Supply Chain Management
Sir Sarfraz Rashid
• Muhammad Fahad Ali Mirza (121103)
• Muhammad Shakeel
• Ahsan Naseem
• Muhammad Usman
Objectives of the Study
• Delivering controlled and predictable supply outcomes.
• Optimizing the decision to source internally from the
external supply chain.
• To maximize the overall revenue of firm.
• Reducing the cost base, controlling quality, improving
operational efficiency and protecting the commercial
position of the company.
• Aligning sub-contracts and processes with customer
• Delivering controlled and predictable supply outcomes.
Benefits of the 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
• Becoming able to differentiate and selecting the best available supply
• Learning the balance between cost and revenue through Supply Chain.
• Marking the difference between the procurement and inventory
• Learned the supply chain profit is the total net profit.
• Company Profit margins are linked with the Supply Chain.
Nestle is the largest food and beverage company
in the world with operations in 130 countries. It
has 6,000 brands, with a wide range of products
including dairy products, coffee, bottled water,
beverages, chocolate, ice cream, infant foods,
performance and healthcare nutrition, culinary,
frozen and refrigerated foods, confectionery and
The company was launched in 2004 under the Banner
of Engro, the Company has established state-of-the-art
processing units in Sukkur and 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.
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
Partnership with Milk Suppliers
Partnership with local Suppliers
Milk Collection & Technical Assistance Teams
Corporate Social Responsibility
Milk Collection on a average of Two times in a
• Quick test before transporting the Milk
Logistics of Nestle
• Inbound logistics:
Inbound logistics used for milk collection from
different milk collection Centers.
• Outbound logistics:
Movement of Milk from factory to Different
No. of cartoons
Logistics of Olper’s
• Inbound logistics
Vehicles are generally used by the Olper’s for
the collection of the milk
• Outbound logistics
80% Dedicated for Distribution & 20% are
especially designed for Northern Areas. 3rd
party is also used for logistics
No. of Cartoons
Logistics of Haleeb
• Inbound Logistics
Long vehicles are used for Milk Collection.
Haleeb has its own Farms & centralized
cooling truck are used for transportation
• Outbound Logistics
Mostly uses 3rd party for transportation &
warehouse facilities. They have very few or
limited Outbound logistics
Distribution Network of Nestle
• Divided into Two channels
Direct Channel (Sales Promotions)
Indirect Channel (Retail Outlet 80%
consumption is from Retail outlets)
• Divided into Three Geographical Area
Northern Zone (Islamabad, Peshawar & Jhelum)
Central Zone (Lahore, Faisalabad, Multan, Gujranwala & Sahiwal)
South Zone (Karachi, Hyderabad, Sukhur & Quetta)
Distribution Network of Olper’s
• Divided into Three Geographical Areas
North Zone(Rawalpindi, Peshawar &
Central Zone (Lahore, Gujranwala & Multan)
South Zone (Karachi, HUB & Nawabshah)
Distribution Network of Haleeb
• Wide Range of Distributors (150+)
• Oldest Company with Highest Number of
• Focus on Rural Areas
Warehouses of Nestle
• Three Major facilities
• Nestles uses Decentralized warehouse system
& developed small warehouse facilities in ever
location where the product is available
Warehouses of Olper’s
• Olper’s have Three Warehouse facilities in
Rawalpindi (Central warehouse )
Sukhur (1.6 million liter capacity & Average
daily dispatch of 350,000 liter milk)
Sahiwal (4 million liter capacity & Average
daily dispatch of 400,000 liter milk)
Warehouse of Haleeb
• Warehouses are located Adjusted to the
Rahim Yar Khan
Every Company keeps some amount of
Inventory with themselves to overcome any
unexpected increase in Demand or in any other
All three companies Nestle, Olper’s & Haleeb
uses FIFO (First in First out) system
Milk Collection System of Nestle,
Olper’s & Haleeb
• Step 1
Farmer Milks the animals twice a day
• Step 2
Transferred to Reception station in area in Aluminum
• Step 3
Initial Testing of the Milk
• Step 4
Poured into the Tanks & checked for the Quality
• Step 5
Transferred to the factories & Processed into
Yogurt, Powder Milk & other Dairy Products
Customer Relation Management of
• No defined Customer Relation Management
• Varies person to the person
• Not to good relations with the farmers
• Currently developing the CRM policy
High visibility mostly in urban area because of
Decentralized Warehouses and vast
Brand of Engro Food which is one of the
leading Company in Pakistan. Fair amount of
visibility because of Centralized system
Low visibility in urban area but high product
visibility in rural areas. Old Distribution system
and links. High amount of Distribution
network in Rural Areas.
Cost Comparison of Nestle, Olper’s &
In cost comparison no thing is defined. All the
three companies are inquiring same amount of
cost with respect to there system. Cost is also
affected by the systems used. If one company is
inquiring nominal cost in warehouse then the
distribution cost will be high & vice versa
Comparison of Nestle, Olper’s &
Dual Channel. Direct
Divides into three
By Products affects
Low as effect of own
Maximum utilization of the Resources.
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
• Milk processing and collection should be according to the health and
safety standards (OSHA).