Dawlance supply chain

S U P P LY C H A I N M A N A G E M E N T

PRESENTED TO: SIR IBTIHAJ ABBAS KHANPRESENTED BY:

HAREEM AKHTAR 0712JAVERIA QASIM 2353 MADIHA MUSIR 0936 ASAD SHABBIR 0941

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INTRODUCTIONDawlance is a leading manufacturing company of home appliances in

Pakistan. It was established in 1980 and is the largest company of Pakistan which is

engaged in home appliance business. Dawlance stands for durable & reliable household appliances.

The objective of Dawlance is to provide the quality and reliable products to the customers of Pakistan.

Dawlance make five types of product. RefrigeratorsAir Conditions

Micro wave ovensWashing machine

Deep freezer

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SUPPLY CHAIN FUNCTIONS

Supply Chain

Production Planning and Control

Planning

Production

Control

Stores (Raw

material )

Logistics & Warehouse

Finish Goods Warehouse

Procurement

Imports Local

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S U P P LY C H A I N M A N A G E M E N T 5


PRODUCTION UNITS

Dawlance has three units in their production department;DPL-1 (Dawlance Private Limited)DPL-2 (Dawlance Private Limited)

URIL (United Refrigerators Ind. Ltd)

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DPL-1 (DAWLANCE PRIVATE LIMITED)

The DPL-1 unit of production department produces washing machines and small size refrigerators.

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DPL-2 (DAWLANCE PRIVATE LIMITED)

The DPL-2 unit of production department produces split (Air condition) and micro wave oven.

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URIL (UNITED REFRIGERATORS IND.LTD)

The URIL unit of production department produces big models refrigerators and deep freezers.

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PER DAY PRODUCTION OF DPL-1The per day production of

Refrigerator 800 to 1000

Washing Machine 450

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PER DAY PRODUCTION OF DPL-2 Per day production of

Air Condition 500 to 700

Microwave 900 to 1200

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PER DAY PRODUCTION OF URIL

The URIL units produce almost 1000 to 1200 big size refrigerators in a single day

Machinery of the production departmentThe machinery which company use in their production

department to make different products.HLD-420Z (use for forming of refrigerators)WG16-B ( use for injection molding in refrigerator)

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PRODUCTION OF REFRIGERATORS

Steps of the production of the refrigerator (big and small sizes)• First took the plastic sheet cut it in U form and send it for different

hinges.• Color or paint the U form sheets.• Assemble different raw materials.• Attach the paint sheet with the metal sheet.• Fit the compressor with the body.• Join the light kit with the body. • Assemble all the other parts with the body.• Packing of the finish goods.• Send the finish goods in the warehouse.

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PRODUCTION OF MICROWAVE

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PRODUCTION OF WASHING MACHINE

Steps of the production of the washing machine;• Prepare the tub.• Assemble different body with tub.• Joint pipe.• Check the body.• Fit the motor and belt with the body.• Join the motor and belt with the body.• Fit the timer.• Assemble all the other parts.• Packaging of the finish goods.• Send it to warehouse.

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PRODUCTION OF AIR CONDITION

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LOGISTIC

S

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INBOUND LOGISTICS

• Mostly suppliers supply the goods with their own transport.

• Some suppliers don’t offer transport and Dawlance pick the material by their own Transport.

• Dawlance local purchase department also has a Suzuki to use in any urgency.

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IMPORTS LOGISTIC

Import of Dawlance depends upon high value items that are used in manufacturing of fridge, washing machines, air conditioner, micro wave etc. They import their material from; 1. China 2. Malaysia3. Saudi Arabia

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OUTBOUND LOGISTICS

For Outbound Logistics, Dawlance use the services of PTN. PTN takes the goods from factory warehouse to warehouses. Dawlance have their own warehouse located in National Highway Landhi, Karachi in which all the finished goods placed in a separate portion. They make supply from their warehouse to all over the Pakistan through the local transport of that area.

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WAREHOUSING

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WAREHOUSING DEPARTMENTDawlance have 2 excise bounded warehouse in DPL-1 and DPL-2 and following 10 distribution centers across Pakistan to cater the whole country.

S. No Locations1. Karachi2. Hyderabad3. Sukkur4. Multan5. Rahim Yar Khan6. Faisalabad7. Lahore8. Gujranwala9. Gujrat10. Harro

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DUTIES OF WAREHOUSE MANAGEMENT

Stored the material as per storing rules maintained by Dawlance and away from fire, sunlight and damages.

