Ici Pakistan 1i3l3i

Supply Chain Management Manufacturing Company

THE COMPANY 

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ICI Pakistan Limited (Imperial Chemical Industries) is located in Karachi, Pakistan It was set up as a public limited company in Pakistan in 1952 The AkzoNobel Group acquired ICI in 2008 bringing together the innovation, leadership and expertise of both companies. In 2011, The Board of Directors of ICI Pakistan Limited approved a proposal from its ultimate holding company Akzo Nobel N.V. to restructure its interest in ICI Pakistan Limited by separation of the Paints Business into a separate legal entity through a scheme of demerger . As of June 1, 2012, we are now operating as AkzoNobel Pakistan. Our businesses are: Decorative Business Refinish Business Industrial Business

VISION STATEMENT Tomorrow’s Answers Today Often people achieve only incremental progress, because their view of tomorrow is determined by what they see today. We believe the future belongs to those smart enough to challenge it. We believe that real progress belongs to those who not only think with courage, but also have the courage to deliver on the thought.  Tomorrow’s answers, delivered today. What drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. What excites us is asking the unasked question. What inspires us is seeing the opportunity others cannot. What unites us is the intelligence to deliver where others have not. This benefits our customers because we sustain their future competitiveness and meet the consumers’ unspoken needs. This ambition defines us. This is the way we work. This is why we come to work. 

MISSION STATEMENT 

“To be the partner of first choice for customers and suppliers, ensuring sustained leadership positions in the markets where we compete, delivering long-term business value through a high performance culture, innovation, ethics and responsible care”.

ORGANIZATION STRUCTURE

INTRODUCTION TO SUPPLY CHAIN 

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. Marketing's objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities

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A typical supply chain may involve a variety of stages. These supply chain stages include:

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Customers Retailers Wholesaler/distributors Manufacturers Component/raw material suppliers

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FLOW IN SCM

HOW SHOULD WE DEFINE SCM

PRODUCT LEAKS

Profit leaks also provide the opportunity for product and process innovation

GOAL OF SCM • • • •

Efficiently manage process Bifurcating demand Controlling inventory Enhancing the network of business relationships a company has with customer, suppliers, distributors and others. • Receiving

• The goal of SCM is to create fast, efficient, and low cost network of business relationships, or supply chain, to get a company’s products from concept to market. • Decisions must be made about how to coordinate the production of goods and services, how and where to store inventory, whom to buy materials from, and how to distribute them in the most cost-effective, timely manner.

SUPPLY CHAIN INFRASTRUCTURE

EXTENDED SCM

COMPONENTS OF SCM

SCM FLOWS It is divided in to three main flows  Product Flow  Information Flow  Finances Flow

LEAN SUPPLY CHAIN MANAGEMENT 

Another important concept in supply chain is effectively managing the waste generated during supply chain operations particularly production also referred to as Lean Supply Chain management. Lean supply chain management is not exclusively for those companies who manufacture products, but by businesses who want to streamline their processes by eliminating waste and non-value added activities. Companies have a number of areas in their supply chain where waste can be identified as time, costs or inventory

DIFFERENT ASPECTS OF LEAN SCM Procurement Companies that practice lean supply chain management reduce their procurement function so that each vendor has one point of , one contract and offers one price for all locations. Companies that use a two-way match, which is payment on receipt rather than payment on invoice, will reduce resources in their purchasing department as well as improve supplier relationships Manufacturing Manufacturing processes can be improved to reduce waste and resources while maintaining operational performance Warehousing • Reduce non value added steps • Reduce unnecessary inventory Transportation Lean supply chain management requires businesses to examine every process in their supply chain and identify areas that are using unnecessary resources, which can be measured in dollars, time or raw materials.

REDUCING WASTE IN SC 1.Product Design 2.Resource Management 3.Use of Scrap Material 4.Improving Quality

FORECASTING IN SCM 

Demand Forecasting

Demand Forecasting is the activity of estimating the quantity of a product or service that Consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets.

 Necessity Forecasting Often forecasting demand is confused with forecasting sales. But, failing to forecast demand ignores two important phenomena. There is a lot of debate in the demand planning literature as how to measure and represent historical demand, since the historical demand forms the basis of forecasting.

DIRVERS AND SUPPLY CHAIN PERFORMANCE IN “ICI” FACILITIES  INVENTORIES  TRANSPORTATION 

Locations are identified by ICI Global Location Numbers (GLN).

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Mode of Transportation

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Air Ship Rail Truck Electronic transportation

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E-BUSINESS IMPLEMENTATION ICI decided to form strategic business alliances for long term contractual co-operation with its packaging suppliers. It demanded delivery of quality materials from controlled (ISO certified) production processes, switched price agreements to product lines and embarked on a partner selection based on quality, reliability, flexibility, and cost criteria. It would communicate to them its production requirements, such as the quality, quantity and timing of deliveries of packaging materials  KEY BENEFITS OF ICI SYSTEM APPLICATION A first analysis of the process has produced three key benefits:  This partnership allows both companies to know and understand each other's constraints;  This system speeds up the process;  Cutting non-value-adding activities has reduced costs. For Smurfit, the key benefits are mainly qualitative.

SCM MODEL OF ICI

PROCUREMENT MODELS

Layout for Local Purchases

Layout for Import Purchases

INVOICING MODEL

Limitations for customers  Average 120 days credit limit.  No dispatches without credit limit.  Overdue s.  Regional sales manager offers discounts.  MM approves discounts.

WAREHOUSE MANAGEMENT A warehouse management system, or WMS, is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization. It involves Inventory Control Hazards Elimination Safe & Efficient Operation Manage Space Constraint Maintaining Housekeeping Standards

WAREHOUSE ACTIVITIES The efficiency of a warehouse depends on how efficiently it can perform the following activities: • • • • • • • • • • • • • • • •

Receiving all material Checking and verification Stacking at designated places Preparing GRN and sending samples to QC Posting of GRN in computer system upon receipt of quality assurance from QC Maintaining and updating daily stock Issuance of raw and packaging material Receipt of material from the plant Receiving invoices Moving the material to the loading area Coordinating with the transporters Getting gate and dispatch advice Maintaining and updating dispatch advice database Maintaining purchase orders record against delivery Ensuring compliance to ICI’s all ISO 9002 procedures Maintaining the warehouse as per Distribution and SSH&E requirements

DISTRIBUTION NETWORK