2014 Project based on supply chain (Procurement) of Shan Foods. SYED JABBAR ALI SHAH
This report is on the Production department of the Shan Foods Private Limited
based on the interview with SYED ZIA UR RHEMAN (Manager Buying Supply
Shan Foods Private Limited was established in 1981 as a home based industry
selling recipe mix and with in no time it get a huge success and now it is a leading
Spice Manufacturer in Pakistan. Company is also slowly and gradually expanding
their operation throughout the globe.
In this report we identified how Shan food Pvt Ltd is managing their inventory in
order to get maximum availability in the market whenever customer demand. As
Shan Foods have a large number of SKUs so it is a big challenge of Shan Foods to
manage their inventory and fulfill the demand of their customer on time.
With state of the art integrated supply chain department Shan Foods Pvt Ltd is
sustaining their position in the market with providing availability of their every
SKU in the market. Shan Food is mainly managing two types of inventories that
are finished goods inventory and Packaging inventory for that separate MRP is
identified for both of them.
Shan Foods is effectively managing their inventory and they have removed all the
barrios and problems by effectively planning their inventories in order to reduce
their inventory cost.
Shan Foods (Pvt) Ltd is a rapidly growing food company with presence in over 50
Strengthening their departments with candidates having extra ordinary
positive energy, obtain and edge in technology, and determined in execution,
with a passion for excellence.
Shan Foods started from a single small room some twenty five years ago.
Management decided to launch its very own brand and start a full-scale
manufacturing unit to cater to the taste of the local public.
Shan is one of the largest exporters of premium quality packaged spices, recipe
mixes, pickles and desserts with products adding taste and flavours
To be a global leader in food products and socially responsible company that
attains its quality standards so that Shan stands for tradition, trust and good
To continuously develop and produce quality products.
To be a consumer oriented company with keen insigne of food product.
To obtain optimum result and retain highest quality standard through
efficient and motivation human resource.
SHAN FOOD COMPETITIVE EDGE
Shan Food always has an aggressive strategy.
Strategy implemented by Shan is Think Globally and Act Locally. Whereby Shan is
capturing middle class who cant afford restaurant or prefer to eat home.
Shan tends to place the brand internationally by getting all international
certification and winning award.
Products of Shan foods
Stir fried food
Lavish fried food
Supply chain process
A company becomes stronger when its supply chain is well equipped to
meet every challenge.
Supply chain team of Shan foods ensure that goods or shipment reach
their destination well in time.
The planning process of Shan foods is depending on S&OP.
The planning purpose of Shan foods is to achieved the target of R=R.
Shan foods believed that planning should be right and in efficient manner.
The main objective of Shan foods sourcing department is to work with
The department diligently pick and select the best quality spices.
Company pays extra attention in obtaining raw Material.
The make process of SCOR model is referred to the production or
Shan foods are dedicated to ensure the consistency of product by using
well equipped production techniques.
The supply chain team ensure that the goods or shipments reach their
destinations well in time to match market trends and customer demand.
Country No of distributors
South Africa 01
Saudi Arabia 01
United kingdom 04
The ware house of Shan foods is located at the following areas:
In this last step, the product is delivering to the customer through
different distribution channels.
Shan Foods always satisfy their customers by providing them high quality
products always on time.
They have employed ERP & SAP system to improve efficiency & to achieve
The two most advanced technologies are fleet control system & V-Lock.
Fleet on control system
Its a system that allows the tracking of those vehicles which are currently on
Real time vehicle monitoring.
Control over the work of various sensors in a vehicle.
Vehicle operational safety improvement.
The company uses the technology in packaging to keep the spices safe
from bacteria and moisture.
Recipe of different dishes.
Widely available almost.
Adapting and implementing latest technologies to offer a variety of foods
Maintaining quality and safety standards all time.
Just in time
Just in time (JIT) is a production strategy that strives to improve a business' return
on investment by reducing in-process inventory and associated carrying costs.
Such as the presence or absence of a part on a shelf. Implemented correctly, JIT
focuses on continuous improvement and can improve a manufacturing
organization's return on investment, quality, and efficiency. To achieve
continuous improvement key areas of focus could be flow, employee involvement
Material requirements planning (MRP)
Material requirements planning (MRP) is a production planning and inventory
control system used to manage manufacturing processes. Most MRP systems are
software-based, while it is possible to conduct MRP by hand as well.
Letter of credit
A letter of credit is a document issued by a financial institution, or a similar party,
assuring payment to a seller of goods and/or services provided certain documents
have been presented to the bank. These are documents that prove that the seller
has performed the duties under an underlying contract (e.g., sale of goods
contract) and the goods (or services) have been supplied as agreed.
WAREHOSE OF SHAN FOODS
Warehouse is a commercial building which is used for storage of inventories. They have in-house warehouse due to reduce damage percentage of finished goods. As we know, foods item should be keep in well temperature due hygiene purpose due to save the health of humanity. They have more than 150 vendors to supply the goods in market as well, all finished goods are placed in proper shelf to maintain SKUs, & they have much place to future expansion according projection base quantity or market demand with the help average monthly sales report. Benefits of In-house Warehouse:
It will reduce the damage cost of merchandise,
Reduce the transportation cost
Strong check & balance on inventory Security System of Warehouse: Shan Foods (Pvt.) Ltd. Also using the close circuit cameras at each entrance & exit points of warehouse to ensure workers will not be stole or misuse of product. If somebody try to do such type of things so management punished him to learn lesson for others.
INVENTORY MANAGEMENT SYSTEM
Inventory management based on forecasting that was given by Marketing & Sales
department. On the basis of required demand, design Master Production
Schedule; also remember the MPS safety covers are incorporate for meeting
uncertainties, in order to achieve the following objectives:
To maintain efficiency of operations.
To meet variation in product demand.
To allow flexibility in production scheduling.
To provide a safeguard for variation in raw material delivery time.
To take advantage of economic purchase order size.
In-transit lead time.
Also continuous review the following system
Reorder point system and fixed order quantity system.
For independent demand items.
Tracks inventory position.
Includes scheduled receipts, on-hand inventory, and back orders (an un
filled customer order or demand against an item, whose current stock level
is insufficient to satisfy demand)
For each of the preceding reasons, be aware that inventory is costly and large
amounts are generall