sscm project group d-ebm

Sustainability in Supply Chain

ENGLISH BISCUITS MANUFACTURERS (PVT) LTD

Submitted By: M. Owais Siddiqui (13785) Muhammad Naveed (14983) Saba Binte Zohra (16877) Shaileen Kareem (15466)

Strategic Supply Chain Management (SCM 503Z) Submitted to: Mr. Kashif Shafiq

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TERM REPORT COVER SHEET

STUDENTS TO COMPLETE

Course Number: SCM-503 Z Course Title: Strategic Supply Chain Management

Student ID Number(s) and Name(s) Muhammad Siddique (13785) Naveed Ahmed (14983) Shaileen (15466) Saba Zohra (16877) Lecturer Name: Sir Kashif Shafiq

Lecture Day/Time: Sunday/ 9:00-12:00 Noon

Report /Name: English Biscuits Manufacturers (EBM) Date Due: 0ct,02,2014 Date Submitted: Nov 16,2014 Word Count:

Declaration (we) declare that this assessment item is (our) own work, except where acknowledged, and has not been submitted as academic work elsewhere,

(we) certify that (we) understand the University Rules in respect of Student Academic Misconduct.

Student(s) Signature: Owais Naveed Shaileen Saba Date: Nov 16, 2014

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LETTER OF TRANSMITTAL

Nov 16, 2014

Mr. Kashif shafiq

Lecturer

Department of Supply Chain

Institute of Business Management

Subject: Submission of Term Research Report

Dear Sir,

It gives us a great pleasure to submit the report on English Biscuits Manufacturers (Pvt) Ltd.

This report is submitted as the requirement to fulfill the research topic of Sustainability in

Supply Chain.

The research topic has been helpful for us to understand the Sustainability in Supply Chain

and its influence in business processes. It has been a wonderful opportunity of widening the

knowledge from the books to practical experiences.

We believe that report meets the research standards and will serve its purpose.

Regards,

Muhammad Owais Siddiqui

Naveed Ahmed

Shaileen Karim

Saba Binte Zohra

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ACKNOWLEDGMENT

First of all we thank the Almighty ALLAH for all blessings.

We express our gratitude to Mr. Kashif Shafiq for his cooperation and encouragement

during the tenure of this course.

Continuing with the same, he has enlightened us in the various stages during the

development of this project and provided us with many insights and useful examples, which

proved to be of immense help in successful completion of this research project.

We extend our sincere gratitude to the Management of English Biscuit Manufacturers

especially General Manager Supply Chain and Production Engineer who provided valuable

knowledge and practical information.

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Contents

INTRODUCTION ................................................................................... 5

OBJECTIVES ......................................................................................... 6

LITERATURE REVIEW ........................................................................... 7

RESEARCH METHODOLOGY .............................................................. 10

FINDINGS AND RECOMMENDATIONS ............................................... 15

CONCLUSION .................................................................................... 17

LIMITATIONS AND EXTENSION OF THE REPORT ................................ 18

REFFERENCE ...................................................................................... 19

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INTRODUCTION

English Biscuits Manufacturers (stated as EBM in this report) are the leading biscuit

manufacturers in Pakistan. With more than 50% market share, EBM holds the prestige place

in the biscuit manufacturing industry of Pakistan. EBM has wide supply and distribution

chain ranging from Inbound of raw materials to finish goods processing, packaging,

transportation and distribution to retailers.

EBMs policy is to pursue Triple Bottom Line (3Ps), People, Planet and Profit in their

business growth model. As per company policy EBM ensures the welfare and growth of

society at large (People), the preservation of the environment and precious natural

resources (Planet) and the pursuit of profitability (Profits) in an ethical manner. With

pursuance of these 3Ps, EBM strives for sustainability in their Supply Chain Operations and

business as a whole.

This report reflects the actions taken up by the company for achieving sustainability in their

Supply Chain Operations. This report also covers some findings and their recommendations

which can further help to bring Environmental Stewardship, Economic Viability and Social

Responsibility to the whole functions of its Supply Chain.

EBM is ISO-9001 (Quality), ISO-14001 (Environment Management System) and ISO-22000

(Food Safety Management) certified. In addition to these, it has achieved number of awards

for its business operations and social responsibility initiatives. This report also reflects the

actions that are being taken by the company to maintain these certifications and to find out

whether the company is actually meeting up with the requirements of these certifications

and awards.

