SUPPLY C HA IN

MA NAGE ME NT IN
EB M

BY
SHERAZ MALIK
NOUSHIN SALMAN
PICTURES
CONTENTS IN BERIEF

 EBM’s History
 Vision
 Values
 Procurement Dept. Division
 Inventory purchases
 General Items
 Working Criteria of MM Commercials
 ISO 14000 (Environmental Management Systems)
 Solid Waste Management
 Application of Safety Stock
 Safety Stock Application in EBM (FGS)
 EBM’s Products
 EBM Revenue
 EBM Product Mix
 Market Share
 Pictorial Representation of the Supply Chain
 Production Functions
 Material Receiving
 Production Process
 Production Step 1: Mixing
 Production Step 2: Cutting
 Production Step 3: Baking
 Cooling (Buffer Zone)
 Production Step 4: Packaging
 Dispatch
 Export
 Procedure For Supply Chain
 Procedure for Evaluation of Supplier
 Procedure for Procurement of Raw/Packaging Material,
Technical and General Items
 General Procedure
 Raw Material Procurement Planning and Management
 Packing Material Procurement Planning and
Management
 General, Technical and IT Items Procurement
 Imported Items Procurement Planning and
Management
 Recommendations
EBM’S HISTORY
English Biscuit Manufacturers (Private) Limited was established as a
joint venture company in 1965 with the name of Peek Freans Pakistan
Limited. In 1966, the UK sponsor company was renamed Associated
Biscuits International Limited (ABIL), while the venture was renamed
English Biscuit Manufacturers (Private) Limited (EBM), which stands to
date.

EBM started manufacturing and marketing the world famous Peek

Freans range in 1967 in order to provide Pakistani consumers with
nutritious and hygienically packed biscuits of the highest quality.

True to its corporate claim, 'The Legend Leads', EBM has led the biscuit
industry in Pakistan for 39 years by playing a pioneering role in
providing innovative and high quality biscuits for every taste bud.

EBM’s trademark, Pied Piper, made its mark three and a half decades
ago, but continues to remain in the hearts, minds, and souls of the
people through the variety and excellent quality of biscuits
manufactured under its umbrella. EBM enjoys the distinction of being
the first food company in Pakistan to promote biscuits as 'food
between meals'.

EBM has been in the business of manufacturing and marketing

branded biscuits in Pakistan for 39 years. The brand name 'Peek
Freans' is a household name, and people trust and believe in the
quality of the products produced under this brand. EBM is also the first
biscuit company in Pakistan to have achieved ISO - 9001 Certification
in correspondence with its institutional slogan 'The Legend Leads'. The
achievement also endorses the company's firm commitment to high
standards of quality.

Under the brand range, Peek Freans, the company today carries the
largest variety of biscuit products including Marie, Gluco, Click, Sooper,
Smile, RIO Double Treat, Marvell, Party, Peanut Pik, Peanut Pista,
Lemon Sandwich and Chocolate Sandwich.

English Biscuit Manufacturers (Pvt) Ltd., or (EBM), is the country's

leading manufacturer of biscuits and cookies since 1967, with an
annual sales volume and production capacity of more than 65,000 tons
and a turnover of more than Rs. 7.0 billion. EBM is the only Company
in the industry to have achieved recognized international certifications
pertaining to quality control, environmental management system and
human resources management, including ISO 9001:2000, ISO
14001:2004, HACCP certifications and IIP (Investors in People)
Recognition. EBM is also the only food company to have been awarded
Environmental Excellence Award for four successive years 2004, 2005,
2006 & 2007.

As a socially conscious company, EBM consistently supports various

humanitarian causes in the areas of education, sports, healthcare and
help for the less privileged.

VISION

 To provide high quality value-added food to contemporary and

future generations
 To constantly endeavor for the acquisition of knowledge and
excellence in developing human skills, product innovations and
state-of-the-art technologies
 To be a good corporate citizen by giving back to the community
and improving the lives of the underprivileged
 To dispense equitably, fairly, and with compassion, the fruits of
success among our “partners in business”
 To become a partner with the Government in sharing the
responsibility of economic and social uplift and development of
Pakistan

VALUES

 We believe that no individual is bigger than the institution

 We believe in integrity, transparency and commitment as our
cultural ethos
 We continually adhere to the highest standards of hygiene and
ecology
 We believe in governance in human face
 We protect and promote the cause of the environment
 We emphasize on employee welfare
 We believe in leading and innovating in all aspects of business

PROCUREMENT DEPT. DIVISION

Inventory purchases

Raw material is purchased on the basis of forecast made by the

marketing department; raw material is purchased after the quotation
from supplier. Mainly flavors are outsourced from the best in class
vendors like IFF and Gevidaun; other raw materials include dry fruits,
eggs, sugar, flour, fat and butter.

Packaging material is sourced from the local market depending on the

nature of the finished products; it includes inner films, outer films and
master cartons.

Once the consignment of the supplier arises; it is recorded in the ERP

system through MNR (Material Receiving Note) and issued to
production through MCN (Material Consumption Note).

