ASSIGNMENT 1

“DISCOVER SUPPLY CHAIN STRATEGY OF A PARTICULAR

PRODUCT LINE AT METRO”

SUBMITTED BY: Huzaifa Farooqui

AMM-4A (2257)
Mujaddid Ali Bhatti

SUBMITTED TO: Sir Afzal Adamjee.

ABOUT METRO
METRO Cash & Carry is a German multinational wholesale chain, owned by Metro AG, which
operates membership-only warehouse clubs across Europe, China, India, Japan, and Pakistan.
The cash-and-carry concept is based around self-service and bulk buying targets business owners.
metro Cash & Carry offers a wide range of products under one roof covering a large spectrum of
your personal/business needs ranging from grocery, confectionery, fresh meat & poultry, fruits
& vegetables, household, stationery, electronics & appliances to IT & Technology.

DISTRIBUTION/BRANCHES/SUPPLY
Metro currently itself has three main branches in Karachi that are located at various
selected areas and they are:

 Metro cash and carry star gate.

  Metro cash and carry habib.
 Metro cash and carry safari.
Out of all these three the branch that we visited was the one located at star gate. Since it is one
of their major ongoing branches and in order to ensure proper and safe distinctions of such heavy
inventory along with smooth process workflow they have divided their product line into two
major categories:
1. Dry food.
2. Fresh food.
3. Non-food hard.
4. Non-food soft.

Dry food:
The dry food section consists of products that are mainly grocery items. For example rice, wheat,
oil, milk etc apart from these products like cosmetics, detergents, soaps, shampoo etc. along with
sweets department which has chocolates, toffees etc are also included in dry food section.

Fresh food:
The fresh food department consists of products that are required or demanded fresh by the
customer on a daily basis this includes products like fish, meat, vegetables, fruits etc are all
present in this section.

Non-food hard:
This section consists of all the electronic items for example refrigerators, gym equipments, tv,
home exercising machines, air conditioners, mobile phones, washing machines, etc these types
of products are placed in this particular category.

Non-food soft:
This sections consist of textile related products like garments, work wears, home apparels etc all
are included in this particular section. Apart from this sports and toys department is also included
in this section.

Supply chain structure

The overall supply chain structure of metro retailing is completely based on ordering. If talk about
food the all of its food ordering is on store end. This ordering process is handled by the
department managers that are responsible for this particular purpose. And when talk about non-
food then 60 to 70% is on store end and the rest hardly 10% is on head office. This ordering is
done as per demand of the product.
OPL (ORDER PROPOSAL LIST):
OPL is a method followed by metro retailing for the processing of their orders in this process they
generate a list which provides them with all the previous and current process orders and by
checking the opl the team then decides how much to order, when to order, when it should be
delivered etc. an oracle based software is present to work with this opl method.
After doing the necessary changes this opl is then handed over to the supplier the supplier then
decides how to function or pass the information along the chain so that the requirement is met
on time according to metro it is suppliers headache as to how he will deliver the goods.

DISTRIBUTION
Since the products needs to be delivered on time metro has provided an ease for their supplier
in the form of centralized distribution centers. Metro has three main braches at first it was taking
a lot of time by the supplier to deliver the goods to each particular branch separately on order to
overcome this issue they made central distribution centers which are located near to the
particular branches. The supplier delivers the goods to these centers and then from here they
are delivered to the actual ongoing branches. Since metro is utilizing their infrastructure as store
and display room booth so warehouses are used in a very few cases. Centralized distribution is
used only by small suppliers whereas suppliers such as TCL, changongruba etc they supply directly
to metro.

INVENTORY
Inventory is delivered in two ways:
1. Cross dock.
2. Directly by supplier.
Both inventories are handled by the same process
the only difference is that the inventory that is
received through cross docks is bound to be
accepted by metro under any condition. It is in terms of agreement by metro that they have to
receive it. Even if that inventory is faulty it has to be accepted now there are some terms that
metro can use to claim against the faulty inventory system but at dock they have no leverage
where as in direct inventory metro has the benefit to either accept or reject the inventory at
hand in case of faults.

Product strategy
Out of different product categories the line we selected was non-food hard and under this line
the product we selected was LCD television in electronics. Metro currently has various suppliers
for lcd tv’s which are sony, Samsung, changing, bravia, multi net, tcl etc. the brand we selected
in order to study the product line strategy was TCL.
Now the reason we selected tcl is because tcl has a very strong supply chain system. It has a big
name in the market hence having large shares, non-shared obones, alon with big impact on sales.
The biggest advantage that tcl provides to metro over other suppliers is that they deliever
inventory through both methods cross dock and direct delivery and due to this their supply chain
network is so strong that stock availability is always insured on time. Apart from this some other
benefits that tcl provide is:
1. Built in inventory buffer.
2. Smooth operations.
3. Strong supply network.
Due to these benefits the products are always in hand and hence the customer is satisfied so the
shelf space that tcl acquires is also beneficial in terms of low space. Metro creates competition
for its suppliers along which tcl is the most effective.