EBM

ENGLISH BISCUIT MANUFACTURER:SUPPLY CHAIN MANAGMENT

Nazeer Hussain University

SUBMITTED BY: RABIA SIDDIQUICLASS: BBA IIITOPIC: SUPPLY CHAIN MANAGEMENT

da

SUBMITTED TO:MS. QANITA NAFEES

Acckknnoowwlleeddggeemmeenntti thank Allah for guiding ME through the phases of compiling this report and helping me out in all the difficulties.I would like to take this opportunity to thank MS, QANITA NAFEES our teacher for the course of OPERATIONS MANAGEMENT at NAZEER HUSSAIN UNIVERSITY, for her valuable support and encouragement, which she has offered. Thanks a lot.

EXXEECCUUTTIIVVEE S UUMMmmAARRYYThis Report Supply chain management of English Biscuit Manufacturers Limited (EBML) is an assignment of our operations management course in 3rd semester at the NAZEER HUSSAIN UNIVERSITY. I conducted this report under the guidance of our teacher Miss QANITA. 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.The reason why choose EBM is that the biscuit industry in Pakistan is currently experiencing high competition between the two major players, that is EBM and LU. EBM had been and is a major player in the biscuit industry. In fact it had been the market leader until the arrival of Continental Biscuit Limited (CBL), the makers of LU Biscuits. To regain its lost market leadership EBM has been forced to reconsider and replant its marketing strategies and reposition itself in the biscuit industry. This has given me the opportunity to analyze a company, which is actively and strongly challenging its competitor for its lost share. It has also given me a valuable chance to apply the concepts, which I have learnt in my operations management course. I have used this opportunity to put fourth my own views and analysis of EBM environment, strategies, organization, systems, productivity, operations and functions. Finally I have given my recommendations and opinions which I have come up with after making analysis.

TABLE OF CONTENT

Company introduction

Company objective

EBM product line

Major suppliers

Major competitor

EBM Supply chain

Structure of supply chain management

Process of supply chain management

Strategies of supply chain management

Decisions of supply chain management

Recommendations

Conclusion

References

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 as Associated Biscuits International Limited (ABIL), while the venture was renamed to English Biscuit Manufacturers (Private) Limited, which stands to date.EBM has led the biscuit industry in Pakistan for over 40 years by providing innovative and high quality biscuits. It started manufacturing and marketing world famous Peek Freans range in order to provide Pakistani consumers with good quality, healthy, nutritious, and wholesome and hygienically packed biscuits. The trade mark of Pied Piper made its mark about 35 years ago which is recognized as a symbol of 'trust & confidence' for consumers and is true to its corporate claim, 'The Legend Leads'.With the help of their strategic vision and direction EBM has successfully transformed the biscuit eating habits of Pakistani consumers by making biscuits more of an everyday necessity and less of a luxury item.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. 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.Company implements ISO Standard for safety, & Quality management.

Company Objectives: Improve the knowledge base of the cereal and baking technology Create awareness in people about hygiene and nutritional value of food Overcome the non-availability of the equipments for quality determination of raw materials Bring our country on the top with a reputation not only for world class scientific and technological discovery but also for turning that knowledge into new and quality products and services.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 PistaEBMS MAJOR SUPLIERS:

EBMS 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 EBMs 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.Ebm SUPPLY CHAIN:Minor & Major Purchasing Decisions & Whos ResponsibilityHead of supply chain take major decisions of purchasing and also responsible of giving approval. For minor decision supply chain department members done all homework and after that final authority will be of head of supply chain.In other part if we are purchasing out of routine then we have to get the approval from the Board of Directors. For supposed if we are given the approval to consume 10 Crore per quarter but if due to certain extra purchases we get to consume more money which beyond to 10 Crore then we are responsible for getting the approval from board of directors.Company replenishes direct material and indirect material one time. All departments are working collaboratively in finding the required material. For example if a company require a new Ac then its technical team explain its configuration from where to buy which brand is good for long term.On this specification company select vendor and negotiate with vendor and allow material to be available. We prefer supplier having low cost.Supply Chain Management According to MeAccording to me Supply Chain Management became a Backbone of a company now days the companies do not compete with other companies but one supply chain competes with other supply chain. So, the companies involved in a specific supply chain are managed as a single entity, not the separated ones.

