SUPPLY CHAIN MANAGEMENT
FINAL REPORT ON
CASH & CARRY SUBMITTED BY: Muhammad Nabeel Shahzad Siddiqui (3851) Faizan Iqbal (3696) Hammad Ahmed (3694) Haseeb Ali Khan (3847) Nida Iqbal (3782) Saba Zuberi (3680)
SUBMITTED TO: Mr. Sohail Majeed
REPORT O N
MAKRO CASH & CARRY
TABLE OF CONTENTS y
Executive Summary «««««««««««««««..
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Company Profile «««««««««««««««««.
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Nature of business ««««««««««««««««.
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Purchasing «««««««««««««««««««..
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Logistics ««««««««««««««««««««.
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Existence
Logistics
Shipments to Individual Customers««..««««
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Cross Docking«««««««««««««« ....
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of Third Party Logistics«««««««
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within factory«««««««««««..
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Pull
Strategy««««««««««««««« ..
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Warehouse
Management ««««««««««««« .
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Purchasing Process««««««««««««««
Warehousing Process«««««««««« ...
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Technology
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Used In Makro««««««««
Inventory Management ««««««««««««««
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Inventory Keeping«««««««««««««.
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Inventory Accounting««««««««««««
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Weaknesses
and Suggestions ««««««««««
Conclusion «««««««««««««««««««
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EXECUTIVE SUMMARY This
report presents a new frame work of Supply Chain Management of Makro Cash and Carry.
Makro Cash and Carry is a whole sale center who caters both type of business buyer and normal buyer it¶s a joint venture currently working in Pakistan¶s two states Karachi and Lahore with two hundred employees they are planning to open more new 8 outlets in Pakistan which will boost the economy as they are investing around 500$ million in this project which will give the turnover of 1280$ million monthly on 8 outlets this will give the employment opportunities. Makro Cash and Carry deals with all type of product like it caters kitchen to office.
The
supply
Chain of Makro Cash and Carry is discussed in detail in this report which will help you to analyze the effectiveness of Makro Cash and Carry here we discussed the purchasing tools and techniques, warehouse system effectiveness, transportation and delivering strategies where they can improve as we always a lways have a portion to improve.
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COMPANY PROFILE: Makro Cash and Carry is is a wholesaler who deals with all type of customer its headquarter headquarter is in Netherlands as a brand brand Makro and in Pakistan they start with the collaboration of house of Habib with the name of Makro Cash and Carry right now they are working with 5 working station in Pakistan 3 in Karachi and 2 in Lahore and planning to open 8 new more store by the end of this year in Pakistan with the investment of 500$ million 300$ million from house of Habib and 200$ million from foreign they estimate that the monthly turnover of one center will be around 160 milli million on Makro Cash and Carry controlled the price in this inflation period and help those who hate bargaining they have a wide range of food and non food items which give a sophisticated touch to your shopping plus safe your travelling cost and valuable time by giving you each and everything under one roof. Makro Cash and Carry it provide growth to customer by giving them at best price their mission statement is e xcellent distribution of products with best price, quality and variety to customer. They
also provide free delivery as well on required amount of shopping which is a big benefit in
Pakistan
because arranging a vehicles is a difficult job, it is a important link between
manufacturer to customer. Makro Cash and Carry they are supporting energy efficient plans and designing their new stores with this theme their staff is fully trained and instructed to work on these three golden rules reduce, reuse, and recycle.
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NATURE OF BUSINESS: Makro Cash and Carry are a wholesaler wholesaler company which work in every type of product with both type of customer business buyers and normal buyers their customer are schools, universities, colleges, hospital, hotels, restaurant, retail shops, bakeries and house wife. They are contribution everything on a very competitive price and with consistency of availability of goods as their motto is to develop long term relationship with their customer or client which will be mutually beneficial for all. they have a very pleasant environment where families can enjoy shopping they have a very good baby sitter glass room where you can drop your children and can enjoy your shopping in that glass room your child have lots of activities to do like coloring, painting, watching Disney cartoon rides and much more this is the most eye catching area for parents. Makro Cash and Carry is made for the benefit of people who can¶t travel all day long from one place to another fighting with traffic jams and lack of car parking just to get a daily usage things with the variation of prices they fixed the price and give guarantee to the customer of the quality plus they have a extensive car parking around 300 cars can be parked at a time in Pakistan what else a man with family want its more than a blessing for them. The discount they offer, to their customer is really attractive and we can say mouth watering for bulk buyers people enjoy their amadan R amadan
packages where they offer a cut down sale sale which is a blessing blessing for Muslim people.
SUPPLY CHAIN GOAL: The
goals of Supply Chain at Makro are to professionally handle thousands of orders, shipments
and deliveries and make sure that goods arrive at the right place at the right time. Supply Chain Management plays an important role in our high performance logistics logistics system and increases their capacity to supply food and non-food products on a daily basis with reliable high quality, variety and freshness.
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PURCHASING To
provide the affordable cost to its customer Makro always willing to reduce its purchase cost.
They
always buy product when they assure that that product is not available on the other places
with cheaper rate. They know the value of reduce cost purchase raw material for their business to fulfill their objective of standard products and cheap sales to the customers.
