report on wms in tapal tea

MOHAMMAD ALI JINNAH UNIVERSITY (KARACHI)

Report on Analysis of INVENTORY MANAGEMENT

of TAPAL TEA through WMS

Group MembersFahad KhalidAdeel Arman Zaidi

Presented to:Sir Zulfiqar Ahmed Farhan

Course Title:Business Process Re-Engineering


EXECUTIVE SUMMARY

Tapal tea (Pvt.) Ltd. faced some problems which were detected by the supply chain department, warehouse manager who was under pressure by the supply chain department. The case underlines the problems faced by the company. Throughout the year 2005 till 2013, over stock, failure decisions, poor racking system high inventory cost and the region could not meet the sales quotas or sales were below expectations while the selling expenses were also on the rise. Thus it was make the team to analyze the situation and come up with suitable solutions.

While analyzing the case, we detected some discrepancies in the company’s operations.

Implementation of “FIFO” Timely Storage in Racking system Damages of cartons Active and efficient dispatches Pilferage doubt Immediate Receiving at Dock Identification and traceability of stock Stock movement within the warehouse. FG Stock Aging. Daily stock verification. No return monitoring stock Error Prone Time consumption The territories were not adequately covered. Friction between distributors because of Territory Overlapping.

Some initiative took by the management but it is not run efficiently. The solutions to the problems we suggested are as follows:


To revise the system so that the SAP could be better taken care of. This way even expense would decrease. Visibility efficiency would be made and no extra time required.

There was a problem relating the dissatisfaction of the customers that can be eliminated by training of the sales representatives so that they know how to best approach your customer and even help in finding new prospects.

Sales representatives who are using manual record eliminate such a practice as it creates slash or POS system due to it accurate data or information gather that is helpful for good decision making.

Due to WMS easily eliminate the above mention lacking and employee empowered by the system.

All these solutions help in reengineering the process and WMS help in taking the accurate record and cost minimizing of inventory holding and damages and sales will help in achieving the sales quota of the company. The sales representatives should be under strict surveillance so that no such practices should increase that will affect the sales of the company in anyway. Or put the reputation of the company.


TABLE OF CONTENTS

1. Introduction to Tapal Tea: ..................................................... Error: Reference source not found

2. Brands of Tapal Tea…………………………………………………………………………………….……4

3. Warehousing at Tapal Tea………………………………………………………………………….…….7

4. ERP used by Tapal Tea for Inventory Management:……..………………………………….8

5. Need of Re-engineering Process:...............................................................................................8

6. SWOT Analysis of Tapal Tea: ……………………………………………………………………….…10

7. Competitor’s information and SWOT Analyis:………………………………………………...12

8. Impacts of WMS in Tapal Warehouse: ..................................................................................... 11

9. Conclusion: .............................................................................................................................. 15


Introduction:

• Tapal conception dates back in the year of 1947 when their forefathers laid the foundation of Tapal tea as a family concern under the personal supervision of its founder Adam Ali Tapal.• The story of Tapal started with his formulation of a unique tea blend, which was later named family mixture which became a hot favorite, and eventually the largest selling brand.• Tapal moved up the ladder of success by innovating and introducing different tea brands to suit every taste which were sold from its retail outlet in Karachi’s Jodia Bazaar.• The company continued to thrive and grow under the management of Fazullah A. Tapal, who started tea distribution to retail outlets around the city for the convenience of the people.• Innovating its way through its near-60 year history, Tapal is presently the largest, 100% Pakistani owned tea company in the country.

• It has set new standards for modern tea blending and packaging factories, warehouses equipped with state-of-the-art equipment and a team of highly dynamic professionals headed by Aftab Tapal himself.• The first to invent the highly successful brand Danedar Leaf Blend. The first to market Kenyan teas in Pakistan.• Tapal is also the 1st national tea company to export tea to the UAE, Canada and USA.

