Gourmet Bakers

BY: Zain Ali Syed Umar Azam Ali Shehzad Zain Haroon Waqas Suleman

Introductiony Gourmet Bakers and Sweet is the largest food retail chain of Pakistan. y It is based in Lahore. y They have 2 processing units and 28 sales outlets. y The company has shown an explosive annual growth of more than 25 % in its business

since 1987.y Mr. Muhammad Nawaz Chatha started this unique business with only one sale outlet. y Now Gourmet has become a success story of business growth in Pakistan. y More than 1700 employees working in the organization.

Gourmet ItemsBreads Buns Rusks Cookies Cakes Pastries Pizzas Packet Milk Powdered Milk Soft Drinks Sweets Other bakery items

Gourmet Milky We would be focusing on

the supply chain of gourmet, and primarily on milk collection and distribution. Gourmet have recently established a new milk pasteurization plant in Sunder Industrial State, around 20km away from Lahore.

Supply Chain

Supply Chainy They have their own procurement centers, therefore they have a complete control over

their supplies.y They have one pasteurization plant and 2 food processing plants which deals with the

production of various products.y Their main facility strategy is to be efficient, therefore they have opted for higher

capacity in their plants and their facilities are product focused.y Gourmets logistics strategy is focused on efficiency, this is mainly because of the amount

of required milk and the cost of transportation.y They have chosen trucks as a mode of transportation for collecting milk from VMCs to

centers, centers to their plant and from plant to retail outlets.

Zain Haroon

Procurement Systemy Have their own procurement centers in following locationy Sahiwal y Pakpatan y Gaziahbad y Mianchalu y Arifwala y Bahawal nagar y Jhang y More-mandi

ach center have an ice factory installed to provide chilled water to cool the milk at 4 degree. y Following are the sources available for Gourmet to choose from.yy y y y

PF (Prefered) VMCs (Prefered) MC HC

y Gourmet have analyzed the risks involved in each of the sources and

decided to choose PFs and VMCs instead of MCs and HCsy VMCs are village mini contractors who are contracted with the firm

on the commission basis. Their responsibility is to collect milk from one village and store it in chillers provided by the firm at a certain point in the village.

y Following are the risks involved in deciding the source :y Poor quality of milk y Inconstancy in supply of milk

y Inorder to overcome these risks, they have decided to have their

own procurement centers and to deal with VMCs mainly.

Pasteurization Plant Locationy Following are the factor considered when decided where to

locate their plant:y Location of supply sources y Labore and material costs by site y Transportation costs y Tax free zone at Sundar

y After analyzing the factors, the biggest factor influencing

their plant location was the Tax free zone at Sundar State.

TransportationAli Shehzad

y There are several different type of transports y There are different costs attached to different types of

transportsy Several points have to be considered when choosing the

mode of transport

y All of these modes of transports have different characteristics

regarding transportation cost and inventory cost/ capacity.y This is the basic trade-off when choosing a certain type of

transport mode, whether to have a high responsiveness and low inventory costs or having a low cost transportation (low responsive) and high inventory costs( Higher transport capacity).

y When looking at Gourmet, they have choosen a more low

cost transportation method and higher transport capacity, that is, they have choosen trucks as a mode of transporting milk in their supply chain.

y y y y y y

Following factors are considered by Gorumet before deciding the mode of transportation: Type of Product (milk) Costs of transportation modes Infrastructure available in the region Location of their facilities Their product demand Their cycle inventory requirements

y Trucks seems to be the best mode of transporting milk from

one location to another, because milk needs to be kept under constant low temperature of 4 degrees otherwise it turns bad.

y There is a high risk involved in this mode of transport

therefore, they opted trucks as a mode of transport. y Once the storage of milk is done, after chilling the milk, it is again loaded in bigger trucks because of the high quantity stored in the centers, to be sent out to their pasturization plant.

y The following are the truck capacities used during the y y y y y y

procurement stage: 1.7 tons 2.1 tons 2.3 tons 2.7 tons 5 tons 6 tons

y The following are the truck capacities used during the Center y y y y

Plant transportation: 6 tons 12.5 tons 20 tons 40 tons

Risk Management

Presented By: Umar Azam

Stages of Risk Managementy Identification y Analysis y Assessment y Control y Avoidance y Minimization y Elimination of unacceptable risks

Risk Management in Transportationy The risk that the shipment is delayed y The risk that the shipment does not reach its destination

because intermediate nodes or links are disrupted by external forcesy The risk of hazardous material

Risk Management in Sourcingy Inability to meet demand on time y Increase in procurement costs y Quality of the milk y Inconsistency in supply of milk

Parameters to check qualityy Physical Parameters y Chemical Parameters y Hazard Points

Risk Management in Inventory

y Unforeseen demand during the summers y Unforeseen supply during the summers

Pricing Strategies

Presented By: WaqasSuleman

Pricing Strategyy Seasonal pricing strategy y Pricing strategy enables the firm to earn a certain profit y Main pricing strategy is based at the procurement center y They go for the quality of work y Make value customer.

y Basically their objective to feed other processing plant within

Gourment. y Winter season the demand is low and supply is high. y Rates at 6% fats Summer: 39rs-41rs Winter: 35rs y Milk pricing formula:Price = (Current Prevailing Factory Price x Fat content) / Maximum possible Fat ContentPrice = (35 x 5.1) /6 = Rs.29.75 = Rs.30

y Winter