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Training Report

Supply Chain Management

A Training report file submitted in partial fulfillment of the requirements for
the degree of MBA


Submitted to:

Submitted by:



I have undertaken training working on one of their project Supply Chain
Management It has been taken care that this documents elicits the system development process in
a lucid and an understandable manner. The contents have been divided into segments, all of which
have been explained in detail in the following pages. I have tried my best to elucidate all the relevant
detail to the project to be included in the report. While in the beginning I have tried to give a general
view if the project, to make it clear in the later stages, I have included the portion that was
specifically assigned to me and also described where that part is actually being used.


I would like to thank respected Mr.. and Mr. ..for giving me such a wonderful opportunity
to expand my knowledge for my own branch and giving me guidelines to present a project report. It
helped me a lot to realize of what we study for.
Secondly, I would like to thank my parents who patiently helped me as i went through my work and
helped to modify and eliminate some of the irrelevant or un-necessary stuffs.
Thirdly, I would like to thank my friends who helped me to make my work more organized and wellstacked till the end.
Next, I would thank Microsoft for developing such a wonderful tool like MS Word. It helped my
work a lot to remain error-free.
Last but clearly not the least, I would thank The Almighty for giving me strength to complete my
report on time.


Supply Chain Management


Company profile


Traditional company

Resource involve in supply chain operations



Value of project to learning

Supply Chain Management:-

Supply chain management is a set of approaches utilized to efficiently integrate suppliers,

manufacturers, warehouses, and stress, so that merchandise is produced and distributed at the
right quantities, to the right locations, and at the right time, in order to minimize system wide
costs while satisfying service level requirements.
In other words, the Supply Chain Management Program integrates topics from manufacturing
operations, purchasing, transportation, and physical distribution into a unified program.
Successful supply chain management, then, coordinates and integrates all of these activities
into a seamless process. It embraces and links all of the partners in the chain. In addition to
the departments within the organization, these partners include vendors, carriers, third party
companies, and information systems providers.

We can say it takes into consideration every facility that has an impact on cost and plays a
role in making the product conform to customer requirements from supplier and
manufacturing facilities through warehouse and distribution centers to retailers and stores.

The objective of supply chain management is to be efficient and cost-effective across the
entire system, total system wide costs, from transportation and distribution to inventories of
raw material, work in process and finished goods, are to be minimized. Thus the emphasis is
not on simply minimizing transportation cost or reducing inventories but, rather, on taking
systems approach to supply chain management.

Drinking tea has become part of life for many people. Only secondary to drinking water in
the world, tea has become even more popular than coffee. However, most people have no
idea of tea production process from processing, blending, packaging, transportation and sale,
as well as the major players involved in this process that spans agriculture, industry and
retail, let alone the impact of tea consumption and production upon the tea growers and
workers' lives.

Company Profile
Tea may not run in the blood of Indians, but it sure comes close. India is the largest consumer
of the beverage in the world, consuming nearly 25 percent of the global tea production,
according to a December 2011 report by trade association ASSOCHAM.
Reading the tea leaves, one may be forgiven for thinking that India would be a land where tea
lounges exist in every corner, with their owners laughing all the way to the bank. The reality,
however, is different. In India, tea rules the homes, while coffee rules the streets. National
chains specializing in hot beverages exist all over the country, but they serve coffee, not tea.
A Caf Coffee Day or Barista running hundreds of cafes in all parts of India is yet to emerge
on the tea-scope of this part of the world.

We wanted to do tea and not coffee because the potential lying under thadi [local tea stall]
has still not been recognized in India. We were totally fixated on opening up a Chai ki
dukaan and were sure of setting up a new trend in this I think we have succeeded, says
Ankit Bohra ,owner of Tapri which sells 40 types of tea in Jaipur and is planning to open a
second outlet in a few months.

Tea is a common mans drink, but there are many uncommon tea types white, oolong,
pearls, green and herbal, to name a few yet to be experienced by him. That is where the
opportunity lies. Over the last one year, Bohra has seen many start-up tea bars emerge in tea.
The reason behind opening up a tea lounge was that we thought we should take this kind of
ownership to take the category to the next level. From being a poor mans beverage, we
wanted to take tea to the level of coffee. We wanted people to enjoy our tea. Also, we wanted

to educate people about the different kinds of tea available, apart from the regular ones. We
are providing our customers with 45 varieties of tea.

