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INTERNSHIP REPORT
SUPPLY CHAIN MANAGEMENT
Kashan Pirzada
ENGLISH BISCUITS MANUFACTURERS (PVT) LTD
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CONTENTS Topic
Page
Acknowledgement........................................................................................................3 Letter of Transmittal.....................................................................................................4 History...........................................................................................................................5 Corporate Profile...........................................................................................................5 Corporate Social Responsibility...................................................................................5 Supply Chain Management (SCM)...............................................................................6 What is SCM?...............................................................................................................7 SCM at EBM.................................................................................................................8 Business Process...........................................................................................................9 How Biscuits are made.................................................................................................10 Material Management (Supply Chain) Department......................................................11 Finance Department......................................................................................................12 Production Department.................................................................................................13 Types of Biscuits...........................................................................................................14 Production Process........................................................................................................14 MIS Department............................................................................................................16 Quality Assurance & Development Department..........................................................17 Marketing & Sales Department....................................................................................18 Engineering Department...............................................................................................19 Learning in the Organization........................................................................................21 Conclusion....................................................................................................................23 Suggestions/Recommendations....................................................................................24 Bibliography.................................................................................................................25
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ACKNOWLEDGEMENT
This report is on Supply Chain Management of ENGLISH BISCUITS MANUFACTURERS (PVT) LIMITED. Humble effort has been made in preparation of this report. I would like to thank everyone who assisted us in preparation of this report. A visit of each department was conducted and a meeting was arranged with the head of each department where every head/manager explained the functions and working of the concerned department. We specially would like to thank the assistance and cooperation of; Mr. Abdul Wahid Mr. Bashir Rawalia Mr. Shahan Arif Mr. Khalid Ashraf Mr. Adnan Nek Mr. Farhan Khan All from General ing
Mr. Tariq Naeem Mr. Mubashir Hassan Ansari Mr. Sabeeh Adnan Mr. Sarfraz Ahmed Khan Mr. Waqas Jalil Ms. Hina Shaikh
We would have been unable to make this report without the assistance of these people. Please us for any query.
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LETTER OF TRANSMITTAL
June 05, 2008 Bahria University National Stadium Road Karachi Sir This report is on “Supply Chain Management of EBM” it is ready for your perusal. This report highlights the whole supply chain and business process of EBM and the functions of different departments. If there be any clarification demanded, I would appreciate a call from you on the given number. Sincerely
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ENGLISH BISCUITS MANUFACTURERS (PVT) LTD HISTORY English Biscuit Manufacturers (Private) Limited was established as a t venture company in 1965 with the name of Peek Freans Pakistan Limited. In 1966, the UK sponsor company was renamed Associated Biscuits International Limited (ABIL), while the venture was renamed English Biscuit Manufacturers (Private) Limited (EBM), which stands to date.
CORPORATE PROFILE EBM started manufacturing and marketing the world famous Peek Freans range in 1967 in order to provide Pakistani consumers with nutritious and hygienically packed biscuits of the highest quality. True to its corporate claim, 'The Legend Leads', EBM has led the biscuit industry in Pakistan for more than 39 years by playing a pioneering role in providing innovative and high quality biscuits for every taste bud. EBM is the only Company in the industry to have achieved recognized international certifications pertaining to quality control, environmental management system and human resources management, including ISO 9001:2000, ISO 14001:2004, HAC certifications. The sales of the company have been increasing with the age of time. The company, recognizing the increased demand of EBM’s biscuits, decided to give extension to the plant. At start (1967), there was only one plant (line) and now 5 lines are working. The EBM has also installed two plants (lines) at HATTAR, named Coronet Food Ltd (CFL), a subsidiary company of EBM. Total 7 lines are being used now for the production purpose. In mid 90’s CONTINENTAL BISCUITS (LU) emerged as the biggest ever competitor in the biscuit industry and achieved a big market share which they held for almost 7 to 8 years. But EBM’s strong planning, management and rational decision making took back the market. Since then, EBM has been growing fast and has left its competitor far behind.
CORPORATE SOCIAL RESPONSIBILITY Environment
Page |6 Environmental protection, safety and security have always been the top priority at EBM. While the company is committed to delivering high quality products, it also recognizes the importance of being a responsible corporate citizen. EBM performs its business activities with utmost respect and care for the environment through proactive environmental management.
Waste Water Treatment Plant EBM has set up a waste water treatment plant and the company is using treated water for gardening purposes and to irrigate the newly landscaped recreation area and park for children.
Solid Waste Management Area The company intends to build a separate area for solid waste so that it does not harm the environment. Waste is disposed of in a manner that is not harmful to anyone.
Development Plan The company has constructed a lush green area for families, including children’s play area, three waterfalls and gazebos, at an expenditure of Rs. 6 Million
Education The company has also initiated an in-house literacy programme for its employees by the name of UJALA. Regular donations and fundraising activities have also become part of day to day business at EBM, as part of the company’s social responsibility initiatives. Moreover, EBM also emphasizes the need of good health; therefore EBM promotes and s healthy activities like cricket etc.
SUPPLY CHAIN MANAGEMENT Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from pointof-origin to point-of-consumption. Supply Chain Management encomes the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence,
Page |7 Supply Chain Management integrates supply and demand management within and across companies. By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.
What is Supply Chain Management? Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM. 1. Plan – This is the strategic portion of SCM. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers. 2. Source – Choose the suppliers that will deliver the goods and services you need to create your product. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, ing them, transferring them to your manufacturing facilities and authorizing supplier payments. 3. Make – This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity. 4. Deliver – This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments. 5. Return – The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and ing customers who have problems with delivered products.
