Beruflich Dokumente
Kultur Dokumente
FINAL PROJECT
Submitted To
Mr. Samnan Ali
13-May-2018
Acknowledgment
A solitary hand can't tie a package" says a familiar proverb. Numerous individuals have made
it workable for us to finish this venture. We are, with the regard profundity of heart,
appreciative to the, Government Collage University, and our Course educator, Mr. Samnan Ali
that he gave us a chance to have a reasonable of all that we have examined in the course and
are occupied in cleaning our relational characteristics.
We have endeavored to achieve the report doled out by the teacher to the best of our
capacities, yet at the same time there are various issues in the report general that will be
expelled just by the direction from the educator. We invite and welcome the recommendations
from the side of our educator.
Executive Summary
Service Industries Limited (PSX: SRVI), popularly known as 'Servis' through the branding of
its products, is one of the leading manufacturers of footwear, tyres and tubes in the country.
The company was formed by a group of namely Chaudhry Nazar Muhammad (Late),
Chaudhry Hussain (Late) and Chaudhry Muhammad Saeed (Late) friends in 1953. The
manufacturing unit was established 1954 in the city of Lahore. The production also started in
the same year.
The company shifted their plant to Gujarat later on. Service Industries got listed on the stock
exchange in the year 1959. Tyre manufacturing was started by the company in the year 1970.
In the initial years of tyre manufacturing, the company targeted bicycle tubes and tyres. In
1990, the company expanded into motorcycle tyres and now is the major supplier to all
motorcycle manufacturing companies in Pakistan.
In 2015, the management of Service Industries decided to venture into power business in order
to diversify its income sources. Two companies were set-up, S2 Power Limited and S2 Hydro
Limited, which will invest in coal and hydel projects respectively.
Over the years, the financial performance of the company has seen significant growth. The top
line of the company, on average, increased by 10 percent. Sales growth can be attributed
towards the overall growth in the country which has translated into increase in per capita
income.
The company has also increased its focus on marketing campaign which saw its brand equity
going up. Advertising on mass media during holiday season drove scores of people into their
stores.
The export scenario has been different from local sales. The exports of the company are
largely dependent on the European market which has slowed down across the board.
Subsequently the Euro has also gone down taking the export revenues of the company down
with it.
In its tyres and tubes segment, the company has been increasing its capacity each year to cater
to the growing demand. This segment over the last couple of years has provided the company
very good opportunity to keep its growth intact.
Table of Contents
TYRE INDUSTRY IN PAKISTAN ....................................................................................................................... 4
SERVIS INDUSTRIES LIMITED ......................................................................................................................... 5
PRODUCTS OF SIL.............................................................................................................................................. 6
SELECTED SKU: ..................................................................................................................................................................... 6
COMPETITORS ................................................................................................................................................... 7
THEORIES OF SUPPLY CHAIN ......................................................................................................................... 8
INDUSTRIAL ORGANIZATIONAL THEORY: .................................................................................................................................... 8
CONTINGENCY THEORY:.......................................................................................................................................................... 8
RESOURCE BASED THEORY: ..................................................................................................................................................... 8
LOGISTIC MANAGEMENT ................................................................................................................................ 9
CUSTOMER MODULE ........................................................................................................................................ 9
QUALITY .............................................................................................................................................................................. 9
COST ................................................................................................................................................................................. 10
FLEXIBILITY ......................................................................................................................................................................... 10
DELIVERY ........................................................................................................................................................................... 10
INNOVATION....................................................................................................................................................................... 10
DEPARTMENTS ................................................................................................................................................ 10
HR DEPARTMENT: ............................................................................................................................................................... 11
MARKETING DEPARTMENT:................................................................................................................................................... 11
ACCOUNTS DEPARTMENT: ..................................................................................................................................................... 11
SALES DEPARTMENT: ............................................................................................................................................................ 11
SCOR MODEL.................................................................................................................................................... 11
PLAN ................................................................................................................................................................................. 11
SOURCE ............................................................................................................................................................................. 12
MAKE ................................................................................................................................................................................ 12
DELIVER ............................................................................................................................................................................. 12
PRODUCTION DEPARTMENT: ................................................................................................................................................. 12
SUPPLY CHAIN DEPARTMENT: ................................................................................................................................................ 13
INTEGRATION .................................................................................................................................................. 13
INTERNAL PROCESS INTEGRATION: ......................................................................................................................................... 13
VERTICAL PROCESS INTEGRATION: .......................................................................................................................................... 13
Forward Process/Downstream Integration: ............................................................................................................... 13
Backward Process/Upstream Integration: .................................................................................................................. 13
