supply chain final project

8/8/2019 Supply Chain Final Project

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S u p p l y C h a i n

M a n a g e m e n t

F i n a l P r o j e c t

M s . S a b a R a n a

0

1 1 / 1 / 2 0 1 0

Samiya Nasir Raja & Osama

Ahmed Khan

[Type the abstract of the document here. The abstract is

typically a short summary of the contents of the document.

Type the abstract of the document here. The abstract is

typically a short summary of the contents of the

document.]

Al-Quraish Paper

Factory


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Lahore School of Economics

Supply Chain Management

Al-Quraish Paper Factory

Submitted by:

Samiya Nasir Raja

Osama Ahmed Khan


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Table of Contents

Introduction:........................................................................................................................................ 5

Products and Details: ........................................................................................................................... 6

The Supply Chain Stages ...................................................................................................................... 8

Supply Chain Processes: ....................................................................................................................... 8

The Production Process and Stages: ..................................................................................................... 9

De-Inking Cells: Stage one .................................................................................................................... 9

Washing: Stage Two ........................................................................................................................... 10

Flotation: Stage Three ........................................................................................................................ 10

Refining: Stage Four ........................................................................................................................... 10

Mixing Chest: Stage Five .................................................................................................................... 11

High Pressure Screens: Stage Six ........................................................................................................ 11

Thickner: Stage Seven ........................................................................................................................ 12

Supply Chain Management levels:...................................................................................................... 12

Strategic Level ................................................................................................................................... 13

Tactical Level ..................................................................................................................................... 13

Operational Level ............................. ......................... .............................. ............................. .............. 13

The Wholesaler Chain: ....................................................................................................................... 15

The Supplier Chain: ............................................................................................................................ 16

List of Suppliers ................................................................................................................................ 17

Customer service management process: ............................................................................................ 17

Procurement process: ........................................................................................................................ 18

Product development and commercialization: ........................................... ....................... ................. 18

Manufacturing flow management process: ........................................................................................ 19

Physical distribution: ............................ ............................... ....................... ................................ ........ 19

Outsourcing/partnerships: ................................................................................................................. 19

Performance measurement: .............................................................................................................. 20

Distribution System: .......................................................................................................................... 21


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End Customers: ................................ ......................... .............................. ............................. .............. 22

Logistics: ............................................................................................................................................ 23

Al-Quraish uses two logistics systems: ............................................................................................... 23

1. WMS ............................... ....................... ................................ ...................... .............................. 23

2. WCS ................................ ....................... ................................ ...................... .............................. 23

Logistics Outsourcing: ........................................................................................................................ 24

Production Logistics: .......................................................................................................................... 24

Drivers: .............................................................................................................................................. 25

Technology Partners: ......................................................................................................................... 26

Push/Pull Processes : ......................................................................................................................... 29

The Implied Demand Uncertainity Spectrum: .............................. .............................. ......................... 30

Resposive Spectrum: ........................... ........................... ............................ ............................... ......... 31

Suggestion and Recommendations for Al-Quraish: .......................... ............................. ...................... 33

References: ........................................................................................................................................ 34


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Introduction:

Al Quraish Paper Industries is part of the

Al Quraish Group of Companies, which compromises

ofAl Quraish PET Bottles (Plastic Bottles Manufacturing) and Al Quraish Board Mills (Kraft

Paper Mill). Al Quraish Paper came into operation at the beginning of 2007 using the highest

quality machinery sourced from Sweden. Located in the newly created Sundar Industrial

Complex,the paper mill specializes in manufacturing writing and printing paper using 100%

recycled waste collected from local suppliers.By leveraging off the renowned and respected Al

Quraish Board name and their abundant expertise, Al Quraish paper is quickly establishing itself

as a major player in the white paper market by producing a high quality product and establishing

professional business relationships with suppliers and buyers alike.

Al Quraish Board Mills (Kraft Paper Mill) and Al Quraish PET Bottles (Pet Bottles Plant).

Acquired in 1995 Al Quraish Board is the oldest company in the group and has been the

cornerstone of the company for the last 12 years. Specializing in the production of natural and

colored kraft paperAl Quraish Board, through its highly experienced staff, has been able to

establish a respected brand in the paper market known for its high quality product and

professional business approach.

