Your SlideShare is downloading. ×
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Supply chain management of Milk industry
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Supply chain management of Milk industry

6,010

Published on

Published in: Business, Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
6,010
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
237
Comments
0
Likes
2
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Supply Chain Management Fall Semester Customer is an integral part of the supply chain Includes movement of products from suppliers to manufacturers to distributors and information, funds, and products in both directions. Typical supply chain stages: customers, retailers, distributors, manufacturers, suppliers All stages may not be present in all supply chains Final Project
  • 2. The Institute of Management and Sciences Lahore Cantt Supply Chain Management : Submitted to : Mr. Sarfraz Rashid : Submitted by: Muhammad Fahad Ali Mirza (121103) Muhammad Shakeel (121104) Ahsan Naseem ( ) Muhammad Usman (092306) 1
  • 3. Dedication First of all many thanks to ALLAH almighty, who blessed us with a lot of skills and abilities. Through which we are able to complete our research with in time. We would also like to thank Sir. Sarfraz Rashid whose way of teaching, method, guidance support us to do this task effectively and efficiently. And we would like to dedicate this Final Report to the Companies through which we are able to complete it. The blessing, help and guidance given by him time to time shall carry us a long way in the journey of life on which we all about to embark. 2
  • 4. Table of Contents Objectives of Study ....................................................................................................................... 4 Benefits of Study ........................................................................................................................... 4 Nestlé Pakistan .............................................................................................................................. 5 Engro Food Limits ........................................................................................................................ 6 Haleeb Foods ................................................................................................................................. 7 Milk Industry of Pakistan ............................................................................................................ 9 Industry Market Share ............................................................................................................... 10 Milk from Rural to Tetra Pack.................................................................................................. 11 Partnership with Suppliers ........................................................................................................ 11 Small Village Diaries ............................................................................................................... 12 Parameters for the Supply Chain Management ...................................................................... 12 Logistics: .................................................................................................................................. 12 Distribution Network .............................................................................................................. 13 Warehouse facilities ................................................................................................................ 16 Inventory Management........................................................................................................... 17 Milk Processing of Nestle, Olper’s & Haleeb ....................................................................... 18 Milk Collection System of Nestle, Olper’s & Haleeb ........................................................... 19 Customer Relation Management: .......................................................................................... 19 Product Visibility: ................................................................................................................... 22 Cost Comparison:.................................................................................................................... 23 Comparison of Nestle, Olper’s & Haleeb: ................................................................................ 24 Recommendations: ...................................................................................................................... 24 References:................................................................................................................................... 25 3
  • 5. Objectives of Study To maximize the overall revenue of firm. Build branded food business to improve quality of life by offering tasty, sage, hygienically processed, affordable, highly nutritional food products through environment friendly processes to our customers while maximizing stake holders' value. Supply chain profitability is the total profit to be shared across all supply chain stages. The main objectives of Supply chain management are to improve the overall organization performance and customer satisfaction by improving product or service delivery to consumer. Optimizing the decision to source internally from the external supply chain. Delivering controlled and predictable supply outcomes. Aligning sub-contracts and processes with customer requirements. Reducing the cost base, controlling quality, improving operational efficiency and protecting the commercial position of the company. Benefits of Study Balancing Supply & Demand and becoming able to forecast future Demand and Supply. Improving our supply chain decision making. Practical Learning through Project work. Exposure to different companies in there supply chain polices. Enhancing Decision making skills through practical visit in the company. Becoming able to differentiate and selecting the best available supply chain process. Learning the balance between cost and revenue through Supply Chain. Marking the difference between the procurement and inventory management. Learned the supply chain profit is the total net profit. Company Profit margins are linked with the Supply Chain. 4