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SUPPLY CHAIN MANAGEMENT AT EBM EBM’s supply chain process is comprised of a series of interdependent steps and starts with the collection of raw materials and ends with packaged brands on customer's shelves. The Supply Chain Management at EBM ensures that appropriate quality standards are upheld and maintained at each link in the chain. The supply chain at EBM comprises the following areas:
Forecasting Planning Manufacturing Deployment Distribution The consumer / shopper
Forecasting Forecasting is a vital element of the business, and can be defined as an unconditional statement of demand of biscuits. Simply put, a forecast predicts how much demand there will be in the market for a specific product over a certain period. Planning The function of planning is to convert marketing forecasts into manufacturing plans. The planning department works closely with the various operations to ensure that manufacturing plans are accurately converted into monthly and weekly production plans and budgets. Planning is also responsible for monitoring and controlling the amount of stock the company holds and for ensuring that the correct stock holding levels are maintained to meet customer service requirements. Manufacturing The manufacturing process at EBM involves the conversion of raw and packaging material into finished product in the most cost effective manner possible. EBM manufactures all of its own products, and production takes place at the two factories located in Karachi and Hattar. Deployment
Page |9 Deployment is the movement of finished goods (biscuits) to warehouses. Marketing & Sales The function of marketing and sales is to market the product with the aim of maximizing the profit of the firm. Effective policies and strategies are made for this purpose. Distribution Simply defined, distribution involves the execution (delivery) of sales orders to a customer. EBM has more than 350 distributors all over Pakistan. The Consumer/ Shopper The shopper and consumer are the individuals who eventually buy and consume EBM’s products. A shopper is the person who purchases the product in store, whereas a consumer is the person who eventually consumes the product. In many instances the shopper and consumer are one and the same.
BUSINESS PROCESS A Business Process is a collection of interrelated tasks, which solve a particular issue. It is a set of linked activities that take an input and transform it to create an output. Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient. This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. EBM is a manufacturing firm and therefore its business process is also based on the same above definition. There are three types of business processes: Management processes - the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". Operational processes - these processes create the primary value stream, they are part of the core business. Typical operational processes are Purchasing, Manufacturing, Marketing, and Sales. ing processes - these the core processes. Examples include ing, Recruitment, IT-, and Engineering.
P a g e | 10 A business process includes different stages through which the business is performed. Each stage covers a large area of its concern.
BUSINESS PROCESS STAGES PURCHASE OF RAW MATERIAL S
MANUFACTURING PROCESS S
MARKETING & SALES S
The core stages in the business include acquisition of raw material, manufacturing of biscuits and finally marketing & sales. Each step is performed by different departments at EBM.
List of Departments
P a g e | 11 • • • • • • • •
Material management (Supply Chain) Finance Production Engineering Marketing & Sales MIS/IT (Management information system) Quality Assurance & Development HR & istration
HOW BISCUITS ARE MADE Manufacturing biscuits begins with a planning process. At first, the production demand is analyzed. The EBM’s management then creates a factory production plan ensuring the people working at the site, and the machines that are running, are best utilized so that time and energy is not wasted. The necessary raw and packing materials, as required by the production plan, are then purchased. The purchased stock is then received from the various suppliers at the factory store that is also called Raw Material Store (RMS). All incoming materials are checked for quality in Quality Assurance Department. The store is responsible for issuing materials for the production process according to the planned requirements. It is only at this point that biscuits start to be made. Manufacturing biscuits comprises a number of steps: 1. Flour and sugar is dispensed into large mixers. The ingredients that are used in smaller quantities are hand weighed and added into the mixing bowl for each batch of dough to be mixed. 2. The ingredients are then mixed to form dough in the mixing bowl according to a specific mixing procedure. 3. The dough is then tipped into a hopper and gravity-fed into the dough sheeting section of the machine. In this process the dough is fed through various rollers to form a sheet of dough. Depending on what type of biscuit is being produced, this process varies. 4. Different forming techniques are used to get the required shape and size of the piece of dough which will form the biscuit. 5. The raw biscuits are transported through a gas-fired oven on a metal conveyor band where they are baked to form fresh, warm and deliciously smelling biscuits.
P a g e | 12 Biscuits are baked rather than fried, so the oil merely assists the flavour particles to cling to the biscuit surface. The flavored biscuits then travel along a cooling conveyor in order to cool off. 6. Once the biscuits have been cooled, they are packed into wrappers, cartons and cases, ready for distribution to one of the warehouses. 7. Quality checks are conducted at key points in the process to ensure process control and product quality is constantly maintained at a high standard. 8. The finished product is then transported to warehouses. Stock is loaded as per delivery orders and sent to the various distributors.
MATERIAL MANAGEMENT (SUPPLY CHAIN) DEPARTMENT Material management department deals with the purchases of raw material, and supply of finished goods (biscuits). This department receives all the CAPEX Orders (for capital items) and Demand Notes (for general items) from other departments for quotation of items against CAPEX. A quotation is a list of vendors in which all the offered prices are given. A CAPEX number is automatically generated by the system. Material management department recommend one supplier from which final purchase is to be made. As soon as the required material is received from the concerned supplier, an MRN (Material Receiving Note) is made, the MRN number is then written on to the invoice/bill. This bill is forwarded to the finance department which approves the purchase and records the transaction into supplier bill . A purchase voucher is made for recording the liability and then a payment voucher is made that shows the final payment to the supplier. Another function of this department is to store all the raw material received, in proper form. Different store rooms and proper shelves have been made for safe storage purpose in order to sustain the quality of received raw material as per standards. A special RMS (Raw Material Store) is built for the same. Material Management department receives an intimation to issue a certain quantity of material to Production Department, as required in the recipe of the biscuit. This raw material includes ingredients of the biscuits which includes; • • • • • •
Maida Sugar Flour Fats Eggs Salt
• • • • • •
Ammonia Cream Butter etc Cocoa powder Nuts Coconut oil
P a g e | 13 • • •
Butter milk flavor Vanilla flavor Soda
• •
Vegetable fat Milk powder
Once biscuits are made and received from production department the cartons of these biscuits are further stored into the FGS (Finished Goods Store). As the Sales Department asks Material Management Department to supply these biscuits to the buyers i.e. distributors, this department issues the same. Furthermore, this department also deals with the suppliers of goods, raw material etc in order to purchase goods and material in economical prices. This department compares local market prices with international market prices and makes purchase from the market which is beneficial to the company. This department very closely observes the government rules and policies which may directly or indirectly effect the buying decisions.
