Operations Management

Case Book

MBA Program – 2022

Instructor: Dr. Saba Fazal Firdousi
Teaching Associate: Zahra Irfan
Table of Contents
Section A ............................................................................................................................................................................... 3
The Golden Soften by Syed Abbas Haider Gardezi and Usman Shahid ........................................................................... 4
Suitss.pk by Nafya Habib and Sarah Mahboob................................................................................................................. 4
AK Enterprises: Role of Process Quality Improvement and Lean Management Tools in Production of Soap Company
by Tooba Sattar and Inam Barri ...................................................................................................................................... 22
Kurdos Industries: Haphazard Momentum by Minahil Imran and Muhammad Balawal Ahmed .................................. 43
Total Parco – Divine Filling Station by Laraib Javaid .................................................................................................... 71
Flowers Affairs: Shifting from Outsourcing to In-house Sourcing Analysis by Saad Saqib and Shanzay Mazhar........ 85
Bright Metal Industries: Managing Operations in Post-Covid Pakistan by Abdullah Butt and Muhammad Zubair ...... 99
Giant Group PK: A Case of Giant Problems! By Mustafa Farooq and Shehryar Sajid Khan ...................................... 123
Arabic Mandi: An Operational Disaster by Momin Tanveer Niaz and Momil Aftab ................................................... 137
Batalas Trading Company: The Case of Organic Elements by Mahnoor Safdar and Minahil Chaudhary ................... 152
Section B ........................................................................................................................................................................... 167
LOADX: Challenges in Logistics and Supply Chain Management by Muhammad Jawad ur Rehman Khan and Saif
Raza ............................................................................................................................................................................... 168
Khaadi – The Experience Hub: An Omnichannel Strategy byAqsa Nadeem and Fatima Zahid .................................. 178
The Burger Cart: Addressing the Service Time Issue by Aazmer Ali and Danish Attique ............................................ 11
INSAF Academy: the Face of E-Learning in Pakistan by Areeba Jamshed and Shayan Mohsin .................................. 29
Orient Apparel – New Face of Denim by Abdullah Saleem and Waleed Sajjad ............................................................ 49
Cotton Web by Nayab Gohar and Noor ul ain Zaka ....................................................................................................... 64
Section C ............................................................................................................................................................................. 76
The London Store: Overcoming the Dynamic Environment by Ali Butt and Urfa Ahmad ............................................ 77
Ms DyeTex: Tackling Poor Dye Qualities by M. Hamza Malhi and Taimoor Jamshaid ............................................... 92
BasraTex: The Supply Chain Crisis and Technological Complications by Munhib Mazhar and Osama Khan ........... 105
UBL; Service Quality and Digitalization by Laiba Waseem and Zoya Ahmed............................................................ 118
Ineffectiveness in Cost Management Leading to Reduced Inventory Turnover – Teflon Metal Ware Industries -
Kitchen King by Umar Subhan and Musa Khan ........................................................................................................... 133
HN Poultry Farm: Qptimizing Stock Keeping in Congruence with Poultry Market Seasonality by Hafsa Mujaddid and
Momina Asad ................................................................................................................................................................ 152
Feeding .......................................................................................................................................................................... 154
Karim Industries: Inventory Management to Avoid the Short Supply of Medicinal Requirements by Iqra Khalid and
Hamza Iqbal .................................................................................................................................................................. 168
Nova Pack: Inventory Management and Cash Flow Crisis by Farhan Ahmad, Muhammad Haseeb and Muhammad
Mubeen Nawaz.............................................................................................................................................................. 181
SW Enterprises: Plastic World Turning Green by Aaima Sadaqat Rana and Mahrukh Zaka........................................... 5
Product innovation in ATM machines while keeping in line with COVID related by Mariam Usman and Fatima Khan9
Section A
The Golden Soften by Syed Abbas Haider Gardezi and Usman Shahid

Overview of Shoes Industry in Pakistan

In Pakistan's economy specially in Lahore region, the footwear business is highly
significant. The accessibility of premium leather in the nation is the shoes industry's key
competitive advantage. High-quality leather is produced in large quantities in Pakistan, and the
leather production sector greatly contributes to the nation's export revenues. While the highly
automated sector meets most local consumption in accordance with shifting fashion trends
throughout the year, the cottage industry mostly focuses on exports. The daily manufacturing
capacity of many factories is 2,500 pairs, although larger ones can generate up to 10,000 pairs.
Shoes made of leather, textiles, and synthetics are included. The primary footwear-manufacturing
region, responsible for more than half of global footwear production, is the Lahore cluster, which
includes Gujranwala, Lahore and Sheikhupura. Karachi and Sialkot are two more important
locations in Pakistan for the manufacture of footwear. Around 86% of the nation's overall
production capacity is distributed among these three locations.
It's noteworthy to highlight that Pakistan ranks as the seventh-largest consumer of footwear
globally, thus as the table below shows, significant imports are being made to satisfy local demand.
Pakistan ranks 50 in terms of footwear exports, accounting for 0.1% of global exports. Top 10
Foreign Markets for Pakistani Product No. 64 Gaiters, shoes, and similar items come in the
following parts:

Pakistan in 2010, has exported only $92.6 million worth of footwear, whereas in 2019 it exported
$135.3, growth recorded approximately 45.9 percent. However, it is still very little fraction as
compared to total exports of $23.8 billion made by Pakistan.
Golden Soft
The Golden Soft is shoe manufacturing company that was founded by Mr. Rana in 1982.
Majorly its production includes hand-made slippers but as the dynamic of consumer market
evolved, Golden Soft also changed from traditional shoe making to automated shoe manufacturing.
From last 18 years they are producing the PU (Polyurethane) Slippers for both ladies and gents.
With time they had integrating the methods used with respect to the competitive market. In 1982
Mr. Rana identified the gap talking to his friend regarding shoe manufacturing where he came up
with the idea to outsource individual processes which can lead to reduced risk and reduced labor
cost. Since then, outsourcing has been done.
It is difficult to keep track of every process individually, so outsourcing is more feasible.
In this way the burden can be transferred to the third party, and it is upon him to pay wages, hire
people and make sure the processes are completed in the given time.

Production Plant
The entire process is an order-based system where the number of units manufactured are
mainly due to the order placed. The vendors are informed timely that they will be required a
specific amount by the given time so that they can prepare their orders at the provided space. The
production plant of Golden soft is located “Timber Market” in a densely populated area of old
Lahore. The production area is 2723 square feet with three floors each performing different
functions. On ground floor cutting, trimming, quality checking, packing and injection molding is
performed. All procured raw materials are also available on ground floor. Printing is performed on
the first floor while the second floor has stitching machines. The plant has production capacity of
200 cartons per day. Each carton contains 12 pairs of various sizes.

Problem
Since the small to medium sized manufacturing plant have several issues of quality and control
operational parameters, golden soft also facing production problems that can lead to increased cost,
decrease in efficiency and productivity. The value addition at each step is mandatory to carry out
the final product that is finest in quality. During the visit of production plant some major and minor
issues identified based upon their scrutiny at each level in production process.
• Cutting:
The cutting of Rexine for lower and upper part of PU slipper is the first step and crucial
because any damage or mismanagement of the cut part will create bottle neck in the
subsequent steps. The cutting machine require skilled labor that could efficiently cut out
the lower and upper parts. Improper assortment will cause the process to cause a bottleneck.
• Printing:
Next from cutting the printing stage, the Misma printed using the flat screen. Since it is a
step-by-step process, if the predecessor part is damaged, it will get printed and
subsequently the process will flow as it is. It will cause production delay in injection
process. Further the counting issue also arises. There is no automatic system to check the
number of pieces and that are recorded as human errors.
• Injection Molding:
During injection molding, the settling of PU in the lower part of mold with upper part of
slipper is accounted for most of its faulted output. The misalignment of upper part and
overfilling of PU in lower part could damage the output. The excess material will stick and
 made thicker layer on upper part. The manual handling of injection molding will cause the
problem of filling and misalignment. This is major problem as it causes a bottle neck in the
whole process. The assortment of shoe pairs cannot be completed due to which time,
material, labor, utilities will be incurred, and production delay will occur.

Product Portfolio
Golden soft has been manufacturing PU slippers in various designs and sizes. The typical
product portfolio contains 20-30 SKUs. The size categorization is done in 3 different ways.
Male: 7-10
Female 8-13
Kids: 1-6.
Each carton contains 12 pairs of PU slippers and the number of respective SKU per carton
is decided when order is placed so that assortment of slippers after packing in done according to
the requirements.

Raw Materials and Costs

In a typical PU slipper manufacturing it usually require five major types of materials:
1. Misma (Thin Rexine)
2. Thick Rexine
3. PU (Polyurethane)
4. Anwar Patta
Misma is type of rexine that is minimal thickness used to make the inner part of slipper. The
price of 50-meter roll is Rs. 15,000. The cutting machine cuts 12 pairs per 10 minutes. The thick
rexine is used to make the upper part of slipper. The 50-meter roll of thick rexine is Rs. 23,000.
Polyurethane is used for making soles of slippers. The company purchase it as 235kg drum from
ATS synthetic PVT Ltd. Its thick black liquid that is heated in an oven around 400-500 degree
Celsius for 6-8 hours before the production process starts. The cost of cutting and printing per pair
including lower and upper parts is Rs18. Cutting of upper part cost around Rs55. Stitching cost
Rs60-120 per pair. In stitching unit, the Anwar patta(strap) is stitched on the rexine using stitching
machine. There are 7 machines available for stitching process. Out of these 7 machines 4 are kept
operational while 3 are kept on standby and can used when more order demand is generated.
Production Process Flow
Production of PU slippers is a 7-step process, and the entire process is completed from raw
material to finished product. Misma and Rexine are the major product to produce upper part of the
slippers. Another major component was polyurethane liquid and the most expensive of the raw
materials to produce PU slippers.
• Cutting of Misma
This is one half of the initial process and in this process a total of 960 pairs are cut from
the 50 metres of Misma. This process is entirely dependent on the order and as soon an
order is placed the contracting company is informed about that and they adjust the
production unit accordingly.
The entire process takes about 187 seconds and is further divided into 5 activities. It begins
with the activity that involves placing the Misma sheet into the machine where they are
clicked into pairs and arranged based on the left or right shoe. Once arranged they are
stacked into bundles and are ready for the printing process. They are further transferred to
first floor where the printing process is done.
• Cutting of Rexine
This is the other half of the initial process which is the cutting of rexine and this process is
carried out simultaneously to the cutting of misma. The process is entirely the same as to
the cutting of misma and the only difference lies in the type of material used.
This process also takes 187 seconds for completion and is also divided into 5 activities
which are same in nature. They are further transferred to second floor for stitching of
rexine. There are 2 people responsible for the process of cutting down rexine and misma
and work together for the process.
• Printing
After the Misma has been cut down in pairs it is received by the printing team which also
has 2 people and during this process the design is printed on the misma pair. There are 7
activities involved in this process and takes a total of 179 seconds for this complete process
It begins with initial printing which takes about 21 seconds per pair to print and is later
allowed time to dry off for 5 seconds. The second color design is done once it is dried again
using the screen print method and it further takes 21 seconds in printing a pair and 5 seconds
to dry. The left and right pairs are arranged in stacks and are placed in poly sandbags after
which they are either sent to Proi on the second floor or downstairs for molding directly.
• Proi
This is a small process which was done on second floor but extremely important as it
important for those slippers which have a thumb loop even though this process takes only
2 seconds on average per pair. There were 3 children employed for this process and they
were an expert at what they were doing as this had been trained. After done with proi it
was sent back to ground floor for molding process.
• Strap Making
There are a total of 7 machines and 4 of them are always operational and they can expand
production depending on the order. In one hour, a total of 360 straps can be made on
average. There are 2 people working on the same pair simultaneously and on average take
a total of 14 seconds per pair.
 During this process the design is created of the Anwar Patta and buttons or any other
component if required is also added. The additional threads are cut off and placed in poly
sandbag for transportation to ground floor for the molding process. Both right and left pair
follow the similar process and is processed at the same time.
• Shoe Formation
This process takes a total of 97 seconds in this where all the components are kept separate
and then molded into product using PU chemical. This process begins with cleaning of
mold which takes 10 seconds before the next product is added to the machine. Misma is
placed on the upper part of the mold which takes 7 seconds and at the same time Proi is
placed on the upper part which further takes 7 seconds. It takes 10 seconds to pour PU
chemical on the lower part of the mold and the lid is closed. Lastly, when the process is
complete it is given 60 seconds to cool off and transferred to the trimming and finishing.
During this process there are multiple laborers as this is the most crucial part of the process.
• Trimming and Finishing
This process takes a total of 12 seconds where the person is extremely specialized in his
skills and can do it in a more efficient manner. In this process there are 2 workers, and in
which one is working on trimming and the other is responsible for finishing. In the
trimming process the worker is to remove any additional part of the Misma which the
molding machine has left out.
Lastly, in the finishing process the person is responsible for removing any flaws which
were missed by the trimming process, and they also paired both the left and right shoe and
send it to the packaging.
• Packing
During the packaging phase there are 2 people responsible for fulfilling the process. In this
process they are provided with flat cardboards which they turn into the box and wrap pair
of shoes in plastic to maintain freshness. They also make sure that the shoe size is same to
avoid any discrepancy if any shoe has been wrongly paired during finishing process.

Critical Path
The exhibit shows that the critical path and is marked red which shows that it is the longest time
required for the completion of product. Upon calculating the time, we calculated that it is 9 minutes
and 7 seconds to produce one complete cycle in producing one pair of PU slippers.

Recommended Solutions
The cutting problem can be reduced by checking for errors simultaneously to avoid the
bottle neck to be created at a further step. This can also reduce the manufacturing of final products
which will be considered as an additional cost for which the product can’t be sold.
Moreover, the use of skilled labor is necessary as this will reduce child labor and having
skilled labor can increase efficiency. The equipment used are dangerous for children and they will
need proper safety kits to avoid any problems in case of any inconvenience. Quality check must
be ensured at every step as one discrepancy can lead to bottlenecks at a further step as well and
thus increased time and lower profits.
A healthy environment must be provided to the employees as the conditions must be
improved. The safety of employees must be a priority and they need to think how satisfying
employees can improve productivity and increase efficiency.
Exhibit 1

Process flow of PU Slipper Manufacturing

Exhibit: 2

PERT Table:

Prede Avg. Avg.

Activit Activity description cessor Time to Time to
Activi perfor perform
y Code. ty m (min) (sec)
A Setting roll on the Clicking Machine for Misma none 0.17 10
A Clicking on Misma Sheet A 0.83 50
a
A Arranging the left and right pairs into stacks Aa 0.08 5
b
Cutting of A Stacking cutted pieces into Boxes Ab 0.03 2
c
Misma A Moving Boxes from ground floor to first for Ac 2.00 120
d printing
B Setting roll on the Clicking Machine for Rexine None 0.17 10
B Clicking on Rexine B 0.83 50
a
B Arranging the left and right pairs into stacks Ba 0.08 5
b
Cutting of B Stacking cutted pieces into Boxes Bb 0.03 2
c
Rexine B Moving Boxes from ground floor to second for Bc 2.00 120
d stitching
C Screen Printing for initial color design Ad 0.35 21
C Time to Dry C 0.08 5
a
C Screen Printing for second color design Ca 0.35 21
b
C Time to Dry Cb 0.08 5
c
C Arranging the left and right pairs into stacks Cc 0.08 5
Prin d
C Stacking cutted pieces into poly sand bags Cd 0.03 2
ting e
C Moving Bags from first floor second for molding Ce 2.00 120
f
Proi D Hole made with plier into the Misma sheet and Proi Cf 0.03 2
formation is pass through it
E Take out the one part (left) of shoe and stich Anwar Bd 0.17 10
Patta on it
E The thread joints are cut off with sissors E 0.03 2
a
E The stiched Rexine is stocked in poly sand bag and Ea 0.03 2
b traferred to molding machine
Stictching of F Take out the one part (right) of shoe and stich Bd
Anwar Patta on it
0.17 10
Rexine F The thread joints are cut off with sissors F 0.03 2
a
F The stiched Rexine is stocked in poly san bag and Fa 0.03 2
b traferred to molding machine
G Cleaning of mold Eb, Fb, 0.17 10
Cf, D
G Misma is placed on the Upper part of mold G 0.12 7
a
G Proi and Anwaar Pata is pulled out from cavity in Ga 0.12 7
b upper mold
G Hot PU is poured into lower part of mold Gb 0.17 10
c
Shoe G The upper part is lowered to close the mold Gc 0.02 1
d
Formation G cooling time Gd 1.00 60
e
G Parially finished shoe is take out and placed in poly Ge 0.03 2
f sand bags
H Excessive side material trimmed using trimming Gf 0.12 7
Trimming machine
H Both Left and Right part if paired up and placed in H 0.08 5
And Finshing a a box
I Setting the Corrugated boxes Ha 0.50 30
Ia Shoe size is rechecked I 0.08 5
Ib Shoe pair is wrapped in plastic bag and placed in Ia 0.17 10
shoe box.
Pac Ic Shoes boxes are tranferred into large cartons Ib 0.25 15
Id Cartons arranged into stacks Ic 0.17 10
king
Exhibit: 3

PERT Diagram:
0 A 10 18
7 C 20
8 18 E 19 0 B 10
7 7
0 0 0 0 16 16 16 16
7 7 7 7
0 10 10 18
7 21 20
8 35 10 36 16 10 17
4 4 7 7

10 Aa 60 20
8 Ca 21
3 19 E
a 19 10 B
a 60
7 9
0 0 0 0 16 16 16 16
7 7 7 7
10 50 60 20
8 5 21
3 36 2 36 17 50 22
4 6 7 7

60 Ab 65 21
3 Cb 23
4 19 E
b 20 60 B
b 65
9 1
0 0 0 0 16 16 16 16
7 7 7 7
60 5 65 21
3 21 23
4 36 2 36 22 5 23
6 8 7 2

65 Ac 67 23
4 Cc 23
9 65 B
c 67
0 0 0 0 18 F 19 16 16
7 7 7 7
65 2 67 23
4 5 23
9 16 16 23 2 23
7 7 2 4
35 10 36
4 4
67 Ad 18
7 23
9 Cd 24
4 67 B
d 18
7
0 0 0 0 19 F
a 19 16 16
7 9 7 7
67 12
0 18
7 23
9 5 24
4 16 16 23 12 35
7 7 4 0 4
36 2 36
4 6
24
4 Ce 24
6
0 0 19 F
b 20
9 1
24
4 2 24
6 16 16
7 7
36 2 36
6 8
24
6 Cf 36
6
0 0
24
6 12
0 36
6 36 G 37
8 8
0 0
36
6 D 36
8 36 10 37
8 8
0 0
36
6 2 36
8 37 G
a 38
8 5
0 0
37 7 38
8 5
47
7 I 50
7 46
5 H 47
2 38 G
b 39
5 2
0 0 0 0 0 0
47
7 30 50
7 46
5 7 47
2 38 7 39
5 2
50
7 Ia 51
2 47
2 Ha 47
7 39 G
c 40
2 2
0 0 0 0 0 0
50
7 5 51
2 47
2 5 47
7 39 10 40
2 2

51
2 Ib 52
2 40 G
d 40
2 3
0 0 0 0
51
2 10 52
2 40 1 40
2 3

52
2 Ic 53
7 40 G
e 46
3 3
0 0 0 0
52
2 15 53
7 40 60 46
3 3

53
7 Id 54
7 46 G
f 46
3 5
0 0 0 0
53
7 10 54
7 46 2 46
3 5
Exhibit: 4

Micro Board
Figure:1 Figure:2

Proi PU Gents Slipper

making

Figure:3

Injection Molding Machine

References

➢ Business Council, Pakistan. “Enhancing the Competitiveness of

Pakistan's Footwear Industry.” Pakistan Business Council, 2021,
https://www.pbc.org.pk/research/enhancing- the-competitiveness-of-
pakistans-footwear-industry/.
➢ Business Council, Pakistan. “‘Enhancing the Competitiveness of
Pakistan’s FootwearIndustry.’” Enhancing the Competitiveness of
Pakistan's Footwear Industry, 2021, https://www.pbc.org.pk/wp-
content/uploads/Enhancing-the-competitiveness-of- Pakistans-
Footwear-Industry.pdf.
➢ Haq, Shahram. “Pakistan's Footwear Sector Demands Incentives.”
The Express Tribune, 24 Apr. 2021,
https://tribune.com.pk/story/2296523/pakistans-footwear-sector-
demands-incentives.
➢ Noor, Reema. “New PFMA Chairman Vows to Ensure Excellence in
Footwear Industry - Daily News.” Daily News -, 9 Nov. 2022,
https://dailynewspk.com/new-pfma-chairman- vows-to-ensure-
excellence-in-footwear-industry/.
➢ Zarnab, Faieqa. Tdap | Trade Development Authority
of Pakistan. 2022, https://tdap.gov.pk/wp-
content/uploads/2022/01/Footwear-industry.pdf.

a. An omnichannel customer experience is made up of individual customer touchpoints, over a

variety of channels that seamlessly connect, allowing customers to pick up where they left off on
one channel and continue the experience on another.
 USMAN SHAHID
666, L Block Sabzazar Scheme Multan Road Lahore · +923374816657
iusmanshahid0@gmail.com · www.linkedin.com/in/usman-shahid1

I graduated with a major in Materials Engineering in early Feb 2019 from University of
the Punjab. I have worked for two years as Management Executive in Yunus Textiles,
Karachi. There I served in services and maintenance department of production plant. I
have also worked on restructuring of Effluent Treatment Plant. After gaining experience
from the industrial field, currently I’m enrolled in MBA from Lahore School of
Economics. In my MBA journey I am engaging with different well renowned
organizations for my term projects implementing different strategies that serves them
best of their concern. Recently I have done term project of operation management on
Goldensoft, a small-scale Polyurethane slipper manufacturing, in which I have done
process analysis and developed the process flow of the whole plant. Furthermore,
identified the problems in each activity being performed and based on operations
management knowledge, recommended the most feasible solutions for the problems.
I am a good manager and executioner. I have done a fellowship program which helped
in gaining professional attire, teamwork, leadership, selflessness. My motto is to work
with best of my abilities in a prolific work environment where I can fulfill the
assignments effectively and efficiently that could add value to the organization. If I can
be any of your interest, please feel free to approach me.

iusmanshahid0@gmail.com
0337-4816657
 SYED ABBAS HAIDER GARDEZI
163 Rehman Villas Ghazi Road Near Bhatta Chowk, Lahore · +923305751414
abbashaidergardezi@gmail.com

Hello, I am Syed Abbas Haider Gardezi. I did my bachelor's from Forman Christian
College with Double Majors in Accounting and Finance with a Minor in Education. I'm
currently enrolled at Lahore School of Economics for my MBA, and I have had the
learned about different organizations and their operations from this program. We have
learnt about the market and how a distribution takes place and why is it necessary for
any organization. I also have some valuable experience working in different banks.
I have good interpersonal skills which makes me a good leader by understanding my
team and work together for a uniform goal. For further information please feel free to
email me at: abbashaidergardezi@gmail.com.
Suitss.pk by Nafya Habib and Sarah Mahboob

As she was about to graduate with her bachelors in psychology from Forman Christian College,
Noor Haider founder and owner of Suits.pk had to step in her older sister’s shoes to support
her family alongside her mother. Her mother who was already in the business of making eastern
dresses for women (Muge) from lounge wear to luxury party wear, Noor already had an idea
of the dynamics of a clothing brand which led her to an idea of introducing a western brand of
her own as this type of clothing (formal and smart causal) for women was not only struggling
due to lack of brands that were forming such clothes locally but also had various quality and
price differentials throughout the market.
Starting off
She knew that there was demand in the market as being a student herself she had to buy suits
and other formals for presentations and different college related events. Going forward with
the idea she knew exactly what issues she would face. Starting with having a good reach and
customer profile something Muge was suffering with at the time due to it being completely
homebased and running mostly through word-of-mouth. Another issue she knew from the
beginning was having picking customers. Women are notoriously known for their size and
fitting preferences which vary from design to design and fabric to fabric. For these two reasons
she decides to launch Suits.pk as an online brand and offer customization. She also benefitted
from Muge by having different types of labor at home and connections in the market of raw
materials that helped Suits.pk not only find better priced products but also good quality and
materials for which the brand is known for today.
Where it stands today
At the beginning a brand that stated off with the support of some good friends and family that
not only helped gain followers on her social media pages but modeled her products so she could
have a well-organized and professional looking online presence. But today she not only has
proper models to work with but also has 21,500 followers in just 2 years of launching. Her
average number of orders per month start from 70 and can to up till 100+. Deliveries do not
stop just in Lahore but go to Islamabad, Karachi, Rawalpindi, Faisalabad and even small areas
in Sindh.
Their target market is of ages between 20–34-year-old which includes students and working
women. They launched on both Facebook and Instagram but currently only operate in
Instagram as Facebook had too many restrictions which interfered with their reach so now the
company fully operates on Instagram that lets them target the ages above 18, which is the age
group they are targeting. Instagram is also having a much easier interface to handle for
engagement and increasing reach to different types of customers.
The brand all in all supports working women by making them feel confident and encourages
them to work in every role that they desire. Suits.pk is a high-quality low-price brand makes
women excel in their work without having to go over their budget. They also support the
environment by having sustainable and environmentally friendly packaging that reduces wastes
and the consumption of plastic.
Products Offered and their Sourcing
The company offers formal suits in which articles such as formal dress shirts, pants are included
as shown in Exhibit 1. The company offers formal coats which are produced by a third party
and their delivery also takes the longest delivery time. As the coat production takes 10-15 days
after which it is delivered. As for dress shirts, smart casual shirts and dress pants they are
produced in-house. The raw materials for which are locally sourced from inner city from only
selected authorized and trusted vendors to maintain the quality and standards of the company.
The average delivery time given to customers is 5-7 days whereas the order is completed on
the 3rd working day or maximum the 4th working day and then given to the delivery
presentative. The delivery service of the company is done through a third party known as Call
Courier. They take 1-2 working days to deliver a package in Lahore, Faisalabad, Islamabad
and Rawalpindi whereas for Karachi and other areas of Sindh they take 2-3 working days.
Pricing
Outsourced Products
As discussed previously the production of formal coats is done by a third party which is because
stitching coats takes expensive labor and machinery that causes them to be more expensive for
Suits.pk. This is why they outsource it causing the stitching of a standard coat to be Rs. 6,000,
any customizations such as size adjustments calls for an additional Rs. 2,000. As a result, a
finished formal coat at a standard size costs the company Rs. 9,000 to 10,000 each which
includes the labor and the fabric only. After which the delivery costs and the cost of other
specifications such as buttons, logos and labels come as an addition to the cost of the finished
coat.
In-house Produced Products
The production facility is based in house as shown in Exhibit 2, which also includes an in house
studio for the product photography. The items which are produced in-house has labor that is
skilled and less skilled due to which production disparities arise for the company. If we talk
about a standard white shirt the fabric for which costs Suits.pk Rs. 500 – Rs. 600 at wholesale
estimated rates. A skilled worker done take 4-5 hours to produce 1 such shirt and would make
3 shirts in 1 day. On the other hand, a lesser skilled worker would 5-6 hours to produce 1 shirt
and would produce 1-2 shirts in 1 day. Both types of workers are paid a per item rate which is
Rs.1000 to Rs. 1,200 per shirt. Similarly, for pants the fabric costs Rs. 800-900 at wholesale
rates and workers are paid Rs. 1,500 per pant. As for the packaging the materials come from
online sources that costs Suit.pk Rs. 120 per packaging as it is made from environmentally
friendly products as shown in Exhibit 3.
Employees
The company has 6-7 workers/tailors that work from Monday to Saturday at a per piece rate
which is decided upon what item (shirt/pant) they produce. They also have an additional
employee called a purchaser that brings in for them the raw materials and also helps supervise
the inventory to make sure that anything from buttons or fabric isn’t left short that could cause
the company delays or disturbances.
Process flow
Delivery Process on Instagram
• Message for an order arrives on Instagram which is mostly after 4:00pm but there is
also a high rate of orders at 6:00pm
 • As currently only 1 person is handling the page on Instagram the response time is
anywhere between 1-2 hours on an average
• The negotiation process on Instagram can take from 15 minutes to 1 week depending
on how quick the response time of the customer is and how information they require
before they place in the order
• Once the order is confirmed two production sheets are made one goes to the CEO and
the other would be sent to the Operations Manager
• At the same time a delivery slip is also printed which needs to be attached to the final
packaged parcel and copy of which is also sent to the delivery service.
• When the production sheet reaches the production room the stitching process starts
which for a shirt takes 4-5 hours and for a pair of pants takes 5-6 hours.
• If the product does not have any customizations, it would directly go to ironing after
the stitching is complete otherwise customizations can take up to 15-30 minutes extra
depending on their extent
• After stitching the article is then sent to ironing station that takes 15-20 minutes per
article
• The complete article is sent for quality inception where it is checked for loose threads,
uneven seams and correct label attachment which takes 5 minutes
• Checked products are then packed into their rightful boxes and the delivery label is
attached on top
• After which the package is handed over to the delivery representative on Call Courier
(Shown in Exhibit 7)

Shirt Stitching Process for a Standard White Shirt

• Once the production sheet arrives to the production room the fabric is cut according to
a standard pattern given to the workers which takes about 30 minutes
• After which the collar is made that takes about 15-20 minutes
• Then the major stitching is done which involves making of the button panel, sleeves
and cuffs which are then attached to the basic structure of the shirt. This whole process
takes 3-4 hours
• The button holes are made by a third party due to which it takes 1-1.5 hours
• Once the shirt arrives back to the unit the finishing of the shirt is done which involves
putting on buttons and labels that takes 40 minutes to 1 hour (Exhibit 8)
Problems
Major Challenges
• Storage Issues
One of the major problems faced by the company is the lack of storage capacity and no
inventory management system. Being a startup and sole proprietorship, the production is
carried out the owner’s own house. Since all the operations of the brand are carried out in a
small facility which is a 10 Marla house. Apart from the family living there, all of the
production takes place there which is now becoming a problem as they are thinking to launch
a men’s suits for which further space will be required.
Currently, the finished good’s inventory is such that the articles which are highly demanded
are kept as inventory and that also are kept in no proper place or order but in spare places of
the house such as empty shelves in cupboard or in a box of cardboard as seen in Exhibit 4.
Mostly standard sizes and standard colors are kept in inventory as they are demanded more
frequently which include white shirts and black pants. Due to lack of space for inventory, most
of the order are made as order is placed.
Raw materials, which include silk and cotton, inventory is comparatively higher as compared
to finished goods yet due to lack of space only 80k to 100k worth of raw materials can be kept
as inventory for further use. Due to lack of capacity to keep good amount of inventory, two
challenges rises for suits. Firstly, raw material’s prices keep on fluctuating and this change
cannot be incorporated into the prices of the articles as this will lead to customers be uncertain
about the brand and their reputation will be compromised. Hence this leads to the profits for
them to suffer. Secondly, it also causes lead time to increase.
• Labor inefficiency
Another key challenge faced by suits was labor inefficiency. Despite having only 6 people
working at the production process, there were high issues even among this small number of
people. There was high absenteeism rate such as when they were given Sundays off so
automatically they will come up with an excuse and also take an off on Mondays, this not only
effected the production efficiency and delay in the process but also demotivated other workers
who did show up.
Regardless of been paid better than the market, the workers still showed laid back behavior
especially when they were asked to customize any article. There was a major behavioral issue
witnessed as they were being lazy during work for which they kept on taking long breaks and
often did not return from break. Mostly they did not give any reason for why they did not return,
barely anyone informed for not showing up, there was no professionalism show cased by them
for work and often when asked for the not returning back to work after break, there were no
serious reasons such as having a headache. They often took sick leaves from work almost once
or twice a month. This laid back behavior by the labor force has led to many issues raising in
the production process as one worker produces 3 dress shirts per day but when they take
additional leaves then the productivity is reduced and the work shifts to next day and hence the
order gets delayed or some other worker has to put up with extra work which creates an
unbalanced and unhealthy working environment within suits.
Minor Challenges
• Lack of staff
A couple of months back, suits faced a technical problem. Initially, order was placed on
Instagram through direct message and the owner of suits, personally took all the orders which
was working for her in the start but as the brand grew more and more, it was not possible to
keep track of so many orders manually and few of orders started to get delayed or totally
skipped. Due to such issues, automatic system of orders has to be arranged but as the owner is
the sole person running most of the operations and did not have the technical know-how of
how to accurately address the problem.
Raw materials from various locations had to be collected by the owner herself, which was time
consuming.
 • Order delivery errors
Due to lack of staff and lack of proper tracking mechanism of orders placed by whom and to
be delivered where, suits also faced delivery issues as mentioned by the CEO during the
interview that once an order of Faisalabad went to Karachi and it costed her undo the issue
faced by the customer of receiving the wrong order.
• Exchange of orders
Firstly, customers take a lot of time to place their order as they start to negotiate the price of
the articles and there are too many questions asked by the customers related to the article that
it takes almost a week for them to actually decide whether they want to make a purchase or
not.
Secondly, there is widely seen that customers are unaware of their sizes such as they are not
sure if small, medium or large which size will fit them and this leads to wrong size of order
been placed by them. Once the order is received by the customer, they then try the article and
want to exchange it when it does not fit them so this leads to a lot of frustration but at the same
time, it leads to extra cost which suits has to incur such as firstly, the delivery cost and secondly,
making a new size of the article, above all is the hassle of task tedious work.
Company’s Take on the Problems
Suits been a startup and operational only since 2 years is having various issues. It has
effectively been trying to solve few of its minor problems but there is little or no solutions yet
to be found for its major problems.
Firstly, suits tackled with order delivery errors problem by hiring an intern for handling the
Instagram orders. Google form was made and the job of the intern was to fill the forms with
the specifications of the order such as name, number, address, article, article size and hand it
over to the owner. This was done to minimize wrong deliveries such as the issue faced of order
of Faisalabad getting delivered to Karachi. This also helped in the orders to be tracked down
correctly from Instagram direct messages. This proved to be successful for suits as it not only
led to delivery errors to reach to zero but also the hassle of personally finding out the orders
and then writing them down was also ended.
Another significant improvement made by suits was to hire an employee to carry out activities
which involved picking up of raw material from various locations such as inner Lahore and
delivering it at the doorstep. This led to less physical hassle by Noor and more efficiency is
work been done as there was a person full time employed just to deliver on time.
Even though another solution was time consuming and difficult but the owner, herself learned
how to make a website and few months back launched a website for suits in which she did not
only got rid of telling specifications of each article to every individual customer but she also
now automated the whole order process and now order sheets were made through it (Exhibit
5). On the website as attached in Exhibit 6, had details of every article and also mentioned the
availability of the sizes and displayed a size chart for convenience of the customers.
Recommended Solutions

Despite suits.pk growing to be more and more popular and recently, having a greater number
of followers on Instagram, it still has not been able to fully manage its major problems and find
suitable solutions for it.
One of the major problems faced by suits is labor inefficiency, in order to tackle with this
problem there are various strategies that can be implemented. Firstly, a good healthy
environment should be provided to the workers such as their working conditions should be
improved by providing them with air conditioners in summers and heater or invertors in
winters. As Pakistani labor loves to consume tea so they should be given tea twice a day, once
based on when they want and second cup of tea especially given when they return from break
in order to give them something to come back to so that they avoid calling off after break. They
could also be given free lunch that is standardized for all, this could ensure that they do not
take long breaks when they go out for lunch.
There should be room for them to grow, such as one of the workers who performs well should
be raised to the position of manager which will be a way to make them feel appreciated and
look up to something after they work day and night. This will also lead to sense of achievement
among them and can cause them to work hard to achieve this role. There could also be
workplace diversity by adding either female workers or disabled workers that are more loyal
and serious about earning a good income which could help the company have proper pace of
work.
Workers must be recognized for their work, a healthy environment should be created where the
owner praises workers for their consistent better performance and privately also should be in
touch with the worker and their needs, such touchpoints can lead to the worker feeling more at
ease and comfortable.
Most importantly, workers should be given bonus if they exceed the limit of articles stitched
with a week so that they work consistently in order to earn bonus. Commission system should
also be initiated in order to reduce the high absenteeism rate of workers, such as they should
be given commission if no leave is taken during a month.
Due to lack of funds and limited retained earnings, there is not enough room for suits to set up
their own outlet or set up in a new location. Hence keeping in view, the current circumstances,
inventory should be managed properly utilizing the house by allocating a whole floor of the
house to the brand and to keep everything in place there, from raw materials to finished goods.
They can also have proper shelves made for their inventories which would not only make more
space for storage but also keep everything organized through proper labeling and designating
each self for which type of fabric/article in order have a smooth flow of tasks and have a better
view of materials available.
As for the minor problems mentioned they can work towards automation of tasks, there are
proper software available that can organize the information and status of each order so that
there aren’t any errors and mix ups that could lead a bad name for the company. The intern
hired could also help them have an organized system without the need of any software as well.
He/she could easily make Google Forms for customers to fill for their customized orders in
order to reduce delays in order taking and have proper Google Sheets for them. These
customers can even be asked to come for fittings in between the final delivery to minimize size
and exchange issues.
For saving time and removing the step of quality check in the process flow of making an article
of clothing quality control can be done at every step of the process. It should be done when the
collar is made, after the shirt for instance is about to be put together, before putting up buttons
and especially when a new pattern is made for a customized order. It would safe time and cost
at the same time.
Lastly, some major suggestions would include firstly, investing in a buttonhole making
machine which is not very expensive and could be bought for 10,000 rupees easily, which will
help them reduce the process time of their stitching and hence the delivery process. For sizes
and product exchange issues they can launch a virtual mirror on their website which might be
an investment for 1 lac rupees but could save them the hassle of returns and exchanges that add
up to their storage.
References
Suitss. (2022, September 25). Suits.pk.

https://suitss.co/?fbclid=PAAaZIISBBZkwu6WIlHAvCojkF9tRLwpiVz7ilPvcrm15u

2TRzORFxy3ViEuE

Suitss.pk. (2020). Instagram. https://instagram.com/suitss.pk?igshid=YmMyMTA2M2Y=

Appendix
Exhibit 1 Products
Exhibit 2 Facility
In house studio
Exhibit 3 Packaging and touchpoints

Exhibit 4 Inventory Management

In the cupboard inventory and packaging
In the cardboard box
Exhibit 5 Order sheets

Exhibit 6 Website
Exhibit 7 Process flow diagram

Exhibit 8 Shirt stitching process flow

Exhibit 9 Interview with the CEO
Miro Board
 NAFYA HABIB
Phase 1 DHA Lahore · 03147991963
nafyahabib@hotmail.com

Hello, my name is Nafya Habib, I have studied at Lahore Grammar School from the
very beginning after which I got enrolled at Lahore School of Economics where I did
my BBA Hons with Double Majors in Marketing and Finance. During my BBA I did an
internship at AkzoNobel Pakistan as a Marketing Intern to learn more about the
marketing department as I have planned to pursue my career in the marketing department
in future. Due to this reason, I am currently doing my MBA from Lahore School of
Economics where I have further learned about the marketing aspect of businesses and
even the sales side of companies as both these departments go have in hand. Through
our projects I also got to visit different large and small scale companies which helped
me learn about their operations, management and commercial (sales and marketing)
departments how differently each company operates according to their product
requirements. I also did a short course at LUMS to learn further about Digital Marketing
which is a growing norm these days.
 SARAH MAHBOOB
WAPDA Town Lahore · 0331 4837538
sarahmahboob98@gmail.com

ure Here
I, Sarah Mahboob, have done my under-gradation from Lahore School of Economics in
Double Majors Economics and Finance. Currently, I am enrolled in MBA program of
LSE.
Apart from my academics, I have polished my leadership skills and learned how to deal
with issues while working in a team to also, managing and organizing events during my
experience as the president of dramatics society. This is where I gained my confidence
which is further enhanced in my MBA.
During MBA, I have learned about the sales process through visiting wholesale and
retail markets, did market research to get insights of the market, developed my
knowledge about distribution processes and also how to solve operational issues of the
companies.
AK Enterprises: Role of Process Quality Improvement and Lean
Management Tools in Production of Soap Company by Tooba Sattar and
Inam Barri
Introduction
People from all over the world use variety of products to improve the way their faces look. In
Pakistan, people spend high amounts of money on beauty and personal care products. Most of
us have experienced been questioned about “which soap do you use?”. Especially Pakistani
women discuss these in their work spaces. One of these examples includes story of a young
entrepreneur, Sana Shaukat, who founded AK Enterprises, a beauty soap manufacturing
company based in Lahore.
Market
The beauty and personal care market in Pakistan is highly concentrated. There are big giants
like Lux and Palmolive responsible for big number of market share. Budgets of millions of
rupees are spent on advertising of beauty soaps. Between 2012 and 2021, the market value
grew at an average yearly pace of +1.7%; nonetheless, the trend pattern remained largely
constant, with some observable variations in some years.1 Since its inception, the market of
beauty soap in Pakistan has grown significantly in both size and scope. Since the coronavirus
epidemic began last year, washing hands has been a major topic. All sectors of the health care
industry have advised the public to practice good hygiene and to regularly wash their hands.
Company background
AK Enterprises is a soap manufacturing firm that was founded in 2021 by Sana Shaukat. She
completed her MBA from Forman Christian College, Lahore and afterwards she completed her
central superior services (CSS) exams. Whilst doing her job she found out about soap making
business from her co-workers and that was when she started developing interest in having her
own soap company. She started doing research relating to this business and with her
knowledge, she found out that there were countless counterfeited beauty soaps in the market
and people were getting no reliable advice. Coming from a wealthy family background, she
found herself to be lucky enough to be financially eligible for the capital required to start a new
venture. She finally took the decision to make investment into a soap making business. She
rented herself a 10 Marla place in Johar Town, Lahore, where she could practice her business.
She turned that place into a warehouse and a factory which is operational till date. Her business
fulfilling all these criteria made it an order qualifier.
It manufactures three types of soaps known as the white soap, the pink soap and the green soap,
under the brand name, Majesty. The main ingredient of the white soap is coconut, for the green
soap it is Aloe Vera and for the pink soap it is glycerin. All three have unique fragrances and
different packaging (Exhibit 1). The most of the distribution network involves private small-
scale distributors based in Faisalabad, Bahawalnagar and Dipalpur.

