SCM & Cost Analysis of one door and two door Refrigerator

1. Submitted To:
Sir Moghira
University of Sargodha,
Lahore Campus.
Submitted by:
ANAM NASIR
MBA 6th
Roll no (054)
Supply Chain Management
& Cost Analysis
Assignment: SCM of Dawlance

2. SHORT COMPANY PROFILE:
Dawlance is a leading manufacturer of house hold appliances in Pakistan. It is privately held
organization. The company has maintained superior quality standards. The Company hired up to
5000 employees. It stands for durable and reliable household appliances.
Dawlance was established in 1980. It was established by Mr.Dawood Bashir. It was set up in
Karachi Clifton Steel Bridge, Dr.Ziauddin Ahmed Road. Industry was based on Consumer
Electronics. It has a long history of more than 3 decades. Dawlance has the largest set up with
respect to manufacturing capabilities, retail outlets, service centers and distributors.
COMPANYOVERVIEW:
Dawlance is the 7th most Favorite brand in Pakistan out of 3500 brands. Highest market share in
3 out of 5 categories. The company has a large setup and is has got the service of talented team,
HR and Marketing team. Dawlance Group has been passed through the stages of continuous
improvements and innovation to achieve its position in Pakistan Market and take lead to its
competitors.
Its factory is located in Hyderabad and Karachi. The company has almost sixteenbig ware
houses all over the country and retail stores in almost all the big cities. It imports of raw material
mainly from China, Germany, Italy, Taiwan and some other countries.
The market share of Dawlance product is: Microwave Oven 40%, Chest Freezers 45%, and Air
Conditioners 15%. The company has maintained superior quality standards throughout its 34
years and can proudly state it is also the first Pakistan Company to have been awarded the ISO
9001, ISO 14001 and OHSAS 18001.
COMPANYVALUES:
 Reliability
 Teamwork
 Communication
 Transparency
 Respect
 Openness & Candor
 Creativity
Company Product Lines:
 Refrigerators
 Air Conditions
 Micro wave ovens
 Washing Machines
 Deep freezer

3. SUPPLY CHAIN OPERATIONSIN DAWLANCE:
Dawlance has separate department for Supply Chain Activities. It is responsible for
the procurement, warehousing, distribution, transportation etc.
Types of material purchasedby the Dawlance:
Imports Local Purchases
Insulation Chemicals Gas kits
Crystal Sheets Tape consumable plastic sheets
Depoxy Handles
Epoxy Knobs
Compressor Wheel
Copper pipe Wracks
Thermostat etc.
Monogram and Bulb
Supply Chain Activities of Dawlance:

4. Procurementof Material:
 LOCAL PROCUREMENT
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)
 IMPORT PROCUREMENT
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.
SUPPLIERS:
Dawlance have both national and international suppliers. From national suppliers Dawlance
purchase chemicals, plastic, copper, but from international usually purchase electric items and
mostly these are finished goods at their level like motors, compressor, etc. Dawlance has a list of
its suppliers, which is selected after fully information. If anyone supplier is unable to provide
quality of material, timely delivery that vendor disqualify for the next procurement. No tender
call for the procurement Dawlance itself approach up to the suppliers. Dawlance import AC and
Microwave as finish good just give its brand name (monogram), but other household items
manufactured by Dawlance itself.
Name of Suppliers:
National
 NORANI Traders Karachi
 KAGHAN Traders Karachi
 Ali Ahmad Traders Islamabad
International (From the origin)
 China
 Japan
 USA
 Germany
 Italy
MANUFACTURING:
 Production Location of Dawlance is in Karachi and Hyderabad. Dawlance manufacture
refrigerator, Deep freezers, washing machine, TV. Dawlance purchase raw material and
manufacture boxes, doors, used in the refrigerators, washing machine.
 Due to lake of technology in Pakistan home Appliances Industry Import Microwave and
AC. Dawlance also import both AC and Microwave.

5. Logistics:
 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.
 IMPORTS LOGISTIC
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
 OUTBOUND LOGISTICS
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.
WAREHOUSE:
 Dawlance possess very effective logistics system with 16 big warehouses all over the
country for the prompt (responsive) execution of sales invoices. Hence Dawlance
products are available almost in all the cities and small towns as well i.e. Karachi,
Hyderabad, Multan, Sukkur, Rahim Yar Khan, Faisalabad, Lahore, Gujranwala, Gujarat
and Harro.
 For cost saving Dawlance shift its warehouse from Islamabad and Peshawar to
WAHCANT.
Inventory Management:
 Dawlance manufacture only in Karachi and Hyderabad which shows it is using
Centralized inventory policy it is cost reducing for the company.
 For the uncertainty company keep some extra inventory as a backup, “It is named as
Emergency Stock for the company.”
DISTRIBUTERS, DEALERS AND OPERATIONALCENTERS:
 Dawlance is using out source for the transportation of the goods from factory to the
warehouse and from warehouse to the retail store on the in house source.
!- There are 800 dealers in the country that is 80% of the total national dealers.
2-There are 16 operational centers (Branches) to operate this large dealer network all
over the country.