HORIZONTAL INTEGRATION: .................................................................................................................................................. 13
RESOURCE MANAGEMENT............................................................................................................................ 14
PEOPLE: ............................................................................................................................................................................. 14
CAPITAL: ............................................................................................................................................................................ 14
MATERIAL: ......................................................................................................................................................................... 15
TECHNOLOGY:..................................................................................................................................................................... 15
SUPPLY CHAIN DECISION PHASE.................................................................................................................. 15
SUPPLY CHAIN STRATEGY OR DESIGN: ...................................................................................................... 15
LOCATION OF WAREHOUSES: ................................................................................................................................................. 15
PRODUCTION CAPACITY: ....................................................................................................................................................... 15
INFORMATION SYSTEM: ........................................................................................................................................................ 16
SUPPLY CHAIN PLANNING ............................................................................................................................. 16
INVENTORY POLICY: ............................................................................................................................................................. 16
MARKETING AND PROMOTIONS: ............................................................................................................................................ 16
SUPPLY CHAIN OPERATIONS ........................................................................................................................ 17
NEW PRODUCTDEVELOPMENT .................................................................................................................... 17
Design for manufacturability: ..................................................................................................................................... 17
Design for purchasing: ................................................................................................................................................ 17
Design for logistics: ..................................................................................................................................................... 17
Design for environment: ............................................................................................................................................. 17
Design for disassembly and reuse: .............................................................................................................................. 18
CUSTOMER FULFILLMENT STRATEGIES ................................................................................................... 18
CUSTOMER SERVICE: ............................................................................................................................................................ 18
CUSTOMER SATISFACTION:.................................................................................................................................................... 18
CUSTOMER SUCCESS: ........................................................................................................................................................... 18
SUPPLIER SELECTION .................................................................................................................................... 19
IDENTIFICATION:.................................................................................................................................................................. 19
EVALUATION:...................................................................................................................................................................... 19
APPROVAL:......................................................................................................................................................................... 19
MONITORING: .................................................................................................................................................................... 19
TYPES OF SUPPLY CHAIN .............................................................................................................................. 20
1. RAW SUPPLY CHAIN MANAGEMENT ................................................................................................................................... 20
2. RIPE SUPPLY CHAIN MANAGEMENT .................................................................................................................................... 20
3. INTERNAL SUPPLY CHAIN MANAGEMENT ............................................................................................................................. 20
4. EXTENDED SUPPLY CHAIN MANAGEMENT ............................................................................................................................ 20
5. SELF-MONITORED SUPPLY CHAIN MANAGEMENT .................................................................................................................. 20
6. PRODUCTION ORIENTED SUPPLY CHAIN MANAGEMENT ......................................................................................................... 20
7. MARKET ORIENTED SUPPLY CHAIN MANAGEMENT ............................................................................................................... 20
8. OUTSOURCED SUPPLY CHAIN MANAGEMENT ....................................................................................................................... 20
9. FINANCIAL ORIENTED SUPPLY CHAIN MANAGEMENT ............................................................................................................. 20
SUPPLY CHAIN OF SERVIS: ............................................................................................................................ 20
INTERNAL SUPPLY CHAIN MANAGEMENT: ............................................................................................................................... 20
SELF-MONITORED SUPPLY CHAIN MANAGEMENT: .................................................................................................................... 20
REFRENCES ........................................................................................................................................................... 21
Tyre Industry in Pakistan
The impressive development in the communication sector besides an all-time high growth in
the automobile industry altogether have elevated the tyre industry as a vibrant area of
investment in Pakistan. Besides catching eyes of the local investors, several other countries are
also taking keen interest in the tyre industry of Pakistan obviously due to robust growth in
demand for tyres. The multi-national tyre producing companies are taking special interest in
tyre industry because the capacity of local industry was not sufficient to cater the needs of
growing vehicular population in the country. Despite a strong industrial growth, the tyre
industry of Pakistan could hardly meet 12 to 15% demand and the shortfall paves the way for
the international tyre companies in Pakistan. Apart from vehicles population, the dilapidated
condition of the roads stand was another reason for high incidence of tyre consumption in
Pakistan.
An importer said more than 50% tyres smuggled into the country. The smuggling methods
change according to situations at boarders. This must be a fact that why no investors are
establishing tyre manufacturing plants in our country although the fact also remains on the
record that Karachi, Lahore, and Rawalpindi are the part of the country where more than six
tyre manufacturing plants are badly required.