Sales process
The soaps weigh 110 grams and 135 grams. There are two sale processes involved for soaps.
1. Selling directly to retailers
 2. Distributors

The retail distribution channel for majesty soaps includes its product’s path from its
manufacturing unit directly to its consumer. This is direct channeling where no other
intermediary is involved. The retailer buys directly from the factory. These retailers targeted
by the company are based in rural areas mostly based in Faisalabad, Bahawalnagar and
Dipalpur. There are three employees who work on commission basis, responsible for making
sales carton of 48 pieces of soaps to these retailers. The commission per carton that they receive
is 200 (Pakistani) rupees. Their requirement is to sell two types of cartons, one consisting of
soaps weighing 110 grams and the other one weighing soaps of 135 grams (Exhibit 2).
The carton that consists of soap weighing 110 grams each is sold to the retailers for 2400 rupees
which they can further sell it in the market with their flexible margins of their own choice. Out
of these 2400 rupees, 2200 rupees is a gain by the company and 200 rupees in commission.
The carton that consists of soap weighing 135 grams each is sold to the retailers for 3000
rupees. Out of these 3000 rupees, 2800 rupees is a gain by the company and 200 rupees goes
in commission too. There is no check on retailers of how much they further sell the product
for.
Distributors are mostly found with the help of social media. A carton of soaps each weighing
110 grams is sold for 1800 rupees and a carton of soaps each weighing 135 grams is sold for
2400 rupees to the distributor. There are business groups on WhatsApp where the
advertisements of the soaps are posted and shared with these distributors so that an effective
two way communication can take place with presence of other stakeholders as well. There are
personal references too, called traders who buy the product and sell it with a higher price
margin in the market (Mobilers).
Personal references are also a very important and integral part of the dealings in the business
world with market retailers like “Anjuman Tajiran” and family friends where they contact
distributors and buy the stock cash terms with entire risk falling towards the distributor,
whether he can sell or not.
The production process
Step 1: Getting material (ingredients) poured. The time duration it takes to take the material
out of the container is 5 minutes. Two employees work on this step. One person pours it out
and the other collects the material in a basket or a tub at the same time (Exhibit 3)
Step 2: Weighing of material (Exhibit 4). The material is weighed according to precise
percentages. This step takes 6 minutes. There are two workers involved in this step. First person
puts it on scale and the other one note the readings according to grams for different ingredients,
which are:
• Nimer soap noodles: 250 Kg
• Talcum: 50 Kg,
• Floral/Perfume scent: 3 Kg,
• Shampoo base: 2 Kg,
• Glycerin: 2 Kg,
• Propylene glycol: 2 Kg,
• Coloring: 0.5 Kg

Step 3: Mixing ingredients. It takes duration of 4 minutes to put the entire material into the
mixer. This is also performed by the same two workers who were responsible for weighing the
material.
Step 4: The mixer rotates for 10 minutes to thoroughly mix the material together. During this
time, one worker is responsible for cleaning the blades while it mixes and keeps an eye on it.
Step 5: After the mixing of all the ingredients have been done thoroughly, the final mixture is
dumped into the tubs. This takes further 4 minutes. It is performed by a mixer attendant.
(Exhibit 5)
Step 6: The mixture is then poured into Plowder (also known as duplex plowder). This takes 1
hour 30 minutes to crush in the first 2 runs of ‘Moutti Jaali’.
Step 7: This process is further repeated three times with smaller sized mesh called zero mesh
size. It takes 2 hours to gain maximum shine and balanced consistency of the mixture. So, a
total of 3 hours 30 minutes approximately. It is performed by two workers (bottle neck).
Step 8: The soap blocks are then collected and cut down alongside the last batch of blocks that
comes out from the zero mesh. As soon as the blocks come out, they are cut into pieces. This
part is performed simultaneously. In the last 35 minutes of the plowder. (Exhibit 6)
Step 9: The zero mesh task takes 15 minutes as it is done by the same two workers who
powdered the last batch in the plowder
Step 10: These are then stamped with a manual stamper done by one worker and another
worker, who then packs the soap into its designed wrapping.
These processes such as stamping take place while the next batch is being prepared. The
stamping of a single batch is done by two workers from the noodle blocks. It takes duration of
1 hour for one batch of 500 Kg.
Step 11: It is then followed by packing into the cartons. This takes duration of 25 minutes.
Total time = 5 hours 25 minutes for the first batch.
The production for the next batch starts. As soon as the material is transferred to plowder, two
people start working on the next batch. So, while the plowder mixes in the first half for 1 hour,
the material for the next batch is prepared followed by wait time of 3 hours and thirty minutes.
These workers help with packing of soap from the first batch. Then, when the plowder is
emptied, the rest process of the first batch is followed simultaneously. So, the second batch has
reduced lead time of 30 minutes.
Hence, in one day a total of 2 batches are produced and therefore the time duration it takes to
produce 2 batches in total is 11 hours and 30 minutes.

Machine acquisition cost

The ingredients of the soap consist of chemicals and soap noodles. These are acquired from
Ismail chemicals located in Akbari Mandi, Lahore. The packaging of the soaps is provided by
Zeeshan packers who are located in Urdu Bazaar, Lahore.
Plowder: It is also known as the duplex plowder machine. It was bought for 1 million rupees
(Exhibit 7).
Mixer: Two mixers are used. One mixer handles 150 kg and the other mixer handles 200 kg.
The cost for each mixer was 150,000 rupees. (Exhibit 8)
Mould: These are the dies that are used for shaping the soaps. The cost was 40,000 rupees
(Exhibit 9).
Stamper: The business owners initially purchased mechanical stampers but due to its poor
quality results, they shifted to manual stampers. There are two stamping machines used. The
cost for manual stampers used on the packaging of the soaps was for 80,000 rupees each.
The machineries were all sourced from Anees electronics located in Kamoki, Pakistan.
Problems identified
Problem 1: Material wastage (conversion wastage)
Due to a lot of material being left on the blades of the mixer and the plowder not being cleansed
off properly, there is a lot of material that gets wasted. Therefore, it is also not stored properly
for the next day as it goes to waste. This causes high increase in wastage costs. (Exhibit 10)
Problem 2: Excess inventory.
The demand isn’t known and is very sporadic. There is no proper inventory and the production
methods used. The rule of thumb which is followed by the company is to produce as much as
possible in a day and then hoping it sells. This results in over sights, whereas on some occasions
they have too much excess material. This results in high holding costs and opportunity costs
(Exhibit 11). Since the excess inventory is of no use for a period of time, the soaps get damaged
or get cracked over the time (Exhibit 12).
Problem 2: Too much clustering and uncleanliness.
Due to poor management, there is too much clustering in the workplace. Everything is
disorganized in most parts of the factory and cleaning has been ignored because of time
consuming process.
(Exhibit 13)
Problem 4: Inefficient workforce.
The workforce slacks off a lot. They take longer lunch breaks and there is no task specialization.
They also lack consistency in their work. They are not trained well. With less check and balance
on them besides camera and a lenient manager who doesn’t report.

Solution provided to the problem 2 by the company

The firm hired the workers on thaika (on basis of contract). This helped them save on costs and
also on management. This helped them to avoid the training costs and the inefficiencies were
reduced prominently. The workers were having proper incentives to finish on time. They were
working fast and wasting less time, as now the faster they worked, the more cartons they would
be able to produce and ending up making more money.
The only issue with this was now to maintain a proper quality control over them for which a
manager who was honest and trust worthy was important.
Recommended solution to problems
Solution to problem 1: Lean manufacturing.
Lean manufacturing is concerned with reducing waste in production systems while increasing
the output. Examining and reevaluating the design of soap is one technique to optimize the
manufacturing while also decreasing the waste.
There are 7 types of wastes of lean manufacturing.
1. Over production
2. Transport
3. Motion
4. Inventory ✓
5. Waiting
6. Over processing
7. Defect

The waste that we would be focusing is the inventory waste, which is having material more
than what is required. There are several facets to waste reduction in the material, and each one
needs to be handled. The most crucial is volume reduction, which lowers wasted quantity
produced by starting with less material. This falls broadly into two categories: source
segregation and waste concentration. While the latter involves treating various waste items
separately in order to recover the metal value in the sludge, the former may increase the
possibility that the material will be reused or recycled.
Since there is a lot of material being left on the blades of the mixer, the work force should make
sure they take off the material from the blades thoroughly and clean the plowder. A lot of
material gets wasted while moulding the soap shape. The excess that falls out gets wasted too.
So, it is suggested to reduce the volume of the soap material that is put into the mould.
The second option to utilize that excess soap is to recycle it into the process instead of wasting
it. The first step is to grate up the leftovers of the soap with a grater Next, it will be required
to make a new batch of cold-process soap by adding the soap gratings to the mix. Then again
moulding would take place and the soap can be reproduced in a new batch of cold-process
separately.
Solution to problem 2: Adoption of inventory control method
Production Order Quantity Model has been suggested so that they can control their
shortage/excess of inventory and get to know optimal level of inventory.
It can be used when the inventory builds up over a period after order they have received or they
decide to produce it (JIT) and when the units produced and also sold simultaneously.

2𝐷𝑆
Qp = √ 𝑑
𝐻 ( 1− )
𝑝

Qp =
D = Annual demand
S = Setup cost or cost of placing an order
H = Holding cost per unit per year
d = daily demand
p = daily production rate
2 (39,670) (1600)
Qp = √ 119 = 117 units of cartons
25000 ( 1− )
189

The company should produce 117 units to minimize the total inventory costs by balancing the
inventory holding cost and average fixed ordering cost. Whereas the original no. of units being
produced before were 189 units.
The reason to use production order quantity inventory model was because a lot of inventory
used to build up over a period of time and get wasted because of its excess. Secondly, the units
were being produced and sold simultaneously.
The economic order quantity model which companies perform that represents their ideal order
size, allowing them to meet demand without overspending, wasn’t suitable for this production
method because it cannot be used in a real life scenario. The demand was volatile in this real
scenario and also there were fluctuations in holding cost, price, quantity and ordering cost.
On the other hand, the quantity discount model was also not appropriate because there were no
quantity discounts being offered as there was no bulk purchasing taking place. Also, even if
there was bulk purchasing, unless sufficient economies of scale are realized to offset the
discount offer, it would have kept squeezing the profits per unit, so it wasn’t appropriate to use
it.
Solution for problem 3: 5s for a total quality environment
5S consists of:
• Seiri – Set in order – The material being used in the factory should be organized in the
efficient manner,
• Seiton – Sort – There should be neatness and removal of clutters from the place.
 • Shitsuke – Sustain – There should be discipline and assurance that 5s is a part of the
culture of the organization.
• Seiketsu – Standardize – The firm should assure standardized ways of working.
• Seiso – Shine – Cleaning should be made integral part of every process. Constant
cleaning of floors during production must be improvised in order to result in an
improvement in the work space.

The implementation of 5S would be helpful in improving the quality of the production. You
cannot know if what you are performing is proper or wrong unless operational procedures are
well established and regularly followed. While not necessary drastic, but these impacts are
nonetheless evident.

Solution to problem 4: Corporate culture and quality training

A quality culture should be programmed at the organization through the active involvement of
the employees and by giving respect to their capabilities. This will help them get motivated
and become more efficient in work. When they will feel belongingness, their consistency in
performing work will improve.
Other than this, specialization/division of labor will also help them to perform better. This will
not only save time but the workers will be better able to utilize their skills. The workforce
should get trained. Training the employees will improve their quality. As the quality of the
workers is reflected in the quality of business operations, it is very important to improve the
quality of skills of the workers by giving them in-house training or at assembling premises.
Exhibit 1

The White Soap with coconut ingredient..

The Pink Soap with glycerin ingredient…

The Green Soap with aloe vera ingredient

Exhibit 2

Cartons of soaps with weight 110 grams and 135 grams.

Exhibit 3

Pouring of material

Exhibit 4

Weighing of material
Exhibit 5

(Mixture attendant dumping the final mixture into the tub manually)

Exhibit 6

(Soaps block being cut down manually)

Exhibit 7

(Plowder – duplex machine)

Exhibit 8

(Mixer)
Exhibit 9

(Mould for back side of soap)

(Mould for front side of soap)

Exhibit 10

(the material being cut down from the external side of the mould getting wasted)

(Leftover material on the blades of the plowder machine)

Exhibit 11

(Excess soap - leftover stock)

Exhibit 12

(damaged / cracked soaps)

Exhibit 13

(soaps before final shape non-hygienically placed on floor)

(clustered and untidy storage room)

References

1. https://www.indexbox.io/store/pakistan-soap-and-detergent-market-analysis-forecast-
size-trends-and-insights/
Appendix I – Process Flow Chart
Appendix II
(Presentation on Miro board)
 INAM BARI
Lahore, Pakistan · +92 305 7703035
inambarilaleka1@gmail.com · www.instagram.com/inamlaleka

I am Inam Bari Laleka. The way I can best describe myself is through my hobbies. I
love hunting, horse riding, video gaming, anime and basketball. As you can tell they are
all over the place and I like it that way.

I want to pursue a career in politics to carry on my family legacy and manufacture quality
soaps and detergents along the way, simple right? I also believe strongly in Islam and
its necessity in today’s corporate culture. I depend strongly on Allah to get me through
all the trials and tribulations that life presents.

I did my Bachelors in Business Administration (BBA) in Marketing and sales from

Forman Christian (FC) College, Lahore and Masters of Business Administration (MBA)
from Lahore School of Economics (LSE). I learned people skills from FC and stress
management along with work ethics from LSE. There is something to be learnt from
everything that you observe so look for knowledge in places other don’t.
 TOOBA SATTAR
Lahore, Pakistan · +92 336 3886622
T.sattar564@gmail.com · https://www.linkedin.com/in/toobasattar/

Assalaam o Alaikum,

I am Tooba Sattar, daughter of Sahibzada Abdul Sattar Nizami. I am a student and a

young entrepreneur who has indulged myself into my entrepreneurial ventures of digital
marketing since past 2 years. I was born and raised in Lahore, Pakistan and have been a
student of business and economics since my O-levels. I have completed my degree of
BBA (hons) from Defence Degree College For Women, Lahore, in marketing and I am
currently enrolled in Masters in Business Administration (MBA) program at Lahore
School of Economics.

I am a basketball player since my childhood and have won many accolades such as gold
medals for achieving first positions and for being best under-19 player as well. The love
for basketball was developed in me when much of my childhood was spent in streets of
Bahawalpur, Chishtian, Multan and many other cities of south Punjab, where I used to
play basketball with children of the streets, to a level of ending up playing in renowned
institutes like Beaconhouse, Ibne Sina, LGS, LUMS, LSE, and Punjab Olympics by the
blessing of Allah Almighty.

With broad knowledge of techniques and strategies in marketing, I hold about 5

certifications of digital marketing and data analytics from LUMS and hold a strong grip
in this field. Therefore, my past work experiences at institutes like United Bank Limited
and Sapphire Textile Mills Limited were also in their marketing areas.
Kurdos Industries: Haphazard Momentum by Minahil Imran and
Muhammad Balawal Ahmed
M. Fayyaz Ahmad, Chief Operations Officer of Kurdson Industries, cordially welcomed two
well-known operational consultants to his production facility at Baghbanpura, Lahore. They
walked from a noisy narrow corridor, half-stacked with sack bags of crushed plastic powder,
upstairs to the suite-size private office of the CEO overwhelmed by the gallery wall depicting
8 decades of successful heritage. From its inception in 1980 as a local veterinary surgical
instruments manufacturer to a globally known manufacturer of high-quality veterinary
products and artificial insemination equipment their driving force is to aim to be the finest and
biggest manufacturer of veterinary equipment in the global world. Kurdson Industries is ISO
9001:2015 and CE Certified Livestock Equipment Manufacturer Company in Pakistan. The
company has won many Trade Performance Awards in acknowledgment of the best import and
export of Veterinary Equipment.
Kurdson Industries has become the first choice brand in the global B2B consumer market
and local B2C plus B2B market due to its operational effectiveness as quality and flexibility
provided by Kurdson is unmatchable by its competitors. From 2014, the marketing team has
been spreading their brand name in the global world mainly in United States, Europe and UAE
through participating in trade shows and developing an interactive social media appearance.
Cutthroat efforts of the marketing team has now come to the surface, surging the demand level
such that there is 65% increase in the international demand and 30% increase in the local
demand.
Along with pouring in revenues, increasing demand levels have snowballed Kurdson’s
operational troubles because their existing production facility lacked scalability1 to cater the
growing demand, as the production facility is already operating at maximum capacity. The
over-stretch of resources coupled with intermittent process flow has led to a complete havoc at
the production factory, which has accelerating problems such as productivity deterioration,
elongated lead times due to defects and lags in inventory management.
Mr. Fayyaz, being the COO and one of the most loyal employee is extremely worried about
these operational pitfalls and fear that it might hamper their operational effectiveness. They
emphasized that they cannot forgo their brand name built by their ancestors, at any cost.
Therefore, they would leave no stone unturned in improving their operational performance. As
a long-term action plan, Mr. Fayyaz has proposed to his top management to relocate facility at
a larger area constructed based on an efficient layout plan. However, in the short term, the
sword is hanging over the head of the company.

Company Overview

Kurdson industries was established in early 1940s by M. Faiz Ahmad Kurd (Late). He set
up an office in his home and started the operations of company from there. Sialkot is famous
for manufacturing of three types of products; Leather, Sports, and Veterinary Surgical
instruments. Mr. Faiz Ahmad decided to enter the surgical industry as he already had some
links in it. He used to market the products, get the orders, and ask the local vendors to

1
How quickly a company’s operational procedures correspond to expansion. At the time they designed the
facility’s layout they did not had a vision of exponential growth.
manufacture the desired products for him. Later, as the company started to settle and got a bit
more mature financially, he decided to hire two workers and started manufacturing his own
products in his home in order to provide customers with consistent quality.
Muhammad Talat Zameem Ahmad, current CEO of the company, joined his father in the
business and clearly defined the industry and the type of products they were to deal in, which
is, Veterinary equipment or Animal health equipment. He discontinued the surgical instruments
line due to quality issues.
Mr. Talat moved the company’s headquarters from Sialkot to Lahore in 1989 in order to
better explore market opportunities. From Lahore, he was dealing with all the local dairy farms,
medical stores, and other customers who used to purchase veterinary equipment from him.
Later, in 1992, he got his first opportunity to explore the export market when he visited Africa
for the first time for business meetings. There, he discovered the huge potential export market
contains for the products he has to offer. Mr. Talat got his first export order from Kenya, and
that one order was bigger than all the local orders. This made him more focused on the export
market and since then, Mr. Talat along with his team, joined all the business exhibitions and
trade shows held abroad, in order to secure the maximum business.
Furthermore, Mr. Talat got his company ISO 9001:2015, and CE Certified to meet the
international criteria as the Livestock Equipment Manufacturer company in Pakistan. Under
his leadership, Kurdson Industries won many awards for the acknowledgement of consistent
efforts for the import and export of the veterinary equipment.
The driving force of company has always been the vision of M. Talat Zameem Ahmad
(CEO), of becoming the finest and biggest manufacturer of veterinary equipment in Pakistan.
Their motto:
“We Make, You Believe”
is what keeps them on toes to strive for the finest quality manufactured for the customers.
For the sole purpose to deliver the type of products to customer that can bear all weather
changes and also maintain hygienic standards, the purchase department makes sure the raw
material that enters the premises if of high quality.
This sheer focus on quality is what sets Kurdson apart from its competition. They use best
quality raw material, which often comes at a high price, to produce the best quality finished
goods and after thorough testing, supply to their clients. They have placed multiple quality
checks throughout their manufacturing process starting from the die making to the final
finished good in order to make sure the product is fool-proof and of best quality.
Products Types
Kurdson Industries deals in Veterinary Equipment. In this line of business, they manufacture
more than 500 different models of products. The product lines they deal in includes veterinary
syringes, Automatic Syringes / Vaccinators, Manual & Automatic Drenchers, Bolus
Applicators, Castration Equipment, Trocars / Bull Holders, Hoof & Claw, Hog Catchers &
Dehorners, Dairy Equipment, Animal Identification, Stomach / Mouth Gags, Obstetric
Instruments, Veterinary Kits, Artificial Insemination Equipment and Surgical Instruments.
These products are used by veterinary reps and doctors to treat animals. The first three product
lines deals with equipment that is used to give liquid medicines to animals of any form. The
remaining products deal with injecting vitamin tablets, or any other solid form of medicine. All
the dairy farm related equipment is essential for any farm to keep in premises to give quick
first aid to animals.
Artificial insemination items deal with the artificially impregnating the animals with the help
of A.I sheaths in order to get the desired progeny. This process helps the farm owners get the
breed they want from animals. Through this process, Europeans and Americans have got the
breeds that produce more than 28 litres of milk in one day. Whereas, Pakistan is far behind this
number with just 8 to 10 litres per day average.
These products are highly sophisticated and complex to manufacture. Different molds are built
to make parts of these products, which are then assembled to make one final product. Some of
the simple looking products are actually so complex that they require 26 minimum different
parts to make one final product. Exhibit 1 shows the picture of the products lines of Kurdson.
Sales process
Kurdson deals with 3 broad categories of clients, which includes business-to-business
clients, business-to-customer clients and government tenders. Business-to-Business clients are
from the local and international markets, business-to-customer clients are from the local market
precisely and government tenders are based on the auction system.
In the domestic market, all the corporate farms, progressive dairy farmers and veterinary
medical stores purchase products from Kurdson Industries. Corporate farms include the likes
of Nishat Dairy Farm, Jahangir Tareen Dairy farm, Sapphire Dairy Farm, At-Tahur dairy farms,
etc. Such high-profile customer base of the company itself reassures the company’s claim of
producing the best quality equipment otherwise they would have switched to any other vendor.
For the export-based clients, the company takes part in different trade shows, exhibitions
held in Germany, France, USA, African regions, Thailand, Russia, and other countries and
showcase their products and market them. Potential clients get the chance to physically try and
test the product samples and then give orders. The inhouse production gives the company a
strong edge which they use to give the clients a maximum of 4 week lead time for their orders.
If a customer has a specific design to be made, the company produces it, sends the samples for
approval and then produce on a mass scale as per the order. Kurdson has a policy of always
producing more than the order. For example, if the order came through for 1000 pieces of an
item, they will produce 1050 and send the extra 50 to the client in case any piece that reaches
is broken or needs to be replaced, the extra pieces are already there.
The last type of sales the company takes part in are the government tenders. Tenders of
Punjab government, Sindh government, KPK government and even the tenders that float by
foreign institutes like FAO, UNICEF etc. are taken into consideration by the company and they
take part in most of them. These tenders require some products which are manufactured by the
company but also, some products which are produced in different countries like USA,
European countries, or China. The company has strong ties built with foreign companies and
also have the distribution rights to sell those products in Pakistan. Kurdson imports the items
that the government has mentioned in the tenders and then supply them with the utmost care.
Kurdson’s production facility has built its competitive position around the catering
customized needs of their clients. If a client demands specific features and modifications in
terms of size, colour, their branding on the product Kurdson’s flexible operations allows them
to cater such customized demands. Kurdson’s sales team receives the order from the customer,
and orders the factory to design and produce a sample as per requirements of the customer.
They produce the sample which is then sent to the customer for approval if the customer pass
the product then the operations team is ordered to batch produce the product and if the customer
asks to make changes then the mould is reworked and another sample is made, which is then
sent to customer for approval again. Exhibit 2 shows the order fulfilment’s time function map.
This optimum flexibility and design collaboration capability in the operations sets Kurdson
Industries apart from the competition.
Most of the sales are made on cash basis for the domestic market. Corporate farms are sold
on credit. Whereas, for export, either LC through banks is used or Advance payments are taken
as per the instructions of the Government of Pakistan.

Production Overview

Kurdson’s production facility at Baghbanpura, Lahore has a covered area of 2.5 kanals and
open area 3 marlas, which is left for the parking for employee’s vehicles and off-loading and
on-loading of inventory. Exhibit 3 shows the front picture of the facility from the main road.
Kurdson’s has an intermittent process flow as it is constructed over two floors, the first floor
consists of production and finishing rooms for different parts of the product, storeroom for
work in process and raw materials inventory and second floor consist of assembly room and
storeroom for finished inventory. Exhibit 4 shows the pictorial layout of Kurdson’s intermittent
process flow.
If the production process of Kurdson Industries is analysed in entirety, through the lenses
of “Hayes-wheelwright matrix”, then their production process would be positioned in the
quadrant of multiple products partially customized produced in moderate volume on a
intermittent line flow producing in terms of batches (As shown in the exhibit 5). However, all
veterinary instruments in the vast product portfolio of Kurdson follow certain a standard
production procedure, which is encapsulated as follows:
1. Production of stainless-steel parts
There are total 10 CNC lathe machines2 used to produce stainless steel parts such as nuts,
bolts, washers and rods used in the production of veterinary instruments (Exhibit 6 shows a
picture of CNC lathe machine). These 11 CNC machines are placed in two rooms opposite to
each other. Bigger room contains 5 machines and a wall mounted drawers to store daily
production of steel parts (Exhibit 7 shows the picture of wall mounted SS parts inventory
draws) the major raw material inventory for this department are Stainless steel pipes, which are
kept on the floor in the corner of the CNC lathe rooms. There are total 9 workers working in
this department on an 8 hrs shift. They continuously produce these parts and build its inventory
as these parts are mostly standardized in all products. On average, the SS parts takes 1.5
minutes to finish.
2. Production of moulds
Whenever there is a new B2B order for a product, customized in terms of size, a new mould
is designed and manufactured for its production. Moulds are designed using 3D softwares such

2
A CNC lathe machine produces all types of structures from milling, turning, drilling, grinding, sawing and then
finishing stainless steel parts, depending on the requirements of different industries (Anon, 2021).
as Delcam Powershape and SolidShape. After designing, the 3D designs are communicated to
CNC milling machines, which produces the moulds as per design. The company owns three
Supermax YCM-V65A CNC milling machines, which are highly known for their precision and
reliability. On average, the CNC machine takes, depending on the complexity of mould, 1 day
to 4 months to produce a mould. This department has 5 employees working on 8 hours shift.
The major raw material required for the production of moulds is steel. Mr Fayyaz claims that
the mould produced by the CNC machine is only 80% complete, the mould-fitting department
completes the rest 20%, which is also done in the room where CNC milling machines are
operating. In the mould-fitting department, the moulds are manually finished through roughing,
etching, polishing and extra polishing in order to attain a smooth finish of the produce of the
mould. The mould is then tested through injecting material manually if the part produced by it
contains flashes, then the mould is reworked. One mould costs 0.2 million rupees henceforth it
is the most class A inventory item, and Kurdson has a total of 600-700 moulds in their
inventory.
3. Moulds Injection
After the mould has passed the quality check by the mould-maker, it is fitted in the
injection-moulding machine for mass production of parts. Kurdson owns two injection
moulding machines including JSW J11OE-C5 and TOYO PLASTAR Ti-5OH (Exhibit 8
shows pictures of both machines). The material for the part is added in barrel in which the
heating rods melt the material, it is then injected in the mould cavity, which takes 40 seconds
to cool and form the shape of the mould. The mould tools opens after the part is solidified and
the part is ejected from the mould. . In one go barrel can contain 25 kg of material after it
finishes the barrel needs to be refilled. In total mould-injection for 1 part takes 1 minute and 30
seconds to complete. JSW J11OE-C5 is used to manufacture plastic material parts and TOYO
PLASTAR Ti-5OH is used to manufacture steel material parts. Plastic parts are stacked in
cardboard boxes and sent on the second floor once the batch is complete, sometimes they send
the parts before the batch is complete if there is not enough space. Metal parts are also stacked
in cardboard boxes and sent to the finishing room.
4. Finishing room
The steel parts are roughed and buffed using abrasive belt grinding machine until desired
finish is achieved. The other part of the finishing room, nickels the steel parts to protect them
against deterioration at high temperatures and make them rust proof. There are 5 workers are
employed for the finishing department who are works on a 8 hrs shift. Exhibit 9 shows the
picture of the finishing room. After the metal part are finished, they are sent to the second floor
and kept in the corridor outside assembly room.
5. Assembly room
The assembly room manually quality checks the parts received from all the departments
from the ground floor. If there are any errors in the parts, they discard it3. After that, they
assemble the parts together and make a complete product. After assembly they check the
function of the product if there are any errors then they reassemble it. If the product performs
well, then they stack the products in the cardboard box and shifts them to the inventory room.
There are 8 workers working in the assembly room working on an 8 hours shift. Time taken to
assemble the product varies with the complexity of the product and number of parts it involves.

3
Discarded parts are sent back to ground floor and melted and restructured again in mould-injection department.
For example, multi-dose gun contains 26 parts but the workers are able to assemble 1000 pieces
in 1 day (8 working hours) which means in 1 minute they are able to assemble 2 pieces. This
is because some of the parts are already assembled in machines during production before it
reaches the assembling department. Likewise, bolus gun contains 7 parts but in 1-day (8
working hours) workers are able to assemble 500 pieces of it. Which breaks down into 1 minute
per piece. Exhibit 10 shows a picture of the assembly room.
Diagram shows a pictorial layout of the production process at Kurdson Industries, the
finished products stored on the second floor are then sent to the ground floor from there they
are sent to the packaging facility, located in the sales office on Shalimar Link Road.

Figure 1: Intermittent Production Process at the Production Facility, Baghbanpura, Lahore

Downside of the Rising Demand

Excessive efforts of the marketing department in local as well as export market and
competitive edge in the industry based on their superior quality and design collaborations has
made Kurdson to pursue breakneck growth in the last decade. Their market share in the local
market is 55% while in the international market they are the largest suppliers from Pakistan of
the superior quality and design collaborations of veterinary instruments. The demand in the
international market is grown by 60%, and in the local market, there is a surge of 30% as
compared from the year 2012. Their exponential growth truly coincides with the vision of
Kurdson’s ancestors. However, their visions epitome has not been reciprocated in the
scalability of their operations at the production facility at Baghbanpura, Lahore.
 Productivity Deterioration
There facility is jam-packed with heavy machinery working continuously on 2 8hrs shifts of
labor and operating at its maximum capacity of 1000 pieces of veterinary instruments per day.
First priority is given to the export orders, as they are bulk orders from mostly from the B2B
segment. During the production of these bulk orders from export market, if any local order is
received then they are given long wait times of usually 40-50 days depending on the fulfillment
of the current in-progress order. However, if any urgent order is received from the local
marquee customers for which the mould and design is already passed then that order is adjusted
in the batch of bulk export order. For that, the factory workers pause the production of the in-
progress bulk order and produce the urgent order. This disturbance in the production of bulk
orders deteriorates multi-factor productivity for multiple reasons. In order to coordinate
workers in different room, extra time is required on debriefing the factory workers in all rooms
that there is a change of task. Moreover, extra time is also required on changing the mould and
material in the injection-moulding machine for the production of the urgent order. In such a
scenario of urgency, injection-moulding machine ejects faulty parts4 because the injecting
speed and/or pressure or the heating/cooling temperature is not adjusted according to the urgent
orders parts. The faulty parts are re-melted and remade in order to reduce the wastage costs,
however, it reduces productivity as output is not generated by the labor and machine hours
employed. Moreover, when the injection-moulding machine is shifted from the in-progress
batch to another part’s production then there are also higher chances of mould accidents
because the workers may make errors in setting the pressure of the plastic material flowing in
the mould cavity and/or they may also make error in setting the clamping force to shut the
mould together. The mould fitted in the machine may not withstand the compression stress and
hence break in the machine. The mould safe protection function in the injection-molding
machines indicates such accidents promptly to avoid any further damage to the mold. However,
the mold accidents are then re-worked in the CNC milling machines hence adding to additional
costs. Exhibit 11 shows the picture of damaged mould, which is being reworked.
Working at full capacity hampers Kurdson’s competitive dimension of offering superior
quality as the workforce are more likely to make errors under time pressure and spend less than
necessary time on quality checks of each part, and hence if the defect is detected in the last
assembling stage then it is re-melted hence adding to the cost. On the other hand, if the defects
are not detected even in the assembling stage then customer complaints arises.
Poor Inventory Management
Inventory management is a serious problem at Kurdson’s production facility as claimed by
their COE, Mr. Fayyaz. In a disconnected production flow, managing inventory is a great hassle
as Kurdson has two unsecured inventory stores one on the upper floor and one on the ground
floor. The manager has no track of inventory because the same type is stored in different rooms
and some is left unattended in the corridors. Excess inventory of parts and worn out molds has
over-filled the ground floors inventory room to such an extent that it does not have enough
space to put inventory of raw materials such as resins bags and stainless steel pipes as they kept
in the corridors.
In the CNC lathe rooms, the machines are operating on continuous bases and stocking
inventory of stainless steel parts, as they are standardized elements in all veterinary

4
Parts with flow lines, sink marks, weld lines, warping effect (www.fastradius.com, 2022).
instruments. These SS parts including nuts bolts washers and rods are stocked at three different
inventory storages including wall-mounted drawers in the stainless steel parts production room,
inventory room on the ground floor, and in the sack bags outside the finishing room after they
are nickeled. Multiple-site storage of SS parts have made it difficult for the manager to keep a
count of these parts leading to excess work in process inventory. Excess work in process
inventory burdens the net cash flows of the business as it ties up cash in the form of idle asset,
which has an opportunity cost of higher returns if it was invested elsewhere. Excess work in
process also showcases lack of production line balancing at Kurdson, as one work center is not
coordinated with the other work center hence mismatch between demand and supply
mechanism between the work centers. Apart from that, excess work in process of SS parts is
also a spatial burden for Kurdson as they are already operating at a small size facility as
compared to the scale of operations.
As a consequence of disconnected process flow, Kurdson is extremely lacking behind
managing their MRO5 inventory. There is no proper check and balance over the MRO
inventory, nor a secure room to safe-keep expensive tools6 and repair kits of machines.
Therefore, employees misplaces these tools and some of the employees takes advantage of this
loophole and steals the expensive tools from the facility. Moulds produced at Kurdson are
amongst the most valuable inventory items as it made from steel, one mould cost 0.2 million
rupees even then they are not properly stored and tagged. 150- 160 of the moulds are kept
untagged on the shelves of the injection-moulding room and rest of them are stacked in the
messy inventory room with the scrapped moulds. At times when urgent orders are received, it
is a hassle to find the respective mould as none of the moulds are tagged and kept in a
chronological manner, therefore adding in machines and labor’s idle time. Moreover, it also
causes duplication of similar moulds as in case of urgency when the factory workers could not
find the existing mould of similar size and shape, they make a new mould, which further wastes
time and resources and increasing cycle time for the products.
The poor inventory management are making Kurdson endure a very high holding cost.
Therefore, without upright inventory management and efficient information system, Kurdson
risks to stock excess work in process inventory, corrode net cash flow and risk holding damaged
inventory, which cannot be used in the production wherein just consume scarce space in
Kurdson’s inventory rooms.
Structural Challenges
As Kurdson grew from a single room to a well-known player in the worldwide market, the
organizational structure that appeared is a centralized management design. The major decision-
making is consigned to Mr. Talat Zameem Ahmad CEO and then trickled down the hierarchy
as shown in Exhibit 12. This top-down approach has negative as well as positive consequences.
However, in Kurdson’s case of operating at maximum capacity and over-stretching human and
capital resources in order to fulfill increasing demand levels, the negative consequences of
centralized structure and operating at full capacity are more prevalent in the workforce.
The factory workers are working on a tight schedule to fulfill orders as per agreed delivery
time. When the export batch orders are delayed due to disruptions from interrupting local
orders, the workforce of injection-moulding, finishing and assembly department spends

5
Maintenance, Repair and Operating supplies (MRO)
6
CNC Tools, Grooving tools, Turning tools, Carbide Milling Cutters, CNC cutting tools, Reamers
overtime because of the limited machinery. Their workload has been increased substantially
over the past 5 years. Increased workload has made them stressful and hence more prone
towards making errors, which causes further delays in the order fulfillment.
Mr Fayyaz, operations manager said
“My hair has turned white because of the excessive workload, doing over-time is my
common routine… what drives my motivation is the sense of belonging as I am working here
since 20 years”
Apart from that, the top-bottom approach has instilled “remote control” working environment,
the factory workers are expected to follow the orders of the CEO, which are made in box room
and lack on-ground operational essence. The CEO has made many rules and regulations
regarding factory operations but they are poorly implemented and some are even completely
ignored by the lower workforce because of excessive workload.
Another major problem highlighted by the operations manager is the high labour turnover and
absenteeism rate in the non-core workers. This is majorly because the workers gets bored with
repetitive tasks and they could not meet the overtime requirements of the facility. Furthermore,
it is also highlighted because of the disconnected process flow they lack direction and feel
unimportant in the whole manufacturing process because they are not aware of which product
they are making; their scope is limited to the task they are associated with by their supervisors.

Forerunner of a downfall?

Deep-rooted operational inefficiencies at Kurdson’s production facility coupled along the

meteoric upsurge in Kurdson’s global demand in the veterinary industry has grasped attention
of the strategic position holders. If these innate inefficiencies in operational management
remains unresolved it can lead to a life-threatening situation for Kurdson Industries.
Productivity deterioration and increase in defects caused by the over-burden of resources can
strain the hard-earned brand image of Kurdson’s in the near future. Their brand image is the
asset entrusted to them by their ancestors, adding to that Kurdson Industries have also worked
a mile in the international market to gain the trust of global B2B giants under the control of
Mr. Tallat. From the inception period, their additional value provision has revolved around
“superior quality” if that is compromised by the over-burden of resources then they would soon
lose the competitive edge in the industry. Now is the time that bare minimum local and
international customers expects from Kurdson Industries is the unmatchable quality of their
products and if it that bare minimum is not provided to the customers then there would be
severe negative impact on Kurdson’s reputation.
Secondly, working at full capacity would make Kurdson to comprise a part of their market
share in the future, as currently there are times Kurdson have to delay orders or sometimes
refuse orders because the facility is already processing a bulk order. In the short term, the
impact of over-turning orders is insignificant. However, in the long time horizon it would
backfire Kurdson, as their competitors would take over these customers and Kurdson’s market
share would shrink.
The COE highlights that working at full capacity has restricted their research and growth as the
operations team has become more reliant on the existing processes and less open towards
operational innovation. The team has a tight work-schedule they believe that if the new ways
does not add value then it would waste their time and cause more delays in production therefore
they do not explore innovative ways. However, such inflexibility would make Kurdson
industries lag behind operational innovation and hence might make them fall back in the
industry if their competitors surpass them.

