FMC Biscuits

Supply Chain network Re-Design

Submitted by:
GROUP 6
Anubhav pattnail| Deepak Kumar| Mohit Rai
Saikat Mondal I Sampark Pani | Vartika Srivastava
1 CURRENT NETWORK DESIGN
OWNED PRODUCTION
FACILITY
FMCB
SUBCONTRAC
TING
Subcontracted most of the
production to 45 plants
Plants are fully dedicated to FMCB
Products are transported to depots
through trucks.
Capacity utilization depends on no.
of SKUs
260 SKUs are grouped into 31 Pack
types and 36 brands
Plants have several product lines
that can manufacture at a fixed
2 3 4 5
MOTHER DEPOT
DEPO
TS
Plants and depots are divided India into
4 regions- East, West, North and South
8 mother depots supplies SKUs to both
wholesale/retail facilities and other
depots
58 small depots spread all over India
Majority of SKUs transported from
plants to depots of the same region.
Sales forecast is done at brand level at
the depot
These forecast are key input for Plants
WHOLESALE/ LARGE
RETAIL
TRADITIONAL RETAIL
Large and traditional retail outlets act as
point of sale.
Biscuits are categorized into cream and
non-cream.
Salespersons visit traditional stores
every day and collect SKU wise orders
for next day
Brand level sales figures are less
fluctuating
Brands having strong presence in all
regions are designated as National
1 2 ASSESSING CURRENT PERFORMANCE 3 4 5

FOUR BROAD AREAS DATA REQUIREMENTS

BUSINESS STRATEGY Alignment of Supply Chain Network with overall Business Strategy

Assessment of Business objectives :

Quality (Freshness): How crucial is it for business? What is the shelf life of the products?
BUSINESS OBJECTIVES
Low cost(RM & transportation costs): How important it is to increase contribution margin?
Ready availability of products : How are competitors faring? Demand elasticity of products?

Expectations of Consumers
CUSTOMER/STAKEHOLDE Stock Outs : How the suppliers and distributors be impacted by the product stockouts?
RS EXPECTATIONS Inventory Levels : the optimum inventory levels and the maximum safety stock capacity?
Demand Fluctuations (Bull-Whip Effect): The fluctuations of demand and its severity?

Operational parameters involved:

Location of manufacturing and depots : How easy & responsive the system is to meet demand
OPERATIONS
Geography : How is the local Topography, Collaborators reach and adaptive environment
Transportation : How are they connected, means of communication and information sharing
1 2 EVALUATION
3 OF ALTERNATIVE DESIGN 4 5

ADDITIONAL DATA REQUIREMENTS

New Markets: What could be the possible new markets that are present that we can access (Short term vs Long Term)

B2B Business: What are the new industrial or bulk purchasing options available requiring different networks (Short term vs
Long Term)

Direct Retail: The ability and additional cost and financial requirements of the factories to directly serve the retail outlets
and not through distributors

Competitors: How and to what extent the competitors have penetrated the market alongwith analyzing their supply chain
strategies

Collaborators: How and in what way are the collaborators helping FMCB to make the product readily available to the
customers

Responsiveness: How responsive is our supply network design to meet the fluctuating SKU level demand maintaining
product variety and freshness

Implementation: What are the constraints in implementing the new supply chain network such proposed incorporating risk
mitigation
1 2 E 3 VALUATION
4 OF ALTERNATIVE DESIGN 5

OBJECTI
VES
DECISION VARIABLES
1 2 3 4 5 Network Design Tools

Facility Role: Shortcomings

Capacity Allocation:
Help in determining the
Optimizie utilization
amount of flexibility in
Minimize cost
the supply chain to
Improve
meet the changing The model does not take into
responsiveness
demand account the qualitative factors like
Operational the freshness of the product,
Strategy Analysis government tax and policies, etc.
The solution may be impacted by
Facility location: Allocation of markets
uncertainty. It may fail in case the
Minimize cost & Supply Sources:
price and demand varies over time.
To minimize lead Affects total production
time cost, inventory and
Reduce lead time transportion cost

Network Design Tools Available

Network Optimization Model: Gravity Location Model:

Objective: Maximize Profit Objective: Minimize cost of transporting
Input Variables: No of plants, No of markets, demand Input Variables: Coordinate location of plant and market,
from each market, Capacity of each plant, Cost of shipping cost of shipping from plant to market, quantity to be
from plant to market shipped
THANK YOU