Supply chain Process (Logistic In-bound & Out-bound in NFL, National Foods Limited)

Supply chain Process (Logistic In-bound & Out-bound in NFL, National Foods Limited)

Submitted By:

Muhammad Faraz Shamshad(8610)

[email protected]

Waqas Mohiuddin (7639)

[email protected]

Muhammad Ubaid Ullah Khan(8995)

[email protected]

Submitted to
Mr. Muhammad Ishaque Shaikh

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Supply chain Process (Logistic In-bound & Out-bound in NFL, National Foods Limited)

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 (NFL) 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.

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Key Words: Logistic, Supply chain management, Import, Export, Transportation

VISION STATEMENT
To be a Rs. 50 billion food company by the year 2020 in the convenience food segment by

launching products and services in the domestic and international markets that enhance lifestyle

and create value for our customers through management excellence at all levels.

(REFERENCE = NATIONAL FOODS WEBSITE)

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BACKGROUND

National Foods began its journey in 1970 as a Spice company, with a

revolutionary product that popularized the concept of having clean, healthy food. National foods

initiatives were, to make food that is hygienic, reduce time spent in the kitchen by women, foster

health and contribute towards personal attractiveness, so that people who use our products would

be able to experience a more rewarding life-style.

This was long before the phrase Corporate Mission had even been invented.

However, our founders philosophy remains unchanged over time. Even if their language and

the notion of only women doing the housework have become outdated, in this age of rapidly

changing lifestyles, fuelled by the rampant development of technology; consumers are compelled

to alter their eating habits. National Foods responds to this challenge of developing innovative

food products based on convenience and quick preparation in line with modern lifestyles and yet

retains traditional values through its diverse collection of food products.

In a history that now crosses three decades, National Foods success has been

influenced by the major events of the day economic boom, depression, wars, changing

consumer lifestyles and technological advancements. Even after three decades the companys

focal point still remains on customers needs through product development in line with the

changing market trends.

Today, National Foods provides a complete food experience to its customers in 33

countries around the world. National Foods produces over 300 SKU's in 12 major product

categories including meal solutions, pickles, sauces, ketchup's, jams and desserts.

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National Foods is reaching out to the voice of its customers by delving further

into the convenience food segment and adhering to their philosophy of offering superior taste

and quality.

PLANNING STRATEGY AND GOALS

In this era of fast paced life, execution of business decisions has significantly been

impacted through the use of technology. Planning, analysis and strategy developments are now

all dependent on the plethora of information available. Correct usage of this information can

impact and reward the outcome of business results in the shape of growth, profits, market share

and also the brand image and perception a company portrays in the one large global market.

Technology has indeed transformed how we think and perform our tasks. Most of all it has

unified markets into a global village promoting direct interactions with customers and service

providers. Indeed, business is being executed at the speed of thought.

Our journey to become a leader in the food business in Pakistan and a major

player in the international markets has not come about without the use of technology. In fact our

growth rate has been sustained through the continuous usage and up gradation of technology

when adapting to modern management practices. Our brand today is ranked at number 2 position

out of a total 3500 brands marketed and sold in Pakistan.

Our brand new website showcases all our categories and brands and in fact offers

you an opportunity to directly interact with us. Although we produce branded multi category

food items; the complex process of manufacturing, supply chain management, quality assurance,

research and development, market research and brand marketing practices are heavily dependent

on the extraction and usage of data to make decisions. Our choice of using SAP applications

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towards enterprise management has helped us reap many awards of excellence. Technology is

embedded in how we do business.

In the months to come, you will see our website develop and evolve further to

cater to all our business stakeholders. We will offer them a direct transactional nature of

relationship by linking our ERP SAP applications to help them make informed choices to further

our mutual business. The Internet in fact will become the nucleus or the hub around which we

shall be carrying out all our business.

The website will become the central hub offering stakeholders and consumers

company information and updated knowledge and news, it will provide a direct access to

employees to interact through a company intranet, it will become a portal for all our supply chain

customers to track their orders and finally a vantage point for all our customers domestically and

globally to order our products as an individual user or a business distributor directly without any

interaction from us.

CORE VALUES

PASSION

We act with intense positive energy and are not afraid to take risks. We challenge

ourselves continuously, were good at what we do, and we take pride in who we are.