6. Considerationfor Allotment of dealership:
 Financial background
 Location of outlet
 Experience and knowledge of dealer
 Dealers attitude
 Good will
Transportation:
 Dawlance uses out sources from factory to warehouse for product transportation
and from warehouse Dawlance have its own vehicles.
 From Karachi to all over the country by truck which are provided by the good
transportation companies.
RETAILERS:
 Dawlance has exclusive retailers and individual show rooms which are 800 in
nearly all parts of the country with the service center.
 Retailer must purchase Rs: 20,000,000 at first on cash company gives benefits to
those retailers who sale products in short time. After first purchase company gives
material on 15% credit.
CUSTOMERS:
 Dawlance manufacture products for everyone,
 Up to Middle, Upper Class of Pakistan.
For rapid delivery Dawlance established a huge network of warehouses and retail
stores in all over the country.
AFTER SALE SERVICES:
 The service centers are present where company dealers exist. There are 20
company’s own service centers and 40 contract workshops in remote areas to
provide timely and effective customer service.

7. Models of Supply Chain Management of Dawlance:

9. Corporate Structure:
All departments of the company are linked with Head Office.
Offices of National Managers are situated in Karachi.
Market Position:
 Leader in household appliances in Pakistan
 Largest Company engaged in appliances business.
Present Market Share of Dawlance product is:
 Refrigerators 65%
 Washing Machines 35%
Structure
Managing Director
Employees
Total
1500
Worker 900
Management 600
Supply Chain Head
Head Office

10.  Microwave Oven 40%
 Chest Freezers 45%
 Air Conditioners 15%
Marketing Strategy:
 The Dawlance Group limited is in the process of continuous improvements
and innovation to adopt efficient measures possible.
 The company is keen to redesign a robust system that has the facility for
online shopping, marketing, procurement, purchasing, customer service,
excellent operational efficiency and extra security so that the extra cost
incurred can be controlled.
PRODUCT STRATEGY:
 Product’s which are as per international standards and carry all the basic
features. The most important factors are durability and good after sales
services.
PRICING STRATEGY:
 Primary focus is to cater to the middle and upper middle class however there
is a selected range of a product which caters to the upper class as well.
 Uniform pricing throughout the Pakistan.
PROMOTION STRATEGY:
 For all products the Dawlance is selling directly or indirectly they are not
promoting able.
 There will be a lottery ticket within and on draw the consumer will be
awarded free TV or Freezers.
 Dawlance has got around 800 dealers all over the country.
 Around 25% of dealers are "A-class" dealers who sell over 1000 units and
above per year. "B-class" dealers are those dealers who sell from 400 units
up to 999 units per year. They are around 50% in total dealer and the rest are
in best 25% of "C-class" dealers sell from 200 up to 399 units per year.

11. Comparison between Dawlance and PEL:
The comparison has been made with PEL because Dawlance is market leader and PEL is
challenger.
1. INNOVATIVE PROCESS:
Dawlance has high innovative process. PEL has also high innovative process but
it is not as Dawlance has.
2. MARKET LEADER:
Dawlance is market leader and PEL is challenger.
3. PRODUCT RANGE:
Dawlance has 20 to 24 products in the market which doing very good business
and PEL has 15 products in the market with good market reputation.
SWOT Analysis of Dawlance:
Strength Weaknesses
• Strong brand equity
• Market Leader
• Quality of product
• Large Dealers network
• Warehousing covering all areas
• Focusing only on Refrigerator’s
• Short Product Line
• Downsizing margin
• Need to Regularly update the
technology
• Seasonal demand & Price
Variations & Margins
Opportunities Threats
• Decentralized production which
can save costof transportation and
storage
• Product line expansion.
• Get technology for the production
of AC and Microwave which is
still not available in Pakistan.
• Export can be increased.
• Cheap product of china
• Energy crises in Pakistan
• Heavy tax levied on consumers
• Govt. Changing policies and
rules
• Increasing competition
&Copyrights
• Increase in raw material cost
• Availability of power

17. Dawlance Refrigerator Market Share:
Comparing with;
According to current market situation
Dawlance Market Leader
PEL Challenger’s
Orient Challenger’s
Others Followers
38%
30%
14%
10%
5% 3%
Sales
Dawlance PEL Orient
Haier Waves Others