With its first outlet that begun in Jaipur in August 2010, Tapri the tea house has been able to
attract approx 300 footfalls a day. It has an area of about 1000 sq.feet with sales of
Rs.40/day/sq. feet.

Traditional company
Road Side Tea Stall:-

It is a road side tea stall at Pratap Nagar, Jaipur owned my Mr. Mahveer Prasad Gautam who
established it two years back with the intention of capture the market near Sanganer Bus
Depo with localites. He has a chai ki Thadi with Average 56 Sq. Ft. area. Where his sales
are average 100-160 cups per day. To make Tea he use normally following Supply Chain
Operations:1. Procure the raw material for Tea making like Milk, Tea, Ginger, Water, Sugar,
Masala etc. and to get all these material he make contacts with different wholesalers
or Sales people who provide these things to him on daily basis. And the costs of this
supply transportation bear by the Company or wholesaler.

2. Storage of raw material:-to store all these raw material he has some small containers
in which he store all these things and use it according demand.

3. Demand forecasting:-on the past basis record he forecast the demand of tea for every
day and accordingly he store the raw material like
in working day the more people are coming to take
Tea but on Sundays or holydays the customer
demand is decrease. Seasonal factors are also play
an important role in demand forecasting because in
winter the demand of Tea is normally increase by
80%-90% while in summers it decrease by 5%-10%.

4. Just in Time:-he normally make Tea on Just in Time concept because he make tea for
customer only when they demand, he not make extra tea. And it helps him to reduce
his risk of disposal or wastage.

5. Network Planning:-In his business the importance of network planning is very critical
because some time the demand of raw material is increasing on such duration the
networking with wholesaler is very useful and he store it in extra amount.

6. Distribution Strategy:-To distribute Tea he actually not uses any special strategy
because he serves tea to their customer directly on their demand.

7. Profit margin: - In his business profit margin is not fixed because it depends on the
number of customers if no. of customers are limited then he make tea with good
quality but when large number of customers are order Tea at one time then he
compromise with the quality of Tea and mix more water so the profit margin is vary
according customers Numbers.

8. Customer Value:-To add customer value he also provide the facility of Fans,
Mathari and other snacks for their customers with Tea on reasonable price.

9. Risk management:-because he use milk and ginger in his Tea and both these things
can be waste after some time so to reduce the risk of wastage of these items he
manage orders of these items in limited numbers. And continuously boil milk twice or
thrice in a day as well as use cold storage.

Resources involve in Supply Chain Operations:

To perform a supply chain management from raw material to distribute final product many
resources are used by Mr. Mahaveer Prasad Gautam and Tapri as well ,they are as following:-

1. Transportation:- first of all to get the raw material from the wholesaler or retailer Mr.
Mahaveer use his motor cycle for transportation because to get ginger and milk he
required his vehicle and the cost of this transportation is born by himself. While in
case of milk, sugar, Tea and other thing are provide by sales people so the
transportation charges of this are pay by company or wholesaler itself. While Tapri
gets it supplies from the distributers where the cost is born by the latter itself.

2. Storage: - as above mention the consumption of Tea is almost 100 to 150 cups per day
so there is need of storage area to store all material so for that Mr. Mahaveer has some
small containers where he put all his raw material which required for making Tea.
And to purchase these container some fixed cost bear by Mr. Mahaveer. Where as in
case of Tapri most of the operations are based on just in time concept there by
eliminating the need of large storage facilities.

3. Equipments:-to fulfill the demand of customer for Tea there is need of some
equipments which are used to make Tea so the Tea making machine or Stove etc. are
manage by Mr. Mahaveer to start his business which increase his fixed cost. And he
uses it on regular basis to prepare the Tea. So was the case with Tapri as Startup.

4. Distribution:-to distribute the tea to the customer Mr. Mahaveer has two kinds of
Cups one which made by the glass and other one made with disposal. So on the

requirement of customer he serves the Tea in Glass cup or disposal cup. Whereas
Tapri realize on ethnic and traditional cutlery to serve its clients.

