
We are recommending following important factors which we felt missing in their supply chain: 1. To build a regional ware house in Karachi that fulfills there supply side gap & to reduce upward logistics cost. 2. EFL is not having its own dairy farms; it largely collects loose milk from farmers & gawalas through its 40 milk collection centers, which sometimes is of low quality and impure because they add vegetable oil to milk to get higher prices. EFL needs to have their own Dairy Farm so that they can meet the increasing demand as their market share is growing by 12% annually & to have quality milk procurement as well. 3. EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available to Olpers for packaging because it is having monopoly in the packaging sector in Pakistan. Due to this reason, Tetra Pak can charge them higher and it could increase the production costs so they need to invest their funds for having their own packaging system. 4. They should expand their brand portfolio by investing in yogurt market as their competitors are enjoying it just because of low competition their otherwise Milk pack has its brand name in drinking milk market only. So its an opportunity for them to grab & enjoy the flavor.
53
REFERENCES
Mr. Salman Goheer. (Head of Supply Chain at EFL) Mr. Ammar Mursalin.(Assistant of Mr. Salman) Mr. Umair Nagi (Supply Chain Development Manager at EFL) Mr.Dilshad Ahmad(Quality Controll Officer EFL) Mr. Ali Akbar, Director Marketing EFL Mr. Hassan, HR Assistant Manger, EFL. Pakistan Dairy Industry, white Revolution paper www.engrofoods.com www.google.com
54