Abstract

In the month of Ramadan, the boarders of university of engineering and technology Taxila face
an immense problem of availability of Aftari in hostels. The hostels’ mess only provide dinner,
so the boarders has to go to local hotels or mosques to have Aftari. In order to resolve this
problem and facilitate the boarders, we’ve decided to provide the Aftari to them in hostels at
very economic prices.

In order to translate this business idea into a business project, we’ve planned to make and
manage a supply chain to provide Aftari services in Ali Hall and Iqbal Hall, two of the boarding
hostels of UET Taxila. This supply chain is committed to provide efficient and effective
services of Aftari with high quality and high profit gains.

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 Acknowledgment
In the name of Allah (S.W.T), The most merciful and beneficent.

Firstly, we will like to thank Allah (S.W.T) for making it possible for us to conceptualize,
develop and complete our project. Indeed, without His will nothing can happen.

After that we are extremely grateful to course instructor Dr. Saif Ullah without whom this
project would never have been possible. He was a source of continuous guidance and
motivation for us. He always appreciated us and acknowledged our efforts and hard work.

Last but not the least, we want to dedicate our thesis to our parents without whom we are
nothing. It was because of their prayers and efforts that we are able to achieve our aim and
objective. We express our gratitude to our parents who always remained a source of light for
us in the dark and taught us to walk in every phase of life.

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Table of Contents
Introduction ................................................................................................................................ 4

Problem Statement ..................................................................................................................... 4

Proposed Solution ...................................................................................................................... 4

Scope of the Project ................................................................................................................... 4

Project description ..................................................................................................................... 4

Supply chain network ................................................................................................................ 5

Customer Value Identification ................................................................................................... 6

Supply Chain Strategy & Design ............................................................................................... 7

Supply Chain Planning .............................................................................................................. 9

Supply Chain Operations ......................................................................................................... 10

Marketing Strategy................................................................................................................... 10

Project Execution & Outcome ................................................................................................. 10

Analysis.................................................................................................................................... 12

Results ...................................................................................................................................... 13

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Introduction

Problem Statement
In the month of Ramadan, the boarders of university of engineering and technology Taxila face
an immense problem of availability of Aftari in hostels. The hostels’ mess only provide dinner,
so the boarders has to go to local hotels or mosques to have Aftari. This is problematic situation
for the boarder fasting in the month of Ramadan.

Proposed Solution
In order to resolve this problem and facilitate the boarders, we’ve decided to provide the Aftari
to them in hostels at very economic prices. We’ve translated the need of the customer into the
product in the form of Aftari box, the have different ingredients related to Aftari in it. We’ve
planned to fulfil the demand of the customer with minimum lead time and cost while keeping
the quality higher.

Scope of the Project

While executing the project idea, it is decided to restrict the service area up to the two halls of
University. This is done to keep the project simple and avoid demand and distribution
complexity.

Project Description
In order to translate this business idea into a business project, we’ve planned to make and
manage a supply chain to provide Aftari services in Ali Hall and Iqbal Hall, two of the boarding
hostels of UET Taxila. This supply chain is committed to provide efficient and effective
services of Aftari with high quality and high profit gains.

The definition of supply chain management is:

The management of upstream and downstream relationships with

suppliers and customers in order to deliver superior customer value at
less cost to the supply chain as a whole.

Thus the focus of supply chain management is upon the management of relationships in order
to achieve a more profitable outcome for all parties in the chain. This brings with it some

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significant challenges since there may be occasions when the narrow self-interest of one party
has to be subsumed for the benefit of the chain as a whole

Supply chain network

Supply chain network is a network of connected and interdependent organisations mutually
and co-operatively working together to control, manage and improve the flow of materials and
information from suppliers to end users.

This supply chain consists of four elements:

 suppliers,
 processers/manufactures,
 distributors, and
 customers.

The suppliers have to provide the raw ingredients of the Aftari items including fruits, samosas
and pakoras etc. Also the disposable boxes and juice boxes are provided by the suppliers within
the minimum lead time. The processors’ task is to make the Aftari box, using the items provided
by the suppliers with minimum processing time. The distributors provide the customer with the
Aftari box as per quantity ordered at their doorstep.