AL QURAISH Group of Companies is a singularly owned organization established in Lahore,

Pakistan for the last 15 Years. We are primarily involved in the paper and board business and the

Al Quraish name is a well known and respected manufacturer of high quality 100% Recycled

Kraft and White Paper. Al Quraish has recently diversified and has also moved in to the PET

manufacturing market where we are currently running a medium scale factory producing bottles

for the beverage market. Our total strength in terms of employees is over 300 with our head

office residing in Fortress Stadium, Lahore, as well as our other factory offices in Kot Lakh Pat,

and Sundar.


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Products and Details:

They use sophisticated machinery imported from Europe and adopt high quality standards in our

production process. Al Quraish Board specializes in the production of various grams of kraft

paper from 100% recyclable materials such as cement bags, white bags, and office waste. Al

Quraish Board continuously looks to innovate and produce new lines of paper products and

should you have any specific paper requirements we will be more than willing to discuss them

with you. While we mainly supply our paper in the Punjab region we are always open to new

opportunities and markets throughout Pakistan and overseas.

Currently, Al Quraish Board manufactures the following grades of Kraft paper:

y 22g A Quality Kite Paper (Mehndi, Green, Red, Violet, Orange, Black)

y

28-30g A Quality Kraft Paper (Golden, Brown)

y 36-42g A Quality Kraft Paper (Golden, Brown)

y 44g A Quality Kraft Paper (Khokar)

y 52g B Quality Kraft Paper (Golden)

y 60-75g A Quality Kraft Paper (Golden)

y 60-75g B Quality Kraft Paper (Golden)

y 55-60g A Quality Kraft Paper (Golden, Natural)

y

55-65g B Quality Kraft Paper (Mehndi, Green, Red, Violet, Orange, Black)

Al Quraish Paper Industries is part of the Al Quraish Group of Companies, which compromises

ofAl Quraish PET Bottles (Plastic Bottles Manufacturing) and Al Quraish Board Mills (Kraft

Paper Mill).

Paper machinery newly imported from Sweden, an experienced staff, and a strict adherence to

standards allows Al Quraish Paper to product fine quality paper to a capacity. The list of paper

being produced given below is not exhaustive and Al Quraish paper welcomes any interest for a

specific paper type. Depending on the capability of our machines to produce that paper and

quantity required, Al Quraish paper will be happy to fulfill the order.

Al Quraish Paper manufactures the following types of writing and printing paper:

y 55-68g A Quality Writing Paper


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y 50-53g B Quality Writing Paper

y 30grm Coated Board


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The Supply Chain Stages

Supply Chain Processes:

raw materials

supportmaterials

supplier

board

paper

manufacturer whole salers

othercompanies

distributor

furtherprocessing

direct selling

retailer end users of

differentcategories

custome

Customer Order CycleCustomer

Replishment CycleRetailer

Manufacturing CycleManufacturer

Procurment CycleProcurement

(Reverse)Supplier


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The Production Process and Stages:

De-Inking Cells: Stage one

Before printed paper, such as office waste and newspapers, can be recycled the ink needs to be

removed, otherwise it will be dispersed into the pulp and a dull grey paper would result. There

are two main processes for de-inking waste paper - these are known as washing and flotation.

De-inking

Washing

Flotation

RefiningMixingChest

HighScreen

Pressure

Thickner


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Washing: Stage Two

The waste paper is placed into a pulper with large quantities of water and broken down into a

slurry. Contraries -such as staples - are removed using centrifugal screens. Most of the water

containing the dispersed ink is drained through slots or screens that allow the dispersed ink

particles through, without taking the pulp. Adhesive particles, known as 'stickies' are removed by

fine screening

Flotation: Stage Three

Again the waste is made into a slurry and contaminants removed. Special surfactant chemicals

are added which makes a sticky froth on the top of the pulp. Air bubbles are blown through the

pulp and these carry the inks to the surface. As the bubbles reach the top a foam layer is formed

that traps the ink. The foam must be removed before the bubbles break or the ink will go back

into the pulp. Because the ink is removed from the flotation machine in a concentrated form, the

flotation system does not require a large water treatment plant

Refining: Stage Four

This is where the cellulose fibers pass through a refining process which is vital in the art of

papermaking. Before refining, the fibers are stiff, inflexible and form few bonds. The stock is

pumped through a conicle machine which consists of a series of revolving discs. The violent


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abrasive and bruising action has the effect of cutting, opening up and declustering the fibers and

making the ends divide. This is called fibrillation. In this state, the fibers are pliable and have

greater surface area, which significantly improves the fiber bonding. The properties of the paper

are directly related to the refining process. Refining used to be called beating.

