Supply Chain manegement of Shangrila foods

1. 1
Supply Chain Management
Shangrila Foods Private Ltd
Submitted to
Sir Zulfiqar Ahmed
Submitted By
Muhammad Zakaria (SP14-EX-0047)

2. 2
Acknowledgement
Firstly we would thank Allah for giving us the opportunity and the resources to be able
to do something productive with our lives. Without His blessings we would not have
been able to come as far as we have.
Then our sincere thanks to Mr. Arif Aziz (Shangrila) for helping us throughout this
report. His guide lines have been very useful for us in preparing this report. He helped
us find new ways of being innovative and creative. This report would not have been
possible without his cooperation and continuous direction.
Then we would like to extend our thankfulness towards our parents who are our
constant supporters, steering us towards achieving our goals.

3. 3
Executive Summary
Shangrila has setting up manufacturing plant in 1988for its seasonings; soy and chili
sauces. Later in the late 90s, the range was supplemented by Tomato Ketchup.
SHANGRILA (Private) Limited has become a brilliant success story stretched not only
throughout the country, but internationally as well, managing four product categories;
ketchup, sauces, seasonings, pickles-in-oil under the brand name of SHANGRILA and
another brand FRUITI-O drinks
SHANGRILA was among the first few in the food industry to obtain the ISO 9001 -2008
Quality Management System & ISO 22000-2005 Food Safety Management System
certifications along with HALAL certification from SANAH the South African National
Halal Authority. It is also a member of the Association for Dressings & Sauces, USA.
Apart from certifications and accreditations, SHANGRILA has consecutively won
Brands of the Year Award, Consumer Choice Award and Global Food Safety Award over
the years.
SHANGRILA has a strong distribution network in all major towns with more than a
hundred distributors nationwide. SHANGRILA has also made inroads in numerous
countries across the globe, including markets like USA, Canada, UK, EU, Middle East
and Africa.
Supply chain management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, third party service providers, and
customers.
Shangrila Foods local suppliers are 150plus majority based on Karachi,
Lahore, Faisalabad, Hyderabad 60% domestic suppliers at Karachi,25% domestic
suppliers at Lahore , 10% domestic suppliers at Khyber Pakhtoon, 5% domestic
suppliers at Baluchistan
Store Facility Karachi ware House 35,000 Sq. Feet (Vertical Supplies)
Lahore Ware House 32,000 Sq. Feet (Horizontal Supplies)
Forecasting By Historical Data, Assignment of Target, Market Situations Trends
Seasoning Cycles
Inventory Maintenance Raw Materials 20%, Packaging Materials 15%, Necessary Spare
parts 5%, Finished Products 20%

4. 4
CONTENT
1. Introduction ……………………………………………………………………………………………….1
2. Internationally Accredited……………………………………………………………………………2
3. Manufacturing Facilities…………………………………………………………………………….……….4
4. Commitment to Quality…………………………………………………………………………….……….4
5. Exports…………………………………………………………………………………………………………...……5
6. Events & Exhibitions…………………………………………………………………………….……..5
7. Competitors………………………………………………………………………………………….…… 6
8. Supply Chains………………………………………………………………………………………….…..6
9. Domestic Suppliers……………………………………………………………………………………..8
10.Break Up…………………………………………………………………………………………………... 9
11. Store Facility………………………………………………………………………………………….… 10
12. Channel of Distributions…………………………………………………………………………...10
13. Procurement Procedure……………………………………………………………………………. 11
14. Information System……………………………………………………………………………….…..11
15. Customer flow………………………………………………………………………………………….13