Figure 1 Supply Chain Network

Supplier

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The function of supplier is to provide the ingredients of Aftari box at daily basis on time. The
quantity of ingredients ordered depends on the demand forecast of each day and the respective
prices of fruits.

Processor

The function of manufacturer is to prepare the Aftari box as per forecast from the raw material
supplied. The Aftari box should be prepared on time.

Distributor

The function of distributors is to deliver the order as per requirement onto the required location
within minimum time.

Customer Value Identification

In order to identify the value of the customer, a survey of Iqbal Hall and Ali Hall is conducted.
The survey is of oral type that the respondents are questioned about their requirement related
to Aftari service. According to the responses and brainstorming following things are identified:

 The Aftari should be provided in boxes of price not more than 100
 Each day the ingredients should be changed
 Juice bottles should also be provided.
 The Aftari box may include:
 Fruits (apple, dates, peach, banana)
 Samosas and Pakoras
 Fruit chaat
 Chana chaat
 Door step service should be provided

It is planned to fulfil all the identified requirement of the customer. The is decides that the
product is provided with minimum price and high quality. But the supply chain strategy does
not focus on only the core product. It also tried to use the customer service to augment the core
product.

It has been suggested that the role of customer service is to provide ‘time and place utility’ in
the transfer of goods and services between buyer and seller. Put another way, there is no value
in the product or service until it is in the hands of the customer or consumer. It follows that
making the product or service ‘available’ is what, in essence, the distribution function of the

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business is all about. ‘Availability’ is in itself a complex concept, impacted upon by a galaxy
of factors which together constitute customer service. These factors might include delivery
frequency and reliability, stock levels and order cycle time, for example.

Figure 2 Using Customer service to augment core product

Supply Chain Strategy & Design

supply chain strategy defines how the supply chain should operate in order to compete. Supply
chain strategy is an iterative process that evaluates the cost-benefit trade-offs of operational
components.

Business strategy involves leveraging the core competencies of the organization to achieve a
defined high-level goal or objective. It also includes the analytic and decision-making process
surrounding what to offer (e.g., products and services), when to offer (timing, business cycles,
etc), and where to offer (e.g., markets and segments) as a competitive plan.

While the business strategy constitutes the overall direction that an organization wishes to go,
the supply chain strategy constitutes the actual operations of that organization and the extended
supply chain to meet a specific supply chain objective.

The processing facility of supply chain is located in Iqbal Hall. Supplier supply the goods from
the markets of Rawalpindi and Taxila. The processor makes the product according to the
demand of the customer. The distributor delivers the product on foot at the customer place.

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The information flows in the supply chain through the channel of phone call and messages.
The customer places order on phone call or message. The raw material supplier receives order
on phone call. The deliveryman also receives information through it.

The following four models are very common:

1. Integrated make-to-stock,
2. Build-to-order,
3. Continuous replenishment, and
4. Channel assembly.

The model used in this project is make-to-order. According to the actual customer order and
forecasted demand, the product is made. The customer values identified through survey and
brainstorming are of great importance. In order to link the customer value to the supply chain
strategy, model presented in the Figure is used.

Figure 3 Linking Customer value to Supply Chain Strategy

The customer values are identified according to the stated procedure. The different customer
segments are identified and the all the common values are linked to form a general requirement
plan, under whose umbrella all the requirements will be fulfilled. The requirements are then
translated into offer by deciding the specifications and ingredient of Aftari box. The market
winners are then identified which include hygienic food, time to market and lower price. These
market winners are then incorporated in the strategy and planning of the supply chain.

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Supply Chain Planning
Supply chain planning (SCP) is the component of supply chain management involved with
predicting future requirements to balance supply and demand. SCP products may include
supply chain modeling, and design, distribution and supply network planning.

Demand management is the term that has come to be used to describe the various tools and
procedures that enable a more effective balancing of supply and demand to be achieved through
a deeper understanding of the causes of demand volatility.

Demand planning is the translation of our understanding of what the real requirement of the
market is into a fulfilment programme, i.e. making sure that products can be made available at
the right times and place. Many companies today have put in place a formalised approach to
demand management and planning that is often referred to as sales and operations planning.

S&OP seeks to ensure that the organisation is able to anticipate the real requirement of the
market and to react in the most cost-effective way. The aim is to ensure the highest level of
customer satisfaction through on-time, in-full deliveries with minimum inventory.
There are a number of pre-requisites for successful S&OP and these are summarised in Figure.