Mixing Chest: Stage Five

The stock passes to a blend chest where numerous chemicals can be added to obtain the required

characteristics to the finished paper. Dyes are also added, as necessary, to color the paper. Dyes

fix themselves to the cellulose fibers and are fast to light and water. Each grade of paper and

board requires a very accurate blend of pulps and additives and the properties of the paper are

continually monitored by computers during manufacture.

HighPressure Screens: Stage Six

Pressure screens are used to prepare paper fiber suspensions and, namely, to process the fibrous

suspension in a wet screening. To do this, this type of pressure screen contains at least one wire

that is provided with a multiplicity of openings. The fibers contained in the suspension are

intended to move through the openings while the undesired solid components are rejected and

guided out of the screen again. Pressure screens can also be used for fiber fractionation whereby

the long fibers are concentrated in the overflow and the short fibers in the throughput. As a rule,

round holes or slots are used as screen openings. In most cases, pressure screens of the type

considered here are equipped with wire clearers, which are moved closely past the wire.

Clogging of the screen openings is thus avoided in a manner known per se.


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Thickner: Stage Seven

This is a drum-type machine which acts as a washer using gravity as the form of momentum. All

fine fractions, including contaminants and excess liquid pass through the fabric or drum.| washed

and thickened stock is couched from the drum. The main object ofThickner is to remove excess

water from the pulp along with unwanted contaminants.

Supply Chain Management levels:

Several models are being used for understanding the activities required to manage material

movements across organizational and functional boundaries. SCOR is a supply chain

management model promoted by the Supply Chain Council. Another model is the SCM Model

proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped

into strategic, tactical, and operational levels .

Stategic Level Tactical Level Strategic level

SCM process


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Strategic Level

Strategic network optimization, including the number, location, and size of

warehousing, distribution centers, and facilities.

Strategic partnerships with suppliers, distributors, and customers, creating communication

channels for critical information and operational improvements such as cross docking, direct

shipping, and third-party logistics.

Product life cycle management, so that new and existing products can be optimally integrated

into the supply chain and capacity management activities.

Information technology chain operations.

Where-to-make and make-buy decisions.

Aligning overall organizational strategy with supply strategy.

It is for long term and needs resource commitment.

Tactical Level

Sourcing contracts and other purchasing decisions.

Production decisions, including contracting, scheduling, and planning process definition.

Inventory decisions, including quantity, location, and quality of inventory.

Transportation strategy, including frequency, routes, and contracting.

Benchmarking of all operations against competitors and implementation of best

practices throughout the enterprise.

Milestone payments.

Focus on customer demand.

Operational Level

Daily production and distribution planning, including all nodes in the supply chain.

Production scheduling for each manufacturing facility in the supply chain (minute by

minute).


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Demand planning and forecasting, coordinating the demand forecast of all customers and

sharing the forecast with all suppliers.

Sourcing planning, including current inventory and forecast demand, in collaboration with all

suppliers.

Inbound operations, including transportation from suppliers and receiving inventory.

Production operations, including the consumption of materials and flow of finished goods.

Outbound operations, including all fulfillment activities, warehousing and transportation to

customers.

Order promising, accounting for all constraints in the supply chain, including all suppliers,

manufacturing facilities, distribution centers, and other customers.

From production level to supply level accounting all transit damage cases & arrange to

settlement at customer level by maintaining company loss through insurance company.

Supply chain at Al-Quraish business process integration involves collaborative work between

buyers and suppliers, joint product development, common systems and shared information.