There is a huge difference in the prices of smuggled and legally imported tyres, as the
importers pay 60 percent tax and other duties, while the smugglers do not contribute even a
single penny to national exchequer, the huge influx of smuggled tyres in the country is causing
a loss of Rs 5 billion annually to the national exchequer and is harming local industry and legal
imports of tyres.
Servis Industries Limited
Servis tyres is a global tire and tube manufacturing based in Gujrat city and Muridke, Pakistan.
It was founded in 1970 with its head-office located in Gulberg, Lahore. It is second-oldest
company of the Servis Industries Limited after Servis Shoes. Company is registered with the
United Kingdom Accreditation Service UKAS and Lolyd’s Register Quality Assurance
LRAQ. Servis is awarded the Best Vendor Performance Award 2012 by the Atlas Honda in a
ceremony held on November 3, 2012. Award was presented by the Senior Managing Director
of Honda Motor Company, Japan.
SIL has pioneered the industry for Tyres & Tubes manufacturing in Pakistan since 1970 with
annual sales revenue of PKR 6.5 billion. Over the years, our umbrella brand, Servis, has
evolved as one of the finest brands of footwear and two/three-wheeler tyres/tubes in
Pakistan. Servis enjoys a respectable place in several countries and is striving for further
expansion. Through rich manufacturing and marketing experience of over 40 years
in tyres/tubes and over 50 years in footwear, Servis has been able to emerge on Pakistan’s
industrial and business landscape as an organization that is widely recognized for its
pioneering role in the development of these industries. Servis is proud to be undisputed market
leaders in bicycle and motorcycle tyres in Pakistan for both the OEM and Replacement
market. We are major supplier of tyres to Japanese motorcycle manufacturers like HONDA,
YAMAHA and other local motorcycle assemblers in Pakistan.
Products of SIL
Selected SKU:
The SKU that we selected from the product portfolio of the servis industry is Gripper a
Motorcycle tyre against this product Panther tyres make Shikra (Motorcycle tyre) and
Diamond produces Extreme (Motorcycle tyre).
Companies Servis Industry Limited Panther Tyres ltd Diamond Tyres ltd
(SIL)
Warehouse 3 2 3
Distributor 21 18 31
Wholesaler 16000
Retailer 31229
Theories of Supply Chain
Contingency Theory:
The Operations, R&D and Marketing departments always focused on the current market trends
& demand of the customers and gave their best in delivering or satisfying the customer needs.
Keeping abreast of changing customer needs, SIL market intelligence and continuous research
efforts, enable SIL to consistently produce new product ranges of tyres and tubes aligned with
the market requirements.
Logistic Management
Logistic management that deals with management of goods in an efficient way. When the
product is ready to dispatch, their logistic partner loads the finished goods from the warehouse
and deliver to the distributors. The logistic partner of SIL is Fateh Sons.
Customer module
After observing and discussing with different customers we find out the following ratings of
these entire three products. The scale is based on 1 – 10 rating where 1 shows the least, and 10
represent the best.
Cost 7 8 9
Flexibility 9 8 6
Delivery 8 9 6
Innovation 9 8 7
Quality
Quality wise servis is quite better than from its competitors, with respect to its performance it
is more efficient and long lastic from others. As servis is famous from its grip and claims that
the grip of servis is better than all. The life of other tyres is from 2-3 years but servis claims
that its life is more than 8 years. The quality of servis get score of 9 as its more reliable, more
durable from its competitors as well as its performance level I quite good than its competitors.
Cost
The cost of servis tyre is quite high as compared to its competitor, because of its unique
designs which gives support to it, and because of its reliability and durability. The cost of
servis tyre (Gripper) is RS1100/- which is quite high as compares to other.
Flexibility
Servis has a large number of different varieties of tyres made for different weighs and
situations. It is more flexible as compared to competitors. it has the capability of increase and
decrease the demand and to shifts itself as per the economy. While panther and diamond has
not such large variety of tyres so they are not able to shift themselves according to economic
changes.
Delivery
Servis has its own supply chain department as well as their distribution channel is quite good.
So, they have good supply of its products but as compared to panther, panther is probably
available on all the small retailers as well so they have better supply chain from servis. So, it
got 9 points out of 10 for its delivery.
Innovation
Servis is the most innovative tyre company in Pakistan because it has the large number of its
products; with it servis also has the large of designs of tyres as well. It has different design for
different situations and different demands. Moreover, they launch a new design of tyre every
year which claims that they are quite innovative. While its competitors are not such innovative
they don’t have such number of tyres. Somehow panther have different verities but these are
also in less number as compared to servis.