Figure 4 Sales and operations planning process

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As the project is of limited scope so there is no intensive planning. All the decisions are made
on daily basis. The markets to be supplied are two hostel of university. So the customers are
limited. There is no place and facility to keep the finished goods inventory. Also the make-to-
order model adopted assures that he product is manufactured when the order is received. The
product follows the concept of time to market. There is no uncertainty in demand. No
production plan has to be developed as all the decisions are made on daily basis.

Supply Chain Operations

The operations of the supply chain include the ordering, procession, demand fulfilment and
customer service. The operational level decisions are made on daily basis. Quantity of fruits
and other stuff is ordered according to the actual demand to decrease the uncertainty. The
delivery of the order done on time.

Marketing Strategy
The marketing is done through advertisement and personal relations. Advertisement posters
are pinned on the green boards of hostels and other main places in university. Mobile messages
are circulated through personal contacts in the university.

Project Execution & Outcome

The project started from the 1st Ramadan and ended on 15th Ramadan. From the first day all
the strategic decagons and planning is executed. Initial investment is collected from each group
member of PKR 500/- per person. The responsibilities are assigned to each member of group.
The group consisted of 24 members, the members are grouped according to their
responsibilities as follow:

Table 1 Members' Groups

Sr. No. Supplier Processor Distributor

1 Muhammad Ali Mohsin Riaz
2 Abdul Rahman
3 Tariq Ali Malik Faisal Shahzad
4 Rian Ali Shah
5 Usman Hamid
6 Huzaifa Siddiqui
7

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The ingredients of Aftari box are

 Apple
 Banana
 Peach
 Pakoras
 Samosa
 Fruit chaat
 Dates

The cost of each item is listed as follow

Table 2 Cost of Items

Sr. No. Item Cost

1 Apple
2 Banana
3 Samosas
4 Pakoras

The profit margin on each Aftari box is approximately PKR 20/-. On the first day the demand
is uncertain so the products were not sold. There was loss on that day. On the second day make-
to-order strategy is applied due to which there was a profit of PKR 2000/-. As on the weekends
the boarders like to go outside for Aftari, so there were very little sales on weekends. The
demand fluctuated day by day, so the make-to-order strategy was kept operational. The sales
are summarised as follow:

Table 3 Daily Sales Data

Day 1 2 3 4 5 6 7 8 9 10
Expenditure 7060 2010 950 2010 2670 1650 1230 980 675 790
Sales 3800 4100 1780 2660 1640 2510 2800 1740 650 900
Profit/Loss -3260 2090 830 650 -1030 860 1570 760 -25 110

It is graphically depicted as

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 PROFIT/LOSS
3000

2000

1000

0
DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 DAY 6 DAY 7 DAY 8 DAY 9 DAY 10
-1000

-2000

-3000

-4000

Graph 1 Daily Profit/Loss Graph

The total profit is PKR 2555/-.

Analysis
After looking at the sales data, it is interpreted that the project is not successful. This failure if
idea and planning is then analysed. The following some reasons contribute to the failure of
project:

1. Wrong Strategic Planning: The strategic planning done is not according to the market
demand. The customer value is not identified properly.
2. Higher Perceived Price: The price of the Aftari box is perceived as very high due to
the unawareness of market rates of fruits and other items. In Ramadan usually the rate
of Fruits and other common eatables rise higher. This resulted in low profit margin and
higher perceived cost by the customer, due to which sales are adversely affected.
3. Free Aftari Options: In Ramadan the two mosques of University offer free Aftari for
the students and other people of colony every day. So instead of buying a limited
amount of Aftari items from such service providers, it is preferred to go to mosque and
avail the free offers there. So majority of boarder have Aftari in the respective Mosques.
Remaining are very small proportion of student who buy the Aftari boxes.
4. Other Competitors: One of the competitors provide homemade items for Aftari to the
students. As people prefer the homemade products, so many of our customers are
shifted towards those offers.

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 5. Low Profit Margin: Due to inflation in Ramadan the items are very costly. In order to
keep the offer into the range of customer, the profit margin is kept very small. Due to
which the revenue generated is very small.

Results

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