Food sc os

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  • The chain starts with a farmer using farm supplies like machinery, seeds, fertilisers,pesticides etc. The farmers then use logistics providers to transport the food eitherdirectly the food processor or indirectly through storage and marketing via acooperative group or consolidator
  • Food sc os

    1. 1. Supply Chain forFood Industry
    2. 2. Food Supply Chain• The chain starts with a farmer using farm supplies like machinery, seeds, fertilisers,pesticides etc.• The farmers then use logistics providers to transport the food eitherdirectly the food processor or indirectly through storage and marketing via acooperative group or consolidator• The involvement of the farmer is often limited upto the processor and does not extend down to the customer or even the distributor.• This limits the traceability and transparency of a typical supply chain
    3. 3. Food supply chain risks• The drive for efficiency and the just-in-time philosophy used by the food industry has progressively reduced stock levels throughout the supply chain• The consolidation of distribution networks by food manufacturers and the trend towards using 3PL providers and reducing distribution sites means that the loss of a site due to events such as a fire or flood could also cause a disruption in the supply chain
    4. 4. Food supply chain risks• Statistically such events are predictable but the trend toward fewer and larger production and distribution sites means that the potential impact is very high• Supply chain risks have been classified as: – risk arising from the problems of coordinating supply and demand – risks arising from disruptions to normal activities
    5. 5. • Established in India in 1996• Invested USD 0.5 Bn in India• Market Share: 32.3% (FY 2009)• Total Market (Value): 1300Cr (FY 2009)• Sales of Rs. 20,000 per minute
    6. 6. Supplier More than 100 suppliers Manufacturing Plant 3 Manufacturing Plants (Punjab, Pune, Kolkata) Depot/Warehouse All-India: 34 NCR: 3 (Delhi, Gurgaon, Noida) Distributor All India: 3072 NCR: 61 WholesalerAll India: Not defined NCR: 19 RetailerAll India: Over 10 Lac NCR: Over 75,000
    7. 7. Supplier More than 100 suppliers Manufacturing Plant 3 Manufacturing Plants (Punjab, Pune, Kolkata) Depot/Warehouse All-India: 34 NCR: 3 (Delhi, Gurgaon, Noida) Carry and Forwarding Agent All India: 63 NCR: 11 RetailerNot-Defined (All Standalones that come under the territory)
    8. 8. Logistics & Transport• Tracks products throughout the supply chain• Uses 848 tractors, 2,251 trailers• Fleet of thousands of local computer-equipped delivery trucks• GIT Trackers
    9. 9. Inventory Management• Over 100 warehouses and CFAs in India• 3rd Party outsourcing – 3rd party CnF agents hired on commission basis – Control lies with the company
    10. 10. Inventory Management• ABC Inventory Analysis – Division of SKUs into 3 parts – Total SKUs: 78 – Part A: Top SKUs that form 80% volumes (15 SKUs) – Part B: The SKUs that form next 15% volumes (36 SKUs) – Part C: The bottom 5% of the SKUs (27 SKUs)
    11. 11. Forecasting• Routine forecasting done on monthly/quarterly/yearly basis• Regression analysis used.• Weekly forecast in collaboration with retail links –Live inventory tracking
    12. 12. Order Processing• Type 20: Ones directly sent to the retail outlet. • Supply failure leads to empty shelves.• Type 33: Ones delivered to the warehouse of the retailer. • 50 % inventory maintained
    13. 13. Order Delivery• PSR Model: – PSR goes a day in advance to take orders – Delivers within 1-2 days.• RSA Model: – RSA carried stock along – Simultaneous order booking and delivery• Shifting from RSA to PSR
    14. 14. Collaboration with Suppliers• 2.3 billion pounds of potatoes and 775 million pounds of corn purchased annually.• Fewer than 100 individual suppliers of potatoes.• Collaboration with the farmers – Long Term contracts – Best varieties of potatoes
    15. 15. Collaboration with Retailers• Over 10 Lac outlets reached every year• Collaboration important• Credit policies for retailers and distributers.• Retail link increases order processing and delivery efficiency
    16. 16. SAP SCM
    17. 17. Planning Activities• Demand planning and forecasting• Safety stock planning• Supply network planning• Distribution planning• Strategic supply chain design
    18. 18. Key Planning Benefits• Increase demand accuracy and order fulfillment satisfaction levels• Reduce inventory levels and increased inventory turns across the network• Increase profitability and productivity• Integrate sales and operations planning process
    19. 19. Execution• Integration of distribution, transportation, and logistics into real-time planning processes• Features: • Order fulfillment • Procurement • Transportation • Warehousing • Real-world awareness • Manufacturing
    20. 20. Key Execution Benefits• Improved tracking with RFID-enabled processes• Seamless integration of different transportation process steps• Higher transparency• Reduced costs of goods sold throughout your company
    21. 21. Collaboration• Suppliers – Seamless access to supply chain information – Synchronize supply with demand.• Customers – Provide broad capabilities for replenishment – Min/max-based vendor managed inventory (VMI) – Exclusion of promotions and transport load building.• Contract manufacturers – Extend visibility and collaborative processes to their manufacturing processes.
    22. 22. Key collaboration Benefits• Streamline collaboration with your suppliers, contract manufacturers, and customers• Significantly decrease procurement, sales, and inventory costs• Reduce inventory levels while managing variations in supply and demand
    23. 23. • Demand/Supply gap leading to sales loss• Out of stock situation due to non availability of stock• Mismatch of primaries of the company and the organized players leading to sales loss and reduction in fill rates• High spoilage and sales returns
    24. 24. Inventory management: RFID• Implementation of RFID• High cost and high return• Ease in tracing securing and managing items• According to AMR research, – 3-5 percent reduction in Supply chain costs – 2-7 percent growth in revenue
    25. 25. Green Supply Chain• Reduction of carbon footprint – Greener manufacturing activities – More Recycling• Cost Reduction – Lower waste-disposal and training costs – Fewer environmental-permitting fees – Reduced materials costs.• Image enhancement in public eyes
    26. 26. Better Collaboration with retailers• Low fill rates and the loss of sales due to sales returns and out of stock situations• Solution – Better use of the Retail link – Better Forecasting – Lesser los of sales
    27. 27. Various risks• Freak weather conditions such as the drought or the floods decreases the production to such a level that prices rise exponentially. Eg. Onion, sugarcane etc.• Fluctuating cost of fuel means transport costs also rises sharply, which again pushes up prices thereby decreasing supply chain profits
    28. 28. Various risks• A lot of dependency on uncontrollable factors: Internationally, supplies of animal feed crops such as maize and soya have suffered• The reduced supply results in shooting up of the prices of meat, particularly chicken and pork• Wastage related to Storage: Infrastructure is a big constraint in India. Tons of grains get wasted because of improper storage. Pests and rodents are a big challenge. Sufficient number of silos unavailable in India to store grains properly. Sufficient Cold storage facilities yet to be developed.
    29. 29. Various risks• Perishability: Because of being perishable by nature, a lot of wastage happens during transportation and material handling.• Highly fragmented market i.e. the industry is highly unorganized. Hence, there is lack of consistency in prices, quality, quantities etc• Maintaining relationships is very crucial for success in any supply chain. However, this becomes very difficult in food industry because of being highly unorganized in nature.
    30. 30. Thank YouSubmitted by –H.Sanchay Grover (91021)TamalTaru (91116)

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