EBMS SUPLY CHAIN MANAGEMENT STRUCTURE:

STRUCTURE

PROCUREMENT OR SOURCINGWAREHOUSING

RAW MATERIAL STOREPACKAGING MATERIAL STOREFINISHED GOODS STORE

DOMESTIC PROCUREMENTIMPORTS

DIRECT MATERIALINDIRECT MATEIAL

PACKAGINGRAW MATERIAL

The structure of supply chain department of English Biscuits is divided into two broad categories: Procurement or sourcing. Warehousing.

1. PROCUREMENT OR SOURCING:-EBMs 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 materialDIRECT MATERIAL:Direct material is further divided into two sections:RAW MATERIALThe raw materials basically are ingredients material which are using in English Biscuits products such as eggs, flour, milk, sugar, cocoa etc.PACKAGING MATERIALEBMs 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. 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:-EBMS 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 thats products.EBMS SUPPLY CHAIN MANAGEMENT PROCESS:EBMs 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 Deployment Suppliers 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. 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 EBMs 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.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 its 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 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. 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. 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 dont 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.

EBMs SUPPLY CHAINS STRATEGIES: Monitoring local and international pricing, comparing them, findings synergies and switching towards it. Long term buying. Long term bookings when suppliers dont 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 suppliers. 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 synergys, 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 its 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. 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.EBMS 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 DECISIONMEMEDIUM TERM DECISIONDAY 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. 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.

Recommendation:

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

One word to describe supply chain of EBM is EFFICIENCY in 4Ms man, material, machinery and method.

Conclusion EBM is one the leading biscuit manufacturers in Pakistan merged with Peek Freens around 1960s. Its a national company. EBM famous product is Sooper biscuit. EBM has one more company in hattar. Product of both company sales according to region wise. Sooper produces only in Karachi and cater the largest sales volume. Purchasing in EBM are all done with collaboration of other departments. Purchasing approval is the responsibility of head of supply chain. Company outsourced all function at upstream and downstream level. Company deals with transaction and alliance partners separately. In alliance relation depends on volume of purchasing & in transaction simple purchasing is done by supply members. Company is ISO certified so they are restricted to suppliers visit. EBM have temporary and contractual workers. Company makes early suppliers involvement in NPD. EBM is a strong buyer in terms of power because company purchase in high volume from suppliers and have strong profile in the market. Company issue purchase order for the most capable supplier or supplier having more capacity. Company manage inventory on sales volume. Company prefers purchasing and leasing of new equipments with collaboration of different department like finance, marketing, supply chain, and technical team. Company use containers and trucks as transportation usage I saw agile containers there during visit.For meeting safety and quality assurance company prefer suppliers visit and recommend suppliers for any kind of bottle neck can be appear in future. Company makes timely delivery schedule for the continuity of products to final consumer. Company never wants to compromise on quality in order to provide high quality biscuits to consumer. Company decreases their profit margin in order to stable the prices. Companies have a good interaction with their suppliers. In case of uncertainty both parties cater the lost and manage their relationship in an efficient manner.So this report can apparently show that EBM has a strong supply chain network with collaboration of suppliers and their departments.

References:http://www.ebm.com.pk/default.html#http://en.wikipedia.org/wiki/Peek_Freanshttp://www.ebm.com/ english-biscuits-manufacturer-supply-chain?related=2http://pakbiz.com/English-Biscuit-Manufacturers-Pvt-Ltd/http://tribune.com.pk/story/741706/biscuit-manufacturers-ebms-story-and-the-journey-that-lies-ahead/http://www.screenonline.org.uk/film/id/711535/index.html

4