General Items

Items like stationary, computer accessories, engineering tools needed

in electrical, mechanical and civil worker is purchased. The category of
general items has been distributed to different official related to nature
of job. Demand note is prepared when there is a need of general item
in the ERP system (Inventory and Procurement Management)
EBM compliance with a paper less organization methodology and each
document is recorded in their module of Inventory and Procurement
management
Electrical appliances are purchased after negotiation by the suppliers;
every purchase has a purchase order prior to the purchase.

WORKING CRITERIA OF MM COMMERCIALS

Forecast (MKT)

Material Planning

Supplier Enquiry

Mailing Quotation

Opening of LC

Purchase Order

Raw/Packaging received

QA sampling

Accepted Rejected

Stored through MNR Sent back to supplier

ISO 14000 (ENVIRONMENTAL MANAGEMENT
SYSTEMS)
Solid Waste Management

Since the introduction of ISO 14000 in 2005 EBM saves around 2

million annually. These standards deal with Solid Waste Management
and Water Treatment Plant. EBM requires around millions of cartons for
packaging purpose so corrugated cartons are sold to different vendors
once not in use, sacks of sugars and flours are also sold to vendors
once raw material has been used. Waste of biscuits on daily bases is
crushed and supplied as cattle feed.

APPLICATION OF SAFETY STOCK

Safety stock is now becoming a major issue for every process industry
globally, weather in the form of raw material or finished goods. It
depends how effective a supply chain is for an organization. When it
comes to raw material, inventory is build up when prices tend to go
high or there is a chance of uncertainties
Many process industries tat employ Mass Production tend to keep
safety stock in their warehouse and also their sole distributors. Levels
of inventory are maintained on for to six weeks.

Safety Stock Application in EBM (FGS)

Although EBM does employs safety stock methodology but due to lack
of space they are bound to do it. FGS store has a maximum capacity of
90000 master’s cartons but on average 15000 masters cartons are
dispatched on daily bases versus 15000 units of production. Also
transfer is taken from production on daily bases due to which there is
a bottle neck in dispatch of finished goods.
There should be an expansion in FGS so that volume of finished goods
can be increased.

EBM’S PRODUCTS
Marching ahead of the competition, Peek Freans biscuits are best
known for their excellent quality and taste. The Pied Piper symbol is
the most popular icon in the country, leading biscuit lovers to
experience one superb product after another.
Offering the largest variety in taste and textures, Peak Freans
produces thousands of tons of premium quality biscuits annually,
employing the most innovative ideas, state-of-the-art technology and
sophisticated Food Safety Systems.

Plain Sweet Biscuits

Gluco
Marie
Sooper
Whole Wheat Slice

Nuts

Peanut Pik
Peanut Pista

Cream Biscuits

Choco Vanilla Sandwich

Chocolate Sandwich
Lemon Sandwich
Rio Double Treat Chocolate/Vanilla
Rio Double Treat Strawberry/Vanilla
Rio Vanilla

Crackers

Butter Puff
Marvell
Saltish
EBM’S REVENUE

350000
300000
250000
in Billion

200000
Net Sales
150000
100000
50000
0
03-04 Y 04-05 Y 05-06 Y 06-07 Y

EBM’S PRODUCT MIX

Rio Variant
Party
Butter Puff
Gluco
Peanut Pik
Munna
Marvel
Other
Sooper
MARKET SHARE

9%

16%
EBM
Kolson
LU Continental
55%
Bisconni
20%
PICTORIAL REPRESENTATION OF THE SCM

Receiving
Raw
Material

RM Unload in
Quarantining Area

QA Rejected QA
Inspection by QA Inspection

RMS Store

Cold Room 1 Flour/Sugar Grinding Nuts Cleaning/Grinding

Mixing Storage Area Weighing Area

Mixing Process

Hopper

Cutting

Baking

Packing

Master Cartons Filling

QA Packing / Coding

QA Inspection

Transfer and Storage in FGS

Distributors

Retail Shop

Customer
PRODUCTION FUNCTIONS

MATERIAL RECEIVING

 Supply Chain contact approved suppliers and purchase raw

material from them.
 Supplies come through trucks. In case of some materials,
material is not off-loaded without testing.
 Sampling and testing is carried out by QA personnel. Composite
sample is collected to get good results.
 After approval, incoming material is stored in raw material store
and packaging material store, whereas sensitive items such as
butter, color, flavors are stored in cold rooms.
 In rest of the cases, Quality assurance performs testing after
material is stored in relevant stores and then accepts/rejects the
material.

PRODUCTION PROCESS

 Information for daily production plan is supplied by marketing

and sales department on the basis of customer demand. Keeping
in view these factors, production plan is made.

PRODUCTION STEP 1: MIXING

 There are six different mixing areas.

 For a specific product, ingredients are weighed (according to pre-
defined recipe) in weighing area.
 Mixing is carried out in either vertical or horizontal mixer,
depending upon the nature of the product.

PRODUCTION STEP 2: CUTTING

 After mixing, dough is transferred from hopper to cutting line.

