SUPPLY CHAIN MANAGEMENT

AL-RAHIM PRINTERS

Submitted to:

Mr. Sohail Majeed

Group members:

Syed Haris Ali (1387)

Nawab Ali (1437)

Muneebullah (2185)

Syed Mubashir Raza (1033)

Saad Hanif (2162)

Ussama Saeed (3721)

ACKNOWLEDGMENT

We faced countless problems when we started the work on report because supply chain
management of printing and packaging company requires a lot of time to generalize the work
but we are greatly thankful to Almighty Allah for enabling us to get successfully through our
responsibilities.

Very warm and special gratitude to our respected Sir Sohail Majeed, whose real dedication
and devotion kindled in hope and light. Sir, we thank your ability of extracting the very best
out of us, for your patience and perseverance, and also for acknowledging the efforts made by
us during the whole semester.

Thank you. God Bless you.

From,

Ussama Saeed

Saad Hanif

Nawab

Haris Ali

Mubashir Raza

Muneebullah

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 TABLE OF CONTENTS

# Topic Page #

A.1 Mission Statement & Core Values 4

A.2 History 5

A.3 Organization Structure 6-7

A.4 Valuable Clients 8

B Supply Chain Management At Al-Rahim Printer 9

B.1 Purchasing 10-12

B.2 Inventory Management 13-14

B.3 Warehousing 15-16

B.4 Manufacturing 17-19

B.5 Logistics 20

C Recommendations 21-22

D Conclusion 23

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 AL RAHIM PRINTERS

MISSION STATEMENT:

To deliver quality products constantly manufactured under the supervision of motivated

professional in a neat and clean environment to support expansion of present business
activities.

Ghulam Ahmed

Chief Executive

CORE VALUES:

• Result Oriented: We are result oriented and do what our customers need.

• Committed: We are committed to work on quality to deliver quality.

• Work together: We have faith in that jointly we can make difference.

• Orderly & Caring: We keep our work place neat & clean and supportive & open.

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HISTORY:

Al-Rahim started formal business under the name and style of printer in 1977.
Initially rendered services in the field of printed stationary items and served for the small
local business and industry. In a short period of about 4 years entered into the Pharmacy
industry. M/S Aspro Nicholas Pakistan (PVT) Limited (the business of which was later on
taken over the M/S Reckitt & Colman of Pakistan Ltd) was the 1st multinational company
who awarded their various jobs. Since then gradually progressed and presently serving for 7
multinational Pharmaceuticals Companies.

Currently Al-Rahim Printers is a reliable name in the field of paper and board printing. They
offer all printing solution under one roof. Factory situated at SITE and a part from the
Pharmacy Industry, which is their core business area, also server for Garment Industry,
Textile Industry and many more including various institutions.

Plans are in hands to provide concept development facility to their valued customers from
this factory. In their plans for the year 2011/2012, which are in process currently, they have
given considerable weight to find out the possibilities for export of printed materials initially
to Middle East.

In short we can say that Al-Rahim Printers is now on a way to get a rank in the list of top 10
Printing Industries of Pakistan.

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ORGANIZATION STRUCTURE:

Al-Rahim Printers is a family business, and a part of its various printing units. In order to
avoid any legal complexities whole business is carried out under the umbrella of various legal
entities. All these printing units are owned by its various members and run and monitored by
an Executive Committee presently comprises on following three gentle men.

1. Mr. M. Haroon Kapadia (ACA)

2. Mr. Ghulam Ahmed (B.Com)

3. Mr. M. Hanif (B.Com)

Excom has empowered Mr. Ghulam Ahmed to act as a Chief Executive Officer. In addition
to his role as CEO, he also looks after Marketing & Sales Department on full time basis.

We are operating under a flexible orgonograme. Business activities have been split out
mainly into following three departments.

1. Marketing & Sales

2. Operations

3. Finance & Administration

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MARKETING AND SALES:

Department has strength of 4 head count headed by Mr. Ghulam Ahmed. Mr. Faisal Ghlam
assist him directly to co-ordinate mainly customer services related activities.

