Professional Documents
Culture Documents
er
2012
DISTRUBUTION CENTRE
AUTOMATION STUDY IN
MEDORA PAKISTAN
COURSE INSTRUCTOR:
Sir Moin Uddin Ali Khan
GROUP MEMBERS:
Salman Saleh (10992)
Muhammad Misbah-ul-Haq (10979)
MBA (IM)
Institute of Business
Management
LETTER OF TRANSMITTAL
July 22, 2012
Best Regards,
Salman Saleh (10992)
Muhammad Misbah-ul-Haq Siddiqui (10979)
LETTER OF ACKNOWLEDGEMENT
July 22, 2012
Dear Readers:
We are thankful to Almighty Allah for giving us the strength and capability to
complete this report on Distribution center automation: Medora of London
PVT Ltd..
We would like to thank our course instructor Mr. Mounuddin Ali Khan for
putting in all the hard work in this course to make it a memorable experience
for all of us. We appreciate his guidance and shall appreciate the valuable
feedback on this report as well.
We are highly obliged to Mr. Zulfiqar Ali (Executive Supply Chain) from
Medora of London PVT Ltd. who shared their valuable time from busy
schedule in order to guide us through the report and provide the relevant
information.
Sincerely,
Salman Saleh (10992)
Muhammad Misbah-ul-Haq Siddiqui (10979)
MBA (IM)
IoBM
S. NO.
TOPIC
PAGE NO.
1.
Abstract
2.
3.
4.
11
5.
Literature Review
13
6.
15
7.
15
8.
16
9.
Implementation Process
17
10.
18
11.
SWOT as Conclusion
22
12.
24
13.
Recommendations
25
14.
References
27
ABSTRACT:
With the increasing awareness of integrated chain management, demand of
implementation of
Information
Technology
based
ERP
software
London PVT Ltd. Well analyze how their downstream supply chain including
improvement in warehouse management will be addressed by ERP implementation.
INTRODUCTION:
FMCG Overview
Products that have a quick turn over and comparatively low value are referred to
as Fast Moving Consumer Goods (FMCG). FMCG products are those that get
replaced at intervals a year. samples
frequently
soap,
cosmetics,
tooth
cleaning product, shaving product and detergents, additionally as alternative nondurables like glassware, bulbs, batteries, paper product, and plastic merchandise.
Pakistans FMCG sector is one among the biggest sector within the economy and
creates employment for more than one million people in downstream activities. The
whole FMCG market is currently growing at double digit growth rate and is
predicted to take care of a high growth rate. The FMCG sector is dominated
by each MNC and domestic players.
Institute of Business Management- Storage & Warehouse Term Report Summer
2012
Page 5 of 27
It is committed to its
VISION:
MISSION:
AND TO
Products Categories
Medora of London has five main product categories,
Color Cosmetics
Fragrances
Perfumed Talc
Shampoo
Mens care
Color Cosmetics
Companys strongest product segment is color cosmetics. The main products in this
segment are,
Matte Lipsticks
Glossy Lipsticks
Glitter Lipsticks
Nail Enamel
Nail Polishes
Fluid Make-ups
Nail Polish Removers
Pair Pack Shades
Compact Powders
Face Powders
Aroma cosmetics
This is companys second largest product segment in terms of sales & revenues. It
contains variety of perfumes & perfumed talcs including,
Festival Brand
Bouquet Brand
Gardenia Brand
Shadow Brand
Delycia Feelings Brand
Delycia Dream Brand
Delycia Beauty Brand
Medora Joy
Medora Season
Medora Passion
Medora Cherish
Medora Pleasure
Medora
Medora
Medora
Medora
Medora
Medora
Medora
Egg Shampoo
Herbal Shampoo
Clarifying Shampoo
Vanishing Cream
Lemon Moisturizing Cream
Herbal Moisturizing Cream
Honey Lotion.
Mens Care:
It has products specifically tailored for men and includes,
Diplomat
Diplomat
Diplomat
Elegance
With an estimated market size of Rs. 200 million a year and an estimated growth
rate of 15% every year, this industry in Pakistan is experiencing tremendous
growth. Further, the distinction between cosmetics for beauty and cosmetics
healthy
lifestyle
is turning
into a
lot
of dominant
with
a larger proportion of customers falling in line with the new trend. A lot of players
have additionally entered
into
this space.
ones, native players also are testing the grounds with their international brands.
Another issue propelling the expansion of cosmetics, particularly in Pakistan, is that
the changing
lifestyle
of various individuals
from
economy
to
premium
product.
Market share movements indicate that company like UniLever Pakistan Ltd and P&G
Pakistan Ltd, with domination in their key classes, have improved their market
shares and outperformed peers within the FMCGs cosmetics and toiletries sector.