Operating an integrated supply chain requires a continuous information flow. However, in Al-

Quraish, management has reached the conclusion that optimizing the product flows cannot be

accomplished without implementing a process approach to the business. The key supply chain

processes are:

Customer relationship management

Customer service management

Demand management

Order fulfillment

Manufacturing flow management

Supplier relationship management

Product development and commercialization

Returns management


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The Wholesaler Chain:

y Pakistan Essence Mart

y Plasticon

y

Amrat Cola

y Sky Cola

y Lahore Cola

y Metro Cola

y Furqan Tradings

y Khawar Butt Paper Mart

y Shani Paper Mart

y

Dawood Paper Marty Royal Paper

Al-Quraish has a network of trusted wholesalers who have been working with the paper factory

since many years. Al-Quriash board and paper wholesalers work in-cordination with the

management providing them with all the orders and placement for each delivery. The office are

placed in different markets in :

1. Urdu bazaar Lahore

2. Paper market Karachi

3. Urdu bazaar Karachi

4. Barkah market Karachi

The offices in these location take orders from the wholesalers and also market the product for

new contracts. Each contract is viable only through the channels of distribution given and

provided from the office located.


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The Supplier Chain:

All the material used is recycled completely to make paper, hence the used material is first taken

in my the scrap market that sells it to the wholesalers who further sell it off to Al-Quraish. These

scrap workers are dispersed throughout the region which collect this material.

The wholesalers are already attained by the factory that provide with the raw materials with each

order placement within 24 hours. Making it lean production using JUST-IN-TIME means.

Just-In-Time:

The suppliers are prepared with the forecasted demands which are placed with each order

placement cycle and procurement cycle.

Wholesalers:

All the direct suppliers provide the materials to the factory which is taken to the insource

WAREHOUSES and kept for further processing. As the system is used for updated orders only, the

inventory is not kept for long before processing.

Scrap Collectors

(Cement bags,used bags and

paper)

ScrapWholesalers

Customers: Al-Quraish


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List of Suppliers

y Gatron Industries

y Crystalite

y Shahzad Plastics

y Mehran Plastics

y Clariant Limitied

y KB Machinery

y Quality Pulp and Paper

y Descon Chemicals

Customer service management process:

Customer Relationship Management concerns the relationship between the organization and its

customers. In Al-Quraish the Customer service is the source of customer information. It also

provides the customer with real-time information on scheduling and product availability through

interfaces with the company's production and distribution operations. Al-Quraish uses the

following steps to build customer relationships:

determine mutually satisfying goals for organization and customers

establish and maintain customer rapport

produce positive feelings in the organization and the customers


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Procurement process:

Strategic plans are drawn up with suppliers to support the manufacturing flow managementprocess and the development of new products. The desired outcome is a win-win relationship

where both parties benefit, and a reduction in time required for the design cycle and product

development. Also, the purchasing function develops rapid communication systems, such

as electronic data interchange (EDI) and Internet linkage to convey possible requirements more

rapidly. Activities related to obtaining products and materials from outside suppliers involve

resource planning, supply sourcing, negotiation, order placement, inbound transportation,

storage, handling and quality assurance, many of which include the responsibility to coordinate

with suppliers on matters of scheduling, supply continuity, hedging, and research into new

sources or programs.

Product development and commercialization:

Al-Quriash is an efficient company providing the customer based on the customized orders and

has a menu of products that are ordered from. Here, customers and suppliers must be integrated

into the product development process in order to reduce time to market. As product life cycles

shorten, the appropriate products must be developed and successfully launched with ever shorter

time-schedules to remain competitive.

Coordinate with customer relationship management to identify customer-articulated needs;

1.

Select materials and suppliers in conjunction with procurement, and

2. Develop production technology in manufacturing flow to manufacture and integrate into

the best supply chain flow for the product/market combination.


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Manufacturing flow management process:

The manufacturing process produces and supplies products to the distribution channels based on

past forecasts. Manufacturing processes must be flexible to respond to market changes and must

accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in

minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times,

meaning improved responsiveness and efficiency in meeting customer demand. Activities related

to planning, scheduling and supporting manufacturing operations, such as work-in-process

storage, handling, transportation, and time phasing of components, inventory at manufacturing

sites and maximum flexibility in the coordination of geographic and final assemblies

postponement of physical distribution operations.

Physical distribution:

This concerns movement of a finished product/service to customers. In physical distribution, the

customer is the final destination of a marketing channel, and the availability of the

product/service is a vital part of each channel participant's marketing effort. It is also through the

physical distribution process that the time and space of customer service become an integral part

of marketing, thus it links a marketing channel with its customers (e.g., links manufacturers,

wholesalers, retailers).