The methodologies used for analysis and fact finding have been a visit to their Production

facility at Korangi Industrial Area, Karachi as well as discussion on questionnaire with their

Production Engineer and General Manager Supply Chain.

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OBJECTIVES

Objectives of this report are to assess whether EBMs Supply Chain operations are

sustainable in lieu of Environment Stewardship, Economic Viability and Social Responsibility.

Following are the main objectives of this report:

1) How EBM measures their Environmental actions?

2) How EBM manages its Solid/Liquid wastes?

3) How EBM enforces their 3rd party Supply Chain partners to consider Environment in

their operations?

4) How EBM makes sure Health and Safety of its employees as well as its customers

and society as a whole?

5) How EBM makes sure that their Economic achievements are in line with ethical

backgrounds?

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LITERATURE REVIEW

Supply chain sustainability is the management of economical, social and environmental

impacts and the encouragement of good governance practices throughout the life cycle of

goods & services.

The objective of supply chain is to create, protect & grow long term environmental,

economical & social value to all stakeholders involved in bringing products & services in to

the market.

According to the UN global compact guide, the reason to emphasize on supply chain

sustainability is that companies are taking actions that result in better social, environmental

& economic impact because end consumers are expecting this from manufacturers. By

doing so, companies can take care the interests of their stakeholders and interests of the

society at large.

The sustainable management of supply chains initiated by the combination of

environmental regulations and pressures enforced by the customers and shareholders has

soon willingly been accepted by the business world due to extensive returns including

improved efficiency, reduced costs, increased internal and external customer satisfaction,

increased sales and market share together with a more effective risk management.

Importance:

According to UN global compact guide, Sustainability in supply chain management is

important as it is necessary to ensure conformity with laws and regulations and to hold to

and maintain global values for sustainable commerce conduct. Moreover, sustainability in

supply chain management is important to ensure reliability of the brand and ensuring

business maintenance along with managing operational costs.

Principles of Supply Chain Sustainability:

UN global compact guide documented ten principles which are necessary for sustainability

in supply chain management. Firstly, international human rights should be protected and

conserved throughout in the business as its the fundamental responsibility of all. Secondly,

abuse to human rights is never acceptable in a business. Businesses should struggle to

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sustain global labor values within their supply chains, including the right to liberally select

service, the freedom of kids from work, freedom from favoritism and the freedom of

relationship and joint bargaining.

Implementations:

Putting up sustainability into an organizations supply chain is difficult but the failure to take

action may be the major risk of all. Numerous implementations are advised by Greenbiz

which can be followed by organizations and companies. Firstly, companies need to plan

their supply chain. For this, recognizing the most important ecological and communal

challenges and prioritizing efforts with suppliers is significant. Secondly, communicating

companys goals and expectations to the suppliers can also help in sustaining the supply

chain management. Thirdly, assessing suppliers performance through self-assessments (to

be filled by suppliers) helps suppliers to match their current performance with companys

standards and expectations. Along with this, organizing training and capacity building

programs for the suppliers can help in sustaining supply chain management by promoting

behavioral changes. It can also to keep suppliers on track and avoid mishaps. Apart from

this, sustainability in supply chain management also requires industry wide collaboration

instead of individual efforts.

Triple Bottom Line of Sustainable Supply Chain:

Economic Viability

Sharing of generated wealth with all stakeholders.

Ensuring adequate remunerations, rewards and retirement benefits for staff.

Assessing financial implications arising from change in technology, threats from new

entrants, minimum environmental standards etc.

Timely deposit of taxes / duties / levies with respective government authorities.

Increase dealer presence through improvement in coverage.

Assisting vendors in improving quality.

Evaluating implications of major threats and devise counter measures.

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Environmental Stewardship

Following the principle of four Rs (Reduce, Reuse, Recycle and Responsible Disposal).

Ensuring strict compliance with environmental standards.

Reduction of carbon footprint and exhaust emissions from operations.

Implementing Green policies on all locations, including business partners.

Improving awareness for protecting the environment through continuous training and

development programs.

Social Responsibility

Ensuring equal opportunity employer-ship.

Updating human resource policies and practices in accordance with the best practices.

