HIRA

15972
AZHAR

Supply Chain Management

Final Examination- BBA 2 Years

20
21
Khadim Ali Shah Bukhari University of Management
Sciences
 SUPPLY CHAIN MODEL:

SYNOPSIS:

The main objective here is to present a supply chain management practices in any organziation. I have opted to present the
supply chain model of my own organization, Tapal Tea Pvt Ltd, where I clearly was able to recognize the important
aspects
of organizational behavior. Studying the supply chain model of Tapal Tea Pvt Ltd helps me get to know the indepth
hierarchial structure that ihas been followed in the organiztaion, the fluid and smooth lines of communication between the
decision makers, suppliers, distributors and end customers.

I tried to present quite a thorough and transparent model of supply chain management practices of Tapal Tea Pvt Ltd as
possible.

WHY TAPAL?

FMCGs have comparatively complex yet detailed and structured supply chain model that depicts the
effectiveness and efficiency of real supply chain management processes. Besides its supply chain management
few key features of choosing Tapal in FMCG are:

1. It is the only leading brand in Pakistan that is serving tea market since the inception of Pakistan.
2. It has narrowed the market share of its competitors to an extent that they need to fight to get that back
till date.
3. It is the first Pakistani company to earn ISO-9001 Certficication.
4. In Dec 2000, Tapal acquired ISO-900: 2000 certification, makinf it one of the fewest countried over the
globe to achieve this milestone.
5. It also exports its products in other countries which has broaden the horizon of supply chain because
Tapal is the only Pakistani leading brand that inports raw material completely from different countries
and exports its finished goods to the other countries of the world.

SUPPLY CHAIN MANAGEMENT:

SCM is a process that involves planning, implementing and controlling the operations of Supply Chain
effectively. SCM caters movement and storage of raw material, work-in-process inventory, and finished goods
from point of origin to the point of consumtpion.

Tapal Tea Pvt Ltd basically have 2 functional Supply Chain departments.

Tea Supply Chain Department

Supply Chain Department

But I will purely elaborate the Tea Supply Chain Department.

A- SUPPLY CHAIN PROCESS:

OVERALL SUPPLY CHAIN MODEL:

GM SC

TEA SCD SCD

Distribution &
Planning &
Tea procurement Tea Quality Warehosue Procurement
Logistics

Raw Tea Tea Lab POS & General

Warehouse Tea Belnding OutBound Packagung In Bound
R&D Material

FUNCTIONS OF SUPPLY CHAIN DEPARTMENT:

TEA SUPPLY CHAIN SUPPLY CHAIN

Procurement Procurement of Packaging Material
Quality control Maintenance, repair &operations
Warehousing Warehousing
Blending Production Planning
Logistics
Transportation

Marketing
STEP-1: Formation of Annual Operating Plan Sales Dept
Dept
Supply chain starts with the identification of need/
Demand of its products. The demand is forecasted Forecasting Generate
Annual
And produced by sales and marketing department Operating
on based on the historical data, change of season, Plan
taste etc. are presented in the form of annual operating
plan to the production department which is further
shared with suppliers and logistics department that
engages all the relevant entities for smoother and Suppliers Manufacturing Logistics
flawless Supply Chain Process.
STEP-2: Tea Supply Chain

Tea leaves are plucked Tea samples send to Brokers tastes the tea Tapal in Pakistan
brokers samples receive the samples

Tapal’s specialist test

Order when reached at the quality and taste of
dock than clearing Order than packed and Brokers bid in the tea again and pass the
agent load it in Tapal shipped auction for tea order to broker
trucks

3PLs of Tapal Tapal’s Warehouse

Once after the production plan is prepared Tapal imports tea from different countries. The process is called as Tea
Supply. This is also a backward integration of Tapal Tea for further processes. Tapal has clearing ad forwarding agents
wo helps in importing tea to Pakistan. Once after the tea leaves are plucked from garden and converted into tea, the
brokers than forward the chosen samples. Tea testing specialists taste the tea and place orders to the exporters. Forwarding
agent under his supervision imports tea from exporting country to Pakistan through shipment.

Shipment arrives at the docks and from the dock to Tapal’s warehouse. Transportation from the dock to the warehouse is
done through the third-party logistics 3PLs of Tapal basically done in 30-40 feet containers.

STEP-3: The Expert Verdict:

After the purchased tea arrives Tapal warehouse, the tea tasters Mr. Fahim Khan and Shakeel Abbas again taste the
samples received and then send it to the blending department where the samples are further modified into brands like
danedar, family mixture, dust etc. From here the tea samples are into forward integration for further production
processes.

