global supply chain- coiron

8/13/2019 Global Supply Chain- Coiron

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Global supply Chain-COIR ON

GROUP 6


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Key Areas Covered

Sourcing decisions based on demand variations

Supplier relations in the coiron company

Transportation policies in the supply to global markets;

raw material is coir and by products

Terms of Agreement between buyer and supplier.


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Coir-on Foam Products India Pvt Ltd.

Established :Year 1986 at Pollachi of Coimbatore District, Tamil Nadu India

Product line :Rubberised Coir Products such as Mattresses

Scope :Marketed overseas & domestically.

Revenue :USD 19 million

Subsidiaries : Harish Coconut Products Pvt. Ltd in 1989

Harisha Tuff Lanka Pvt Ltd in 2006


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Global SourcingA Fundamental Strategic Objective which Coir-on adopted

Global Supply and SourcingThe business process of identifying, evaluating, negotiating and configuring supply

chains across multiple suppliers and geographiesCommon Reasons for a Global Sourcing Strategy Reducing overall cost structure

Availability of new technology and capacity. Often domestic suppliers lack capacityand / or are not making the necessary investments to stay competitive.

Establishing alternative sources of supply

reduced risk. Access to new designs or specialized intellectual capital.

Superior quality: Supplier investment in technology and capacity to attract globalbusiness.

Michael R. Leenders and P. Fraser Johnson,Major changes in supply chainresponsibilities,2002


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GLOBAL SUPPLY CHAIN

Harishownedfarms

U.S

Coir on

HarishcoconutproductsPvt Ltd

Farmers,coconut

husksourced

SME-coiroutsourced

LatinAmerica

Gulfcountries

SouthAfrica

U.K

Coiron-

Israel


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Sourcing Strategies-Self or Shipped

The raw materialfor coir sourced

from the sisterconcern Harishcoconut productsPvt Limited.

Sourcing isnecessary to meetthe request of theinternationalbuyers.

The local suppliersdont export theirproducts, as localsuppliers lack theefficiency to exporton their own.

Important criteriais quality.

1. SUPPLIER RELATIONS


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High demand forcoir products in theinternational market.

Attributes: Fitness,price, craftsmanship,quality, attractivenessand eco-friendlynature.

Increasing cost of rawmaterial is the majorthreat faced by theindustry .

Demandvariations

Demand is forecastedbased on climaticfactors.

Reason: Directimpact on the fiberproduction, latex(rubber )

Seasonalityfactor

Resource andManufacturing

strategies are plannedbased on the marketdemand.

High demandscenarios arecountered throughlocal farm suppliers.

Workforce is scaled up

when required.

Adaptationstrategies

2. SOURCING DECISIONS


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In-house logistics for collecting the raw material.

Heavy demand- request is sent to the local suppliers to deliver attheir factory.

Duly weighed at their office premises & checked for qualitybefore processing.

Mode of transport

Risk Averse: Supplies FG and coir to the dealers in major parts ofIndia, Lakshadweep and to global markets such as US, UK,Europe, UAE and Israel.

Supplierdevelopment:

Current market price and its fluctuations are evaluated and pricesare negotiated and fixed, based on quality.

Quality of productskey differentiator of its pricing strategy.

Impurities seemed to be the major set back for the price variation.

Pricing strategy

3. Evaluation parameters for external suppliers


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COIR-ON as an exporter

Coir on sources its Raw material from Harish Pvt Ltd, which constitutes only 10%of Harish Products output.

Rest of the business-export to various markets in the form of various products.

Mode of transport/ Transportation terms of coir:

FOB destination freight prepaid.

Total cost of ownership(TCO) borne by the company.

Policies differ at different terminals. For example the policy and the pricesdiffer within India when compared between Mumbai and Cochin port.

Fiber sourced as Bales or coir pith as blocks/grow bags, on product request.

The shipment basically is through Marine and cargo. Insurance policiesdifferent for different shipments; and the insurance company varies based on

the export to different countries . Coiron has different insurances for China,European countries, Sri Lanka.

Lead time: 7 days from the arrival date to the port. Demurrage charges borneby the supplier if any.(10$per day). It is country dependent.


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AGREEMENT TERMS

Company owns responsibility for the damage of goods during manufacturing.

If the damage is incurred during shipping, the Shipping liner is responsible; ifits during stuffing /clearing the goods the consignee has to pay the damage.

The Contract terms include:

Quantity of goodsQuality

Price

Payment Procedures

Shipping date

Origin of Shipment

Trans shipment detailsThe contract term, payment details vary from consignment vendors. Based

on the payment mode it is finalized whether it is (DP) direct payment, (LC)letter of credit etc.,


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CONCLUSION

A vertically integrated company

High Focus on Quality

Strategically operated; Identified the need of perennial supply.

Expanded Inorganically into Sri Lanka by acquiring Harish Coconuts Pvt

Ltd.

Coir-On is still in the nascent stages of Supplier relationships.


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Thank You

Acknowledgements

Mr. GiridharanManager- OperationsCoir-on Pvt Ltd.Coimbatore

global supply chain- coiron

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