Procurement Process of Space

SUPPLY CHAIN PROCESS OF

SPACE COMPANY

SUBMITTED TO SIR ATIF AHMED SIDDIQUI

AUG 4, 2019

Submitted as a requirement for the course “PROCUREMENT AND SOURCING STRATEGY” in

the Program, Master of Business Administration

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 Procurement Process of Space

Group Members

Muhmmad shahrukh rizwan (11100)

Muneeb basharat (11026)

Muhammad Osama Khan (6987)

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ACKHNOWLEDGEMENT

This research was supported by THE SPACE COMPANY and all the group

members mentioned in title. We would like to thanks SIR Atif ahmed Siddiqui our

faculty member, whose teaching enabled us to complete this project. We are also

grateful to Muhammad Asad Lali

Head Of Operations For assistance and moderating this report and in that line

improved the manuscript significantly.

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 Procurement Process of Space

EXECUTIVE SUMMARY

Main reason behind this project is to develop the understanding about procurement

and sourcing strategy . According to the instruction given by our faculty our work is

to illustrate the procurement process model of any company, for that we selected

The Space, we visited there important knowledge about their procurement with the

help of MR ASAD LAL ( HOD OF SUPPLY CHAIN DEPARTMENT ) at THE

SPACE COMPANY.

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TABLE OF CONTENT
 Introduction
 Vision
 Mission
 Product Range
 Competitive strategy
 Research and Development Schedule
 Core Values
 Achievement
 Management Hierarchy
 Production
 Supply Chain Process
 Logistics
 Supply Chain Model
 Conclusion

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INTRODUCTION

At SPACE, they design, manufacture, and market premium tech gear to enhance
the mobile lifestyle - and they do this with immense passion. As a young and
dynamic company, SPACE strives to deliver uncompromising quality, cutting edge
technology and maximum value to its users by creating world-class tech gadgets.
Their team of imaginative techies is in relentless pursuit of continues innovation to
keep developing inspiring tech products. At SPACE, they promise that our users
will continue to discover more.

Following its inception in the year 2015, SPACE was quick to establish itself as a
trusted name in the mobile and IT industry; today the brand identifies itself as a
significant player in the Pakistani market. Currently, SPACE exhibits a portfolio of
eight categories - ranging from Power Banks, Wall Chargers, Car Chargers,
Cables, Earphones and Headphones - and aims to expand its product range
substantially in the near future.

SPACE products are routed and sold through a distribution network comprising of
dealers and retailers nationwide. Products are also available at numerous counters
of reputed chains of hyper markets, specialty stores across the country, and e-
commerce websites.

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VISSION

o Make SPACE a globally respected name

o Make SPACE a pioneer in technology
o Raise people's living standards

MISSION

o Explore consumer technology

o Create world-class products
o Focus on customer needs
o Care for all stakeholders

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 Procurement Process of Space

PRODUCT RANGE

- Power Banks
- Wall Chargers
- Car Chargers
- Speakers
- USB Cables

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 Procurement Process of Space

COMPETITIVE STRATEGY

The space company have direct competitor but have many competitors in different
sector. They have their multiple competitors including Audionic, majlis ,Xpod and
more. Competition should be healthy. They used competition to reduce the cost.
But they believe that they are better in the quality of providing products and the
achievement of the materials from the suppliers, they know they provide best
quality of the products which is checked by different stages of quality control and
strict checking from the Research and development department and Quality control
department of their company. Their competitive advantage is of having strong
quality control department which other companies in this sector might not
have..However, today by the grace of Allah & support from their valuable
customers, they are among the leading manufacturing company in Pakistan.

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R&D MANUFACTURING

SPACE has Research & Development (R&D) and manufacturing

facilities in Pakistan and China under the supervision of highly
innovative thinkers. Product design and development is our top priority.
Our team approaches every detail of product development from the end-
user's perspective so that we can create products that incorporate
maximum value for our customers. With this mindset, the brand
launched its first range of product lines consisting of innovative mobile
tech gear, intelligent accessories, and solutions, and will continue to
expand its product range in future.

At SPACE, our In-House Research and Quality Management work has

proved to be the foundation of our R&D and manufacturing division.

