SUPPLY CHAIN STRUCTURE

OF BERGER PAINTS PVT

LTD

Name: S. M. ABBAS SHAH

Reg #: 8080
Program: MBA (Evening)
Course: Supply Chain Management
Submitted to: Sir Adnan Shahzad
Date: 25 October 2010
 District Projects
Main City Provisional
Institute
Retailers Retailers
Industry

DISTRICT WAREHOUSES

CENTRAL WAREHOUSE
KARACHI

MANUFACTURING
PLANT, KARACHI

STORE

PROCRUTMENT

SUPPLIERS

IMPORTED SUPPLIERS 60% LOCAL SUPPLIERS 40%

 1) Industrial Products: are customized products for other businesses (B2B
Clients) e.g. Honda(Car) Pakistan, Yamaha – DY, Wapda etc. and are also
included in the Forecast but their base material is customized. These include
Ber-Coat, Oxi-Plast, Matt Finish , Stoven Paints.
2) Decorative Products: are those products which are used in homes

Flow of Orders:
Berger distributes it self to retailers throughout Pakistan by a mechanized Order flow
structure
Decoration: Warehouse- Order Place à Purchase Document (PDP) (B.O.M) à
Lab/Reference Files à Production Schedule.
Industrial: Regional Office or Warehouse à Technical Department à Lab Reference
Purchase Order (PO) à Warehouse à Store à Production Schedule.
 Regional Office Warehouse-
or Warehouse Order Place

Technical
Department

Purchase
Lab Reference Document (PDP)
Purchase Order (B.O.M)
(PO)

Warehouse
Lab/Reference
Files

Store

Production Production
Schedule Schedule

Procurement

Overview:
Total No. of Materials = 2500 different materials
Average Imported Materials = 60% (i.e. 1500 materials)
Most important and Expensive Material = Titanium Di-Oxide (TiO2)
Purpose = Adds durability to the products. (only used by Berger and ICI)
 Usage = 200 ton/month
Economic Order Quantity (EOQ) = 600 tons
Price = $2000/ton

MRP/MPS/ERP
Master production scheduling (MPS)

The objectives of this module are to help Berger Pakistan to anticipate shortage before its
occur, (current stock, purchasing order, manufacturing order & sales order) these
activities creates a projection of your stock levels anywhere from a week to several years
in advance through this you can easily highlights your shortage in red and excess in
green.
Drill down in any item to analysis of stock activity, through MPS you can easily see what
exactly the shortage will appear if we execute the specific production plan.

Material Requirement Planning

MRP serve as a bridge between the master production schedule and real purchase order
and manufacturing order. MRP shows which item have to purchase, in what quantity, and
when the order should be placed so that the required material will arrive just in time.

Procurement Process:

1) Forecasted Procurement:
As sales are forecasted for the next upcoming three months and consistent
changes are made for the deviations created in the market due to any factor.(e.g. if
we are standing at November 2006 we will forecast for Febuary 2007)
So, procurement planning is also made for the next three months as 60% of raw
materials are imported and only 40% are locally acquired, so, the lead time is:
 Materials

Locally
Imported
Procured

Lead Time: 70- Lead Time: 10 -

90 days 15 days

“Resin” one another important material which is

- used in bulk quantity
- availability of it is very unfrequented
- And profit margin is sometimes very high.
Therefore they manufacture themselves.

2) Bill Of Material (B.O.M.)

3) Querying Sources of Suppliers of Raw Material

Sample of raw material is acquired from the suppliers and tested for quality
assurance that it is up-to the mark.

Defects are checked till the raw material is consumed and final product is made and
usually no defects are found as Certificate of Analysis is made by the Procurement
and the Laboratory (+ QCC) departments.

4) Price Negotiation

5) Performa Invoice is called

6) Purchase Order is placed

 7) Establish Letter of Credit (L.C.)