Strict adherence with employee safety and labor laws.

Implementing policies that counter corruption and fraudulent activities.

Training employees in modern health and safety standards.

Focusing on education and development of local communities.

Ensuring compliance with human rights initiatives.

Striving to make safer products and ensuring safety training of customers.

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RESEARCH METHODOLOGY

The research for this report comprises of questionnaire filled and discussed with General

Manager Supply Chain and Production Engineer of EBM. In addition of this, findings from

visit to EBMs Karachi production facility have also been incorporated. Questionnaire has

been drafted in such a manner that gives a glimpse of how much sustainability EBM has

achieved so far in its Supply Chain operations as well to find any short comings and

improvement. Following are questions which were discussed with the stated personals

along with its replies:

1) Does EBM consider Environment in its Strategic Objectives and Business Processes?

Yes, EBM has a documented Environmental Policy which is accredited by 3rd party ISO-14001

certification. Environment is considered in every business and decision making policies. Bi-

annual environmental audits are being carried out to measure the effectiveness of

Environmental Policy.

2) How solid/liquid wastes are managed at EBM?

Liquid wastes are being managed through in-house Waste Treatment Plant. All the liquid

wastes are treated in the plant with the controlled pH, BOD (Biological Oxygen Demand) and

COD (Chemical Oxygen Demand) values and is then released to drain channel.

Plastic wastes are sold to outsourced contractor who build plastic blocks and send it to

northern areas for the purpose house building. Other solid wastes are sent to Government

certified incinerator facilities.

3) What measures are taken to maintain the housekeeping of the facility?

Janitorial staff has been outsourced which ensures the housekeeping of the facility. In

addition to this weekly fumigation is also carried out. Employees and 3rd party workers are

continuously educated and trained on maintaining the housekeeping of the plant. Use of

tobacco is strictly prohibited.

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4) Is smoking/tobacco allowed at EBM facility? If yes then is there any designated place?

Smoking is allowed only on 6 designated places. If any worker is found violating the policy

then fine of Rs.1000/- is imposed on him.

5) Is Environment Impact Assessment available for the facility?

Since, facility was built in 1960s no Environment Impact Assessment is applicable, however

Environmental Management Plan is implemented whose audit is carried out Bi-Annually as a

part of ISO-14001 Audit.

6) Are there ISO 14001 EMS and any NEQS standards implemented at EBM?

Yes.

7) Does the transportation vehicles and Plants machinery tested for Carbon Emissions?

EBM has Power Gas Generators and Baking Owen machines whose exhaust emissions are

monitored through in-house installed Continuous Emission Monitoring system. In addition

to this, Bi-Annually 3rd party emission tests are also carried out in compliance to ISO-14001.

8) Does EBM have any Environmental Policy? If yes is it communicated to employees and

Supply Chain stakeholders?

Continuous trainings on Environment considerations are conducted for employees and even

for outsourced staff. A strict supplier selection criterion has been setup and is imposed into

Product and Services agreements.

9) Does EBM measures efficiency and effectiveness of its suppliers and outsource service

providers on the basis of their Environment friendly initiatives?

EBMs Quality Control, HSE & Supply Chain dept regularly visits suppliers facilities to check

their environmental and food safety measures. Any shortcomings are informed to the

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suppliers, however currently there is no KPI developed to consider it in supplier selection

criteria.

10) Does EBM promote Energy Conservation and Recycling in its Supply Chain processes?

EBM has taken many initiatives for the Recycling of the materials. For the purpose of cooling

the plant machinery, evaporator type chillers are installed which are run by exhaust heat

being recovered from Power Gas Generators and Baking Owens. Utility dept monitors the

power usage of the facility through Energy meters installed at every power feeder. Initiative

has been taken to educate the employees on Energy Conservation.

11) Does EBM provide safe and healthy working environment to its employees? Does EBM

provide its employees with necessary PPE (Personal Protective Equipment)?

Yes, proper PPEs are provided to the employees along with uniforms. HSE dept has been

developed recently whose purpose to implement the health and safety measures within the

facility as well as develop and implement the procedures for the Safety of the workers.

12) What are fringe benefits which EBM offers to the employees and their families?

Life Insurance Policy for permanent staff, OPD Medical, Paid Leaves and Bonuses.