As recession hit the market badly even though Makro is able to provide standard product to their customer at a very cheaper rate.
They
are able to sold every product from there store which
customers unable to buy during recession. There
There
growth is constant across the whole market.
sales volume and market shares increases drastically. Their previous year volume increase
by one third but this year increase even better as it was increase at the rate of two thirds of their business. The main reason of it sustainability is that they sales there product cheaper than others but they are still able to be in a competitive advantage over the other competitor.
Makro tried to satisfy their entire customer whether they belong to a high class our weather they belong to middle our lower class family status, they satisfy their customers because they are providing standard product at prohibitive prohibitive price.
Suppliers are very important in the eyes of the company that¶s why Makro give so much important to its suppliers. When
They
are very willing to make strong relationship with the suppliers.
there is a change in purchase they use their strong relationship with the suppliers and
overcome the problem and gives relief to the customer as demanded. They never forgo any cost saving opportuni oppo rtunities. ties. They save the cost of o f their purchase as it directly effect to its customers.
Makro purchase on bulk basis that why they are hired those staff who have the beat convincing and negotiable powers. Because of negotiable purchase the prices of their product varies on every month. The policy that is being employed by Makro is to give benefits to their customers for which they provide suitable discounts which is now a days the requirement of all the customers, through discounts they get more and more customers who generate greater revenue SUPPLY CHAIN MANAGEME NT (MO NDAY 6:30 TO 9:30)
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for them. There discounts are much more less than their other competitors insure that customers only get attracted to their t heir retail store.
PURCHASING PROCESSES: The
purchasing processes of Makro are up to the mark as they do every possible effort to
maintain their inventory.
When
the inventory reached to its lowest quantity as per management
policy, their management system refers the notice to buy the product up till the inventory is out of stock.
To
save the time and money and save the purchasing and other cost they buy the
product when they are needed. Makro have the policy not to make the inventory in the warehouse for so long that¶s the reason they buy less in bulk.
They
ordered for products to
purchase twice in the week. The suppliers distribute the required product to the Makro center in the working days. The supplier can only be place order when Makro negotiate the price, services and quantity is done. Makro gives a specific documentation to the supplier for product specification.
LOGISTICS Makro cash and carry brings a new concept in Pakistan. Makro drive small number of outlet in the starting. But makro have problematical items of greater than 1400 items include vegetables, fruit , fish, all types of meat, motorcycle etc. Makro make the half of the sales for individual customer. Average 200 employees are directly employed in outlet. But if we incorporate all employee who¶s indirectly associated touch ing the operations that is supplier, transporter in that case the number of peoples exceed thousand or o r more then on that figure figure involved in Makro logistics. The
numbers of outlet will increase in future as they opening a more outlet in the major cities in
Pakistan
and its is more benefit for peoples of Pakistan and they generates more and handsome
revenue by spread their t heir business and logistical area.
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EXISTENCE OF THIRD PARTY LOGISTICS: Makro cash and carry use third t hird party logistics to satisfy their logistical business need. Involves transportation to assort others resources who finding the easiest way as the part of the Makro because quick payments pa yments in the limited time. Makro mostly have the own transport contracts. They work for right time in the right place with quality work.
The
imperative attribute of makro logistics is fast and well structured transport
system. The distribution centre of the makro involved trucks and other vehicles like mini trucks load lifters with the help of this truck makro shifted the inventory from distribution center to store room this movement of this trucks acting vital role in between distribution centre and store room.
They
employed skilled and trained staff for done the quick and rite operation and this is
the result of good pay scale and give the job security is per contract. Makro supervisor give the instruction to the workers and also delegate authority for making decision on time.
They
also guide to the worker what is the plan for next step to be taken to
satisfy the consumer wants and this is the prime objective of the makro. Many organizations pick third party logistics only for the convenient to minimize the cost and give good service, but makro cash and carry has its own transportation system for quick excess to supply customer demand for keeping to reduce cost(under control). Makro is not betrothed in transportation-in for the procured items. It is the mandatory responsibility of the suppliers to send off their products at Makro centers to make sure that the products are delivered at the right number at right moment and in the right mode. Makro¶s customers are required to carry off their purchased items by their own automobile that is why Makro is saving its logistics cost as well as time to reduce risk of damages.
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LOGISTICS WITH IN FACTORY: Inventory move within the premises of warehouse with the help of fork lifter, mini cars, palettes and etc. one of the factory factory warehouse distinguish distinguish makro from other because they have wide parking space and this is the more convenient for transportation. Many families don¶t visit to other outlet just because of parking space. Makro has a good space for family event. Visitors come in makro for quality product easily available in a one roof with competitive price and also makro has a good place for eating area (get together). makro.
The
They
don¶t have any security issue in
internal logistic of the makro working in the manner that no one employee do not
interfere to the work of other employees. Makro have own transportation system and this system is running with very skilled and ex perienced persons that means that the makro transportation system give the 100% to makro. Internal logistics of makro is good because makro done the special K PI.