8) Revival and Recovery of Original Documents:

- Bill of Lading
- Invoice
- Certificate of Analysis (Confirms no deviation in order)
- Letter of Credit

9) Clearing Agents

10) Delivery and Possession of Material

11) Good Receipt Note

Berger’s Quality Policy

Manufacturing

Overview:
Maximum Capacity: 110,000 liters/day (1000 Kg per day.)
Forecast: 3,300,000 liters/month
Actual Capacity: 2,500,000/2,600,000 per Month

General Manufacturing Process:

Types of Products:

Products

WaterBased Solids e.g.

Powder Paints

Lead Time: Lead Time: 4 -

1.5 day 5 days
Batch Sizes:
(Actually done in Weights as Raw material is charged in weights but the output is in
usually in the form of Liquid through Standardized Formulae)
200 litres smallest batch sizes then 400 litres and so on….

If there is an order of 300 litres of industrial product (P/O) then the production
department asks the clients to go for 200 litre or 400 litre or see other orders of same
specifications to produce combine.

Brief Manufacturing Processes:

1) Material Acquisition from Store: Store is controlled by the Procurement

Department. Any material required by production Department is ready after max
24 hours. As this store issues raw material from the warehouse which orders raw
material of 3 months ahead by the forecast created and approved by the sales
department. E.g. if standing in November the forecast will be approved for
Febuary and the Material Procurement process will come into action.

Note: The daily deviations are also reported to all the departments as any new extra or
out of ordinary orders are placed.

2) Charging: it is the phase of production in which the raw materials are inputted
into machines as there are many types of raw materials and are in bulk quantities
keeping in mind the exact standardized quantity of raw material to achieve
consistent quality and performance of the product.
3) Grinding: Grinding the raw material of solid form and mixing of liquid raw
material with it. After this process the output is in the form of paste and this
similar to the base material.

4) Mixing: after grinding raw materials are mixed.

5) Finishing: Raw materials for the durability, bonding and glossiness of the paint
are added.

6) Colour Matching: Colour is added and checked according to the specified

standards and according to the ordered requirement.

7) Quality Check (Q.C): the quality of the product is checked in all terms and
respects including colour, shine, bonding, base material, drying procedures,
drying time etc.
8) Filing: The Orders for the filling packs or tins are given at the time when
production Schedule is made, so by the time manufacturing is completed the
empty packs and tins are ready and available from the supplier. Filing of
Industrial Products of 2000 – 5000 liters takes one day. And filling of Decorative
products of 2000 – 8000 liters a day.

9) Printing: Ink Jet printing is used to print each tin or packets. A single packet or
tin takes 1 min for printing.

10) Storing: all the finished goods after packing and printing are stored in the
warehouse which is situated within the premises of Berger Pakistan S.I.T.E.
 Container Div.
Orders
(Tins)

PDP Colour Matching + Quality Control Tin

(B.O.M.) (2-3 days) Preparation

Production Filling
Planning (1 day)
Tanks Pots
(Large Batch) (Small Batch)
Store Ink Jet
(Raw Material) Printing

Charging Grinding Quality Store

(1-2 hours) (5-6 hours) Control (Finish Goods)

Bottlenecks:
1) Grinding
2) Colour Matching
3) Quality Control

LOGISTICS

Warehouse & Distribution

As paint is a product that is very sensitive to seasonal conditions that is why warehousing
should be according to the specific needs that are required to store particular type of paint
.As for plastic emulsion it can be stored at room temperature that should not exceed 27
degree centigrade on the other hand for stoving paint that is particularly for automotives
air conditioning is also required. So Berger paints has state of the art warehouses that are
completely RCC structured as well as some warehouses are equipped with air
conditioners.
 Manufacturing

Karachi Gujranwala
Lahore Islamabad Multan Faislabad Warehouse
Central
Warehouse Warehouse Warehouse Warehouse
Warehouse

Others Warehouses
 Quetta
 Hyderabad
 Peshawar
 Rawalpindi

They have different warehouses in Pakistan and Karachi warehouse works as a central
warehouse through which others warehouses Orders are catered, which is located right
besides the manufacturing plant in Karachi.

Berger Pakistan has its own network of distribution they directly supplies to its retailers
through their above 10 warehouses and from retailers it reaches to the final consumers.