FINANCE DEPARTMENT Finance department deals with the day to day financial matters of the company. These include recording of transactions into respective concerned module, making payments, sales tax matters etc. Finance department is divided into three sub-departments. • Budgeting • General ing • Treasury Budgeting department is given budget of every department as estimated by each department. Departmental budget shows the requirements of overall financial year. Budgeting department’s work is to estimate the next overall budget of EBM by observing past budgets. Actual expenditure of current year is compared with the estimated budget of the current year and also actual expenditure of current year is compared with the actual expenditure of preceding year. In general ing department, all matters relating to recording of transactions like payables, receivables, inventory, fixed assets, expenses and sales tax issues etc are dealt. Treasury department deals with all the cash related matters. All the Cheques are made and signed in this department.
PRODUCTION DEPARTMENT
P a g e | 14 As the name suggest, production department deals with the production of biscuits. EBM currently has 5 lines (plants) for producing biscuits.
Line 1 Line 2 Line 3 Line 4 Line 5
IMAFORNI MEINCK IMAFORNI IMAFORNI IMAFORNI IMAFORNI
IMAFORNI is Italian plant while MEINCK is Denish manufactured. Most of plants at EBM are IMAFORNI. IMAFORNI has mash belt on which biscuits on from different zones while MEINCK has plain belt. These different belts are due to the slightly different manufacturing processes of biscuits. EBM also has its subsidiary company with the name of CFL (Coronet Food Limited) at HATTAR. CFL also operates 2 plants in which biscuits are manufactured, both the plants are IMAFORNI. On line 3, 4, 5 only SOOPER biscuits are being manufactured 24 hours, to meet the high demand of SOOPER through out the country. Other biscuits like RIO, PARTY, PEANUT PISTA, PEANUT PIK etc are manufactured on line 1 and 2.
TYPES OF BISCUITS Crackers • • •
Butter Puff Marvell Saltish
Plain Sweet Biscuits • • • •
Gluco Marie Sooper Whole Wheat Slice
• •
Peanut Pik Peanut Pista
Nuts
Cream Biscuits •
Choco Vanilla Sandwich
P a g e | 15 • • • • •
Chocolate Sandwich Lemon Sandwich Rio Double Treat Chocolate/Vanilla Rio Double Treat Strawberry/Vanilla Rio Vanilla
PRODUCTION PROCESS The whole production process consist of 5 different stages which are as follow. • Mixing • Cutting • Baking • Chilling • Packaging
MIXING The mixing stage is of great importance in biscuit-making technology, as a good process starts from the head of the line. In the mixing stage, all ingredients must be uniformly and evenly incorporated in a consistent mass and transformed into dough which can be processed by the next set of machines. The mixing is done by two ways 1. Vertical way mixing 2. Horizontal way mixing In vertical mixing, the mixture is blend in vertical direction through a machine while in horizontal mixing the mixture is blend in horizontal direction, depending on the recipe of the biscuit. The mixture (dough) is then forwarded to next step. There are a variety of factors that are important when it comes to mixing the dough: the temperature of the ingredients, the mixing time, and the order in which ingredients are added.
CUTTING In this step, a long sheet of the dough is made which is then cut into different shapes of biscuits through different dyes.
BAKING
P a g e | 16 The biscuits now come into the baking zone on moving belts. This step further divided into 5 zones. In zone 1 and 2 the biscuits are baked on direct fire, these zones are called Direct Gas Zone and after ing zone 1 and 2 these biscuits are moved towards zone 3 and 4 which are called Thermo cycle zone. In these zones biscuits are baked through hot air. In zone 5, a final spray of hot air is given to the biscuits which after ing through zone 4 change their color into brown. In MEINCK plant, biscuits are baked through the spray of hot air in all 5 zones.
CHILLERS In this step, baked biscuits are ed from the chillers. Chillers’ main function is to cool the biscuits. Once cooling process is complete, the biscuits are forwarded to packaging department.
COOLING CONVEYORS
PACKAGING This is the final step in the production process. The biscuits are wrapped and packed into different sizes of packets like; • • •
Ticky pack Half roll Family pack etc
These biscuits are further packed into master cartons which are then either dispatched or stored into Finished Goods Store (FGS).
P a g e | 17
MIS (MANAGEMENT INFORMATION SYSTEM) DEPARTMENT Manufacturers need information about inventory availability, machine uptime and down time, product cycle times, yield, waste, WIP etc. They need real-time information management tools for continuous improvement and decision . Only a live link to the production floor can provide the link to the critical information that can control the supply chain's actual ability to perform. An Advanced ERP Interface is available which enables the to maintain the system's Job Queue and Product Databases from transactions created by an ERP system. An Activity File and a Real Time Status File are maintained to provide the ERP system with real time on job starts, completions and status. s report electronically updating inventory records improves inventory accuracy. EBM is an ERP (Enterprise Resource Planning) based Organization. All the departments are linked with each other through networking called INTRANET. EBM is also connected with CFL with INTERNET as well. A central database has been maintained at EBM where the information related to Payables, Receivables, Fixed Assets, and Inventory etc. are saved. A module has been established for each (payables, receivables, fixed assets, inventory and so on). Each module is integrated with each other. This integration has increased the efficiency of each department, as maintaining and keeping record of data and information have become easier. Overall effectiveness of the organization has also increased to a great extent. All the budgeting, general ing and treasury related works are being performed on this ERP software. MIS department is responsible to make sure the safety of information. They are also responsible to take corrective measures if any problem relating to ERP arises. Moreover, any issue relating to networking, hardware, software etc are dealt by this department. Since ERP has been recently developed and implemented at EBM, therefore it still has some areas to be improved. If any department has any query relating to its concerned module, it may ask and instruct MIS department to make desired alterations. Furthermore, new modules are also being constructed for the complete implementation of ERP.
