Haleeb Foods supply chain management drivers
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Transcript of Haleeb Foods supply chain management drivers
Supply Chain Management
Assignment No. 1
Submitted By
Raza Sajjad Hussain12350
Submitted toMr. Adnan Shehzad
Date: 8-March-2013Class: Friday 6-9
Haleeb Foods Limited (HFL)
The industry structure packed milk in the category is oligopolistic where there are a few
firms (Haleeb, Nestle, Engro, Good milk) producing essentially the same commodity.
Pakistan is the fourth largest producer of milk in the world, three-fourth of its total milk
is produced in the Punjab province.
Supply Chain Driver:
There are five supply chain drivers that are integrated with the motive to achieve
company’s competitive and supply chain strategy in optimal manners.
These supply chain drivers include:
1) Facility
2) Inventory
3) Transportation
4) Information
5) Sourcing
First three drivers of facility, inventory and transportation are logistical drivers, whereas
rests of three are known as cross-functional drivers.
These five drivers play a vital role in HFL’s supply chain process in order to achieve both
efficiency and responsiveness in fulfilling the market demand.
The brief description regarding theses drivers as tailored Haleeb Food is as under.
1. Facility
HFL have two facilities where all the products that include milk, cream, powder milk,
yogurt, tea mix and juices are assembled, fabricated and stored. These facilities are
located in the districts of Bhai Pharoo and Rahim Yar Khan.
Bahi Pharoo’s facility began operations in 1986 with the production of UHT milk, cream
and yogurt. While reorganizing and reinforcing the existing brands, new production lines
were installed like juices, Desi ghee, powder milk and Dairy Queen.
Rahim Yar Khan’s facility commenced in 2005 when HFL’s daily demand fetched to1.2
million litters per day. Recently, this facility is not being operated due to low market
demand.
These both facilities are located near to HFL’s big markets and its collections centers,
which really enable the company to get and make the supply of prime quality material.
Both of HFL’s facilities are equipped with advanced imported plants, which enable the
company to vary its production capacities according to market demand. Due to this
capability, achievement of economies of scales is not a hurdle. Besides, HFL’s intensive
distribution network delivers the products to distant areas where Haleeb Food plans to
create a market.
2. Inventory:
HFL does not carry large amount of inventory in its facilities and warehouses, gets
production through varied capacity and entire products are dispatched to market in 7
days.
While production of dairy items and juices, no inventory of raw material is kept, milk and
fruits are transferred to production facilities just after the arrival at plants. Similarly,
when the fabrication begins, it is not stopped at any cost until the last step of packaging is
performed; hence no work in process inventory is maintained. Only the finished goods
inventory is held at plant’s warehouses that too for very short time period.
HFL’s inventory control strategy enables the company to gain efficiency since minimum
inventory is held. This strategy also helps Haleeb Food in demonstrating a low cost
producer where the advantage of cost reduction methodologies is transferred customers.
3. Transportation
HFL is using only traditional fast moving road transportation modes in all the stages of
supply chain process. All the trucks at procurement stage are equipped with essential
technology that ensures the safe transfer of milk from PHEs to facilities. This mode is
adopted to achieve efficiency while reducing transportation costs in the movement of
products in all stages without any lose in quality and standards of products.
HFL Limited is emphasizing on both responsiveness and efficiency in transportation of
goods with an objective to carry final products to customers within the targeted cycle
time of 2 days by incurring as minimum cost as possible.
4. Information
HFL has designated an active Forecasting and Planning Department, which explores the
customer’s purchasing patrons and behaviors in each market and prepares a feasible
demand sheet on weekly basis. This report helps Procurement Department in assigning
targets to all Milk Collection Centers, routs through which a milk should be carried to
PHEs and then to production facility in Bhai Pharo. HFL also ensures the complete and
accurate information of trucks during their journey towards the facility, in case of any
accident or unfavorable circumstances, alternative sources are drastically used to avoid
any kind of lose.
HFL Limited also developed an Operations Team, which keeps up-to-date record of
inventory and new orders and shares with Head Office on daily basis.
HFL Limited has accessed to all necessary information technological tools like mobile
phones, internet, faxes, Enterprise Resource Planning and Supply Chain Management
Software to keep the full information regarding supplier’s and PHE’s capacity, total
production per day, delivery to warehouses and sales per day. This all information really
enables the company to be responsive and fulfill any uncertain demand within the time
span of 3 to 4 days.
5. Sourcing:
HFL’s entire manufacturing process of all products categories is performed in-house
facilities under the domain of company’s experts, since HFL is committed to provide
prime quality goods to its customers. Besides, HFL have a portfolio of suppliers
regarding all the fundamental inputs of milk, fruits and technology. Company believes in
long term and strong relationship with all of its suppliers by demonstrating mutual
respect, reliability, coordination and consultation.
HFL have a careful process as far as the selection of its supplier is concerned. For this
purpose, company’s agri-services teams visit all the rural areas and securitized all the
factors that are essential to perform prior to obtaining the superior quality inputs.
HFL’s basic objective is to achieve efficiency in its operations, for which company is
relying both on in-house and outsourced sources that will ensure the delivery of prime
quality products to market.