Saving the Legacy

Market share growth in domestic and international markets and excellent global brand
reputation are the hard-earned assets of Kurdson Industries in the veterinary instruments
industry, which they do not afford to let go at any cost. Therefore, the strategic position holders
have worked upon rectifying the haphazard momentum at Kurdson’s production facility caused
by the intermittent process flow and intensified by operating at full capacity.
First mode of action taken by the company was to increase the labor force in CNC Lathe,
finishing, assembling and mold injection workrooms by 2-3 workers. In the initial phase,
increasing labor force was beneficial because the excessive workload was shared amongst the
labors hence increasing output produced more than the labor hours added; it raised the labor
productivity. However, when the demand elevated further even the increase in work force was
of little benefit. This was because the workers needed more capital to work on as the existing
machinery was exhausted. Therefore, to raise the output production more capital invested was
necessary.
This lead to the second mode of action, in which the company invested substantially in the
machinery and equipment. They purchased the second mould-injection machine; JSW J11OE-
C5 and assigned production of plastic parts to the new machine and production of steel parts
to the old machine. Whereas, previously both material parts were made on one machine, which
wasted time and resources in changing the material in the barrel, and the process was more
prone to errors as workers had to reset pressures, heating/cooling temperatures, flowing speed
while shifting to steel parts production on the mould-injection machine. The purchase of the
second machine allowed simultaneous production of plastic and metal parts and eliminated the
setting up hassle undertaken by workers while shifting from steel parts to plastic parts and vice
versa. The company also purchased more CNC lathe machines, increasing the number of CNC
lathe machines from 6 to 10 in 2020. This have been beneficial in the short term because there
is a vast variety of production of stainless steel parts, now 2 machines are allotted to the
production each part. With this modification, lot sizes of parts produced by each machine has
been increased, ultimately reducing set-up cost 7and increasing throughput time. Along with
increasing the machines, they made their core employees to do overtime and doubled the shifts
of non-core employees. This substantially raised the manpower, however, it over-burdened the
key employees.
Long-term Solution: 3 Kanals to 27 Kanals
As a third phase of action, Kurdson’s strategic position holders have adopted a bottom-up
approach by grasping real-time issues faced by the operational staff through holding one-on-
one meetings with them at the production facility. As a result of the meeting, the CEO has
decided to opt for facility expansion by relocating to a larger land area, designed under

7
In this context, setup cost is defined as a cost incurred to get the machinery ready to manufacture a different
batch of parts
architectural precision of the best factory architects and requirements of Mr. Fayyaz Chief
Operations Officer.
Their plan is to shift from a 3 kanals production facility to a 27 kanals site near Sialkot ring
road (Exhibit 13 shows the exact location), which is well connected via road links and much
nearer to distributors of raw materials. The new site is designed keeping in mind streamline
process flow eliminating the hassle of intermittent process flow at the current facility, therefore
increasing productivity, decreasing lead times and reducing excessive coordination by the
operating officer.
No doubt that this relocation would resolve special issues for the production machinery and
inventory storage which was previously congested in to small rooms, nevertheless the question
arises whether 9 times larger scale expansion is required?

Conclusion and Recommendations

The hurricane of operational inefficiencies has directly attacked the company. Lack of
operational innovation would put a halt at the company’s progress and growth. Kurdson has
been overburdened with more demand than their current production capacity. This overburden
has put a rash mindset of the employees where they are more focused on completing the orders
on time. This sheer focus on time and delays has made them ignore some of the errors of
production. Some defects in production process are covered in the next step of the production
process but this is not the sustainable growth model. If the products with defects started to
reach customers, which they will sooner or later under current circumstances, company would
lose their market share and the strong grip they currently have of customers.
After thorough analysis of the current operations of Kurdson’s industries at their production
facility, the operational consultants has advised Kurdson Industries to take rigorous corrective
action. Following up the consultants has stratified two set of solutions, which would directly
tackle the operational inefficiencies at their production facility.

Short term

Multi-cavity moulds
One of the ways Kurdson industries can improve the speed of the production is by producing
multi-cavity moulds. This means that if the mould is made for producing 1 item at a time, multi-
cavity mould would allow the same machine to produce more, say 4pcs, at one time. Although
this would require the designer to make changes in the computer software first to the design of
mould and then test it in real time whether it is feasible or not. Mould would be initially tested
in the aluminium material and then after thorough testing would be made in steel blocks.
Making new moulds is not easy, it requires a lot of cost. We asked Mr. Fayyaz about the
estimated cost of the mould and he gave the figure to be between 2 to 10 lacs, depending on
the mould design and size. But if done efficiently, this would help in increasing the production
in less time. Exhibit 14contains the picture of a multi cavity mould as an example. Multi-cavity
moulds would force the company in increasing the speed of assembling the products parts as
well. This would mean more finished products at one day.
Computerized inventory management
Another solution to the current scenario is applying the computerized inventory management
system. Currently their inventory is mismanaged due to lack of storage spaces. All the tools are
placed literally everywhere. And this makes the inventory count of semi-finished and finished
products extremely difficult. One of the ways to tackle this issue is by using computer software
like excel sheets for the most basic work or an integrated inventory management software that
would update the inventory and give results on a real-time basis.
Long term

Factory size
As the current area is of 2.5 kanals, and fully utilised, it is getting difficult for the workers to
manage production in the current premises. Huge capital investments have made the company
put new machines in garage because there is no space for them to work at the moment. Long
term solution for this is to shift the premises to a new area which they mentioned to us in the
interview. They have purchased 27 kanals land for the new factory. But in that our
recommendation is that they must design the factory place properly from a professional
architect by telling them their needs and requirements so the architect can properly make spaces
in design which would suit them. Furthermore, it is recommended to them to use only the space
which they require and do not waste the spaces available to them.
In the long term, after expanding its production facility and streamlining its production
processes, it is recommended to Kurdson to adopt 5S methodology to uplift their competitive
dimension of offering superior quality.
Quality Task Forces
They should form quality task forces who are given the responsibility of formulating the
strategy of implementing the best quality procedures. This task force should include the factory
manager, office manager, and a factory senior employee initially. Along with this quality task
force, a business consultant would be hired that would train the employees and the managers
in team related activities of formation, dynamics, performance evaluation, structure, and
problem-solving techniques.
Participation and Teamwork
For every target to be achieved or a problem to be solved a team shall be formed. This would
have the responsibility of performing whatever that is necessary in order to solve that problem
or implement a strategy. Once the aim is achieved, the task force shall be disbanded
immediately. One of the major issues that we witnessed was the cleanliness of the area. Since,
due to low storage space all the items were placed almost everywhere, it showed an untidy
work environment. Teams should focus majorly on cleaning the area. A clean environment
itself motivates the employee to work in a better way.
Training
People are the most important contributor to success. It is shown in the way the management
deals with its employees. But that is not enough in the situation they are currently in. Employees
need regular training from CNC department to manual workshop laborers. In house training by
the senior or expert staff should be a regular part of the company where everyone shares every
piece of knowledge, they have to accelerate the personal and professional growth of the
employees. Specific trainings in the CNC department, assembling departments, packing
departments would help the employees in reducing errors to a great extent. When every
employee is trained and specifically taught to be customer centric in every area of the
production, they would produce products with such care like it was their own customer they
wanted to sell.
Recognition and Rewards
The reward and recognition system encourages the team-based quality efforts put in by the
workers. These rewards should be a mixture of monetary and non-monetary benefits.
Employees should get extra payment or double of salary for the overtime they put in. Other
factors like attendance, punctuality, team work, cleanliness, should be recognized the head in
charge of the area and that employee should be given rewards for his efforts. Yearly or quarterly
bonuses could also be a part of the reward system that would improve the motivation of the
workers to a great extent. Quality task force team that outperformed the other teams should be
given a trophy at the end of the year or semi-annually. This would also encourage more team
work.
Management Control Systems
Appropriate systems should be in place to make everyone accountable for the actions they do.
CCTV cameras are placed but not thoroughly checked. Raw material is purchased but the prices
are not tallied which shows the management does not have the market information properly.
Top management should keep the records of all the purchases and tally the market prices of
raw material or any other product purchased formally. Furthermore, they should use the
CCTV’s placed in the vicinity in order to keep a check if the resources of the company are
effectively used or not.
Exhibit 1: Product portfolio

Figure 1: Product portfolio of Kurdson Industries

Exhibit 2: Order fulfilment’s time function map
Time Function Map
Receives
Receive
Customer Order Product Sample for
Products
testing
Sales Process Order
Sample
Wait
Manufacturing
Sample Approval Move
Mass Production Production Starts
Plant A Wait
Warehouse Move
Packing Wait
Transport Move

1 day 10 days 4 days 10 days 1 day 3 days 1 day

30 days

Figure 2: Time Function Map

Exhibit 3: Front picture of the production facility

Figure 3: Front Picture of the Production Facility, Baghbanpura, Lahore

Source: Kurdson Industries, Google Maps
Exhibit 4: Intermittent production process

Figure 4: Intermittent Production Process

Exhibit 5: Hayes-wheelwright matrix
Product Process Matrix

Product Structure
Low Volume Low Volume Higher Volume Very High Volume
Unique Multiple Products Standardized Product Commodity Product
Jumbled Flow
Job Shop
Job Shop
Process Structure

Disconnected Line Flow

Kurdson
Batch
Connected Line Flow
Assembly Line
Assembly Line

Continuous Flow
Continuous
Continuous

Table 1: Hayes-wheelwright matrix

Exhibit 6: CNC Lathe Machine

Figure 5: CNC Lathe Machine

 Exhibit 7: Stainless Steel parts inventory draws

Figure 6: Stainless Steel Parts Inventory

Figure 7: Raw Material for CNC Lathe production Figure 8: Stainless Steel Parts Inventory
Exhibit 8: Mould-Injection Machines

Figure 9: JSW J110E-C5

Figure 10: TOYO PLASTAR Ti-5OH

Exhibit 9: Finishing room

Figure 11: Abrasive Grinding Machine

Figure 12: Nickle finish

Exhibit 10: Assembly Room

Figure 13: Assembly Room

Exhibit 11: Damaged Mould

Figure 14: Damaged Mould After Mould Accident

Exhibit 12: Organizational Structure
Import + Nutraceutical
Sales Force
Local Sales + Vaccines + Mr. Ansar
Team
Development Equipment

SEO IT Dept.
Marketing &
Sales Social Media New Hiring +
Balawal + 1
Export Experienced Marketing IT Dept.
Export Manager
Find New
Government Export Sales Distributors
Mr. Naqi
Tenders Team in new
markets
1
Human Experienced
Resources Manager +
Staff
1 to 2
Equipment Employees -
Engineers -
Line Labour
Factory Factory heads
Production
Pharmaceutical Pharmacist Staff

Managing Packing Zubair Staff

CEO
Director

Store Keeping Mr. Hammad Staff

Account
Bookkeeping
Manager
Accounts &
Finance
Taxation Tax lawyer

1 Design
Designer
expert
IT
Department
Website management + other Software Possibility of
IT Developments Engineer Outsourcing

Fyaaz + 2 other
Innovation + New technical engineers +
Research and
Development in CEO
Development
Production

Figure 15: Organizational Structure

Vision Statement

To become the finest and biggest manufacturer of veterinary equipment in Pakistan

Motto

We make you believe Sign of Quality

Exhibit 13: Exact location Pin

Figure 16: Location Pin of the New Facility at

Sarghoda Lahore Motorway
Exhibit 14: Multi-Cavity Moulds

Figure 17: Multi Cavity Mould

Picture Gallery:

Appendix

Table A-1: Miroboard

 MINAHIL IMRAN
Eden City, Lahore · +92 3316679295
Minahill_99@outlook.com · www.linkedin.com/in/minahilImran

Highly ambitious and performance-driven MBA student determined to steepen my

learning curve. Acclaimed to maintain a solutions-oriented approach to tasks and believe
in effective communication, innovation and practical knowledge. To my understanding,
in this dynamic world a flourishing business base upon value-for-all ecosystems rather
than constricted vertically integrated structure.

Owing to the constant need of increasing my knowledge, I have simultaneously managed

to learn through online certifications and work opportunities that came my way while
pursuing a BSC Double Majors in Economics and Business Management at the Lahore
School of Economics.

Multiple projects in my learning period have enhanced my time-management and

interpersonal skills, along with the ability to work with diverse people of different
temperaments, meeting targets and successfully delivering within tight deadlines.

After graduating in May 2023, I can effectively contribute in areas including; Data
Analysis, Business Development, Strategy Formulation, Digital Marketing,
Consultancy, Google Analytics, Social Media and Advertising and Operations
Management.

The driving force behind my hard work is the collective growth and value creation for
myself and all the stakeholders involved. Consequently, leading to innovative,
prospering, self-sustaining organization.
 MUHAMMAD BALAWAL AHMAD
DHA, Lahore · +92 321 8871753
Ahmadbalawal@gmail.com· https://www.linkedin.com/in/m-balawal-ahmad-05b254161

A hard-working, self motivated, committed, and responsible person. A person with good
Data Analytics skills who believes in team effort. I am keen to learn and explore new
fields of work for my career enhancement and also for the benefit of my organisation.
Currently, I am an active participant in many activities at university level. Also like to
keep myself updated with latest technologies related to the industry

I am very enthusiastic about marketing and sales in general. It is the part of my degree
that appeals to me the most. I believe sales and marketing are the biggest proponents of
success in any business, which is why working in them is so exciting for me. Having
worked with both big conglomerates and small startups alike, I have garnered a thorough
understanding of how these portfolios work. This, combined with my academic
background, has equipped me with the skillset to bring about positive results in any team
I work for.

I also like to keep myself updated with promising, up and coming techniques and tools
used in marketing and sales.
Total Parco – Divine Filling Station by Laraib Javaid
Introduction

In today’s times, petroleum has somewhat become essential for any economy to survive.
Petroleum is also widely known as crude oil which is used to burn in order to get energy for
various consumption purposes including manufacturing and driving a car etc. Just like natural
gas and coal petroleum is also a fossil fuel that is formed over a course of millions of years
with heat and pressure applied on organic remains which turns into carbon-rich substances
which is further cleaned and processed into fuel for usage. Generally, crude oil is often
restricted to liquid form only but technically petroleum also includes some content of gas and
bitumen which are extracted by oil refineries like PARCO for end users.

The economic foundation of every nation is its petroleum reserves. With a per capita oil
consumption of 41.9 gallons, Pakistan is the world's 33rd largest oil consumer. Pakistan has a
significant hydrocarbon potential, the majority of which is untapped. The first recoverable
reserves were estimated by the technical assessment to be 1,515 million barrels of oil. A sizable
sedimentary expanse exists in Pakistan. A total of 1,123 exploration wells and 1,496
appraisal/development wells, with an average drilling density of 3 wells per square kilometer,
have been completed so far. It's interesting that these wells have produced 411 discoveries with
a reasonable success rate. Indus Basin has the majority of these wells about 95% of them while
Baluchistan, Khyber Pakhtunkhwa, and the offshore regions have less.

Transportation, energy, and industry are the three primary applications of petroleum in Pakistan
where the transport sector comprises 60%, the power sector 32%, and the industry sector 8%.
There are a total of five refineries in Pakistan including Pak Arab Refinery Limited (PARCO),
Attock Refinery Limited (ARL), Byco Refinery Limited (Byco), National Refinery Limited
(NRL), and Pakistan Refinery Limited (PRL) contributing a total capacity of 19.37 million
tons.

Background & History (Oil & Petroleum)

Pak-Arab Refinery, mostly known as PARCO emerged as a private company back in 1974 as
a joint venture between the Pakistani government and an Arab investment company, Mubadala.
The shares are divided such that Pakistan owns 60% of the company and the rest of the 40%
lies with UAE. As the name suggests, is an oil and gas refining company. Their major business
offerings include crude oil refining, transporting, storing, and marketing. It is one of Pakistan’s
biggest and most strategic oil refineries producing around 100,000 barrels of oil per day, with
a storage capacity of over one million tons. The organization includes 2000 km of cross-country
pipeline network, including that of its subsidiary PAPCO, and Pakistan's second-largest
refinery (after Byco Petroleum Pakistan Ltd.'s ORC-2). To guarantee that the diesel generated
by the refinery complies with worldwide Euro-II standards, the firm installed a Diesel Hydro
Desulfurization Unit in 2010. In 2012, PARCO also put into operation a Biturox plant that will
generate bitumen for paving roads.

By purchasing SHV Energy Pakistan's entire share capital in September 2012, Pak-Arab
Refinery completed its first purchase. SHV Energy Pakistan had previously been Pakistan's
largest LPG marketing company and a strategic partner of PARCO since 2001. On April 12,
2017, the company declared that it would upgrade its refinery outside of Multan, Pakistan,
using Honeywell technologies to create fuels that burn cleaner. A modern refinery with a
capacity of 250,000 barrels per day and an estimated cost of more than $5 billion was built by
Pak-Arab Refinery in 2019 close to Hub, Balochistan.

Over the course of years, PARCO also extended itself as a company with its range of
automotive and industrial lubricants which were launched back in 1999 and Total Energies
Marketing and Services has successfully marketed the whole range.

Number of Filling stations in Pakistan

According to Daily Pakistan Newspaper (Ali, 2016), a total of 7,560 filling stations are
currently working in Pakistan. Their job is to facilitate consumers at any cost and make sure to
fulfill their needs and demands on a daily basis.
Initially, the government was encouraging the establishment of petrol pumps, as the demand
was highly increasing day by day but due to the current situation occurring in the country, as
the fuel prices are changing drastically and consumers are reducing vehicle consumption which
highly affects the development of new filling stations. Out of 7,560 filling stations, 3500 are
serving the Public sector and the remaining stations are serving the bulk of wholesale
consumers.
Oil Industry in Pakistan

Although Pakistan has five huge oil refineries they are not able to meet the demand of the
economy of the country. The reason is that they are not able to reach their full potential due to
both financial and technical issues. As for the financial aspect, the prevailing debt is an issue
and on the technical side all refineries except PARCO are operating on their older facilities and
their main product is not petroleum but naphtha which is considered to be the cheapest form of
fuel. PARCO is a joint venture between the Pakistani government and a UAE-based Investment
Company, Mubadala where Pakistan owns around 60% and UAE 40%. Significant shares of
National Refinery Limited and Attock Refinery are owned by Pharaon Investment Group
Limited.40% of the shares are currently owned by the Abraj Group. One of the Byco Refinery's
founders, Perviz Abbassky, now serves as the company's CEO alongside his son Amir. Pakistan
State Oil is in charge of and owns Pakistan Refinery Limited. The PSO owns nearly 62% of
the shares.

Therefore, Pakistan’s energy sector is highly reliant on imported fuel in terms of petrol and
LNG and is expected to stay this way for the coming decade or two. The total capacity of local
oil refineries in Pakistan is around 19 million tons only. The rest of the 80% of demand which
is around 8.09 million tonnes is fulfilled by importing crude oil and petroleum worth $15 billion
to $16 billion annually.

OGRA and its role

OGRA is Pakistan’s Oil and Gas Regulatory Authority established back on 28th March 2002. .
The Authority of OGRA is the only entity with the authority to issue permits for regulated
activities in Natural Gas, Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG),
Liquefied Natural Gas (LNG) and other oil sectors. These tasks include building pipelines,
creating a transmission and distribution network, selling and storing goods, and more for CNG,
LPG, and LNG, etc. Some of the significant functions of OGRA include
● Determining the necessary revenue, setting the natural gas utilities' mandated pricing,
and notifying customers of those charges
 ● Calculating and communicating ex-refinery prices for SKO, E-10, and ex-depot prices
for all products, as well as the Inland Freight Equalization Margin (IFEM)
● Keeping an eye on petroleum product pricing in a deregulated environment.
● Enforcement of technical requirements and standards across the board for all regulated
operations.
● Resolution of public grievances and disagreements between and against licensees and
against licensees.

Main oil Marketing companies in Pakistan

All the oil companies in Pakistan are working day and night to establish their names on top of
the Oil industry as they are competing with each other to become one of the leading petroleum
companies in Pakistan.
The most well-known companies that play a major role in the economical and social
development of Pakistan are Shell, PSO, Attock Petroleum, Total Parco, Mari Oil and Gas
company, and Dewan Petroleum are included in it (ARIFEEN, 2018).
Pakistan is considered one of the richest countries in the world, in terms of preserving a huge
amount of oil and gas. The availability of such resources benefits the country's economic and
social development as a whole. Total Parco and PSO are the major key players in supplying
petroleum in all over the country.
Supply chain of oil
In the supply chain process of oil, first, it is transported to the storage which in other terms is
called a depot, and then to the refineries, and from refineries, it is shifted to the terminals and
finally to the sale of point which the petrol pump.
Divine Filling station
Divine filling station is a dealer franchised operated company by Total Parco. It is located near
Airport, DHA Metro. The company plays a major role in it because the company’s name is
associated with this franchise's dealership. If any sort of problem occurs, it will directly affect
the company's name.
The company keeps an eye on every filling station whether the particular dealership is
maintaining its quality or not. The product usage is good enough to satisfy their customers and
cater to them well. These types of checks and balances are maintained by the quality assurance
department which is responsible for this whole process. The quality control van visits three
times a month on a particular filling station. A laboratory installed in a van, checks the quality
measures of the filling stations. The capacity of the oil is ordered one day before so that they
have enough fuel to entertain their customers well. The capacity of the fuel tank is almost
40,000 per tank and Total Parco makes sure to have an extra capacity of 40,000 available at
their petrol stations in case of emergency like Road blockage, Protests, etc.
There is a separate complaint department made by the company itself, to listen to the
complaints about the filling station and their dealership especially. Strict action will be taken,
if the customers are not satisfied with their services.
CEO and Area Vendor pay surprise visits to check if the dealer is working well. According to
the Interviewer, Total grip and Customer retention are quite good compared to other pumps.
The Profit margin is the same for everyone and is fixed by the company itself, which is 7
percent and after taxes, it will reduce to 5 percent.
A total of 50 staff members are working in the divine filling station with 8 hours shifts and a
total of three shifts take place within 24 hours, and this is the best thing that they are doing.
Two managers, 1 cashier, 1 Fore Coat managers, and the shift In-charge are the main persons
available 24/7. Divine filling station is the first petrol pump that gives you refunds and this
action is taken by the owner itself, not a company. Training is given to workers within a month
like Fire extinguishers etc. by the company to train them to handle difficult situations.
According to the owner, they do not hire trained workers, they prefer to hire freshers because
they can mold themselves accordingly. As they can work according to dealers' choice. It is
easier to train them. Stipends are 20 thousand per shift and one-time food is given to them
according to their shifts.
Currently, single units of 4 Alies are working, and at every Alie two fillers and one helper is
available with two cashiers. The process is very smooth and flexible. The customer with the
cars is the most frequent one, because of trust and loyalty. Their filling station will never get
closed, doesn't matter if prices go up and down.

Problem and Bottle Necks

The Divine Filling Station because of its location caters to a large number of customers and the
peak rush hours are the morning school/ office time and at evening i.e. 5 pm to 6 pm which is
also considered as the rush hour. During this time the inflow of customers’ increases and it
becomes difficult for the fillers and the staff to manage the customers at the Islands as a result
the forecourt gets crowded. This not only interrupts the smooth running of the operations but
is also time-consuming and the customers often avoid such filling stations which are
overcrowded.

The Divine Filling Station has 4 Islands operational with 2 dispensing units each while 2
Islands are not operational. At each Island, there are two fillers, 1 who is responsible for filling
the fuel and the second who attends to the customer at the car and cleans the windscreen. There
are two cashiers who are responsible for all the cash dealings at the entire forecourt. When a
car arrives at the island, the filler comes to the windscreen and asks the customer about how
much fuel and then goes back to the dispensing unit to fill the fuel at the same time the second
filler comes to clean the wind screen and once the fuel is filled then the cashier arrives or the
filler gives the money to the cashier. This entire process takes almost 10 minutes for a car to
enter the forecourt and leave after refueling.

The following process flow chart (See Exhibit 1) shows the entire operations which are carried
out at the forecourt from the customer entering the forecourt, getting the tank filled and leaving.
There are several bottlenecks in this process. The first bottleneck is at the entrance of the
forecourt, when the cars enter the forecourt, they need to be directed towards the empty Islands.
The entrance of the Divine Filling Station is also very small as it has expanded vertically. When
there are more cars, especially during rush hour, the entrance gets jammed whereas the islands
are still empty.

Secondly, the fillers at the Island focus on only 1 car at the Islands whereas the second
dispensing unit is also free and the customer at the second unit needs to wait. Lastly, the filling
process and cash collection is time taking and it causes trouble during rush hour, and managing
the customers becomes difficult.
According to the current process flow chart, the average time taken by a car to enter the
forecourt and leave after refueling is 9 minutes which may vary from car to car depending upon
the tank size. This experiment was conducted on Suzuki Wagon R.

We can clearly see that there is a bottleneck at the beginning when the customer has no idea
about the empty island and takes time to reach the empty island and during the process, any
traffic causes the delay. This delay is then carried forward as the car may reach such an island
where the filler is not present and it takes time for the filler to reach the island and attend to the
customer.

The second bottleneck is seen at the stage where the windscreen is cleaned and the payment
needs to be done. There are only two cashiers at the Divine Filling Station and it takes time to
bring any cash/change also as told by the manager at the Divine Filling Station, daily sale
through cards payment is more than 0.25 million so whenever the customer needs to make a
card payment, the cashier especially has to come to operate the card scanning machine.

Reason behind the bottlenecks:

After conducting the interviews, we found out that there are two main reasons behind the
bottlenecks. Firstly, the staff retention ratio at the Divine Filling Station is very low as the
fillers keep on switching jobs although they are compensated very well by the management of
the Divine Filling Station through better wages, lunch/ meal allowances, and residence if
needed. Although there are several training programs by Total Parco Pakistan Limited for the
fillers and the staff in order to ensure smooth operations and make the experience better for the
customers, still no such initiative is taken by the management to motivate and educate the fillers
and the staff.

Secondly, the role of the floor manager is very restricted and he is not much involved in what
fillers are doing, he just makes sure that there is no major incident at the forecourt. Now
whenever new staff comes, it becomes difficult to train each and every staff individually.

Possible Solutions:

We suggested some changes to the operational processes at the Divine Filling Station which
reduced the average filling time from 9 minutes to 6.25 minutes. (See Exhibit 2)

First of all, divine filling station needs to revamp its whole Infrastructure as it is expanded
vertically and the customers cannot see the empty islands while entering. It isn’t feasible to
place a warden near the forecourt for customer guidance. They should Installed sign boards so
that customers could easily follow them. Secondly, the car will go to the island where the filler
is already present and as a result, the bottleneck at the start of the process is removed. Then in
order to further smoothen the process, the staff member is responsible to clean the windscreen
will ask the customer how much fuel they want to get and will communicate it to the filler.
This will save time when the filler comes at the driver's end and goes back to fill the fuel. The
customers of divine filling station should have their Total Card so the filler does not need to
ask them either they are paying through cash or card. This step in the process removes the
second bottleneck and the time taken at the payment stage is reduced. If we combine the entire
time of the process, it becomes 6.25 minutes which is 2.75 minutes lesser than the normal
process time which is being carried out at the Divine Filling Station.
Results:

After the implementation of the above-mentioned changes in the process, the operations at the
Divine Filling Station became more efficient and all the changes were very effective as the
customer inflow was easily managed during rush hours and the total time will further reduced
to 5 minutes. The main difference in the average filling time is explained as follows:

Before Implementation of the changes

Throughput time

Car reaching the Island + Filler reaching the driver mirror + Filler going back and starting
to fill the fuel + Staff member cleaning the windscreen + Filler coming to collect cash +
Receipt collection + Car exiting the forecourt

2 + 1 + 1.5 + 1 + 3 + 0.25 + 0.25 = 9

Cycle Time

Car reaching the Island = 2 mins

Filler reaching the driver mirror = 1 min

Filler going back and starting to fill the fuel = 1.5 mins

Staff member cleaning the windscreen = 1 min

Filler comes to collect cash = 3 mins

Receipt collection = 0.25 mins

Car exiting the forecourt = 0.25 mins

After Implementation of the changes

Throughput time

Car reaching the Island + Staff member asking the customer about fuel and cleaning
windscreen + Filler starts filling the tank + Staff member cleaning the windscreen + Filler
comes to collect cash + Receipt Collection + Car exiting the forecourt

0.30 + 1.5 + 1 + 1 + 2 + 0.20 + 0.25 = 6.25

Cycle time

Car reaching the Island = 0.30 mins

Staff member asking the customer about fuel and cleaning wind screen = 1.5 mins

The filler starts filling the tank = 1 min

Windscreen staff asks if card payment or cash = o mins

The cashier comes to collect cash = 3 mins

Receipt Collection = 0.20 mins

Car exiting the forecourt = 0.25 mins

Exhibit 1

Figure #1
Bottleneck
Bottleneck

Car reaching the Filler reaching the

Island Filler going back
driver mirror
and starting to fill
2 min 1 min the tank
2 1.5 min 1.5 min
20 min
Bottleneck
0.4mins

1.5member
Staff min
Filler comes to cleaning the wind
collect cash screen

1 min
Bottleneck
0.5 min
Bottleneck

Card Payment Cash Payment

2 min 1 min

Bottleneck Bottleneck
Receipt Collection
0.25 mins

Car exiting the

forecourt
0.25 mins

Source: Process Flow Chapter (showing operations at Divine Filling Station)

Exhibit 2
Figure # 1

Staff member
asking the
Car reaching the
customer about
Island Filler starts filling
fuel and cleaning
the tank
0.30 mins wind screen
1 min
2 1.5 min

20 min 1.5 min

Filler comes to
Wind Screen
collect cash
Staff asks if
card payment 1 min
or cash

Card Payment Cash Payment

1 min 1 min

Receipt Collection
0.20 mins

Car exiting the

forecourt
0.25 mins

Source: Process Flow Chapter (After implementation of changes at Divine Filling Station)
Exhibit 3

Figure # 1

Figure # 2

Figure # 3
Figure # 4
References
Ali. (2016). Do you know how many petrol pumps are operating in Pakistan? Journal of Media.
ARIFEEN. (2018). Oil marketing companies playing a pivotal role for economic growth.
Journal of Economics & Marketing.

MIRO BOARD
 LARAIB JAVAID
160- Ahmed yar block Mustafa town, Lahore · 0333-4594657
laraibjavaid6@gmail.com · https://www.linkedin.com/in/laraib-javaid-17883a178/

Ad d
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I have done my bachelors from Lahore School of Economics and now I am doing my
Masters from LSE as well. I have done three Internships of Marketing, one in Shopistan
one in Brandpa, and the other one in Punjab Revenue Authority (PRA). Currently, I am
working as a Senior Sales Executive in a Software house named Creative Bun
Technologies (CBT). Hopefully, after completing my MBA from LSE I will be able to
get a better job in one of the Multinational company. Although, my dream is to work in
Pepsi, either in their sales or marketing department.
Flowers Affairs: Shifting from Outsourcing to In-house Sourcing Analysis
by Saad Saqib and Shanzay Mazhar
Overview
Floriculture is gaining popularity in Pakistan and where its export is contributing to the GDP
of Pakistan, locally flowers are sold through multiple Florists. Flowers Affairs is one of those
florists and they started their operations in 2021. From selling bouquets to now entering into
the event management segment, Flowers Affairs has come a long way in such short time span.
This case study analyzes the supply chain operations of Flowers Affairs to see how they are
managing the three main attributes, time, cost and quality. Currently they are outsourcing the
entire supply of flowers from multiple vendors but this is impacting their time, cost and quality.
Recently, Flowers Affairs diversified their services and entered in to online market place.
Furthermore, they diversified their business by entering in to event planning. Because of the
increase in demand due to sudden expansion; their supply chain is exposed to serious problems.
Through an in-depth analysis of the problems, a decision is to be made either to keep
outsourcing the flowers or shift to in house sourcing of flowers.
Company Background
The journey of how Flowers Affairs grew from a simple flower shop to a full fledge customized
bouquets and event planner was full of challenges. It was February, 2021 when the founder of
Flowers Affairs started off selling flowers in its very first branch on Barki Road, Lahore. With
a highly competitive market where many existing flowers shops had won the trust of many
clients, it was challenging for the owner to make Flowers Affairs No. 1 choice of customer.
Flower gifting was relatively a niche market with very few people heading towards a fancy
shop to buy flowers for their loved ones when there were other local vendors available.
To achieve what they aimed for, they started off by getting fresh and unique flowers from the
vendors and transformed them into a bouquet that the customers demanded. Where the current
location seemed to be a market with no other flower shop nearby, it was seen as a great
opportunity for the founder to sell premium flowers to the residents of Paragon City as well as
the nearby residents of Cantt and Defence.
At the start, there were only 3 employees hired to take this flower shop forward, but after seeing
the growing demand and competitiveness, where most of the competitors were spending a lot
on marketing and expanding their product portfolio, Flower Affairs also hired people for
Marketing and handling operations. Soon afterwards, the team of three employee grew to 10
employees that were heavily invested in making flowers Affairs one stop solution for flowers.
There was huge potential in the event planning industry and being a seller of flowers, it wasn’t
hard to enter into this market but due to less capital Flower Affairs wasn’t able to enter into
event planning until March 2022, when they were able to reach breakeven in finances and they
started offering event planning services as well.
For the initial 6-to-8-month company suffered huge losses mainly due to the adverse impact
COVID-19 left on the market but they were able to recover from it. In September 2022, they
opened another store In Gulberg 2 that was considered to be one of the main business hubs of
Lahore. The market here was saturated, but it seemed promising for earning good profits.
Industry Analysis
In Pakistan, horticulture and floriculture account for 6% and.5% of all agricultural production,
respectively. Evidently, the number of flowers produced daily is rising due to the increasing
demand of flowers for multiple uses. The flower and other decorative crop producing sector is
primarily centered in and around the following major cities: Karachi, Hyderabad, Lahore,
Rawalpindi, Islamabad, Multan, Faisalabad, and Quetta. (National Agricultureal Research
Centre, NARC)
Large tracts of these crops are being grown in places like Pattoki near Lahore, Sahiwal in the
Sargodha district, and areas close to Hyderabad, giving these sites increased importance. The
southern region of Pakistan has a well-established industry for producing dried rose petals.
Since several decades ago, this industry has advanced. The cut flower industry in Pakistan is
traditionally based on field cultivation. The domestic cut flower market is still developing and
relatively small, with a limited product selection that includes rose petals, marigolds, roses,
jasmine, tuberose, gladioli, day lilies, and narcissus in season (Exhibit 1).
The production percentage of some of these flowers can be seen in Exhibit 2. One of the most
popular cut flowers both domestically and internationally is the rose. Markets and demand for
cut flowers have dramatically increased during the past ten years. Be it event planning
businesses or domestic use of flowers as gifting, the suppliers are enjoying great profits from
their sales to multiple vendors and direct supplies to flower shops. The flowers are grown and
then their wholesale in done in auctions. The per flower rate offered by these people in 2022 is
Rs. 2 per flower. The vendors or retail buyers visit these Mandis themselves and get different
flowers in bulk. The cost is PKR 235.16 per kilogram in Pakistani Rupees. A ton typically costs
US$ 1528.54 in Lahore and Islamabad. Generally the local florists state that they sell a lot of
flowers (3000 to 4000 per day), most florists spend more than Rs. 20,000 per day on this
company, which indicates that they are doing well because they typically make 80% profit
most of them earn more than three lacs each month from this business, but the government
does not provide any assistance for it to grow (Farooq and Kamal,2020)
The fresh cut flowers in Pakistan are not only supplied domestically but they also have a huge
export value. Between 2015 and 2019, the value of fresh cut flowers in Pakistan increased by
58% annually, while the quantity increased by 98% annually during the same time period. The
total values in export for fresh cut flowers in Pakistan were US$ 1,137, US$ 780, US$ 1,722
and US$ 1,446 in US dollar thousand for the years 2016, 2017, 2018 and 2019 in that order
(Selina Wamucii). The growing value of the exports can be seen in Exhibit 3.

Many local florists have emerged in the market and they deal with local as well as imported
flowers such as Blossoms, Gulbaan and the flower studio. The traditional selling of just
bouquets is no more a factor giving competitive edge to these florists but the increasing demand
among the customers of bouquets, customized gift baskets and event decorations have
increased the opportunities and every florist is now offering all these options to not just cater
customer demand but also gaining huge profits.

Current Competitors

There are many emerging players in the florist market and they have a dominant place in this
industry. Flowers Affairs is relatively new florist shop and it is striving to compete some of the
existing names.

One of the oldest names in the Florists in Lahore is Blossoms. After receiving a lot of interest
from the general public regarding their modest work here and there, the first retail location of
blossoms opened in 1999. It was founded by two brothers, Mr. Ashfaq Nazir and Mr. Irfan
Nazir. Since then, they have not just served by selling bouquets, but they have grown into a
full-service flower specialist, serving both individual and business clients. They owe a large
portion of their success to its exceptional customers who inspire them to create distinctive and
eye-catching products and combinations. They expanded their operation in the events line after
seeing great opportunity in the business of decoration. They collaborated with Al-Jannat Event
Management to form a team to execute the decoration for high profile parties to wedding
events. They already had an advantage of being in one of the best locations of Lahore, Mini
Market and their huge clientele that led them to grow successfully in event decoration segment
as well.

Another major competitor of Flowers Affairs is Gulbaan. The stepped into the market with
their fresh, premium flowers that they sourced from their farms. They were one of the first ones
to establish new standards for flower purchasing and flower gifting and they further expanded
their offerings to customized boxes, bouquets, vases and gift sets. They are acting as a one stop
solution and a brand name that can be used synonymously to gifting. In order to gain
competitive edge, they established a website through which the customers can online view
multiple packages and get them delivered to their door steps in Lahore. From floral jewelry to
farmers box, they have ensured that they offer something that no other competitor is offering
and that made them one of the top florists in Lahore.