This
has
significantly been
aided
by the
employment of
data technology
to
&
Distribution
administrative prices,
guarantees the
communication prices,
reduction
lesser
in
storage prices,
wastage
and
lesser
transportation price due to higher route designing. It enhances the revenue due
to higher selling designing, demand volatility management, responsive product
development. The individuals productivity is additionally enhanced due to effective
use of sales knowledge, improved communication flows and PC assisted ordering.
Considering of these blessings, it's prefer to be a natural candidate to be utilized
in warehousing and distribution.
Medora
of
London,
as a
corporation,
to respectable
cosmetics products and this changing shopper mind-set indicates that its poised to
grow at a comparatively higher rate in Pakistan with its massive product portfolio.
To be able to exploit this chance, the warehousing and distribution network ought
to be capable enough to handle the increased masses with reduced logistics price.
Information technology is
the answer
to needed potency in
Warehousing
&
LITERATURE REVIEW:
Primary Objective
One
of the
first objectives
at
is to
connecting
know the
all
the
Distribution
distributors
and
center
automation
warehouses
on a
companies
and
supply
recommendations
to
confirm
successful
The manufacturing for cosmetics is done in production plant. After that the finished
merchandise are transported to Carry and Forward Agents (CFA) who further
deliver it to the distributors and super distributors. The warehousing of finished
goods is done at CFA for direct distributors only, whereas, company owned super
distributors have their own warehousing setup.
Super Distributors Warehouse locations:
1. Karachi (two locations)
2. Peshawar
3. Quetta
4. Multan
5. Lahore.
Primary Sales
The requirement for smart delivery comes from the distributor who sends out a
mail
to
the
CFA primarily
based on this
inventory
levels and
therefore
Secondary Sales
DVSM (Salesman) sometimes goes to a collection of outlets in a day (called a Beat)
and records the inventory levels in the slightest degree the retailers in that beat.
Then he notes the requirement for new stock based on the average turnover and
retailers suggestion for each retailer that he additional notifies the distributor. The
bills are created at the distributor end and therefore the delivery is either done
Institute of Business Management- Storage & Warehouse Term Report Summer
2012
Page 15 of 27
on same day or the next one. Currently most of the distributors use one or the
opposite proprietary software to record all the invoices, stock keeping, payment
settlement et cetera. In majority of the cases, its the DVSM who truly operates the
system to
make invoices and prints outline beside alternative reports needed for
the delivery.
outlets.
totally integrated
Tracking
Sales
secondary
Tracking
System
helps
you to
grasp that section, region, and products mix have high and low demands.
Formulating and evaluating warehousing & distribution strategies Recognize the distribution channel's performance and strategize ensuing
distribution & warehousing cycles accordingly.
Implementation Process
Initial
Site Readiness check
Institute of
Business of
ManagementInstallation
the softwareStorage & Warehouse Term Report Summer
2012
Page 17 of 27
Initializing
the system
with training
opening to
inventory
Providing
sufficient
the distributor
Loading the masters
Item,
Customer
etc.
and other
dealer
specific
details
like
Userto ensure usage of the system
Possible Solution
These personnel should be trained properly in the ways of how they are
supposed to interact with the distributors as well as well-versed with the
software to be able to respond to their queries.
Possible Solution
Once all distributors & CNF get integrated with the organization, computer
readable Batch numbers & PKD are required to be pasted on the products
when
they
are
leaving
manufacturing
site
to
CNF.
Radio-frequency
identification (RFID) or bar coded labels can be used for this purpose.
Institute of Business Management- Storage & Warehouse Term Report Summer
2012
Page 19 of 27
BENCHMARKING:
A benchmark is typically a quantitative assessment of some aspect of performance
of an enterprise. Benchmarking is the process of gathering and sharing those
assessments and developing an improvement plan of action based on the
assessment.
The three perspectives of benchmarking are internal, external and competitive.
Here we are doing Internal benchmarking which looks at firms conducting
business in the same company/group. For internal benchmarking Kohinoor
Soap & Detergents (Pvt.) Ltd has been decided which already go through the
same procedure of automation.