13) What is EBMs policy on Child Labor and does EBM promotes equal employment?

EBM strongly discourages Child Labor and 3rd party contractors are bound through contract

not employ the same. EBM is an equal opportunity employer with no discrimination of

gender, race, creed or religion.

14) Does EBM carry any CSR activities for nearby local communities and for whole society

if any?

EBM delivers its biscuits free of cost to NGO based schools for children of poor families.

Further to this, EBM with 80-20 % partnership with the Government setup a EBM causeway

road which connects Korangi Industrial Area to Main Shahra-e-Faisal. This road shortened

the distance between the two locations and helped to increase economical activities of the

area.

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EBM has partnership with World Bank, through which it develops special Energy Biscuits for

the pregnant women of countrys poor areas. This program is sponsored by World Bank and

the quality and nutrients are checked by both EBMs and World Banks food technologists.

15) How customer service is being handled by EBM and what is the procedure to cope

with customer complains?

Any complaints relating to EBMs products are delivered through Reverse Chain process, in

which the customer launch its complain to retailer than retailer informs the same to EBMs

Distribution and Sales Team.

16) How EBM does measures the quality of ingredients and packaging for its Products?

How does it make sure the quality doesnt deplete during finished product stage till

distribution cycle.

EBM has a Quality Control dept having Food Technologists whose responsibilities are to

check the quality and specification of inbound raw material supplies that are Flour, Sugar,

Egg, Water etc. EBM has setup a dedicated micro-biological lab in its facility for the same

purpose. For the finished product, EBM adds Sodium Meta Sulphite chemical in its biscuits

during stack process which preserves the freshness for a prolonged period.

17) What business processes are outsourced by EBM?

Transportation and Logistics from Plant to Warehouses

Packaging

Janitorial and Housekeeping

Scrap/Waste disposal

18) Are there any metrics developed for measuring the supplier performance?

Although EBM maintains multiple supplier policy however, no specific metrics have been

developed so far for measuring the performance.

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19) How does EBM do the market and environment scanning for streamlining the

production planning?

Production planning is carried on yearly basis with the help of past sales record and demand

trends. The production facility is flexible which can meet the demand in case of market

bullwhip effect.

20) What is the market share of EBM in Pakistan Biscuit Industry? What measures EBM is

taking to gain/retain the competitive advantage?

Current market share of EBM is about 52%. The main reasons for EBM to maintain its

market share for all those years is their Brand Image which is backed by no compromise on

Quality. EBM has highly skilled and experience employees and the employee retention

within the organization is high.

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FINDINGS AND RECOMMENDATIONS

After the discussion with the GM Supply Chain and Production Engineer alongside EBM

Korangi Plant visit, following are our findings relating to the sustainability of Supply Chain as

well as their recommendations:

S.NO FINDINGS AREA DETAILS RECOMMENDATIONS

1 Smoke plume near EBM facility.

Environment Black smoke plumes were observed at EBM facility. This smoke was coming from neighboring factory.

EBM should launch the complain with SEPA (Sindh Environment Protection Agency) as well as local Trade and Commerce Authority to the neighboring industry to control its emissions, otherwise the smoke is not viable specially for food manufacturing plant.

2 Lack of Fire Protection

Environment Although fire extinguishers are placed after some distance within the facility but no Automatic Fire Suppression and Alarm system found

EBM needs to install Automatic Fire Suppression system at least at Main Production Hall along with Fire Alarm System for the safety and environment of the facility.

3 Tough operations shift schedule

Social It has been found that current operations shift schedule has been very tough for the employees. Some of them have been found to be working 12 hour night shifts for 10 days straight.

EBM HR dept needs to look into this matter and develop a shift Rota schedules according to the safety and health of the employees. Employee working hours should be in compliance to local labor laws. This will lead to employee motivation and maintaining the employee retention.

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4 CSR activities for local community

Social Although EBM has been participating in numerous CSR activities, but no major actions has been taken so far for nearby communities.

EBM can setup free medical camps twice a year for the relief of nearby communities. This will bring a good image of the organization.

5 No metrics for Supplier performance

Economic EBM deals with number of suppliers for their raw materials as well packaging of finish goods but there is no metrics created to measure their performance

EBM needs to develop metrics that can be a simple Supplier Scorecard with weightage of Cost, Lead time, Order Fulfillment rate, Environment stewardship, Social responsibility etc to measure the performance of the Supplier and create programs for the Supplier training accordingly.

