Supply Chain Management

TABLE OF CONTENTS
TABLE OF CONTENTS.....................................................................................................1 WHAT IS TAPAL?............................................................................................................5 MISSION AND VISSION OF TAPAL..............................................................................6 SLOGANS OF TAPAL......................................................................................................6 SHARE OF TAPAL IN PAKISTANI TEA MARKET......................................................7 SUPPLY CHAIN OF TAPAL.............................................................................................8 SUPPLY CHAIN PROCESS OF TAPAL.........................................................................11 TAPAL PRODUCT DESIGN...........................................................................................16 TAPAL TOTAL QUALITY MANAGEMENT................................................................16 TAPAL CORE COMPETENCEY....................................................................................17 FLOW CHART OF SUPPLY CHAIN OF TAPAL..........................................................17 BRANDS OF TAPAL.......................................................................................................18 CONCLUSION..................................................................................................................19 RECOMODATION ..........................................................................................................21

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CKNOWLEDGEMENT

As we start working on this report which gives a brief analysis of supply chain management of Tapal Tea (Private) limited . I would like to extend a solemn vote of thanks to our Teacher Mr. Rizwan Tanveer Malik visiting faculty Iqra University Karachi, for giving us the opportunity to carry out an in depth study of various elements of supply chain management. As well as along Mr. Tanveer ul hassan: Logistic Executive Tapal. All your valuable input was the key to our research and enlightened us greatly upon the Supply chain practices of the said organization as well as different performance metrics and the effect of various styles of decision making on the overall supply chain of the organization. It has been a wonderful experience for us and we have learned a lot from it, we also gained a birds eye view of the overall situation of the Tapal Tea (Private) limited in respect to SCM practices. Also we would like to thank Aamir Shehzad and all others who made this project become possible. All your input and assistance was valuable to us.

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S
was Tapal Tea (Private) limited.

YNOPSIS

The main objectives of our research were to study supply chain management practices in an organization of our choice. The organization we selected to study

For the purpose of our research we interviewed Mr. Tanveer ul hassan: Logistic Executive Tapal and were able to clearly see the important aspects of how this particular organization behaves, we came to know what kind of a hierarchical structure is followed in this organization, how fluid are the lines of communication among the management the decision makers, suppliers, distributor and customers and how different decisions take place because all of these play a key role in the success of the supply chain process of Tapal. We tried to be as through with our study as possible but there is always chances for ambiguity and error, hence I request the reader to forgive any mistakes herein as none were intended and all work done was from research that we personally carried out by visiting Tapal and interviewed Tanveer ul Hassan, there may be also places where we might not have been able to shed appropriate light on certain aspects of our study so let me say that any omission is also totally unintended

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WHY TAPAL?
For the final project of supply chain management course we have to analyze an organizations supply chain, its process, entities and strategies to conclude the teachings we obtained in this course. After a combine decision of Rash group members we decided that FMCG has more complex supply chain. If the effectiveness and efficiency of real supply chain need to be study then FMCG supply chain is the best opportunity for it. Now the question arise which company among FMCG companies should we consider for the final project. A suggestion from one of our group member arose about Tapal the reason was, 1. Tapal is the only leading brand in Pakistan which serves Tea Market from the last 64 years and still 100% own by Pakistanis. 2. Tapal reduce the Market size of its competitor Lipton and Broke Bond from 60 million Kg to 45 million Kg and took over the remaining market in tea. 3. In December 1997, Tapal Tea became the first Pakistani Tea Company to earn the ISO-9001 certification: a symbol of the highest international quality standards. 4. In December 2000, Tapal acquired the ISO-9001: 2000 certification, making it one of the first few companies in the world to achieve this milestone. 5. Tapal also export its product in other countries of the world which broad down the scope of its supply chain because Tapal is the only Pakistani leading brand which import its raw material completely from different countries of the world and exports its finished goods in other countries of the world. All success Tapal achieved since Mr. Aftab Tapal joined the companys C.E.O in late 1988-1989 is because of its effective supply chain management and customer and supplier oriented management that is CRM and SRM.

