Data compiled over stats of 2016 sales. Overall processes and structure discussed of Dawlance as it's the company that has the overall proper channel and distribution procedure within the country.

1. SUBMITTED TO: SIR ASGHAR REZA
S U P P L Y – D I S T R I B U T I O N - M A N U F A C T U R I N G 1
REFRIGERATOR & HOME
APPLIANCES INDUSTRY OF
PAKISTAN- FOCUS ON
DAWLANCE

2. INTRODUCTION
Refrigerator market of Pakistan is growing every minute and is creating potential in best
manner from international investment. Example: Arcelik acquired Dawlance.
With growth of around 3.5% every year, there are many regions that are untapped. Grey
markets still caters a considerable amount of sales.
50%of the population is under 50 years of age, and the country’s per capita income is around
$1500, which is expected to grow to $2000 in the next eight years. All of these are rising
demand signals. The potential is huge in Pakistan.
S U P P L Y C H A I N M A N A G E M E N T 2

3. PRODUCT OVERVIEW OF INDUSTRY PLAYERS
S U P P L Y C H A I N M A N A G E M E N T 3
Brands
Haier
Orient
Gree
Dawlance
Waves
Panatron
Pel
Kenwood
Refregerators-Air-Conditioners-MicrowaveOvens-DeepFreezers-WashingMachine-LEDS-Laptops-WaterDispensers-SmallHomeAppliances
Products
Refrigerators-Air-Conditioners-MicrowaveOvens-LEDs-WaterDispensers
Air-Conditioners
Refregerators-Air-Conditioners-MicrowaveOvens-DeepFreezers-WashingMachine -WaterDispensers-SmallHomeAppliances
Refrigerators-Air-Conditioners-MicrowaveOvens-WashingMachines-SmallHomeAppliances
Refrigerators
Refrigerators-Air-Conditioners-MicrowaveOvens-DeepFreezers-WaterDispensers
Air-Conditioners-MicrowaveOvens-SmallHomeAppliances

4. Key
Players
Distributor
Network
Marketing Consumer
Preference
Price Perceived
Quality
Haier 3 3 3 3 3
Orient 3 4 3 3 4
Dawlance 5 4 5 4 4
Waves 3 2 3 2 3
Panatron 2 2 2 2 2
Pel 4 4 4 4 4
COMPETITIVE ANALYSIS OF KEY MARKET
PARTICIPANTS

5. Procurement ( Imports + Local )
MANUFACTURING (FACTORY)
WAREHOUSES
DEALERS
END CUSTOMERS
DISTRIBUTION CHANNELS OF MARKET
PARTICIPANTS

6. DISTRIBUTOR SYSTEM FOLLOWED IN THE INDUSTRY
S U P P L Y C H A I N M A N A G E M E N T 6
DISTRIBUTOR GUARANTEES A DEFINITE AMOUNT
OF SALES.
REQUIRES A CERTAIN INCREASE IN INCENTIVES
(MONTHLY/ ANNUAL) AS COMPARED TO NORMAL
DEALERS.
CIRCULATE YOUR PRODUCTS TO EVERY REGION
OF THE TERRITORY GIVEN BY THE COMPANY.
HAVE RESTRICTION IN GOING ACROSS YOUR
TERRITORY.
MOREOVER OVER THE TIME THE DISTRIBUTOR
GETS STRONGER AND DICTATE TERMS IN THE
LONG RUN.

7. DISTRIBUTOR SYSTEM FOLLOWED IN THE INDUSTRY
S U P P L Y C H A I N M A N A G E M E N T 7
CHALLENGING ENVIRONMENT
FOR COMPANIES DEALING IN
DEALER NETWORK.
LUCRATIVE AND ATTRACTIVE
INCENTIVE FOR UNIFORMED
PRICING AND MORE REWARDING
FOR THE DEALERS.
LESS MARKET SHARE BUT WITH A
VERY STRONG DEALER NETWORK
MORE CONTENT CAN BE
INTRODUCED TO THE MARKET
AND BE SUPPORTED BY THE
MARKET DEALERS.
PRICES OF THE PRODUCTS HAVE
TO BE COMPRISED DUE TO TOUGH
PRICING COMPETITION IN THE
MARKET.