QUALITY ASSURANCE & DEVELOPMENT DEPARTMENT EBM is strictly following the policy of providing its customers, the best quality. EBM has never compromised on this and therefore, it has been the main reason why the EBM is so successful and famous amongst its customers. EBM, for this purpose, has developed a Quality Assurance & Development Department. The basic function of this department is to check and maintain the quality and standards of raw material used. This includes testing of flour, eggs, Oil & fats etc. Four Labs are
P a g e | 18 currently working at EBM, for checking and testing purpose. Two more labs are under construction. • • • •
Analytical Lab (Centre of Excellence C.O.E ) Packaging Lab Microbiological Lab Process Lab
Under-constructed lab includes Research and Development where research work will be performed and new product development work will be done. Quality control begins with the ingredient assembly stage of production during the measuring, weighing, and processing of the raw ingredients. Additionally, most large manufacturers have quality control (QC) labs responsible for making sure the materials meet determined specifications. Characteristics such as appearance, color, odor, and flavor are checked. QC technicians also test for particle size, viscosity of oils, and pH of raw materials. The finished product is also carefully monitored. Like the inspection of the raw material, the finished products must be examined for appearance, flavor, texture, and odor. The product is compared to a standard established during product development. Specially trained testers are responsible for detecting subtle differences that deviate from the norm.
MARKETING & SALES DEPARTMENT Marketing is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of customer demand in a manner that will achieve the company's objectives. EBM is very much concerned about its marketing as it is the backbone of its sales. A good marketing strategy has always been adopted by EBM which keeps on changing with the age of time. One of the biggest tools of marketing is advertising. EBM does advertising through different media channels which include TV commercials, Radio, Magazines etc. Furthermore, EBM also sponsors different events like cricket matches, concerts etc. Sales activity is also performs by the same department. This department sets the targets of sales for the current year and for the years. Once the target is set, a strategy is developed for achieving this target. They collect orders from the distributors and supply to them the same. Their overall strategy is to maximize the sales by observing the market trend and consumer demand. EBM has more than 350 distributors all around Pakistan. EBM has recently achieved a sales target of Rs.7 billion, which is a great achievement. Following is the supply chain of biscuits from producer to final consumer.
P a g e | 19
SUPPLY CHAIN
RAW MATERIAL
DISTRIBUTOR
WHOLESELLER
PRODUCTION
WARESHOUSE
SHOPKEEPE R
P a g e | 20
CONSUMER
ENGINEERING DEPARTMENT All technical problems and issues in the machines are resolved by Engineering Department. Technical staff at EBM consists of about 47 people including Chief Engineer. A regular check of machines is performed by this department, whether or not the machines are working properly. If any problem is found, an immediate action is taken to resolve it. Technical staff remains present 24 hours at factory office. EBM has its own POWER-HOUSE which provides electricity 24 hours. This is due to miserable electricity condition at Karachi. This Power-House has the ability to generate 2 Mega Watts of electricity. Currently 1300 to 1400 Kilo Watts are being utilized.
P a g e | 21
LEARNING IN THE ORGANIZATION GENERAL ING I have worked mostly in General ing department. In general ing department, all the payments and receipts are recorded. Taxation, Depreciation on fixed assets is also dealt by General ing department. EBM is ERP based organization; they designed modules for all the departments. Each module is used for the data entry and making reports. In General ing, there are two modules are used. One is for recording of Fixed Assets and Depreciation, and other is for the s Receivable, s Payable etc. I have spent most time of my internship tenure on s Payable Module. In this, all the expenses are record in relevant heads of the companies. After recording the invoices, Module automatically ed the Entry. Then we make payment voucher of it on the due date and forward it to Mr. Bashir Rawalia (Head of ing), who signed it and finally forward it to Treasury department which make the payment via cheque. I have also worked on s Receivable Module. EBM received all the payments in advance and they don’t provision for bad debts. s Receivable module is used for recording all the payments in advance.
P a g e | 22
BUDGETING & COSTING In budgeting & costing department, they received estimated budget of every department and compile it and make budget for the whole organization. This practice repeats every month. Budgeting & costing department is forecasting the cost of raw materials. They also calculate all type of variances which includes material variance, labor rate variance etc. Budgeting & costing department is also responsible for maintaining over all contribution margin of the organization. They set the standards, if any of the product’s contribution margin goes down, they inform marketing department for not collecting the orders of that product. They also inform research and development (R&D) department for alteration in recipe of the product so as to maintain the required contribution margin.
TREASURY DAPARTMENT Treasury department is responsible for all the cash activities in the organization. Salary to the employees and wages to the workers are made by this department. They are also responsible for maintaining cash in hand required in day to day operations. EBM has s in different banks. They receive payments from different banks on daily basis and at the end of each day, all the amount is transferred to its central bank . They also make working capital summary and forward it to upper management and to Mr. Abdul Wahid (Head of Finance), and Mrs. Sadia Naveed (Director Operations).
P a g e | 23
CONCLUSION Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). Supply chain management flows can be divided into three main flows: •
The product flow
•
The information flow
•
The finances flow
P a g e | 24 The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit , payment schedules, and consignment and title ownership arrangements.
SUGGESTIONS / RECOMMENDATIONS Following are some suggestions/recommendations which may be fruitful, if adopted by EBM.
All lines at EBM are being fully utilized and there is no more capacity to increase the production. Therefore, new plants and machinery (new lines) should be installed in order to meet the high demand. EBM should also start production of its other famous brands like Smile, Marie, Butter Puff, Ringo and Butter Puff etc on large scale and should not rely only on SOOPER, PARTY, RIO, PEANUT PIK & PEANUT PISTA.
P a g e | 25 Egg breaker machine should be used in Production Department instead of manual method for breaking eggs, so as to increase the production efficiency. Since EBM is an ERP based organization and all the departments are linked with each other through ERP. It is highly recommended that its distributors should also be connected with the organization through ERP.