Outsourcing/partnerships:

Al-Quraish uses not just outsourcing the procurement of materials and components, but also

outsourcing of services that traditionally have been provided in-house. The logic of this trend is

that the company will increasingly focus on those activities in the value chain where it has a

distinctive advantage, and outsource everything else. This movement has been particularly

evident in logistics where the provision of transport, warehousing and inventory control is


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increasingly subcontracted to specialists or logistics partners. Al-Quraish also uses managing and

controlling this network of partners and suppliers requires a blend of both central and local

involvement. Hence, strategic decisions need to be taken centrally, with the monitoring and

control of supplier performance and day-to-day liaison with logistics partners being best

managed at a local level.

Performance measurement:

There is a strong relationship from the largest arcs of supplier and customer integration to market

share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term

supply chain perspective in customer relationships can both be correlated with firm performance.

According to experts, internal measures are generally collected and analyzed by the firm

including the following in Al-Quraish:

1. Cost

2. Customer Service

3.

Productivity measures4. Asset measurement, and

5. Quality.

Al-Quraish uses a system that sees external performance measurement examined through

customer perception measures and "best practice" benchmarking, and includes 1) customer

perception measurement, and 2) best practice benchmarking.


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Distribution System:

Distributor Storage with Carrier delivery/direct pickups

The Al-Quraish distribution system compromises of distrubution via either carrier delivery or direct

pickups from end customers. As the paper produced is a by-product the end customers further process it

in any way they want in completion of their products. E.g for wrapping sweets, book stores, publishing

companies etc

There have also been some innovations in the distribution of these products. For example, there

has been an increase in franchising and in rental services - the latter offering anything from

televisions through tools. There has also been some evidence of service integration, with services

linking together, particularly in the travel and tourism sectors. For example, links now exist

between airlines, hotels and car rental services. In addition, there has been a significant increase

in retail outlets for the service sector.


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End Customers:

y

FurqanT

radingsy Khawar Butt Paper Mart

y Shani Paper Mart

y Dawood Paper Mart

y Royal Paper

Kraft paper can be utilized for many different purposes. One of the most common uses of the

plain brown Kraft paper is in the manufacture of paper bags for use in grocery stores. The solid

construction of Kraft paper makes the bags ideal for use with all sorts of grocery items. While

many grocers have switched to the use of plastic bags, many supermarket chains continue to

offer customers the option of receiving their purchases in bags made from Kraft paper.

Butcher shops often make use of the bleached Kraft paper as a wrap from fresh cuts of meat. For

many years, consumers would place meats sealed in Kraft paper in the freezer, if the intent was

to prepare the meat over the next few days. While many meat counters at supermarkets now use

plastic trays and plastic seal wrap with their meats, many independent grocers and butcher shops

still use the familiar Kraft paper.

Kraft paper is sometimes used for home crafts as well.A section of craft paper is an ideal

medium for the creation of homemade costumes for Halloween or a costume party. Children can

draw on bleached or unbleached Kraft paper without a lot of worry about markers leaking

through to tabletops. People who want to be more natural and creative with their gift wrap may

choose to use inexpensive Kraft paper for wrapping gifts, often embellishing with other natural

elements or using markers or stencils to create a unique design.

Hence the end customers of Kraft paper are many that the company is providing for. These

include kite making and including sweet wrapping papers in the sweet market.


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Logistics:

InA

l-Quraish uses Logistics as the management of the flow of the goods, information and otherresources in a repair cycle between the point of origin and the point of consumption in order to

meet the requirements of customers. Logistics involves the integration of

information, transportation, inventory, warehousing, material handling, and packaging, and

occasionally security. Logistics is a channel of the supply chain which adds the value of time and

place utility. Today the complexity of production logistics can be modeled, analyzed, visualized

and optimized by plant simulation software.

Al-Quraish uses two logistics systems:

1. WMS

2. WCS

Although there is some functionality overlap, the differences between warehouse management

systems (WMS) and warehouse control systems (WCS) can be significant. Simply put, a WMS

plans a weekly activity forecast based on such factors as statistics and trends, whereas a WCS

acts like a floor supervisor, working in real time to get the job done by the most effective means.