PEOPLE-CENTRIC

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We put our people first. We treat them with respect and actively contribute

towards their development.

CUSTOMER FOCUS

We see the world through the eyes of our customers. We do everything possible

that makes them happy.

LEADERSHIP

We are part of the solution, never the problem. We act like owners and have a

positive influence on others.

TEAMWORK

Our roles are defined, not our responsibilities. We believe in going the extra mile

to accomplish our goals. We coach and support each other to ensure everyone wins. We have a

WE versus I mindset.

ETHICS

We dont run our business at the cost of human or ethical values.

EXCELLENCE IN EXECUTION

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We say. We do. We deliver. We talk with our actions. We strive for nothing but

the best. Execution is the key to winning.

ACCOUNTABILITY

We see. We act. We take full responsibility for our actions and results. We dont

blame others for our mistakes; we analyze them and correct them.

PRODUCT MARKETING STRATEGY:

Raise consumer brand awareness, excitement and involvement

Promote a special offer or incentive
Stimulate product sampling and trial
Demonstrate product/service benefits
Generate in-store or online site traffic
Stimulate media interest and industry buzz

PRODUCT

Product is a term covering goods, services, places, persons and ideas.

GOVERNMENT LEGISLATION:

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The production department of National food uses special machinery that has to be

imported from abroad. Government has fixed a quota system that company cannot import. It

more than a specific ratio. This quota system is creating a threat for company and soon company

needs to find an alternative.

PRODUCT MIX

PLAIN SPICE

SALT

RECIPE MASALA

CHINESE SALT AND VINEGAR

PICKLES

KETCHUP

JAM JELLIES AND MARMALADES

SNACKS

DESSERTS

READY TO EAT

RICE

POWER DRINK

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FURTHER DIVISION OF THE

PRODUCTS:

SNACKS

CHAAT MASALA

DHAI BHALA

PAKORA

FRUIT CHAAT MASALA

CHUTNI

CHINESE

CHINESE SALT

SOYA SAUCE

VINEGAR WHITE

CHILLI SAUCE

AVAILABLE IN TWO SIZES,

SMALL AND LARGE

SALT

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TABLE SALT

IODISED SALT

AVAILABLE IN POUCHES

POWER DRINK (KNOWN BY THE NAME OF FRUITILY)

ORANGE
MANGO
LEMON
MIXED FRUIT

AVAILABLE IN MINI SASHA`S, BOTTLES

AND PACKETS

DESSERTS

VANILLA
STRAWBERRY
BANNANA
MANGO

AVAILABLE IN TWO
SIZES, SMALL AND
LARGE

RICE

SUPER KERRENEL BANASPATI

LONG GRAIN BANASPATI

AVAILABLE IN DIFFERENT GRAM

POUCHES

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KETCHUP

TOMATO KETCHUP
CHILLI GARLIC SAUCE
HOT AND SPICY SAUCE

AVALABLE IN POUCHES,SQUEEZ BOTTLES AND GLASS BOTTLES IN

SMALL AND LARGE SIZES.

JAMS

APPLE
MANGO
MIXED FRUIT
STRAWBERRY
BLACKCURRENT

AVAILABLE IN A STANDARD BOTTLE SIZE

PICKLES

MIXED
MANGO
GARLIC
KASUNDI
LASOORA
CHILLI
HYDERABADI MIX
KARELA
MIX VINEGAR
MANGO VINEGAR

AVAILABLE IN POUCHES

READY TO EAT (KNOWN BY RONAQ)

CHICKEN QORMA
CHICKEN KARAHI
CHICKEN BARYANI
CHICKEN WHITE KARHAI

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CHICKEN GINGER
CHICKEN HALEEM
CHICKEN ACHARI
CHICKEN NIHARI

AVAILABLE IN PACKETS OF TWO DIFFERENT SIZES, SMALL AND LARGE.

PLAIN SPICE

GARAM MASALA POWDER

CURRY MASALA POWDER

AVAILABLE IN PACKETS OF TWO DIFFERENT SIZES, SMALL AND LARGE.

BRAND IDENTIFY

BRAND LOGO

At NFL, freshness is what keeps us going. We keep life

updated with new recipes, new products, and now weve got ourselves a

Transformed logo.