5. Communication Channel:-to make an order to wholesaler Mr. Mahaveer has a mobile

phone which is very helpful for him because whenever he needs anything he ordered
that thing with the help of his mobile phone and it is used as an important
communication channel for him. While for Tapri their networking strategies help a lot
while making use of basic facilities like telephone and internet.

Fresh Leaves

Self processed
Tea Growers

crude tea

Fresh Leaves
Primary Processing

Brand tea


Brand Owner
1. Local
(2.Tea House)

Ultimate consumer

Supply chain Operations:-


After picking fresh tea leaves, tea growers have two options: selling the leaves
directly or selling selfprocessed tea. As processed tea is more expensive than fresh
leaves, to get more profit, skilled tea growers tend to process tea themselves and sell
the remaining fresh leaves to primary processing factory and brand tea factory.

There are mainly three distribution channels that turn fresh leaves picked by tea growers into
finished tea.

Tea growers sell fine tea leaves they handpicked to brand tea factories which
process the leaves into tea and then sell it to dealers. Through wholesale and retail
the tea is sold to tea store, teahouse, supermarket and other stores, and finally to


Tea growers sell both leaves and buds to processing factories for massproducing
tea. After the processing factories have turned them into crude tea, the refineries
will buy it and reprocess it into finished tea after sorting and selection. Refineries
mainly engage in tea mass production, and tea mass produced, after entering the
distribution channel, is sold in the market mainly through wholesale. Such tea is
mainly supplied to places such as hotels and restaurants
that provide free tea.


Tea growers process fresh leaves into tea and sell it

themselves. On the one hand, tea growers sell their
roughly processed tea to refineries, brand tea factories
and businessmen that come to their place to buy tea. On the other hand, tea

growers further process crude tea into highend tea and sell it in the township or
countylevel retail market. In the genuine tea areas, as the tea available is limited
but expensive, dealers and consumers will also go to the tea growing households
to buy tea directly.

There is another different distribution channel, which consists of tea growers, brand owners
and consumers. The brand owners here refer to comprehensive tea companies that engage in
production, supply and marketing. Such companies usually have their own production bases
and processing factories, and place orders to tea growers for fresh leaves and have their own
tea chain stores directly selling tea products to consumers.


In the tea houses like Tapri, the orders are placed regularly likewise the orders for grocery,
vegetables, milk and etc. They place orders mostly over phone. And some suppliers provide
things on regular basis without any intimation.

In case of local tea vendor, distributors visit him quite often, take orders and deliver on
regular basis. There is a regular supply of Saras Milk.

Comparing supply chain operations of formal organization and traditional

organization i.e. Tapri vs. .local Tea Vendor
a) Demand Forecasting and Seasonal Factors affecting the same

Tapri teahouse: - Like any other organized firm, there is a well established system of record
keeping. The stock reports keep track of regular purchases, depicting their trend thereby
enabling estimation of sales turnover.

Sudden rains, post- examination period, IPL matches or other significant cricket matches
make sales a sensitive issue and deriving impacts of more of such occasions are determined
purely on common sense.
Unlike Tapri, a local vendor merely assumes the footfall of a day. To handle any shortages he
maintains good relations with the distributers-who tend to be just a phone call away.

b) Network Planning

The Tapri believes that Network planning plays role when it comes to sourcing tea from
different gardens. A well established network helps getting right product at right time.
Whereas there exist no similar criteria with a local vendor.

c) Value of information

In circumstances like expected price rise, Tapri stocks well in advance. It seconds the fact
that Information is Money. Whereas its just the assumptions on basis of their experiences
that local vendors work upon.

d) Over stocking, shortage or wastage at stores

Tapri has undergone such problems. As is evident from the incidence when it had ordered
5000 kulhad (earthen mugs) without arranging space for same. A lot got wasted because of
improper stocking. Also, there occurs a problem of shortage in stock with bakery products as

they outsource them to a bakery, and because they dont have good shelf life, they have
problem managing stuff in short notice.