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WHAT IS TAPAL?
Tapal is one of the leading brand in Pakistani Tea Market, 100% Pakistani own company also exporting its brand in North America, South America, Eastern Europe, Western Europe, Africa, Middle East, South East Asia and Oceania. Tapal is serving in tea market since the partition from 1947. the Founder Mr. Adam Tapal bought a shop in Jodia Bazar and start the journey of Tapal till 1970 the shop of Jodia Bazar exist then Mr. Aftab Tapal Current C.E.O of the company joined Tapal and give a new life to business, a complete new and modern face of Tapal turn into the market. He was the first to introduce soft packs in the country. He developed an entirely new brand and category- Tapals Family Mixture (the mixture of tea & dust). Mr. Aftab Tapal was the first to invent the highly successful brand Danedar Leaf Blend. Tapal has different brands of tea and green tea, Tapal also localize its brand according to the region they are distributing their product in. for example in Interior Sind they have Pearl dust, Meezban and Cheenak, in Punjab region they have Tezdum Tea similarly one of their localize product is Gulbahar. Tapal also diversified their production in Green tea with different flavors and Ice Tea in cans and sashes. Some of Tapal Products are as follows, 1. Tapal Danedar 2. Tapal Family Mixture 3. Mezban Tea 4. Pearl Dust 5. Gulbahar 6. Chenak 7. Jasmine green tea (in Lemon, Ilaichi, Mix) 8. Tapal Tea Bags 9. Tapal Ice Tea in different flavors.

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MISSION AND VISSION OF TAPAL

TAPALs Environmental Vision is: Sustainable world, a world in which human populations can continue to exist indefinitely with a high standard of living and health. To produce, market & distribute its product in a way that does not cause harm to people or damage to the Environment. We believe our activities should: Respect the environment Generate economic benefits Create positive influence in the society Create opportunities for good quality of life Our Philosophy is: to act locally, but think globally Our Employees are: provided with the information & training necessary to enable them to perform their tasks in a hygienic manner

SLOGANS OF TAPAL
1. Tapal Truly Yours. 2. Tapal Danedar Chai har eik dana jaisay tazgi. 3. Tapal Family Mixture Chai bhar day Zindagi main Rang.

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SHARE OF TAPAL IN PAKISTANI TEA MARKET

Pakistan, which has a 170 million kg tea market, imports about 100 million kg annually. Tea imports from Kenya make up about 85 per cent of the total import, and India is in the second place. Smugglers bring in another 60 to 70 million kg. Tapal has been able to successfully compete against the multinational companies and has captured more than 35% market share of the organized market sector of Pakistan and is one of the top 100 tax paying companies of Pakistan and one of the top 5 FMCG companies of Pakistan. Tapal's envious growth has come at the expense of its multinational competitors, Brooke Bond and Lipton brands, whose combined market share has shrunk from 60 million kg to 45 million kg during the same period.
Tea Market Of Pakistan
90% Percent Contributed 80% 70% 60% 50% 40% 30% 20% 10% 0% 85Mil kg Kenya Contries Of Import 14.99Mil kg India Series2 Series1

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SUPPLY CHAIN OF TAPAL

Tapal has a very effective and efficient Supply Chain Management which ensures quality at every step of value chain from procurement of raw tea till distribution to the end consumer. To describe the effectiveness and efficiency of Supply Chain of Tapal we first will define the entities of Supply Chain of Tapal. ENTITIES OF SUPPLY CHAIN OF TAPAL: Following are the entities and their description involve in the Supply Chain of Tapal, 1. Suppliers Supplier of Tapal Tea Company: Tapal suppliers suppliers are those suppliers who supplies tools, equipment and commodities related to the cultivation and harvesting of Tea. Tapal another suppliers supplier are those suppliers who supplies Foil, Hard Paper, Polythene bags and packaging material to the Packaging supplier of Tapal. 2. Supplier of Tapal Tea Company: Tapal Import raw tea from different countries who actually are the main supplier of Tapal. Following are the countries from where Tapal Import the Raw Tea, Kenya (major part of Import) China Sri Lanka Tapal second important supplier is the packaging supplier who provides the Packaging for the different product of Tapal. Tapal another supplier is taste binder which provides essentials to Tapal which Tapal then with the help of its R&D combines to produce refreshing and soothing taste.