Current
Performance
CurrentResource
Requirement
Benchmark
Performance
BenchmarkResource
Requirement
ResourceSaving
Rate
Shipping
Accuracy
Storage
Density
Warehouse
Order-Cycle
Time
Inventory
Accuracy
Annual Volume
Dock-toStockTime
Productivity
WAREHOUSEFINANCIALOPPORTUNITIESASSESSMENT
3,000
40,000
8,000
lines / year
SKUs
60,000
PKR100,000,000.00 PKR100,000,000.00
lines/PH
50
24
75%
99.60%
2.5
lines/PH
hours
hours
%locations
%lines
SF/SKU
15,000
750
160
20,000
person-hours
locations
lines / year
SF
24
12
95%
99.95%
1.4
lines/PH
hours
hours
%locations
%lines
SF/SKU
7,500
150
20
11,200
person-hours
locations
lines / year
SF
7,500
26
12
600
140
8,800
person-hours
hours
hours
locations
lines / year
SF
PKR60.00
0.10%
0.10%
PKR200.00 PKR3,000.00
PKR450.00
PKR/ hr
%/ day
%/ day
PKRlocation
PKR/ SF *Yr
Annual Savings
PKR450,000.00 PKR100,000.00
Total Savings
(PKR/ year)
PKR5,100,000.00
PKR/ line
Possible Solution
Bar-Code Scanning: With the bar-code scanning system, the paper document
directs the employee to the reserve position. At the reserve position, the
employee scans the unit-load reserve position, transfers the unit load to the
pick position and scans the pick position label. The scanned information is
entered on line or delayed in the host computer to update the on-hand
inventory.
Disadvantages:
Disadvantages are investment and employee training.
Advantages:
Advantages are that it handles a high volume, provides an accurate record,
provides an accurate transfer of data, is online and handles a large number of
SKUs.
Possible Solution
Bar-Code Scanning Count: The bar-code scanning count is similar to the manual
count method, but an employee uses a hand-held bar-code scanning device to scan
bar-code labels on the product and storage-pick positions. In a unit load
warehouse, the employee scans the unit load and rack position. This represents an
exact inventory count by warehouse location.
When all required scans are made, the information is entered into the computer.
The entry updates the on-hand inventory level by the reserve and pick position
counts in the warehouse.
BULLWHIP EFFECT
across
the
supply
chain
distorts
Profitability
Possible Solution
Implementation of ERP in downstream supply chain helps a lot in
improvement in accuracy in demand forecast, thus reduces overall cost of
holding inventory at warehouse.
CHANGE MANAGEMENT
Possible Solution
Distributors have to be convinced that the system just does not sit to benefit the
company, rather theres something in it for the distributors as well. Increased
ROI with reduced stock outs, and better managed inventory should be
something that can be highlighted here.
If selling supply chain systems is difficult on the outside, it isn't much easier inside.
Sales people are accustomed to dealing with phone calls, faxes and hunches
scrawled on paper, and will most likely want to keep it that way. If we our sales
people cant see the benefits that it has for them and using the software will be
worth their time, they will easily find ways to work around it. Also they wont have
the conviction to convince the distributors to use the system.
DBA Manufacturing is matured software with most of the features at par with
the other software which is available in the market.
User friendliness of the software will go a long way in driving the usage
among the warehouse managing personnel.
WEAKNESSES
OPPORTUNITIES
Use of ERP software at downstream supply chain will give company accurate
information about the tertiary sales which can be used for market research
understanding consumer behavior
Sales forecast module can be used for better demand planning for the
company which helps in improving warehousing of finished goods which
ultimately reduce holding cost.
Automatic data upload eliminates the need for manual data retrieval saving
time for other activities
Real time sales data facilitates intervention at the right time for declining
sales
THREATS
Lack of exposure to the ERP software among the distributors might require
addition efforts in the future to get the necessary support.
RECOMMENDATIONS:
We need to make sure that distributors trust the system and the
processes behind it. One thing which is most important behind successful
implementation is the involvement of the channel partners and the
critical role of top management in ensuring that.
Implement ISO 28000 for security management system for the supply
chain.
REFERENCES
http://www.erp.asia/scm-implementation.asp
http://www.medora.com.pk/
http://en.oboulo.com/information+technology+as+an+enabler+of+sales+an
d+distribution/
http://www.dbamanufacturing.com/contact/
http://fmcg-marketing.blogspot.com/2007/12/maricos-distributionnetwork.html
http://howtogetfasteratrunning.com/botree-software-international-bagsorder-from-nestle-globe/
http://eng.hi138.com/?
i261762_Distributor_of_FMCG_industry_how_to_make_money
http://books.google.co.in/books?
id=orimz5E6IO4C&pg=PA88&lpg=PA88&dq=marico+
+MidAs&source=bl&ots=-tl9DR4Ksa&sig=VexQsXyiHT0sChGAfHghxBm2xM&hl=en&ei=9wPJTf3mIJStgfjrayECA&sa=X&oi=book_result&ct=result&resnum=9&ved=0CFcQ6AEwCA
#v=onepage&q=marico&f=false
http://www.itcinfotech.com/CPG/mobility-application-service.aspx
http://www.slideshare.net/WayneGoodrich/how-automation-can-help-fmcgsales-managers