OPERATION

This part of our business performs the versatile activities covered from the purchase of raw
materials up to the delivery of finished goods to the customer’s warehouses. Mr. Hanif,
member of Excom, has been entrusted to head all these activities performed by 5 sections. He
takes care of purchase section on his own while following 4 sectional heads reports to him.

1. Production – Mr. Muhammad Asif

2. Quality Control – Mr. Faisal & Mr. Rabi

3. Warehousing – Mr. Ahmed

4. Customer Services – Mr. Muhammad Aamir

FINANCE AND ADMINISTRATION

Incoming & Outgoing Man and Money related matters are deal by this department headed by
Mr. Ashraf (EDP Section).

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PRODUCT RANGE

They deal in all types of printing jobs related to paper and board. Since mostly they serve for
pharmaceutical companies. They have expertise in carton for medicines. List of products they
currently deal with are:

Paper Items: Labels (Glass Bottles & Injections), Leaflets (Instruction manual in drugs),
Physicians writing pads & Calendars.

Box Board Items: Carton, Packing Box for readymade garments, visiting cards.

Stationary Items: Bind

VALUABLE CLIENTS

They prefer not to make high claims but have a list of satisfied clients. Below is a list of their
“A” class clients.

1. Barett Hodgson Pakistan (Pvt.) Ltd.

2. Bayer Pakistan (Pvt.) Ltd.

3. Bonanza Garments Industries (Pvt.) Ltd.

4. Getz Pharma Pakistan (Pvt.) Ltd.

5. Hilton Pharmaceuticals

6. Metro Agarbatti Co. (Pvt.) Ltd.

7. Novartis Pharma (Pvt.) Ltd.

8. Reckitt Benkiser Pakistan Ltd.

9. Searle Pakistan (Pvt.) Ltd.

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SUPPLY CHAIN MANAGEMENT AT AL-RAHIM PRINTERS:

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 Purchasing

Vendor
Vendor

Vendor Vendor

Inventory
Management

Warehouses Manufacturing

Logistics
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 Purchasing

Vendor
Vendor

Vendor Vendor

Inventory
Management

Warehouses Manufacturing

Logistics

Customer Customer
Customer

Customer

Customer

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PURCHASING

The company has centralized purchasing. Mr. Ghulam Ahmed is responsible for all kinds of
purchasing from the suppliers. There are many local suppliers in the market. Some of them
imports raw material purchase from Brazil, China etc, while other manufactures the raw
material in Pakistan. The purchasing process in Al-Rahim Printers is:

1. Receiving Purchase Request:

Al-Rahim receives any order from the customer. Mr. Ghulam Ahmed sends his
specification to their 91 local suppliers in the market. He checks out the quality and price.
Negotiate the price, if necessary.

2. Exploring the Sources of Supply:

Mr. Ghulam Ahmed sends quotation to the suppliers of the various materials such as
paper, box boards and ink. He compares the given prices from every supplier and select
the most appropriate supplier according to the quality and price offered. They have
minimum 5 supplier of every raw material like boxboard, bleach board, inks and chemical
etc.

3. Placing Purchase Order:

He places a purchase order with the chosen supplier for specific materials. The order is
placed according to the need and is specific in nature. The purchase order consists of raw
materials specifications such as size, weight, batch, quantity and quality. Some purchase
orders are sent by emails while others by fax or courier.

4. Receipt of Materials and Inspection:

When the materials are received by the administration department, the quantity and
quality of the material are checked. The administration officer signs the receipt of raw
materials and sends it to the supplier and keeps a copy in the administration department.

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5. Checking Invoice and Making Payment:

The invoice is checked by the administration department and is also recorded in the book
of purchase and in computer too. The receipt is sent to the accounts section for making
payment to the supplier.