Supply Chain Management at Flowers Affairs

Flowers are grown in ‘Pattoki’ by different farmers and every morning at 6:00 am, auction is
done in Mandi. One of the biggest Mandi in Lahore is at Saggian Bypass. Market is held on 7
days of the week. Farmers bring their flowers to display at auction where per day rate is decided
based on the demand, availability and weather conditions. Bidding process is as simple as it is
for other products. It starts after weighing the flowers and based on the day’s rate whole process
is carried out and vendors get hold on to the flowers at a very reasonable price.
The rate of flowers varies by type, freshness, demand, competitor’s prices and availability. On
average, a typical red rose of high-quality cost 2 rupees and a bundle of 50 red roses cost around
100 rupees. This market is highly inefficient as the probability of making abnormal profits is
really high. On the days of bad weather forecast the rate of flower goes up to 5 rupees.
Similarly, on weekends when the market is really fast then rate of flowers varies each hour and
sometimes after each 30 minutes. During Covid, flowers available in the market for auction
were less as compared to normal days. The main reason was the lack of growth of flowers
because of unforeseen circumstances and non-availability of fertilizers for crops. Hence, rates
of flowers during the Covid were high.
Flowers Affairs is currently operating at Operational Level of supply chain. 100% of their stock
is outsourced through different vendors. These vendors source flowers by directly visiting
Mandi’s and by participating in the bidding process. As the business is still in growth stage
their primary decision to outsource the flowers from vendors is based on their less labor force.
Furthermore, time, cost and quality are the three key factors which were kept in mind while
taking the outsourcing decision.
The flowers market is very well concentrated as well as risky on the same side. The life of high
quality locally produced red rose is around 3 days while it is a little less for white roses. Their
life is 2 days based on Pakistan’s temperature and environmental factors. Initially, the decision
of outsourcing was very fruitful as Flowers Affairs did not have much capital to setup their
own departments so they relied on outsourcing the flowers from different vendors. Another
main reason of outsourcing the flowers through different vendors was based on the Time, Cost
and Quality optimization. In the start, they were optimizing all three elements till their
breakeven reached.
Because of having low capital, Flowers Affairs wanted to reduce their time consumption in
procuring the flowers while keeping the quality as their top priority. Moreover, having less
labor and to reduce the cost Flowers Affairs model relied on outsourcing. But now it has started
backfiring them. After the high demands of their Bouquets in other geographical regions of
Pakistan the outsourcing has become a big challenge for them.
The entire flow of supply chain is shown in Exhibit 4.
Issues in Supply Chain
Time
The life of a typical high quality red rose is around 3 days. Flowers Affairs has no contract with
the vendors and their supply is reliant on pull strategy were based on demand they procure the
flowers. This process is safe in the sense that the capital is not bound and it is in maximum
circulation. Even if the company needs flowers every day, the vendors are capable of delivering
it. After getting hands on to the inventory, the stem of the flower is half cut and the flowers are
placed in fresh water to increase their life. This process increases the life of a red rose by 6-7
days on an average whereas life of white rose in comparison increases by a couple of lesser
days. Hence, there is a higher risk associated that consumers will not be getting the fresh
flowers in their Bouquets.
Furthermore, vendors sometimes delay the supplies in response to finding cheaper flowers from
‘Zimedar’s’. Instead of going to Mandi, they try to source flowers directly from farms to
increase their profit margins. Now-a-days, Flowers Affairs acquire the 2-rupee flower in 5
rupees from the vendors. Hence the profit margin is 3 rupees if sourced right from the Mandi.
But to get more profit, vendors try to source flowers directly from ‘Pattoki’ farms. Because of
long negotiations and more complex process of acquiring the flowers, the overall supply is
delayed to Flowers Affairs and hence the delivery time to customers is increased.
Some big brands like Blossom have higher demand of their products so vendors mostly run out
of their stocks and Flowers Affairs couldn’t get the inventory they need. According to the
company’s policy, if company fails to deliver the product to consumer because of having
backlog in inventory then it has to pay 20% of an additional amount in addition to the payment
made while placing the order. Hence, the ‘time’ and ‘cost’ element of supply chain
management fails to meet its requirements and company has to suffer.
Quality
An incident took place recently that shook the company’s employers. Spider Mites was found
in one of the roses which bit the brand manager of Flowers Affairs at Barki Road Branch and
he got severely ill for 14 days. Upon the research, it came to the perspective of the company
that this insect is often the cause of death if treatment is delayed. Aphid insect is also common
in white roses which can cause serious damage to the skin. It can cause rashes and severe
allergy if treatment is delayed. While buying flowers from the brands, consumers expect high
quality and less risk of allergies. Hence, the ‘quality’ perspective of supply chain management
came in to the play and along with time and cost now quality is also the primary concern of the
brand.
Cost
Another issue that highlights the poor performance of supply chain arises when on weekends
these vendors control the inventory and does not release it to brands. It boosts the hourly rates
in the market and brands have to negotiate and buy the same 5-rupee flower in 7-8 rupees. To
rectify this, brands mostly buy inventory in bulk in week days and try to enhance the life of
flowers by artificial means so to make their supply chain more effective. Hence, the consumers
don’t get superior quality products on weekends.
Recently, sudden expansion of Flowers Affairs has created a lot of backfires in their supply
chain management. After the decision to diversify their services and move towards event
planning, the company has started to realize the need of in-house sourcing mechanism. Event
planning demands a more advance flow of inventory so they cannot rely on vendors for much
time now. Also, it is the matter of brand perception where they diversified their portfolio and
moved to a new category. So, to build a positive image in the minds of the consumers, company
has to optimize their time, cost and quality mechanism. Furthermore, increase in surplus of
supply chain members is low and the risk is very high so in house sourcing is the most viable
option for them at this point of time.
Switching to In-House Sourcing
The demand of flowers has been increased significantly because of sudden diversification of
Flowers Affairs in to event planning and online platforms. Before diversification, the demand
was 10,000 flowers per month. So outsourcing cost was 10,000x5=50,000 rupees per month.
If it were sourced in house, then the cost could go up to 80,000 rupees per month. But in last
month, their demand has increased up to 30,000 flowers per month for which the outsourcing
and in house sourcing cost are shown in Exhibit 5.
Clearly as the demand increased to 30,000 flowers, the in-house cost is significantly lower than
outsourced cost through vendors. It puts Flowers Affairs at an edge so if they develop a
mechanism to source flowers internally, they can even set the prices of their Bouquet a bit
lower than their competitors to gain competitive edge in the market. It will lead to operational
effectiveness as well. Flowers Affairs will utilize its resources in more effective way to achieve
cost leadership in the market. Hence, the cost element of supply chain will be more effectively
and efficiently managed. Based on last month’s demand, the prices for bouquet and profit
margins are calculated in Exhibit 6. The profit margin is higher at this demand so the price of
bouquet can be lowered in week days and can be increased on weekends based on competitor’s
prices. After doing so, Flowers Affairs will still be able to generate more profits than they were
achieving while outsourcing.
Recommendations
Shifting to in-house sourcing of flowers will lead to a better quality and time management.
Based on the demand and market rates, Flowers Affairs should choose to source flowers daily
as well as on alternate days which will increase the quality of flowers delivered to the
customers. Also, the effect of manipulation of prices on weekends will be minimized. Time to
source the flowers will be reduced which will make supply chain more efficient. Hence, all
three factors of supply chain Time, Cost and Quality will be optimized.
Moving Towards Sustainability
In order to be competitive in the market and beat the already existing florists it is very important
for flowers affairs to go towards making a sustainable business. It all incorporates using
techniques that could help flowers affairs gain the competitive advantage in the market. In the
future, flowers affairs should focus on getting their own flower seeds and growing flowers
inhouse. They must also look for ways to increase the life of flowers by using essential nutrients
and then dipping the cut stem of flower in it. This powder of nutrients can also be given to the
customers along with a bouquet so that they can preserve the flowers at their homes.
Furthermore imported seeds can be used which will increase the shelf life of flowers when
placed along with water.
Looking Ahead
Demand of Flowers Affairs is expected to increase significantly and hence they need to devise
a mechanism and setup their departments accordingly. They need to hire employees who will
be responsible for bringing flowers from the market on daily or alternate days’ basis. This will
not only help them maintain the quality of flowers but a direct control of their supply. In future,
there will be a need to setup own Supply Chain Department for smooth flow of the materials.
References
Farooq, S., & Kamal, M. A. (2020). Analysis of Cut Flower Industry in Pakistan: Market
Mechanics for Availability, Freshness and Customer Preferences. Journal of Xi'an University
of Architecture & Technology. https://doi.org/12
https://agris.fao.org/agris-search/search.do?recordID=PK2007000852
https://tribune.com.pk/story/771551/budding-industry-opportunities-grow-in-blooming-
flower-market
https://www.selinawamucii.com/insights/prices/pakistan/fresh-cut-
flowers/#:~:text=In%202022%2C%20the%20approximate%20price,is%20PKR%20235.16%
20per%20kg.
https://greenworks.pk/floriculture-in-pakistan/
https://www.selinawamucii.com/insights/market/pakistan/fresh-cut-flowers/
Exhibit 1

Figure 1. Images taken from the visit to Flowers Affairs

Exhibit 2

Figure 2: Types of Flowers

Exhibit 3

Figure 3: (Selina Wamucii, Pakistan fresh cut flowers market insights)

Exhibit 4
Lose
Open Market

90 mins 60 mins
Lahore Mandi Auction/Bidding
Patoki Farms

Win

Vendors

60 mins

Storage

1 Day

Flower Affairs

Figure 4: Supply Chain Flow

Exhibit 5

Figure 5: Cost Calculations

Exhibit 6

Figure 6: Profit Calculations

 SHANZAY MAZHAR
Lahore · 03234102354
shanzaymazhar@gmail.com · https://www.linkedin.com/in/shanzay-mazhar-23a152241

A
dd Picture Here

I am Shanzay Mazhar, from Lahore, Pakistan. I completed my bachelors in Marketing

and Media Studies from Lahore School of Economics in the year 2022.Currently I am
completing my MBA from the same institute and would graduate in the year 2023.
During my bachelors, I explored many fields of the corporate world by doing internships
in the companies like Global Education and Migration Services where I handled their
social media accounts and got exposure to social media marketing. Later I joined
Absolute Solutions, an IT company as an HR intern where I got to closely observe the
crucial role of HR department and it helped me a lot with polishing my communication
and management skills. Recently, right before my MBA, I joined Xavor Corporation as
their IT sales intern. This internship not just gave me the sales experience but it has
taught me a lot about teamwork, meeting targets and improving communication skills.

From past 3 years I am also working as a freelancer on Fiverr and it has been a constant
source of motivation for me to learn new skills related to social media and helping out
the clients with their projects from all across the world. My passion to explore, learn and
groom my personality is a never-ending journey and the constant hustle to work
alongside studies has taught me time management.

My work experience as well as MBA has grown my interest towards marketing and sales
and I am constantly looking for more opportunities, either online or through my social
circle to get a deeper understanding of how these two disciplines work. After my
postgraduation, I am planning to step into the corporate world, be it marketing or sales
and serve the companies with all the skills I have learnt so far and continue to learn from
corporate professionals as much as I can.
 SAAD SAQIB
Gujranwala/Lahore · 03086625626
saadsaqib113322@gmail.com https://www.linkedin.com/in/saad-saqib-8a059b1b2

Picture Here

I am Saad Saqib from Lahore, Pakistan. I have done my Bachelors in Electronics

Engineering from University of Engineering and Technology Taxila (UET) Pakistan in
2019. Now I am doing my MBA from Lahore School of Economics.

After my bachelors I have worked with my Father in his business in Sales and
Distribution of Seeds in Areas of Sindh and Southern Punjab for 2 years. Then I started
my MBA at Lahore School of Economics. My MBA will end in May 2023. During my
Summer Vacations I worked with PEPSI Co. Naubahar Bottling Company Gujranwala
as a Summer Intern in Sales and Distribution Department for 2 months. I have worked
in 2 territories under Unit Manager and Sales Officers.

At Pepsi, I looked after the whole distribution process along with route planning by
doing daily market visits along with order bookers and sales officers. After I got done
with my first internship, I worked with Sapphire Textile Mills Limited as a Summer
Intern in HR Department in Centre of Expertise function for 2 months.

At Sapphire Textiles i designed Job Descriptions for Civil and Sales Department’s key
roles (Manager, Assistant Manager and Executive Positions). Furthermore, I made a
plan and conducted Employee Satisfaction Survey within the Organisation under
Employee Engagement. Also, i worked in other functions of HR as well which includes
Employee Training, Recruitment and Selection, Orientation, Shared Services and HR
Business Partner.

At the end of internship, I was awarded with 2nd Position in Summer Internship Program
2022-2023.

Being an engineer, I am good with data and my interest now is in Operations and Human
Resource field. However, I’m open to work in Sales and Distribution as well.
Bright Metal Industries: Managing Operations in Post-Covid Pakistan by
Abdullah Butt and Muhammad Zubair
Introduction
In 2022, two years after the COVID-19 pandemic took the world by storm, Muhammad Abid
Butt, the running CEO of Bright Metal Industries stepped outside of the facility and pondered
over what the future had to offer. It was evident the after effects of the pandemic still lingered
on in the present day. With a volatile workforce, capacity problems and a lack of standardized
quality control, there was a dire need for change in the manner the factory’s operations were
being handled.
Company Background
Situated along the Grand Trunk Road and towering over a sprawling area of 15 Kanals, Bright
Metal Industries stands as one among many manufacturers fulfilling demand for everyday
kitchenware. (Exhibit 1). Established in 1952, Gujranwala's Bright Metal Industries (BMI) is
a family-run business. There are around 220 people working there right now. Muhammad Abid
Butt, the company's CEO and founder, has been running BMI since Muhammad Haji Yaqoob
Butt established it. Only creating aluminum sheets, BMI began their adventure. Nevertheless,
as a result of their diligence, they are now acknowledged as a top producer of non-ferrous metal
sheets (Aluminum, Copper, Lead, Zinc etc.). Additionally, they produce cookware, stainless
steel utensils, and hotel-grade aluminum products.
Cookware made of aluminum, which is also used for tools in the kitchen, is quite popular for
use in the kitchen. Because of its high thermal conductivity, low weight, and resistance to a
wide variety of types of corrosion, it is in high demand. However, utensils made of uncoated
or anodized aluminum have the potential to react with meals that are acidic. The assortment of
products includes every kind of aluminum utensil that is often seen in restaurants, hotels, and
other eating establishments including hospitals and schools. Cooking casserole sets, frying
pans, sauce pans, woks, backing discs, pressure cookers, and other similar items are among the
most important goods. These utensils are produced in a wide variety of dimensions, contours,
styles, and finishes, including metal, mirror, and non-stick coated options. Sonex, Casio,
Kitchen King, Chef, Majestic, Trophy, and Kiran are some of the major brands that are
produced in Gujranwala's aluminum utensil manufacturing industry.
Covid-19 & Business Issues
“Before Covid-19, the ruling government was that of Nawaz Sharif, heading the
Pakistan Muslim League-N (PML-N). It was during his reign we experienced a
prosperous business environment; a decrease in electricity loadshedding while
providing gas at favorable rates to the industries, leading to considerable growth and
a sharp hike in our exports.
However, with the change in government in 2018, we experienced a sudden shortage
in the supply of electricity and gas. On the other hand, the rate of the U.S dollar shot
up, leading to high inflation consequently reducing the price gap between us and our
international competition.”
In an attempt to explain the stark contrast in conditions, Mr. Abid further explained:
 “Before the change in government, if we were exporting 10 containers worth of our
products in a month, we can now only manage to send 4-5 containers.
The situation worsened with the spread of the pandemic. The global economy was
experiencing a downfall. Even now, two years after it first made news, the effects of
Covid-19 still linger on. It nearly destroyed the export-oriented businesses, especially
here in Pakistan. The recession in the international market has hampered sales, while
local demand has also faltered in the long run. With rising costs, Bright Metal has been
forced to use furnace oil as a substitute for burner gas. Right now our production has
slowed down, our costs are rising, but owing to our high quality we are still able to
manage competition in the international market.”
Concerning the plight of the Gujranwala kitchenware cluster, Mr. Abid continued:
“We have also requested the government at the chamber level to provide us (cookware
exporters) with relief, just as they have with textile manufacturers in terms of electricity
and gas subsidies. As of now, we have received no response, but we shall try again and
attempt to reel in their attention on this industry, since we contribute to the country’s
exports and bring in US dollars as well. For now, we are trying our very best to cut
costs at every step, but this may not be sustainable in the long run.”
Gujranwala & the Kitchenware Cluster
In Pakistan's Punjab Province, the city of Gujranwala is an important industrial centre.
According to PSIC (2016), in terms of the population density of Pakistan's metropolitan
regions, Gujranwala is the eighth most populated city. It has a border with Ghakhar mandi as
well as numerous other towns and villages, and it is located 226 meters (744 feet) above sea
level. Gujranwala is now subdivided into four (4) Tehsils that are referred to by their respective
names: Gujranwala, Wazirabad, Naushehra Virkan, and Kamonki.
The city's success in the industrial and agricultural sectors is attributed, in large part, to the vast
road and rail connectivity it has. Because it is located on the Grand Trunk (G.T.) road,
Gujranwala is able to maintain logistical linkages with neighboring cities as well as rural
regions.
The industry that produces kitchenware has developed throughout the course of time. Before
the nation's independence, utensils were often handcrafted. The ability to make various
implements was handed down from generation to generation. Gujranwala is now home to a
significant number of enterprises related to kitchenware, some of which date back decades. The
majority of the items that are produced by the Gujranwala kitchenware sector are made of
aluminum. These products include Pressure Cookers, Baking Sets, Frying Pans, Non-Stick
Cookware, Sauce Pans, Tawa, Steam Roaster, BBQ units, Mixing Bowls, Pots, Utensils, Milk
pans, and many more. The majority of these items are offered on the local market in order to
satisfy the requirements of the consumers there. When it comes to selling handcrafted
kitchenware goods to customers all over the globe, Gujranwala has a significant competitive
edge. (PSIC, 2016).
The Utensils Industry is mostly comprised of small and medium-sized enterprises (SMEs), all
of which are labor-intensive and semi-mechanized in their production processes. It is projected
that the Gujranwala aluminum utensils cluster produces a total of 60,000 tons of goods per
year, with only a capacity utilization rate of forty percent. Over 18,000 people in the area are
directly employed as a result of the cluster's existence. In terms of expenditures and revenues
associated with aluminum utensils, the costing of a typical utensil reveals that approximately
56% of the total cost is comprised of the cost of raw materials, 17% is comprised of the cost of
labor, 17% is comprised of the cost of gas and electricity, and approximately 10% is comprised
of the cost of administrative and operating expenses. While just around 8–10 percent of the
entire cost is what adds to the owner's profit margin on average, it may be a significant amount.
(SMEDA, 2019)
The demand for BMI goods fluctuates with the seasons, so the company keeps a close eye on
consumer trends and adjusts its supply and inventories to reflect those changes. By introducing
innovation and altering designs that its clients appreciate, BMI tries to hold onto and increase
its market share. In order to keep up with their worldwide suppliers' and consumers' speed, they
are likewise continually modernizing many parts of their business. To learn about various
industry trends and designs they might use, BMI also travels to foreign marketplaces.
Technology
The technology that is used by the cluster in Gujranwala is completely conventional and has
been around for a long time. The use of additional energy resources, such as sui-gas (natural
gas), and power charges has resulted in higher input costs because of the detrimental effect of
outdated technology. These expenses now exceed the benefits obtained from using the
technology. Major tools and machines used in the production process are as follows:
• Kilns/Furnaces
• Heat Rollers
• Hot rolling machines
• Cold Rolling machines
• Circle Cutting machines
• Hydraulic Rollers
• Edge Making Machines
• Buffing machines
• Polishing Machines
• Finishing machines
A technical understanding is necessary in order to conduct a needs assessment and purchase
the machinery and equipment that, depending on the potential of the business, are required. In
this regard, support in the form of technical advice is sought from the following sources.
According to the results of PSIC (2016)’s poll, around 80% of businesses purchase equipment
based on in house expertise. 12% percent of the sector use consultants. 4% of buyers are
influenced by the recommendations of the provider. While the remaining 4% use both their
own knowledge and the recommendations provided by their suppliers.
Labor
The industry that produces aluminum kitchenware does not need its workers to have a
particularly high level of qualification in order to carry out technical and managerial tasks.
Because of the semi-automatic nature of the technology, the technical operations are connected
with experienced HR personnel who have received training, a certificate, or certification in
grinding. On the other hand, management roles are often filled by owner managers. There is
an abundant supply of human resources, and talents are often passed down from generation to
generation. The majority of the workers have intermediate levels of expertise and are educated
on the job. In addition, smaller organizations do not have dedicated divisions for marketing or
accounting as larger ones have. Personal connections are the driving force behind the sales
generated by these units. Due to the improper maintenance of business accounts, this cluster
has a disproportionately high number of issues with regard to the filing of tax returns,
monitoring, and assessment.
The laborers in Gujranwala are highly volatile and opportunistic in terms of seeking out and
holding down employment opportunities in factories. This holds true especially for daily wage
workers, according to Mr. Abid.
“Take for example, an established manufacturing brand such as Sonex, which is more
likely to offer higher wages compared to smaller units in the cluster. This is because
Sonex experiences higher (daily) demand, accounting for relatively higher production.
The daily wage workers working in the factory would be paid in proportion to the
number of units upon which they perform their labor. Owing to the economic downturn
since Covid 19, the laborers are on a constant lookout for favorable wage rates in
surrounding factories, even if the increase is an incremental PKR 100-200.
Consequently, the laborers are more likely to quit their jobs at existing factories and
inclined towards joining the bigger factory, until a more favorable opportunity can be
found around the corner.”
Labor force absenteeism is one of the main issues experienced by manufacturers in this cluster.
Since the laborers comprise of village dwellers, they are much more susceptible to disregarding
their contractual agreements. Muhammad Abid observes most workers taking a day off on
Saturday, right after Friday without any plausible reason. He believes this is owing to a lack of
professional grooming, accountability and procrastination. When probed into and inquired
regarding their absenteeism, the laborers resort to citing fake ‘deaths’ within their village as
the primary excuse. Muhammad Abid draws a parallel between this excuse with what students
often use with their teachers to explain their absence as well. Ironically, the workers complain
of not being able to make ends meet for the week or month.
Interactions between the labor and top management (owners) is both a sensitive and crucial
aspect of managing the entire business. The nature of manufacturing businesses, especially
Bright Metals is such that they are highly dependent on physical labor working directly over
the machinery and equipment. Likewise, owing to the high concentration of factories in the
industrial cluster, there is a mighty abundance of employment opportunities. As a result,
laborers hold immense power when it comes to quitting and joining factories.
Similarly, it is imperative that all advisory and feedback functions directed at laborers should
be fulfilled by a ‘thekedaar’ instead of the top management. This is because the thekedaar,
albeit superior in hierarchy to the laborers, is perceived as a much more approachable and open
figure. In the event that an owner approaches the laborer to provide feedback regarding their
performance, the laborer might perceive it as an insult to his capabilities. A trivial remark
provided by the owner can cause the laborer to escalate the situation into a full-blown argument,
which can lead them to impulsively quit their job. Consequently, the laborer can persuade his
fellow laborers to accompany him in his initiative. This drastically impacts productivity and
increases labor turnover.
“Training organizations like TEVTA and others, as well as other similar groups, should
take an active role and work with the kitchenware industry to develop new courses.
Both businesses and universities need to work together on research and development.
New workers may be more interested in getting the skills they need if they know that
trained workers will be able to find jobs and be paid at rates, they are happy with.”
Mr. Abid continued:
 “With the help of new technology, it's possible to make the working conditions of a
company's employees better. The growth of an industry could give business owners and
managers a reason to invest in the health and safety of their workers and in the
infrastructure, they need to do their jobs. In terms of health, safety, and general working
conditions, export markets also need accurate assessments of the sector. In order to
teach the industry about these requirements, workshops need to be held. In the near
future, improvements should be made to health and safety, the environment, and the
infrastructure for transportation.”
Raw Materials
The category 3006 of aluminum is the most important raw material that is used in the
production of aluminum cutlery. Approximately 95% of this material is imported in the form
of aluminum ingots with a purity of 99.7% alongside scrap aluminum foil, window section
,cables, PVC, Aluminum Conductor Steel Reinforced (ACSR), kitchenware, UBC, and the
like. With the assistance of importers and dealers from Gujranwala, Lahore, and Karachi, the
sector is able to meet the demand for raw materials that it has. The raw materials are also
imported directly by some of the larger producers. Both scrap and chunks of aluminum are
brought in from all over the world, including Afghanistan, Russia, the United Kingdom,
Canada, the Middle East, the European Union, and Africa. In addition, the materials being used
packaging and the wood that is utilized in the handles are also employed as raw materials in
the production of aluminum utensils. (PSIC, 2016).
Raw materials, both domestic and international, may be purchased on a cash or credit basis
from the neighborhood market. Approximately 36% of businesses rely only on locally sourced
raw materials, over 32% utilize imported raw materials in addition to those sourced locally,
and the remaining industries use just imported raw materials.
Manufacturing Process
(Exhibit 4)
Melting and Molding
The raw aluminum is heated until it melts, then it is filtered to eliminate any pollutants. Finally,
the liquid aluminum is poured into the vertical rectangular molds, which are surrounded by a
jacket of water that cools the liquid and transforms it into a solid state. The Fireman is
responsible for maintaining the correct temperature.
Rolling Mills
These billets are first rolled in a hot rolling machine, and then they are rolled in a cold rolling
machine in order to give us with aluminum sheets of the desired gauge. The supervisor of
quality control maintains a constant watch to make sure that rolling is done within the limits
that have been set. The sheets that are taken out of the rolling machines may be rather lengthy,
thus a shearing machine is used to cut these sheets in half once they have been drawn out.
Circle Cutting
Once the sheets have been cut in half, they are further shaped into circles using a cutting
machine. The scrap metal left over during the process are then taken back to the furnace, molten
down and reused in the production of aluminum cookware.
Pressing
After the circular has been cooled, it is placed in a double action deep drawing pressing
machine where it is pushed into the required form. With the assistance of a variety of dyes and
a press machine, you may create almost any sort of form. After the aluminum circular has been
pressed, a cutter machine is used to trim the edges and corners of the aluminum utensils so that
they all have the same size and shape.
Brand Name Punching
On the product, the information and the business name are punched out by a machine that is
fully automated.
Polishing
After the product has been finished, it is taken to a "Polishing Section" where the top coating
of the aluminum utensil is removed so that the utensil may be polished to a sheen. It is also
feasible to avoid going through this procedure and instead anodize the product in accordance
with the specifications provided by the client.
Washing
The product is the washed properly in boiling hot water, dried and make ready for finishing
process.
Finishing Process
The worker will next secure the handle by putting pins through the holes that have been
punched into the product at the correct positions on the side of the product. After that, these
items are packaged into boxes in a manner that corresponds to the needs of the user.
Problems
a) Capacity Utilization Issues
Activiti No. of Shift No. of Avera Capaci Capaci Capaci Dema Utilizati
es worke (hour worki ge ty (per ty (per ty (per nd on Rate
rs s) ng time hour) week) month) (In
days for units)
activit
y
1 3 8 5 20 9 360 1440 12500 868%
2 2 8 5 2 30 2400 9600 10000 104%
3 3 8 5 1.5 120* 4800* 19200
* 10000 52%
4 3 8 5 1.5 120 4800 19200 10000 52%
5 2 8 5 0.5 240 9600 38400 10000 26%
6 2 8 5 0.5 240 9600 38400 10000 26%
7 1 8 5 0.5 120 4800 19200 10000 52%
8 2 8 5 1 120 4800 19200 10000 52%
9 3 8 5 3 60 2400 9600 10000 104%

120*= (60/1.5) *3
4800*=120* 8* 5
19200*=4800* 4
Utilization rate= Demand/Capacity
The table mentioned above provides details on the activities, including the typical amount of
time spent on each task, the number of employees needed to execute each activity, and more.
Demand for casserole pans from the company is anticipated to be 15,000 units during the
following month. They are, however, a little concerned about fulfilling the order because, as a
result of bottlenecks in a few activities, the order completion time per unit is exceeding the
average time. This could lead to a delay in timely order completion, which could annoy an
important customer and cause them to cancel their business with the company. On the other
hand, the capacity and utilization rate of each activity are both evaluated in order to determine
whether or not the activity is underutilized, optimally used, highly utilized, or overutilized. It
has been discovered that all of the other activities are being employed to the optimum level,
however activities 2nd and 9th are being utilized to an excessive degree, which results in
bottlenecks in the operations and required redesigning. (Exhibit 5).
b) Quality Control Issues
Bright Metal Industries began exporting in the international market early on and came across
European cookware products known for their high quality. They saw it as an opportunity to
research about the sanding (finishing) processes involved for non-stick cookware and took the
initiative to implement our learnings. They purchased relevant machinery and had them setup
back in our factory which drastically improved quality and helped us expand our product
portfolio as a whole. As of now, Bright Metal is competing on the same front against India
and China. In these neighboring countries, the labor and raw material costs are comparatively
high, which compels them to produce and sell at higher prices, whereas here in Pakistan, the
costs are low. This gives Bright Metal the upper hand (unique selling point), engaging in low-
cost leadership, when it comes to pricing their products competitively without compromising
on profit margins.
"Focused on Excellence" sums up BMI's mission. High-quality goods manufactured in
accordance with international standards are being offered by BMI on the market. They produce
solid, aesthetically pleasing kitchenware made entirely of aluminum. BMI is certified for ISO
14001:2004 & ISO 9001:2008 quality management systems. (Exhibit 7)
Because of their high standards for quality, their goods are not only utilized in Pakistan but are
also exported to other nations. The CEO of this firm informed us during our interview that their
significant output is sold to other nations, such as Afghanistan, due to the high quality of their
products. Due to the huge demand for their goods, they added three to four machines for each
minor manufacturing step, such as scratching, polishing, cutting, etc. These equipment imports
came from England. The timely operation of the machinery was the responsibility of two
operators per large machine. Machines were properly inspected twice a month as far as
maintenance is concerned to ensure that they continue to function. Five technicians and
engineers are also there, and it is their responsibility to ensure that all the equipment is
functioning correctly and, in the event of a technical issue, to repair the equipment as rapidly
as possible.
However, BMI does face their own fair share of issues. One being quality control. Currently,
it was being managed on the intuition and experience of the owners with negligible written
documentation and reporting of the processes.
According to PSIC (2016) , 52 percent of industries had ISO certification, whereas 44 percent
do not. On the other hand, around twenty percent of industries are making plans to achieve ISO
certification. In order to get into the worldwide market, this association with international
standards and accreditations has been kept to a minimum.
On the other hand, nations like China and others employ components that are not only of higher
quality but also much more affordable. The quality of the local steel and aluminum varies,
which may have an influence on both the pricing and the quality of the product. There are just
a few of cookware manufacturers that adhere to the industry requirements. Additionally, one
of the challenges facing the sector is the lack of readily available steel that meets the required
specifications. Both the inventories and the prices are very unpredictable, which causes pricing
issues for the business as a whole.
According to the findings of the study (PSIC, 2016) 44% of businesses in the kitchenware
sector export their goods. This indicates that the overseas market contributes about half of the
industry's total income. However, in the process of manufacturing items and sending them to
countries where they will be exported, authorities open containers in order to check the cargo
or lodgment. When products are sent in boxes that have not been properly packed, they are
more likely to be damaged in transit, which may lead to consumer dissatisfaction and even
product rejection. Poor product packing abilities on the part of laborers are a potential cause of
product harm.
Strategy & Recommendation
Capacity Utilization Solution
On the other hand, in order to address the issue of excessive use in the ninth activity, our team
advised piling up activity 8 & 9
• Total Capacity =5 workers* 4 weeks* 5 days* 8 hours* 60 minutes =48,000
• Total Time demanded= (10,000*1) +(10,000*3) = 40,000.
• Utilization rate=40,000/48000=83%

Piling up of activity 8 & 9 will help in minimizing the bottleneck in the washing & packing
operation and improve the utilization of the resources. The utilization rate turns out to be 83%
that is slightly above ideal utilization of resources but somewhat better than over utilization
that is the major cause of bottlenecks and delay in the operations. The change in the process
flow is shown in (Exhibit 6).
To avoid bottlenecks in first 2 activities, Bright should consider installing a new furnace and
molding die’s which could take up to 5 days and cost them 285,000 rupees in total. Cost
division is shown in the tables below.
Cost related to furnace installation:
Costs
Labor Cost 10,000
Gathiali 150,000
Bricks 50,000
Total 210,000
Cost related molding die: (outsource)

Time to produce die’s 5 days

Machinist (Kharadia) 25,000/die
3 dies 75,000*

75,000*=25,000*3.
It takes up to five days to manufacture molding dies and cost around 25,000 per molding die.
Company outsources the services from the expert machinist known as ‘Kharadia” in order to
produce it. However, Bright should install at least 3 more molding dies in order to avoid bottle
neck in 2nd activity that could cost them up to 75,000 rupees. (Exhibit 5 & 6)
To improve production capacity, Bright should install a new furnace as they are having a major
bottleneck in that operation in order to cover their expenditures and utilizing their resources
effectively and efficiently. Secondly, molding activity is also causing bottleneck in the
operations due to over-utilization of resources. By installation of new furnace and molding
die’s the capacity of both bottleneck activities would be doubled from 1440 to 2880 units and
9600 to 19,200 units per month that will help Bright to improve their operation by minimizing
the bottlenecks in it. The process flow would change after inclusion of furnace and die’s as
shown in (Exhibit 6).
Quality Control Solutions

a) Backward Vertical Integration for Control over Raw Material Supply

Bright Metals Industries being a family run business has a network of familial contacts which
can aid in their attempts to control quality. The relatives of the CEO are engaged in the
aluminum import business, which has allowed them to gain a steady control over raw material
inputs. However, with rising inflation and lack of import tax subsidies, it is time they resort to
focusing on local material extraction. Since Pakistan has numerous Bauxite ore reserves
sprinkled across Khushab, Ziarat, Loralai, Muzaffarabad & Attock, Bright Metal Industries
can setup a local extraction plant which can help them gain tight control over the supply of
aluminum to their factory.
Additionally, the quality of the raw materials should be maintained since this will have a direct
influence on the quality of the finished goods. The installation of the new extraction plant
provides an opportunity to enhance the quality of the raw material that is produced locally. As
a result, the final product's quality will improve, while the reliance on imported raw materials
and the susceptibility to price swings will both diminish. It will also have the effect of rendering
the local suppliers and importers powerless in the negotiation process.

b) Horizontal Integration by Investing in Quality Control Labs

There is a need for introducing a thorough documentation process for maintaining quality
control. It is important to encourage connections between research institutes in academia and
in business. In order to accomplish this goal, the chamber should conduct seminars in
conjunction with the research institution so that a representative from the institute may
familiarize the industry with the services. The organization of such sessions on a constant basis
is recommended in order to build a striking interaction between the two. In the near term, the
government should enable a research project that should be carried out in partnership with the
association to create alternative food grade stainless steel and excellent quality aluminum.
Exhibit 8 shows a series of tests which should be implemented in order to improve the quality
control process as a whole.
International Marketing Strategy
a) Focusing on International Trade Promotions/Expos/Fairs
Bright Metals Industries could seek the help of TDAP in its endeavors to improve its
international image. The Government of Pakistan established the Trade Development
Authority in 2006. The Export Promotion Bureau (EPB) was replaced by TDAP, which has the
mandate to take a more comprehensive approach to the development of international commerce
than did its predecessor. Each year, TDAP sends 20–40 trade missions abroad and participates
in 60–80 foreign trade delegations. By holding fairs, exhibitions, seminars, and conferences,
as well as by setting up an export facilitation committee for exporters, TDAP is working to
promote and boost Pakistan's exports.
The following are the duties and mandates of TDAP:
• To design a systematic, durable, and result-oriented, holistic export development plan,
outlining vision, objectives, strategies, and plan as approved by the Board. To support
and educate new exporters.
• To support and stimulate research in trade and policy-related fields that could help
create effective export policies and programs.
• To offer stakeholders advisory support.
• To communicate with commercial associations abroad.
• To coordinate and plan delegations and exhibitions to and from Pakistan.
• To organize conferences, workshops, and seminars for local, international, and
interprovincial export promotion.

Before sending an item out for sale, the item being exported needs to have adequate packaging
applied to it. The labor force has to get enough training on how to correctly pack the export
goods in order to prevent any damage that could be caused while inspection is being carried
out.
The manufacturers that export their goods should do an investigation of the typical number of
items that are harmed during the inspection procedure. A similar number of items should be
supplied in shipping as extras, so that in the event that any of the pieces are damaged, fresh
ones may be quickly and easily replaced.
In addition, businesses that export goods need to ensure their shipments against catastrophic
losses in the event that adverse conditions prevail.
b) Online Sales
Bright Metal should correctly construct their websites. Websites should be updated often, and
both present and future customers should have access to online ordering and payment options.
Websites ought to contain:
• History
• Range of product
• Brands / trade mark under which product are sold
• Current products innovated
• Features of innovative product
• Photographic display of products (to make the product look more attractive)
• Specialties and health benefits of products manufactured
• Detail of quality certificates possessed
• Warranties and product recall terms and conditions
 • Few recipes to attract the customer to visit website more
• Feed Back portals on the website
Working with Government/ Government Organizations
Local institutes include:
• SMEDA
• TEVTA
• PSIC
• Gujranwala Chamber of Commerce
For the purpose of educating the industry and assisting its members in better comprehending
the advantages of international standards and certification, seminars and workshops need to be
held. If a company has the appropriate quality certifications, it will have an edge in both the
domestic market and the global market. We are able to entice consumers from other countries
by assuring them that our firm operates within industry-accepted parameters and produces
high-quality goods. For the purpose of motivating other businesses to get certifications, ISO-
certified businesses should be eligible for certain perks and incentives.
On the other hand, the government may establish a storage bank for restricted materials. In
which local raw materials and imported raw materials may be kept in order to maintain a
constant supply to the industry at a constant pace. This is something that may be put up with
the association keeping a close eye on everything. The pricing has to be carefully managed in
order to make it easier for the manufacturer to get the raw material at a price that is competitive.
In order to make local industry more competitive on both domestic and global markets, import
taxes should be lowered until such time as alternative forms of steel and aluminum become
available. A tax credit should be granted as an incentive to the manufacturing sector for the use
of food-grade stainless steel and aluminum in items intended for local use. These materials are
used in kitchenware. After the initial acceptance of food-grade stainless steel and aluminum
for consumption in the local market, a complete ban on the use of substandard quality in
stainless steel and aluminum should be imposed by adopting international standards. This step
comes after the initial acceptance of food-grade stainless steel and aluminum for the local
market.
The government should make it easier for chambers of commerce and other associations to
host awareness sessions for various industries. The purpose of these sessions is to educate
companies about the potential advantages of coordinating their operations so that they can take
advantage of more consistent and affordable rates for the purchase of stainless steel and
aluminum.
References

PSIC (2016). Diagnostic Study for Kitchenware Cluster Gujranwala. Punjab Small Industries
Corporation. Retrieved from https://cdi.psic.gov.pk/reports/psicpublications/PSIC%20-
%20Final%20Report%20of%20Kitchenware%20Cluster%20%20ST%202.pdf.

SMEDA (2019). Cluster Profile Aluminum Utensils Gujranwala. Retrieved from

https://smeda.org/phocadownload/Punjab/cluster_profiles/Aluminium%20Utensils%20-
%20Gujranwala.pdf.
Appendix
Exhibit 1: Bright Metal Industries Front Gate
Exhibit 2: Group Photo with Manager
Exhibit 3: Internal View of Polishing Area
Exhibit 4: Process Flow

Melting Molding Hot Rolling Cold Rolling

20.00 minutes 2.00 1.50 minutes 1.50 minutes
minutes

Slicing

0.50 minutes

Cutting Circle

0.50 minutes

Press Draw

0.5 min

Finishing
1.00 minute

Washing and Packing

3.00 minutes
 Exhibit 5: Process Flow After Installation of New Furnace and Molding Dies.

Melting Molding
20.00 minutes 2.00 minutes

Hot Rolling Cold Rolling

1.50 minutes 1.50 minutes

Melting Molding

20.00 minutes Slicing

2.00 minutes
0.50 minutes

Cutting Circle

0.50 minutes

Press Draw

0.50 minutes

Finishing
1.00 Minutes

Washing and Packing

3.00 minutes
Exhibit 6: Process Flow Consolidation of Activity 8 And 9

Melting Molding Hot Rolling Cold Rolling

20 min 2 min 1.5 min 1.5 min

Slicing

0.5 min

Cutting Circle

0.50 minutes

Press Draw

0.50 minutes

Polishing,
Washing and
Packing
Exhibit 7: Bright Metal Industries Quality and Environmental Policy
Exhibit 8: List of Proposed Quality-Check Tests
Tests Descriptions
Inspection of Source Before and after the molding process, the
surface of each and every aluminum pan and
pot go through a meticulous examination to
guarantee that the final product does not
include any bubbles or scratches.
Dimension Measurement The dimensions of the cookware, as well as
its rim thickness and bottom concavity,
should be measured with calipers and
dilatometers to ensure that it satisfies the
requirements that have been specified.
Bottom Surface Striking A tiny copper hammer is used to securely
attach the base of each pan or pot. This is
done to ensure that the bottom does not come
loose.