Whereas at local vendors, inventory is limited and so is the risk and associated problems.
Material handling requirements are low as the products as the products are consumable,

e) Tackling problems

Unlike vendors, Tapri has options to store the surplus or the unpredictable ones at the

f) Importance of relationships

A lot of times monopoly lies with the vendors (in areas like taste, consistency or economy in
prices) In that case, Tapri people (owners) have to maintain relationship. And, be it any
relationship, it has to be like a marriage.

g) Preferred methods of making supply chain management effective

According to Ankit Bohra, a realistic approach towards forecasting and calculation of risk
could make a supply chain effective. Whereas the vendor Mr. Gautam had no clue as to what
a supply chain exactly was. To him SCM merely meant to be concept of timely transportation
and availability of product.

h) SCM vacuum

In absence of an effective Supply chain, Tapri tends to lose its revenues at times. A lot of
stuff in the Menu is not offered due to its unavailability. This is majorly the case with white
tea as it grows only for a particular period of time thus making its procurement a tough job.

Reverse is the case with the local Tea shop where the owner remains ignorant from taking
care of any of the supply chain operations. He maps his trivial profits with the proportion of
water that is used in preparation of tea.

Analysis:By doing the comparative analysis of both local chai ki Thadi and Tapri we found
following results which are very helpful to highlight the importance of this study:-

1. Demand forecast:-both the traditional outlets and retail stores are actually work on
demand forecasting and for that where traditional outlets are more focus on the past
data or records the retail outlets are focus on the market competition, trends and the
need of the customers. And both are almost maintain the output and forecasting in
balance so that the risk factor is minimize and it increase the profit of firm and
minimize its cost.

2. Suppliers:-both traditional outlets and retail stores are depend on their suppliers for
supply of the raw material which they required to make their product but there is a
huge difference in both approach where traditional outlets are more focus on those
suppliers who provide them more profit margin the retail outlets are focus on the
quality product because in market there are many kind of Teas are available but as we
know the consumption of chai ki Thadi is not so much so they are not concentrate
on quality but retail outlets purchase material in bulk so they can get good quality
product from the suppliers. In traditional outlets wholesalers or suppliers are
approaches them while in retail store they ask to selected suppliers for tender or some
other process to find out best from them.

3. Numbers of Suppliers:-As we already know that the demand of traditional outlets are
limited so they normally purchase their material from one or two suppliers while in
case of retail stores they approach to multiple Numbers of suppliers but as Mr. Ankit

Bohra founder of tapri said that there was monopoly of suppliers so the relationship
between suppliers and them is like a marriage where they both are cooperate with
each other.

4. Transportation:-The role of transportation is very important in their logistic activities

because both traditional as well as retail store required transportation for procure raw
material from the suppliers but as we know the purchase amount of raw material is
different for both the firms so the need of transportation is also different like for
traditional outlets they required limited amount of raw material on daily basis so there
is supply of these item with the help of two wheeler can be possible while Tapri
required raw material like Tea and sugar in bulk so they use riksha trali or Pick
up as a transportation.

5. Order:-If we talking about the order numbers then it is very clear that the traditional
outlets are required more order in respect of Tapri because the amount of investment
capacity is different for both. Where traditional outlets purchase raw material in less
amount so the no. of orders are increase the retailer stores are purchase raw material
in bulk so no. of orders are less in comparison of traditional outlets.

6. Warehouse:-by studying both kind of stores we found that the requirement of

warehouse is different for both and it is required because they both manage inventory
of raw material for their product Tea but the difference is this that the cost of
warehouse is less for traditional in respect of retail stores due to order amount if they
dont have warehouse then there should be a problem like in case of Tapri due to lack

of warehouse in Mr. Bohras ordered 5000 Kulhar some are damage which increase
his cost and risk.

7. Inventory management:-Inventory management impact directly on the firm or their

profit because if a firm has good inventory management then in that case the optimum
utilization of inventory is there. Inventory management includes storage of inventory,
right amount of order for right quantity of raw material at right place.