For instance, a WMS can tell the system it is going to need five of stock-keeping unit (SKU) A

and five of SKU B hours in advance, but by the time it acts, other considerations may have come

into play or there could be a logjam on a conveyor. A WCS can prevent that problem by working

in real time and adapting to the situation by making a last-minute decision based on current

activity and operational status. Working synergistically, WMS and WCS can resolve these issues

and maximize efficiency for companies that rely on the effective operation of their warehouse or

distribution center.


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Logistics Outsourcing:

Al-Quraish uses Third-party logistics (3PL) involving using external organizations to execute

logistics activities that have traditionally been performed within an organization itself. According

to this definition, third-party logistics includes any form of outsourcing of logistics activities

previously performed in-house. If, for example, a company with its own warehousing facilities

decides to employ external transportation, this would be an example of third-party logistics. And

this is done by Al-Quraish as they have outsourced their transportation system to local

companies given below:

1. A&D transporters

2. GM motors

Production Logistics:

The term production logistics is used to describe logistic processes within an industry. The

purpose of production logistics is to ensure that each machine and workstation is being fed with

the right product in the right quantity and quality at the right time. The concern is not the

transportation itself, but to streamline and control the flow through value-adding processes and

eliminate nonvalue-adding ones. Production logistics can be applied to existing as well as new

plants. Manufacturing in an existing plant is a constantly changing process. Machines are

exchanged and new ones added, which gives the opportunity to improve the production logistics

system accordingly. Production logistics provides the means to achieve customer response and

capital efficiency.


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Drivers:

1.

Facilities

2. Inventory

3. Transportation

4. Information

5. Sourcing

6. Pricing

Facilities:

The basic factory is located at Kot Lakhpat and Sundar. Medium warehouses having the capacity

of 15 tons of raw material. Also has two finished products warehouses having 6 tons capacity

each of finished products. The head office is situated in Fortress Lahore that provides the hub of

all the activity. The factory uses BATCH PRODUCTION PROCESS with continuous flow of

machinery and work in progress. The lead time to any order is according to the size and rate of

the order. The paper cleaning and transmitting takes 6 hours on an average and one batch process

is completed in 22-24 hours keeping 6 tons in mind.

The factory capacity is 6 tons at a time of paper production, depending on the different types of

paper quality and amount. The total strength in terms of employees is over 300 with our head

office residing in Fortress Stadium, Lahore, as well as our other factory offices in Kot Lakh Pat,

and Sundar.

Inventory:

Inventory management is required at different locations within a facility or within multiple

locations of a supply network to protect the regular and planned course of production against the

random disturbance of running out of materials or goods. The scope of inventory management

also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset

management, inventory forecasting, inventory valuation, inventory visibility, future inventory


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price forecasting, physical inventory, available physical space for inventory, quality

management, replenishment, returns and defective goods and demand forecasting. Balancing

these competing requirements leads to optimal inventory levels, which is an on-going process as

the business needs shift and react to the wider environment.

The inventory system used in just-in-time keeping all the inventories in the proper trimmings to

use least space and focus on efficiency.

Transportation:

Moving inventory from one point to other is the basic transportation needed. Al-Quraish as

already explained has outsourced all modes and logistics to support its systems viability. The raw

materials are brought in by these transporters

The minimum size of inventory brought in: 2 tons

Transportation costs: negotiated on the duration and size of the inventory

Average outbound inventory size: 1 ton 10 tons maximum

Fraction transported by mode: utilizes the facility by maximum utilization factors

Information:

Information serves as the connection between various stages of the supply chain and provides the

lubricant and leverage of action to be taken between each stage. Hence information is a vital role

in the 7 drivers. It is very crucial to daily operations as well.

The information that takes place between uses the following technology partners:

Technology Partners:

y Hooked Technologies

y Tatming Ltd

y Chumpower Ltd

y Shini Technologies

y Farhan Securities

y Nash


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y Festo

y Al Jadeed Boiler Works

Sourcing:

Already covered in transportation, the outsrouced logistic in Al-Quraish is transportation.

1. Coordinating all activities related to procurement of a commodity beginning with intent

to purchase through delivery.

2. Analyzing the requirements of the commodity, including preliminary specifications,

preferred supplier, and date commodity is needed.