BIBLIOGRAPHY http://searchcio.techtarget.com/sDefinition/0,,sid19_gci214546,00.html http://en.wikipedia.org/wiki/Supply_chain_management
http://www.theprogressgroup.com/publications/wp2_logs.html
English Biscuits Manufacturers (Private) Limited Plot 1-4, Sector-23 Korangi Industrial Area Karachi, Pakistan Phone: (92-21) 506-3131 to 37 Fax: (92-21) 506-0825
SUPPLY CHAIN MANAGEMENT
Kashan Pirzada
ENGLISH BISCUITS MANUFACTURERS (PVT) LTD
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CONTENTS Topic
Page
Acknowledgement........................................................................................................3 Letter of Transmittal.....................................................................................................4 History...........................................................................................................................5 Corporate Profile...........................................................................................................5 Corporate Social Responsibility...................................................................................5 Supply Chain Management (SCM)...............................................................................6 What is SCM?...............................................................................................................7 SCM at EBM.................................................................................................................8 Business Process...........................................................................................................9 How Biscuits are made.................................................................................................10 Material Management (Supply Chain) Department......................................................11 Finance Department......................................................................................................12 Production Department.................................................................................................13 Types of Biscuits...........................................................................................................14 Production Process........................................................................................................14 MIS Department............................................................................................................16 Quality Assurance & Development Department..........................................................17 Marketing & Sales Department....................................................................................18 Engineering Department...............................................................................................19 Learning in the Organization........................................................................................21 Conclusion....................................................................................................................23 Suggestions/Recommendations....................................................................................24 Bibliography.................................................................................................................25
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ACKNOWLEDGEMENT
This report is on Supply Chain Management of ENGLISH BISCUITS MANUFACTURERS (PVT) LIMITED. Humble effort has been made in preparation of this report. I would like to thank everyone who assisted us in preparation of this report. A visit of each department was conducted and a meeting was arranged with the head of each department where every head/manager explained the functions and working of the concerned department. We specially would like to thank the assistance and cooperation of; Mr. Abdul Wahid Mr. Bashir Rawalia Mr. Shahan Arif Mr. Khalid Ashraf Mr. Adnan Nek Mr. Farhan Khan All from General ing
Mr. Tariq Naeem Mr. Mubashir Hassan Ansari Mr. Sabeeh Adnan Mr. Sarfraz Ahmed Khan Mr. Waqas Jalil Ms. Hina Shaikh
We would have been unable to make this report without the assistance of these people. Please us for any query.
Page |4
LETTER OF TRANSMITTAL
June 05, 2008 Bahria University National Stadium Road Karachi Sir This report is on “Supply Chain Management of EBM” it is ready for your perusal. This report highlights the whole supply chain and business process of EBM and the functions of different departments. If there be any clarification demanded, I would appreciate a call from you on the given number. Sincerely
Page |5
ENGLISH BISCUITS MANUFACTURERS (PVT) LTD HISTORY English Biscuit Manufacturers (Private) Limited was established as a t venture company in 1965 with the name of Peek Freans Pakistan Limited. In 1966, the UK sponsor company was renamed Associated Biscuits International Limited (ABIL), while the venture was renamed English Biscuit Manufacturers (Private) Limited (EBM), which stands to date.
CORPORATE PROFILE EBM started manufacturing and marketing the world famous Peek Freans range in 1967 in order to provide Pakistani consumers with nutritious and hygienically packed biscuits of the highest quality. True to its corporate claim, 'The Legend Leads', EBM has led the biscuit industry in Pakistan for more than 39 years by playing a pioneering role in providing innovative and high quality biscuits for every taste bud. EBM is the only Company in the industry to have achieved recognized international certifications pertaining to quality control, environmental management system and human resources management, including ISO 9001:2000, ISO 14001:2004, HAC certifications. The sales of the company have been increasing with the age of time. The company, recognizing the increased demand of EBM’s biscuits, decided to give extension to the plant. At start (1967), there was only one plant (line) and now 5 lines are working. The EBM has also installed two plants (lines) at HATTAR, named Coronet Food Ltd (CFL), a subsidiary company of EBM. Total 7 lines are being used now for the production purpose. In mid 90’s CONTINENTAL BISCUITS (LU) emerged as the biggest ever competitor in the biscuit industry and achieved a big market share which they held for almost 7 to 8 years. But EBM’s strong planning, management and rational decision making took back the market. Since then, EBM has been growing fast and has left its competitor far behind.
CORPORATE SOCIAL RESPONSIBILITY Environment
Page |6 Environmental protection, safety and security have always been the top priority at EBM. While the company is committed to delivering high quality products, it also recognizes the importance of being a responsible corporate citizen. EBM performs its business activities with utmost respect and care for the environment through proactive environmental management.
Waste Water Treatment Plant EBM has set up a waste water treatment plant and the company is using treated water for gardening purposes and to irrigate the newly landscaped recreation area and park for children.
Solid Waste Management Area The company intends to build a separate area for solid waste so that it does not harm the environment. Waste is disposed of in a manner that is not harmful to anyone.
Development Plan The company has constructed a lush green area for families, including children’s play area, three waterfalls and gazebos, at an expenditure of Rs. 6 Million
Education The company has also initiated an in-house literacy programme for its employees by the name of UJALA. Regular donations and fundraising activities have also become part of day to day business at EBM, as part of the company’s social responsibility initiatives. Moreover, EBM also emphasizes the need of good health; therefore EBM promotes and s healthy activities like cricket etc.
SUPPLY CHAIN MANAGEMENT Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from pointof-origin to point-of-consumption. Supply Chain Management encomes the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence,
Page |7 Supply Chain Management integrates supply and demand management within and across companies. By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.
What is Supply Chain Management? Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM. 1. Plan – This is the strategic portion of SCM. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers. 2. Source – Choose the suppliers that will deliver the goods and services you need to create your product. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, ing them, transferring them to your manufacturing facilities and authorizing supplier payments. 3. Make – This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity. 4. Deliver – This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments. 5. Return – The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and ing customers who have problems with delivered products.
