ENGLISH BISCUIT MANUFACTURER:

SUPPLY CHAIN MANAGMENT

EBM

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SUBMITTED TO:

MRS, TOOBA SAUBAN

GROUP MEMBER’S NAME:SAMREEN LODHIBEENISH KABIRDOULAT MALIK DOLLYAROOBA AZAMSHAHZADI NEELOFERSAHAR KHANHIRA SHAHID KHANCLASS: BBA IV

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SUBMITTED TO:

MRS, TOOBA SAUBAN

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We thank Allah for guiding us through the phases of compiling this report and helping us out in all the difficulties.

We would like to take this opportunity to thank MRS, TOOBA SAUBAN our teacher for the course of “SUPPLY CHAIN MANAGEMENT” at JINNAH UNIVERSITY FOR WOMEN, for her valuable support and encouragement, which she has offered.

This report is a joint effort of all the group members SAHAR KHAN, SHAHZADI NEELOFER, HIRA SHAHID KHAN, DOULAT MALIK DOLLY, BEENISH KABIR, AROOBA AZAM and our group leader SAMREEN LODHI and we could not have been made possible without the immense help and cooperation of our family members. Without their support and the amount of time that they gave us, this report would not have existed.

Thanks a lot.

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This Report “Supply chain management of English Biscuit Manufacturers Limited” (EBML) is a project of our supply chain management course in 8th semester at the JINNAH UNIVERSITY FOR WOMEN. We conducted this report under the guidance of our teacher Miss TOOBA.

English Biscuit Manufacturers (Private) Limited was established as a joint venture company in 1965 with the name of Peek Freans Pakistan Limited. EBM has been in the business of manufacturing and marketing branded biscuits in Pakistan for over 40 years. EBM is also the first biscuit company in Pakistan to have achieved ISO - 9001 Certification in correspondence with its institutional slogan 'The Legend Leads' .English Biscuit Manufacturers (Pvt) Ltd., or (EBM), is the country's leading manufacturer of biscuits and cookies since 1967

We also highlight our commitment to Best Practice, not just within our company, but encouraging other companies and individuals on to being the very best that they can be. Presenting our commitment to a healthy environment through our own initiatives, to manage the impact of our activities and by encouraging that commitment in others. EBM has a vision for a brighter future and we believe that this report demonstrates our commitment to realizing that future, through our actions, through our own plans for the future, and through everything that we are.

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TABLE OF CONTENT

Company introduction

Vision

Mission

Values

Policies

Product line

Major suppliers

Major competitor

Supply chain management

Structure of supply chain management

Process of supply chain management

Strategies of supply chain management

Decisions of supply chain management

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THE LEGENDINTRODUCTION:English Biscuit Manufacturers (Private) Limited was established as a joint venture company in 1965 with the name of Peek Freans Pakistan Limited. In 1966, the UK sponsor company was renamed Associated Biscuits International Limited (ABIL), while the venture was renamed English Biscuit Manufacturers (Private) Limited (EBM), which stands to date. EBM started manufacturing and marketing the world famous Peek Freans range in 1967 in order to provide Pakistani consumers with nutritious and hygienically packed biscuits of the highest quality.

EBM has been in the business of manufacturing and marketing branded biscuits in Pakistan for over 40 years. The brand name 'Peek Freans' is a household name, and people trust and believe in the quality of the products produced under this brand. EBM is also the first biscuit company in Pakistan to have achieved ISO - 9001 Certification in correspondence with its institutional slogan 'The Legend Leads'. The achievement also endorses the company's firm commitment to high standards of quality.

English Biscuit Manufacturers (Pvt) Ltd., or (EBM), is the country's leading manufacturer of biscuits and cookies since 1967, with an annual sales volume and production capacity of more than 90,000 tons and a turnover of more than Rs. 12 billion. EBM is the only Company in the industry to have achieved recognized international certifications pertaining to quality control, environmental management system and human resources management, including ISO 9001:2000, ISO 14001:2004, HACCP certifications and IIP (Investors in People) Recognition. EBM is also the only food company to have been awarded Environmental Excellence Award for seven successive years 2004, 2005, 2006, 2007, 2008, 2009 & 2010.

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VISION:

To provide high quality value-added food to contemporary and future generations.

To constantly endeavor for the acquisition of knowledge and excellence in developing human skills, product innovations and state-of-the-art technologies.

To be a good corporate citizen by giving back to the community and improving the lives of the underprivileged.

To dispense equitably, fairly, and with compassion, the fruits of success among our “partners in business”.

To become a partner with the Government in sharing the responsibility of economic and social uplift and development of Pakistan.