PRINCIPLES OF PURCHASING

The Principle of purchasing in Al-Rahim Printers is:

1. Right Price

2. Right Time

3. Right Quantity

4. Right Quality

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The Purchasing System in Al-Rahim Printers is as follows:

1. Purchase made is 10% extra as per requirement:

The purchase is made about 10 percent extra to the requirement. This ensures that if, any
wastage occurs. They can still satisfy their customers. In the case, if the wastage is less.
The raw materials are sent to the warehouses for the safety stock of raw materials.

2. Contract Purchasing:

There is contract purchasing with some of the suppliers. This is due to the demand
fluctuations. Suppliers which are supplying them raw materials for the past 10 to 15
years, there is no written purchasing done. Only verbal agreements are made.

3. Market Purchasing:

Al-Rahim continuously checks the market price of raw materials offered by 91 local
suppliers in Karachi. According to him, every single rupee is precious and generates a lot
of profit. If a supplier, offers him low price and good quality. He goes with him though he
has a new supplier in the market.

4. Scheduled Purchasing:

There is a schedule for some of the products of their customers, such as, Mortein
products, Strepsils and Optalidon etc. The demand of these products is fixed around the
year. Hence, there are scheduled purchasing of the raw materials at the end of every
month. A periodic and fixed purchasing is done at every month.

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INVENTORY MANAGEMENT

The purpose of inventory management at Al-Rahim printers is to ensure;

• Sales forecasting

• Operation planning

• Stock Planning

• Material requirement planning

1. Sales Forecasting:

Al Rahim printers usually forecast the sale of every product they manufacture. The
administration department is responsible for sales forecasting. They are more concerned
for the future sales as to make sure that their client is highly satisfied and to improve their
relations with customers.

2. Operation Planning:

They plan their operation accordingly if the customer such as Novartis or Hilton asks
them to make an urgent supply of goods. They are ready for it. They never say no to their
customers. This gives them a competitive edge in the market. Their commitment to the
customer is to deliver at same date and time. This has given them a competitive edge in
the market.

3. Stock Planning:

They maintain a safety stock for some of the products such as Mortein Coil Optalidon and
Strepsils, etc. They have minimum 6 months of the stock of constantly demand’s product
because the customers are giving the order for the entire year. They know the demand of
every product is very urgent therefore they keep their stock safe. In any worst situation
like in law and order situation they have their buffer stock.

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 4. Material Requirement Planning:

They are using pull strategy when the demand comes they plan for their raw material at
how much quantity they buy it so that they contain low cost. They have local suppliers
which produce raw materials by themselves but for as others, the raw material is imported
from Brazil, China, and Dubai etc.

Inventory Management Objectives of Al-Rahim:

1. Improve customer service: The main objective to manage the inventory is to improve
the customer service. Some customers have independent demand while others have
dependent demand. The dependency can be season, fashion, need for the time being,
etc. While others have independent demand which means that the customer can order
at anytime. This is due to either unforeseen future demand or demand fluctuations.
For this situation, the inventory must be managed efficiently otherwise the customer
can offer the order to the competitor.

2. Economies of purchasing: Purchasing of raw material at huge quantity can be

beneficial. The suppliers offer discounts on large quantities. This means that the cost
can be saved on ordering large quantities where as ordering small quantities on
periodic basis can become an expensive procedure.

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WAREHOUSING

Al-Rahim printer has two warehouses in Karachi. One is located at the production facility
while other is rented. The rent costs them around Rs.30, 000/- per month excluding security
expenses, administration expenses and carrying cost. Mr. Ahmed is responsible for both
warehouses.

The factors which are considered for the location of a warehouse for Al-Rahim are:

1. Environmental conditions: The materials are fragile in nature and can be obliterate on
expose of sun light, heat, humidity and cold. The materials are kept with delicacy
according to their nature, so that it does not affect the quality.

2. Some materials require a cold place such as ink. The ink, if exposed to heat or
sunlight can become thick and can reduce the quality.

3. Security is an obvious issue in the city like Karachi. The warehouses are located at
safe locations, apart from residential area. So that any mishap or theft can be avoided.

4. Proximity to customers is very high because the warehouses are located at the SITE
areas where they can easily transport deliveries on low cost.