• Stock the finished goods after production from factory.• Maintain stock level and further report to Sales department.• This reporting enables Sales personnel to be aware about the stock position.• Prepare and compile monthly statements of items received and delivered.

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PROCUREMEN

T

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LOCAL PROCUREMENT

If we talk about the local procurement of Dawlance so will see that they also classified its local procurement department:

• Production Items purchasing (Direct Material)• General Items purchasing (Indirect Material)

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PROCUREMENT WORK FLOWP2P Cycle (Purchase to Pay)

P U R C H A S E

Select Suppliers, Price Inquiry, Costing, Negotiations, Price Approvals

Issue Purchase Orders after getting it approved by the

authorities.

Found Discrepancy!

Intimate Purchase for Re-working / Return

Intimate Purchase to Resolve the matter

Supplier 1

Supplier 2

Supplier 3

Receiving

Invoicing

SQA Check

OK

Check PO/MSR

OKSubmit Invoice in

FINANCE

Store Dept. Receive the material.

P A Y M E N T

Reject

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IMPORT PROCUREMENT

They import different kind of raw materials but the main imports are the kits of Air Conditioner and different models of Washing machines and Microwave ovens as a finished good.

Country of Import:

Dawlance import the raw materials and the finished good from different origin like China, Malaysia etc.

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I M P O R T

PLANNING

P R

Search SupplierQuotationsNegotiations Receive P.I.

Issue P.O to FINANCE Dept. along with;Performa InvoiceCovering SheetInventory SheetNegation Details

S U P P L I E R

Finance Dept. opens L.C. against P.O. % Send it to the supplier.

Send Shipment Details to ImportPURCHASE

Material Can be

purchase locally, If N-A in Import

Availability Status, Delays, Local purchase & other related matters

Major Controlling through ETD Report

IMPORT WORK FLOW

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PROCURE TO PAY PROCESSPurchase requisitionCreating Purchase OrdersCommunicating PO to SupplierConfirm ReceiptQuality Check

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EXTERNAL PURCHASING(IMPORTS) Some of the production items they purchase from the other countries.

Those items are • For Refrigerator Condensers CompressorLight kit• For Washing MachineTimer Motors • For Micro Wave OvenDawlance import the overall kit of the microwave oven from the other

countries. They only assemble the parts of the microwave in the company

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PROCUREMENT CYCLE

Purchase Requisition

Purchase Department

Generate Purchase

Order

Communication To

SuppliersDelivery

PaymentDeliver To Store

Supplier Quality

Assurance

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PROCURE TO PROCESS

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SUPPLIERS

The company has different suppliers for different purchases.

• The company has almost 300 active suppliers for the purchasing raw material of local supplies.

• The company has almost 200+ general suppliers.• The company has almost 20+ international suppliers.

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Supplier 1

Manufacture (Outbound)

Procurement

Retailer

Warehouse

DistributionLogistic

Transportation

Supplier 2

Supplier 3

Supplier 4

Manufacture (Inbound)

Retailer

SCM MODEL

Warehouse


MAKE OR BUY

To focus on their core competencies, Dawlance make only those parts in which they are well capable. They make Refrigerator Liner, washing machine tub, power codes, injection molding items etc.

As they are not well capable in making washing machine pipes, Trims, profile etc so they don’t make this and instead of this they procure these.

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PHASES

OF

SUPPLY

CHAIN

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1. SUPPLY CHAIN STRATEGY

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Shortages, Plan Change, Follow-ups etc

P U R C H A S E

(PSI) Prod. Sales Inv.

Forecast N+4

W I P Inventory

Store Inventory

W I P Inventory

On-Order Quantities

M R P When to be produced?

How much to be Produce?

What to Produce?

Materials Requirement

M P S Production Control

Planning Department

P R

Sales / Marketing

Forecasting, F.C. Revision Demand Fluctuations,

Priorities, etc

Planning Workflow


2. SUPPLY CHAIN PLANNING

• To focus on their core competencies, Dawlance make only those parts in which they are well capable. They make Refrigerator liner, washing machine tub, power codes, injection molding items etc. As they are not well capable in making washing machine pipes, trims, profile etc so don’t make this and instead of this they procure these.

• They have very strong logistics system and use 3PL logistics system and Dawlance own controlled logistic system to full fill their need for both upstream and downstream so they hire services.