8. Flow of information:-flow of information also play a vital role because the flow of
information is flow at time then only the supply chain can run smoothly like whenever
there is requirement of material it should be communicate to the supplier on time so
that he can provide raw material on time similarly the right information flow by the
customer to the person for Tea then only he can make Tea in that number and reduce
the chances of wastage. And different external or internal factors are also
communicated on right time to both the party then it reduced the chance of
misunderstanding. So we can say that the flow of information in both directions is
very useful.

9. Structure:-Structure includes the infrastructure of both chai ki Thadi and Tapri

and it shows the investment in fixed assts. Where chai ki Thadi required a nominal
space with some small equipments and furniture, a retail store (Tapri) required a big
space as well as they use latest technological equipments for Tea making they also use
good furniture and other facilities like Air conditioner, LCD and other products like
snacks, different Tea flavors etc. to enhance customer satisfaction. In structure we

also include the number of employees where in chai ki Thadi Mr. Mahaveer handle
all task in Tapri on different point of purchase different people are there.


On the basis of above analysis we want to recommend some suggestion to both traditional
and retailer store which help them to improve their profit and service as following:1. Like Mr. Mahaveer told us that he compromise with the quality of Tea according
number of customers but if he maintain their good quality for everyone in every
situation then it increase the trust and loyalty of his customers which helps him to
increase his market share.

2. Although he has some snacks in his shops but in todays scenario people not want
mathris and fans that much so to additional he can also store other snacks like
Chips, Kurkure etc. that give him additional benefits.

3. Normally Mr. Mahaveer purchase raw material from those supplier who provide him
it on cheaper rate but in my opinion he should go for quality product because if he
purchase good quality Tea, sugar or milk then indirectly it decrease his cost because
less amount of these things can increase the taste and quality of his Tea which attract
most of the people.

4. Mr. Mahaveer order each raw material on daily basis but in my opinion some raw
material like Tea and Sugar he can purchase in bulk or we can say in sufficient
amount because these things are not waste in early time period which decrease his

order cost and also provide uniformity to his product taste because normally Tea
comes from different places so some time the taste of tea become change. But the
question is if he purchases these things in bulk then the storage cost will increase but
actually Mr. Mahveer already has container with sufficient place so there is no
additional cost of storage is there.

5. In my opinion near to this chai ki Thadi many small and big shops are there so if
Mr. Mahaveer also provide home delivery facility to them for distribute his product it
will increase his market share then again the question is that the wages of that person
is increase so in spite hire any person for it he can approach himself to those places
where he can easily distribute it.

6. As mention by the owner of the Tapri, the problem facing the firm is from the
suppliers monopoly, at times. So it is advisable for the firm to keep suppliers offering
similar products as options.

7. Targeting the business class while designing ambience congenial to business meeting
(this could be an add on to the upcoming brand to the jaipur.

8. Organizations move in long run may undergo criticism for having hampered the
growth of local entrepreneur. So it is required that the company benefits the
participants of its supply chain. Also, it can employ a few local venders to prepare
offerings of Tapri against Justified payments.

Value of project to Learning:

This project is valuable for us to understand the practical implication of Supply chain
management in to real market. During the analysis we found that the course design of
Supply chain management is very helpful for us and actually cover all the practical
aspects of supply chain management. Because normally we learn what kind of supply
chain management concept are used in market only theoretical but due to this project
during interviewing the concern person at both chai ki thadi and Tapri we found
that these all theoretical concepts are used by those people even they are literate or
illiterate. Like Mr. Mahaveer owner of Chai ki thadi is not so literate but even
though he used all the basic concepts of supply chain management like demand
forecasting, inventory management, network planning etc. in unorganized way while
Mr. Ankit Bohra founder of Tapri who has good knowledge of supply chain
management concept used all these thing in organize form.

And both the parties Mr. Mahaveer and Mr. Ankit bohra want to increase their profit
by reduce their cost which incur in transportation, warehouse, order of raw material to
supplier etc. by applying these supply chain management concepts.

Now we are able to understand that by using Supply Chain Management concept we
can enhance the performance of the organization and for that it is very important that
the flow of information is move in both direction smoothly.

Complexities within the entire network i.e. their exists too many supply chain within a
large supply chain. Lack of management amongst them could create hassle in the
entire process.

Before entering a niche, one must not only analyze growth factors but also understand
the interest that the stack holder will hold.