  • 6. Introduction Nestlé Pakistan Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartered in Vevey, Switzerland. It is a food processing company, registered on the Karachi and Lahore stock exchanges and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took over management in 1992. For ten years in a row, the company has won a place among the top 25 companies of the Karachi Stock Exchange. Headquartered in Lahore, the Company operates four production facilities. Two of its factories in Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad and one in Karachi produce bottled water. Through its effective marketing and a vast sales and distribution network throughout the country, it ensures that its products are made available to consumers whenever, wherever and however. Nestlé Pakistan operates in many ways but people, products and brands are the main flag bearers of the Company’s image, and we continue to enhance the quality of life of people. Nestlé Pakistan now operates the biggest milk collection operation in Pakistan, Currently; Nestlé Pakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq. Km's in the province of Punjab and Sindh. Nestlé believes in creating shared value and is committed to the communities it works and lives with. In Pakistan, the company is working closely with the communities in areas related to Nutrition, Water and Rural Development, and continues to enhance the quality of life of people throughout its value chain. Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Ever since 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today more and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their health and quality of life. The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line with internationally accepted best practices and ethical performance culture. Nestlé’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant products to people, wherever they 5
  • 7. are, whatever their needs are, and for all age groups. In line with Nestlé’s global philosophy, Nestlé Pakistan is proud of its commitment to excellence in product safety and quality and to providing value and aims to be the leading Nutrition, Health and Wellness Company. As a socially responsible corporate, we always focus on environment friendly operations, ethical business practices and our responsibility towards the communities. Vision Nestlé’s global vision is to be the recognized leading Nutrition, Health and Wellness Company. Nestlé Pakistan subscribes fully to this vision of being the number one Nutrition, Health, and Wellness Company in Pakistan. In particular, we envision to; Lead a dynamic, passionate and professional workforce – proud of our heritage and positive about the future. Meet the nutrition needs of consumers of all ages – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality. Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic, and environmental sectors of Pakistan. Mission To positively enhance the quality of life of the people of Pakistan by all that we do through our people, our brands and products and our CSV activities. Ambition To be the leading Nutrition, Health and Wellness Company in Pakistan. Engro Food Limits Engro Foods Limited was officially launched as a fully owned subsidiary of Engro in 2004. Using dairy as a stepping stone to enter into the food business, the Company has established state-of-the-art processing units in Sukkur and Sahiwal, along with an ice cream production facility in Sahiwal. Top quality brands like Olper’s, Olwell, Tarang, Omore and Owsum have been successfully launched under the helm of Company’s dairy products. To support these brands and their highest standards of quality, Engro Foods has invested heavily in milk processing and milk collection infrastructure. 6
  • 8. With an acquisition of Al Safa – a fast growing and established Halal meat brand – Engro Foods is now venturing into North American market starting from Halal Foods category. The new organization, Engro Foods Canada Ltd. with a subsidiary Engro Foods USA, LLC, intends to aggressively grow the business in this market. With the vision of Elevating Consumer Delight Worldwide, Company’s significant focus will be towards the global operations in the years to come. Vision Aim at transforming the company within five years into first national food industry gaint, then into regional force and finally into global force. Mission Build branded food business to improve quality of life by offering tasty, affordable and high nutritional products to our customers while maximizing stakeholder’s value. Ambition Engro Foods main objective is to supply everyone there favourite Olper’s Milk & to satisfy the consumer needs and wants. Engrofoods second objective is to increase the value for the stakeholders and compnay value. We want to be major player in the food industry. Haleeb Foods Haleeb Foods Ltd. was incorporated on July 1st, 1984 with a capital