Non-Stick Coating Check In order to evaluate the thickness, hardness,

and adhesiveness of non-stick coatings, a
coating testing equipment and 3M 898
adhesion tapes are also necessary tools.
Last-Stage Inspection After assembly, each component, including
the handle and the lid, is subjected to
thorough inspection. There has to be no
scratching, greasy buildup, or ugly welding
spots permitted.
Abrasion-Resistance Check The durability of the nonstick coating is
measured by attaching 3M 7447 scouring
pads to a wiping machine and running it
through 3-5k cycles.
Concavity Check Bottom concavity should stay within a low
range during the course of 10 tests performed
repeatedly. After a thermal shock, measure
the value using a dilatometer after the
temperature of the cookware has dropped
from 200 degrees Celsius to 20 degrees
Celsius.
Heat-Resistance Check In order to evaluate how well the nonstick
coating can withstand high temperatures, we
place the pan or pot in the thermotank and set
the temperature to 250 degrees Celsius.
Salt Resistance Check The ability of the non-stick coating to resist
corrosion is evaluated using 5% sodium
chloride. The solution is heated at a high
temperature for seven hours.
Packaging Check To guarantee that aluminum goods are
. packed according to industry standards
before transport, ASTM B660 is employed.
This quality control and inspection system
for aluminum cookware guarantees that
importers will get exactly what they
purchased and that it will arrive in perfect
shape.
Chemical Analysis of Aluminum The chemical analysis of aluminum
according to ASTM E34 can only be carried
out by analysts who have received extensive
training. The information gathered during
this inspection, which can only be carried out
in labs that are adequately stocked, will be
used to determine the level of aluminum and
other chemicals that were used in the
manufacturing of the aluminum cookware, as
well as whether or not the product is safe to
use in the kitchen.
 Exhibit 9: Miro Board Preview
Bright Metal Industries

Manufacturing Process Capacity Utilization Quality

Gujranwala
Kitchenware Sector - Melting & Molding - Underutilized or over - ISO 14001:2004
(SMEDA, 2019) - Rolling Mills utilized? - ISO 9001:2008
(PSIC, 2016) - Circle Cutting - Exports to Afghanistan
- Pressing Recommendations - Use Imported Machinery from
- 8th Populous City - Brand Name Punching England
- Rail & Road Linkages - Polishing - Pilling up of activities
- Bimonthly maintenance
- SMEs (Semi Mechanized, - Washing - Installation of furnace
- 3 operators per machine
- Finishing - New molding die’s
Labor Intensive)
- Cookware (Pots, pans, Issues
bowls, utensils etc.)
- Quality Control
- Costs: 56% DM, 17% DL,
- Varying quality of local raw
27% FOH materials
- High reliance on intuition of
supervisors
Bright Metal Industries - 50% wastage during
production
- Established 1952
- Poor product packing
- 220 employees
- Family-run business Recommendations
- Cookware & hotel-grade
aluminum products - Proper daily documentation
- Competitors: Sonex, of processes
Casio, Kitchen King, - Standardized tests after
Chef, Majestic, Trophy, molding.
and Kiran - Trainings must be provided to
refine labor input.
- Safety wear and equipment.
- Insurance + extras for
exported items.
ABDULLAH BUTT
Address · 03316415854
Abdullahbutt201@gmail.com
https://www.linkedin.com/in/abdullah-butt-8448641b1

Finance and Marketing graduate of LSE Batch’22 with one-year experience at a renowned
manufacturing cookware company known as “Bright Metal Industries”. I am a skilled multitasker
with superior work ethic and good teamwork, problem-solving and organizational skills. Willing to
take on added responsibilities to meet team goals. Reliable and dedicated team player with
hardworking and resourceful approach always striving to upgrade my skills and currently enrolled
for my Masters in business administration. Well-versed in business organization and modernizing
workplaces. Proficient at project support with proven history of solutions-oriented problem-solving.
Seeking to maintain full-time position that offers professional challenges utilizing interpersonal
skills, excellent time management and problem-solving skills. Organized and dependable candidate
successful at managing multiple priorities with a positive attitude with a history of meeting company
goals utilizing consistent and organized practices. Skilled in working under pressure and adapting to
new situations and challenges to best enhance my working efficiency and upgrade the organizational
brand. Driven to learn quickly, advance computer proficiency and training in industry operations.
Collaborative with dedication to partnering with coworkers to promote engaged, empowering work
culture delivering encouragement and feedback. Energetic professional with great poise and
documented strengths in building and maintaining relationships with diverse range of stakeholders
in dynamic, fast-paced settings. Forward-thinking with exceptional initiative and deep understanding
of what it takes to make things work. Enthusiastic about learning field inside and out. Pursuing
opportunities for better understanding and to learn new skills.
 MOHAMMAD ZUBAIR
456-D, Street 11, Phase 8 (Ex-ParkView), DHA, Lahore · +92 3076783194
mzubairfreelance@gmail.com · LinkedIn Profile

Coupled with a desire for learning, a flair for writing and a passion for presenting, I see
myself re-entering the world of academia as an educationist in the next 5 years.

Education, for me, is a lifelong process.

It could be best summarized with the following quote by Martin Luther King:

"The function of education is to teach one to think intensively and to think critically.
Intelligence plus character – that is the goal of true education."

Building upon my undergraduate degree in business and as a graduate student pursuing

his MBA at the Lahore School of Economics, I can testify to this statement
wholeheartedly.

The multidisciplinary approach has allowed for me to shape my mindset thoroughly and
has exposed me to rigorous analytical skills and research methods. I particularly chose
this field in order to grasp the business world at an advanced theoretical and practical
level, with a significant focus on the application of real-world insights to the Pakistani
economy and the performance of Pakistani businesses, utilizing empirical and analytic
references.

Likewise, working with people of diverse backgrounds, managing conflict and receiving
exposure to an assortment of markets from differing industries have all enabled me to
polish my interpersonal and communication skills.

In the future, I envision myself as a well-rounded individual equipped with broad

management abilities, a comprehensive grasp of the functional areas of business
organizations, the capacity to employ quantitative decision tools, and an awareness of
the political, social, ethical, and economic variables that influence business choices as a
whole.
Giant Group PK: A Case of Giant Problems! By Mustafa Farooq and
Shehryar Sajid Khan
On a bright yolky sunny day of November 2022, Syed M. Altaf Shah, the Operations Manager
of the Giant Group PK was shaking his head in denial as once again his General Manager, Eraj
Ameen, had downplayed the issue of rising problems.
Giant Group, one of the most esteemed software provider company in the UK, had a worldwide
clientele and was known to be the pioneer of umbrella solutions i.e., One Giant Solution.
Expanding its global footprint by establishing an office in Lahore, CEO Mathew Brown
believed that their company could be run prolifically by the top tier sitting in the UK but that’s
exactly the opposite of what was happening as of now.
It wasn’t the first time Mr. Altaf had been gaslighted by his manager and it certainly wouldn’t
be the last time either. Mr. Altaf knew that these problems weren’t as trivial as the manager
deemed them to be. If the problems such as limited manpower available on certain days due to
political unrest, the time difference which causes idle time, accessibility to the software systems
only within the office premises, incorrect or double payments, high turnover ratio, major threat
of data security and lastly the widening communication gap between Pakistan and UK
administration, weren’t kept in check, sooner or later these issues were going to sit in the roots
of the organization and bog down the growth prospect of the company. This in turn will haunt
the management and the workforce.
Giant Group Pakistan
Giant Group, a household name in the software industry of United Kingdom, set foot into the
land of the pure (Pakistan) in 2018. From humble beginnings on the 6th floor of the Shaheen
Complex, Egerton Road Lahore with only 30 people initially, today Giant Group Pakistan takes
pride in being the leading umbrella services provider, with over 110 employees. Their
registered office on the 4th floor of the glamorous askari corporate tower, Main Boulevard,
Gulberg III, Lahore is a true testament to their company personality i.e., Elite.
Giant Group Pakistan’s current General Manager is Eraj Ameen, and she is responsible for the
entire Pakistan setup and directly reports to the CEO present in UK. Giant Group is proud to
be labeled as the one stop shop where they provide top notch service solution to their clients.
Capitalizing on their vast experience and skilled employees, Giant group has been expanding
their footprint in the software industry of Pakistan. Giant provides umbrella services such as
HR, screening, payrolls, taxations, and legalization solutions. Giant Group Pakistan’s
commitment to quality and data security is in line with international standards and it strives to
work for and with people in order to achieve exponential and mutual growth.
History of Giant Group
Giant Group UK was incepted 30 years ago by Mr. Mathew Brown and has been providing
specialist, end to end software which enable any workforce to manage, resolve and support
their services. Their major clients have been the medium scale and small scale recruitment
agencies across the globe. The CEO claims that as much as we want to be everywhere and
boast everywhere about our elite solutions, that isn’t practically possible as of now and we have
expanded over to Pakistan because this is the land which can and is helping us serve our clients
prolifically. Giant Group constantly invests in technology and tries to stay one step ahead of
its competitors. Giant Group is the pioneer solution provider which came up with the first self-
serve portals and online contract acceptance.
Giant Group takes data security very importantly thus they adhere to international security
standards of ISO 27001. Their annual, rigorous, and independent pen tests ensure their quality.
At Giant, honesty, and straightforwardness, both within and outside the organization is
expected and is part of their company culture and values. Giant’s software are highly
configurable and act as the perfect stepping stone for their clients to achieve growth and ensure
smooth sailings in their operations.
Giant Group’s pioneer software range includes applicant tracking, onboarding and contract
management, timesheet processing, invoicing, payroll, and disaster recovery. Some benefits of
working with Giant Group are that they possess ISO 9001 quality systems, their support team
is available 24/7 on their respective online channels. Their umbrella offerings are simple,
paperless and hassle free. Lastly, Giant is extremely proud of the fact that they are a responsible
organization which has ISO 14001 environmental management standard. Not only do they
reduce waste but also they promote and ensure recycling.
Company Structure
The Giant Group has a hybrid structure which is indeed one of a kind. Exhibit 1 illustrates the
Giant Group Organogram. Their Group CEO, Group CFO, Group CTO, Group Client Services
director, CEO of Giant Finance+, Group sales director, managing director and corporate sales
director are all working from Great Britain. Something that stands out about them is that despite
being more than six thousand kilometers away from Pakistan, the top line management present
in the UK, accounts for 30% of the workforce and prolifically ensures smooth sailings of the
organization. Anyway, around 70% of the workforce is operating from Pakistan under the
supreme guidance of The General Manager of Giant Group PK.
The daily dual feedback and communication mechanism that is deployed by the management
ensures that the employee objectives and targets are in line with the company’s objectives and
targets. Giant group’s organogram explicitly reveals the fact that Giant Group Pakistan’s all
nine departments are reporting to the senior manager who is then reporting to the General
Manager of Pakistan.
Hiring Process
Giant Group has a rigorous hiring process because their aim is to bring the intellectual cream
of Pakistan under one roof. In the very first step of this diligent process, Pakistan’s HR
department shortlists from a pool of talent available and then subsequently interviews the
potential candidates. Those people who make clear this round undergo a proper screening
process which is conducted by the company itself. Adept at providing screening software to
their clients, Giant itself leaves no stone unturned when it comes to meticulously conducting
due diligence pertaining to every employee that clears the first round. In the next round, the
Manager of the respective department present in the UK conducts an online interview with the
candidate and sends him/her an online test which they need to complete and send back within
the next four hours. When someone clears that, he/she is then given the final go-ahead to join
the prestigious group.
It is important to signify that the IT department recruits fresh graduates or experienced ones
from FAST University. The Business development, Operations, Marketing and Finance
department prefers LUMS, LSE and IBA Graduates. In a nutshell, the CEO believes that in
order to soar to new heights every day, it is imperative that we stay on our toes to seek the best
minds and recruit them into our workforce.
Giant Group Services:
The Giant group takes pride in providing a Giant set of services (solutions) to their clients
which consists of 12 various software. Each solution is unique and is a powerhouse in itself.
Their attributes stand out for them, and it is important to signify here that the Giant team has
separate SLAs (Service Level Agreements) defined for each software. These SLAs help them
have a competitive edge and they will be discussed in detail when we scrutinize each solution.
The Giant Team makes sure that each and every client, irrespective of the fact whether they
choose the entire solution or some parts of it, is dealt with the best of their abilities and with
best practices. Exhibit 2 outlines the step by step Giant solution and we’ll now discuss it one
by one comprehensively.
1. Applicant Tracking System:
The primary solution that Giant provides is Applicant tracking system (ATS) software. This
software is so vital because it ensures that every resume that is submitted is screened for certain
keywords. Any resume which does not have those required keywords (which the job
description seeks) is archived and stored in the database for a later date. ATS software
streamlines and expedites the hiring process thus it is essential ATS ensures an improved
functionality of candidate management and is equipped with round the clock reporting
mechanism
2. Candidate Tracking System:
Next in line is their Candidate Tracking system (CTS). This software ensures that the people
who are shortlisted based on the job description, their entire hiring process journey is digitally
recorded here. CTS software is a powerhouse because it has the capability to store countless
records and the database is so strong that it can keep a backlog of the last 10 years for each
candidate. CTS lowers administration cost and acts as a strong and single database to store all
the necessary data.
3. Vendor Management System:
Giant Group’s vendor management system is software which enables any client to keep a
prolific record of all the interactions, communications, negotiations, and business
deals/relationships. This software is quite user friendly, and it aids in firstly defining the goals
of the company. Next, it can store all the vendor’s data and help the clients shortlist the vendors
based on their respective metrics. It also measures the performance of the vendors and
consistently prompts the clients with any renewal/termination updates. Digitalization of all
these processes is indeed a lifesaver for the clients and acts as a perfect assistant to possess.
4. On Boarding:
This software solution ensures that all types of user’s data, whether it be in any quantity or any
combination whatsoever, is collectively stored in software when any onboarding is exercised.
This way, the clients never lose sight of important dates and also all the contractual agreements,
terms and conditions are present here. This software saves huge amount of time and costs as
once this software is purchased, there isn’t a manual need to process, log and store data in piles
and piles of paper.
5. Timesheet:
This is one of the most efficient processes of Giant Group. These timesheets are the need of
the hour for every company because they capture any format whatsoever and can be customized
to suit every client’s needs. These secure and flexible numerous timesheets have unique layouts
which can help in storing authorization data and provide various processing options pertaining
to each specific user’s own needs.
 6. Billing:
Giant Group’s billing software provides a comprehensive billing solution to meet their
customers’ needs. This software ensures that the hassle of billing is made easy by incorporating
unique customization options for templates, standard transaction, and tax handling. Giant’s
software ensures that friendly reminders are prompted via this software for all billing schedules
and a portal for recurring billing, multi-currency billing is provided here too. Moreover,
billable, and non-billable hours for each employee can be stored here.
7. Funding:
This software ensures that every funding is perfectly organized and all the records pertaining
to their source, time and utilization is uniformly stored. This way every single penny is
accounted for. Furthermore, this software is responsible for perfectly tracking the funding
expenditures.
8. Payroll:
This solution is responsible for prolific cost reductions as it is a powerhouse. This integrated
solution perfectly incorporates each country’s specific legislative rules and is a perfect tool for
compliance. Giant takes pride in coming up with a payroll solution that is customized for each
of their clients, whether it be for a small scale company or a huge multinational. This solution
is responsible for maintaining effective pay schedules, pensions records, pays for holidays,
taxes, and all other payments. This is certainly the most selling solution of Giant.
9. Professional Employer Organization, Personal Service Company & Fee payer
Solution:
These are the umbrella services that Giant provides via their prolific software. These are fast
and simple solutions to ensure that all risks are mitigated. Professional Employer Organization
(PEO) software is responsible and capable enough to store the records of all full time
employees and independent contractors harmoniously. PEO software are a vital tool as it
performs all human resource functions. Errors are seriously reduced; legal compliance is no
longer a hassle and decision making is made easy due to this software.
Moving on, PSC software are one of those solutions which help in effective quality
management and setting up of any Personal Service Company (PSC). They have the most user
friendly interface and maintaining earnings is as easy as it gets here. This software, backed by
the strongest of technologies provides magnificent accounting support. Giant ensures that
within 24 hours, this software will help them set up any personal service company. Tailored
advice and continuous personal support is the unique selling point of this software.
The fee payer software helps the clients with compliance and legal responsibilities. All the
invoices and remittances data is stored here. Giant’s software promises to bear all the burden
for any kind of financial risk. This compliant and reliable solution is indeed a game changer
for them.
10. Credit control:
This software acts as the database which has all the record for the credit control mechanisms.
This software ensures that optimal cashflow levels are maintained and time which is of the
essence is saved. Automated formal emails and in house credit scoring ratings are what stand
out about this software. Once an unpaid invoice is detected, automatic email correspondence
is initiated, and reminders are given based on what the clients deem best. This software, based
on the historic record of all the billers, itself does credit scoring ratings and helps the client
determine who should be or who shouldn’t be given the credit and on what terms. Lastly,
consolidation of invoices is also conducted with this software.
 11. Agency Accounting:
This is standard accounting software provided by the Giant group and it helps in monitoring
day to day transactions, preparing and reconciling financial statements. The security and user-
friendliness of this software is the reason why it is so popular amongst the masses. Moreover,
the projection elements of the next couple of years, based on certain standard models is a unique
characteristic of this software.
12. Compliance Advice:
This software is responsible for ensuring that the any company which uses it stays on the right
track, and does not deviate from the legal, industry and security of the area that it operates in.
This software is known to reduce costs and risks and simultaneously improve efficiency,
flexibility, and performance. Prolific use of this software helps the clients in being more
strategic because attention to detail is enforced via this software.
These are all the solutions that the company provides and it’s up to the clients, whether they
want the fully integrated giant solution or they just want parts of it. The Speed of
implementation and delivery of these software depend entirely on the client’s requirement.
Giant ensure that all their departments join hand to provide the solutions to their clients faster
than any competitors.
The Giant Competitors:
The Giant group holds their competitors in highest regards and believes that if it weren’t for
them, Giant group would have transformed into a complacent group and wouldn’t have been
as efficient as it is today. They believe that Giant’s competitors keep them on their toes and if
it weren’t for them, Giant wouldn’t have consistently aspired and continued to evolve amidst
these changing dynamics of this industry.
Their direct competitors include Contour Software Pvt. Ltd., Parasol Technologies, Randstad,
Pontoon Solutions and Guidant Solutions. Contour and Parasol operate in Pakistan too and
have the same business model as Giant Group. Whereas on the other hand, Randstad, Pontoon,
and Guidant solutions are the three competitors that lock horns with Giant across the global
Market. Since Giant provides umbrella services and is catering to many solutions, thus it is a
no brainer really that it has many direct and indirect competitors.
Contour Software owes its inception to Constellation Software (its ultimate parent company).
Contour set foot in the software and IT industry a little over a decade ago. They’ve now grown
into a more than 1400 employee company. Their main offices are located in Lahore, Islamabad,
and Karachi. They have the same business model as Giant group because they’re operating
from within Pakistan and serving both, internal clients, and external clients. They’re now
growing their base in the US and since Giant intends to do the same very soon, a fierce battle
is on the cards.
Moving on, Parasol technologies is a leading software house which is located in the UK and in
Lahore. Since their inception in 2000, they are growing rapidly and have been making a name
for themselves as they are also providing one stop solutions. Their wide range of internationally
reputed clients, alongside their huge workforce of over seven thousand employees, make them
a force to reckon with. Parasol technologies knows that Giant group has the best workforce,
so when Giant group experienced a system breach in 2020, Parasol technologies capitalized on
this opportunity and acquired many employees from Giant by offering them more salaries.
Since Randstad, Pontoon and Guidant Solutions aren’t operating from Pakistan thus we will
just lightly mention them here. These three are big players in the industry and when Giant
group, against all odds, is battling with them, this is a big feat for them. Anyway, the respect
that these competitors have for Giant is mutual in every essence of the word.
The Industry Outlook:
Even though Giant group is the umbrella solutions provider, their top software are HR and
screening ones. Thus, they categorize themselves as falling under the HR, payroll software
industry. Based on future projections, the market for HR payroll software, which was valued
at $23.55 billion in 2021, will rise to $55.69 billion by 2031, with a CAGR of 9.16% between
2022 and 2031.
The market is expanding as a result of factors like the rising adoption of new technologies and
the surge in demand for cloud-based HR payroll software that boosts business efficiency.
Additionally, a surge in HR process automation, which aims to increase efficiency, supports
market expansion. In addition, it is anticipated that the rising use of app-based HR payroll
software and increased investment in AI-focused HR payroll software would provide the
industry lucrative growth prospects in the years to come. However, issues with data security
and privacy as well as a lack of payroll professionals limit market expansion.
ADP, LLC, Ascentis Corporation, Cornerstone OnDemand, Inc., Epicore Software, Oracle
Corporation, Patriot Software, Paycom Software Inc., Sage Plc, SAP SE, and SumTotal
Systems, Inc. are some of the industry participants active in this industry. These top players
have embraced a number of crucial development tactics, including company growth, the
introduction of new products, and partnerships, which support the evolution of this software
industry on a global scale.
Moving on towards the Covid Impact now. Businesses all across the world have been
significantly impacted by the global COVID-19 outbreak. The lockdown imposed by several
governments positively impacted the usage of HR payroll software. In response to the COVID-
19 issue, businesses are focused on cutting-edge technology to undertake contactless
operations, including AI-powered solutions, automation, cloud-based technologies, and app-
based HR payroll systems. Additionally, as more sectors transition to digitalization, the need
for HR payroll software increases since it offers agile efficiency by getting rid of manual
activities that bog down business operations and offers real-time reporting features.
Additionally, it lessens the dangers to businesses and inaccuracies associated with human data
entry. Due to these advantages, it offers the market profitable growth opportunities over the
course of the future projection period. Additionally, the pandemic has created significant
difficulties for businesses that are trying to execute crucial processes, accurately report data
that is dispersed across numerous locations, run complex systems, and effectively collaborate
with coworkers; particularly when there is no infrastructure for such processes
The Giant Problems faced By Giant Group Pakistan:
The company is facing various operational issues which are restricting its growth. Firstly, due
to the political instability of Pakistan, there are frequent protests at liberty which is right next
to its office in Gulberg. This leads to limited manpower at the office as a result at times they
are unable to meet service level agreements (SLA's), negatively impacting its reputation.
Secondly, the software login portal/system is in Pakistan, which is the backbone of the firm, so
such protests halt the operations. Thirdly, there is a timing difference issue. Since the majority
of clients are in UK and USA so there is a time difference of 5 and 12 hours which is a major
bottleneck negatively impacting operations. Fourthly, software glitches occur quite often due
to the complexity of the software. This leads to the involvement of the IT team to get it resolved,
slowing up the process and leading to a bottleneck.
Fifthly, at times payment is transferred to the wrong employee, or overpayment is made to the
correct employee. This leads to time wastage in recovering the payment by involving the legal
team and the bank. Sixthly, systems get breached through email viruses slowing the processing
time and making it difficult to meet SLA's. The company receives a huge number of emails
daily, so it is difficult to differentiate between virus and non-virus emails. Moreover, there are
communication issues due to the involvement of various departments such as the welcome
team, the operations department which has multiple sub-departments, ESO, Legal, Sales, and
Finance departments. So, a small communication gap delays the payment by 1-2 months due
to which worker stops using the platform. Also, internet load shedding is the new norm in
Pakistan which is a major bottleneck as the SLA's are not met on time. The company cannot
survive without a strong internet connection. Lastly, there is high turnover due to which the
company is operating with less labor force. It has a capacity of 130 employees, but currently
only has 110 in the office, so it is not properly utilizing the available capacity. The reason
behind the high turnover is that Giant is not quickly promoting employees giving them bigger
titles.
How is Giant currently coping up?
One can only expect a prolific company like Giant to quickly identify and resolve these
problems, but the ground realities are very different. As explained by Operation’s manager
Syed M. Altaf Shah, the management believes and reiterates that:
“Don’t fix what’s not broken.”
The operations manager has time and again reported these issues to the general manager and
has tried to reason with her countless times, but her lack of interest is something that is
appalling. Since the top level management is currently in the UK and none of them has visited
the Pakistan premises since over a year, the management here is becoming complacent and
believes that just like we’re currently handling all that comes our way, we can continue doing
so until and unless there’s a major issue. These issues aren’t considered one of the major ones
yet and the contrasting view of the operation’s manager is that an impending doom is just
around the corner.
What does the future hold for Giant Group?
Firstly, the major challenge is safeguarding payroll data. The payroll system holds various
sensitive information such as social security numbers and other protected employee data. If the
firm is unable to develop a secure platform with strong encryption to store this data, then there
is a high risk of data breaches negatively impacting the goodwill. This information can be used
by hackers for the purpose of identity theft. Due to this time and money are wasted on
investigations and lawsuits. Secondly, another challenge is ensuring compliance with payroll
laws. Since Giant is dealing with clients in the US and UK it has to keep up with payroll laws
which are consistently getting updated. Thirdly, lack of adequate human resources with the
required skills set in Pakistan. Giant is primarily a software firm and needs IT experts for its
smooth functioning, but due to a lack of IT institutes in the country, it struggles to hire
candidates who are experts in IT.
Fourthly, inflation is consistently increasing in Pakistan which is putting cost pressure on the
firm. Due to inflation, it needs to offer greater salaries to employees to retain them. Lastly, the
firm is facing tough competition from Contour software, Parasol, and Guidant Solution. These
firms have a greater R&D budget due to which they constantly develop innovative products,
leading to expansion in the customer base.
Managerial Solutions:
These recommendations will improve the firm's operational efficiency and market
competitiveness. Firstly, to avoid breach of software through email viruses, the firm should
provide fishing email training to employees which would enable them to detect such emails.
Secondly, separate working teams should be created to deal with bottlenecks created by time
differences. This can be easily done since the company has the capacity to hire 30 employees.
Thirdly, to reduce employee turnover various financial and non-financial rewards can be
provided to increase motivation levels. Financial rewards would include increments, bonuses,
allowances, promotions, etc. Non-Financial would include better job titles, empowerment, job
enrichment, and enlargement and recognition. All this would improve their productivity and
loyalty to the organization.
Fourthly, to resolve communication gaps create an official communication policy stating the
standards related to which medium to use, the departments to be involved, and the maximum
time to solve an issue. Also provide training on effective communication covering active
listening, use of technology, and communicating with different cultures. Fifthly, to deal with
competition it should allocate a greater budget to R&D to innovate and launch products that
provide a competitive edge to clients. Giant is operating in an industry where innovation is the
key to success. To fight competition, it should create and implement a sustainable operations
strategy that cannot be copied by rivals. It is crucial to achieve strategy differentiation through
processes, systems, and technology.
Another recommendation to the firm would be to understand its customer needs and then
incorporate these needs into the corporate strategy. Based on the corporate strategy it should
create an operations strategy with the purpose of planning, analyzing, and executing operations.
While creating an operations strategy the firm should consider its operational resources which
would include capacity, supply chain process, and technology. It should also consider the
market requirements which would include quality, response time, flexibility, and market
demand and supply. The operational resources should then be used to meet market
requirements.
Conclusion
If the General Manager turns a blind eye to what is happening in this Pakistan office, in the
immediate short run, they might get away with this, but in the long run, things can pile up and
then it would probably be too late. We believe that Syed M. Altaf Shah has every reason to be
concerned because these problems have the potential to bring any company down on its knees.
We believe that Giant Group cannot afford to lose what they have gained over the last three
decades, so the General Manager’s attitude is detrimental to the company and the workforce
even.
We strongly disagree with her current answer that we shouldn’t fix what’s not broken and we’ll
simply propose our line to her that “Fix it until it gets too late.”
Exhibit 1 – Company Organogram

Group CEO
CEO of Giant
Group Chief Finance+
Financial Officer

Group Chief Group Client Group Corporate

Group Sales General Manager
Technology Services Managing Sales
Officer Director Pakistan
Director Director Director
Senior Manager and
Company Secretary

HR
Department

Back Support
Department

Sales
Department

IT
Department

Operations
Department

Marketing
Department

Onboarding
Department

Screening
Department

Finance
Department
Exhibit 2- One Giant Solution
An overview of the comprehensive Giant solution which covers all the software that they
provide

Exhibit 3- Photo Evidence

A picture with Operations Manager Syed M. Altaf Shah at Giant’s office premises

Exhibit 4- Top 10 Clients

The top 10 Clients of Giant Group who have incorporated the Giant Solution in their
organization totally
 Morgan McKinley Wealthify Rolls Royce

Agile Recruitment Suffolk Reed

Gravitas Sellick Partnership RBS

Creative Circle

References:
1. https://www.giantgroup.com/
2. https://finance.yahoo.com/news/worldwide-hr-payroll-software-industry-
084800475.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmN
vbS8&guce_referrer_sig=AQAAALiwVjgTtws2rUVIfMuYR6paKuzjODo0XERnQt
Rb_Ffyiq4emj5ecy08dJ5nPGtkKKqYVUbaM-
VbBXMMRDrVtYlnIBlCO2XOMOf3HMYb2aenLZojB7q4NgE0ZfWDIoo81ta6sEI
3EZBlHeGvf3r0-
4wQSSJiiSnTxlXxrv8gkzMk#:~:text=According%20to%20this%20report%20the,a%
20standard%20and%20automated%20way.
3. https://www.alliedmarketresearch.com/hr-payroll-software-market-A16446
Miro Board:
 SHEHRYAR SAJID KHAN
House Number 178, Block K, Model Town Lahore · 0301-4188448
Shehryarsajidkhan1@gmail.com · www.linkedin.com/in/ssk-3a072025a

I am currently enrolled in the Lahore School of Economics’ MBA program. I am

fortunate enough to have three years of international job experience in the Middle East
(Bahrain). I served as a financial analyst in a multinational management consultancy
firm, Onshore Advisors.

Throughout the scholastic journey of my life, I’ve been blessed to be a part of the best
institutions of Pakistan and thus after completing my MBA, I intend to make a name for
myself in the Pakistani corporate industry. My dedication, hard work and integrity,
coupled with the mindset to succeed at all fronts, makes me think that I can be a valuable
Asset wherever I end up.

In my leisure time, reading and writing gives me solace. Lastly, I’m a curios soul who
wants to learn everything in life. I believe in living life in a way where every moment
counts.
 MUSTAFA FAROOQ ZAHEER
79/2 Q Block, Street 3, Dha Phase 2, Lahore · Phone: 03424371128
Email: mustafafarooqzaheer@gmail.com · LinkedIn Profile:
https://www.linkedin.com/in/mustafa-farooq-zaheer-b50b89179

ure Here

I am currently completing my MBA from the Lahore School of Economics. Previously I was
working as an analyst for an American-based management consultancy company, Trivium Global.
After graduating I look forward to working in a well-reputed organization to explore my
capabilities. Ultimately, I want to pursue the path of entrepreneurship with the purpose to create
value and impact.

For my hobbies, I am extremely passionate about cars, and I am the admin of "Mercedes W202
Club of Pakistan" on Facebook.
Arabic Mandi: An Operational Disaster by Momin Tanveer Niaz and Momil
Aftab

Mr. Shahab Khan, Chief Executive Officer of Arabic Mandi, was ecstatic when we discussed,
over the phone, visiting their office/kitchen in Khuda Buksh Colony, Lahore, to discuss their
sale fluctuation problem, alongside the operational issues being faced by him. Driving through
Bhatta Chowk's busy main road, we spotted a massive sign for Yasir Broast. From there, we
entered the adjacent road, which got bumpier as we went on, reaching a point where it could
no longer could be called a road. With no Google location or sign board, we faced a difficult
time spotting the correct building, but with a bit of guess work, we reached the correct building,
shown in exhibits.
Walking into the building, we entered a reception area, decorated with Arabian themed pieced,
with a small sitting area and a counter where the manager/cashier greeted us and took us
upstairs to the suite-sized office. The office was beautifully decorated with a seating area
and an office desk. There, we met Mr. Shahab Khan, founder of Arabic Mandi. We began
discussing the problems he was facing regarding sales, costs, wastage and reach.
After receiving the briefing, he gave us permission to go about investigating as we please,
questioning as we wanted. The more time we spent understanding their systems and protocols,
the more we realized the massive amount of loopholes which existed. This led us to believe
that this was an Operational Disaster.

Company Overview
Business
Arabic Mandi offers traditional Arabic cuisine, serving to B2C & B2B customers both. They
range from serving Mandi, a traditional Arabic dish, from 1 person up to catering events
consisting of 150 people.
History
Arabic Mandi began back in 2018, when Mr. Shahab Khan, motivated by the extraordinary
feedback he had continuously been receiving by people around him, decided to start making
Mandi from his own house. Being a serial entrepreneur and having existing experience in the
food industry as he used to own a restaurant back in Kuwait, more than a decade ago, he decided
to give it another go.
"The first six months were the toughest, the entire day would go by, but there would not be a
single order."
Once word of mouth spread and people came to know more about their Mandi, they began
receiving orders. Over time, they renovated their kitchen to meet the demand. Once Covid
settled down, they shifted from their house kitchen to renting a building where they built their
1st proper kitchen and office. They did not offer dine in, and focused mostly on
delivery/takeaway. They advertised using billboards and social media. Reaching to a point
where they were generating daily sales of Pkr. 75,000+. Their slogan;
"Home of Mandi"
Presently, Arabic Mandi is situated in Khuda Buksh, Bhatta Chowk. Nearby are Savour Foods
and Yasir Broast. They have 10 thousand+ followers on Facebook/Instagram. They have 6
employees on payroll, including the manager, who reports to the CEO. They have an
outsourced marketing agency. They charge premium pricing to their customers and claim to be
serving the best Mandi in all of Lahore, something anyone would have trouble disagreeing with
after tasting the premium product. The packaging is brilliant, being served on a metal thaali,
wrapped by foil to maintain the temperature, with a sticker of the Arabic Mandi logo.
The CEO of Arabic Mandi has a vision for his product and taste. His short term goal is to
stabilize his sales and open a new branch with a dine-in, hoping to capture a big portion of the
Arabic cuisine market in Lahore, and a long term goal of opening his first branch abroad in
London, with his son, soon thereafter.

Operations and Production Overview

The area was divided into three main operational spaces. The category we feel the production
process falls under is Assembly Line. Upon entering you approach the waiting/reception area
where walk-in customers can place and wait for their order. This is where the manager sits,
receiving and punching orders in person and via landline/mobile calls. The second area is the
heart of this operation, located behind the reception area; the kitchen. The kitchen was
approximately 20' x 15' feet. Designed to be an open kitchen plan where the stove, sink and
prep counter all come together in a triangular formation for maximum functional utilization of
the design. This design detail allows for multitasking to take place and the open floor plan
allows for free flowing circulation throughout the kitchen. The last spatial division is a main
office, located on the maisonette, functioning as a space for meetings regarding the everyday
operational procedures and marketing decisions.
The system works as such that when an order is received:
1- The manager enters the order into a very basic POS system and manually in their
books. The digitally generated receipt is printed and moved to the kitchen.
2- Where the head chef checks the order and begins preparing it, with two kitchen
helpers besides him.
3- Once the order is prepared and packed, it is given to the rider who delivers it directly
to the customer. In case of pick up orders, the customer is given an exact time for
when food will be prepared and packaged for pick up, at time of receiving the order.

It is the responsibility of the two helpers to open the shutters and start food preps on a daily
basis, by 10:30am. Food preps include making fresh sauce and other side items, for the entire
day, which is packaged with the Mandi. The remaining staff begins to arrive between 11am to
12pm, despite accepting orders by 11am. Once the head chef arrives, he checks and gives the
daily requirements for the ingredients (demand) required, including meat, vegetables, etc. This
demand is then forwarded to the Manager, who forwards it to the CEO who in turn brings the
relevant demand requirements by 1pm. While, products such as spices, oil, rice, etc. are bought
on a monthly basis. Ample backup is kept for all ingredients in case of large urgent orders. The
average prep + cooking time for each order are 45 minutes and another 15 minutes for delivery.
The office area is suite-sized, well furnished with a seating area and an office table. There is a
screen next to the office chair showing the display of all cameras. This is where the CEO
conducts all meetings regarding marketing, planning and strategy. The marketing department
has been outsourced, with the planning being conducted by the CEO and executed by the
marketing agency.
The menu currently consists of Mandi in chicken, mutton and fish. Alongside this, Mutton
Kunnah was introduced a while ago, and Basbousa for dessert. They also offer an entire goat
Mandi for special events. Moreover, plans of an entire menu addition were shared with us,
assuring the highest level of quality in taste. Quantity has been divided according to the number
of persons, while there is another division within number of persons which goes by quarter and
half of 1 person serving. This was launched to incentive individual orders, alongside group
orders. When asked regarding grams per 1 person serving for rice was 450 grams.
Overall, the division of area was something they got right, especially the kitchen area. The
concept of an open kitchen allowed flow between stations. Separate stations of food
preparation, storage/scale/microwave, cleaning area, cooking area, then refrigeration and
storage for prepared and packed food, were apparent. The cleanliness seemed immaculate,
closer inspection would be required to better understand. The original recipe is in the hands of
the founder/CEO, and the head chef. However, numerous issues could also be spotted, such as,
lack of SOPs, checks and balances, KPIs, operational standardization, inventory management,
wastage, locational issues, digital footprint, marketing and branding, etc.

Problems Identified
Major Fluctuation in Sales & High Costs
There have been huge fluctuations in sales, with some weeks averaging sales between Pkr.
50,000 to 75,000, while some weeks go by averaging sales between receiving no orders to less
than Pkr. 5,000. The reasons from our understanding are numerous, including operational,
marketing and reach problems and locational issues.
Operational Issues
There seems to be a lack of any kind of system when it comes to basic operational day to day
tasks. A simple yet important task of receiving the order on call, punching it into the system
and books, lacks any check and balance. When questioned what would happen if the order
received is not entered into the system/books, prepared, sent and received payment for, they
responded that we would end up with a cash surplus. When questioning the manager, he said
that this could be an issue if I was not present, implying that the business was reliant on a
relation of trust with the manager.
Coming to inventory, there were no real checks and balances found in terms of understanding
how much inventory is needed and used. Other than spices, oil and rice, most ingredients were
bought on a daily basis, as they are fresh items. There was no proper system in place; everything
was based off an "andaza" system.
When discussing wastage, we were told that there was wastage daily in terms of rice,
vegetables and sauces. This wastage was prepared at day's end and given to the needy.
However, there was daily wastage, leading us to believe that they had inefficient
inventory/demand forecasting.
The portion sizes for both, meat and rice are extraordinarily high. The average portion for rice
in Pakistan is between 230g and 250g, they are offering 450g of rice. While two proper pieces
of meat, approximately 500g, are served with this amount of rice, all for a 1 person serving.
The location of the dark kitchen/office was next to the main road, on a double lane street next
to Yasir Broast and Savour Foods. The main road is a high activity area. However, the street
road gets worse as you go on, reaching a point where there no longer is a road, making reaching
the location very difficult. What was worse was that there was no location given online, such
as Google location.
The operational issues above have led to unnecessarily high costs, money which could be spent
on better marketing. Moreover, the location they have rented is too much space for just a dark
kitchen. Leading to even greater costs, causing problems for when there are fluctuation in sales,
putting pressure on the business.
Another major issue is that the product, pricing, packaging, all are premium, however, their
social media marketing and offline advertising are not up to par. Almost as if you want to target
SEC A, but, end up targeting SEC C, due to inaccurate marketing practices, as can be seen in
the exhibit for the menu/brochures, discussed more in depth below.
Digital Footprint & Marketing
Coming to the Marketing side of the business, this is one of the most major problems this
restaurant is currently facing. Their quality of marketing does not match the type of customer
they want to target. The product being offered is royal in nature and with the level of high
quality being offered by this restaurant, they can easily position themselves as a must have for
"royal" events, especially considering they offer entire goat Mandis.
When going through their social media presence, from start to end, it can be seen that they have
taken multiple attempts at fixing their marketing, but still unable to find the right agency/plan.
This difference can be seen shown in the exhibits. This sort of marketing is found to be done
mostly by restaurants catering to SEC C.
When searching for Mandi in Lahore, while Arabic Mandi does come up, thanks partly due to
its high number of followers. While their focus is on delivery, many do opt for pick up,
however, no location has been shared, the road is broken and no online reviews can be found,
no footprint in food groups, and not even the neighborhood restaurants were unaware of Arabic
Mandi, situated slightly down the street.
No Dine-in
As the restaurant current does not offer dine-in, they have set aside numerous plans for when
they do open up their new branch. They plan on making it high quality, introducing a new range
of items, focusing on service and ambience. However, the problem currently being that
operating in such a large area can be costly, especially when the entire area cannot be fully
utilized, leading to high fixed costs.