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SUPPLY CHAIN MANAGEMENT AT EBM EBM’s supply chain process is comprised of a series of interdependent steps and starts with the collection of raw materials and ends with packaged brands on customer's shelves. The Supply Chain Management at EBM ensures that appropriate quality standards are upheld and maintained at each link in the chain. The supply chain at EBM comprises the following areas:
Forecasting Planning Manufacturing Deployment Distribution The consumer / shopper
Forecasting Forecasting is a vital element of the business, and can be defined as an unconditional statement of demand of biscuits. Simply put, a forecast predicts how much demand there will be in the market for a specific product over a certain period. Planning The function of planning is to convert marketing forecasts into manufacturing plans. The planning department works closely with the various operations to ensure that manufacturing plans are accurately converted into monthly and weekly production plans and budgets. Planning is also responsible for monitoring and controlling the amount of stock the company holds and for ensuring that the correct stock holding levels are maintained to meet customer service requirements. Manufacturing The manufacturing process at EBM involves the conversion of raw and packaging material into finished product in the most cost effective manner possible. EBM manufactures all of its own products, and production takes place at the two factories located in Karachi and Hattar. Deployment
Page |9 Deployment is the movement of finished goods (biscuits) to warehouses. Marketing & Sales The function of marketing and sales is to market the product with the aim of maximizing the profit of the firm. Effective policies and strategies are made for this purpose. Distribution Simply defined, distribution involves the execution (delivery) of sales orders to a customer. EBM has more than 350 distributors all over Pakistan. The Consumer/ Shopper The shopper and consumer are the individuals who eventually buy and consume EBM’s products. A shopper is the person who purchases the product in store, whereas a consumer is the person who eventually consumes the product. In many instances the shopper and consumer are one and the same.
BUSINESS PROCESS A Business Process is a collection of interrelated tasks, which solve a particular issue. It is a set of linked activities that take an input and transform it to create an output. Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient. This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. EBM is a manufacturing firm and therefore its business process is also based on the same above definition. There are three types of business processes: Management processes - the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". Operational processes - these processes create the primary value stream, they are part of the core business. Typical operational processes are Purchasing, Manufacturing, Marketing, and Sales. ing processes - these the core processes. Examples include ing, Recruitment, IT-, and Engineering.
P a g e | 10 A business process includes different stages through which the business is performed. Each stage covers a large area of its concern.
BUSINESS PROCESS STAGES PURCHASE OF RAW MATERIAL S
MANUFACTURING PROCESS S
MARKETING & SALES S
The core stages in the business include acquisition of raw material, manufacturing of biscuits and finally marketing & sales. Each step is performed by different departments at EBM.
List of Departments
P a g e | 11 • • • • • • • •
Material management (Supply Chain) Finance Production Engineering Marketing & Sales MIS/IT (Management information system) Quality Assurance & Development HR & istration
HOW BISCUITS ARE MADE Manufacturing biscuits begins with a planning process. At first, the production demand is analyzed. The EBM’s management then creates a factory production plan ensuring the people working at the site, and the machines that are running, are best utilized so that time and energy is not wasted. The necessary raw and packing materials, as required by the production plan, are then purchased. The purchased stock is then received from the various suppliers at the factory store that is also called Raw Material Store (RMS). All incoming materials are checked for quality in Quality Assurance Department. The store is responsible for issuing materials for the production process according to the planned requirements. It is only at this point that biscuits start to be made. Manufacturing biscuits comprises a number of steps: 1. Flour and sugar is dispensed into large mixers. The ingredients that are used in smaller quantities are hand weighed and added into the mixing bowl for each batch of dough to be mixed. 2. The ingredients are then mixed to form dough in the mixing bowl according to a specific mixing procedure. 3. The dough is then tipped into a hopper and gravity-fed into the dough sheeting section of the machine. In this process the dough is fed through various rollers to form a sheet of dough. Depending on what type of biscuit is being produced, this process varies. 4. Different forming techniques are used to get the required shape and size of the piece of dough which will form the biscuit. 5. The raw biscuits are transported through a gas-fired oven on a metal conveyor band where they are baked to form fresh, warm and deliciously smelling biscuits.
P a g e | 12 Biscuits are baked rather than fried, so the oil merely assists the flavour particles to cling to the biscuit surface. The flavored biscuits then travel along a cooling conveyor in order to cool off. 6. Once the biscuits have been cooled, they are packed into wrappers, cartons and cases, ready for distribution to one of the warehouses. 7. Quality checks are conducted at key points in the process to ensure process control and product quality is constantly maintained at a high standard. 8. The finished product is then transported to warehouses. Stock is loaded as per delivery orders and sent to the various distributors.
MATERIAL MANAGEMENT (SUPPLY CHAIN) DEPARTMENT Material management department deals with the purchases of raw material, and supply of finished goods (biscuits). This department receives all the CAPEX Orders (for capital items) and Demand Notes (for general items) from other departments for quotation of items against CAPEX. A quotation is a list of vendors in which all the offered prices are given. A CAPEX number is automatically generated by the system. Material management department recommend one supplier from which final purchase is to be made. As soon as the required material is received from the concerned supplier, an MRN (Material Receiving Note) is made, the MRN number is then written on to the invoice/bill. This bill is forwarded to the finance department which approves the purchase and records the transaction into supplier bill . A purchase voucher is made for recording the liability and then a payment voucher is made that shows the final payment to the supplier. Another function of this department is to store all the raw material received, in proper form. Different store rooms and proper shelves have been made for safe storage purpose in order to sustain the quality of received raw material as per standards. A special RMS (Raw Material Store) is built for the same. Material Management department receives an intimation to issue a certain quantity of material to Production Department, as required in the recipe of the biscuit. This raw material includes ingredients of the biscuits which includes; • • • • • •
Maida Sugar Flour Fats Eggs Salt
• • • • • •
Ammonia Cream Butter etc Cocoa powder Nuts Coconut oil
P a g e | 13 • • •
Butter milk flavor Vanilla flavor Soda
• •
Vegetable fat Milk powder
Once biscuits are made and received from production department the cartons of these biscuits are further stored into the FGS (Finished Goods Store). As the Sales Department asks Material Management Department to supply these biscuits to the buyers i.e. distributors, this department issues the same. Furthermore, this department also deals with the suppliers of goods, raw material etc in order to purchase goods and material in economical prices. This department compares local market prices with international market prices and makes purchase from the market which is beneficial to the company. This department very closely observes the government rules and policies which may directly or indirectly effect the buying decisions.