of Rs. 46 Million under the name of Chaudhry Dairies Limited which was renamed as CDL Foods Limited and now it is known to be as Haleeb Foods Limited. At that time it had the capacity of producing 80,000 / liters of milk per day having total area of 32 acres. Initially 150 people were employed at the plant. The production process started with UHT liquid milk. The liquid milk was the first product launched in the market, it started its operation in 1985 at that time 20 other dairy plants were also coming in, and all those including MILKPAK were using obsolete technology that was used in EUROPE. Haleeb Plant was the only plant based on the latest technology and the basic idea behind that were particularly dairy foods products. Haleeb is one brand that is toady known everywhere. From November 1989 till December 1991 Haleeb had a joint venture with fries land Frico Domo of Netherlands. This joint was amicably dissolved on account of FFD's change in management in their global strategy. Today as an ISO 9002 certified company, Haleeb is the dominant market leader of UHT milk in Pakistan by capturing 52 % share. 7
  • 9. Franchise agreement with Canada, a market leader in the liquid milk market in France, was assigned in December 1998. Under this arrangement, the company launched Candia range of value added liquid milk product and also have access to latest production, technical and marketing knowhow. Initially company launched different products but some of them could not become successful. As the company's core concern is quality eventually company abandoned products that were not according to the market needs. In 2002 the company contributed 54% to the country's packed milk market. In order to provide best quality products to its consumers, HFL has a well-developed supply chain infrastructure. It has heavily invested in a vast network of company operated milk collection centers across the country. HFL has a strict and stringent quality policy regarding intake of raw milk. It is the only company that conducts 21 rigorous quality tests to ensure that only fresh milk of the highest quality is accepted at the plant premises. These internationally recognized tests are used to check for: a) adulteration, b) microbiological contamination and c) adequacy of nutritional contents. Further, Haleeb Foods is the only food company in Pakistan that has the following international certifications of quality and prestige: · HACCP (in process controls for safer products) · ISO 9001 – 2000 (better quality for greater customer satisfaction) · ISO 14001 (environment-friendly operations) Vision Most Innovative and fastest growing food company offering products enjoyed in "every home every day. Mission Build Branded food business to improve quality of life by offering tasty, affordable and highly nutritional products to our consumers while maximizing stake holders' value. Ambition Build branded food business to improve quality of life by offering tasty, sage, hygienically processed, affordable, highly nutritional food products through environment friendly processes to our customers while maximizing stake holders' value. 8
  • 10. Milk Industry of Pakistan Pakistan is the one of the biggest Milk producers in the world. Still Pakistan is not using any modern technology. With modern technology we can triple the production of the milk. 9
  • 11. Industry Market Share Pakistan is the Developing Country. Still there are people who live below the poverty line. But by making the Efforts Packed milk have made some mark in the society with the view of Social Responsiveness and effective advertisement. Milk Packed Fresh In total consumption of the milk the Fresh milk holds the 60% Share while Packed Milk holds the 40%. 10
  • 12. Milkfrom Rural to Tetra Pack Milk is obtained from the Different sources. After obtaining the milk from different sources it goes through the different processes to increase its shelf life and to make it Healthy and safe. Partnership with Suppliers In our efforts to provide pure, high quality milk to consumers in distant towns, Companies entered into an unprecedented partnership with local farmers. Today, Companies entered the milk district in force, the hard work and determination for milk collection & technical assistance teams and their dedication to Corporate Social Responsibility have raised the bar for dairy concerns in Pakistan. 11
  • 13. Small Village Diaries An agent runs the diary. It occupies a small room, either in the agent’s house or in a building that Company rents. The milk collected on average is two times 150 liters per day. The agent does a quick tasting test on the milk before recording the delivery in the farmer’s personal milk logbook. The dairy is open two or three hour’s morning or evening. The agent transports the milk to the secondary receptions and cooling station before closing. Parameters for the Supply Chain Management Logistics Warehouse Distribution network Product Visibility Customer Relation Management Milk Processing Milk Collection Cost Comparison Inventory Management Logistics: Nestle Inbound Logistics: Inbound logistics used for milk collection from different milk collection Centre is centrally owned by nestle Pakistan limited. In Pakistan, logistics has always had been a problem especially for sensitive product like milk in the hot weather. Initially the supplier who supplied there milk. Outbound logistics: Outbound logistics concerns finished milk movement from factory to different warehouses located in different cities. The logistics usually take 3 days to arrive at Nestlé’s warehouses in Karachi from their manufacturing factories at Lahore, Kabirwala and Sheikhupura Size 1 liter 200 ml 1.5 liter 500 ml No. of cartoons 1092 1815 1040 1750 12
