Shan foods

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  • Shan Foods

    May 29

    2014 Project based on supply chain (Procurement) of Shan Foods. SYED JABBAR ALI SHAH

  • Executive Summary

    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.

  • Introduction

    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 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

    Biryani products

    Authentic curries

    Stir fried food

    Lavish fried food

    Chat Masala

    Sumptuous BBQ

    Pickle product


    Plain spices

    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

    quality suppliers.

    The department diligently pick and select the best quality spices.

    Company pays extra attention in obtaining raw Material.

  • Make

    The make process of SCOR model is referred to the production or

    manufacturing facilities.

    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

    Pakistan 450

    America 12

    South Africa 01

    Saudi Arabia 01

    United kingdom 04


    The ware house of Shan foods is located at the following areas:





  • Buy

    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

    their vision.

    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

    the road


    Real time vehicle monitoring.

    Control over the work of various sensors in a vehicle.

    Cost reduction

    Profit maximization.

    Vehicle operational safety improvement.


    The company uses the technology in packaging to keep the spices safe

    from bacteria and moisture.

  • Value added

    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

    and quality.

    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.


    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 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 inventory.

    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