MISSION:

Strive for highly responsible management. Highest standards of hygiene.

Protect and preserve the environment.

VALUES:

We believe that no individual is bigger than the institution.

We believe in integrity, transparency and commitment as our cultural ethos.

We continually adhere to the highest standards of hygiene and ecology.

We believe in governance in human face.

We protect and promote the cause of the environment.

We emphasize on employee welfare.

We believe in leading and innovating in all aspects of business.

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POLICIES:

EBM Quality Management System binds the management and employees of the company to follow core policies:

We will critically examine and continuously review all aspects of operations, from procurement to be distribution of finished products, to identify any shortcomings or space for cost - effective improvement and will undertake appropriate quality – enhancement measure.

We will identify and, where possible, anticipate changes in consumer tastes and preferences through Market Research, on the one hand, while Technical Research and Development on the other, in other to retain leading edge in product and process development.

We will endeavor to recognize and establish Beat Practice criteria for all aspects of the company's activities, including the maintenance of environmental protections and safety standards.

We will undertake continuous appraisal, feedback and training of our personnel at every level to ensure optimum levels of productivity, creativity and job satisfaction.

The Management believes that every member of the organization at every level shares and fully affirms the Company's Quality Commitment.

FOOD SAFETY FAMILY:

"For more than four decades, EBM philosophy has been to produce biscuits which meet International standards of Quality and Hygiene in terms of safety and wholesomeness.

Every member of EBM team is committed to owing this philosophy and has mind-set to produce the best of products under the Trade Mark of "Peek Freans" and has inculcated this qualitative culture which gives EBM a competitive edge in keeping its customers satisfaction".

ENVIRONMENT POLICY:

"The EBM Management takes environment as a part of its cultural ethos and deeply committed to consistently deliver high quality products. It is EBM‘s mission to strive continuously for environmentally friendly technologies based on a highly responsible management and regulatory requirements. Aiming to protect and preserve the environment for our employees, our valued customers, our business associates and the community at large."

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EBM PRODUCT LINE:

PLAIN SWEET BISCUITS: Gluco Marie Sooper

CREAM BISCUITS: Lemon and chocolate

sandwich Rio

CRACKERS: Butter Puff Saltish

NUTS: Party Peanut Pick Peanut Pista

EBM’S MAJOR SUPLIERS:

EBM’S major suppliers are:

Habib sugar mills. Millac and Saima packaging.

COMPETITOR:

The major competitor of English biscuits is CONTINENTAL BISCUITS (LU), which has a

significant share of the market in terms of sales volume.

LU basically has five to six brands which it markets vigorously in comparison to English Biscuits Manufacturers.

But EBM’s strong planning, management and rational decision making took back the market. Since then, EBM has been growing fast and has left its competitor far behind.

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SUPPLY CHAIN MANAGEMENT:

“A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these

materials into intermediate and finished products, and the distribution of these finished products to customers”.

The management of this chain of events is what is known as Supply Chain Management. To be more precise Supply Chain Management can be defined as:

“The proactive act of improving the efficiency and effectiveness of the flow of goods services and knowledge within a particular channel with the goal of reducing total

cost and obtaining a competitive advantage for all the partners.”

EBM’S SUPLY CHAIN MANAGEMENT STRUCTURE:

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DIRECT MATERIAL

IMPORTS

INDIRECT MATEIAL

DOMESTIC PROCUREMENT

PROCUREMENT OR SOURCING

WAREHOUSING

RAW MATERIAL

STORE

STRUCTURE

PACKAGING MATERIAL STORE

FINISHED GOODS STORE

RAW MATERIAL

PACKAGING

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The structure of supply chain department of English Biscuits is divided into two broad categories:

Procurement or sourcing. Warehousing.

1.PROCUREMENT OR SOURCING:-

EBM’s sub-divide their procurement section into two parts:

Domestic procurement. Imports.

DOMESTIC PROCUREMENT:

The domestic procurement is sub-divided into two parts:

Direct material Indirect material

DIRECT MATERIAL :

Direct material is further divided into two sections:

RAW MATERIAL

The raw materials basically are ingredients material which are using in English Biscuits products such as eggs, flour, milk, sugar, cocoa etc.

PACKAGING MATERIAL

EBM’s product packaging involves three packaging material that is master carton, dispensers and films.

INDIRECT MATERIAL:

Indirect material are those material which are uses in the factory but that are not directly related to the products such as computer equipment ,marketing stuff, tool , stores/equipment, medicines and stationary.

