Supply Chain Management Of A lather SHOE MANUFACTURING FIRM,Its a new idea and plan for those who are going to start a business .This ppt can applicable for every business. Because every business needs a good supply chain...
SHOE MANUFACTURING FIRM
Ajay K. Sivan (22002)
A. Mary Spandana (22003)
K J Deepak (22010)
G. Mrudula (22012)
Niranjan Nahak (22021)
Y. Naveen- M8-07
FACTS FROM OUR SURVEY
Hyderabad is the Diabetic capital with 16.6% of the population suffering from
it in India.
Followed by 11.7% in Kolkata, 11.6% in Delhi and 9.3% in Mumbai.
Total population of Hyderabad is approximately 8 million with 16.6% diabetic
80,00,000* 16.6%= 13,28,000
Total no. of areas in Hyderabad =50( estimated)
Therefore per area population is 26,560.
DEMAND AND TARGET MARKET
Our shoe is especially for those people who are suffering from Diabetics.
Age group emerging from 40.
5.5% of the people living per area in Hyderabad are affected with Diabetics.
Therefore they are our target customers.
Many patients don’t have much awareness about the care to be taken while
they are affected with Diabetics.
Demand for such type of products are quite more in urban areas.
Our shoes target all the retired people, suitable for corporate peoples and
working men and women.
OUR PRODUCT FEATURES
Our shoes are very light in weight and easy to wash.
It can be wore anywhere in the home and outside and are of good
They are especially designed and produced for the patients suffering
They are durable and reliable and no fear of any cut or damages.
Provision for Air flow and sweat absorbing soles adds value to our
They are reasonable in cost and available in different colours, designs
and sizes for both men and women.
To take an active role in defining the future of materials, our innovation agenda
focuses on four areas:
•What materials we use – including new choices for recycled and recyclable
•Better processes – employing new ways of processing with less energy, water,
chemicals or waste
•Better choices – creating and applying indexes, restricted substance lists, policies
and better ways of operating, and sharing them with vendors and suppliers
•Bringing choices to scale – increasing the scale and availability of new material
choices, including sharing intellectual property and enabling recycling of materials
SUPPLIERS AND DISTRIBUTORS
1. Leather- RK Leather suppliers 1.Rose Footware- Kompally
2. Color threads- Sagar Colors 2. Sai Shoes- Uppal
3. Bolts, Buckles,soles & 3. K N Distributors-Secunderabad
Designer stationary- Local markets
Short term, reacts to market
Little sharing of information on both sides
Total cost of ownership
Cross-functional teams and top management
Both supplier and buyer share short and long term
Share risk and opportunity
The objectives for the first three years of operation include:
• To create a product-based retail store whose primary goal is to exceed
• To increase the number of clients served by 20% per year by serving an
unmet need with outstanding selection and customer service.
• To develop a start-up business, surviving off of its own cash flow.
Layout is the physical arrangement of production machines and equipment,
workstations, people, location of materials, and all kinds and stages of
material handling equipment.
The need for change in layout arises from such factors as product design,
methods, materials and process changes.
PRODUCT DESIGNING PROCESS
Step 1: The Design Process
• Establish target price, target audience and product features
• Produce "tech package" to send to subcontractors in factories
Step 2: Raw Material Supplies
Step 3: Manufacturing
Sewing (of upper section above the sole)
Stock fitting (prepares the sole)
Lasting (prepares attachment of upper to the sole)
Heeling (attaches and shapes heel bottom to final form)
Treeing (attaches accessories)
After the manufacturing process, the shoe is then shipped to
distribution and trading companies where it is then distributed to
retailers and sold to consumers.
PRODUCT MARKET SHARE DEMAND
Our objective is to manufacture formal shoes and informal shoes using leather and
synthetic and rubber leather.
The market share we estimated is of 2-3% as we are new entries and there are many
competitors to us in Andhra Pradesh.
This estimation was done by calculating the total demand for shoes as there are about
40% of elderly people in our state.
Demand for the shoes will be more in the market because there are less of this kind of
specialty shoes which serve as a purpose.
Our shoes target all the retired people, suitable for corporate peoples and working
men and women.
• Recognition of need
• Requisition approval
• Placement of the purchase
• Follow-up and expediting
• Receipt and approval of
ECONOMY MARKET (199-559)
SPORTS MARKET (555-2555)
PREMIUM LEATHER (2999-4999)
Our shoes will scale from the range of Rs.199 onwards to Rs.4999
Direct materials 4000000
Direct labour 90000
Repairs and maintenance 50000
Factory Overhead 105000
FACTORY COST 4320000
Administrative Overhead 310000
Sales cost 25000
Distribution Cost 320000
PRODUCTION COST/ TOTAL COST 4975000
ESTIMATED SALES 7000000
NET PROFIT 2025000
Estimated Cost Sheet
Leather shoes and ladies sandals are products with leather upper and PVC
soles used as a walking shoe.
Such conventional design shoes have cement lasted leather uppers and
cemented on sole units that do not require finishing once assembled.
It is usually consumed by persons of average , higher income.
Name of the machine No/ amount
• Over lock machine 1
• Stitching machine 6
• Iron regular 1
• Cutters 7
• Scissors 7
• Factory tables 7
• Scale 5
• Inch tape 5
• Water cooler 5
• Show case 1
RAW MATERIALS REQUIRED
Adhesives and bonding
Shoe and leather coloring
Randing and welting
Soles and heals
Screws, rivets and stems
Cords and threads
Finishing ink and Waxes
Working hours: 8 hours
Job /Position No.of Employees
Cutting Master 2
Packing master 1
Fusion master 1
Skilled Stitcher 5
Capacity: 1000 pairs of shoes in a month
King Koti Dilsukhnagar
Reasons for choosing plant and warehouse
Secunderabad is a well known area and many government institutions are located.