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CORE VALUES

The foundation at SPACE is cemented by its core values - Product

Excellence, Customer First and Global Thinking. The three core values
become evident, and reflect in our organization's day-to-day practices.
They are all interrelated to our missions and goals, which ultimately
support our vision.

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ACHIEVMENTS/ ACCOLADES.

Progressive innovation, premium quality products, skilled customer

satisfaction and after-sales support, are the core reasons behind SPACE
earning its trust in the mobile and IT industry nationwide.

 Patented Product Designs

SPACE became the first local brand to create patented designs in its
product range.
 Approved By Apple

SPACE is the first and only Pakistani brand to have manufactured an

Apple certified product. The SPACE Evoque Power Case is certified for
achieving the standards of Apple Inc'sMFi -"Made for iPhone" -
Program.

 Country's First Power Cases

The SPACE Glide and Evoque Power Cases are nation's first and only
Power Cases ever to be launched by a Pakistani brand.
 Entering the Power Solutions Domain

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SPACE became the first domestic brand to enter the Power Solutions
domain with after-sales support and services.

 Country's First Power Cases

The SPACE Glide and Evoque Power Cases are nation's first and only
Power Cases ever to be launched by a Pakistani brand.
 Entering the Power Solutions Domain

SPACE became the first domestic brand to enter the Power Solutions
domain with after-sales support and services.

 1-Year Warranty

SPACE became the first Pakistani brand to introduce a 1-Year Warranty

claim on its Power Banks, Power Cases, Wall Chargers and Car
Chargers categories.
 Customer Care & Display Center

SPACE became the first Pakistani brand to open a Customer Care &
Display Center designated to mobile tech gear and accessories.
.

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Management Hierarchy:
- CEO
o Head of Departments
 Operations
 RSM
o Sales Manager
 Sales Executive
 Warehouse In charge
o Warehouse Officers
 Marketing/Product Development
 Graphic Designers
 Business Development Managers
 Asst Marketing Managers
 After Sales Service
o Technical Staff
o CSR

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 Procurement Process of Space

WHICH SOFTWARE HAVE THEY USED?

The software that they are using in custom department just for the
clearance purpose is vbok (to find out good reputation)

PRODUCTION

- Production is based in China.

- All finished products are imported

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SUPPLY CHAIN PROCESS

As the SPACE company is dealing in variety of products. They have many different

products which are imported throughout basically they are the distributor and

assembler of the products. The research and develop department forecast the need

analysis of the products as they are also dealing with corporate clients it takes at least

three months to complete the order lead time differs some time it takes one and a

half and sometime three months.

SUPPLIERS POOL

They have multiple local and foreign suppliers as they don’t want to compromise on

standards and quality of the materials for the product. Suppliers provide them the

materials the lead time of suppliers differs usually it takes one and a half or two

month but on early necessity basis they can provide material within a month .It

usually comes in huge ships through via sea to the port as they required lot of

material to fulfill the customers demand. We have 30 to 37 suppliers. We use bulk

buying but it’s difficult for innovative products because technology is changing

rapidly that’s why our bulk buying may be useless.

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LOGISTICS

- Import from China through:

o Sea
o Air
- Local Logistics managed by Vendors like:
o TCS
o M&P
o Bolan Cargo

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SUPPLY CHAIN MODEL

PROCUREMENT

They find products by research then bring samples here; it is confirmed and verified

then our graphics designer Mr. Moin starts working on packaging of the products.

We design packaging and send their packaging designs and we make advance

payment from here. Advance payment normally 20 or 30 % of the value and it is

invoice. We have methods to send payment through unofficially so that they start

work. Normally, this process takes 25 days, some take 35 days. If large product then

it takes till 50 days. Once goods are ready then we make remaining payment. Our

benefit in FOB terms is that we take only forward contract that this is our freight

folder then they reserve our containers, buy warehouses, freight loading, clear export

custom, handover and send it here.

FOB means "Free On Board" or "Freight On Board" is a word for shipping used in

retail to show that is responsible for paying transportation charges. It is the location

where ownership of the merchandise transfers from seller to buyer. The seller pays

the freight, and the buyer takes the title once it's been shipped. The buyer pays the

transportation costs from warehouse or vendor to store.