Brands of Tapal Tea

Tapal Danedar• First introduced in Pakistan in 1987.• The name ‘Danedar’ suggests a blend consisting of premium quality Kenyan granules.• Especially created to suit the local taste buds combining a lively flavor with a rich color and a distinct aroma.• Tapal Danedar enjoys a leadership position in the Tapal portfolio by catering to diverse income segments, from single serving sachet users to large households.• Sachets: Rs 3 & Rs 5 sachets.• Hard pack: 30 gms, 100 gms & 200 gms.• Economy pack: 400 gms & 1000 gms.• Jar: 450 gms.


Family Mixture• Tapal created a pioneering blend of tea called Tapal Chai in 1947, later renamed Family Mixture.• It appeals to an ever-growing section of the market and commands a leadership position in Pakistan’s tea industry.• Is growing rapidly in popularity in Central and Northern Punjab as well.• Hard Pack: 22 gms, 100 gms & 200 gms.• Economy Pack: 500 gms & 1000 gms.• Jar: 450 gms.

Tapal Tea bags• Another premium offering from Tapal Tea are the Danedar Tea Rounders.• The only round & string less teabag available in Pakistan.• At 2.5 gms each the Danedar rounders are specially designed to deliver quality taste in a teapot.• Available not only in Pakistan but also readily used across USA, Europe & Australia.• Teabags: 100 gms ( 50 envelopes) 200 gms ( 100 envelopes)

Mezban• Tapal Mezban is the second largest selling brand of the company.• First launched in the mid 1990’s, it quickly achieved popularity in Sindh.• Just a small quantity is enough for several satisfying cups, making it ideal for homes as well as hot tea shop consumers.• Mezban truly captures the brand essence of fortifying relationships through hospitality which is a part of the culture of Sindh.• Sachets: 6 gms ( Rs.3)• Hard Pack: 35 gms, 125gms & 250 gms.• Economy pack: 500 gms & 1000 gms.• Jar: 220 gms.

Tapal Tezdum• The identity of Tapal Tezdum is rooted in the culture and folklore of Punjab.• Tezdum delivers a good quality, strong tea that is rich in taste and color at a very reasonable price.• It is also the first tea brand in Pakistan to be introduced in an attractive and economical silver foil packaging.• Launched in 2003, Tapal Tezdum equates the strength of the blend with the moral courage of its user.• Sachets: 22 gms sachet• Hard Pack: 100 gms• Economy Pack : 400 gms

Shades of Green• In the year 2000, Tapal became the first tea company to launch a range of flavored green teas in the country.• Available in refreshing Jasmine, Lemon, and Elaichi flavors.• A favorite of health-conscious people.• It helps to soothe and relax you whilst helping in digestion, enhancing metabolism and aiding in weight loss.• Teabags:1. Jasmine ( 45 gms, 30 envelopes & 90 gms, 60 envelopes)2. Lemon( 45 gms, 30 envelopes & 90 gms, 60 envelopes)3. Elaichi ( 45 gms , 35 envelopes)• Jar: Jasmine (100 gms)


Ice Tea• Innovators at Tapal decided to introduce Ice Tea to cater to a youthful market segment.• Initially launching with a Peach Flavored tea in a can, Tapal added a Lemon and Lime flavor to cater to an market niche• Rich in Vitamin C and antioxidants, it is non-carbonated, contains no preservatives and is low in sugar as well.• Sachets: 25 gms powder sachet ( Lemon & Lime, Peach)• Cans: 320 ml ( Lemon & Lime, Peach)

Tapal Instea• Tapal decided to expand its portfolio in May 2009 with its introduction of Instea in the 3-in-1 instant tea category.• Instea gives a complete tea solution, and seeks to expand awareness of the concept of immediate, ready to drink tea.• Sachets: 20 gms ( Rs 10)

Warehousing at Tapal Tea

Functions of the warehouse• Handling• Counting• Placement• Replacement• Receiving

Distribution at Tapal Tea• The distribution network at Tapal Tea is divided into 2 divisions. South Division: Karachi, Hyderabad & Sukkhur. North Division: Raiwind, Multan & Islamabad. Karachi & Raiwind are the two production plants of Tapal Tea in Pakistan.