3. Soliciting and evaluating proposals for the requested commodity. Investigating and/or

interviewing potential suppliers to determine if they meet the specified requirements.

Pricing:

Al-Quraish uses ABC ( activity based costing system) with relevance to competitive and cost

based pricing.

The whole price is defined by the fixef and variable costs that are the basic inputs of the

structure:

25% fixed costs

75% variable costs

And 10-15% margins for profts depending on the lot size ordered and negotiated power.

To reach economies of scale and be efficient the minimum cost level has to be reached over a

large number of customer with big order. Batch production makes effieceincy easier and makes

the cost plus and competitive pricing an easy task.


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Average order size: 4 ton

Range of sale price: Rs 12 60 per piece

Range of periodic sales: max 6 tons and min 2.5 tons per period of one month time.

Pricing strategies are a sometimes-overlooked part of the marketing mix. They can have a large

impact on profit, so should be given the same consideration as promotion and advertising

strategies. A higher or lower price can dramatically change both gross margins and sales volume.

This indirectly affects other expenses by reducing storage costs, for example, or creating

opportunities for volume discounts with suppliers.

The Pricing Strategy course addresses the need of all decision makers to get an overview of

systematic pricing strategies and their practical impact. It is essential for all managers

responsible for creating, evaluating, and implementing pricing strategies and for executives

charged with the overall profitability of the firm. Mid- and senior-level executives in product

development, marketing, accounting and finance, and operations will particularly benefit from

this.


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Push/Pull Processes :

The process used by Al-Quraish is Pull process as the order cycle starts the manufacturing

process and hence the customers initiate the cycle.

In a "pull" system the consumer requests the product and "pulls" it through the delivery channel

Applied to that portion of the supply chain where demand uncertainty is high

Production and distribution are demand driven

No inventory, response to specific orders

Point of sale (POS) data comes in handy when shared with supply chain partners

Decrease in lead time

Difficult to implement

In a pull-based supply chain, procurement, production and distribution are demand-driven so that

they are coordinated with actual customer orders, rather than forecast demand.


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The Implied Demand Uncertainity Spectrum:

Al-Quriash Paper Factory

Predictable Demand Moderate Highly Uncertain Demand

Al-Quraish stands at a midpoint between moderate and uncertain demand hence choosing the

pull process.


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Resposive Spectrum:

Responsiveness is providing the product to their customer quickly, when they needed and where

they needed. Higher the responsiveness, more the satisfier customer is.

The lined comes from responsiveness to cost is called cost-responsiveness efficient frontier line.

Its the best place for a company. Al-Quraish is trying to come on this line. Most of the

companies in this world are not exactly utilizing their capabilities so most of the companies are

lying below this line. Al-Quraish is also one of them. To thing go beyond this line is same as

living in the foolish paradise. The position has been drawn with the help of a star in the diagram

given.


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Position ofAl-Quraish watch shows they are not utilizing their resources in best way. They can

either improve the responsiveness by spending same amount or reduce cost by giving same

responsiveness.

Al-Quraish

Highly Efficient Moderate in both Highly responsive


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Suggestion and Recommendations for Al-Quraish:

1. The order placement strategy should be revised

2. The lead time and transportation time should be cut off

3. A better more integrated marketing strategy

4. The core business product should be established

5. The responsiveness should be enhanced

Increased understanding of supply chain processes and capabilities has the potential to inform

and influence the direction and rate of supply chain evolution and performance. Linked computer

information systems establish essential infrastructure in integrated supply chains. However, notall efficiency-enhancing suggestions call for investment in information systems.

IMPLICATIONS FORPOLICY, DELIVERY ORPRACTICE:

Driven by persistent pressures to control costs, improve service levels, enhance information

flows, and gain transaction efficiencies, supply chain management is gaining currency as a

strategic focus in the health services industry. The fifteen ideas--based on investigation of

industries with more established supply chain network capabilities--aim to stimulate discussion,development, and performance ofAl-Quraish

y Benchmarking

y Commerce

y Cost Savings

y Counseling

y Group Purchasing

y

Health Services

y Human resource

y Industry

y Information Systems

y Economics


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References:

Al-Quraish Paper Factory General Manager; Javed Khalid

www.quraishgroup.com

supply chain final project

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