Kompally, Nampally, Mehdipatnam covers all the directions of Hyderabad and big shopping
malls and more residents are located.
Transportation will be easier for us if our main central location of warehouse
is King Koti. Because both the road and rail and airways from Koti becomes
closer and not much too time taking.
The goal for our business is to minimize transportation costs while also
meeting demand for products.
The raw materials from the suppliers also gets easily transported without not
much cost and therefore the location is proved cost efficient.
The essential of supply chain is collaboration
We have the following processes for our reverse logistics:
1)Damage: If any shoe material get damaged we get that back to the plant and
we re-stich it and again float it out.
2)Recycling: If the material get damaged or is of out of fashion we get it back and
we recycle them for future use or for future fashion.
3)Recall: If any un-satisfaction from customers are note through RFID used. We
would recall that material and solve the problem according to the customer
CHOOSING THE RIGHT RELATIONSHIPS
Reducing dependence on
these items through
diversification of suppliers and
Using strength carefully to
draw suppliers into a
relationship that ensures
supply in the long term
Not jointly developed; Unbranded; Do
not affect performance and safety.
Reducing prices and pushing for
The biggest management challenge in the new millennium of
liberalization and globalization for a business is to serve and maintain
good relationship with The King – The Customer.
The main customers of the companies in the leather industry are the
The product in the leather industry is complex and quality is an
The CRM is a new technique in marketing where the marketer tries to
develop long term relationship with the customers to develop them as
life time customers.
CRM POLICIES – Stylone
Differentiating your customers.
Different people use different styles of shoes and we understand their
requirements for a healthy living.
Interacting with the customer.
RFID technology is the basis through which we can keep in touch with the
Just In Time in Stylone
• Just in time is a ‘pull’ system of production, so actual orders provide a signal for when a
product should be manufactured.
• Demand-pull enables a firm to produce only what is required, in the correct quantity and at
the correct time.
• This means that stock levels of raw materials, components, work in progress and finished
goods can be kept to a minimum.
• This requires a carefully planned scheduling and flow of resources through the production
• Information is exchanged with suppliers and customers through EDI (Electronic Data
Interchange) to help ensure that every detail is correct.
APPLICABILITY OF CPFR IN STYLONE
Retail Link had emerged into an Internet-enabled in Stylone SCM system
whose functions were not confined to inventory management alone, but
also covered collaborative planning, forecasting and replenishment (CPFR).
In CPFR, stylone worked together with its key suppliers on a real-time basis
by using the Internet to jointly determine product-wise demand forecast.
Though CPFR was a promising supply chain initiative aimed at a mutually
beneficial collaboration between STYLONE and its suppliers.
CPFR BENEFITS: STYLONE
1. Enhanced Relationship
Implicitly, CPFR strengthens an existing relationship and substantially accelerates
the growth of a new one.
Buyer and seller work hand-in-hand from inception through fruition on business
plan, base, and promotional forecasts.
Continual CPFR meetings strengthen this relationship.
2. Greater Sales
The close collaboration needed for CPFR implementation drives the planning for
an improved business plan between buyer and seller.
The strategic business advantage directly translates to increased category sales.
3. Category Management
Before beginning CPFR, both parties inspect shelf positioning and exposure for
targeted SKUs to ensure adequate days of supply, and proper exposure to the
This scrutiny will result in improved shelf positioning and facings through sound
4. Improved Product Offering
Before CPFR implementation, the buyer and seller collaborate on a mutual
product scheme that includes SKU evaluation and additional product
CPFR BENEFITS: STYLONE SUPPLY
1. Improved Order Forecast Accuracy
CPFR enables a time-phased order forecast that provides additional information,
greater lead time for production planning, and improved forecast accuracy vs. either
stand-alone VMI/CRP or other industry tools.
2. Inventory Reductions
CPFR helps reduce forecast uncertainty and process inefficiencies.
How much inventory does your company hold to “cover up” for forecasting errors or a
trading partner’s inability to have the product available in a timely manner?
With CPFR, product can be produced to actual order instead of storing inventory
based on forecast.
3. Increased Customer Satisfaction
With fewer out-of-stocks resulting from better planning information, higher store
service levels will prevail, offering greater consumer satisfaction.
IT APPLICABILITY IN STYLONE
Information is the driver that serves as the “glue” to create a coordinated supply chain
Information must have the following characteristics to be useful:
Accessible in a timely manner
Information must be of the right kind
Information provides the basis for supply chain management decisions
Provide better customer service
Make call centers more efficient
Cross sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers
Increase customer revenues
SRM focuses on keeping suppliers satisfied by evaluating and categorizing suppliers
for different projects, which optimizes supplier selection.
AAA SUPPLY CHAIN IN STYLONE
Fab expansion based on technology
and market changes
Evolution to service-focus business
Optimized product/fab assignment
Information sharing across supply chain
Collaborative relationships with customers
Tight connectivity with assembly and test
Trust-based, people-oriented organization
Highly efficient manufacturing processes
Centralized command, decentralized control
Today Leather products has became fashion symbol for Teenagers and young
generation and even for the elders too in India and also in western world.
And in future we have plan to go for globally if we succeed in Hyderabad.
In future it is predicted that the winter season period is increasing as
compare to the summer. Leather products are treated as fashion symbol and
to protect the bodies against cold.
So we have forecast that the future need/trend is bright due to the above