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PROCUREMENT PROCESS

The orders are finalized based on samples received from China based suppliers then

products are tested

Receiving of Performa Invoice

Order finalization after negotiation

PO is generated

Payment of Advances

Productions begins

After production products are exported by the suppliers

Import of goods at local ports.

PRODUCERS:

As already updated in the above, products are assembled or manufactured here in

Pakistan rather they are custom made and designed as per needs of the market as

well as the market trend. Space has team of marketing experts who have keen insight

of the industry to cope up with the new demand influx as well as keep an eye on

market trend of new products; furthermore CEO as well as CFO at usually visit china

after every few months to attend the Technology fair to import new tech gadgets.

In addition to the above after selecting the Niche product it is brought back to

Pakistan and experts here test it and give further recommendation to change and

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improve the design to meet the needs of local market. Once the product design is

finalized Space usually does a contract with the production company to not market

their design to another Competitor company thus in this way design can be exclusive

of Space.

During our interview we also discussed whether they use vendors from Alibaba, so

it turns out that Alibaba is used for screening the product and also to get pricing

insight, because local manufacturer in China are usually producing the same

electronics items with considerable price difference.

WAREHOUSE:

Upon successful arrival of the products to Karachi port they are delivered to

warehouse located in Korangi, the products are already packed with proper labels

and stored right away in the warehouse.

The warehouse design is very simple with a separate space for spare parts and also

for defected items. There is separate space allocated for each item in warehouse, for

small products like mobile chargers and hands free and other items which were

already describe in the initial portion of the report there is a separate room to ensure

safety and also to make sure that nothing is stolen or mixed up with other items.

Usually speakers take bulk of space in the warehouse and a separate section is

dedicated for them to make sure that they can be handled easily without any damage.

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DISTRIBUTORS:

There are no distributors involved in Space as they are directly responsible for

delivering the desired products to the markets via their sales team.

Distribution of the products in upcountry is also handled directly by Karachi Head

office, hence eliminating any distribution agency.

INVENTORY:

Space don’t hold any extra inventory since all the production is from China, orders

are calculated as per the forecast of the market and technology trends.

TRANSPORTATION:

Local mode of transportation is usually used; Bolan cargo is the main choice for that.

Space also uses M&P and TCS for local orders if necessary.

RELATIONSHIP WITH SUPPLIERS

Suppliers not only provide you with the goods and services you need to run your

business - they can also be an important source of information, advice and trade

credit.

As per our interview with Head of Supply chain they usually follow below guide

lines in order to have working and positive relationship with their suppliers.

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 Procurement Process of Space

 Talk to your suppliers regularly.

 Pay your suppliers' accounts promptly.

 Communicate with a supplier before the due date for payment, should you

foresee a delay in paying an account.

 Build good relations with your current suppliers' representatives.

 Be fair but firm with industry sales representatives – they can easily take up a

lot of your time.

 Avoid rush orders wherever possible – they can cause significant stress in

your business and put a strain on the relationship with your suppliers.

 Monitor the financial position of your suppliers – talk with industry colleagues

and competitors about the general financial stability of those businesses that

supply goods and services to you.

 Address any issues of concern in relationships with your suppliers as they

arise.

 Refer damaged or faulty goods to the supplier promptly, with supporting

documentation.

 Be prepared to review and renegotiate the terms of trade with your suppliers

from time-to-time.

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CONCLUSION:

Space is a market leader when it comes to sound industry and mobile accessories,

this is not done overnight and it will not be wrong to say that effective supply chain

model plays an important and vital role towards the success of the company. Being

the market leader in their niche products they have to follow strict rules of

maintaining close and effective relationships with their vendors and also to make

their products patented only for them by their vendor so that their model is copied

elsewhere. Furthermore innovative product design can only be successful if it is

intruded timely here in Pakistan and supply chain model of Space plays a vital role

in doing so that market can be captured at the right time.

For us it was really educational as well market oriented project for us to dig deep

into the supply chain process of Space and we have learned a lot to equip ourselves

theoretically as well as with actual market knowledge and supply chain antiques

involved, we once again thank Mr. Faisal Mustaq for that.

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