Departments
Served has divided its departments according to their function each department is responsible
to handle different task. It has number of employees being headed by department’s head,
which is mostly a manager the departments are interrelated to each other. Thus, the
performance of one sector affects the activity of others. Managers have the authority so they
are responsible for group performance
HR department:
The HR department plays a vital role in the prosperity of organization; there is a team which is
working in the HR department. It functions like a bridge between employees and management.
HR departments try to help employees develop their full potential. It encourages employees to
give their best to the organization. It is all about people at work, both as individual and groups.
It will help the organization meet its goals in the future by providing competent and well-
motivated employees to build and maintain cordial relation between people working at various
levels in organization.
Marketing Department:
The main objective of marketing department is to promote their products mostly newly
launched products. They drive their marketing campaigns by using different marketing tools.
There is a team which is working effectively in marketing department. Mostly Servis advertise
its products through commercials for its marketing.
Accounts department:
Accounts department is a backbone of any organization. There is a team in accounts
department working efficiently. The accounts department performs daily functions of
collecting and accounting for payments, receipt of payments and other income, preparing
deposits, account analysis, payroll, processing purchase orders, monitoring, paying vendors
and reporting on payments and budgets and various other projects to assist higher management
with accounting administration.
Sales department:
The one of the most important department is sales department, the sales team leads all the way
by escalating sales through distributors and the main key objective of the sales department is to
achieve the sales targets. Tyres are sold to all over the Pakistan through its extensive dealer
network. There is a huge team working very effectively in sales department.
Production department:
The main important department is production department and its core objective is the
functional area authority for turning inputs into finished output through a series of production
processes. The Production Manager is responsible for making sure that raw materials are
provided and made into finished goods effectively. It is make sure that work is carried out
smoothly, and must supervise procedures for making work more efficient, effective and more
transparently. Workers in this department include technicians, engineers, designers, machine
operators headed by Production Manager there is a huge team working in Production
Department.
Plan
The biggest customers of servis tyres are HONDA motors, they use servis tyres in their
motorcycles moreover the new design is also used by HONDA first and then by others. So, the
basic plan of servis tyre is to make tyre from HONDA. Demand and supply planning and
management are included in this first step. Elements include balancing resources with
requirements and determining communication along the entire chain.
Source
Servis collects rubber from foreign suppliers and after processing (milling, building, curing,
and inspecting) it they make the final product. Servis tyres manage manufacturing &
inventory, the supplier network, supplier agreements, and supplier performance. It is how to
handle supplier payments and when to receive, verify and transfer product.
Make
Servis is the manufacturing the core product servis tyre (Gripper). The make step includes
production activities and dispatching to the distributors. It also includes managing the
production network, equipment and facilities, and transportation. Servis has the proper plant
and machinery and skilled labour for production of tyres.
Deliver
Servis has the production capacity of tyre (Gripper) 16000- to 20000 per month. Servis deliver
sits product to customer through a proper channel, there are large wholesaler then to the
retailers and then to the customer. Delivery includes order management, warehousing, and
transportation. It also includes receiving orders from distributors or big retailers and invoicing
them once product has been dispatched. This step involves management of finished
inventories, assets, transportation, product life cycles, and importing and exporting
requirements.
Integration
Servis Tyre is a division of the Servis group, they have a very vast network of distributors,
whole sellers and retailers, they have 21 distributors all over Pakistan, 16,000 whole sellers
and almost 31,229 retailers this show how well integrated this company is and that why they
have the largest market share in Pakistan.
Horizontal Integration:
Servis has the same old factory located in Gujrat over the years with increase in demand they
have also expanded their production capacity, but the exact details of their expansion are kept
secret, so they practice some sort of horizontal integration in form of internal expansion but
hey have not acquired or merged with anyone else.
Resource Management
People:
SIL currently employee’s 9,200 employees from which 2,200 belong to servis tyre, as Servis
tyre is a division of servis group, Mr Omar Saeed serves as its CEO.
Capital:
Servis tyre is a market leader and their main focus is to generate maximum return from there
invested capital, there revenue for last year was $ 90 million
Total Capital, as of 2017: 474,676,000
Material:
Servis tyre purchases their raw material from suppliers in South Korea, Italy, Germany and
China. Their main focus is on quality that is why they don’t compromise on it. That is why
they are the most trusted brand in Pakistan
Technology:
Servis tyre currently employees the latest technology used in tyre production all their
machinery is certified by ISO.