Recommendations
There are multiple areas which need improvements, as discussed above, and recommendations
can be made. To begin with:
Rent out a smaller kitchen, removing the office and reception, and separate the call center.
This will require either updating the existing POS system or buying a new one. Get a system
in which an entire customer database can be built, including address, name, previous orders,
etc. and have a standardized script for receiving orders. Incorporate in real-time the POS system
at the dark kitchen to detect as soon as the call center logs in the order. This will separate two
important processes, due to which the business will not have to base everything on trust.
Following this recommendation will eliminate one major issue of lying/stealing/theft, and
separate the two. It will also massively reduce costs, especially fixed costs, allowing for greater
sustainability.
Moreover, major changes need to be made in terms of marketing strategy. A location needs
to be added on Google, alongside a business account, which all loyal customers should be
pointed towards for reviews. Food groups will need to mobilized, some bloggers, reviewers,
critics should be invited, because the businesses biggest strength is its taste and cuisine. This
will help with SEO. Moreover, a much better marketing agency should be hired with all the
costs which will be saved by reducing rent/salaries and increasing efficiency. This new
marketing agency should overhaul the entire design for brochures, menus, billboards, social
media pages; introduce the concept of short viral videos, etc.
As of current, we have created a digital only menu, including a new logo, with updated portion
sizes. This menu will serve as a new template for Arabic Mandi to follow. For short term
basis, we are going to offer this new digital menu instead, shown in exhibits (Fig 14 & 15).
This is being offered as an immediate emergency solution, to guide the business towards a
better direction immediately. Moreover, KPIs & SOPs will be implemented. For the medium
term, an entirely new marketing strategy and then campaign needs to be formed, including
aggressive marketing and viral worthy content, including reviews, blogs, influencers, etc.
While, for long term, the top priority should be to have an established brand name, strong
operational SOPs, and a high quality dine in experience, in areas such as the newly established
DHA Markaz (Fairways).
Proper operational SOPs need to be formed. For example, the amount of ingredients which go
into a 1 person serving should be noted down to the dot and all ingredients being bought/used
daily should be measured at day end, against the number of orders received. This will help
reduce discrepancies in cash and material.
Also, portion sizes should be reduced, e.g. rice portion from 450g to 300, by gradually
reducing 50g at a time over a period of a few months, in order to not demotivate existing
customers. Also, this reduction in portion for rice and meat should in turn be shown in the
prices of the dishes, in order to attract more customers. The menu needs to be changed in terms
of making it less confusing. Offering against number of people is fine, but the portions need to
be reduced, and in turn remove the division of quarter/half, as there will be no need left for
those since 1 person will be enough for exactly that, 1 person, instead of 2 people ordering a 1
person serving dish, since the portion sizes are too much.
Lastly, a dine-in should not be offered till these foundations have been solidified, in order to
make sure that when taking the risk by investing more to open a proper outlet, proper work and
research must be done on operational SOPs, etc.
Conclusion
To conclude, from our understanding, this business has perfected its taste and standardization.
In terms of cooking, their production process is brilliant, including hygiene and scale. Meaning,
their greatest strength is their product, which is the most important factor in restaurants.
However, everything else is a disaster, including operations and marketing. For this business
to succeed, they need proper strategy, marketing and a real understanding of operational
standardization and checks. The high costs and fluctuation in sales can drive this business
down, if not handled well.
Exhibits

The building exterior and office interior (Fig 1 & 2)

Cameras and Reception Area (Fig 3 & 4)

All stations of the kitchen (Fig 5, 6, 7, 8 & 9)

Mandi (Fig 10)

New Menu Items Addition Proposal (Fig 11 & 12)

Existing Menu (Fig 13)

New Digital Menu Front & Back (Fig 14 & 15)
Miro Board
 MOMIN NIAZ
Lahore, DHA Phase II Q - 22 · +92 300 457 0044
momin.tanveer99@gmail.com · LinkedIn - Momin Niaz

I am a highly ambitious individual, with motivation of reaching the absolute top, and
with a smart mind to back it up. When I was younger, my lack of confidence was my
biggest weakness; however, I have since then reached a point where it is my biggest
strength. I believe in practicing kindness and humility in your daily life. I put a great
deal of focus on understanding on how to manage people, my people skills have become
a great strength for me, as I have witnessed greatly over the course of my MBA, leading
me to believe i can work well in managerial roles.

Since childhood, I have had a keen interest in businesses, coming from a business
oriented family. My interest is not only in being a business owner myself, one day, but
also in working for great organizations in order understand their structure. My dream
would be to create a positive impact on Pakistan's economy through the SME sector. I
would want to create brilliant businesses from scratch and take them to over $1 billion,
all made in/of Pakistan.
 MOMIL AFTAB
Lahore, DHA Phase II Q - 22 · +92 302 218 3919
aftabmomil@gmail.com

I am a highly motivated and enthusiastic individual with a passion for design and a back
ground in Architecture, currently pursuing my MBA. I believe in simple design solutions
which aid people in helping their association and understanding of space itself, by
incorporating psychological sensitivity. My design philosophy is built around the
philosophy of constant innovation.

I am known for exemplary time-management, problem solving skills, strong command

on geometry, metaphysical conceptual bases and project management for optimum
productivity. What I lacked previously was a good sense and understanding of
businesses, and how I can utilize my talent to better brand and market myself, leading
me to my MBA. This program has given me a completely new perspective with loads
of new information and understanding, which has led me to understand the differences
and similarities between the two. My dream is to be a successful entrepreneur.
Batalas Trading Company: The Case of Organic Elements by Mahnoor
Safdar and Minahil Chaudhary

Managing director stared out of the window of his favorite meeting room onto the streets of
Delhi Gate Market below, now lit only by the sparse streetlights and the occasional passing
motorcycle. It was early November 2022 and already the October inventory and invoicing
contradiction had just come in. They had missed their internal supervision at some point for
the tenth month of the year and the gap between projections was widening, as they are
following the manual receipt system and there wasn’t any software for their usage or record
keeping and the transaction history wasn’t maintained. As the Managing Director of Batalas, a
wholesaler of herbs and natural spices to enhance your recipe and making every dish delicious
for the end consumer, this contradiction was more than just a disappointing.

Batala’s Trading Company:

Batala’s Trading company was founded in 1956 and initially dealt only in herbs but later in
2005, added spices to their product range as well and started exporting the finest quality spices
globally. Batala’s was founded by the current Managing Director, Haider Shehzad’s
grandfather in result of having a keen interest in herbs and spices and how efficiently the right
and pure form of spices change the taste of entire dish and makes it more delicious and
tempting. Now the company has three shareholders, each holding equal shares of the company.
Their business has amassed tremendous growth in past 6 decades and currently spices hold
95% of the business’s trade, while the other 5% is held by herb. This shift in demand is a result
of an increase in demand of herbs and spices locally and internationally. The shop is located in
Akbari Mandi near Delhi Gate. They have their own warehouse near to their shop where they
have placed all the inventory with only samples of products available on their shop

Batala’s Workforce:
The workforce involves four people in lower management where two are the workers and two
are the accountants. We interviewed the Managing Director, Haider Shehzad, who does the job
of middle management and the director. The workforce consists of full-time employee.
Accountants and workers on the same level in hierarchy but the accountants have a higher
salary than the shop workers. All employee’s salary is on monthly basis; each employee gets
their salary at the start of each month who are paid on cash basis. One of these accountants is
an old one, who has been serving the business and its board of directors for years, while the
other one was hired through LinkedIn very recently.

Product Range in spices:

Batala’s deal in total of 45 range of spices, some of them are mentioned below, which are also
their best sellers, usually in high demand.
• Cassia/ Cinnamon (Dar Cheeni)
• Black Pepper (Kali Mirch)
• Black Cumin (Kalonji)
• Cumin (Zeera)
 • Clove (Laung)
• Star Anise (Badian Khatai)
• Saffron (Zafran)
• Tamarind (Imli)
• Dry Ginger

Batala’s Range in Herbs:

Batala’s range in herbs, which contributes 5% of the business and are grown in Pakistan are
mentioned below:
• Jeff
• Jalbatri
• Sana Maki
• Gum Nigeria
• Shells from the sea
Batalas also holds a monopoly in products like Kafoor powder, Gum Aloes and Warqiya.

Batala’s Operations:
The actions and decisions made by participants and members of a business that affect the
production, distribution, service, management, etc. needed for a company to function that
requires the use of resources and assets.
Batalas operations work in such a way that they import their spices from several international
vendors and then export globally. The countries from where they import spices and further
export these spices to Vietnam, Brazil, Afghanistan, Italy, China, Spain, Iran, Madagascar,
USA, Sirilanka and India. They have developed long term relations with their vendors and still
working with them till now. They order their required inventory (spices) in the month of
November as crop gets ready and the vendors load them in the container in the month pf
December. It took 1.5 months approximately to reach the destination which is Karachi Port.
Most of the times, inventory has been delivered in the month of January. This whole process
took almost 45 days. When the container reaches to destination, the 40ft loader or trucks further
load spices from the container and reaches to Batala’s Warehouse or storage area. Peak months
of their business or most demanding months of their business are Muharram, Rabi-ul-Awal and
religious events like Eid.
Batala’s supplies their products locally as well as export their products. Locally they supply to
Abbott, Qureshi, Hamdard and Suleman Dawakhana. Batala’s is an established company and
consumers have built trust on this brand as they promised to deliver what they have shown you
as sample. They say:
“Hum jo bori ke upr dikhatay hain, wohi bori ke neechay hota hai”
They follow ‘the customer is always right’ philosophy and he also mentioned that building trust
on customers took ages and slightest mistake to shatter. The managing director said, “We
developed our brand by the support of our customers so we always deliver the best quality
products to them and the nature of our business requires to retain our customers as they develop
the brand image of our company and their word-of-mouth matters everything to us because the
way they perceive our company will be the way others build repute of our company.”
The importing process include different stages as the spices are not man made but earth’s
natural grown products:
• Preparation of seed and fertile land
• Getting the crop ready
• Crop Cultivation
• Loading of the product in the container from the desired vendors
• Reaches the port in Karachi
• Load in again from the containers to loaders and trucks
• Reaches to the warehouse
The entire 40 ft container is directly unloaded at the warehouse which is 500m away from the
shop. The goods come in as khula and the company stamp on their brand to the final packaging
before selling it locally and exporting them to their clients. They only sell the goods in 40kg
sack packaging. There are a few products such as kalonji that have a smaller SKU size of 25kg
sacks as well.
Every product has different timings for their crops. Some of the products get ready by summer,
spring, winter or fall. For example, dry Ginger’s crop ripens in November, and is cultivated.
Batalas has outsourced two people who are just responsible for travelling to the country from
where they are importing the product for the inspection of the product that they are delivering
upto the mark and fresh product. Next step that takes place is packaging of the product, it packs
in sacks that we call “bori” in our desi language. Inspection team stayed there till they load the
product in the container. Batalas placed their logo on their packaging and they further export it
to globally. Supplier clarified all the documents and sent to the representatives of the company.
Also at the port the agent deals with the customs on the behalf of the company which they call
“custom agent”. Custom agent calculates the price on the 10% of total cost that is paid as
custom duty tax and deals with them at the port with all the released documents that they issued
from Banks. Bank Al Habib and Meezan Bank holds their required clearance documents that
are required at the port to get the products release.
One product can import from various different countries but they order the top notch quality
product. Sometimes in the case of natural disaster, they have to switch the vendor and lower
down one step down quality product. For Example, Thailand produces the best quality tamarind
(Imli) but they are unable to import from them because of flood. So now because of not leading
to the shortage of the product they are importing it from Barma and Indonesia. Because of the
shortage of Thailand Tamarind buyers are switching to Indonesian one, demand of the product
increased and the rate of the product also increases. Price and demand is directly proportional
to each other in this case. Negotiation also takes place but it all depends on goodwill of the
company and the representatives of the company.
Payback Period:
It refers to the length of time required for an investment to recover its initial outlay in terms of
profits or savings. Batalas caters both the options for the payment process of products that is
by cash and by credit. 80% of their work revolves on credit basis of 90 days. Payment on credit
terms refers to payment of product in 3 months.. If any client tries to extend this 90 days limit,
they are noted and from next time onwards, they are either not given discounts and credit
policies or are given at a low rate with a shorter credit period. On the other hand, the companies
that fulfill their dues on time are given bigger discounts as compared to what the others in the
market are offering. Moreover, only the ones with prior trade relationship gets the facility of
credit payback period of 90 days, the new customers will need to pay in cash before getting the
goods.
When it comes to exporting the product, that payment process takes place in three steps:
• 20% of the advance is required when the buyer just place in the order.
• 30% payment of the total cost is required when they load the product and reaches to the
port and depart for the final destination.
• The rest 50% of the payment when the product reaches to the buyer.

Order Qulaifiers
Order qualifiers are necessary attributes that a product must possess for it to be entered into
competition. Market has become very saturated and barriers for entry has been increased. This
business can only be done if someone has the large amount of capital because not only import
of the product matters here, also the payment of the customers that took on credit terms. This
is the main barrier to enter in the business of spices and herbs. One other reason that mentioned
by the interviewee is that they have developed long-term relations with their customers as well
as with their vendors. Their customers prefer to maintain these relations as they don’t want to
do any experiments by changing their product supplier.
On the other hand, in order to qualify they need to offer the lowest price possible since they are
competing on a low price strategy. Batalas has been present in this market for quite a few
decades and have established a good reputation and credibility in the market along with good
relationships with their clients which helps them when selling to their clients.

Pricing:
Batalas pricing strategy depends on various factors; product price, packaging of the product,
freight cost to and from Karachi and all cost is relatively to the 40 kg packaging. The only two
factors that contribute to minimize their price by negotiating from the supplier and by lessen
up the transport cost to and from Karachi. The transport cost can be controlled in such a way
that they negotiate with the truck drivers as they take price per kg which is set as 5.5 rupees
per kg which can be finalized as 4.5-5 rupees by negotiating with them. To calculate the price
the company adds the following:
Cost of goods purchased (70%) + Custom Duty (15%) + Freight and transportation cost from
Karachi to Lahore (15%) ÷ Total Kgs of products imported
Reorder Point:
They consult the stock register and base their decision of placing an order on variables such as
the next crop for that product, demand in the market and how much stock is left in the
warehouse, the current season, prices in the local and international market and dollar rate. The
local demand depends on peak seasons such as wedding season or other holy events such as
Eid or Rabi-ul-Awal and so the company places orders 1.5 months before such peak demand
seasons. Another way to examine demand in the market is when people in the market start
asking more about a specific product, it’s an indicator that either the supply for that product is
low or the demand is rising. Moreover, there are a few products that are bound to get sold no
matter what since the demand for those products is always high; Cinnamon, Imli, Black Pepper,
Star Anise and Saffron. Hence, there isn’t a set reorder point of each order, since there are a lot
of variables they need to consider and it is usually seasonal and depends on the next demand
season too.

Quality Control
The company needs to submit two certificates to the Pakistan Customs Authority as requested
by Ministry of National Food Security and Research (MNFS&R):

1. Phytosanitary Health Certificate: This certificate verifies that agricultural products have
been inspected and are pest and disease free.
2. Fuminagtion Certificate: This certificate validates that all boxes or shipment containers
have been chemically disinfected (with a food safe disinfectant in this case).

These certificates are issued by the exporter of the products (e.g. CV. Agro Mega, Jordan
International). These certificates are sent to the importer and kept safe at a bank, in this case
either Meezan Bank or Bank Al Habib in Pakistan. Once the shipment reaches Pakistan, the
custom officers request these forms and upon inspection, they release the containers to the
company. Moreover, in order to manually check the products before they’re loaded on to the
ship, an inspection team (outsourced) representing Batalas Ltd goes to the exporter’s country
and inspects the products.

Inventory:
Batalas Limited follows the perpetual inventory system, where they keep a track of all the
receipts in their khattas and update the inventory on continuous basis. In the ABC method of
managing inventory, they keep an inventory of raw materials so their inventory is classified in
the C class, which means it has a low annual dollar value, has a low storage cost, no engineering
costs and relatively low delivery and quality problems as well. The only storage cost they need
to pay is for the cold storage items i.e. PKR 60/ bag per month. As they keep selling their
products, the inventory keeps going down and so does the cost they need to pay for their
inventory kept at the cold storage. Moreover, the inventory model followed by them is the
independent inventory model – the demand for an item is independent of the demand of any
other item in the inventory. Dry Ginger is an item that discharges liquid after it is cultivated
and packed into sacks. This release of liquid affects the product when it is being weighed and
from being packed to ship to the shipment reaching the company’s warehouse, the final weight
of the product can go down as much as 2kgs which means they end up paying more for the
quantity of products received.
Batalas should follow a quantity discount model of Economic Order Quantity since they have
an edge as they have their own warehouses and the expenses of electricity and rent aren’t as
high for them either so they can afford to keep an immense amount of inventory in their
warehouses. Their total cost of keeping inventory of black pepper would be:

2DS
Q* =
IP
D/ Semi annual demand in kgs = 260,000
S/ Ordering cost = Delivery (*6500 x PKR 50) + Ordering (PKR 550,000)
= PKR 325,000 + 550,000
= PKR 875,000
I/ Holding cost per unit per year expressed as a percent of price P = ***19% of PKR2000
=380
P/Price per unit = PKR **2000/kg

2 ∗ 260,000 ∗ 875,000
Q=√
380 ∗ 2000
= 773.7468

*6500 = 260,000/40 (40kg product per bag)

**2000 = 80,000/40 kg (80,000; cost per container of black pepper)
*** 19% = Refer to Table 1

Challenges faced:
During the importing process, water spillage due to human error or splashes from the ocean
can damage the goods. The managing director gave the example of their product, Gum Aloes,
that was imported and out of 500 sacks, 15 sacks were damaged due to water spillage. However,
he claimed such occurrences are very rare and the margin of error is only 1%.

Competitors:
Their competitors include the other herbs and spices wholesalers who are present in the same
market e.g. Kazim and Sons, Multinational Corporation, Najaf Trading Company. These
competitors are operating the same way Batalas operates, in the way they import herbs and
spices as well. The market competes on price competition and whoever offers the lowest price
gets the higher revenues. The price offered also depends on the rate the import documents are
retired on. The import documents include the following:
• Bill of Landing
• Packing List
• Commercial Invoice

Problems Identification:
Inventory Management
We identified that the biggest problem they are facing is their inventory management. They
have 3 separate books just to keep track of their sales and inventory management. However,
there is still a lot of room for fraud and after experiencing fraud in the past, the owners, instead
of moving towards a better way of inventory management, tried keeping a stricter control over
their operations while trying to minimize their employee base. This way is very ineffective as
well as inefficient and the current managing director realizes that. We suggested multiple
inventory management systems but to keep it simple, the owner was willing to incorporate
basic inventory management on excel. This is necessary because products such as cinnamon
powder need to be weighed in twice every day since they can fly away in the air.

Packaging during shipment:

The managing director also mentioned that they damage due to water spillage is a major sunk
cost for the company. We suggested that this could be avoided by resorting to a better
packaging e.g. plastic packaging that could be reusable as well. However, the managing
director claimed this would lead to an increase in cost for the company and it would not be
sustainable for the company unless they pass it on to the customers. That would not reflect
positively on the business since they are already operating on the low price strategy and the
customers are already very price conscious with other competitors in the market present as
well. This leaves very little margin for the business themselves to add other costs or increase
the prices.

Recommendations:
The managing director is looking to expand the business to European and US market. He
especially stressed Spain in the European market and believed that even capturing 1% of that
market would provide him with the total revenue the company is earning at the moment. He
further elaborated that the demand for Batalas’ products, especially black pepper, cinnamon
and dry ginger is prevalent in Spain with an estimated order size of 700 tons per order, which
is the equivalent of the total amount of product they sell in a year as of now. In order to do so,
the company needs to have a functioning website in order to reach a higher target audience.
They should also get their business registered on google which will raise their credibility for
their clients and increase their international reach. Moreover, they should also extend their
product line by adding more herbs and spices to their product portfolio and advertise them with
their benefits and use cases using mediums such as pamphlets or social media banners,
The problem identified by the managing director was that a very small population knows how
to utilize the herbs which led to the fall in demand for them and making them switch to spices.
If Batalas manages to create awareness about the herbs they offer, they might witness a rise in
demand. As a short term solution, they can reach out to small hakeems who sell homemade
remedies to customers who cannot go to a professional doctor due to financial concerns.
Table 1 Determining Inventory Holding Costs
CATEGORY COST (AND RANGE) AS A PERCENT OF
INVENTORY VALUE
Housing costs (building rent or 4% (3 - 10%)
depreciation, operating costs, taxes,
insurance)
Material handling costs (equipment 2% (1 - 3.5%)
lease or depreciation, power,
operating cost)
Labor cost (receiving, warehousing, 3% (3 - 5%)
security)
Investment costs (borrowing costs, 8% (6 - 24%)
taxes, and insurance on inventory)
Pilferage, space, and obsolescence 2% (2 - 5%)
(much higher in industries undergoing
rapid change like tablets and smart
phones)
Overall carrying cost 19%
Exhibit 1: PERT Diagram:

It takes a total of approximately 63 days for the goods to reach the warehouse from the day the
order is placed for them.
Exhibit 2: Process Flow:

Shipping 45 Days Mailing QC

Placing Order
Doc

15 Days

7 Days

Mailing
Shipment 1 Day
Import Doc
Reaches to
Karachi Port

5 Days

3 Days
Submitting Doc Release of Goods
to Duty Customs

3 Days
Goods reaching Delivering Goods
cold storage and from Karachi to
warehouse Lahore
Exhibit 3: Batalas Trading Company Warehouse

Exhibit 4: Shells from the Ocean

Exhibit 5: Gum Nigeria
Exhibit 6: Miroboard Summary of the case
 MAHNOOR SAFDAR
Lahore · 03317513737
mahnoor.safdar8@hotmail.com · Mahnoor Safdar

Mahnoor is currently a student of MBA at Lahore School of Economics. She completed

her BBA from Lahore School of Economics in 2021, with a degree in Marketing and
Media. She worked as a Digital Marketing Executive at Rezaid, managing clients in the
cryptocurrency ecosystem all around the world, before joining Publicis Media,
Brainchild, as a Social Listener to Nestle.

She excels in environments which lets her creative juices flowing, challenging her to
think outside of the box and learn something new each day. She aims to secure a job as
a product manager in the near future which would hopefully let her unlock her creative
potential and venture into a field as her creative outlet while challenging her to keep
refining her output.

Another passion of hers, second to none though, is venturing out into the field and
getting first-hand knowledge about the products and mechanic governing different
markets. The case study about Batalas Trading Company provided her the perfect
opportunity to venture into the world of herbs and spices and presenting something akin
to a sales pitch in the face of unyielding circumstances.
 MINAHIL CHOUDHRY
Lahore · 03324627846
Minahilch2999@gmail.com · https://www.linkedin.com/in/minahil-ch-/

I have completed my Bachelors in Business Administration. I have done major in

marketing and minor in media studies in 2021 from Lahore School of Economics and
currently doing MBA from the same institute.

Previously, I have done job in Descon Group of Companies as a Sales & Proposal
Executive. I have Worked with Inspection Division. My second Job was at Hyundai
Nishat Motors Pvt. Ltd. I was appointed as a Marketing Communication Executive.

Further in future I want to be expert in my field as marketing requires creativity and

innovation with the changing times and trends and I like to design and pitch new ideas
and incorporating them with the help of my fellow employees and want to land in well
reputed Multinational Organization. I want to learn professional as well as moral values
which help me in becoming not only professional but also a better human for our society
and country.
SECTION B
LOADX: Challenges in Logistics and Supply Chain Management by
Muhammad Jawad ur Rehman Khan and Saif Raza

Company Overview:
LOADX is a firm that provides logistics services and is headquartered in Lahore. It has 8
different offices in major cities of Pakistan. LOADX first began offering its services in the
United Kingdom. Dr. Muhammad Awais was the one who initiated the project in 2015. They
have another company named as Soft and in couple of months another company named Freshin
is going to be launched in Pakistani market. LOADX is a service providing firm with unique
features such as professional transporters, instant price, real support, full Pakistan coverage,
secure booking and saving emissions. Their tagline is "Move Anything, Anywhere," The
company is attempting to find solutions to all of the logistical issues they are currently
experiencing.
The goal of the company is to gain the highest profit along with satisfying customers fully by
delivering their parcels to the right destination as quickly as they can and in the right manner.
Areas of Operations management that are covered in LOADX are: employee training, they
train their employees on a regular basis, since LOADX is a service providing company
therefore it is important for them to have a trained staff that is ready and willing to help the
customers as fast as they can and with great deal of efficiency. Furthermore, since the
company's core service is to deliver parcels to the right place in the right time therefore, it will
be justifiable to say that the concept of Just in Time (JIT) can be applied here this means picking
up the right order at the time that it has to be delivered.
Taking into account the challenging conditions that are now present in the logistics sector, the
LOADX firm was established with the objectives of reducing the total amount of time spent
delivering the product and to enhance the quality services provided to customers. You can
connect with carriers located across the country with LOADX. In addition to this, LOADX
offers you the most competitive pricing in the industry. All you want to do is book and take a
seat down back & relax, we join you with a transporter who then arrives at your chosen time
& day to finish your job. We additionally make matters even extra easy through imparting you
in with the coverage of your gadgets and steady price process. LOADX always believes
that customer support is the cornerstone to any business with that during thoughts you've get
right of entry to customer service 7 days per week through phone, email & chat. LOADX now
has a contract with both Daraz and Levi's and has grown its workforce to 450 drivers. They use
their own delivery vehicles and personnel to carry out the delivery of large orders that have
been placed on Daraz. In addition to this, it is attempting to reach an arrangement with Pepsi
which will enable LOADX to deliver bottles from the manufacturing plant to the warehouse.
This paper goes on to detail the issues that plagued the business, causing losses even while it
sought to increase market share and profits. There were couple of significant issues
identified that make them suffer now and will cause them trouble down the line. Forecasting
both their financial situation and their challenges, LOADX is certain that they will be able to
deal with them in the long run and that they will be able to capture the largest proportion of the
market. Their main focus is to streamline the supply chain management process. Every business
experience issues from poor management, in the case of LOADX, a firm that provides courier
services, customers use their services to transmit vital goods. The security of the product is one
of the issues that can arise with LOADX services. This is one of the most frequent issues as
many of their rivals, including DHL and other courier services providers, also had to deal with
security issues. In the case of DHL, someone sent a package, but it was later lost, which resulted
in issues for the company. This is the main issue that has affected logistics providers in the
past.
LOADX Culture, Innovation:
As discussed earlier that the company deals in logistics and delivers parcels from one place to
another therefore, it is an ethical responsibility of the company to deliver parcels of the
customers without breaching their privacy. This means that the parcels should not be opened
or damaged by the employees while delivering them. LOADX takes this issue very seriously
and in order to cater to this problem they have started monitoring the working of their
employees and each parcel is packed in a way that it cannot be opened by anyone except the
person to which it is being delivered. Moreover, the company has started moral training of its
employees so that they can counter this problem. Also, customers can complain if they are
faced with any of this sort of problem. Furthermore, the world is becoming more and more
aware of the environmental changes and becoming sensitive towards this topic therefore, the
companies around the world also have started practising Corporate Social Responsibility
(CSR). Similarly, LOADX also believes in the betterment of the environment and is aware of
the hazardous effects of emission of harmful gasses. Keeping in mind this aspect the company
has encouraged customers to use shipping methods of their couriers so that the environmental
effects can be minimized. Lastly, the company strongly trusts its employees and believes that
its employees are its core assets therefore, the company has taken several steps for the
betterment of its employees and have made sure that their voices and concerns are heard so that
they do not feel that they don't belong in the organization.

LOADX is making efforts to build organizational strengths to achieve maximum profitability

growth and to diversify itself into the new market. This helps the company to gain excellence.
Innovation allows LOADX to build competitive edge such as low price and quick delivery. For
this purpose, the LOADX has implemented several steps into their operations which incudes
web base management system (WMS), 24/7 Call Center, tracking system etc. Customers can
order, monitor, and manage their goods using a web-based management system called "WMS.
Furthermore, for customers convenience service centers are located in strategic locations and
the 24/7 service offers LOADX customers different channels of communication. LOADX has
also introduced a new medium for the customers where they can give their feedback and
suggestions which allows the company to enhance their services.
LOADX adds value to the customers in a way that it even works on special occasions so that
the deliveries of their customers can be made on government holidays. Delivery is not offered
on weekends; however, customer service is available 24/7. LOADX should take certain steps
to reduce plastic as it is hazardous to the environment. This is a long-term task that needs to be
considered.
Operations:
The company LOADX provides an easy approach that customers may take advantage of. In
order to complete this step, the customer must place their order on the company website. The
very first thing that they do is record all of the information that they need to know about the
location of the drop off where they want to send the product. Following the selection of the
pickup location, the buyer will next select the vehicle type, taking into account the nature of
the items as well as their weight. The vehicles can range anywhere from a loader rickshaw,
which can carry a load of around one ton, to a 22-wheeler container, which can transport up to
forty-five tons. Additionally, LOADX provides the option of using a helper, which is often
used for the purpose of loading hefty goods. However, an additional fee is required to pay for
the assistance provided. After you have provided the website with the aforementioned
information, it will provide you with an estimated pricing within the next 30 seconds. This is
the one thing that sets LOADX apart from the competition. The following step is to fill in the
specifics, which includes the city, the person's name, as well as the phone numbers for both the
sender and the receiver. After that, a representative of LOADX will come to your location to
load and pack the parcel in a manner that is suitable for the type of item that is being shipped.
If the product is to be delivered within the same city, they hand the product over to the delivery
boy and provide him with the address where the parcel is supposed to be sent. If the parcel is
to be delivered to a different city, it is then transferred to the truck or van. If the package is to
be delivered inside the city, it will be delivered within twenty-four hours; however, if the
package is to be transported to a different city, it will take between two and three days to deliver
the package. The overall process has been shown in Figure A.
Work breakdown structure at LOADX:
The LOADX work breakdown structure is depicted in the diagram (Table 1). Activity A in the
image represents the placement of orders, which marks the beginning of all other activities.
Activity A will be immediately followed by activity B, which will consist of packaging the
order. At this stage, the customer receives an email including the tracking identification number
for their product. After then, the process of shipping is represented by Activity C. The item has
been sent, and the consumer may monitor the status of their product by using the identifier that
was emailed to them. After the item has been dispatched, the next step, Activity D, which is
the delivery of the package, will take place. The delivery time from the site is somewhere
between five and six hours, depending on the distance of the consumer. The consumer is given
the opportunity to examine the goods for any signs of damage once it has been delivered.
Activity E is known as the "Reverse logistics" activity. LOADX does send the driver another
order from that city in order to prevent the driver from incurring any losses.
PERT Diagram:
This figure illustrates the work breakdown structure in the form of a sequence and specifies
distinct times for the tasks, such as Early to start (ES), Early to Finish (EF), Late to start (LS),
Late to Finish (LF), and Slack time (SL). The event will begin at its earliest possible time,
which is ES. Therefore, in the case of LOADX activity A, which entails placing orders, there
will be no early start time, it will be 0.
Location strategy:
Selecting the location to open LOADX centers is one of the most important factors. LOADX
centers are located in the commercial areas and place which are easily accessible by the
customers. Furthermore, to provide better services LOADX is increasing its customer centers
and channels across the country. This atmosphere is very favorable for the courier and logistics
industry.

The main factor for selecting a location is low cost, availability of labor. So, the warehouses of
LOADX are located in those regions/areas where there is availability of utilities and
land/construction cost is low. LOADX has also established centers in many cities of the
country, with a particular focus on areas with fast and reliable transportation system, so that
packages can be delivered on time.

Planning:

Sales and operations planning is very important for LOADX. Demand forecasting is needed to
know when to bring in extra hires for peak seasons. This is comparatively easy to do as logistics
follows a very predictable trend which does not vary much from forecasted values. However,
Covid lockdowns were a true testament. LOADX saw a huge influx of online COD orders
which resulted in massive operational changes in the company. However, such events are not
routine and demand forecasting can be relied on to a great extent.

For LOADX, it is of the utmost importance to have a highly precise projection of the number
of man hours that are required in order to fulfil customer demand. Because this is a service
sector, having enough manpower to meet customer demand is extremely vital. It is also
essential to ensure that there are backup resources available in the case there is a sudden
increase in demand. Because the majority of the work performed by the labour force is
unskilled, it is essential for LOADX to be able to allocate various persons to the task and swiftly
swap tasks, when necessary, in order to ensure that the process is carried out in the most
efficient manner possible.
Key Challenges:

• Most of people are unaware of the app provided by LOADX. A significant obstacle for
LOADX is increasing people's familiarity with the app. Most of people are not aware
of the app. They are still using traditional methods for delivery of the items.

• The second issue with LOADX does not have its own vehicles; rather, they leased the
trucks, and when a driver takes a truck out for a delivery, it is their responsibility to
maintain the truck. In addition to that, the drivers who are transporting the goods may
sometimes act as though the truck has broken down. When this happens, the vehicle is
driven to nearby mechanics, who then detach/extract various components from it.
 • In certain circumstances, mechanics even remove the truck's whole engine. In this
particular scenario, Load is responsible for covering all of the costs. The corporation is
responsible for paying the costs associated with maintaining Onboard vehicles, which
leads to an increase in the firm's overall operating expenses.

• Due to the fact that LOADX drivers are not required to make a long-term commitment,
the company does not have a formal contract with them. This might have negative
repercussions, such as the driver leaving the firm, which would result in financial loss
for the business.

• In addition, the delivery costs that are charged in the local market are fluctuating
frequently as a result of economic and political factors; however, the app that is
provided by the firm does not update its prices as rapidly. It is possible for it to result
in the company offering a lower price to the consumer, which will have a consequence
on the profitability of the company.

• Changing political situations and ongoing protest are contributing factors to the price
fluctuation. This is another significant issue. For instance, the drivers are required to
deliver goods from one location to another, and sometimes, the whole operation of the
supply chain can be thrown off by floods or other adverse weather conditions. As a
direct consequence of this, the expense of fuel is the main point of contention. In case
of extreme weather condition, the driver had to wait for some time, and if the condition
is extremely bad, the wait can be extended to one or two days. It can increase the lead
time and can have adverse impact on customer satisfaction.

Solution/Recommendations:

• In order to prevent any risk of theft, the company had to deploy its own mobile
workshop to respond to the problem. The mobile unit will fix the vehicle, and if the
repair is going to take an excessive amount of time, they will get in touch with the firm
to ask them to send a replacement truck. It will ensure that there is no delay in the
shipments. In order to solve this issue, LOADX ought to have its own fleet of delivery
trucks and personnel. They have to purchase cars on payments, ranging from loader
rickshaws to 20-wheeler containers. It will allow LOADX to safeguard against theft
and streamline the processes involved in their supply chain.

• Furthermore, to keep drivers connected with the company, LOADX need to establish
a legally binding contract with the driver and provide them with a significant amount
of money in exchange for their continued service to the firm. Employees and labour are
 always a company's most valuable asset, and showing appreciation for them is one way
that businesses demonstrate they care.

• LOADX does not have a human resource department; so, they need to establish a HRM
department in order to properly care for the staff members who are now employed by
the firm. This department will watch out for their well-being and provide
encouragement for them by making attractive offers and incentives to them. In addition,
they will get higher rewards based on how well they have performed in their jobs. They
won't be able to concentrate on the task that has been assigned to them until they see
evidence that company is appreciating their efforts and duties.

The company is working to solve these issues, and in the long run, they intend to take on board
the trucks. With the assistance of this, they will be able to make a profit, and the majority of
the company's efforts are based on the credit system, and they will soon be able to do eliminate
it completely. LOADX's unique selling proposition is that they provide the pricing within thirty
seconds, which enables the consumer to make a choice on the spot. In contrast, other rivals
take a longer amount of time to provide the price, which results in a loss of customers for those
businesses. Since LOADX has stated that they will include an increased number of trucks into
their operations and it has the potential to dominate the market for logistics services in the long
run.

Table 1: Work break down structure

Activity Duration Predecessor

A) Order Placement 1 hour -
B) Packing 2 hours A
C) Shipment 4 hours B
D) Delivery 5 hours C
E) Reverse Logistics 4 hours D

Figure A: Network Diagram

Start A B C D E END
 Table 2: Critical path (CPM)

ACTIVITY ES EF LS LF SLACK ON
CRITICAL
PATH
A 0 1 0 1 0 Yes
B 1 3 1 3 0 Yes
C 3 7 3 7 0 Yes
D 7 12 7 12 0 Yes
E 12 14 12 14 0 Yes

Figure B: Pert Diagram

0 A 1 1 B 3 3 C 7 7 D 12 12 E 14
START 0 0 0 0 0 0 0 0 0 0 END
0 1 1 1 2 3 3 4 7 7 5 12 12 2 14

Figure C: Process flow

Figure C: Miro Board
 MUHAMMAD JAWAD UR REHMAN KHAN
Lahore · 0334-3331312
jawad.khan3106@gmail.com · https://www.linkedin.com/in/jawad-khan-10a5bb22a

dHere

Before starting my introduction I want to quote one fact.

What God has for you, Is for you. Trust his timing. Trust his plan

Starting with the introduction, my name is Jawad Khan and I am from Bahawalpur. I
completed my early education from Bahawalpur. In Bahawalpur, I thought that I am in
a bubble and I want to get out of my comfort zone for that I decided to move to Lahore
or Islamabad for my graduation and then I gave tests in many universities. At the end, I
came up with the decision that I should study in Lahore School of Economics because
LSE work’s on your grooming like presentation skills, communication skills, etc. When
I came to LSE in my bachelor I was a different person but in those 4 years of my degree
I learnt a lot. I have a grip on MS office as well as I can make logos, posters, etc. My
keen passion to learn more skills which can add value to my personality.

At 25 May 2022, I completed my degree on “BBA major in Marketing and Minor in

Media Studies” which was an achievement for me because I sacrificed a lot in those 4
years. I lived in a hostel, ate hostel’s food and learned how to set your bed and wardrobe
which was new experience from me. After graduating, I did a sales job in a Marketing
agency for 6 months. I was working part time from April and after graduation I started
permanently which added value to my experience. I touched the corporate life too but
after sometime I decided to do MBA and for that I took admission in LSE again. I am
currently in my MBA program and I am learning a lot from it because I did a job and
most of the concepts are relatable from job. I hope MBA will add on more to my
experience, I will learn a lot from my Post Graduation and start my job in a well-known
company.
 SAIF RAZA
House 44 Executive block Paragon City, Lahore · 0304-2200989
saifr7048@gmail.com · https://www.linkedin.com/in/saif-raza-0515571a2/

ere

My name is Saif Raza, born and brought up in Multan. I had completed my schooling
from British International School Multan. I scored 92% in Matric and 81% in
Intermediate. From my school days, I was interested in business and always wanted to
get into this field. So, in 2018 I moved to Lahore to pursue a Bachelor’s degree in
business Administration from Lahore School of Economics. Currently I’m enrolled in
MBA program at LSE. I’ve done a couple of internships in renowned organizations of
Pakistan such as PEL where I assisted marketing department in their advertising and
promotional activities. Besides my academic pursuits, cricket is my passion, and I’m a
part of LSE cricket team.
I'm really passionate about my work and I'm always looking for new ways to learn and
improve my skills. I'm also a firm believer of teamwork, and I think that working
together is the best way to achieve success. I'm excited to start my career in multinational
organization and can't wait to see what the future holds for me.
Khaadi – The Experience Hub: An Omnichannel Strategy byAqsa Nadeem
and Fatima Zahid

Coronavirus at long last got Pakistanis to spend on fashion over the web… yet majority
organisations were taken off-guard. -Pakistan Today, June 2020

July 23, 2020. Shamoon Sultan walked in his office pondering upon how to revert customers
towards brick and mortar post the pandemic. He knew that there is no going back to how it was
anytime soon. The fear of contracting the virus would mean that people have no other choice
but to shift towards e-commerce. Research by McKinsey shows that consumers are likely to
adapt to these stay-at-home orders, which means spending more time over the internet shopping
online and fewer mall visits. Big giants like Khaadi cannot afford to be in a wait-and-watch
mode. Shamoon always knew that there is a need to revamp the retail experience but now, more
than ever, it is important to bring these changes at a staggering rate. Moreover,along with
improving their retail experience it was also very important to create and omni-channel
experience by improving their online presence as well.

