Project

Assign by:
Sir Sarmad Irfan
Assign to:
Mehreen Shah
MBA3Y02123058
Subject:
Supply Chain Management
LBS

University of Lahore

Shoes Manufacturer Organization

Executive summary:
As a student of MBA I am studying the course of supply chain
management. For the understanding of this project Sir Sarmad Irfan assign us a project
in which we have to visit a firm and observe the whole supply chain and recognize its
problems. For this purpose I visit a shoe manufacturing organization. I interview the
owner and also the labors. By analyzing the data and problems I made some
recommendations at the end of this report.
This is a small organization of shoe manufacturer. The supply chain of shoe
manufacturer organization is responsive. They are working on differentiating strategy.
They have few distribution channels. They are selling their products within the limits of
Lahore and Peshawar. They are doing self investment. They also contact with the
suppliers and purchase raw material. Therefore the risk of loss is greater. For
manufacturing process, there are 25 labors working in the organization. They are not
using any heavy machinery. The organization is giving incentives to labors to keep them
loyal and honest toward work. The demand of shoe is not constant and it varies every
day. Non availability of raw material creates difficulties in fulfilling the demand of market.
They have many competitors. They are distributing shoes through local transport. They
distribute their products to the shoe market everyday.
The organization is facing many problems because of less coordination in supply chain.
This is also affecting the supply chain drivers. The main problems are regarding raw
material and non availability of electricity. Shortage of facilities causes wastage of time
and delay in delivery of product. For the solution of all these problems they have to keep
a good relation with the suppliers and also arrange some sort of electric supply to avoid
wastage of time.

Introduction:
Objective of the project:
This project is about to visit the manufacturing company and to
analyze problems by interviews, questionnaires and observations. The main objective is
that how this project will provide us the opportunity to demonstrate our understandings
and mastery of the course material. We have to analyze that how the problems in
supply chain affect the market condition and also the product?
Company Introduction:
It is shoe manufacturing organization. It consists of 25 employees.
It is located in Sheikhupura and work in a house. This organization made a shoe
approximately in 4 hours. They make 30 shoes in a day. They contact with the suppliers
of raw material and they also doing self investing for all the procedure. After finishing the
product they are distributing these shoes to the retailers of shoe market of Lahore and
Peshawar. They have many competitors. Their manufacturing process starts as follows.

Cutting
Sewing (of upper section above the sole)
Stock fitting (prepares the sole)
Lasting (prepares attachment of upper to the sole)
Heeling (attaches and shapes heel bottom to final form)
Finishing
Treeing (attaches accessories)

 After the manufacturing process, the shoe is then distributed to retailers and sold
to consumers.

Introduction of problem area:

In the supply chain of shoe manufacturer organization,
the problems are related to raw materials. The problem is in supply chain drivers.
Sometimes non-availability of fabric, metallic, foam, plastic and other accessories are
making the process very slow and less effective. Sometimes the chemical solution
which is used to stick all the materials is not available or the solution which is provided
is not working properly. In this way sometimes they are unable to fulfill the demand of
consumers.
Problem background:

The problem in supply chain drivers occur due to the less

coordination in supply chain. The suppliers are not fully cooperating with the
manufacturers. They are also selling unfavorable raw material. When the facility of raw
material is poor then the labors cant work according to the time. All these problems
affect the whole manufacturing process. Due to this delay, the demand of market
couldnt fill properly. Thats why after getting the product most of the retailers refuse to
pay the full amount. In this way the supply chain have to bear loss.
Problem analysis:
Data:
I have collected data by interviewing the manufacturer organizations owner and
also by observing the whole process of making shoe. I asked them different questions
with respect to these parts which are as follows:

Strategy
Investment
Supply chain drivers (Facilities, inventories, information etc)
Suppliers
Raw materials
Labor force
Distribution
Product availability
Payment methods
Demand influence in SCM
Sourcing
Co-ordination in supply chain
Safety inventory
IT

Analysis of data:
Analysis of data obtain from answers explain the whole supply chain
and its problems. They are working on differentiating strategy. For this purpose they
have to work efficiently and effectively to earn competitive edge. They are self investing
on each and every process. Thats why the risk of loss is greater than the profit. In

supply chain drivers the facilities regarding manufacturing process is very

unsatisfactory. The organization has different suppliers but they often have difficulties
regarding raw material availability. Due to this they cant make the right design of shoe
and in this way they are loosing their customer. The organization is giving incentives to
labors for better work because it is necessary to keep them loyal toward the
organization. The supply chain is responsive as they are distributing their products at
daily basis. They are using local transport. Their product is available at Lahore and
Peshawar shoe markets. Their payment method includes the expense of all
manufacturing process. It also includes the transportation expense. Demand of shoes
changes day by day. They have no IT facility and also they are not keeping safety
inventory. The co-ordination in supply chain is average.
Issues:
The main issue of this problem is load shedding of electricity which is very
common problem in small organizations.
The other issue is claim of shoe from customers with respect to quality.
They do not keep safety inventory.
Lack of co-ordination in supply chain
Why and how?
Due to electricity problem the working process cant be completed at
exact time. Shortage of time and facilities increase work load on the labors. Flexibility in
work decreases and the supply chain cant work smoothly. It creates bad relationship
between owner and workers. It also effects the whole operations of supply chain. When
the organization is unable to meet the demand of market then it would become less
competitive in the market.
When the customer claims about some product then the goodwill of organization will
effect badly. It is the failure of product as well as the manufacturing process. The
efficiency of the supply chain becomes less. It also helps the competitors to take

advantage of the situation. They do not keep safety inventory and thats why they are
unable to replace the claim product.
Co-ordination in supply chain is lacking and due to this the supply chain is unable to
perform well in the market. The whole manufacturing process is effecting due to this
problem.
For responsive supply chain these issues creates large number of difficulties and soon
become a problem. JIT can be missing due to these issues.
Recommendation:
To deal with all the problems and issues some recommendation
should be follow. In this way the supply chain will become effective and more
responsive. This will also help the organization to grow and improve the quality of
product.
Supplier relationship management:
The organization should have contact with many suppliers. So if any supplier is
unable to provide raw material then they can contact with other supplier. Their should be
little sharing of information on both sides. They should maintain a good relationship with
all suppliers. It will help to improve the co-ordination in supply chain and also help to
build a trustworthy relationship with suppliers. Products quality can be improved by
focusing on this step. The organization will progress as the basis of quality and
availability of product.
Raw material recommendation:
They should have to assure about the right quality of raw material.
Perfection in every step will give product a long survival. In this way the customer will
satisfy with product and never claim back. It will help the organization to beat the
competitors.

Safety inventory:
They should have to keep safety inventory so they can deal with the
variability in demand and also resolve the issue of claim. By doing this they can
maintain the trust between customers and the organization.
Electric supply recommendation:
They should have to arrange a generator or small size
of electric supply to deal with the problem of electricity. They can save time in this way.
They can also able to follow JIT strategy.