8. MARKET SHARE ANALYSIS OF REFRIGERATOR
INDUSTRY IN PAKISTAN
S U P P L Y C H A I N M A N A G E M E N T 8
33%
29%
20%
15%
3%
DAWLANCE
PEL
HAIER
ORIENT
OTHERS

9. BRANDS SALES
DAWLANCE 465000
PEL 421000
HAIER 280000
ORIENT 220000
OTHERS 40000
TOTAL 1,426,000
NOTE: Others include small brands like Gaba-National,
ChanghongRuba, Waves, Singer, Panatron & Imported Brands.
NATIONAL SALES 2016 REFRIGERATORS

10. BRANDS SALES
DAWLANCE 445000
PEL 423000
HAIER 205000
ORIENT 240000
OTHERS 35000
TOTAL 1,348,000
NOTE: Others include small brands like Gaba-National,
ChanghongRuba, Waves, Singer, Panatron & Imported Brands.
NATIONAL SALES 2015 REFRIGERATORS

11. BRANDS SALES
DAWLANCE 425000
PEL 405000
HAIER 230000
ORIENT 220000
OTHERS 30000
TOTAL 1,310,000
NOTE: Others include small brands like Gaba-National,
ChanghongRuba, Waves, Singer, Panatron & Imported Brands.
NATIONAL SALES 2014 REFRIGERATORS

12. MA
S U P P L Y C H A I N M A N A G E M E N T 12
Produc
t
January Februar
y
Marc
h
Apri
l
May June July Augu
st
September Octobe
r
Novembe
r
Decembe
r
SEASONAL DEMAND FOR HOME APPLIANCES

13. ROOM REFRIGERATOR
Cities like, Hyderabad, Sukkur,
Gujranwala, khairpur, Quetta,
Khanewal and others small
towns and cities do face
shortages in smaller
segments of refrigerators
from 7-9 Cft.
Companies follow to cater
bigger maarkets first and
thaat’s where smaaller
companies like Gaba-
National, Panatron, SG &
others comes in to play their
key role.
S U P P L Y C H A I N M A N A G E M E N T 13
Brands Cities Sales
SG KHI-HYD 3500+
Panatron Ryk-Qta-Guj 3500+
Gaba Suk-Krp-Fsd 3500+

14. SUPPLY CHAIN FUNCTION OF REFRIGETOR
INDSUTRY
S U P P L Y C H A I N M A N A G E M E N T 14
Supply
Chain
Production
Planning and
Control
Planning
Production
Control
Stores (Raw
material )
Logistics &
Warehouse
Finish Goods
Warehouse
Procurement
Imports Local

15. S U P P L Y C H A I N M A N A G E M E N T 15

16. PRODUCTION UNITS
Dawlance has three units in their production department;
DPL-1 (Dawlance Private Limited)
DPL-2 (Dawlance Private Limited)
URIL (United Refrigerators Ind. Ltd)
S U P P L Y C H A I N M A N A G E M E N T 16

17. DPL-1 (DAWLANCE PRIVATE LIMITED)
The DPL-1 unit of production department produces washing machines and
small size refrigerators.
S U P P L Y C H A I N M A N A G E M E N T 17

18. URIL (UNITED REFRIGERATORS IND.LTD)
The URIL unit of production department produces big models refrigerators
and deep freezers.
S U P P L Y C H A I N M A N A G E M E N T 18

19. PER DAY PRODUCTION OF DPL-1
The per day production of
Refrigerator 800 to 1000
S U P P L Y C H A I N M A N A G E M E N T 19

20. PER DAY PRODUCTION OF URIL
The URIL units produce almost 1000 to 1200 big size refrigerators in a single
day
Machinery of the production department
The machinery which company use in their production department to make
different products.
HLD-420Z (use for forming of refrigerators)
WG16-B ( use for injection molding in refrigerator)
S U P P L Y C H A I N M A N A G E M E N T 20

21. S U P P L Y C H A I N M A N A G E M E N T 21

22. INBOUND LOGISTICS
• Mostly suppliers supply the goods with their own
transport.
• Some suppliers don’t offer transport and Dawlance
pick the material by their own Transport.
• Dawlance local purchase department also has a Suzuki
to use in any urgency.
S U P P L Y C H A I N M A N A G E M E N T 22

23. IMPORTS LOGISTIC
S U P P L Y C H A I N M A N A G E M E N T 23
Import of Dawlance depends upon high value items that are used in manufacturing
of fridge, washing machines, air conditioner, micro wave etc. They import their
material from;
1. China
2. Malaysia
3. Saudi Arabia

24. OUTBOUND LOGISTICS
S U P P L Y C H A I N M A N A G E M E N T 24
For Outbound Logistics, Dawlance use the services of PTN. PTN takes the goods from
factory warehouse to warehouses. Dawlance have their own warehouse located in
National Highway Landhi, Karachi in which all the finished goods placed in a separate
portion. They make supply from their warehouse to all over the Pakistan through the local
transport of that area.

