Supply chain management at Engro foods

Prepared by Nasir MuhammadB.B.A 7th finance AWKUM MARDANcrazylover190@yahoo.com

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Engro food is a subsidiary of Engro chemicals.

Engro foods started its operations in 2006.

Within a very short span of 2 years, it has become the house of four quality dairy milk brands: Olpers Milk, Tarang, Olwell, and Olpers cream.

It has two processing plants at Sukkur and Sahiwal.

Introduction of Engro foods

Products

Importance of supply chain management process?

very crucial in backward and forward linkages between the company and its suppliers and its customers.

Without supply chain mgt, the company can not ensure that the basic raw material reaches the plant and then leaves the plant to the clients.

to ensure the supply of milk on time without any delay or detriment to the milk.

Managing the supply chain efficiently help in reducing cost of the product and make the company in position t offer the product on lower price to the final consumer which drives out the competition

SUPPLY CHAIN MANAGEMENT AT ENGRO FOODS

The above chart depicts the overall supply chain management process at Engro Foods (Pvt) Ltd.These activities can be divided into three categories as follows:

· Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.

· Operations: the processes of transforming inputs into finished products and services.

· Outbound Logistics: the warehousing and distribution of finished goods..

Long term relation with suppliers are made to ensure that quality raw materials are supplied on time at discounted costs.

The various kinds of raw materials required for the milk and cream production at Engro foods

include: · Raw Milk · Other ingredients like SNF and fats · Packaging materialSources of milk supply At Engro Foods the supply of raw milk, that is the way milk

collection is done can be divided into: · Direct Sources · Contactor based collection

1.RAW MATERIAL PROCUREMENT

Direct Sources:milk collection done through various dairy farmers residing in different villages and delivers milk every morning and evening to the Milk Collection Centre in that Area.

Engro Foods can be regarded as having one of the largest milk collectionnetworks in the country which is unmatched in size, productivity and efficiency to meet the selfimposed commitment to quality.

It started off with hundred Milk Collection Centres in March 2006 andnow in 2008 has over five hundred and fifty Milk Collection Centres operating across thecountry.

The vast network comprises of village milk centres which are equipped with chillers to preserve the quality prior to long hauls to the factories served byspecially designed tankers.

Indirect or Contractor Based CollectionThe contractor based milk collection involves collecting milk from approved suppliers who are aware of the quality standards adopted by the firm. The contractors are responsible for milk collection from a large area and can bring about ten thousand litres of milk a day from dairy farmers.

Large quantity of milk is collected through method nut first quality and taste of milk is tested.

Once this milk is tested, is sent to the chillercontainers which protect milk from air, light and heat. This milk is then transported to the plant.

Packaging material

The packaging material is supplied from Tetra Pak Ltd. It is in the form ofrolled sheets of aseptic packaging arriving at the manufacturing plant directly from the supplier.

The aseptic packages are sterilised prior to filling of UHT (Ultra Heat Treated) milk, with a 3 months shelf life.

The raw milk is transported from the milk collection centre to the manufacturing plants via insulated tankers.

Insulated tanker maintain a temperature which avoid growth of germs or expiration of milk.

The transportation fleet at Engro Foods is partly owned and partly contracted that is they make use of third party logistics.

Routes are selected to reach plants are to reduce time and cost. (shortest routes).

2.TRANSPORTATION OF RAW MILK

THE PRODUCTION PROCESS

Chilling, pasturization, UHT treatment, Packaging:-When milk is brought first it is tasted then it cooled and stored.

Then it is boiled and suddenly cooled this is called Pasteurization.it kills all the germs in milk,.

After this point the milk is separated into different product by adding different nutrients in it. For example olwell, tarang olper milk and olper cream etc.

The pasteurized milk is then passed through the UHT (Ultra Heat Treatment). This is the mostsophisticated and advanced stage in milk processing. which in turn kills all the bacteria.

After this milk is cooled and packed in Tetra pack cortons as soon as possible.

The cartons are filled automatically and continuously under completely sterile conditions and then heat-sealed

the next step involves the immediate transfer of the products to the warehouse maintained right next to each of the production plants.

4.FINISHED GOODS

5.DISTRIBUTION(sale)

Engro Foods is following traditional channel of distribution that involves some intermediaries between the transfer from producer to the consumer.

LogisticsFor distribution of goods from warehouses, a fleet of trucks ismaintained by Engro Foods themselves while part of transportation have also been given to third party logistic companies

Engro Foods has almost 200 distrbutors all over Pakistan.

For the larger orders, the finished goods are transported directly to the distributors.

for the smaller distributors, goods are also being delivered and deposited in warehouses maintained by Engro Foods in some important locations all over Pakistan, from there small distributers get there require bulk of goods.

Any Question?