FINANCE DEPARTMENT Finance department deals with the day to day financial matters of the company. These include recording of transactions into respective concerned module, making payments, sales tax matters etc. Finance department is divided into three sub-departments. • Budgeting • General ing • Treasury Budgeting department is given budget of every department as estimated by each department. Departmental budget shows the requirements of overall financial year. Budgeting department’s work is to estimate the next overall budget of EBM by observing past budgets. Actual expenditure of current year is compared with the estimated budget of the current year and also actual expenditure of current year is compared with the actual expenditure of preceding year. In general ing department, all matters relating to recording of transactions like payables, receivables, inventory, fixed assets, expenses and sales tax issues etc are dealt. Treasury department deals with all the cash related matters. All the Cheques are made and signed in this department.
PRODUCTION DEPARTMENT
P a g e | 14 As the name suggest, production department deals with the production of biscuits. EBM currently has 5 lines (plants) for producing biscuits.
Line 1 Line 2 Line 3 Line 4 Line 5
IMAFORNI MEINCK IMAFORNI IMAFORNI IMAFORNI IMAFORNI
IMAFORNI is Italian plant while MEINCK is Denish manufactured. Most of plants at EBM are IMAFORNI. IMAFORNI has mash belt on which biscuits on from different zones while MEINCK has plain belt. These different belts are due to the slightly different manufacturing processes of biscuits. EBM also has its subsidiary company with the name of CFL (Coronet Food Limited) at HATTAR. CFL also operates 2 plants in which biscuits are manufactured, both the plants are IMAFORNI. On line 3, 4, 5 only SOOPER biscuits are being manufactured 24 hours, to meet the high demand of SOOPER through out the country. Other biscuits like RIO, PARTY, PEANUT PISTA, PEANUT PIK etc are manufactured on line 1 and 2.
TYPES OF BISCUITS Crackers • • •
Butter Puff Marvell Saltish
Plain Sweet Biscuits • • • •
Gluco Marie Sooper Whole Wheat Slice
• •
Peanut Pik Peanut Pista
Nuts
Cream Biscuits •
Choco Vanilla Sandwich
P a g e | 15 • • • • •
Chocolate Sandwich Lemon Sandwich Rio Double Treat Chocolate/Vanilla Rio Double Treat Strawberry/Vanilla Rio Vanilla
PRODUCTION PROCESS The whole production process consist of 5 different stages which are as follow. • Mixing • Cutting • Baking • Chilling • Packaging
MIXING The mixing stage is of great importance in biscuit-making technology, as a good process starts from the head of the line. In the mixing stage, all ingredients must be uniformly and evenly incorporated in a consistent mass and transformed into dough which can be processed by the next set of machines. The mixing is done by two ways 1. Vertical way mixing 2. Horizontal way mixing In vertical mixing, the mixture is blend in vertical direction through a machine while in horizontal mixing the mixture is blend in horizontal direction, depending on the recipe of the biscuit. The mixture (dough) is then forwarded to next step. There are a variety of factors that are important when it comes to mixing the dough: the temperature of the ingredients, the mixing time, and the order in which ingredients are added.
CUTTING In this step, a long sheet of the dough is made which is then cut into different shapes of biscuits through different dyes.
BAKING
P a g e | 16 The biscuits now come into the baking zone on moving belts. This step further divided into 5 zones. In zone 1 and 2 the biscuits are baked on direct fire, these zones are called Direct Gas Zone and after ing zone 1 and 2 these biscuits are moved towards zone 3 and 4 which are called Thermo cycle zone. In these zones biscuits are baked through hot air. In zone 5, a final spray of hot air is given to the biscuits which after ing through zone 4 change their color into brown. In MEINCK plant, biscuits are baked through the spray of hot air in all 5 zones.
CHILLERS In this step, baked biscuits are ed from the chillers. Chillers’ main function is to cool the biscuits. Once cooling process is complete, the biscuits are forwarded to packaging department.
COOLING CONVEYORS
PACKAGING This is the final step in the production process. The biscuits are wrapped and packed into different sizes of packets like; • • •
Ticky pack Half roll Family pack etc
These biscuits are further packed into master cartons which are then either dispatched or stored into Finished Goods Store (FGS).
P a g e | 17
MIS (MANAGEMENT INFORMATION SYSTEM) DEPARTMENT Manufacturers need information about inventory availability, machine uptime and down time, product cycle times, yield, waste, WIP etc. They need real-time information management tools for continuous improvement and decision . Only a live link to the production floor can provide the link to the critical information that can control the supply chain's actual ability to perform. An Advanced ERP Interface is available which enables the to maintain the system's Job Queue and Product Databases from transactions created by an ERP system. An Activity File and a Real Time Status File are maintained to provide the ERP system with real time on job starts, completions and status. s report electronically updating inventory records improves inventory accuracy. EBM is an ERP (Enterprise Resource Planning) based Organization. All the departments are linked with each other through networking called INTRANET. EBM is also connected with CFL with INTERNET as well. A central database has been maintained at EBM where the information related to Payables, Receivables, Fixed Assets, and Inventory etc. are saved. A module has been established for each (payables, receivables, fixed assets, inventory and so on). Each module is integrated with each other. This integration has increased the efficiency of each department, as maintaining and keeping record of data and information have become easier. Overall effectiveness of the organization has also increased to a great extent. All the budgeting, general ing and treasury related works are being performed on this ERP software. MIS department is responsible to make sure the safety of information. They are also responsible to take corrective measures if any problem relating to ERP arises. Moreover, any issue relating to networking, hardware, software etc are dealt by this department. Since ERP has been recently developed and implemented at EBM, therefore it still has some areas to be improved. If any department has any query relating to its concerned module, it may ask and instruct MIS department to make desired alterations. Furthermore, new modules are also being constructed for the complete implementation of ERP.