As with everything we do, we took a careful look at what we had, kept the best of

the past, and introduced elements that were exciting, appealing, and yet always true to

our soul. Were still caring, optimistic, and reliable and now were
livelier than ever before!

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CORPORATE LOGO

For over 40 years, weve been known as the one

brand women all over Pakistan count on, but just

like people grow and change, were growing too.

And now its time for a change.

Every year were growing bigger, brighter, more

global, and our NFL spirit of adventure which

has been the energy behind every new and

innovative product is now the encouragement

behind our new logo. The new Pakistani

homemaker is feisty and vibrant and our new

image is helping her feel just as we have

generations of food lovers feel completely at

home.

BRAND COLOURS

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CULTURE

NFL talk about their values consistently at all levels and use the HAMSAB

platform to build and sustain a healthy positive vibe across the organization. With the growing

passage of time, they reinforce their core values through communicating them down to every

level in the organization.

They remind their people of the principles they stand for and how to create

business opportunities within the boundaries of integrity and fairness. This is how they create

lasting change and develop a mindset of a truly accountable workforce.

THE SELECTION OF SPECIFIC BRAND

NATIONAL KETCHUP

The national ketchup is providing:-

TOMATO KETCHUP
CHILLI GARLIC SAUCE
HOT AND SPICY SAUCE

KETCHUP BRAND ANALYSIS:

Ketchup brands vie for supremacy in a very tough battlefield. Ketchup is also

more severely judged than other kinds of food, because while it is exceedingly popular among

adults, by far the largest consumers of ketchup are children and children are very hard to

please.

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Were proud to say that National Foods Limited has succeeded in meeting Pakistani childrens

high ketchup standards year after year. Delivering the perfect balance of tart and sweet, National

Tomato Ketchup stood 1st at the Brand Elections 2010, leaving other competitors far behind by

tremendous margins.

PRICING ANALYSIS

This is another very important aspect in marketing a product. Because most of the

people in our country adopt or buy any product because of its low price and high quality so our

main objective is to make a low price and high quality product.

SELECTING THE PRICING OBJECTIVE:

EVERY FIRM HAS ITS OWN PRICING OBJECTIVE IT MAY EITHER MAY TOO.

SURVIVE IN THE MARKET

TO MAXIMIZE THEIR PROFITS
MARKET SHARE MAXIMIZATION
MARKET LEADERSHIP

Well the pricing objective of NFL is to capture mass amount of market share

because if they manage to do so then automatically with the passage of time they can become the

market leaders and can maximize their profits.

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DETERMINING DEMAND:

The determination of market demand is another very important factor in pricing,

the demand can be either elastic or inelastic .I think the demand of their kind of products is

elastic because there are a lot substitutes available in terms of other food mix of other company.

So if NFL introduces a high price product the greater chances are that our product wont be very

successful.

ESTIMATING COST:
This is the most important step in pricing, and is a combination of fixed cost and
variable cost.

Total cost =fixed cost +variable cost

AUDIENCE VIEWS:
The pricing of national ketchup brand is nominal in customers view, the pouch

pack is convenient to use and cheap in price.

PROMOTION

Promotion is to inform, persuade and remind a market of a product an

organization is selling in a hope to influence customer feelings and buying behavior. By adopting

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the promotional method NFL want to inform the market about our new product, with the hope

that it will influence the customer feelings and buying behavior.

PROMOTIONAL ANALYSIS:

Both pull strategy and push strategy is executed to make a good image in the

minds of consumers and to promote the sale.

PUSH STRATEGY:

For an effective push strategy wholesalers and retailers are advised to increase

the sale of NFL product. For this purpose NFL offer them different incentives and good profit

margins so that they convince their customers to buy our products.

PULL STRATEGY:

Through advertisement on different Medias and promotional campaigns NFL

make animate in the minds of end user about our product. Because launching a new product in

the market and there are number of competitors in the market, so emphasis is to capture the

maximum market share. to concentrate on NFL`s pull strategy so that they can make leader in

the market of this kind of product.