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IMPORTS:

The EBM appoint two officers who dealing the imports of raw material that is using in products, the factory tools and spare parts of machinery and equipment.

2.WAREHOUSING:-

EBM’S has three warehouses:

RAW MATERIAL STORE:

Raw material store are those in which they store their raw material stock which are using in their products such as eggs, milk, flour and cocoa etc.

PACKAGING MATERIAL STORE:

Packing material store is that store in which they store all their packaging material that is films, dispensers and master carton.

FINISHED GOODS STORE :

Finished goods store are those in which they store their finished goods that’s products.

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EBM’S SUPPLY CAHIN MANAGEMENT PROCESS:

EBM’s supply chain process is comprised of a series of interdependent steps and starts with the collection of raw materials and ends with packaged brands on customer's shelves. The Supply Chain Management at EBM ensures that appropriate quality standards are upheld and maintained at each link in the chain.

The supply chain at EBM comprises the following areas:

Forecasting Planning Manufacturing DeploymentSuppliers Distribution The consumer / shopper

FORECASTING:

Forecasting is a vital element of the business, and can be defined as an unconditional statement of demand of biscuits. Simply put, a forecast predicts how much demand there will be in the market for a specific product over a certain period.

PLANNING:

The function of planning is to convert marketing forecasts into manufacturing plans. The planning department works closely with the various operations to ensure that manufacturing plans are accurately converted into monthly and weekly production plans and budgets.

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RAW MATERIA

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WAREHOUSE

RETAILER

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Planning is also responsible for monitoring and controlling the amount of stock the company holds and for ensuring that the correct stock holding levels are maintained to meet customer service requirement.

MANUFACTURING:

The manufacturing process at EBM involves the conversion of raw and packaging material into finished product in the most cost effective manner possible. EBM manufactures all of its own products, and production takes place at the two factories located in Karachi and Hattar.

DEPLOYMENT:

Deployment is the movement of finished goods (biscuits) to warehouses.

MARKETING AND SALES:

The function of marketing and sales is to market the product with the aim of maximizing the profit of the firm. Effective policies and strategies are made for this purpose.

SUPPLIERS:

For every item EBM have 3 to 4 suppliers, so to cope with any uncertainty.

DISTRIBUTION:

Simply defined, distribution involves the execution (delivery) of sales orders to a customer. EBM has more than 350 distributors all over Pakistan.

THE CONSUMER /SHOPPER:

The shopper and consumer are the individuals who eventually buy and consume EBM’s products.

A shopper is the person who purchases the product in store, whereas a consumer is the person who eventually consumes the product. In many instances the shopper and consumer are one and the same.

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MARKETING & SALES DEPARTMENT:

Marketing is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of Customer demand in a manner that will achieve the company's objectives.

EBM is very much concerned about its marketing as it is the backbone of its sales. A good marketing strategy has

always been adopted by EBM which keeps on changing with the passage of time. One of the biggest tools of marketing is advertising. EBM does advertising through different media channels which include TV commercials, Radio, Magazines etc. Furthermore, EBM also sponsors different events like cricket matches, concerts etc. Sales activity is also performs by the same department. This department sets the targets of sales for the current year and for the upcoming years. Once the target is set, a strategy is developed for achieving this target. They collect orders from the distributors and supply to them the same. Their overall strategy is to maximize the sales by observing the market trend and consumer demand. EBM has more than 350 distributors all around Pakistan. EBM has recently achieved a sales target of Rs.7 billion, which is a great achievement.

SALES FORECAST:

In any industrial unit or FMGC unit planning starts from sales forecast. In EBM, sales forecast for the coming month is provided before the end of current month and sometimes forecast of two additional months is provided in advances. Now the forecast is for the months of October, November and December. The benefit from it is that we get an idea about the trend coming.

PRODUCTION PLANNING:

On the basis of sales forecast production department will start production planning. Production capacity will either be above from sales forecast or below the forecast it’s never in line with production capacity. If it is above the production capacity than material flow from opening stocks. If it is below production capacity than production department will have to take decision either to produce less or to produce maximum in order to build further stocks. The trend that EBM follow is to build further stocks. Let say for example in the month of Ramadan if we have 100% production capacity and the demand is for 35% we opt for producing 100%. By

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producing 100% we took 15% of that 100% to our opening stocks for the next month. On the

basis of production planning we break them in to the components known as MRP.

MANAGEMENT RESOURCE PLANNING (MRP):

MRP is a systematic approach to management and planning that allows us to develop production plans and order materials as required by the plan.