  • 14. Olper’s Inbound Logistics: Long vehicles are generally used by the Olper’s for the collection of the milk situated at the various locations in the rural area. Due to the bad Traffic conditions it is sometimes difficult for the Company to maintain their level of the service. During summers weather is hot, so cooling is very important factor while getting the milk in the factory. Outbound Logistics: Company have 80% of the dedicated fleets for the distribution of the milk. And remaining 20% are especially open truck for the northern areas. Company also uses the Third party for the logistics purpose. Third party provides the specialized Transportation and warehousing facilities to the company. The below given Figures are of the 50 Feet truck. Size 1 Liter 250 ml 1.5 Liter 500 ml No. of Cartoons 939 1552 890 1497 Haleeb Inbound Logistics: Long Vehicles are used by Haleeb for the collection of the milk. Haleeb Milk has their own farms as well as the suppliers. Haleeb Milk takes majority of the Milk from the rural area of the Punjab. During summer they use the centralized cooling truck to transport the Milk from Farm to the Factory. Outbound Logistics: Haleeb Milk has hired the Third party for the Distribution of the milk. The third party provides the facility of warehouse and transportation. They have the minimum number of their own outbound facilities. Distribution Network Nestle There are many authorized distributors of milkpak. Company has its own network of vans, which deliver the milk to all the retail outlets early morning. Nestle uses the SAP software to make the response time effective and fast enough so that goods can be delivered. 13
  • 15. Channel Level: Manufacturer It is a two-level channel, milkpak has its own distributors which are supposed to deliver the milkpak to the wholesaler as well as the retailer,. Consumer Wholesaler &Retailer Distributor 1. Direct Channel : It includes the sales Promotions 2. Indirect Channel : It includes Retails outlets. Pakistani Consume 80% of the Milk from the Indirect Channel that is the Retail Channel. According to the distribution, Pakistan is divided into three geographical zones. North Zone Islamabad & North Outstations Jhelum Peshawar Central Zone Lahore Faisalabad Gujranwala Multan Sahiwal South Zone Karachi Hyderabad Quetta Sukher 14
  • 16. Mother Godown Carriage & Forward Agent Distributor Retailor Superstockist Wholesaller Redistributor Retailor End Customer 15
  • 17. Olper’s Olper’s have a vast range of the Distributors. They don’t have any major software for it. They uses simple excel sheet with the supplier to record the order and while dispatching the Milk they still use the same method. Olper’s have a Distribution network which is divided into three Geographical Zones. North Zone Rawalpindi & Islamabad and outstation areas Peshawar South Zone Karachi Hub Nawabshah Central Zone Lahore Gujranwala Multan Haleeb Haleeb have a wide range of the Distributors. Haleeb being the oldest company enjoys the luxury of being having the biggest Distribution channel. That’s the main reason why the Haleeb milk is accessible in all regions of Pakistan. Especially in the rural areas of the Pakistan. Haleeb Focus is more on the Rural and developing areas where the competition is prevailing. Warehouse facilities Olper’s Olper’s have three major warehouse located at different locations for the better response time and associability Rawalpindi: Rawalpindi is the Central warehouse of the company. It covers 30,000 sq.ft which is on the rental basis @600,000/- per months. It fulfills the requirement of the northern regions of the Pakistan. Sukhur: Adjacent to the manufacturing plant which covers whole of south i.e. Sindh and Baluchistan. The Sukhur Warehouse is placed adjacent to the factory and has a capacity of 1.6 million liter of milk and a daily average dispatch of 350,000 liters of milk. 16
  • 18. Sahiwal: This is known as the mother warehouse which is situated adjacent to the factory which covers the central area of the Pakistan. It has the capacity of 4 million liters of milk and average dispatch of daily 400,000 liter of Milk. Nestle Milk is very perishable item; therefore it is required very effective storage conditions at warehouses to preserve milk in its real condition. For this Nestle milkpak warehouses contains very suitable temperature atmosphere, temperature should not increase from 38 degree Celsius in order to keep preserve milk in its fresh condition. In Lahore distributor have four warehouse around the city in Fatehgarh, Islampura, Bedian, Muslim town. From the Fateh Garh warehouse they are covering four areas which are swami nagar, dharam pura, daroghawala, Shalimar. From Islam Pura warehouse they are covering 10 areas which are wall city, jail road, railway station, gari shahu, badami bagh, shadrah, amen park, islam pura, band road, gulshanravi.From their Bedian warehouse they are covering four areas which are DHA, Cantt, Walton, Bhatta chowk and mm alam. From the Muslim Town warehouse thy are coveing 12 areas which are faisal town, garden town, ferozepur road.firdous market, gulberg,, model town, ichra, iqbal town, green town . Nestle warehouse uses a proper system to record all the in and out of the products. Warehouse in charge is the person to record all the transactions. Nestle also have the Handling facilities in three different locations. Gujranwala Mureedky Sadoki Haleeb Haleeb is the One of the leading milk producers of the Pakistan. Haleeb warehouses are located adjusted to the factory. In BhaiPheru& Rahim Yar Khan. Haleeb supplies the milk from there to the whole country through the distribution Network. Inventory Management Milk is a perishable item. It can’t be stored for a longer period of time. Even after processing the milk to increase its Shelf Life up to Six months still the companies have adopted the FIFO (First In First Out) method. In this method the company supplies the product which is produced first is put in the market first. As the cost of inventory is very high companies tries to maintain the minimum required inventory to meet the customer expectations under the unusual 17