PROMOTIONAL CAMPAIGN:

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A survey conducted by National food advertising agency owned by company

itself shows that correct media selection has helped company achieving communication goal. As

a combination of different types of media used (TV, Radio, and Newspaper) by national food,

50-70 % people are accessed out of whole population of Pakistan. National food spends lots of

efforts on promotion of its products as management thinks itis the essence of marketing that you

communicate effectively with your target customers.

Following campaigns are used for the promotion of our product.

SALES PROMOTION:

Advertisement is done in such a way that people are waiting anxiously for NFL`s

product. NFL starts by giving a surprise to people that something useful for them is coming to

serve them. they adopt this way because their product is going to be launched for the first time in

the market. So they also use billboards to promote our product.

NEWSPAPERS:

NFL knows that newspaper is very effective and inexpensive media to convey the

message to target market. Newspapers is extensively used to promote NFL`s product. General

awareness and advantages of NFL`s products is given to the prospect users.

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SEMINARS:

To start with an effective sales promotion some introductory seminars are

conducted. In which all the wholesalers are invited from different parts of City and Country.

They are introduced with their product and sales and promotional plans. NFL

briefs them about the incentives they are going to offer them. they convince them about the

strength of their product.

TELEVISION (TELEMARKETING):

They know that TV is very effective media now days. NFL can convey their

message to all the prospects very effectively. Different ads and commercials run at different

times preferably during family programs (dramas). To use TV intensively is long term strategy,

which will last the image of their product in the minds of customers for a long span of time.

PUBLIC RELATION AND PUBLICITY:

Doctors are invited in the TV advertisement. They will discuss about NFL`s

product because this product related to food so this could convince to the health conscious

people. Through Doctors. NFL generates the idea about the product that how much it is

necessary in peoples daily life. Through this NFL will establish an effective link between their

product and user. Their relation campaign also targets different cooking schools to generate

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awareness about the use of our product. NFL tries to make ladies their advocates. National food

also arranges different types of funfairs, Cat walks, Cooking competition, Kids show, singing

competition etc to promote its products and invoke the interest among people.

DISTRIBUTION

DISTRIBUTION CHANNEL

ROLE OF DISTRIBUTION CHANNEL:

Middleman is of lot of concern for the distribution of our product. Middle man

involvement is necessary for our product because our product is not that kind of in which we

direct contact with end user, so thats why we need the role of middle man which specifies the

role of our distribution channel.

TYPE OF DISTRIBUTION CHANNEL:

Our product is a consumer good. So our distribution chain is:

PRODUCER WHOLESALER RETAILERS CONSUMER

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This distribution chain is for Karachi. In Karachi those wholesalers are selected
who deal with the major markets and big stores of all the parts of Karachi.

PRODUCER AGENTS WHOLESALER RETAILERS CONSUMER

This distribution chain are used out side Karachi for different other cities. From
where agents are used to distribute our product in different other cities.

INTENSITY OF DISTRIBUTION CHANNEL:

NFL say that intensity of our distribution channel will be selective, so that we can

spread their product throughout PAKISTAN. Because their goal is to capture the maximum share

of market.

DISTRIBUTORS OF ISLAMABAD:

Capital distributors of Islamabad for NATIONAL tomato ketchup are situated in

Tarlai, and they are responsible for the distribution in Islamabad and as well as in Rawalpindi.

Exports

At NFL, exports have an important focus. For this purpose, aggressive channels of supply chain

are working for NFL in various international markets. Our Products have a special appeal for the

halal conscious consumer segments around the world.

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NFL 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. NFL is

all set to explore new markets, identifying specific consumer needs and providing much desired

NFL products on the market shelves, Insha-Allah!

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.

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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

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Efficient & Responsiveness

Efficiency Respons

Inventory Transportation Facilities Info

Domestic Suppliers

National Foods local suppliers are 150 plus majority based on Karachi,

Lahore, Faisalabad, Hyderabad

60% domestic suppliers at Karachi

25% domestic suppliers at Lahore

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10% domestic suppliers at Khyber Pakhtoon

5% domestic suppliers at Baluchistan

Break Up

Packaging

10 Suppliers are based on Karachi and Lahore

Pulping

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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

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.

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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

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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

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

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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. NFL 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%

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Customer flow

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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

Conclusion

Supply chain of NFL 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 NFL have a very good and efficient supply chain.

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