5. 1
Introduction
When it all began about 23 years ago, nobody could have even dreamt that such a small
company would one day become a leading national food brand.
SHANGRILA took over the challenges in domestic markets by setting up a diminutive
manufacturing unit in Karachi in 1988 for its seasonings; soy and chili sauces. Later in
the late 90s, the range was supplemented by Tomato Ketchup drawing a huge success
due to its quality, taste and innovative packaging; initially with the 100g sachet which
was a one of its kind pack during that era and later the Stand Alone Aluminum Foil Pack
with a nozzle & a screw cap. The 100g pack managed to wedge through consumers in
developing the ketchup market among the masses, while 1Kg SAP catered to economy.
Early in 2000s, SHANGRILA enhanced its portfolio with Pickles-in-oil in Stand Alone
Pouches for the first time in the history of commercially produced pickles, and this
resulted in a steep vertical ascent in the brand’s growth in the following years.
Continuous product and packaging innovations, besides advancement of the supply
chain process, removal of bottlenecks, and modernization of manufacturing facility with
European technology cruised SHANGRILA ahead of the competition. SHANGRILA has
been persistently taking on the tough situation in the industry, and has managed to
create depth, as well as width for itself, moving at a pace faster than its rivals.
With a phenomenal multifold-fold rise, SHANGRILA (Private) Limited has become a
brilliant success story stretched not only throughout the country, but internationally as
well, managing four product categories; ketchup, sauces, seasonings, pickles-in-oil
under the brand name of SHANGRILA and another brand FRUITI-O drinks.

6. 2
InternationallyAccredited
To increase the acceptability of SHANGRILA products locally and globally, the company
has taken the lead in implementing the industry’s best manufacturing practices and
obtaining internationally acclaimed certifications. SHANGRILA was among the first few
in the food industry to obtain the ISO 9001-2008 Quality Management System & ISO
22000-2005 Food Safety Management System certifications along with HALAL
certification from SANAH the South African National Halal Authority. It is also a
member of the Association for Dressings & Sauces, USA. Apart from certifications and
accreditations, SHANGRILA has consecutively won Brands of the Year Award,
Consumer Choice Award and Global Food Safety Award over the years.
Global Footprints
SHANGRILA has a strong distribution network in all major towns with more than a
hundred distributors nationwide. SHANGRILA has also made inroads in numerous
countries across the globe, including markets like USA, Canada, UK, EU, Middle East
and Africa.
Prospering Like Never Before
With SHANGRILA spreading wings all over the globe, acquiring key markets &
strategically developing new products, there was a corporate need felt to identify with a
wider scope .The company started working on new food related projects & products. All
this has led to strategic realignment of resources & focus giving birth to a new brand
FRUITI-O drinks.
Tradition to look Beyond
Reaching new heights and breaking newer grounds is something that’s regarded as the
motto of work at SHANGRILA. Today, fully geared with an undying passion for success,
SHANGRILA is fueled by the dynamic drive that has shaped its yesterday, fascinated its
today and tomorrow.
The company’s inner spirit is one of motivator; participative culture and constant strive
for inspiring targets and new initiatives to broad – base our products’ portfolio. This
ambitious spirit is reflected in the aggressive, non-compromising growth the brand has
achieved nationwide. Targeting high growth in terms of revenues over the years in the
domestic market, there has been a quantum increase in both distribution and sales.
Passion towards Corporate Brand Building
SHANGRILA is the leader in producing nutritious, innovative, halal and tayyab food
products within its categories, and since long, it enjoys nationally acknowledged
patronage. SHANGRILA, as a brand, appreciates every honor it receives, and works
hard to ensure that its award-winning standards remain high, but there’s nothing quite
like being recognized as a good, fair place to work at. As a company it treats its
employees and community with the respect and gratitude they deserve.

7. 3
Corporate Philosophy
At Shangrila, we believe that our organization is responsible to our Creator, our people
and our business partners. We continuously aim to satisfy our customers and consumes
by providing them Halal, Tayyab/Hygienic, Nutritious, and Convenient food that are
produced with international quality standards, through continuous research and
development, to give best value for their money, through a customer driven and service
oriented dynamic team.
We pledge to contribute to the betterment of environment and culture in communities
where we produce and distribute out product.
Accreditations & Awards
 ISO 22000:2005 (Food Safety Management System)
 ISO 9001:2008 (Quality Management System)
 SANHA (South African National Halal Authority)
 ADS (Association for Dressings & Sauces,USA)
 PSQCA (Pakistan Standards and Quality Control Authority)
 Consumer Choice Award – 2005 to 2008 & 2013 (Consumer Association of Pakistan)
 Brand of the Year Award – 2008 to 2012 (Brands Foundation of Pakistan)
 Global Food Safety Award (Global Media Links)
 PLMA (Private Label Manufacturer Association)
Manufacturing Facilities
Shangrila has always strived to deliver the best to its customers with an insatiable quest
for premium quality. Our priorities are to produce quality food, in compliance with the
international standards regarding food safety. Our success across the globe is an
affirmation of the quality standards that are maintained for each of our product range.
The innovation in product lines, recipes and tastes that Shangrila has been consistently
able to deliver, are a result of the continuous in-house research and development.
The experienced manufacturing experts and quality assurance team ensure that every
product unit is of the highest and consistent standard. The acceptance of our products
by major international and country specific food grading and clearance authorities itself
speaks for the universal food quality and packaging standards that we maintain.
At Shangrila, we do our best to satisfy our clients. Top quality management procedures
are thoroughly implemented in order to match global standards. With investment in
latest technology, Shangrila has fully automated plants for its ketchup & Juice brands.
With minimal human interaction, both ketchup and juices are produced and packed
using state-of-the-art technology.