• All the electrical appliances bought with Dawlance brand has given 5 years warranty and any product having manufacturing or technical fault will be free of cost.

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3. SUPPLY CHAIN OPERATIONS

Dawlance follow the push strategy and their planning department plan according

to this strategy. As Dawlance deals in home appliances (mostly Refrigerator & Split) so

their demand is not constant in all seasons. So by considering this they follow this strategy because they can’t produce for the whole year in 6 to 7 months so that’s why they even produce in the period in

which demand is low.

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COMPETITIVE STRATEGY

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Dawlance United Refrigeration Industries Ltd.

was established in 1980. It is the Largest Company in Pakistan engaged

in refrigerator appliance business. Dawlance stands for durable & reliable

household appliances. Its Factory is located in Hyderabad. The main

Objectives are to provide dependable and reliable product at reasonable

price to majority of Pakistanis and to enhance their quality of Life. Present Market Share of Dawlance product is: refrigerators 65%, Washing Machines

35%, Microwave Oven 40%, Chest Freezers 45%, Air Conditioners 15%,

LGHaniska International is a

multinational company, located in Korea. LG is an agent of Haniska

International in Pakistan market. LG is an importer of home appliances in

Pakistan. It imports Refrigerators, Air Conditioners, Washing Machines & Microwave Ovens from Korea and

China. LG has got around 300 dealers all over the country. Marketing

objectives of L.G are: to provide world class product to upper and upper

middle class to enjoy real luxury in their life. Present Market Share of L.G product is: Refrigerators 4%, washing

machines 2%, Microwave Oven 3%, Chest Freezers nil, Air Conditioners

25%.


PEST ANALYSIS

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PoliticalThe country is passing through the

dark stage of the history facing security and instability problems. Government is not in position to provide funding for the company

growth and is not in the position to go for international legislations.

International trading policies are worst and corruption is very high.

Economic

Due to recent global economic crisis the company is facing a lot of

problems. Tax rate is high and the retail market seems to be going down.

SocialMost of the people of the country are living in rural areas, unaware of the

products and its benefits. These people don't like products TVs

because of religious concern. The people in these rural areas like manual work and don't like machinery. Female

normally don't visit shops and don't work. Most of the people can't afford

to buy.

Technological

Technology is growing day by day. The company has latest machinery and has

highly qualified engineers and professionals. The cheap technology

of china has brought a new revolution not only in Pakistan but in the whole

world.


PORTER FIVE FORCES

Threat of New Entrants LOWDawlance is facing the threat of new entrants in the home appliances industry. The new entrants

can be potential competitors for the company and can severely dent the company and can affect

company’s market share. The new entrants are entering in he market because of Active returns

and foreign brands.

Threat of Substitutes HIGHAs we talk about Dawlance , is facing a threat

from the growing number of substitutes available in the market like in Pakistan the biggest threat

for Dawlance are the Chinese products, which are serving as an alternative choice for the

consumers. These products are low-priced and people can simply afford them.

Bargaining Power of Customers HIGHIn Market there are so many substitutes present for home appliances products, specifically foreign brands and Chinese products as Dawlance can affect by such situation that the bargaining power of consumer remains high and consumer demands to decrease the prices of Dawlance products. If company does not work accordingly it will affect Dawlance market share, as consumer will switch to any other brand.

Bargaining Power of Suppliers LOW

Dawlance is efficiently working with its suppliers by creating balance between the supplier’s

powers and interests of the company. So Dawlance is signing long-term agreements with suppliers

concerning the raw materials, which can save the company from prices fluctuations of the materials

Competitive Rivalry in the Industry HIGH

Dawlance is coming up with more innovations as the competition is increasing day by day and many

competitors like LG, Sony and Haier etc are competing in the market and to survive in the

market Dawlance is focusing on innovative home appliances for the customers to increase the profit of the organization and to gain the edge over its

competitors.


CONCLUSION

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Dawlance was established by Mr. Dawood Bashir in 1980. The factory is located in Hyderabad and Karachi. Industry is based on consumer electronics and has the largest setup with respect to manufacturing capabilities, retail outlets, service centers and distributors. In household appliances category, Dawlance leads the charge as the top brand, known for its reliability with revenue of PKR 48 billion. Dawlance enjoys 65% market leadership in the refrigerator segment. According to the research which included interviews with consumers across 22 cities in four provinces in April 2011, Dawlance bagged the second slot in Pakistan’s top ten brands space.

Dawlance supply chain

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