Mode of transportation at Tapal Tea• Purchased teas are transported through containerized shipments from their country of origin to reach the factory in the best condition possible.• After an order is placed by the distributor a Route plan is devised. Tapal Tea uses three different models of vehicles to transport its tea to the distributors.• Shehzore (Max. capacity = 150 cartons, Min. capacity allowed = 115 cartons)• Mazda (Max. capacity = 400 cartons, Min. capacity allowed = 350 cartons)• Hino (Max. capacity = 400 cartons, Min. capacity allowed = 350 cartons)

Logistics at Tapal Tea• In Pakistan, the normal size of containers used in transporting tea is 40 feet.• Tapal Tea gives initiatives & bonuses of different sorts to the owners and asks them to maximize their container’s size to 50 feet.• This is done so that more stock can be delivered at one time.• These containers feed the 6 warehouses across the country.


ERP used by Tapal Tea for Inventory Management

Tapal tea uses Warehouse Management System a module of SAP for their warehouse operations across Pakistan.

Benefits of WMS:

A comprehensive warehouse management system helps streamline multiple functions of your enterprise:

Receiving – Gain insights into shipments that have been delivered, but that are not yet at their final location. Make sure items at low stock levels are staged and put away first, reducing the impact of out-of-stocks and inefficient fulfillment processes.

Put-Away – Know the location of all inventory on your shelves. Route your workers to the right location, set up their picks in the proper order to minimize travel time, and increase the number of orders they can pick each day.

Picking – Improve error-proofing and productivity in the picking process. Workers receive their picks on a mobile device that routes them to the proper location. Scanning items when you pick them verifies that the right item at the right quantity is picked.

Packing – Ensure the accuracy of each order that is picked and reduce material costs by determining the right sized shipping carton.

Shipping – See that each order is properly packaged and shipped to the right destination and delivered on the right date.

Need of Re-engineering Process

Following are the causes that Tapal tea go towards re-engineering their business through WMS

Timely storage in racking system

Due to Lack of Information over stock Production planning are disturb so not possible timely storage in a racking system.


Damage cartons

High inventory become a cause of damage carton they are not doing proper stacking.

Active & efficient dispatches

They were gathering manual data so they are unable to do active and efficient dispatches due to late receiving data to the department.

Pilferage doubt

There is no data to return stock so the return stock is not maintain in a system so the pilferage doubt.

Immediate receiving at dock

Department are working in isolation logistic and warehouse are differently doing there works.

Identification & traceability of stock

Tapal has not any barcode system or identification and traceability of different stock.

Stock movement within the warehouse

Due to high carrying inventory stock movement with in the warehouse is hurdle.

Daily stock verification

Tapal has not any system to connect with distributor so the inconvenient for daily stock verification.

SWOT Analysis of Tapal Tea


STRENGTHS OF TAPAL1. Continuous innovation for increased customer value, forexample:2. First to introduce soft pack in the country,3. The pioneers of introducing Jasmine Green Tea in Pakistan.4. The only company to introduce round-tea bags in Pakistan.5. The only company to develop an entirely new blend andcategory (the mixture of leaf &

dust).6. Tapal is one company that is catering to the needs of allsegments of the society.7. Export8. Tea cultivation9. Strong R&D team10. Brand sponsored shows such as musical concerts andcricket tournaments.11. Good brand awareness in the local target market

WEAKNESSES OF TAPAL1. It is a major hurdle for Tapal to position its tea abroad in theminds of theconsumers and

encourage them to indulge in brandswitching.2. Have to import some of their products from other countries,which increase theircosts.3. Most of the sales are on cash, problem for the distributorthen they can switch

tocompetitors.4. Tight quality control procedures lead to higher costs and itstime consuming andoften

discontent the suppliers

OPPORTUNITIES OF TAPAL1. In the long run there is going to be a lucrative market for Ice- Tea and flavored tea.2. The market growth of the tea-bag market because of itbeing easy to use.3. Customers are more attracted towards strong taste andquality of tea offered bytea

providers.4. There are markets in Punjab, N.W.F.P and Balochistan, whichare not as yetexplored by

competition.5. Duty free tea import from Sri Lanka and Bangladesh andIndia.6. Green tea market is growing.