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3. Manufacturing of Tapal Tea: Tapal has two manufacturing plants, one in Karachi at Korangi and other in Raiwand at Manga Road. Each manufacturing plant has its own warehouse adjacent to the Factory. Tapal manufacturing process may be given as follows, Raw tea testing at Tapal Tea Room Blending of tested tea in mechanical drum Testing of Blended tea Packaging of Blended tea Delivery of finished goods to warehouses

4. Mode of Transportation of Tapal: Tapal use 3PL transporter services for its local inbound and outbound Transportation. Tapal didnt use any 4PL services to manage its numbers of 3PL transporters. Tapal has its own dedicated staff which specifically deals in Transportation. Tapal use Ocean / Water Mode of Transportation for importing its raw tea and exporting its Finished Tea products to other countries. 5. Warehouses of Tapal: Tapal has its own Warehouses at 6 different regions of Pakistan. These are well equipped with state of art equipments. The 6 regions are, Karachi Sukkar Hyderabad Raiwand Islamabad Multan 6. Distribution Channel of Tapal: Tapal has more then thousand distributor in all over the Pakistan who placed orders at the 6 warehouses and distributes the products of Tapal in all over the Pakistan. Tapal has agents in Germany, UK, North America, South America, UAE, Saudi Arab, Africa and Western Europe. These agents import

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Tapal products in these countries and distribute to the end consumers.

7. Customers of Tapal: Tapal customers are its distributors. Tapal also has vendor management with Macro, Metro, Naheed, Aghaz and with Hyper Market in other regions of Pakistan whom Tapal directly supply the Finished goods from its warehouses. 8. Customers Customer of Tapal: Tapal customers customers are wholesaler, retailers and end consumers. 9. Integrated System of Tapal: Tapal has Integrated Oracle base ERP system which connects all of its entities of supply chain along with Sales, Marketing and R&D. Tapal make utilization of POS for its Inventory Management in integration with its vendors like Macro, Metro and others. Tapal has its own Internet Services in collaboration with PTCL fiber optics which connects the Suppliers, Manufacturing plants, logistics, sales, marketing and R&D all the time.

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SUPPLY CHAIN PROCESS OF TAPAL

Tapal religiously believe to deliver its products at right place where they are demanded at right time when they are demanded in right quantity in which they are demanded at right price which is feasible for its customers. Tapal effective supply chain can be better understand in dividing it into steps as,

Step 1: Formation of AOP (Annual Operating Plan):

Tapal supply chain starts with the determination of its products demand. The demand for the products of Tapal is derived, produced and forecasted by the Marketing and Sales department. Marketing and sales department on the basis of historical data, change in season, taste and other factors forecast the demand of Tapal products and present in the form of a report which is called Annual Operating Plan (AOP) to the production department, this AOP also shared further with Supplier and logistics department to engage all entities for effective and flawless Supply chain. An AOP for international export is formed separately on the basis of orders generated from exporting countries. Tapal exports its tea brand to USA, UK, Germany, UAE and some portion of Saudi Arabia as well. This AOP is formed on annual basis, a plan of production which defines the production of one year of Tapal from June to July every year. Tapal has push strategy at national level of production and when it comes for export tapal has pull strategy .This AOP then divided on monthly basis according to the forecasted demand in that month. Purpose of making AOP for one year is the lead time of raw tea supply from exporting country to Pakistan which is normally 5 to 6 months. Tapal for safety also include 20% to 25% of inventory of August too in their AOP. That strategy saves their time and also the cost which incur in importing the Raw Tea from its exporting countries. The cost for storage and handling of raw tea is much lesser then the cost of Importing of Raw Tea incase if inventory finished at the warehouse of Tapal. SALES DEPT MARKETING DEPT GENERATE FORECASTING ANNUAL OPERATING PLAN (AOP) - 11 -

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DEMAND HISTORICAL DATA SUPPLIERS MANUFACTURING LOGISTICS

Step 2: Tea-Supply:

According to the production plan Tapal import tea from different countries. This process is called Tea-supply. Tapal has forwarding and clearing agents who work in exporting countries to import tea for Tapal. Tapal has agents who locate the best quality tea for Tapal. Once the Tea leaf after plucking from the garden till to the conversion into tea is ready brokers forward the samples to the agents of different importing companies like Tapal. Catalogues are printed along with the total description of Tea its originated garden and grades. Tea has 4 grades BP1, PF1, PD or D1. The agents taste the tea and forward the samples to Tapal, Tapal specialist taste the Tea and placed the order to the exporters. Forwarding agent in his supervision imports the tea from exporting country to Pakistan through shipment. When the shipment arrived at the dock clearing agent perform his part by delivering the shipment from the dock to the warehouse of Tapal. The transportation from dock to warehouse is done by contracted 3PL of Tapal which is basically done in 30 to 40 feet containers.