25. S U P P L Y C H A I N M A N A G E M E N T 25

26. LOCAL PROCUREMENT
S U P P L Y C H A I N M A N A G E M E N T 26
If we talk about the local procurement of Dawlance so will see
that they also classified its local procurement department:
• Production Items purchasing (Direct Material)
• General Items purchasing (Indirect Material)

27. PROCUREMENT WORK FLOW
P2P Cycle (Purchase to Pay)
P U R C H A S E
Select Suppliers, Price Inquiry,
Costing, Negotiations, Price
Approvals
Issue Purchase Orders after
getting it approved by the
authorities.
Found
Discrepancy!
Intimate Purchase for Re-
working / Return
Intimate Purchase to Resolve
the matter
Supplier 1 Supplier 2 Supplier 3
Receiving Invoicing
SQA Check
OK
Check
PO/MSR
OK
Submit Invoice in
FINANCE
Store Dept. Receive the
material.
P A Y M E N T
Reject
S U P P L Y C H A I N M A N A G E M E N T 27

28. IMPORT PROCUREMENT
S U P P L Y C H A I N M A N A G E M E N T 28
They import different kind of raw materials but the main imports are the kits of
Air Conditioner and different models of Washing machines and Microwave
ovens as a finished good.
Country of Import:
Dawlance import the raw materials and the finished good from
different origin like China, Malaysia etc.

29. I M P O R T
PLANNING
P R
Search Supplier
Quotations
Negotiations
Receive P.I.
Issue P.O to FINANCE
Dept. along with;
Performa Invoice
Covering Sheet
Inventory Sheet
Negation Details
S U P P L I E R
Finance Dept.
opens L.C. against
P.O. % Send it to
the supplier.
Send Shipment Details to Import
PURCHASE
Material
Can be
purchase
locally, If
N-A in
Import
Availability Status, Delays, Local purchase & other related matters
Major Controlling through ETD Report
IMPORT WORK FLOW
S U P P L Y C H A I N M A N A G E M E N T 29

30. PROCURE TO PAY PROCESS
Purchase requisition
Creating Purchase Orders
Communicating PO to Supplier
Confirm Receipt
Quality Check
S U P P L Y C H A I N M A N A G E M E N T 30

31. EXTERNAL PURCHASING(IMPORTS)
Some of the production items they purchase from the other countries. Those items are
• For Refrigerator
Condensers
Compressor
Light kit
• For Washing Machine
Timer
Motors
• For Micro Wave Oven
Dawlance import the overall kit of the microwave oven from the other countries. They only
assemble the parts of the microwave in the company
S U P P L Y C H A I N M A N A G E M E N T 31

32. PROCUREMENT CYCLE
S U P P L Y C H A I N M A N A G E M E N T 32
Purchase
Requisition
Purchase
Department
Generate
Purchase
Order
Communication
To Suppliers
Delivery
PaymentDeliver To Store
Supplier Quality
Assurance

33. PROCURE TO PROCESS
S U P P L Y C H A I N M A N A G E M E N T 33

34. SUPPLIERS
The company has different suppliers for different purchases.
• The company has almost 300 active suppliers for the purchasing raw
material of local supplies.
• The company has almost 200+ general suppliers.
• The company has almost 20+ international suppliers.
S U P P L Y C H A I N M A N A G E M E N T 34

35. Supplier
1
Manufacture
(Outbound)
Procurement
Retailer
Warehouse
Distribution
Logistic
Transportation
Supplier
2
Supplier
3
Supplier
4
Manufacture
(Inbound)
Retailer
SCM MODEL
Warehouse

36. MAKE OR BUY
To focus on their core competencies, Dawlance make only those parts in
which they are well capable. They make Refrigerator Liner, washing
machine tub, power codes, injection molding items etc.
As they are not well capable in making washing machine pipes, Trims,
profile etc so they don’t make this and instead of this they procure these.
S U P P L Y C H A I N M A N A G E M E N T 36