THREATS OF TAPAL1. Strong marketing campaigns of Unilever makes it extremelydifficult for Tapal tocounter-

attack because of low budgets.2. Unilever as a more established brand name than Tapalworldwide.3. High import duties encourage smugglers of tea to grow.4. The unstable rules and regulation of the government hindersthe tea companies.

Due to climatic conditions, when the weather of Pakistan ismostly hot;consumers would prefer soft drinks over tea.


Competitor’s information and SWOT Analysis

Lipton, the world’s leading tea brand, was started by a Glasgow-born innovator and entrepreneur Sir Thomas Lipton in the 19th century. Ever since its inception, Lipton has successfully provided its consumers with the best quality tea in the world.

Lipton was launched in Pakistan in 1948 and is one of the oldest brands in the country. Our vast experience in the world of tea blending in Pakistan and around the world means only two things; Quality & Reliability.In the modern world, the tea category is often considered to be lacking excitement & thrill. Lipton plays the role of an energetic brand that aims to modify this perception and redefine the meaning of tea in people’s lives.By celebrating positivity in everyday life, Lipton helps its consumers incorporate confidence, optimism and cheerfulness in their lives.Lipton’s portfolio in Pakistan consists of Lipton Yellow Label Tea, Lipton Mega Daane, Lipton Teabags, Lipton Green Tea and Lipton Flavored Tea

Following is the SWOT analysis of Lipton tea.

STRENGTHS OF LIPTON1. Experienced and quality management.2. Strong Ethical value (culture and heritage)3. Strong financial position4. Strong company image5. Success of the slogan6. Quality & variety7. Effective & attractive packaging8. Brand recognition9. Accessibility

WEAKNESSES OF LIPTON YELLOW LABEL1. High prices of the product2. Substitute products

OPPORTUNITIES FOR LIPTON1. Research & development2. Makes people active3. Brand is the part if traditional drinking habits


4. Expansion in other areas of country

THREATS FOR LIPTON1. Strong competition in rural and urban areas2. Internationally increasing tea prices3. Political conditions in the country may be obstacle to exports4. High inflation in the country can negatively affect the brand

WMS impacts on Warehouse Operations:

Early warehouse management systems could only provide simple storage location functionality.Current WMS applications can be so complex and data intensive that they require a dedicated staff to run them. High-end systems may include tracking and routing technologies such as Radio Frequency Identification (RFID) and voice recognition.Successful WMS solutions are generally designed to merge computer hardware, software, and peripheral equipment with improved operating practices for managing inventory, space, labor, and capital equipment in warehouses and distribution centers. Implementation of a WMS allows a company to increase its competitive advantage by reducing labor costs, improving customer service, increasing inventory accuracy, and improving flexibility and responsiveness. A WMS enables a company to manage inventory in real time, with information as current as the most recent order, shipment, or receipt and any movement in between.

ADVANTAGES FOR WMS USERS

For Management: WMS can help management to access an instant picture of: How much inventory exists in the warehouse How many orders are currently being shipped? What are the stages of processing of pending orders? Staff productivity details Goods shipped by the warehouse over any given period of time.

WMS BENEFITS

WMS is an invaluable tool for improving your organization's productivity and customer focus. Here is a list of some of the benefits that you can expect to get.


Visibility

Warehouse Manager has a very clear picture of the status of each customer orders; as a result he can give a true and accurate feedback to the customers. Information like percentage of order that has been completed, expected shipment date and problems in meeting schedule can be passed on to customer for his satisfaction. Advanced shipment notification helps customer in preplanning his further processes.WMS provides diversified all-embracing reports for almost any plausible aspects of activities and substantiates the fact that working of Warehouse is made 100% transparent. Each and every activity can be tracked, reported, monitored and consequently controlled. These reports are web based and are platform independent applications. Therefore reports are visible to anyone who is willing and authorized to see. This feature is especially beneficial for multi location Warehouses and sales offices.