Information system:
Our both factories are connected with the head office through an Enterprise Resource Planning
(ERP) and Material Resource Planning (MRP) system for efficient operations.
Our company has a strong information technology culture which focuses on immediate
information delivery and paper less environment. In addition to our IT teams, they have
maintenance teams who are trained to prevent machine breakdowns in the first place. The
skills of our maintenance engineers are regularly updated by international training courses.
This transforms to a better production environment and practically negligible production
breakdowns.
Inventory policy:
They keep back up of 2 months of Finish goods keeping in view the uncertain conditions
of Pakistan.
Marketing and promotions:
Servis tyres marketer has identified their target audience. The target market is upper,
middle and lower class so that they design promotional campaigns keeping in view their
target market. Servis tyre is using functional promotion as they are relying on functional
and economic benefits to the customers.
They are using of non-personal communication mediums to reach the consumer to tell
those Servis tyre is your need as we can see a lot of Television advertisements running on
our TV channels and which has gained a lot of attention of the target audience. Servis
tyres use these following mediums:
Television
Social media
Magazine
Newspaper
SIL have PRET (Process re-engineering teams) instituted who work closely with the material
research and development teams to keep rising raw material costs in control.
Operations division oversees design and control of the product process as well as redesign of
business operations, in the production of goods or services. The division is vital in increasing
value of the business, securing income and satisfying clients with quality products.
At every stage of the manufacturing process of tyres starting from the raw material processing,
compounding and mixing, component preparation through calendaring, extrusion and bead
building, assembling all the components for tyre building (TBM) in a fully automated
environment and curing for final shaping of the product, the Operations division vigilantly
monitors each and every process in order to ensure a perfect finish.
Tyres are also inspected by X-ray machines that can penetrate the rubber to analyze the steel
cord structure. In the final step, tyres are inspected by human eyes for numerous visual defects
such as incomplete mold fill, exposed cords, blisters, blemishes and others.
Customer Satisfaction:
SIL is consistently finding a way to expand their consumer loyalty thus their Quality
Assurance office handles all the quality issues exceptionally well that increments saw
consumer loyalty. SIL innovative work division continued improving new items for their client
to build clients intrigue. Consistently SIL fabricate new tires in various shapes for new models
as indicated by the need of the current mechanical needs of the vehicle. This causes SIL to
build consumer loyalty.
Customer Success:
SIL is concentrating on client achievement technique on the grounds that in this procedure
organization helps their clients with the goal that they address the issues of their client's
Customer. SIL is helping their wholesalers, merchants and retailers by giving them such item
which their clients are requesting, in the long run talking care and fulfilling their clients. SIL
has no service GAP in There inner divisions, as they are connected together such that the
organization continued working just to build accomplishment of their clients, they function as
a teammate not contender, Because of this technique they have figured out how to fulfill their
clients, their concentration is to fulfill the last buyer and make their necessities and to that they
are additionally giving certain advantages to retailers and they likewise have a check and
adjust on their retailers with the goal that they can ensure that the end user is getting what they
need and that is the "Guaranteed Quality"
Supplier Selection
Identification:
SIL is particularly sharp in determination of their Suppliers. Over 90% of Raw material they
import from South Korea, China, Germany and Italy. This incorporate engineered elastic,
regular elastic, texture and wire, alongside carbon dark and other synthetic mixes. SIL scan for
best reasonable providers who can take care of the demand (as far as Quality and Quantity) of
SIL, at best case scenario rate.
Providers are likewise required satisfy the beneath specified things and for that they utilize an
indistinguishable procedure from of the SIL.
1. Banking incorporates contracts, lawful assertions, Letter of credit and Active Tax Payer
Status.
2. Import incorporates shipment from South Korea, China, Germany and Italy to Bin
Qasim port, Karachi and to the generation plant
3. Logistics/Transport
Evaluation:
Once the providers or suppliers are distinguished, SIL assess each and every provider on a
specific criterion and select their suppliers carefully.
Monitoring:
SIL has an observing office which checks the accessibility of the considerable number of
assets. They screen the provisions test that are conveyed by the provider and based on the
quality they consider which suppler is to be chosen.
Types of Supply chain
There are different types of a supply chain. Supply chain of a company depends on the
structure and operations of that particular company. Major types of a supply chain are as
follows:
The supply chain of Service Industries Limited is a world-wide network of suppliers, factories,
warehouses, and distribution centers through which raw materials are acquired, transformed
and delivered to customers.
https://www.servistyres.com/
http://www.servisgroup.com/