5. Proximity to supplier is very high because the most of the suppliers of raw materials
are located at the SITE areas too. So the deliveries of raw material are not the issue
for Al-Rahim.

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Al-RAHIM WAREHOUSES OPERATION:

• Receiving materials

• Identifying materials

• Sorting materials

• Dispatching materials to storage

• Holding materials

1. Receiving: The warehouses receive raw materials and a receipt of receiving is

generated by the warehouse manager. A copy of receipt is sent to administration.

2. Identifying: The materials are identified and a record is made of each item by the
warehouse executives.

3. Sorting: The material are then sort out according to the size and gram of board.

4. Dispatching: The materials are then dispatched to the racks and pallets in warehouse.

5. Holding: The materials are kept in storage until needed in the manufacturing. They
are properly handled and protected in the time being.

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MANUFACTURING:

Steps of manufacturing are as under:

1. Proofing:

When the customer wants to place an order to them, they acquire a sample of that item. In
this they make films and plates etc. It is then the film and a sample is sent to the customer
for consent. If the customer accept over proofing then for the next step otherwise,
restarting the proofing process.

2. Film Making:

After proofing, the head of supply take the size of the product, he knows the customer
requirement what board is wanted to the customer, than the manager decide in how many
ups we makes to reduce cost. Suppose if he decides 6ups on the size of 30*50 according
to that size they make the film. For making film they email to film maker which is in
Pakistan chowk. Film maker make the film for us and send it within 24hours maximum.
Most of the company sends them a CD of the item then it is sent to the film maker.

3. Plate Maker:

Al-Rahim is making the plate in-house according to the size and shape of the film. One
plate is made in 10 minutes.

4. Cutting Department:

The manager draw the map of cutting in a piece of paper and send it to cutting department
so they can easily understand it from where you cut it and where you not. In the company
they have six cutting machines three is auto and manual too. The time is dependent on the
demand of the customer. Suppose they demand 50,000 packets of product it’s contain
15minutes.

5. Printing Department:

In printing department they have different type of machines, in which every machine has
different lead time. The lead time of most of the machines is 30 minutes. After cutting
department the orders moves to printing. They have 2 Japanese machines and their lead

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time is 20 minutes and it prints dual colors at a time. It prints 8000 to 8500 in an hour.
Therefore if the urgent demand arises they use those machines.

6. Die-cutting Department:

After the printing it moves to die-cutting. Die is made in-house, the lead time is
30minutes of automatic machines but in a manual machine it takes 15 minutes to ready.
The output of automatic machine is 7000 but in manual 3000 in an hour.

7. Pasting Department:

In pasting they have three pasting machine their lead time is 10 minutes. The output they
generate in an hour is too high and too quick, in pasting there is an option to increase the
speed as much as possible.

8. Sorting:

After the procedure of pasting they do sorting. This is checked by the quality assurance
person. If there are any pasting mistake. It is taken out for remanufacture. It also reduces
the cost of production and trying to reduce the cost.

9. Packaging:

The last and final step of manufacturing is packaging. Packaging is done by 3 persons.
One put glue, second wraps and the third puts the packet in the delivery line.

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AL RAHIM AS “LEAN MANUFACTURER”

Lean manufacturing at Al-Rahim refers to the techniques implemented which reduce

costs and expenses of the company without affecting sales, quality or profit.

These are the wastes that are identified and eliminated at Al-Rahim:

1. Over processing: The Company avoids from over processing. This is due to the
machines which are built to manufacture 100,000 units at a time. If the machine is
given job for more than 100,000 units, it elevates the energy required and also heats
up the machine which affects the quality of the units. This means they only
manufacture according to their capacity.

2. Transportation: The Company focuses on the mode of transportation. If the customer

is willing to take away the finished goods. They welcome them.

3. Inventory: The Company checks thoroughly when receiving raw materials from the
suppliers. If there are issues related to the raw material such as low quality or less in
weight. They return it to the suppliers immediately. Inventory is stored in a very
cautious and efficient manner so that it can be retrieved easily when required. This
also reduces the time for inventory to reach at manufacturing.