8. 4
Commitment to Quality
Pursuing the quest for continuous improvement, Shangrila ensures the efficient
implementation of ISO 9001:2008 Quality Management System & ISO 22000:2005
Food Safety Management System, incorporating HACCP and GMP. We are constantly
investing in acquiring advanced measurement resources and modern manufacturing
equipments which are supported by fully equipped Chemistry & Microbiology Analytical
Laboratories. Validation is also done through continuous audit process of our integrated
management system according to the international standards.
Our products have been tested and approved by following international authorities
 FDA (Food and Drug Administration), USA
 SASO (Saudi Arabian Standards Organization), KSA
 Ministry of Health, UAE
 Ministry of Health, Qatar
 Ministry of Health, Kuwait
 AQIS (Australian Quarantine Inspection Services), Australia
 BSTI (Bangladesh Standard Testing Institute), Bangladesh
 NAFDAC, Nigeria
 PSQCA (Pakistan Standards and Quality Control Authority)
 CFIA (Canadian Food Inspection Agency)
 Food Standard Agency UK
 Norwegian Food Safety Authority Norway
Exports
At Shangrila, exports have an important focus. For this purpose, aggressive channels of
supply chain are working for Shangrila in various international markets. Our Products
have a special appeal for the halal conscious consumer segments around the world.
Shangrila identifies the consumers’ specific demands for religious compliance, hygiene,
nutrition, taste and convenience on market to market basis. The demanded products are
accordingly made available in the respective markets thus generating a huge response
from the consumers. Shangrila is all set to explore new markets, identifying specific
consumer needs and providing much desired Shangrila products on the market shelves,
Insha-Allah!
Private Labeling
Other than our premium brand Shangrila, we also extend our services by offering our
customers private branding opportunities in the increasing global market. Maintaining
highest manufacturing standards, authenticated sourcing, state-of-the-art
manufacturing facility and a long professional experience, we offer contract

9. 5
manufacturing and private labeling & facilitate the interested customers to the best of
their requirements. A wide array of services and service options have proven to be the
primary reason why customers have chosen Shangrila (Private) Limited to fulfill their
production needs. Shangrila is well versed in handling glass, PET and convenient
flexible packaging (stand alone pouches) with a wide variety of filling/bottling, capping,
labeling and packaging options. Our strengths include
 Understanding customer need
 Quality manufacturing facility
 Minimum production volumes
 Wide variety of options
 Flexibility
 Over 20 years of experience
Events & Exhibitions
International Events
 Gulfood – Dubai, UAE
 Anuga – Cologne, GERMANY
 SIAL – Paris, FRANCE
 PLMA (World of Private Label)
Local Events
 Dawn Life Style
 My Karachi
 Kids Expo
 Expo Pakistan
Competitors
Knorr Ketchup
Mitchells Ketchup
National Ketchup
Ahmed Tomato Ketchup
Shangrila Ketchup
Nauras Tomato Ketchup
Tops Tomato Ketchup
Dawn Tomato Ketchup
Qarshi Tomato Ketchup

10. 6
Pickles and Sauces
Shan Foods
National Foods
English Foods
Unbranded etc
Supply Chains
Supply chain management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, third party service providers, and
customers. Supply chain comprises of all the activities necessary for making and
delivering the product to consumers. A basic model of supply chain can be seen in the
following diagram. They have several confidential suppliers which are providing quality
standard raw materials.