Keeping unnecessary inventory on hand is expensive and inherently wasteful. MRP helps us avoid costly overstocks. Conversely, inventory shortages can stop the manufacturing process and lead to employees being sent home or working on other less productive tasks. Material Resource Planning programs provide a time-dependant picture of future requirements. Automated planning of material requirements allows us to consistently meet customer due dates. The MRP process help the sales department provides reports forecasting future orders. The forecasted data is integrated with information regarding orders already in-process. The Bill of Materials module is consulted to determine raw material requirements. Purchase orders are scheduled using the following criteria. The master production plan is scheduled. EBM is working to connect suppliers on MRP to have physical contact with them.

MANNER OF PLACING ORDER TO SUPPLIERS :

To many suppliers we provide material forecast that we have to do. Afterwards the suppliers have their own requirements and lead times. We purchase material when dealing in for long terms. Sometimes when we have a good understanding with suppliers we provide them material forecast which is as good as an order. On this basis suppliers perform their planning and procurement. In this way whenever we want we place order and purchase the material. In short we got requirement, raise purchase orders and material is available to us by our suppliers.

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QUALITY ASSURANCES DEPARTMENT:EBM is the only Company in the industry to have achieved recognized international certifications pertaining to quality control, environmental management system and human resources management, including ISO 9001:2000, ISO 14001:2004, HACCP certifications and IIP (Investors in People) Recognition. EBM is also the only food company to have been awarded Environmental Excellence Award for seven successive years 2004, 2005, 2006, 2007, 2008, 2009 & 2010.

EBM is strictly following the policy of providing its customers, the best quality. EBM has never compromised on this and therefore, it has been the main reason why the EBM is so successful and famous amongst its customers. EBM, for this purpose, has developed a Quality Assurance & Development Department. The basic function of this department is to check and maintain the quality and standards of raw material used. This includes testing of flour, eggs, Oil & fats etc. Four Labs are currently working at EBM, for checking and testing purpose. Two more labs are under:

Construction. Analytical Lab (Centre of Excellence C.O.E ) Packaging Lab Microbiological Lab Process Lab

Under-constructed lab includes Research and Development where research work will be Performed and new product development work will be done. Quality control begins with the ingredient assembly stage of production during the measuring, weighing, and processing of the raw ingredients. Additionally, most large manufacturers have quality control (QC) labs responsible for making sure the materials meet determined specifications. Characteristics such as appearance, color, odor, and flavor are checked. QC technicians

also test for particle size, viscosity of oils, and pH of raw material. The finished product is also carefully monitored. Like the inspection of the raw material, the finished products must be examined for appearance, flavor, texture, and odor. The product is compared to a standard established during product development. Specially trained testers are responsible for detecting subtle differences that deviate from the norm. No information is passed on the ERP until it passes from QC department.

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MIS (MANAGEMENT INFORMATION SYSTEM) DEPARTMENT:

EBM is an ERP (Enterprise Resource Planning) based Organization. All the departments are linked with each other through networking called INTRANET. EBM is also connected with CFL with INTERNET as well. A central database has been maintained at EBM where the information related to Payables, Receivables, Fixed Assets, and Inventory etc. are saved. Module has been established for each (payables, receivables, fixed assets, inventory and so on). Each module is integrated with each other. This integration has increased the efficiency of each department, as maintaining and keeping record of data and information have become

easier. Overall effectiveness of the organization has also increased to a great extent. All the budgeting, general accounting and treasury related works are being performed on this ERP software.

MIS department is responsible to make sure the safety of information. They are also responsible to take corrective measures if any problem relating to ERP arises. Moreover, any issue relating to networking, hardware, software etc are dealt by this department. Since ERP has been recently developed and implemented at EBM, therefore it still has some areas to be improved. If any department has any query

relating to its concerned module, it may ask and instruct MIS department to make desired alterations. Furthermore, new modules are also being constructed for the complete implementation of ERP.

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LEAD TIME:

The lead time of every product of EBM is different from other products. let say e.g. if we needs eggs we get them on one day notice so we don’t need a huge stocks or to have maximum ordering lead time. We order one day and on the very next day material is available to us. We hold 2-3 days of material in stocks. When there are those products which need either more production time or the suppliers have schedules to provide material then we set lead times accordingly.

FOR LOCAL PRODUCTS:

On an average the lead time of local manufacturing products is 21 to 25 days, it may extend to a maximum of 30 days depending on their requirements.

FOR IMPORTS:

In case of imports the lead time is about 2 to 4 months. For different origins and different products lead times will be different.

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EBM’s SUPPLY CHAINS STRATEGIES:

Monitoring local and international pricing, comparing them, findings synergies and switching towards it. Long term buying.Long term bookings when suppliers don’t need money and we trust them enough we book orders.