6 Improvement in Customer Service Management

Economic Currently there is no effective Customer Service Management at EBM. It solely depends on traditional customer feedbacks from the retail chain.

EBM needs to develop communication channels to get the feedback directly from the customers. This can be achieved through Product fairs, Participation in Trade Expos and Visit of Sales team to School, Colleges etc. This will also enable EBM to handle Returns Management more efficiently and will bring further improvement in Quality as well as ideas for new Product Development.

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CONCLUSION English Biscuits Manufacturers (EBM) is committed on achieving the Sustainability in their Supply Chain Operations. With certifications of ISO-9001 (Quality), ISO-14001 (Environment) and ISO-22000 (Food Safety) it makes sure the Sustainability is continuously achieved and is measured accordingly. Throughout our research, we have noticed the actions taken up by the management of EBM for the protection of the Environment. The same is incorporated in company polices and mission statements. EBM also incorporates the same in PSAs (Product and Service Agreements) with its Suppliers and 3rd party contractors. However, there is still room for improvement as there is no KPIs (Key Performance Indicators) developed so far to measure the suppliers performance on the basis of Environmental Stewardship. EBM has an efficient process of handling facilitys Solid and Liquid Wastes. This is achieved through the operation of Waste Water Treatment Plant which discharges the liquid waste after treating it within NEQS (National Environmental Quality Standards) limits. Solid wastes are sent to Recycle contractor as well Government certified incineration facilities. The performance of their waste management is monitored by their Micro-biological lab as well as 3rd party ISO surveillance audit team bi-annually. EBM incorporates the Environmental factors in their contracts with Supply Chain partners. This includes emission testing and certificates of Supplier vehicles, quality reports of raw material supplied. However, there is no procedure developed so far for Suppliers continuous training on the same along with metrics to measure their performance. Recently developed HSE (Health, Safety and Environment) department has developed procedures for Worker Safety and protection of the environment. EBM provides proper safety equipments to its workers. Strong actions are taken against those who dont comply with the companys HSE procedures. LOTO (Lock Out Tag Out) procedure is in place for the maintenance department for safe work on the equipment and machines. Improvement is required in Fire Detection and Suppression system as currently only manual action related system is in place. Workers shift schedule is also tough and HR department needs to make sure that Shift ROTAs should comply with local labor laws. Company has achieved remarkable results in its business with highest market share of Pakistans Biscuit Manufacturing industry. However, in order to retain and gain the market share EBM needs to do much more in the field of CSR and it needs to make sure that all of its supply chain process complies with International and Local regulations.

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LIMITATIONS AND EXTENSION OF THE REPORT The research on the topic has been limited by the following factors:

Time

Study resources

No access to Companys documents and Sales Record

Non-availability of Company Suppliers performance record

Following extension to this research report can be done:

Visit to Suppliers facility and finding out the Suppliers performance on achieving the

Sustainability.

Research on individual business functions and their contribution for achieving the

Sustainability.

Study of companys ISO Surveillance Audit Reports.

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REFFERENCE

1. English Biscuit Manufacturers. (2008). Social sustainability report 2007-08.

Retrieved from:

http://www.csrcp.com/Reporting%20Data%20Base/Search%20Sustainability%20Re

ports/2008/reports/English-Biscuit-Manufacturers-Sustainability-Report-2008.pdf

2. Salmona, M. A., Selam, A. A., & Vayvay, O. (2010). Sustainable Supply Chain

Management: A Literature Review. Retrieved from:

http://www.academia.edu/2063643/Sustainable_Supply_Chain_Management_A_Li

terature_Review?login=&email_was_taken=true

3. Sisco, C., Chorn, B., & Pruzan-Jorgensen, P. M. (2010). Supply chain sustainability.

Retrieved from:

http://www.bsr.org/reports/BSR_UNGC_SupplyChainReport.pdf

4. Wollmuth, J., & Ivanova, V. (2014). 6 steps for a more sustainable supply chain.

Retrieved from:

http://www.greenbiz.com/blog/2014/01/24/6-steps-more-sustainable-supply-

chain

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