A New Baseline – An Omnichannela Experience

To begin, retailers need to adjust their in-store activities in a way that they conform with the
standard operating procedures (SOPs) given by the World Health Organization in regards to
Covid ’19. This will include limiting the number of employees and customer interactions,
wearing masks, maintaining a 6-feet distance, implementing contactless transactions, adding
more self-service options and enhancing service quality as well as speed. Along with
reengineering their retail experience it is also important to focus on improving the e-commerce
experience in order to make it seamless. Consumers will no longer stand sub-par digital
experience. Limited chances do exist that consumers might revert back to brick and motor post
pandemic but that assumption cannot be relied upon - augmented in-store operations along with
a well-functioning e-commerce experience are the table stakes.

Rethinking the In-Person Experience

Since 2013, Khaadi has been putting more priority on the retail experience than just selling the
product. Khaadi has been one of the pioneer brands to focus on providing special experiences
and services in-store not just to sell products but also to attract customers so that they can spend
more time in stores.
Because of Covid-19, all businesses will need to improve the in-store experiences for
customers who may physically visit. They must provide visitors with a compelling motive to
visit stores in a way that it outweighs the health dangers they may be exposed to as well as the
habits they developed during the shutdown.
Retailers should focus on providing unique experiences because they serve a better purpose of
not only enhancing what was already being provided to customers and fixing the drawbacks of
current choices. By providing premium store layout, ease of transaction and other
conveniences, Khaadi made visiting stores better over online shopping.

Company Background

Khaadi was founded by Shamoon Sultan, 24 years ago in 1998. Khaadi has become one of the
leading brands in the country. It is a one-man vision built with strength, faith, and leadership.
It is now spread world-wide in 19 countries to cater to aesthetically astute consumers who value
designs inspired by global cultures. Khaadi has its outlets in Asia, Europe, Australia, America,
Northern America and Middle East. The brand is famously known for its superior quality
manufacturing fabric representing the culture in a beautiful blend of colours and prints. Khaadi
has 60 stores in Pakistan distributed amongst 30 cities. It is also a leading brand in lifestyle
with Khaadi home, Khaadi Khaas, accessories etc.

Khaadi focuses on three main objectives that are 1) Continuous improvement 2) state of the art
stores and 3) Advance technology. Khaadi has spent around 100 billion rupees on technology
and has inculcated innovation in all resources, systems and processes from product lifeline,
delivery, design, production, warehouse to loop. The ideology behind the design is the culture,
colors, heritage and craft. Their designers are inspired by the places all around the world and
became a multinational apparel brand. The state-of-art design is the brand’s strength and is
echoed in every product under their name. Shamoon Sultan made a revolution by introducing
this trend. Khaadi has maintained its number one position in terms of revenue amongst retail
brands. Khaadi’s compounded growth over the past five years has been 28% vs 12% for the
industry. Over the couple of years Khaadi has expanded into a huge retail brand with a total
number of assets of ~PKR 11 billion. The total leveraging amount for the Khaadi Group
maintains a high position with a total annual revenue of ~PKR 15.1 billion.

Revenues
Khaadi’s revenue declined to PKR 15.1billion in fiscal year 21 as compared to PKR 15.7billion
in fiscal year 20. This was mainly due to the negative impact of the pandemic that hit in 2020.
The revenue is mainly obtained from local sales of 93.4% and the remaining is from sales
through exports. The revenue in the first quarter of 2022 was PKR 4.6 billion and shows
enhanced performance.

Margins
The gross margin of the company is stagnant at fiscal year 2021: 31.7% and fiscal year 2020:
31.4% due to a reduction in sales mainly due to the negative effect of the COVID 19 outbreak
which resulted in a lockdown. Moreover, due to its high operating costs, the operating margin
was negative in FY21: -2.4% and FY20: -5.6%. The financial cost of the corporation rose to
PKR 1.2billion as compared to PKR 1.43billion in the years before as Khaadi took a long-term
loan of PKR 2.9billion for the very first time: Due to it the Company made a net loss of PKR -
130 million in fiscal year 2021 as compared to fiscal year 2020 PKR -1.54billion.
The improved net income was due to PKR 1.2billion interest income from the turn-around of
IFRS-16. Therefore, Net margins got better by -0.9% in fiscal year 2021 as compared to -9.8%
in fiscal year 2020. Khaadi’s net profit as of Sep-21 was PKR 53 million. Their net margin also
improved by 1.2% in September 2021.

Margins
FY 21 FY 20
Gross
Margins 31.70% 31.40%
Operating
Cost -2.40% -5.60%
Net Profit
Margins -8.60% -9.80%

Figure 1: Margins FY 20 and FY 22

Competition
Due to an increase in demand for textile products internationally, driven by a strong post-
pandemic rebound worldwide, the country's textile exports increased by 28.6% between July
21 and August 21 to reach USD 2.9 billion as opposed to USD 2.3 billion. The medium-term
forecast for the textile industry is anticipated to be stable going forward, with a predicted rise
in demand for textile goods. Due to the COVID-19 variations breakout, there is still a chance
that demand may only slightly decline in the future. The textile industry has had great
performance in the local market. The State Bank of Pakistan's relief efforts, which include a
salary refinance programme, low interest rates, and a year-long delay in loan payments. The
textile sector was also comforted by the relief measures implemented by the State Bank of
Pakistan, such as the one-year postponement of loan payments, low interest rates, and salary
refinance programme. Khaadi holds a solid position as compared to its rivals. Khaadi's rivals
include Bareeze, Ethnic, J., and Ideas by Gul Ahmed, Sapphire etc. Khaadi leads these rivals
with a sizable market share. Exhibit 6 shows Khaadi and its market share along with some of
its competitors.

5.2% market share in the apparel industry. Ideas (5.2%), Ethnic (4.2%), J. (3.5%), and Bareeze
(2.8%) are the companies that come next. Khaadi's industry-wide compound growth rate is
28%, whereas the retail sector's is 12%.
Nishat Linen
Nishat Linen transforms fashion and incorporates cultural aspects into the designs and
concepts, bringing their consumers the colours of the east spiced up with flair and grace. They
are in charge of presenting attire that reflects the consumer’s fashion sense. The modern, yet
straightforward, and incredibly eye-catching colours and cuts are what make their apparel
beautiful. They keep the quality of their products high because they care about the demands of
their customers. They have something that can appeal to everyone's hearts and minds, whether
they be women or children.
Nishat Linen provides both stitched and unstitched clothing lines, so their consumers may pick
the style that best reflects them.
Beechtree
In 2010, Beechtree was unveiled as a multipurpose high-street wardrobe option for young,
motivational, and independent girls ready to change the world. When there wasn't much
available in the pret area, HKB, the parent firm, noticed a void. Since 2010, the brand has
expanded in terms of the number of outlets and product categories due to the innovation and
commitment of their team. The company, originally only sold pret, now they also sell a variety
of goods, such as unstitched clothing and accessories.They present themselves as a brand
for the masses because their perception revolves around the fact that fashion is for all. Each
product category offers stylish yet functional clothing with cutting-edge styles. They aim to
encourage young girls to keep positive self-expression and have no fear while adhering to the
newest fashions by using funny designs and eye-catching colour schemes.
Beechtree now has a significant presence both online and offline. By incorporating fresh
concepts and ensuring that everyone enjoys their shopping, they hope to keep expanding in the
future.
J.
J. was founded in 2002 with the original mission of preserving the nation's cultural history and
popularising Shalwar Kameez. It quickly rose to the top of South East Asia's most well-known
and identifiable clothing companies. It increased the number of outlets in its nationwide
network to over 100 outlets. J. has increased its global reach by opening at 20 new locations,
among them are UK, Australia, Canada, New Zealand, the UAE, and Qatar. J. takes pleasure
in being a full-service garment company that offers footwear, accessories, perfumes, and
eastern dress for both men and women of all ages. They work with a variety of materials with
various textures, including silk, chiffon, cotton, cambric, lawn, and fabrics appropriate for the
season. With understated details, their apparel collection follows current fashion trends.
Renaissance, Aztec, Fusion, Arabian, and other aesthetics are used in the designs. From the
modest beginnings of a company that took pride in being solely in the East, they have advanced
with more decorative touches to our portfolio and built up a devoted following of clients around
the globe.
Ethnic
In 2013, Outfitters a western apparel brand, debuted eastern wear under the brand name
"Ethnic". It was their eagerly anticipated eastern clothing line that has won countless praises
from its devoted clients. As one of Pakistan's top iconic youths pret brands, it has ensured that
women may embrace the essence of their ethnic beauty and lead the way as an icon with the
widest product selection; offering four pret lines, each with its own unique spin - Casual,
Rozana, Boutique, and Fusion. Since 2013, Ethnic has made significant progress and opened
more than 44 outlets across Pakistan, with more on the way. The goal has always been to spread
widely in order to make sustainable fashion accessible in both urban and rural areas, where the
majority of people live.

Sapphire
Sapphire is a Pakistan’s high-street fashion retailer which sells unstitched, ready-to-wear and
haute couture. With its headquarters based in Lahore, Pakistan Sapphire was founded in 2018
by Nabeel Abdullah. In a relatively short period of time, the label has developed into one of
the best, most coveted high street fashion companies in the nation. Sapphire has achieved its
goal of providing a high-quality product to everyone by fusing 100% pure fabric with a cutting-
edge design style to produce designer clothing at an affordable price. The brand's selection of
clothes includes casual wear, formal dress, party wear, silk scarves and tunics, as well as
unstitched fabric suits that are conveniently accessible at any of their retail locations.
Benchmarking
The fashion retail industry has suffered due to the pandemic. Majority international businesses,
including H&M, Gap, and Topshop, saw skyrocketing consumer confidence as a result of shutdown
stores but international brands like Zara believes that the strongest connection between retailers and
customers can still be made in physical locations, and hence, Zara has done this well through a
business strategy that prioritised customer experience (CX) and technology well in advance of the
pandemic. Since its founding, Zara had made a name for itself as the inventor of fast fashion. Zara
had increased consumers' confidence in traditional brick-and-mortar stores in an era of online
shopping and e-commerce platforms.

Matching with Zara’s step, Khaadi also took inspiration and skillfully invoked meaningful and
memorable CX through a mix of engagement, immersion, and transformation of retail outlets and a
strong ecommerce presence.
The Experience Hub

With their Experience Hub at Dolmen Mall, Clifton, Khaadi once again astounds everyone by taking
the top spot as Pakistan's most creative and interactive fashion retail outlet. Khaadi used the concept
"Wild about you" to honour its customers. Everyone experienced a sense of belonging with Khaadi.
Through their distinctive shopping experience, Khaadi has always been the pioneer in putting the
customers-first philosophy into effect. The large store boasts a preference for simple shapes and well-
lit interiors. All of the brands under the Khaadi umbrella are spread over 32,000 square feet. Every
area offers a unique experience, from ready-to-wear to Khaas, from relishing in fabric to getting your
purchase gift wrapped at the present station.
In the new store, Khaadi has added creative, entertaining areas and experiences along with enhanced
customer service and other perks. Keeping in mind Khaadi's creative approach, aesthetically pleasing
‘Hear Me Roar Throne’ and ‘Glam Booths’ are added for customers. Khaadi promotes the value of
being yourself and dressing in a way that it reflects your personality, thus it has created its store very
instagramable as it allows its consumers to express themselves. It also allows them to let their
imagination run wild, and be themselves. Khaadi Café elevates the customer experience with its
products.
The experience hub is all enhancing customer experience. In their new store Khaadi promotes the
idea of self service. They have added storage spaces all around the strong from where the customer
can pick their clothes and directly take them to the counter. This not only reduced the lead time but
also enhanced customer experience. The concept of the store is to relax at the Khaadi station, take a
breather and take a quick exit from the elevator that takes you directly in the store. Moreover, a self-
service section is placed near the entrance of the store. It also allows you to purchase through the web
screen. Khaadi reinvented their retail experience with their Experience hub and it redesigned the
outlook of future retail in Pakistan.
Building and Planning
In 1998 Khaadi made its first store even then their focus was on providing better stores as compared
was what was already in the market. Redesigning and reimagining stores' outlook has always been in
the DNA of Khaadi. Khaadi’s stores are a brilliant example of continuous improvement as they have

1
always redesigned their stores according to the changing market trends of fashion retail. The
Experience Hub - built on an area of 32,000 square feet with the almost same product, team and
market that was used in the traditional outlets of Khaadi, led to an increase in sales by 300 times only
through the new store located in the Dolmen Mall, Karachi.

Khaadi collaborated with international interior store designers from Singapore and Dubai were
consulted in order to discuss how the store outlook, in store customer journey can be improved for
example for the past 50 years unstitched clothes were displayed in the form of roll fabrics. In 2011,
Khaadi decided that they wanted to sell unstitched fabrics in pack suits so instead of opening that
fabrics and imagining how the dress would look on the customer, customers could now see the
photograph on the pack suit and visualise the dress on them. After finalising the articles, the customer
would ask the store staff to fetch that article from the warehouse which would take another five
minutes. Khaadi then decided to place trolleys across the store so customers could take the process
themselves. This led to enhanced customer service, decreased lead time hence, higher conversion
rate. Khaadi later researched and the findings showed that customers find it difficult to visualise the
clothes on them hence, in the experience hub they placed two hundred mannequins. All the unstitched
low sellers or hot sellers were placed on the mannequins next to their trolleys. This reduced the
customer journey as the visualising time was further reduced hence a shorter lead time that led to
even more conversion. This also reduced customers' dependency on other factors such as store staff.

Moving on to the stitched section, in stitch all articles are hung in-stores but due to smaller store area
the store gets cluttered. Khaadi plans on shifting its existing stores to an area triple the size of their
traditional stores.

Khaadi Café
Khaadi cafe is an initiative by Khaadi to make their store an experience-oriented place. Khaadi cafe
not only is another source of business but it is also a value-added service no other apparel retail brand
offers in Pakistan. A lot of times women shoppers visit malls with their husband and children and
they are least bothered about women shopping, with the presence of Khaadi cafe they can now chill
at the cafe, have a snack while the women can shop. Khaadi cafe offers a wide variety of meals
ranging from continental to desi food with juices, milkshakes and coffee.

Kreate by Khaddi

In a time when fast fashion has established ever-deeper roots throughout Pakistan and every brand is
vying for higher profitability rates at the expense of dwindling quality, there is one retail behemoth
that has moved beyond the need for profit and is instead fostering an environment that is supportive
of aspiring entrepreneurs.

Shamoon Sultan and his team at Khaadi have successfully transformed 2022 into a year of transition
after dominating the Pakistani fashion market for more than two decades. With their most recent not-
for-profit platform, Kreate Your Mark, the team, which began with a whole new image for the
company, has gone even farther into providing a support system for small businesses and
entrepreneurs.

2
The platform paves the way for women entrepreneurs in Pakistan to own their ambition by giving
them a dedicated space at the centre of The Experience Hub. By giving access to prime locations
within Khaadi stores and to Khaadi customers, the platform hopes to enable women entrepreneurs to
pursue their passion and create their mark. It seeks to give "Kreators" a chance to engage with not
just customers but also other amazing ladies who want to follow their journey.

In their launch, Khaadi chose three female business owners. The owners of PJ's Jars, Rahma and
Javaria, have over 40 seasonal varieties of chutneys, achaars, spices, cooking oils, and contemporary
jewellery that are bold, daring, original, and expressive are designed by Ayesha Basit of Ayesha
Accessories. Fariha Arsalan, founder of Interlace, a company that offers contemporary handcrafted
pieces made from natural materials.

Each selected entrepreneur was nominated following a thorough process of reviewing portfolios and
requirements. This included conditions such as being resident in Pakistan and that he owned the
largest or equivalent share in a business of at least one year. Entrepreneurs can join his platform for
at least 30 days for each business and have the opportunity to become part of Khaadi's supply chain
and eventually expand their business.

The much-needed platform, which will soon be seen in stores in Islamabad and Lahore, will not only
pave the way for more women entrepreneurs to pursue their dreams, but also give them financial
freedom. Khaadi ensures that each entrepreneur selected receives 100% of the revenue contribution
from the product line.

Ecommerce

For e-commerce companies, change is inevitable, but that shouldn't alter their mission. E-commerce
firms are able to react to new changes while making sure they don't stray from their objectives by
having a clear roadmap in place and that is exactly what Khaadi has been doing. Khaadi has a state-
of-the-art websiteb that is consumer friendly. Khaadi not only survived in the pandemic because of
their pre-existing online presence but also constantly evolved along with their consumers.

Millennials and Gen Z are two important categories and to be successful as a brand one has to cater
to both of them. Research suggests that Millennials prefer brick and mortar stores in-order to shop
while Gen Z prefer mobile apps. Khaadi is working on their user friendly mobile apps. It is also
important to understand that millennials and Gen Z are their only shoppers so along with building
and spending huge number of investments on their in-store experience hubs it is important to spend
on improving their only presence for Gen Z consumer audience. Khaadi is using technology in order
to analyse and understand their customer to cater them better.

Digital Transformation
Shopper Value
Khaadi chose Shopper Value as part of their digital transformation process in order to gain real-time
visibility over important store KPIs and provide objectivity to the staff performance rating system.
Khaadi wanted to quickly identify areas in need of improvement in the stores using footfall data so
that quick action could follow. Using data-driven forecasting, goal-setting, and decision-making
techniques would greatly increase Khaadi's efficiency and reduce costs.
Shopper Value was used as a benchmark for expansion. Conversion was monitored, and
3
comparisons between stores and over time were conducted to assess store performance. On the basis
of trends, performance goals for the employees were established with precise measures. To provide
real-time data availability for a quicker detection of issues, the health status of the data was monitored.
Increased visibility improves the concentration on rational decision-making that increases
conversion.
In order to harness untapped growth potential, Shopper Value's assistance to Khaadi's leadership
through real-time footfall data was crucial to the company's productivity goals. Teams at Shopper
Value were able to offer Khaadi a customer-centric solution that could satisfy their requirement to
quantify performance KPIs and bring objectivity in their business with the help of highly competent
customer success experts. The fact that Shopper Value's solution is routinely evaluated for data
vulnerability and penetration risks allowed it to satisfy Khaadi's data security needs as well.

According to Muhammad Rehan Qadri (Head of Information Technology), Shopper Value is an

amazing tool as it not only creates value in the product, but also to Khaadi and to retail industry in
Pakistan in coming years.

Shopper Value has benefited Khaadi to tap into conversation-enhancing opportunities by improving
focus on fact-based decision making. Moreover, exhibit 1 shows various customer benefits provided
by Shopper Value.

Systems Limited
With 45 outlets domestically and 15 abroad, Khaadi is Pakistan's top fashion clothes maker and
retailer. The well-known company routinely performs extremely effective marketing efforts, such as
40-hour uninterrupted discounts, with foot traffic at their major retail outlets topping 200,000 visitors
on a typical weekend.
The platform that Khaadi was utilising prohibited them from gaining a clear, integrated view of their
operations across regions and negatively impacted active cross-channel decision making. Khaadi had
recently started a major period of expansion in both domestic and international markets.
As a single, integrated solution for supply chain, finance, and retail, systems adopted Microsoft
Dynamics 365 for Finance and Operations. The solution supported store operations for both domestic
and foreign markets twenty-four hours a day, seven days a week. It enabled timely monthly closure
and assisted Khaadi in achieving KPIs for their IT division and other business units.
To provide centralised management of all customer and inventory information, the deployed solution
was integrated with Khaadi's eCommerce platform, footfall and traffic counters, and warehouse
management system.
The solution's logical and thorough business intelligence dashboards enabled better decision-making.
It eliminated the need for Khaadi's ERP system's constant platform updates and other hassles by
sending transactions straight to the cloud.
Local retail servers are now used as a failover in case the Internet is disrupted. All Khaadi retail
outlets have exceptional uptime because of this hybrid system. To support high sales traffic, Systems
Limited suggested mPOS terminals with both offline store-connected and online modes.
The 45-store implementation's analysis, design, development, POC, CRP, stress testing, UAT, pilot
testing, and deployment were all finished in less than six months. Exhibit 2 shows all the services
provided by Systems Limited to Khaadi. The new POS system passed stress tests that showed it could

4
manage a large workload for 12 hours. Systems received the 2018 Microsoft Pakistan Partner of the
Year award for the installation. All these technologies (Exhibit 4) resulted in significant outcomes
(Exhibit 3) for Khaadi.

Future Implications
Khaadi is the pioneer of bringing a whole new in-store experience for customers and many clothing
brands are replicating its layout. Hence, it is important for Khaadi to continually improve as they are
doing before. In future Khaadi plans on renovating all their stores. The team is currently looking for
land in DHA Y-Block, Lahore and is also looking for places in Islamabad. They plan to provide a
similar experience to their customers in smaller cities as well. This will be done with billions of rupee
investment but will prove to be extremely profitable in the longer run for the company. This will also
bring synergy in the brand.

Moreover, meanwhile it is also important for Khaadi to improve their e-commerce presence
simultaneously as post covid dozens of people will adapt to online shopping behaviour hence, having
a strong website presence with state-of-the-art website that provides customers has become extremely
important.

5
APPENDIX

Exhibit 1: Customer Benefits

Customer Benefits

Balanced service intensity Better management of staff

Positive impact on conversion Enhanced visibility of ground operations

Defined staffed performance indicators Enhanced ability on forecast performance

Defined baseline for growth Reduced reaction time

Exhibit 2: Services Provided by Systems to Khaadi

Services

Infrastructure as a Service [LAAS] Dynamic 365 implementation

Modern POS implementation Business intelligence dashboards

Batch job configureation Operational Support

6
Exhibit 3: How Technology Helped Khaadi?

Exhibit 4: Technologies Used by Khaadi

TECHNOLOGIES USED

AZURE Power BI

Power Apps Retail Analytics

Microsoft Dynamics 365 Microsoft Flow

SQL Azure Azure Fucntions

7
Exhibit 5: Ecommerce sales trend of Khaadi over the years

Source: EcommerceDB

Exhibit 6: Apparel Industry Market Share

Market Share

Khaadi Sapphire Ethnic J. Nishat Linen Beechtree Other

8
 AQSA NADEEM
244C villas DHA Phase 8 ex. Park View, Lahore · 03218434098
aqsanadeem19999@gmail.com · https://pk.linkedin.com/in/aqsa-nadeem-388042130

I am Aqsa Nadeem currently enrolled in MBA at the Lahore School of Economics. Prior to this,
I worked at Outfitters for a year as their Digital Marketing Executive. Outfitters is one of the
leading western wear brands in Pakistan. Working at Outfitters has been very exciting for me
as it has allowed me to express my passion for digital marketing in an active, creative, and
innovative manner. Moreover, I have done my bachelor’s in double majors Marketing and
Finance from Lahore School of Economics as well. During my bachelor’s I did multiple
internships such as I interned in the Human Resource department of Wateen Telecom. I also
interned at Crestech technologies, a digital marketing firm where I was responsible for making
weekly content calendars. I also organized the content sheets for several brands. Moreover, I
assisted the social head in researching the upcoming social media posting trends. After Crestech
technologies I interned at Mangobaaz during Covid. I assisted Mangobaaz’s CEO with planning
and developing strategies for his new beauty eCommerce startup. In the future, I aspire to work
in fashion or cosmetic marketing and create an impact.

9
Add Picture Here FATIMA ZAHID
DHA Phase 8, Lahore · +923204515191
fatimazahidb@gmail.com · http://linkedin.com/in/fatima-zahid-949ba6205

I am Fatima Zahid, currently enrolled in MBA at the Lahore School of Economics. I have also
done my bachelor’s in double majors Marketing and Finance from Lahore School of
Economics in 2017. This case study has been written during my Master’s degree as a project
for the course Advanced Operations Management. Other than this, I have worked as a teacher
assistant at Lahore School for Cost Accounting course. During this time, I had the
responsibility of keeping the record of each student’s grades. After MBA, I’m planning to start
my own business in Décor and Designing consultancy. Moreover, I want to start my own
clothing line.

10
The Burger Cart: Addressing the Service Time Issue by Aazmer Ali and Danish
Attique

The Burger Cart is a Pakistani local fast-food chain of beef and chicken burgers. It is a fast-food local
food chain that was first introduced in 2017 with their very first branch in DHA Phase 2. After its
success in DHA, it has expanded to Johar Town and Gulberg. The Burger Cart’ s main selling point
is its beef burger coupled with variety of add on options.
The Burger Cart has expanded their menu from a basic offering of just beef burgers to chicken
burgers, sandwiches, sodas, pastas etc. to cater to a larger and diverse range of people. “The Burger
Cart” believes in continuous innovation hence, they have and will continue to add popular and famous
dishes to their menu so they can improve their menu as much as they can. In 2018, they introduced
their char grilled super grilled burger that eventually got the highest number of reviews on multiple
Facebook food groups. One of the leading and most favourite burgers of “The Burger Cart” include
Mister Cheetos, Red Alert, and Raging Bull. Recently, in 2021 they introduced various kinds of pastas
and continental dishes so it won’t be wrong to say that the raging bull is still considered as their
signature food despite the extremely diverse food items in the menu. Conversely, “The Burger Cart”
introduced various products that failed to get hold of the market share in the market place, a prime
example of this would be their Cheeto pops. Despite the increasing love for flaming hot Cheetos in
Pakistan their Cheeto pops failed to tempt their target audience. However, the fast-food restaurant
which was known for its excellent product and service quality along with the diversity in menu slowly
was losing its quality position where both its service and product quality was being neglected and
compromised especially during the peak hours where the staff was unable to provide with timely food
at best quality.
Delivery Service
Despite the outburst of COVID-19 that led to the entire city to shut down due to the pandemic “The
Burger Cart” survived. This was only because of their brand loyalty amongst their consumers.
Moreover, it was also because they started their delivery service right before COVID hit Pakistan.
During COVID when most restaurants failed to survive, “The Burger Cart” did an amazing job just
through their home delivery food service. Their home delivery service not only helped them survive
through covid but also helped them in increasing their customer reachability as through it they were
able to cater to their consumers living in a 30 km radius however it was revised to 10 km due to cost
of serving at a higher radius.
Competitors
Some of the competitors of “The Burger Cart” include Burger Lab with 32 outlets across Pakistan.
They were the first ones to introduce smash burger technique into the Pakistani market and are
constantly innovating and experimenting with new sauces and flavours. Another competitor is Daily
Deli with their unique selling point of fresh beef patties blended well with ingredients like mozzarella
sticks or caramelised onions. Daily Deli and Co.’s most popular burger is their Molten lava beef
burger. Finally Smash Burger, with started as a take-out kitchen serving almost hundreds of burgers
every single day. Their original loyal customers started from their own friends and family and through
just word of mouth they grew very fast. Their USP is their premium beef cuts that make smash an
absolute hit.
11
The service problem
Service Quality in Peak Hours
The service quality was deteriorating in the form of increased order time which got worsened during
the peak hours such as between 2-4 pm and at night during 9 pm to midnight. When the order
frequency and size was increasing, the chefs at Burger Cart were unable to provide a timely service.
Due to the increasing queries by the customer, the chefs tried to stick to the 15-20 minutes order time
but that led to the comprise in food quality where sometimes the desired add on was not added or the
beef patty was not grilled according to the customer demand. The average time to serve an order in a
fast-food restaurant according to a study is 4 minutes 15 seconds (Tucker, 2021).
In case of such efficiencies, the customer usually returned the order to make it according to
his or her desired expectation. The correction of the original order again took extra time which ranged
from 5 to 10 minutes. Thus, the total time of service cumulative of the order correction took around
30 minutes which is way above the fast-food service benchmarks.
New orders in addition to the correction of the previous orders led to increased pressure on
the limited staff of “The Burger Cart” who were unable to cope up with the pressure leading to further
deterioration of both food and service quality.
Complexity of food items
Food Quality is not itself the major defining problem of “The Burger Cart” but it may be categorized
as the product of the root problem which is mentioned earlier i.e., the service quality.
To understand the food quality problem, one needs to understand the variety of foods items
provided by “The Burger Cart” (Exhibit 1). The Burger Cart provides with both chicken and beef
burgers, sandwiches, continental dishes, pasta, sides such as BBQ fries and various kinds of sauces.
Thus, it is not limited to burgers as suggested by its name however burgers in particular beef burgers
are still the main selling items for “The Burger Cart”.
The various kinds of dishes offered further complicates the service quality where for example
if one order consists of pasta, a beef burger and a chicken burger then the chefs are unable to cater to
complexity of the orders consisting of different items. The chefs get confused to decide that what
food items should be made first, how should the different preparation methods be divided among
different kitchen staff and which food item should be given priority.
Add On
Another problem is with the add on provided by “The Burger Cart”. The restaurant offers up to 17
add on. However, it is observed that they may not have the appropriate stock for the add on such as
the grilled pineapple. In addition, the scheduling of add on with the original order again adds to
service time where the kitchen staff is not proactive in preparing the add on with the original order
and instead for example first prepare the whole burger which includes the meat patty and the burger
buns. After its preparation, they then move towards preparing the add on which again is dependent
on the available stock and further increases the service time.

Causes of the Problem

There are multiple issues regarding operational management of “The Burger Cart” which lead to these
problems as explained below.
Inventory Management

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One of the major reasons for the problems at “The Burger Cart” was lack of set protocols for the
inventory management both of the raw materials for food and the equipment.
In terms of the raw material, the basic items required for a burger includes burger buns,
beef/chicken and vegetables such as onions etc. It was observed that “The Burger Cart” had no set
protocols for ordering these raw materials. In case for add on which required items such as onions,
jalapenos, mushrooms and pineapple etc., “The Burger Cart” had no proper track of the items to see
that whether they are in stock or not to fulfill additional demand. Only when the demand arose, the
kitchen staff realized that they have limited stock.
This led to the kitchen staff taking inappropriate measures such as adding a smaller number
of jalapenos instead of the prescribed quantity for a Rs 49. Add on. In turn, consumers complained
of not getting the value for price denting the food quality.
Furthermore, it was also observed that service time delay was also due to lack of equipment.
For example, a grill typically of 500 sq inch could accommodate almost 20 burgers but it was
observed that average order size at “The Burger Cart” was of 2-4 burgers thus one grill could not
cater to increased demand during peak hours.
Process Flow
It was observed through the process flow diagram (Exhibit 2) of a typical beef burger of “The Burger
Cart” that there were food scheduling problems prevalent within the restaurant.
For example, if a customer ordered an add on such as the grilled pineapple. The kitchen staff
first prepared the whole burger including the burger buns and beef preparation and grilling. After the
beef patty got grilled, then the kitchen staff started preparing the required add on. The add on
preparation could have been done simultaneous to the beef patty preparation to avoid delay in service
times but such proactiveness was not observed.
Moreover, the main ingredients such as onions etc. should have been prepared in advance to
the peak hours or the restaurant opening but it was observed that it was done whenever the order was
generated. This led to firstly the increased pressure on the kitchen staff to make the ingredients ready
within a specified time thus the margin of error became high leading substandard preparation and in
turn the food quality.
Other then the food quality, the increased time to prepare ingredients led to an increase in the
service time which dented the service quality of “The Burger Cart”. Thus the 5-10 minutes benchmark
of a typical fast-food restaurant was rarely adhered to in the case of “The Burger Cart”.
Staffing
It was also observed that the kitchen staff was not appropriate according to the demand in a particular
area.
For example, both the Gulberg and the DHA branch had almost the same number of kitchen
staff despite different demand levels. The Burger Cart’s DHA branch is more established and was the
first branch with more customer demand. In contrast the Gulberg branch is relatively new and the
restaurant is rarely full at its maximum customer capacity.
However, both the restaurants had one head chef and three assistant chefs/kitchen staff in the
DHA branch and two assistant chefs/kitchen staff in the Gulberg branch.

13
 The chef had more of a supervisory role instructing the kitchen staff on the functional tasks
such as shaping up the raw meat into a circular burger patty form appropriate for the burger and
setting up the grill to heat it up for a set time or assembling the burgers into its final form etc.
It was observed that if the order had some sort of customization such as add on in the form of
jalapenos or mushrooms or cheese, then the chef was himself involved in the order making where he
would make sure that the add on is appropriate in terms of quantity and price where the extra value
is added for both the customer and “The Burger Cart” in terms of the extra margin generated by
delivering just the right quantity to the customer.
Moreover, if there were complaints regarding the order being not according to the expectation
of a customer, then again, the chef was involved where if a customer is to be provided with for
example a new burger, then the chef himself will be involved in the functional tasks involving the
preparation of the burger to ensure that the customer does not face any issue regarding the food in the
compensatory order.
Therefore, for the regular order, excluding order complaints and add on, the chef had no part
to play in the functional preparation of the food order and instead the limited kitchen staff had to
prepare the order.
The staff also had no such training for the proper standard operating procedures and health
related precautions for food preparation thus it was not surprising to see that the whole process was
inorganized and lack of precautionary measures could potentially worsen the food quality which in
this case is discussed as the product of the poor service quality.

Future Implications of the Problem

The future outlook of “The Burger Cart” can be negative if the problems are not looked upon. There
can be various negative outcomes. Three of the major outcomes are explained below.
Competition
One of “The Burger Cart’s” branches is located in the main area of Lahore i.e., Gulberg with various
restaurants in its vicinity.
MM Alam Road known for being the ultimate restaurant hub of Lahore is a 3 km drive from
“The Burger Cart”. Thus, if the problems regarding food and safety quality are not resolved then the
repurchase intention of the customers would decrease. This decrease would lead to a low repurchase
by the customers and shifting towards easily available alternates of Fast Food at the MM Alam Road.
Furthermore, the quality problems can also lead to a negative word of mouth by the customers
which can be harm the restaurant’s repute specially on the social media. There are multiple forums
where a consumer can post about his or her bad experience of “The Burger Cart” such as forums like
the “The Voice of Customers” on Facebook in addition to “The Burger Cart’s” own social media
channels.
Thus, this negative PR may also decrease the potential future customers of “The Burger Cart”
putting the restaurant in a risky situation.
Impact of one Branch on Other branches
As “The Burger Cart” has opened up three branches thus the negative PR generated around one
branch can also hurt the reputation of the other branches even if it is performing up to the set quality
benchmarks.

14
 Thus, in worst case scenario the cumulative demand for both all branches will decrease where
the management may have to divest operations in one of the branch due to less demand and a higher
operating costs to run a restaurant in an area such as Gulberg with premium business costs.
Kitchen Staff Turnover
Beef Burgers are a specialty of “The Burger Cart” and the recipe/preparation method of the burger is
guided by the skilled kitchen staff working for the past 6 years. For example, one of the hot selling
items of “The Burger Cart” is “The Raging Bull” made with jalapenos.
If due to increased pressure of time constraints coupled with consumer complaints mounts up,
then the pressure will also be felt by the kitchen staff. The limited staff in the worst-case scenario
may look for other jobs maybe in a competitor’s restaurant.
This turnover in short run will again complicate the service quality already facing issue of the
limited staff but more importantly the chefs skilled in making one of the hot selling items such as
“The Raging Bull” will be replaced by someone who may not be adept at it.
This further would lead to consumers rejecting “The Burger Cart” not only because of the
service or food quality but also due to the taste of the original Burger which may get changed due to
the introduction of a new chef.

Burger Cart’s own solution to the problem

The Burger Cart took a very short-sighted approach to cater to higher demand and increasing service
time which was not a successful option for “The Burger Cart”.
The management of “The Burger Cart” tried to resolve the service issues by staffing more and
more people to cater for the demand and to reduce the increased service time, what they failed to do
was to find the actual reason behind it. The people they added to their kitchen staff were not assigned
specific job descriptions to exactly specify their work. They worked on multiple tasks. As there were
no specific operating procedures prepared by “The Burger Cart”, thus the additional staff remained
confused on how to proceed to a specific order.
In addition, the additional staff was not planned and hired according to a demand analysis of
how much staff is actually required to cater increasing orders. Rather the staff was hired without any
forecast. This led to an increase in costs of “The Burger Cart”, where the staff hired were laid off
after few months.
Thus, the solution of increasing staff without any analysis of the demand was unsuccessful
and costly for “The Burger Cart” marked by regular lay offs of the staff and increased costs. All of
this due to lack of planning.

Recommendations
In the light of the problems discussed above, there can be different solution to cater to each cause of
the problem.
Use of IT in sourcing
The role of information technology is vital in the operations domain. As it was observed that “The
Burger Cart” had no as such inventory tracking system leading to stockouts of the raw materials thus
proper tracking through inventory management systems is required.

15
 Upserve is one of such software which can help “The Burger Cart” in tracking of the
inventory. Through software capability “The Burger Cart” can keep a track of burger buns and onions
etc. that should remain in stock to fulfill demand during normal and peak hours.
Upserve has several capabilities which could help restaurants in managing their stock such as
inventory scanning, ingredient tracking for each recipe and alerts for low stock items etc.
The software company claims that through the use of Upserve, restaurants reported a “a 30
percent increase in revenue along with a 10 percent decline in the order serving time”.
The benefits stated by Upserve solves one of the crucial problems for “The Burger Cart”
which is the order serving time thus can potentially improve the service quality.
Formal procurement contracts
Currently, “The Burger Cart” has no such procurement contract with their suppliers which is vital in
the restaurant industry.
For example, “The Burger Cart” can establish a formal procurement contract with the burger
buns supplier such as “Dawn Foods” through their key accounts team. The contract can on one hand
establish efficient supply of the burger buns on a daily basis and on the other hand help the restaurant
in decreasing costs.
Cost reduction can be done through contracts to coordinate supply chain costs where quantity
discounts can be demanded by “The Burger Cart” where they can source a large number of burger
buns at relatively low price thus decreasing cost and increasing availability.
In case of kitchen equipment such as the grills which are strategic items with higher cost and
higher criticality; it can be sourced directly from kitchen appliance providers such as “Canon” or
“Nas Gas” etc.
However, in this case the supplier assessment factors will be different from the critical items
such as the burger buns (Low Cost and High Criticality), where suppliers will be mainly assessed
through functional capability (supply quality) and pricing terms offered by different kitchen appliance
providers.
In contrast for items such as burger buns the emphasis will be on replenishment lead time,
delivery frequency, pricing terms and on time performance. These factors will be critical for the
service quality of “The Burger Cart” which needs to be improved.
Workforce Organization
As mentioned in the problems that there was no specified organization and workforce operating
procedures being practiced at “The Burger Cart” which needs to be looked upon.
To maintain the standardization towards a total quality environment, “The Burger Cart” needs
to implement the 5S activities.
For example, Seiton (Neatness) can be done through organizing the inventory where specified
places should be allocated to the storage of different material required for each of the specified addon,
moreover standard operating procedures should be established and placed on notice boards for the
kitchen staff to read. Seiri (organization) should be done by focusing on the necessary raw materials
such as the most ordered add on and by eliminating stale materials of add on not regularly ordered.
Thus, future sourcing should be done according to the demand of each item. Seiso (Cleaning), should
be done through regular cleaning inspections by the owners to provide a quality working environment
16
for the kitchen staff so they may fulfill the order efficiently and effectively. Seiketsu (Standardization)
can be done through color coding of the raw materials such as burger buns and vegetables according
to the expiry dates with different colors given to the close to expiry and fresh items so the kitchen
staff could use the materials in a quick manner avoiding time and material wastage. Finally, Shitsuke
(Discipline) can be practiced by giving individual responsibilities to the kitchen staff where each may
be responsible for food and service quality and manuals can be provided to them telling about how
they can implement 5S activities to fulfil their responsibilities. Thus, 5S activities can contribute
directly by improving the product and service quality
Although, after the COVID situation it is recommended that the restaurant stick to the present
staff by increasing each staff’s productivity, however if the budget permits them then they can
optimize the staff according to the demand in each branch. For example, DHA with higher demand
can staff more kitchen staff than Gulberg.
Revamping the process flow
The current process flow diagram (Exhibit 2) indicates the various steps in sequential manner to
make a typical beef burger.
The process flow indicates the lack of proactiveness of the kitchen staff where some of the
tasks are not done simultaneously to decrease the service time of the food items.
The bottleneck process in the process flow is the beef patty preparation which takes 12
minutes including the seasoning time of 2 minutes and the grilling time of 10 minutes. The process
of preparing the add on is usually done after the beef patty preparation.
The add on preparation time of 5 minutes can be avoided firstly if some of the add on are
prepared before the start of the restaurant working hours or peak hours and another option is to do it
simultaneous to the beef patty preparation.
As seen in the diagram that burger buns are being made alongside with the beef patty, thus
the add on can also be made alongside the beef patty preparation and should not be delayed towards
the end.
The reason of avoiding the add on towards the end is that all the kitchen staff is busy preparing
for the main food item such as patties and burger buns and add on is given a secondary priority.
Thus, this mindset can be avoided if “The Burger Cart” makes a standard operating manual
for food preparation through the use of process flows by identifying the bottle neck operations and
increasing the on-time service delivery efficiently.
Meat Forming Machines
Through the process flow diagram (Exhibit 2), it was observed that 5 minutes are spent in shaping
up the meat manually by the kitchen staff which in this day and age should be replaced by technology
driven solutions.
However, this solution is completely dependent on the owner’s willingness to invest in
machineries. If the owner is willing to do so then meat forming machines can be sourced.
Meat Forming Machines can help in cutting meat into prescribed shape in the form of a burger
patty or nuggets etc. This completely avoids the manual time required to shape up the meat and large
output of patties can be made in a short span of time.