COMPETITIVE EDGE OF EBM:

The buying at EBM takes place at two tier level. Tier 1 is our supplier. Tier 2 is our supplier supplier’s. We monitor international and national prices where we see synergies we say our converters to book orders. Converters are the one who are purchasing us (SC department) do not have any money involvement in it. But the decision is our, we decide the price point of material. In material pricing we see the main components such as films, what we do we collaborate with local or international suppliers and crack a deal because obviously our volumes are huge and when we deal in with large volumes we get synergy’s, our converters deal on our behalf and get those volumes if e.g. requirement for a particular material is around 150 to 200 tons for a month. Individual vendor will not be able to provide material of more than 30 to 40 ton.

When that individual vendor go to either local or international supplier with 30 to 40 ton volume it will be expensive because price will be set on individual ton as it is less in quantity. What we do we go to the party and state our requirement which is around 200 to 300 tons of volumes and on the basis of huge volumes we get a very a good price. Afterward we allocate those volumes to our individual converters e.g. 30 ton belongs to converter 1, 50 ton to converter 2 and it goes further on until all is allocated. If it is an international party the converter opens LC and if it’s local converter directly purchase it. The benefit we get that we cover 70% out of that 80%. We are controlling the suppliers by helping them buy less expensive material.

Another important thing that we do we negotiate with our suppliers on conversion cost. Annually we sit and discuss issues like inflationary effects, utility expense, labor cost etc for the year. We negotiate hard and set the final conversion cost for the year. It addresses 15% or 20% of the components.

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TIER 1 TIER 2

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EXPORTS:

English Biscuit Manufacturers (Private) Limited is a producer of high quality biscuits in Pakistan. It caters not only to the wide requirements of the domestic market but also exports its products to USA, Canada, UK, UAE, Bahrain, Djibouti, Saudi Arabia Mauritius, Sudan and South Africa. English Biscuit Manufacturers exports its products in special sea worthy packing to keep its products intact during and after transit.

LEVEL OF UNCERTAINTY:

As we are sitting in FMGC the level of uncertainty could be either +100 or -100. Because on the shop consumer decides which biscuit they want to buy. Supply chain officer said himself he had never seen pre calculated buying.

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EBM’S SUPPLY CHAINS MANAGEMENT DECISIONS:

Supply chain management decisions are often said to belong to one of three levels; strategic, tactical or the operational level:

LONG TERM DECISION

MEMEDIUM TERM DECISION

DAY TO DAY OPERATION

STRATEGIC LEVEL:

Alignment of overall organizational strategy with supply chain strategy to achieve organizational objectives.

Decisions concerned with the size, number, and geographic location of the supply chain entities, such as plants, inventories, or distribution centers.

To determine which products to produce, where to produce them, which suppliers to use and to identify plants from which distribution centers are supplied.

Development of information technology infrastructure to support supply chain operations through planning and execution related applications.

TACTICAL LEVEL:

Identification of sourcing locations, establishment of contracts and other purchasing decisions.

Inventory decisions including quantity, location and quality of inventory.

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TACTICAL LEVEL

OPERATIONAL LEVEL

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Transportation s t r a t e g y including frequency, routes and contracting. Benchmarking of all operations against competitors and implementation of best practices

throughout the organization. Decisions such as medium term production requirements demand forecasting and staffing planning etc.

Identification of new cost efficient markets for procurement of materials required for production.

OPERATIONAL LEVEL :

Daily planning of all related nodes in the supply chain. Demand planning and forecasting, coordinating the demand forecast of all the customers and sharing the forecast with all suppliers.

Source planning, including current inventory and forecast demand, in collaboration with all the suppliers.

Inbound operations, including transportation from suppliers and receiving inventory along with outbound operations including all fulfillment activities and transportation to customers. Supply chain operations, including consumption of materials and flow of finished goods.

Performance tracking of all activities pertaining to supply chain.

During the last few decades we have seen an increasing rate of globalization. Products are no longer produced and consumed within the same geographical area. The world has shrunk to palms with the introduction of computer based business applications, internet and e-procurement concepts, thus changing fundamental assumptions about business in terms of challenges and opportunities.

Organizations operating in today’s business are required to understand these new phenomena’s and respond quickly to ever changing global requirements by seeking maximum benefits out of available technological developments to achieve their business objectives. Since in today’s world only “survival of the fittest is the rule of the game.

One word to describe supply chain of EBM is “EFFICIENCY” in 4M’s man, material, machinery and method.

By Senior Manager,

Waqas Jalil

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