  • 19. circumstances.All the three companies Nestle, Olper’s and Haleeb use the FIFO system. Nestle have a safety inventory of Eight Days and Olper’s have the safety inventory of one week based upon the Centralized concept of Warehousing. Inventory also comes with the cost. More the Inventory level the cost will increase and profit margins will automatically Decrease. Milk Processing of Nestle, Olper’s & Haleeb Milk Reception The Milk Reception Unit receives milk and liquid milk products for a milk processing plant. The unit measures and pumps the product for buffering or further treatment Mixing Tetra performs in-line mixing for a wide range of powders and liquids for dairy applications such as reconstituted and recombined milk, yoghurt milk, flavored milk, evaporated milk, recombined concentrated milk, ice cream mix, chocolate slurries, and dairy cheese Heating & Cooling Heating and cooling are basic processes within dairy processing and take place in plate or tubular heat exchangers. Tetra Pak heat exchangers have high thermal efficiency for low energy consumption Standardization Automatic direct in-line standardization of milk and cream. Accurate control of fat, fat/solids and non-fat ratio gives better utilization and control of the production parameters Pasteurization Along with correct cooling, pasteurization is one of the most important processes in the treatment ofmilk. If carried out correctly, these processes will supply milk with longer shelf life. Temperature and pasteurization time is very important factors which must be specified precisely in relation to the quality of the milk and its shelf life requirements etc. The pasteurization temperature for homogenized, HTST pasteurized, regular-grade milk is usually 72-75 °C for 1520 seconds. 18
  • 20. Milk Collection System of Nestle, Olper’s & Haleeb Milk Collection system is basically involves 5 steps. Each step has an important part to play in the processing of the milk. Milk is a perishable product so its collection and processing is very important to increase its life and make its safe and healthy. Step 1 A small farmer in rural are district milks his buffalo twice a day and takes about4 liters to one of Village Milk Collection Centers. Step 2 At the Village Milk Collection Centre the farmer's milk is poured into aluminum churns. The agent checks the milk's freshness and purity, and enters the quantity into the farmer’s logbook. He takes it to one of Secondary Reception and Cooling Stations, about 2-4 kilometers away. Step 3 The Secondary Reception Station has a large electrically powered cooling tank. A milk inspector measures the fat content, the non-fat solids content, and the milk's acidity. Once satisfied, he takes the milk to one of Main Reception and Cooling Stations. Step 4 At the Main Reception and Cooling Stations the milk is poured into huge tanks and is thoroughly checked for quality. The milk is dispatched to the factories. Step 5 The milk is processed and packed into the familiar cartons you can find in your grocery store. It is checked for quality thrice before being released for sale. Some is processed into yoghurt, powdered milk, or other dairy products. Customer Relation Management: Customer relation management is the key to success to any organization. Many organizations fail due to the bad practices of the CRM. CRM plays the role of the organization development. If the customer is satisfied with the services of the company the Customer will be willing to purchase more often the product you are offering and the services. 19
  • 21. Nestle: Nestle have developed deep relations with the framer. Due to which there product market share is very High as compared to the other competitor in the milk industry. Transaction Processing System: In this segment Nestle Process the data resulting from the business transitions, updates the operational database and produces Business documents. Process Control System: Nestles uses PCS in the food Department. They use electronic sensors linked to the computers to continuous monitor food material processing and made instant adjustments. Enterprise Collaboration Systems: In this segment Nestle considering team work & workgroup collaboration within and outside the boundaries of the Organization.Like e-mail, chat, video conferencing group software. 20
  • 22. Olper’s: Olper’s believe in the Customer Relation Management more than any other Organization in the milk industry. Before they started the business of Milk, they started to build the relations with the farmers to provide the quality milk and services to the Engro Foods. Olper’s is the brand of Engro. Engro CRM is effective n efficient as compares to the competitors in the market. Haleeb Foods: Haleeb is the one of the oldest Milk producers in the Pakistan. Being the one of the oldest and longest it has deep relation with the customers but in term of facilitating the customers they have certain polices. Firstly they have their own farms so there relations with the Farmers are not as good as other companies believe in the Relations. Haleeb does not have any defined policy regarding the Customer Relation Management. 21