STEP-4: Blending of Tea:

Blending is the process of mixing of assorted tea in a mechanical drum. The aim of this blending is to maintain the taste
consistent according to the consumer’s taste. The blended recipes are tasted several times to ensure the quality against
previous batches.
STEP-5 Packaging of Tea:

Tea absorbs moisture very quickly and changes its taste and quality. To keep its freshness intact the tea leaves are packed
immediately after the blending in such packaging that should secure the taste of tea. Tapal has contracted with packaging
firms which provide approved and standard packaging material to Tapal. The packaging contractor also imports material
from other countries and customize it for the requirements according to Tapal Tea.

Some are hard packs, some are pouches, some packed with foil wrapping etc. The packaging material is so effective that
Tapal’s product can be stored for over an year.

STEP-6 Distribution:

Now the finished goods are moved to finished goods warehouse through third-party contracted trucks for stock keeping
and to provide he finished goods to the distributors, wholesaler, retailers and eventually to the consumers. The lead time
for order fulfillment is almost 24 hours. Tapal uses FIFO method for its inventory management. Tapal has more than 1000
distributors across Pakistan. Tapal also export its products in different countries for its global consumers.

Manufacturing Plant of
Tapal

Retailer-Metro

30-40 Feet Truck 3PL Tapal’s warehouse

14-15 Feet Truck 3PL

Retailer- Macro

14-15 Feet Truck 3PL

Distributor Export
STEP-7: Quality Assurance & Reverse Process:

According to Tapal Quality Assurance department the ration of returned products is 99:1 or nearly zero due the diligent
quality assurance process at every step from selecting ear tea till the packaging of Tea. But incase if any claim is recorded
the returned goods are discarded at the very same moment and is never reused.

B- SUPPLY CHAIN OF TAPAL:

Tapal being one of the very well renowned brands of Pakistan has a supreme, efficient and effective Supply Chain
Management which ensure quality at every step from the procurement of raw tea till the finished product. Entities of Tapa
Tea plays an important role in this smooth communication.

ENTITIES OF TAPAL’S SUPPLY CHAIN:

Following are the entities of Tapal Tea supply chain.

1. Supplier’s Supplier of Tapal Tea Company:

-These are those suppliers of the suppliers who provide the equipment, mechanical tools and other stuff related to the
cultivation and harvesting of Tea.

- Another supplier’s supplier is the one who supplies the raw packaging material like polythene bags, foil papers, hard
paper, boxes etc.

2. Supplier of Tapal Tea:

The company import raw tea leaves of different qualities and taste from different countries who are the direct suppliers of
Tapal. Tapal import tea leaves from:

 Kenya
 China
 Sri Lanka

The next important and direct supplier of Tapal is the packaging supplier and the third direct supplier is the taste binder
which provides essentials to Tapal which Tapal with the help of its research and development department combines to
produce fresh tea with premium quality.

3. Manufacturing of Tapal Tea:

The manufacturing of Tapal is a simple yet a very careful process as the tea tasters are responsible for the consistency in
maintaining the taste of the different brands of Tapal Tea. Tapal Tea has 2 manufacturing plants one in Karachi Korangi
industrial area and the second in Raiwind at Manga Road. Each manufacturing plant has its own warehouse next to it.

Raw Tea Tasting at Tapal Blending of tested tea in Testing of Blended tea
Tea room mechanical machinery

Packaging of Blended Tea Delivery of Finished goods to

warehouse
 4. Mode of Transportation of Tapal:

Tapal tea uses third part logistics (3PLs) for all the inbound and outbound transportation. Tapal did not use any fourth
party logistics to manage its supply chain management as it has its own dedicated staff to deal in transportation.

Tapal uses water mode of transportation to import raw tea and export its finished goods to other countries.

5. Warehousing:

Tapal has two regions North and South and has warehouses at 6 different regions in Pakistan.

 Karachi
 Sukkur
 Hyderabad
 Raiwind
 Islamabad
 Multan

Functions of warehouse is the handling, counting, placement, replacement and receiving of finished goods.

6. Distribution Channel:

Locally Tapal has over 1000 distributors who places orders from 6 different warehouses of Tapal and distributes the
products of Tapal in all over Pakistan.

Tapal has agents in Germany, UK, North America, South America, UAE, Saudi Arab, Africa and Western Europe. These
agents import Tapal products in these countries and distribute to the end consumers.

7. Customers of Tapal:

Are its:
 Distributors
 Vendors like macro, metro, Naheed, Aghas, and Hyper Mart in other regions of Pakistan whom Tapal directly
supply Finished Goods from the warehouses.

8. Customer’s Customer of Tapal:

 Whole seller
 Retailer
 End Consumers

9. Integrated Systems:

 Tapal has Integrated Oracle base ERP system which connects all of its entities of supply chain along with Sales,
Marketing and R&D.
 Tapal make utilization of POS for its Inventory Management in integration with its vendors like Macro, Metro
and others.
 Tapal has its own Internet Services in collaboration with PTCL fiber optics which connects the Suppliers,
Manufacturing plants, logistics, sales, marketing and R&D all the time.