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Supply Chain Management Assignment No.

Submitted By Raza Sajjad Hussain 12350 Submitted to Mr. Adnan Shehzad

Date: Class:

8-March-2013 Friday 6-9

Haleeb Foods Limited (HFL)

The industry structure packed milk in the category is oligopolistic where there are a few firms (Haleeb, Nestle, Engro, Good milk) producing essentially the same commodity. Pakistan is the fourth largest producer of milk in the world, three-fourth of its total milk is produced in the Punjab province.

Supply Chain Driver:

There are five supply chain drivers that are integrated with the motive to achieve companys competitive and supply chain strategy in optimal manners. These supply chain drivers include: 1) Facility 2) Inventory 3) Transportation 4) Information 5) Sourcing First three drivers of facility, inventory and transportation are logistical drivers, whereas rests of three are known as cross-functional drivers. These five drivers play a vital role in HFLs supply chain process in order to achieve both efficiency and responsiveness in fulfilling the market demand. The brief description regarding theses drivers as tailored Haleeb Food is as under.

1. Facility
HFL have two facilities where all the products that include milk, cream, powder milk, yogurt, tea mix and juices are assembled, fabricated and stored. These facilities are located in the districts of Bhai Pharoo and Rahim Yar Khan. Bahi Pharoos facility began operations in 1986 with the production of UHT milk, cream and yogurt. While reorganizing and reinforcing the existing brands, new production lines were installed like juices, Desi ghee, powder milk and Dairy Queen. Rahim Yar Khans facility commenced in 2005 when HFLs daily demand fetched to1.2 million litters per day. Recently, this facility is not being operated due to low market demand.

These both facilities are located near to HFLs big markets and its collections centers, which really enable the company to get and make the supply of prime quality material. Both of HFLs facilities are equipped with advanced imported plants, which enable the company to vary its production capacities according to market demand. Due to this capability, achievement of economies of scales is not a hurdle. Besides, HFLs intensive distribution network delivers the products to distant areas where Haleeb Food plans to create a market. 2. Inventory: HFL does not carry large amount of inventory in its facilities and warehouses, gets production through varied capacity and entire products are dispatched to market in 7 days. While production of dairy items and juices, no inventory of raw material is kept, milk and fruits are transferred to production facilities just after the arrival at plants. Similarly, when the fabrication begins, it is not stopped at any cost until the last step of packaging is performed; hence no work in process inventory is maintained. Only the finished goods inventory is held at plants warehouses that too for very short time period. HFLs inventory control strategy enables the company to gain efficiency since minimum inventory is held. This strategy also helps Haleeb Food in demonstrating a low cost producer where the advantage of cost reduction methodologies is transferred customers.

3. Transportation
HFL is using only traditional fast moving road transportation modes in all the stages of supply chain process. All the trucks at procurement stage are equipped with essential technology that ensures the safe transfer of milk from PHEs to facilities. This mode is adopted to achieve efficiency while reducing transportation costs in the movement of products in all stages without any lose in quality and standards of products. HFL Limited is emphasizing on both responsiveness and efficiency in transportation of goods with an objective to carry final products to customers within the targeted cycle time of 2 days by incurring as minimum cost as possible.

4. Information
HFL has designated an active Forecasting and Planning Department, which explores the customers purchasing patrons and behaviors in each market and prepares a feasible demand sheet on weekly basis. This report helps Procurement Department in assigning targets to all Milk Collection Centers, routs through which a milk should be carried to PHEs and then to production facility in Bhai Pharo. HFL also ensures the complete and accurate information of trucks during their journey towards the facility, in case of any accident or unfavorable circumstances, alternative sources are drastically used to avoid any kind of lose. HFL Limited also developed an Operations Team, which keeps up-to-date record of inventory and new orders and shares with Head Office on daily basis. HFL Limited has accessed to all necessary information technological tools like mobile phones, internet, faxes, Enterprise Resource Planning and Supply Chain Management Software to keep the full information regarding suppliers and PHEs capacity, total production per day, delivery to warehouses and sales per day. This all information really enables the company to be responsive and fulfill any uncertain demand within the time span of 3 to 4 days. 5. Sourcing: HFLs entire manufacturing process of all products categories is performed in-house facilities under the domain of companys experts, since HFL is committed to provide prime quality goods to its customers. Besides, HFL have a portfolio of suppliers regarding all the fundamental inputs of milk, fruits and technology. Company believes in long term and strong relationship with all of its suppliers by demonstrating mutual respect, reliability, coordination and consultation. HFL have a careful process as far as the selection of its supplier is concerned. For this purpose, companys agri-services teams visit all the rural areas and securitized all the factors that are essential to perform prior to obtaining the superior quality inputs. HFLs basic objective is to achieve efficiency in its operations, for which company is relying both on in-house and outsourced sources that will ensure the delivery of prime quality products to market.