  • 23. Product Visibility: Nestle: Nestle have the highest Product visibility as compared to the other companies. That is because of its distribution network and decentralizing of the warehouse. Although it affects in the increase of the cost of Warehouse but the product is available in all the major area of the Country. Mostly Urban areas are covered by the Nestle. The Demand for Nestle is high in the urban area becauseit’s a Brand of Multi-National company. People living in the urban area are more aware of the technology and benefits and use of the Tetra Packed milk. Olper’s: Olper’s Milk is the brand of the Engro Foods. Engro is the one of the leading companies in the Pakistan. Olper’s milk has the Second highest market share after the Nestle Milk pack. It is the result of the smart allocation of the warehouses In the Pakistan. Olper’s have covered all the major regions of the country. Olper’s have the strength of making centralized warehouse facility in the Rawalpindi the cost Increases as the result but it results in the better strength and visibility. Mostly northern areas use tetra pack milk during winters because fresh milk is not the answer to the Northern Areas of the Pakistan. So Rawalpindi warehouse not only provides the facility the northern areas but also to the rest of the Pakistan. Haleeb: Haleeb is the one of the oldest companies in the Pakistan in the milk industry. Due to the bad polices of the Haleeb in the past it was white washed from the market and seen nowhere in the market except from the few areas. Haleeb bad polices result to the market share lose as well. But as the new companies have arrived and use the business well, Haleeb is now also staring to improve its product visibility due to the good polices and making of the proper system. Earlier it was known to be the Saith Company. But now it has been changed and the management has realized how to make profit and have a solid market share. Currently Haleeb has the strong hold in the rural areas as compared to the others. 22
  • 24. Cost Comparison: Nestle: Nestle being the biggest company operating in the Pakistan in the Milk Industry do also have the cost advantage. In Milk industry Milk is not the only product produced. There are also many by products produces from that milk and during the processing of the milk. Cost is also affected by the by products produced by the Company. Most importantly Nestle have decentralized Warehouse system so the cost of warehouse and transportation increases. The best advantage that Nestle gets is that there customers are quite satisfied and permanent. And generally they achieve the economies of the scale In production and reduces the cost of the processing and milk production. Olper’s: Olper’s have the centralized system and distributors. Distributors have to collect the Milk from the warehouses and distribute the milk. For this Olper’s have established the simple excel sheet as compared to the nestle who have the proper system installed in there handling & facilities site. Today the 21st century is all about the use of the resources to the maximum level. Olper’s centralized system has the cost but it results in the but product. Olper’s milk by product is high in the market. Many firms buy those buy product from them. And the customers are mostly satisfied with the services of the Company. Haleeb: Haleeb previously was conscious about the milk cost and don’t realize the effect of the by products produced from the Milk and thus they failed to have the impact in the market. But know they have realized the importance of it and working on it. Now they are paying good amount for the Milk and producing by products as well and reducing the cost factor. Haleeb have a major impact in cost due to the personal farms as well. They have their own farms as well. It is the biggest and best advantage in regards to the cost and other economic and social factors faced by the other companies. 23
  • 25. Comparison of Nestle, Olper’s & Haleeb: Parameter Olper’s Nestle Haleeb Logistics Low high High Warehouses High Low Low Dual Channel. Direct & Indirect High Divides into three Geographical Area High Biggest Distribution Network Low High High Low By Products Low as effect of own farms Same Distribution Network Customer Relation Management Product Visibility Milk Collection Same By Products affects the Cost Same Milk Processing Same Same Same Inventory Management FIFO FIFO FIFO Cost Comparison Recommendations: Following are the recommendations: Maximum utilization of the Resources. Technological factors. By Products also add value to Supply Chain surplus. Suppliers should be Reliable and should provide quality product. Flexibility should be there. Market Worth should be strong in terms of Farms or Milk providers. Transportation cost should be nominal. Quality should be the first Priority. Packaging must be according to the standards & reliable. Proper veterinary doctors should be hired for the better productivity. Proper Examination of the system according to the international standards. Milk processing and collection should be according to the health and safety standards (OSHA). 24
  • 26. References: Following references were used in the developing of this document: 1. engro.foods.com 2. papercomp.com 3. kninn.blogspot.com/2012/02/nestle-in-pakistan 4. slideshare.com 5. nestle.org.com 6. nestle.pk 7. exportpakistan.blogspot.com 8. studymore.com/essays/nestle 9. 25

×