SHIPMENTS TO INDIVIDUAL CUSTOMERS: The
shipment is not entertained by makro to individual customer. Makro has no matter to
purchase in bulk or small quantity, because this is more ex pensive and a highly risk involved in shipment that¶s why makro is not dealing dea ling with it.
CROSS DOCKING: To
make makro distribution process is more efficient and flexible for makro logistic technique is
called cross docking. It is work in just in time technique cross docking finished products are directly lifted from the manufacturers and after sorting it out handed over to the customers who are their retailers and many times institutional customers.
Through
cross docking the makro
reduces the cost in a positive manner because they have to store the more inventories in warehouse that means that we must have own or big warehouse and this is very ex pensive to manage the warehouse. That¶s why makro use cross docking. SUPPLY CHAIN MANAGEME NT (MO NDAY 6:30 TO 9:30)
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Makro use cross docking specially for perishable items like chicken, fruits and vegetables. All other items will rotten in few hours and this may be very riskier to eat that why makro uses this logistic technique of cross docking. Through cross docking with certain product the lead time is very important to prevent the rotten items and this is heavy losses of makro. Through
cross docking technique the electronic item in cross docking system shifts to order
place so that why it¶s no chance to go out of stock. The supplier knows that the is the lead time to placed the order so supplier is very conscious and care.
PULL STRATEGY: The
one of the most achievement story of makro is adoption of cross docking. Through cross
docking system can change the SCM into the demand change. It means that the retailers has no more influence to increase the sales but the customers to demand more, as the quality management by Makro is higher as the wall-mart¶s strategy .by the help of this strategy makro find is more convenient way to what is customer demand , what is requirement are in makro. If the any product of makro lost its sales so its mean that the more focus on that particular area where the lacking is going on and done the wrong work so you must do work again for their customer.
WAREHOUSING WAREHOUSING
MANAGEMENT
PROCESS:
Makro Cash and carry have no warehouse; its selling outlet is also used as warehouses that accumulate massive warehousing ex pense. It have two warehouses one is front area where we are doing purchasing and other is of back store where surplus inventory are keep for packaging and labeling barcode tags for its keeping record and which also help in prevent from theft. A supplier is limited to supply their inventory between 9 to 5 p.m. All the inventories are kept in
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the right state at the right specific section to make sure its best superiority and display which catch the attention of o f buyers.
TECHNOLOGY USED IN MAKRO: Makro are fundamentally use Barcode and a little bit
FID R FID
for goods management, moving to
store, keeping stock in smart shelves, and moving of inventory within the outlet, so if any manufacture is not have the barcode printing facility, they are mandatory to purchase barcodes at Goods getting unit and consequently forwarded to back store warehouses. As many received goods are outfitted with
FID-chips R FID-chips
(pallets, boxes and cases), the individual tracking and
tracing of the products is been significantly improved. In this way, the total supply chain is record. In place of by hand calculating all the received goods, the employees manage the inventory via PC and with the PDA-equipment in a greatly great ly superior way.
INVENTORY MANAGEMENT: KEEPING INVENTORY: Makro is using vertical inventory system to utilize its ma ximum space more efficiently and effectively. Due to this Vertical system the inventory is easily accessible. It also saves labor, coat & time to arrange that inventory in racks.
ACCOUNTING INVENTORY: FIFO inventory system is used by Makro for recording and selling to follow that there is less chance of inventory damaged due to ex piry date. FIFO method is generally used in under developing countries like Pakistan due to increase in inflation rate and insecurity from consumer likely.
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WEAKNESS
AND SUGGETIONS:
CHOICE OF LOCATION: Location
plays a vital role in SCM. A good location saves you cost as well as time. If you chose
a low cost location which is not visible to customers. If you have a location outside the city, so it requires a travel to customer which is is very difficult nowadays. nowadays. Makro-Habib Store (1st centre) is located at Manghopir R oad, oad, which is quite unsafe both for shopping and vehicle and requires a lot of travel for customers living inside the city.
SUPPLIERS TIME
WASTE
BY GODS RECEIVING DEPARTMENT:
Suppliers face a problem from Makro Goods R eceiving eceiving Department GR D. D. Because their vehicle have to stand in queues and the timing of GR D department is not suitable for them i.e. 9:00am to 5:00 pm due to Pakistani¶s akistani¶s business environment.
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CONCLUSION Supply chain management is now working as they competitive advantage for the company¶s to measure the future future growth of a company this will predict the investor or a client client the ratio of profit as many big business man said that¶ ³ the organization who works with the best supply chain practices in their working is the future leader as they minimize the error ratio in all measures of supply chain which safe cost and we can decrease our cost to make our product more efficient efficient in the market´ market´ the company¶s who use technologies¶ like like R FID, FID, Bar Code and Pick
by Voice technologies are bringing a drastic change in Supply Chain industry of Pakistan.
The
name of Makro Cash & Carry stands for one of the great success stories in modern
commerce. The unique wholesale B2C model of Makro Cash & Carry is focused only towards their customers. Multi layered supply chain modal of Makro improve their shopping.
They
provide them considerable and transparent price which all is possible only by consistent supply sources.
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