 There are total 6 lines, which are reserved for different products.
 Dough passes through the conveyer belt and is shaped according
to product.
PRODUCTION STEP 3: BAKING

 Unbaked biscuits enter the oven, conveyer belt is constantly

moving at a slow pace.
 Different types of heating devices are present in oven which
provides different temperature.
 Approximately 6 minutes are passed in oven during which
different temperatures treatment are given to biscuits starting
form lower to higher temperature.
 Conveyer belt then moves to Buffer Zone.

COOLING (BUFFER ZONE)

 After high temperature treatment baked, biscuits are not very

stable and texture is not fully developed, that’s why they are
passed through Buffer Zone for cooling.
 It is merely an area consisting of relatively low temperature.
Conveyer belt containing biscuits passes through this area to
cool down the biscuits.

PRODUCTION STEP 4: PACKAGING

 After cooling, workers pick the biscuits for conveyer belt and
place them in different gauges set according to Ticky Pack (TP),
Snack Pack (SP), Half Roll (HR) or Family Pack (FP).
 Biscuits are automatically packed in final packaging material
(inner sealing) incase of TP, SN, HR, and then are finally packed
in master cartons.
 FP is packed in 3 different packaging material; inner sealing,
outer sealing and then finally master carton.
 Master cartons are sealed and are transferred to finished goods
store.

DISPATCH

 Products are stored in finished goods store according to date are

dispatched on FIFO (First in First Out) basis.
 QA performs final checking of finished products, after which
product is dispatched through trucks to different distributors.
 Distributors further distribute the product to retailers.
EXPORT

 Peak Freans products are also exported to different countries of

the world including USA, UK, and Canada etc.
 Export order is raised from sales and marketing department.
 Export order contains the name, type, quantity, packing
specifications of the product.
 Supply chain and production is enquired whether they can
produce the required amount of product in limited time.
 After their approval, product is manufactured according to
specifications defined in export order.
 Product is packed in containers which are shipped to the
destination.
 After custom’s clearance, containers are delivered to address
mentioned on the export order.

PROCEDURE FOR SUPPLY CHAIN

Procedure for Evaluation of Supplier

 Supplier is evaluated on the basis of range of products and

services he provides.
 The supplier is required to furnish details of his quality system.
 Supplier performance is evaluated be Supply Chain Dept.
 Supplier’s end survey is to be conducted upon requirement. If
the system/ supplies are not flowing properly then it needs to be
addressed through site survey.
 Based on the information gathered supplier is approved /
rejected.

Procedure for Procurement of Raw/Packaging Material, Technical and

General Items

General Procedure
 Procurement of Materials is done on the basis of Annual Sales
Budget
 Raw & Packaging Materials are purchased from Approved
Suppliers only.
 Approved Standard Specifications of all materials are given to
suppliers
  Negotiation of prices of various materials depends on quantity
purchased in a certain period. Rates of various materials vary at
different interval. For locally purchased items, normally one
month credit period is allowed except for few items which
payment is made on delivery. In case of Engineering / IT /
General Items, the payments terms are negotiated on case to
case basis.

Raw Material Procurement Planning and Management

 Requirement is computed on the basis of Weekly Production
Schedule
 Purchase Order is issued to Local Suppliers with all terms and
conditions and specifications / credit record
 After Receipt of Material QA department collects the samples of
receipt material and verifies them
 If the material is rejected by QA, the rejected materials are
returned to the supplier
 Bills are received at MM Department from the suppliers and sent
to Finance Department

Packing Material Procurement Planning and Management

 Monthly Requirement is generated on the basis of
Comprehensive Report on periodic basis
 Purchase Order is issued to Local Suppliers with all terms and
conditions and specifications / credit record.
 After Receipt of Material QA department collects the samples of
receipt material and verifies them
 If the material is rejected by QA, the rejected materials are
returned to the supplier
 Bills are received at MM Department from the suppliers and sent
to Finance Department

General, Technical and IT Items Procurement

 Demand Note is received for purchase of General / Technical / IT
equipments.
 Required materials are arranged from on spot market buying
 Purchase Order is issued
 Material is received by concerned Stores
 Bills are received at MM Department from the suppliers and sent
to Finance Department
Imported Items Procurement Planning and Management
 Requirement for Imported Raw Material is generated on period
basis
 A letter is sent to supplier or their Agent in Pakistan and Price /
Rate is negotiated
 Application is sent for L/C to the bank
 Copy of L/C is sent to Supplier through courier / fax.
 Negotiable documents are received from our bank
 Clearing Agent arranges for clearance of consignment and
delivery at EBM
 Bill of Clearing Agent is sent to HOD for approval.

RECOMMENDATIONS
 Raw Material should be stored according to FIFO which avoids
bottle neck in dispensing the raw material
 Raw Material should be kept at 20 feet away from main
entrance, because once the gate opens there are chances of
pesticides entering the store.
 EBM should deploy self distribution in spite of hiring on
contractual bases, this will leave a positive perception on the
consumers mind once they see transport vehicle of the company.