37. S U P P L Y C H A I N M A N A G E M E N T 37

38. 1. SUPPLY CHAIN STRATEGY
S U P P L Y C H A I N M A N A G E M E N T 38
Shortages, Plan Change,
Follow-ups etc
P U R C H A S E
(PSI) Prod.
Sales Inv.
Forecast
N+4
W I P
Inventory
Store
Inventory
W I P
Inventory
On-Order
Quantities
M R P When to be
produced?
How much to
be Produce?
What to
Produce?
Materials
Requirement
M P S Production Control
Planning Department
P R
Sales / Marketing
Forecasting, F.C. Revision
Demand Fluctuations,
Priorities, etc
Planning Workflow

39. WAREHOUSING COMPARISON OF REFRIGERATOR
INDUSTRY
S U P P L Y C H A I N M A N A G E M E N T 39
Daw PEL Haier Orient Waves
KHI KHI LHR LHR KHI
Hyd LHR KHI KHI LHR
SUK MUL MUL RWL RWL
MUL RWL GJR PSH RYK
RYK PSH RWL RYK
FSD
LHR
GJW
GJR
Harro

40. 2. SUPPLY CHAIN PLANNING
• To focus on their core competencies, Dawlance make only those parts in which they are well
capable. They make Refrigerator liner, washing machine tub, power codes, injection molding
items etc. As they are not well capable in making washing machine pipes, trims, profile etc so
don’t make this and instead of this they procure these.
• They have very strong logistics system and use 3PL logistics system and Dawlance own
controlled logistic system to full fill their need for both upstream and downstream so they hire
services.
• All the electrical appliances bought with Dawlance brand has given 5 years warranty and any
product having manufacturing or technical fault will be free of cost.
S U P P L Y C H A I N M A N A G E M E N T 40

41. 3. SUPPLY CHAIN OPERATIONS
Dawlance follow the push strategy and their planning department plan according
to this strategy. As Dawlance deals in home appliances (mostly Refrigerator & Split) so
their demand is not constant in all seasons. So by considering this they follow this
strategy because they can’t produce for the whole year in 6 to 7 months so that’s
why they even produce in the period in which demand is low.
S U P P L Y C H A I N M A N A G E M E N T 41

42. PEST ANALYSIS
S U P P L Y C H A I N M A N A G E M E N T 42
Political
The country is passing through the dark stage of the
history facing security and instability problems.
Government is not in position to provide funding for
the company growth and is not in the position to go
for international legislations. International trading
policies are worst and corruption is very high.
Economic
Due to recent global economic crisis the company is
facing a lot of problems. Tax rate is high and the retail
market seems to be going down.
Social
Most of the people of the country are living in rural
areas, unaware of the products and its benefits. These
people don't like products TVs because of religious
concern. The people in these rural areas like manual
work and don't like machinery. Female normally don't
visit shops and don't work. Most of the people can't
afford to buy.
Technological
Technology is growing day by day. The company has
latest machinery and has highly qualified engineers
and professionals. The cheap technology of china has
brought a new revolution not only in Pakistan but in
the whole world.

43. S U P P L Y C H A I N M A N A G E M E N T 43
PORTER
FIVE FORCES
Threat of New Entrants MEDIUM
Dawlance is facing the threat of new entrants in the home appliances
industry. The new entrants can be potential competitors for the company
and can severely dent the company and can affect company’s market
share. The new entrants are entering in he market because of Active
returns and foreign brands.
Threat of Substitutes HIGH
As we talk about Dawlance , is facing a threat from the growing
number of substitutes available in the market like in Pakistan the
biggest threat for Dawlance are the Chinese products, which are
serving as an alternative choice for the consumers. These products are
low-priced and people can simply afford them.
Bargaining Power of Customers HIGH
In Market there are so many substitutes present for home appliances
products, specifically foreign brands and Chinese products as Dawlance
can affect by such situation that the bargaining power of consumer
remains high and consumer demands to decrease the prices of
Dawlance products. If company does not work accordingly it will affect
Dawlance market share, as consumer will switch to any other brand.
Bargaining Power of Suppliers LOW
Dawlance is efficiently working with its suppliers by creating balance
between the supplier’s powers and interests of the company. So
Dawlance is signing long-term agreements with suppliers concerning
the raw materials, which can save the company from prices fluctuations
of the materials
Competitive Rivalry in the Industry HIGH
Dawlance is coming up with more innovations as the competition is
increasing day by day and many competitors like LG, Sony and Haier etc
are competing in the market and to survive in the market Dawlance is
focusing on innovative home appliances for the customers to increase
the profit of the organization and to gain the edge over its competitors.

44. RECOMMENDATIONS
S U P P L Y C H A I N M A N A G E M E N T 44

45. S U P P L Y C H A I N M A N A G E M E N T 45