Tea Gardens

Tea Samples send to brokers

Brokers taste the tea samples

Tapal in Pak Receive the samples

Order when reached at dock then clearing agent load it in Tapal Trucks

Order then packed and shipped

Broker bid in the auction for tea

Tapal Specialist test the quality and taste of tea again and pass the order to broker

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3PLs of Tapal

Warehouse of Tapal

Step 3: Tapal Tea Room The Expert Verdict:

Once the purchased tea arrives at the Tapal warehouse, the tea tasters again perform the organoleptic tasting of samples drawn from the various lots. After testing the tea then send to the blending Department where the tea then transform into various brands like Danedar, Mezban, Dust, Family Mixture etc.

Step 4: Blending of Tea:

Artistically mixing assorted tea varieties in a mechanical drum is called blending. The aim of blending is to obtain consistent quality to meet the global consumers taste. Blending is usually carried out immediately before the retail packaging to keep the quality and freshness intact. The blend recipes are tasted several times for their quality consistency and compared against previous batches.

Step 5: Packaging of Tea:

After blending the tea packaging process starts at once. Tea is such a commodity that absorbs moisture very quickly which affect its taste and quality very badly. Tapal has to prevent its tea products in such packaging which can secure its taste and quality for long time. Tapal has contracted Packaging firms who provide packaging materials to Tapal. This firm itself import the best foiled which secure the tea from moisture and humidity from other countries then manufacture specific packages according to the demand of Tapal and deliver it to the Tapal Manufacturing plants. Tapal has different packages some are in hard paper cover in which tea is covered with double coded foil paper, other is in bottle in which the top of the bottle is sealed with foil paper and the bottle is of good quality plastic and its cover is air tightened, one of the packaging style is in pouch for 1000 grams it is basically a plastic bag which is double coded with foil inside and polythene cover outside. Tapal also pack its products in sashes which are of foil paper and sealed on the top tightly. Tea bags are packed in polythene bags and then covered with hard paper boxes. Tapal packaging process is so effective that Tapals products can be stored up to one year.

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Step 6: Distribution of Tapals Products:

After packaging the Products of Tapal then moved out from manufacturing Plant to warehouses. Tapal here again uses 3PL logistics for movement of finished products from manufacturing plant to the 6 designated Warehouses. This movement is carried out in 14 to 15 feet containers. Tapal distributors then place Their orders at the warehouses. Products then delivered to the distributor who further delivered the product to wholesalers and retailers. The lead time of order fulfillment is at most 24hours. Tapal use FIFO method for its inventory management. Tapal has more then thousands of distributors in all over the Pakistan. Tapal also have Vendor management contracts with Macro, Metro, Imtiaz, Naheeds in Karachi and other Hyper Markets in other cities of Pakistan. Tapal also export its product in different countries. In Exporting when an order is placed at Tapal from importers, Tapal packed the order in pallets loaded it in 14 to 15 feet trucks delivered it to the port where Tapal forwarding agent shipped the order to the importer country.

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Step 7: Reverse Process of Tapals Products:

Whenever any claimed is made by any distributor or importer to Tapal regarding the quality of its product that claimed has been fulfilled by Tapal and returned goods spoiled at the same time. According to Tapal the ratio of returned products is approximately equals to zero due to their quality assurance process at every step from selecting the tea till to the packaging of Tea.

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TAPAL PRODUCT DESIGN

Tapal in collaboration with their supplier introduce new brands. Tapal always include its supplier from the very beginning step of supply chain that is product design. Supplier when sends high quality raw tea to Tapal, Tapal Research and development department utilized modern techniques on the raw tea to come up with new brands like ice tea that is introduced by Tapal.

TAPAL TOTAL QUALITY MANAGEMENT

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TAPAL CORE COMPETENCEY

FLOW CHART OF SUPPLY CHAIN OF TAPAL

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BRANDS OF TAPAL
Tapal danedar Family mixture Tapal tea bags Mezban

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Tezdum Chenuk Shades of green Ice tea Instea Gulbahar Tapal special

CONCLUSION
In the end we would like to conclude that Tapal is a highly cohesive organization having fluid lines of communication and open doors for its suppliers, employees, customers and distributors this makes their supply chain more effective.

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All the entities of supply chain are closely connected with each other they dont work in silos instead they work with each other to give the best quality product to its consumers .For Tapal health of its consumer is the major concern and that is why quality assurance at each level of production is done so that consumer can have healthy and happy lifestyle. Withstanding the above, Tapal commitment towards the timely delivery of quality products to consumer from healthy and safe working environment remains definite.

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RECOMODATION

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