Accuracy

The system keeps an intensive check of the goods or a stock unit meant for different customers and flashes an alarm/warning if the goods meant for one customer are mistakenly placed in cartons meant for other. Intensive checks are kept at each and every stage which safeguards against possibilities of errors in inventory records. As the items are systematically stored and retrieved, no time is wasted in searching for items not in stock and more than one order can be processed at any given time. This result in the increase of efficiencies, eliminating wastage of time due to errors.WMS incorporates distinct features for functions to be performed by Manager or Operators thereby eliminating the chances of wrong data entry. WMS makes information readily available to only those who have permission to see it. For example the operators are not entitled to view the important MIS reports. Inventory Managers can track transactions at a very fine detail to diagnose unexpected sudden changes in inventory. For example, if we had thousands of pieces of some SKU yesterday and today we don't have any, then where did they go? Were they shipped to some other customer? Were they sent to some other warehouse of the company to be shipped from there? Or did they get lost or were picked away? WMS helps answering such problems.

Resource planning and productivity

By keeping track of the operator's and staffs' activities, their productivity can be monitored. This aspect is of particular importance in case of productivity based remuneration schemes. When deciding for automation, one of the major concerns of management is that they have to hire technical people at all levels and retrain the existing workforce. But in WMS the programs


are so designed that no special skills are required to operate the system even at lower level. Programs for shop floor are specifically designed to run on hand held radio frequency terminals and emphasis is on scanner based data inputs. Therefore same workforce can very effectively be used for implementing WMS. Automation and streamlining of processes ensures that operational bottlenecks are eliminated and productivity increases. As a result all resources - man, machine, and money are utilized to their optimum level. Apart from the system no additional manpower or special machinery is required in order to automate the process for an efficient and proper handling of the goods. Efficient tracking of warehouses activities are possible with WMS as it provides a comprehensive set of web-enabled reports detailing all the activities happening in the warehouse and their effect on the inventory management. WMS also helps to detect bottlenecks in operations, which can increase the overall throughput of the warehouse.

Order Processing

More than one order can be processed at any given time helping in better resource utilization.

Inventory Holding Cost

The main goal of WMS is controlling and streamlining the flow of inventory in a profitable and productive manner thus optimizing all resources. Payback period of WMS project will be very short because we are addressing the warehousing area where at-least 60% of organization's working capital is tied. The results of such savings are immediate and apparent.

Optimal Level of Inventory

In an average business around 60% of the working capital is tied down in the inventory; the percentage is even higher in trading business. In an ideal situation warehouse should maintain optimal level of inventory at any given time avoiding both under and over stocking. If the Warehouses are overstocked that means excess working capital is tied in inventory which is dead money. Under stocking leads to delay in customer orders and even cancellation of orders at times. Thus actual picture about the inventory status in the Warehouse have valuable financial and strategic implications. WMS not only streamlines the flow of inventory but also tracks the inventory at various levels of processing thereby enabling decision makers to view actual picture of inventory at any given time and take appropriate steps.

Better Revenue Realization


Companies often loose considerable amount of revenue due to:

Excessive / under stocking as explained above Incorrect tendering due to inaccurate knowledge of available stock Over / under shipping to customers. Wrong consignments. Inaccurate billing. Delay in order processing leading to order cancellation. WMS helps in controlling these losses to a large extent.

Orders and Stock Planning

The warehouse management can determine how much inventory exists in the various stages of processing unlike in non-automated warehouse management. The reports generated during checking processes enable policy decision to be taken about the reliability of the suppliers. Sales people can determine how much inventory is available and can relate better to the warehouse staff thus bettering their Customer Relationship levels. Customer Managers can reserve inventory for a customer thereby ensuring that it will not be shipped to anyone else.

Warehouse Operations Ease and Speed

WMS eases the operator's task and makes the data input process fast, increasing the overall efficiency of the operator. Some programs like Locating and Pulling are especially designed to run on hand-held radio frequency terminals. These terminals make the task of pickers and locators easy, as these are easy to carry. Modern WMS programs have been coded with extra emphasis on scanner based data input to minimize the need for keyboard or mouse input.

Conclusion:

After thorough analysis of situation, we have achieved all the required activity through system generated document & New warehouse orientation step by step jobs created and given to time to time have been Successfully completed conclude that proper warehouse management system meet our present requirement of proper inventory management.

report on wms in tapal tea

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