4. Defects after production: The Company sells any defects which occur during
production. They reuse the defects again if usable otherwise, defects are sold
according to the weight age. Nothing is thrown away in garbage. Every possible
technique is applied to utilize the waste.

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LOGISTICS:

Al-Rahim Printers has a cross functional integration with logistics which means every
department is interconnected with logistics. The company logistics consists of two Suzuki
Ravi trucks which are capable of delivering around 600Kgs and one Hyndai Shehzore truck
which is capable of delivering around 1500kgs. The Ravi trucks are on CNG and Shehzore is
on diesel. The management of logistics is a very important and key factor of Al Rahim’s
success. They have only one logistics channel:

Multi echelon: a logistic channel where raw material are brought at production area for
manufacturing or storing of raw material. When the raw materials are changed into finished
goods then they supply to the customers end.

The company has two types of logistics:

1. Inbound: a logistic, it is used to take raw material from vendors and delivered at
production area or warehouse. Shehzore truck is used for inbound services.

2. Outbound: a logistic, which manages finished goods that are to be delivered to the
customers. Ravi trucks are used for outbound services.

The company’s consideration in transportation is:

1. Cost: It is the most important consideration. A unit manufactured has a profit of less
than Rs.1. They are continuous in struggle to reduce the cost of transportation. They
have bought 3 new vehicles which have are good in mileage and less in maintenance.

2. Speed and time: It is a key factor of company’s success. Delivering products to its
customers on time, helps company to achieve good relations with its customer’s.

3. Routes: The specific routes are selected for deliveries. As the city is very vast and
have many problems related to traffic jams and roads are ripped off. This causes them
a good maintenance expense of trucks. The drivers are trained professional and are
instructed for every delivery of the product through a specific and safe routes.

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RECOMMENDATION:

We have found out the some major problem in the organization, our recommendation on
those problem are given below:

• The core thing which are seen that the flow of work is not proper. It should be from
the top floor till bottom. They should have to make the process of manufacturing in
the cycle or in sequence in manner, so they will decrease their lead time easily by
doing this.

• They should build one floor more for their warehouse so that it would help them to
decrease their rent cost, transportation costs, carrying cost etc. Fourth floor is
available but unutilized.

• They should buy latest machinery which would decrease their lead time and wastages.

• They should apply EOQ formula so that their costs could be reduced, as EOQ helps in
reduction of holding cost, ordering cost and also helps in economic order to be placed
every time.

• They are only concerned with the customer relationship and do not focus on their
vendors. This is the main reason for which they change their vendors for material
requisitions. They are in win/lose situation with their vendors.

• They can use RFID technology to track and record materials and finished goods. It
takes their plentiful time to record materials and goods. Their time can be saved by
this.

• There is no scheduled planning for their processing. Employees should have

scheduled work for each day so that it makes sure that they complete the work on
time.

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• They should implement supply chain management applications that can help them to
improve purchasing and logistics activities and relation with vendors and customers.

• They should reduce the wastages during processing’s. The wastage is about 5% on
each production which increase their cost and time. The wastages can be reduced by
training their employees and maintenance of their machines on regular basis.

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CONCLUSION

The printing industry is just like manufacturing industries. They are also affected by the
economic sufferings and inflation hits. The printing industries have gain popularity over the
past decades. This is due to outsourcing. This has given printing industries a colossal market
share in the economy. The Company offering cheapest price with good quality is preferred.
The one who is unable to provide it, they are lashed out from the market.

Al-Rahim has a competitive advantage over the competitors which is they provide finished
goods on time. This is the most valuable and attractive technique which has made them
popular in the market and is taking them towards success. A customer’s product which has
fluctuating demand gives them order anytime with confidence that they will produce it by the
earliest date.

In their plans for the year 2011/2012, which are in process currently, they have given
considerable weight to find out the possibilities for export of printed materials initially to
Middle East. In short we can say that Al-Rahim Printers is now on a way to get a rank in the
list of top 10 Printing Industries of Pakistan.

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