QUALITY ASSURANCE & DEVELOPMENT DEPARTMENT EBM is strictly following the policy of providing its customers, the best quality. EBM has never compromised on this and therefore, it has been the main reason why the EBM is so successful and famous amongst its customers. EBM, for this purpose, has developed a Quality Assurance & Development Department. The basic function of this department is to check and maintain the quality and standards of raw material used. This includes testing of flour, eggs, Oil & fats etc. Four Labs are
P a g e | 18 currently working at EBM, for checking and testing purpose. Two more labs are under construction. • • • •
Analytical Lab (Centre of Excellence C.O.E ) Packaging Lab Microbiological Lab Process Lab
Under-constructed lab includes Research and Development where research work will be performed and new product development work will be done. Quality control begins with the ingredient assembly stage of production during the measuring, weighing, and processing of the raw ingredients. Additionally, most large manufacturers have quality control (QC) labs responsible for making sure the materials meet determined specifications. Characteristics such as appearance, color, odor, and flavor are checked. QC technicians also test for particle size, viscosity of oils, and pH of raw materials. The finished product is also carefully monitored. Like the inspection of the raw material, the finished products must be examined for appearance, flavor, texture, and odor. The product is compared to a standard established during product development. Specially trained testers are responsible for detecting subtle differences that deviate from the norm.
MARKETING & SALES DEPARTMENT Marketing is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of customer demand in a manner that will achieve the company's objectives. EBM is very much concerned about its marketing as it is the backbone of its sales. A good marketing strategy has always been adopted by EBM which keeps on changing with the age of time. One of the biggest tools of marketing is advertising. EBM does advertising through different media channels which include TV commercials, Radio, Magazines etc. Furthermore, EBM also sponsors different events like cricket matches, concerts etc. Sales activity is also performs by the same department. This department sets the targets of sales for the current year and for the years. Once the target is set, a strategy is developed for achieving this target. They collect orders from the distributors and supply to them the same. Their overall strategy is to maximize the sales by observing the market trend and consumer demand. EBM has more than 350 distributors all around Pakistan. EBM has recently achieved a sales target of Rs.7 billion, which is a great achievement. Following is the supply chain of biscuits from producer to final consumer.
P a g e | 19
SUPPLY CHAIN
RAW MATERIAL
DISTRIBUTOR
WHOLESELLER
PRODUCTION
WARESHOUSE
SHOPKEEPE R
P a g e | 20
CONSUMER
ENGINEERING DEPARTMENT All technical problems and issues in the machines are resolved by Engineering Department. Technical staff at EBM consists of about 47 people including Chief Engineer. A regular check of machines is performed by this department, whether or not the machines are working properly. If any problem is found, an immediate action is taken to resolve it. Technical staff remains present 24 hours at factory office. EBM has its own POWER-HOUSE which provides electricity 24 hours. This is due to miserable electricity condition at Karachi. This Power-House has the ability to generate 2 Mega Watts of electricity. Currently 1300 to 1400 Kilo Watts are being utilized.
P a g e | 21
LEARNING IN THE ORGANIZATION GENERAL ING I have worked mostly in General ing department. In general ing department, all the payments and receipts are recorded. Taxation, Depreciation on fixed assets is also dealt by General ing department. EBM is ERP based organization; they designed modules for all the departments. Each module is used for the data entry and making reports. In General ing, there are two modules are used. One is for recording of Fixed Assets and Depreciation, and other is for the s Receivable, s Payable etc. I have spent most time of my internship tenure on s Payable Module. In this, all the expenses are record in relevant heads of the companies. After recording the invoices, Module automatically ed the Entry. Then we make payment voucher of it on the due date and forward it to Mr. Bashir Rawalia (Head of ing), who signed it and finally forward it to Treasury department which make the payment via cheque. I have also worked on s Receivable Module. EBM received all the payments in advance and they don’t provision for bad debts. s Receivable module is used for recording all the payments in advance.
P a g e | 22
BUDGETING & COSTING In budgeting & costing department, they received estimated budget of every department and compile it and make budget for the whole organization. This practice repeats every month. Budgeting & costing department is forecasting the cost of raw materials. They also calculate all type of variances which includes material variance, labor rate variance etc. Budgeting & costing department is also responsible for maintaining over all contribution margin of the organization. They set the standards, if any of the product’s contribution margin goes down, they inform marketing department for not collecting the orders of that product. They also inform research and development (R&D) department for alteration in recipe of the product so as to maintain the required contribution margin.
TREASURY DAPARTMENT Treasury department is responsible for all the cash activities in the organization. Salary to the employees and wages to the workers are made by this department. They are also responsible for maintaining cash in hand required in day to day operations. EBM has s in different banks. They receive payments from different banks on daily basis and at the end of each day, all the amount is transferred to its central bank . They also make working capital summary and forward it to upper management and to Mr. Abdul Wahid (Head of Finance), and Mrs. Sadia Naveed (Director Operations).
P a g e | 23
CONCLUSION Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). Supply chain management flows can be divided into three main flows: •
The product flow
•
The information flow
•
The finances flow
P a g e | 24 The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit , payment schedules, and consignment and title ownership arrangements.
SUGGESTIONS / RECOMMENDATIONS Following are some suggestions/recommendations which may be fruitful, if adopted by EBM.
All lines at EBM are being fully utilized and there is no more capacity to increase the production. Therefore, new plants and machinery (new lines) should be installed in order to meet the high demand. EBM should also start production of its other famous brands like Smile, Marie, Butter Puff, Ringo and Butter Puff etc on large scale and should not rely only on SOOPER, PARTY, RIO, PEANUT PIK & PEANUT PISTA.
P a g e | 25 Egg breaker machine should be used in Production Department instead of manual method for breaking eggs, so as to increase the production efficiency. Since EBM is an ERP based organization and all the departments are linked with each other through ERP. It is highly recommended that its distributors should also be connected with the organization through ERP.
BIBLIOGRAPHY http://searchcio.techtarget.com/sDefinition/0,,sid19_gci214546,00.html http://en.wikipedia.org/wiki/Supply_chain_management
http://www.theprogressgroup.com/publications/wp2_logs.html
English Biscuits Manufacturers (Private) Limited Plot 1-4, Sector-23 Korangi Industrial Area Karachi, Pakistan Phone: (92-21) 506-3131 to 37 Fax: (92-21) 506-0825
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