11. 7
Sourcing
International Suppliers (Raw Materials) China
Heinz (Qingdao) Food Co Ltd China
Product Benefits: 1 One global recipe. The Subtle blend of spices used to make Heinz
Tomato ketchup has remained a secret for over 130 years 2 Well selected Red ripe
tomatoes as materials; One bottle of ketchup contains at least 6 Red ripe tomatoes 3
Very balance of sweet and sour taste, freshness, and natural 4 Super hot break
production techniques, keep original and fresh tomato flavor and texture 5 100% crude
ingredients, no preservative, thickeners, artificial essence or coloring

12. 8
Efficient & Responsiveness
Domestic Suppliers
Shangrila Foods local suppliers are 150 plus majority based on Karachi,
Lahore, Faisalabad, Hyderabad
60% domestic suppliers at Karachi
25% domestic suppliers at Lahore
10% domestic suppliers at Khyber Pakhtoon
5% domestic suppliers at Baluchistan
Oracle Software
Some features of oracle software in their research and development.
Efficiency Responsiveness
Inventor
y
Transportatio
n Facilities Information

13. 9
Break Up
Packaging
10 Suppliers are based on Karachi and Lahore
Pulping
5 Suppliers based on Karachi, Faisalabad and Hyderabad
Engineering and Spare Parts
30 Suppliers are based on Karachi and Lahore
Miscellaneous Items
100 Major suppliers based on Karachi and Lahore
Sugar
5 Factories through single broker
Logistics
Through third party yearly Contract based
Currently three contractual transporters are working

14. 10
 Company has more than hundred vehicles to convey their finished goods to
retailers and distributors.
 Transportation mode is good due to high quality infrastructure.
 All distributors are responsible for transportation.
 For international delivery company used container from manufacturing unit to
Karachi port
 For local delivery company used trucks and containers.
Store Facility
Karachi ware House 35,000 Sq Feet (Vertical Supplies)
Lahore Ware House 32,000 Sq Feet (Horizontal Supplies)
Forecasting
By Historical Data
Assignment of Target
Market Situations
Trends
Seasoning Cycles
Duration
Yearly
Six Monthly (Semi Annually)
Quarterly
Monthly
Process
Every Month get the sales target and Coordinate with production department
Final data will put on MRP
Arrangement of Supplies through concern Suppliers
Channel of Distributions
All over Pakistan
Direct Distribution
Company used direct distribution
 Metro
 Hyper star
 Al-Fateh
 Imtiaz Super Market
 Naheed Super Market
 Chase Up
 Shaz Super Market etc

15. 11
Indirect Distribution
Distributors are responsible for other retailers
5 Distributors
Lahore and Karachi
Recently Launched Products
Hot and Spicy Ketchup
Green Chili Sauce
Procurement Procedure
 Sales Forecast
 Material Requirement Planning
 System Generated Purchase Requisition
 Quotation (If required) from exist Supplier otherwise search the vendor and rate
 Approval of quotation with terms and condition including lead time etc
 Purchase Order
 Follow up on Supplier
 Arrival goods
 Inspection by Quality Assurance Department
 If Consignment Fails return to Supplier
 If consignment Pass then Shift to RM Store, Consumable Store, POS Store,
Engineering Store and Cold Storage
 Issuance of Materials according to procedure of requirements
Information System
The use of information systems has become increasingly important in today's world. Companies
need to have the best set of information systems and professional to fully benefit from it. A good
information system can provide company with a competitive advantage. Shangrila currently
uses software like excel, SPSS and some features of oracle software in their research and
development. Apart from this they have a computerized system for their inventory control and
production handling.
Inventory Maintenance
Raw Materials 20%
Packaging Materials 15%
Necessary Spear parts 5%
Finished Products 20%

16. 12

17. 13
Customer flow
Key Performance Indicator
 Inventory Turnover
 Carrying Cost of Inventory
 Order Tracking
 Inventory to Sales Ratio
 Rate of Return
 Order Status
 Inventory Accuracy
 Perfect Order Rate

18. 14
Conclusion
 Supply chain of Shangrila company is very good because they have hundreds of vehicles
for delivery their product
 They have efficient supply chain strategy.
 They produced tomatoes from different farms. So the quality of ketchup is very high
 They have very fast information system so due to good information system they could
manage their inventory of raw material very good manners
 According to our analysis Shangrila have a very good and efficient supply chain.