17
 Meat forming machines range from Rs. 0.5 million to Rs. 1.5 million sourced through Chinese
suppliers from Alibaba. The price varies by different capacities offered by the machines. Thus, one
machine each for the two different branches of “The Burger Cart” can be sourced depending on the
investing willingness of the owners.
Contract with Foodpanda
“The Burger Cart” should address the home delivery issue by contracting with Food delivery
providers such as Foodpanda.
This could help “The Burger Cart” in reaching consumers at a higher radius which they
previously did at an increased cost. The cost to serve a customer would decrease compared with
providing delivery through company owned riders and vehicles.
Vegetable based Burgers
Instead of focusing on other food items to provide a diverse menu, “The Burger Cart” should instead
focus on diversification within the burger segment.
An innovation in this regard would be vegetable based burgers targeting people who are not
savvy of meat based burgers. This would be an interesting innovation in Pakistan where competitors
are not innovative in terms of offering burgers other than chicken and beef as their primary ingredient.
Complexity of Menu
The management needs to do a demand analysis of each of their food items and analyze which food
items are hot selling and which are not preferred by the target audience.
Accordingly, the food items which are not sold much should be discarded from the menu and
the core emphasis should be on the items which is popular among the target audience such as the beef
burgers.
This would save costs in which storage and spoilage of unnecessary ingredients of food items
which are not regularly ordered will be avoided.
Training of Employees
One of the root causes of delayed service time was the lack of training of kitchen staff to approach
towards providing food at peak service hours.
The Kitchen Staff in this regard should be provided with short courses from COTHM where
they can be trained to provider a quicker service while not compromising the quality.
This would help the kitchen staff in approaching towards peak hours through a systematic
manner where they can employ a more proactive approach in preparing ingredients and providing
with the food items at a relatively quick span of time.
SOPs
“The Burger Cart” should replicate the big fast-food chains and make a standard operating procedures
manual for the kitchen staff which elaborates the steps required to make and serve a particular food
item.
This would instill a systematic and an organized approach by the kitchen staff towards
delivering the value to the final consumer. The systematic approach will lead to improved order
18
serving time where vagueness in the approach towards making and delivering a particular food item
will be avoided. A sample of McDonald’s employee manual for kitchen responsibilities is provided
in Exhibit 3.
Therefore, “The Burger Cart” needs to address the service quality issue through multiple
solutions catering to the use of information technology and specifically supply chain software. In
addition, procurement contracts with key suppliers, workforce organization, process flow revamping
and investment in machinery should be implemented as a solution to improve service and in turn
product quality.

19
Reference

Tucker, B. (2021, July 9). Cut customer wait times in half with these 5 tips. SpeedLine Pizza Point of
Sale. Retrieved November 27, 2022, from https://www.speedlinesolutions.com/blog/cut-
customer-wait-times-with-5-tips?hs_amp=true

20
Appendix
Exhibit 1: Menu of The Burger Cart

21
22
23
Add Ons

24
 Exhibit 2
Process Flow of a Beef Burger
A typical process flow for preparation of a beef burger made in “The Burger Cart” is as follows:

Heating up the Grill

Grilling the patty
(10 Mins)
(10-15 Mins)

Seasoning of Patty Add On

(2 Mins)
Shaping up the raw Preparing the
meat in patty form Burger Buns
(5-10 Mins) (5 Mins)

Yes
No

Preparing Add on

Assembling Burger (Cutting onion rings,

grilling pineapples
(2 mins)
etc.)

(5 Mins)

25
Exhibit 3: McDonalds Kitchen Staff responsibilities (a sample from their employees’ manual)

26
 AAZMEER ALI
704 Umar Block Bahria Town Lahore · +923014784511
aazmeerali25@gmail.com · https://www.linkedin.com/in/aazmeerali/

I am an MBA student at Lahore School of Economics. I have done Bachelors in Marketing

and Finance with a CGPA of 3.89 from the same institution. My internship experiences are
primarily in the FMCG sector including Coca Cola CCI, Tapal and Sabroso within the
Marketing and Sales departments. Other than internships I also took part in competitions such
as the British American Tobacco’s Battle of Minds where I was the first runner up in Pakistan.
In future I plan to join in a Sales role in FMCG sector and contribute towards generating value
both for the company and the consumers.

27
 DANISH ATIQUE
House 198/2 Phase 1 AA, Citi Housing Gujranwala · 03247337070
sheikhdanish125@gmail.com · https://www.linkedin.com/in/danish-atique-429a04237

I am an MBA student at Lahore School of Economics. I have done bachelors in Accounting

and Finance with a CGPA of 3.38 from the same institution. My internship experiences
primarily are finance related, I worked as a finance internee at Bashir & Sons Pharmacy and
Nasgas. Other than internships I’ve represented LSE multiple times in its Table Tennis
Tournaments. In future I have plans of opening up a software house after gaining some
experience in the relevant industry.

28
INSAF Academy: the Face of E-Learning in Pakistan by Areeba Jamshed and
Shayan Mohsin

After the success of “Essentials of Modern Marketing” (EOMM) – a project by Kotler Impact
Inc. and Naqeebz Consulting, Moazam Shahbaz, CEO Naqeebz sat with his team and reflected upon
the operational ups and downs in completing EOMM. As the team was forecasting future projects,
the most important factor was to decrease the operational inefficiencies which led to the late deliveries
of the project. This was one thing that the team could not afford in the execution of Insaf Academy.
In September 2021, Naqeebz received a call from PCTB (Pakistan Curriculum Text Board),
approving the RFP that was submitted for an upcoming game-changing project, Insaf Academy.
Naqeebz and PCTB, in collaboration with the Punjab Government, joined hands to improve the
quality and free accessibility of education, specifically Matric/Intermediate, in Pakistan.
With only two and a half years of experience in the field, Mr. Moazam did not have enough
skilled human resources to produce an E-learning platform for the masses in Pakistan within nine
months. Looking at the short timeline, Moazam and his team dived right into the execution of the
project without devising any game plan or strategies to allocate resources and budget, consequently
increasing the lead time. Although the structure was disorganized, Moazam and his team were
confident that the execution without a prior plan would work effectively.

E-learning in Pakistan
The e-learning industry is a fast-growing sector that provides resources and information for
learning and developing skills. Such platforms are now becoming mainstream, offering individuals
the ability to learn online more conveniently and interactively. The increasing demand has led to an
abundance of learning opportunities available for people on various platforms ever since the COVID-
19 pandemic hit however, not all learning platforms are equivalent.
This can be due to the wide range of learning platforms available and the diverse nature of
learning needs in general. E-learning platforms can vary in terms of their approaches to teaching, the
types of learners they aim to recruit, and their success at reaching those goals. As a result, some online
platforms offer broader learning resources than others. This can entail a variety of factors such as
services and content being more dynamic or reliable than others or being more accessible or
convenient. In addition to these online learning platforms, there are also online tutoring environments
like “StudySoup” and “TutorVista” offering free or paid assistance in subjects such as Chemistry,
Geography, and Physics for example, and then there are websites such as “Khan Academy” which
provide a collection of free educational videos and resources.
These E-learning platforms have become popular with students interested in learning skills
and acquiring knowledge from the comfort of their homes, but the industry is most commonly used
by companies who want to offer their employees e-learning services. There is also a growing
community of online learners in Pakistan who participate in online courses offered by international
universities. The e-learning industry has become a significant player in Pakistan's economy, bringing
in revenue of Rs. 2.67 billion in just 2013. The e-learning industry mainly comprises online education
platforms, MOOCs, and online tutoring environments and has been constantly growing since its
introduction in Pakistan. The e-learning market is projected to grow further as mobile learning
becomes more popular and as people become aware of the convenience of gaining skills.
According to the report, "E-Learning in Pakistan Market 2015 to 2019" the e-learning market
was expected to be worth US$4.2 billion by 2019. This resulted in an annual growth rate of 14.9%
from a total market value of US$2.3 billion in 2014. The MOOCs market was expected to reach a

29
value of US$4.4 billion by 2019, growing at a 13.8% CAGR and it is predicted that the online tutoring
market will be worth US$0.9 billion, growing at a 21.8% CAGR from 2014.
There are many cons to e-learning as well; such as internet accessibility. “Far-flung areas of
Pakistan do not have quality or widespread internet access which means e-learning for students in
those areas is nearly impossible. Even in urban areas, internet availability fluctuates from time to
time, and sometimes, disruptions occur which means learning concepts are disturbed. This causes a
huge gap in the market.”
“In a class, students can put forward their queries physically, but e-learning does not provide
them with this option quite often. This brings the tricky side of e-learning forward. The world is
advancing at a fast pace and Pakistan as a nation is in the race to adopt innovation and technology.”

An Overview of the Agency

Naqeebz is a leading agency in the field of software development and growth marketing. It
claims to create software that drives business sales and revenues from industries in North America,
the UK, Europe, the Middle East, and Pakistan. It specializes in several areas such as digital
marketing, video production, and learning management systems. This specialization comes from the
firsthand experience of the CEO, Moazam Shahbaz who has worked as Head of Marketing and
Communications at Rozee.pk (2015-16), as a Group Director of Marketing at the University of South
Asia, and talk show host at DIN Media Group (2012-15). He also held the position of Country Head
at ICM, one of the top awarding bodies for business and management qualifications (2005-12).
During his tenure in ICM, he played a role in developing the Pakistan Qualification Framework for
HEC Pakistan.
The agency has also taken over the project of launching an international marketing book.
“Essentials of Modern Marketing” by Prof. Philip Kotler, by joining hands with Pakistan’s top brands
and incorporating their case studies. Recently, Naqeebz has developed an e-learning app and over
7,000 high-quality video lectures for Punjab Government’s project ‘Insaf Academy’.

Insaf Academy
Insaf Academy is an initiative undertaken by the Government of Punjab to provide free access
to high-quality online video lectures to help students in their pursuit of knowledge. This initiative
aims to provide equal opportunity for all students. Since Pakistan has a low literacy rate it’s essential
for the governing bodies to take initiatives. Platforms like Insaf Academy helps enable self-paced
learning, provide access to a depository of quality lectures, and eliminate disparities among students,
fast-tracking the pursuit of knowledge. To provide comprehensive databank and visual aids to
facilitate learning completely free, Insaf Academy aims to provide a collaborative learning experience
that can be self-evaluated through quizzes and exams.
Naqeebz started the journey of developing a state-of-the-art learning management system
(LMS) equipped with features that accelerate the pace of learning and real-time tracking of progress.
The vision was to create the best e-learning platform using a blend of the latest technology and
aesthetic interface that cultivates the spirit of learning in students. The next step was to develop lecture
videos.
The agency recruited the best teaching faculty to deliver lectures and provide them with all
the latest tools and resources that enable them to deliver lectures that inspire. The production team
worked around the clock to edit, enhance, and assemble the recorded sessions to ensure quality is
maintained and delivered. The skilled editors then brought these lectures to life by developing
supporting visuals that accelerate the pace of learning through captivating graphics, simplistic
diagrams, and charts to depict concepts in a fun, intriguing, and easy-to-follow manner. A dedicated
30
Quality Assurance team worked tirelessly in close collaboration with PCTB’s own subject specialists
to ensure that each lecture was up to mark in terms of concepts and supporting media content. Each
lecture was passed through three layers of quality inspections before its final approval for upload on
LMS.
This journey of Naqeebz and Insaf Academy is ongoing. They continue to work upon their
shared vision of enabling students to acquire knowledge without barriers and ascertain a bright future
for our upcoming generations. As an agency that follows the concept of a matrix project. Each
department plays a role in the ongoing project. As shown in figure 1 below, all the named projects
are executed with the help of four departments, under the supervision of the CEO. Although, matrix
system has a lot of advantages relating to enhanced communication, reduction of duplication errors,
shared responsibility of any loss or damage, Naqeebz has still faced several major challenges during
the completion of Insaf Academy.

CEO

Growth & Operations Digital Quality

Strategy Marketing Assurance

INSAF
ACADEMY

EOMM

LMS

GRADUATE
EMPLOYABILITY

Figure 1: Pictorial Structure of Naqeebz Consulting

31
 The Process
To make it possible Naqeebz developed a process and a team that followed and executed the
production efficiently, for which there was hiring done on certain criteria set initially by the core
team. There were in total 10 cameramen working in 4 studios where the production was done, 30
people working in post-production, 15 RA’s in Quality Assurance, 5 consultants from PCTB for a
second approval, and a core team of 5 which was responsible for uploading the lectures and keeping
the portal updated. These numbers are of the 2 shifts collectively, who coordinated and followed the
same process for all 5 subjects (Computer Science, Biology, Physics, Chemistry, and Mathematics)
in each shift.
Once the hiring was done, the process started with the first step which was the Macro planning
- where the teachers filled out a form stating the subject they will be delivering, the timestamp
(duration) of the lecture, and the equipment required for the recording. The second step was Micro
planning where the teachers filled out the form stating the class, name, subject, and topic to be covered
plus the hyperlink of the diagrams that they want to show virtually in the lecture. In the next phase,
the lecture was recorded and the 1st cut without the graphics and animations was shared with the
quality assurance team, who then incorporate their feedback. Depending on the feedback, it is either
approved or the lecture is sent into re-recording and/or voiceover. Soon as the feedback is
incorporated, the 2nd cut with graphics and animation is created and sent to quality assurance again
for approval.
Each lecture was passed through three layers of quality inspections before its final approval.
After the approval, the final step was to share the lecture videos on the portal and give access to
teachers, students, and parents.
The key challenge that Naqeebz faced was the re-dos. Creating lectures several times to
maintain quality was tough. A small delay in a single stage delayed the time of the whole process.
Even if 1 member was unable to work, the whole process stopped therefore, if a teacher is not present,
no recordings were done on that day, and no work for the quality assurance or production team. So it
was crucial to keep a check on every step since the lead time varied with each day and lecture as
shown in figure 2 below.

32
 A. Macro/Micro
B. Lecture Slides C. Lecture Recording
Planning

D. 1st Cut without Changes by

Animations and Graphics QA

Yes No

Sent back for

E. Animations & F. 2nd Cut with
re-recording and/or voice
Graphics Added Animations & Graphics
over

Review by PCTB,
H. Approved for
Teachers & G. Feedback Incorporated
Uploading on Portal
Internal Team

Figure 2: Process Flowchart of Insaf Academy

33
 Current Challenges
Insaf Academy is a high-involvement project which requires all hands on deck. The long
working hours (2 shifts – 8 hours per shift for 6 days a week) had the employees on contract agitated.
It decreased the productivity of the employees and therefore, incurred loss in terms of lecture
completion and higher lead time. Considering the extensive chain of command in the government
sector, Naqeebz had delayed the salaries of the employees as PCTB could not authorize payment until
all stakeholders had approved and reviewed the lectures. This led to a decreased motivation and will
to work such long hours eventually, causing a higher number of absentees and lower production. The
consultants and RAs hired did not necessarily have prior knowledge or experience in the field of the
subject they were appointed for. This led to several defects in the lectures which were sent back into
production after reviews.
One of the major concerns Naqeebz faced was the space shortage. The four studios for
recording were working at a 100% capacity, 24 hours for 6 days to produce 7000+ videos.
Additionally to that, the equipment used for the production is also stored in these studios. Since the
equipment is imported, the cost attached to its damage is huge therefore, to ensure its safety, the
studios are also utilized as storage rooms. This consequently leads to a high ideal time since at a time
only 4 lectures could be recorded meaning that the teachers, consultants and the post-production
teams of the subjects not in recording incurred high ideal time.
Additionally, the technology that is used to produce video lectures is highly advanced such as
light rooms, 3-D visual rooms, neon light boards, etc. Such technological advancement is yet to be
introduced at a larger scale in Pakistan and therefore, the team at Naqeebz required extra training to
gain expertise in the area. Another very major challenge the agency faced was the hack attempt on
the server. With such sensitive data, Naqeebz was looking forward to a lawsuit had the server not
been recovered.
Another challenge that has taken the agency off its foot was the ongoing political instability
in the country. PTI’s government was set to be dissolved and Insaf Academy was their initiative.
Being a neutral body, PCTB was not accountable for the name of the project however, Naqeebz was
the only party with high stakes due to its large investment in the execution of Insaf Academy.
The fishbone diagram in figure 3 below shows the challenges explained above along with
table 1 which shows the percentage productivity.

34
Figure 3: Cause – and – effect Fishbone Diagram

35
 Table 1: Total Productivity in Percentage
Biology Physics Chemistry Mathematics
Total lectures 2037 2037 2037 2037
Recordings completed 1287 1338 1409 1478
Total Lectures Finalized
Internally 338 376 437 489
Approved by PCTB 25 89 128 155
Percentage
Recordings completed 63% 66% 69% 73%
Total Lectures Finalized
Internally 17% 18% 21% 24%
Approved by PCTB 1% 4% 6% 8%

• Percentage recordings completed = (Total lectures/recordings completed)*100

• Percentage lectures finalized internally = (Total lectures/lectures finalized internally)*100

Recommendations:
To avoid future challenges, Naqeebz is suggested to utilize the two shifts effectively by
adding another layer of RAs. This will help in reducing the lead time and ensure that there is no
bias among other RAs and teachers. If one team does not show up, the second shift can be called
early. This way, the time of the first shift will not be ideal and the production will not be affected.
Moreover, the utilization breakdown of each activity, shown in table 2, highlights the
activities that are inefficiently being carried out with idol time. The CPM model in figure 4
elaborates on how every activity is on the critical path, there is no slack time. This shows that if
either of the activities is delayed, it will cause disruption throughout the process and lead time
will increase (the Gantt chart in exhibit 2 shows the exact activity duration in contrast to other
activities). Also, to cater to the server hack issue, Naqeebz must go for a firewall-protected server
after which only authorized personnel will be able to access the data and no outsider will be able
to attempt logging in. The structure is to divide the subjects among the team leads who will further
have a designated team of production, post-production, RAs, teachers, graphic designers, editors,
animators, etc. This structure will help build a smooth flow of communication and process without
any inaccurate information. The agency will have a centralized goal of achieving the target.

36
 Table 2: Utilization Rate of Each Activity

Avg. Time Utilization

Activity (Minutes) Capacity/hour Capacity/week/hour Demand Rate
A 10080 168 8064 2037 0.25
B 480 8 384 2037 5.30
C 40 0.7 32 2037 63.66
D 30 1 48 2037 42.44
E 60 2 96 2037 21.22
F 1440 24 1152 2037 1.77
G 1440 24 1152 2037 1.77
H 10080 168 8064 2037 0.25

Table 3: Activities & Duration

Activity Immediate
Predecessor Duration (Days)
A - 7
B A 0.33
C B 0.03
D C 0.02
E D 0.14
F E 1
G F 1
H G 7
Total 16.52

37
 7 0.33 0.03 0.02 0.14 1 1 7

A B C D E F G H
D

0 A 7 7 B 7.33 7.33 C 7.36 7.36 D 7.38

0 0 0 0 0 0 0 0

0 7 7 7 0.33 7.33 7.33 0.03 7.36 7.36 0.02 7.38

7.38 E 7.52 7.52 F 8.52 8.52 G 9.52 9.52 H 16.52

0 0 0 0 0 0 0 0

7.38 0.14 7.52 7.52 1 8.52 8.52 1 9.52 9.52 7 16.52

Figure 4: PERT Diagram

Critical Path: A → B → C → D → E → F → G → H

7+0.33+0.03+0.02+0.14+1+1+7 = 16.52 Days

38
Appendix

Exhibit 1: Miro Board

39
Exhibit 2: Gantt chart

40
Exhibit 3: Components of Insaf Project

Exhibit 4: Virtual Rooms

41
Exhibit 5: Selection & Recruitment Criteria

Exhibit 6: Macro Planning Sample 1

42
Exhibit 7: Micro Planning Sample 1

43
Exhibit 8: Studio & Equipment

Exhibit 9: Production & Post-Production Room

44
Exhibit 10: Pictures from the agency

45
References:

1. https://www.naqeebz.com/
2. https://www.naqeebz.com/insaf-academy/
3. https://www.youtube.com/watch?v=pY0WO7wJSZM&t=4s

46
 MUHAMMAD SHAYAAN MOHSIN
P 268 AYESHA BLOCK, ABDULLAH GARDENS, CANAL ROAD , FAISALABAD ·
03008382232
SHAYAAN911@GMAIL.COM · MSHAYAAN MOHSIN

My current focus is on learning and gaining experience with time in Digital marketing, and
also the fact that I have done jobs in this field which is why I have a good grasp of it. But for
the future, I feel like exploring more options and interests. After graduation i am looking
forward to work in an FMGC company. Since school times I was an average kid who loved
playing and watching cartoons, playing video games, waking up late, all the stuff that average
kids do. But then came the time for studying and I realized that there is no such thing as
average. Everyone needs to work hard, study hard and be what they want to be so being above
average was a norm for me from then on. In high school I did sports, participated in the
academic council (gold medalist). In A/O levels, I won 2 gold medals for 2 straight years and
became an academic silver medalist. So my interests has always been in academics and doing
activities that challenge me. I was always told that I would be an average student but i always
knew i can always do better and break the average barrier.
I joined a digital marketing company "The Maddex" as a trainee after BBA, not knowing much
about this company and after working there for 1 years, I realized that i enjoyed what I was
doing. I got to learn from experts in different fields, some of them have become friends through
which we share and learn from each other.
There have been more failures in my life then success when it comes to academics but the fact
is I never stopped learning and that is me.

47
 AREEBA JAMSHED
Lahore Cantt, Pakistan · 0331-4298373
areebajamshed98@gmail.com
https://www.linkedin.com/in/areeba-jamshed-802791212/

My passion for the unknown makes it easier for me to step outside of my comfort zone at every
opportunity. I would describe myself as someone who thrives on seeking new experiences;
monotony is not my strong suit. My mantra is "constant growth," and ending each day as a
better or more knowledgeable version of myself is extremely important to me. This way of
thinking has a deeper effect on me because it reminds me of how I want to travel and hope to
wake up every day in a new place with no limits. My biggest flaw is that I only get excited
about perfection, which I believe motivates me to aim higher but also wears me down because
I out work every time to raise the bar even higher or else I feel like I'm slacking, which doesn't
sit well with me. Having worked for 1.5 years with top players in the market such as; Jazz,
CCBL, PepsiCo, FFC, RB, EFU, Shan Foods, NFL, Daraz, Makeup City, Dawlance, Rooh
Afza, Swyft Logistics, etc., and PCTB for the execution of INSAF Academy, I believe it has
made me a better, more focused version of myself, and going all in is the only option for me
because I don't believe in regretting missed opportunities.

48
Orient Apparel – New Face of Denim by Abdullah Saleem and Waleed Sajjad
Orient Apparel is a subsidiary of the Orient group of companies and was founded in October
2021 and it is situated on main Multan Road in Lahore. Their offerings, which come in a variety
of styles, colors, washes, and finishes, include denim jackets and jeans. The firm has strong
beliefs towards sustainable production and uses cutting-edge technologies to ensure that
uniform quality will be maintained. The company has adopted the Lean manufacturing process
that includes cutting, sewing washing, finishing and packing. The facility is located on Multan
Road; the site has easy access to the national highway and the motorway thus an easy
connection to the rest of the country. Similar tasks are clustered together in the Orients process
plan, and when each worker has completed their task on the product, the product is carried to
the next workstation on trolleys. Orient apparel is currently operating at 50% capacity due to
Covid-19 protocols and their daily targets are set accordingly. They are not utilizing their
capacity to maximum as of now but in the near future they will reach their maximum capacity
as per increase in their demand. Orient-Apparel keeps very low inventory as they work on
make-to-order strategy and due this they do not have to keep inventories. Most of their raw
material is purchased as per the demand or the order given to them and this is why they keep
very low inventory. A main issue faced is worker absenteeism due to the number of paid leaves
workers are allowed and that they have is their lack of a conveyor belt. They manually move
semi-finished goods from one workstation to another, which only adds up in the lead time of
processes, increasing average time of the products handled at each operation.

Industrial overview
Pakistan has developed into a top choice for clothing businesses and designers looking to
source goods over time. Due to its skilled labor force and high-quality textiles, it provides the
same high-quality products at an average lesser production cost, in comparison to countries
like India, China, and Bangladesh. Pakistan offers the second-best cotton throughout the world,
with prices that are 20–25% lower than those of other Asian countries. Clothing and textiles
account for over 57% of the nation's total exports, making it the sixth-largest exporter of
textiles. Nike, Sears, and Old Navy are just a few of the well-known companies that get their
products manufactured in Pakistan. Pakistan’s apparel and textile industry plays a significant
role in the nation's economy. Roughly 40% of Pakistan's entire industrial labor force is directly
employed in the textile and garment industry, which accounts for about 61% of all of Pakistan's
exports. Over 10 million agricultural households are also supported by thisindustry, thanks to
Pakistan's status as a significant raw cotton producer. On the down side, Pakistan's garment
and textile industry is plagued by chronic power outages, turmoil brought on by unstable
political environments, and a reduction in the Pakistani cotton's quality, a key raw material,
due to a variety of factors, including the country's shifting climatic circumstances. The clothing
market is anticipated to earn approximately US$6.01 billion in sales in 2022. The market is
expected to grow by 1.95% every year (CAGR 2022-2027).
Women's clothing will account for the market's largest category in 2022, with a volume of
US$2.51 billion. In 2022, the United States will have the most revenue, totaling 312 billion US
dollars. Based on population figures, per-person sales of US$26.19 are generated in 2022. A
volume of 1,893.8 million pieces is projected to also be sold in the clothing industry by 2027.
The size of the apparel industry is expected to rise by 5.4% in 2023. In 2022, it's expected that
each individual would wear 7.8 items of clothing on average. By 2022, non- luxury products
will account for all of the sales inside this apparel industry.
49
Company Background
Orient Apparel, was founded in October 2021 and is situated on Multan Road in Lahore. They
are an aspiring startup that wants to provide the finest in fashion to its clients overseas. The
European market, especially nations like Spain and Portugal, is now the company's main
prospect. Their products, which come in a variety of styles, colors, washes, and finishes,
include denim jackets and jeans. According to them, the ongoing automation of conventional
manufacturing and industrial operations employing cutting-edge smart technologies is the
fourth industrial revolution. Simply put, they consider that efficient and environmentally
friendly production are now standards in the textile sector, so automation and textiles should go
hand in hand. Modern technology is employed to guarantee that standardized quality will be
upheld, and the business has a strong moral stance on sustainable manufacturing. As a result,
they want to refine their focus on energy conservation, waste management, water management,
chemical management, and employee involvement in order to reach this milestone.

Competitive Strategy
The business has started using the lean manufacturing method.
It's a production method built on the belief that waste should be reduced while productivity is
increased in a production process.

• The company adopts the lean manufacturing process by first determining its process
layout, which involves
Cutting Sewing Washing Finishing Packing
It’s a sequential operation process where raw material travels from one department (i.e., cutting
to sewing) to another while processing is being done upon the semi-finished product till it’s
finished and ready for packing.
Lean tools incorporated by the Orient Apparel in designing layout are
• Continuous flow
Since production is in batches and as per customer requirements, the denim clothing passes
from one operation to another individually or smaller batches. This ensures processes are
aligned with the workstation and the labor involved.

• Kanban
This system involves “Make one, move one”. So until one of their denim garments is not
done with its respective process, it doesn’t move on to the next. This method validates the
quality and flow of the product through procedure.
• Advanced technology
Meanwhile designing a layout, equipment becomes the second most important element.
The crucial machinery on the vicinity included: The Automatic hanger system, Auto pocket
hemmer, Auto pocket attacher, Auto loop setter, Welt pocket setter, Thread trimmer,
Vacuum press table.

50
Product Range
Orient Apparel has specialized in the manufacturing of denim. They make premium jeans and
jackets and export them. They have the most appealing costs, the latest trends, and the highest
quality as their mainstay. They're at the top when it comes to high-end and convenience, they
are able to be compared to the top of the best in the world. With modern designs and designs,
they have a prominent place in the domestic and international markets.

• Denim Pants
• Denim Jackets

Planning Department
This department at Orient Apparel plans and works on each and every design to fulfill an order
within the given time limitation. Without a deadline, processes can't last so the business adheres
to every task within the given timeframes with the help of planning. Every order has a specific
delivery date, and the department of production works on the plan they’ve made based on the
delivery date of the order. They are aware of when the fabrics and the trims are available in-
house at the plant or are obtained from the supplier. Some of the fabrics and trims are purchased
from Local suppliers and some are imported. The team plans each process according to the date
of delivery. The production planning department is responsible for a few essential tasks listed
below:

Planning of Capacity
Time & Action
Meeting in Production Process
Order Allocation
Labor and allocation
Task execution
Material Follow-up
Meet delivery
Time and Action
The planning department has to follow each process according to the timetable. Each order
is given its own specific time frame and is ensured that it is delivered on time. Each stage
has its own development process from the start until shipment. This is the responsibility of
the planning department, otherwise they will not be able to deliver as per the scheduled
timetable. The planning department implements with a particular plan to keep track on time
and actions calendar. Exhibit 1 explains the timeline followed by the production department
of Orient apparel from the starting date of production process till the delivery of the product.

Scheduling
The department of production planning makes the decisions when any article/style has been
introduced into the production line. In the process they use cheek fabric and trims together with
the store department and the department of Merchandising. They have to be able to get their
in-house staff on time for each item to be put into the line. However, if they do they do not
receive trims and fabric in time, they can alter the line plan in order to lower costs.

51
Computer Aided Design Department
The CAD department receives tech-packs from the sampling department to aid in pattern
creation. The patterns are designed according to the specifications sheet, which includes style
information. Designs created manually are converted to digital with the digitizer. The CAD-
created pattern is traced on plotting paper with the Rich Piece Plotter. The designs are cut by
hand and glued onto the cardboard. The patterns are used to check quality as well as for
referencing, sampling as well as cutting. After pattern development, marker making is
performed using Optitex software. It imports patterns in accordance with technology packs.
The marker has details like size sets, dimensions of the markers, its width, and efficiency, and
the plan of the marker. Cut Order Plan is prepared in accordance with the specifications of the
marker.

Competitive priorities in Operations

Quality
Orient Apparel is a startup and is dealing with international clients; they cannot compromise
on quality because there are competitors such US denim and Nishat textiles that are very
established as compared to them. They focus on providing consistent quality since the
production is in batches and demands standard and customer-oriented approach.

Speed or Time
Another important priority Orient apparel competes in, is its on-time delivery promise with its
customers. The average time of order completion is based upon their order size and level of
customization required. However, the delivery is promised within 45-50 days after the order is
placed, which sometimes demands shipping half of the batch when completed or partial
shipping as per customer requirement.

Customization
There is a certain degree of customization required by customers e.g., in trims, finishing and
style. In this case, operations are somewhat disturbed because automation is pretty standard but
when it comes to customized goods, this involves manual labor work. In the case of Orient
Apparel, happens often. So, they’ve trained labor to simultaneously adjust and adapt to the need,
highly labor intensive.
Factory Location
The factory where Orient Apparel began operations is situated in Lahore's Maraka
neighborhood, 26 kilometers off the Multan Road. The company's Apparel division now has
its own space in this factory, which previously was dedicated to the electronics division of the
business. With surroundings of manufacturers like Bata and High-noon Textiles, the factory is
in a significant location. Due to its location on Multan Road, the site has quick access to the
national highway and the motorway, making it simple to link to the rest of the country. The
fact that the facility is outside the metropolitan region which means that their cargo can readily
enter or exit the factory at any hour of the day, which is a crucial consideration for the site's
location. While choosing the site of manufacturing for any company, one important factor that
is kept in mind is the easy and cheapest access to the raw material. As Orient is currently only
working on Denim jeans so it is really easy for them to get hold of the raw material locally in
Lahore. This lowers a major transportation cost as raw material is available nearby so they not
only get them at the earliest but at a lower cost. Moreover, being strategically located on Multan

52
 Road they have easy access to the labor that is working on their products. A company official
told us that major of the workers working on apparels in Lahore are located in Sundar, Pattoki
and Changa Manga. So the location of the site is such that people from all of these locations
can easily access the site and come for work. Similarly, as the site is near the motorway entrance
thus it is really easy for the company to get hold of some supplies that have to come from other
parts of the country. Another benefit that the location provides to the company is easy access
to the new Lahore dry port situated in Prem Nagar which has state of the art facilities and is
located only 30 kilometers from the Orient factory. As Orient currently only plans to export its
product so having an access to dry port is really important for any company.
Although Orient has its plant at a really fine location but still there could be some factors to
consider placing its factory at a better location. First and foremost is the lack of usage of
industrial estate area especially when the factory is located near Sundar Industrial area which
is couple of kilometers away from the current one. Being situated in an industrial estate has its
own privileges such as purpose-built site with uninterrupted gas and electricity supplies and
secured site. Moreover, government is also providing tax relives when the companies shift their
operations to these industrial areas to promote the companies in locating to a centralized area.

Factory Layout

The Orient apparel uses a process layout since similar tasks have been grouped together. Once
each worker has completed their task on a product, it is carried to the following station on
trolleys. The product is created at each work station in batches, and when a certain number of
them have been done, they are transferred to the next workstation to continue the process. The
finished product leaves the factory once all tasks have been finished. Given that the product's
demand is erratic and apparel items are highly customized, the firm occasionally keeps semi-
finished goods in stock instead of finished goods in order to meet urgent demands.
As they are entering the apparel business, they must recruit skilled employees, particularly for
the sewing job since the efficiency and quality of the clothing manufacturing process rely on
how well the workers do their duties. The Orient apparel now employs a conventional
warehouse which has been modified to accommodate the machinery and serve as a clothing
factory. They utilize underground wiring, which significantly lowers the chance of accidents.
After all, related operations are ordered in that line, the item is moved to the start of next line,
where it will undergo a different type of procedure.
Although Orient's management has worked to make the entire process efficient, there are still
certain shortcomings that may be fixed to make the whole process and production more
efficient. The need for wider aisles should be the first significant modification. The aisles were
seen to be narrower than they ought to have been. At Orient Apparel, the aisles are not the
proper size since process layouts require wider spaces for product circulation. It was observed
that occasionally workers at the opposite end of the assembly line would bring another cart
with a product that was in a different stage of the process while the items were being moved
from one production line to another. They had to clear the way for one another at this point,
which caused a delay in their mobility during their shifts. Similar to how the building where
the machines were installed was originally designed as a warehouse and later modified, there
were other aspects lacking that may have increased the overall productivity of the workers,
such as inadequate lighting. Given the height of the windows and the surrounding tall buildings,
some light was blocked from entering. Similar tothe jeans sewing area, the accessory sewing
room's interior lighting was insufficient. In comparison, jeans sewing area should have
automated production line and specialized sewingareas each had their own lights.

53
 Another method to improve the layout of the lines is to simply reverse each alternating line,
which would reduce traffic in the aisles and make them one-way. Due to the fact that all product
lines currently have beginning points facing the same way, products had to be transferred back
and forth from line end to line start, but by making other lines reversed, one line's end point
will be directly next to another line's process start point.

Capacity Management
According to the definition of capacity, it is the entire quantity that can be produced or the
ability to do, manufacture, retain, receive, store, etc. The ability of a business to create the
goods is known as production capacity. Due to Covid-19 guidelines, the Orient Apparel is
presently only working at 50% of its potential, and its daily goals are established appropriately.
They are not currently using their capacity to the fullest, but due to a rise in demand, they will
in the near future. They produce 5000 pieces every day on average. Due to their make-to-order
business model, they have maintained a limited capacity. “Make to order" enables customers
to buy items that are tailored to their needs. It's a manufacturing procedure where an item is
only produced when a valid client order has been received. Similar to other companies, Orient-
Apparel begins producing its goods after receiving an order from a customer. Since Orient
Apparel is a startup with erratic sales, MTO assists them in meeting changing demand and
completing a range of requests. Additionally, they are able to waste less and keep their
completed goods inventory low thanks to this. Compared to the industry Orient Apparel
compete in, Orient Apparel's product waste is relatively low at 10–20%. The majority of their
trash is also recyclable, aiding them with their goal of sustainability and lean manufacturing.
Their cutting debris is sold and used for recycling. This lowers their production costs while
also assisting them in reaching efficiency.
Exhibit 2 lists different activities, their average completion times, the number of workers
needed for each task, etc. Company’s expected demand is 120,000 units for the next month.
However, the problem of blocking and starving is there that needs to be catered in order to
increase efficiency and ensure that customers get their orders on time. When products finish at
one specific line, they need to be manually shifted to the next production line, which causes
blocking. Furthermore, Washing and packing are outsourced so the delivery activity faces
starving, as it won’t have any products when the products get delayed from the outsourced
company. To determine if an activity is underutilized, ideally, highly utilized, or over utilized,
the capacity and utilization rate of each activity are computed. All of the activities are
underutilized as there is excess capacity available. They are expecting bigger orders in future
that wouldfully utilize their operations and capacity. As of now majority of their activities fall
below 50% utilization rate, which means that Orient Apparel is not fully utilizing their
resources, in fact they are wasting their available capacity which is sort of adding to their costs.

Capacity Decisions
Due to the current low demand for their products, Orient-Apparel has maintained its
manufacturing capacity low, but they intend to raise it in the future. They analyze the certainty
of forecast every three to four months and enhance their capacity as necessary. Their strategy
goal is to run their manufacturing process as efficiently as possible while increasing
productivity, therefore they retain capacity to do this.
Over the next 5-7 years, Orient-Apparel intends to raise their everyday manufacturing capacity
from 5,000 to 100,000 pieces. The combination of economies of scale and maximum capacity
would be made possible by this. Their fixed expenses would be dispersed among a vast number
of units, and the cost of their raw materials would decline as production volume rise. As
workers get more practice managing their time and high productivity, their operational
54
 efficiency would also rise. All of this would aid Orient-Apparel in expanding its ability to
realize economies of scale, which would result in lower costs and greater effectiveness.
However, this expanded capacity would also present issues for them, such as difficulties in
coordination and communication with the staff, which might result in diseconomies of scale.
With the expansion of Orient-capacity Apparel's and production, production bottlenecks and
failures will occur. Conflicts and internal politics inside the unit might occur. Employee
tiredness and demotivation may develop with increased productivity and workload. The
percentage of total capacity kept in reserve for unpredictable circumstances is known as the
capacity cushion. To satisfy any unforeseen demand or to account for any production defects
or errors, Orient-Apparel has established a 10% capacity cushion.

Inventory Management
Inventory is the term used to describe the goods or supplies that a business keeps in store with
the purpose to produce, sell, or use them. Inventory management’s prime focus is determining
the location and form of stored commodities. In essence, it is a store of goods preserved to
satisfy potential future demand.
Orient-Apparel maintains extremely little inventory since they use a make-to-order technique,
which frees them from the need to do so. They hold extremely little inventory because the
majority of their raw materials are bought in response to requests or orders. The majority of
generic goods, such basic yarn and servicing supplies for machines, are only kept in stock.
They benefit from the elimination of inventory holding expenses. As they order the precise
quantity which will be sold based on demand and only get products into inventory when they
are required, Orient-Apparel aims to maintain little to no inventory. Reduced inventory is more
efficient, more adaptable, and less costly than maintaining and storing huge volumes of goods
for them, centered on this JIT inventory model of short lead periods.

Issues and Recommendations

The plant has not been operating at its full potential since the operation began 1 year and six
months ago.The building where all of operation was being performed was only being used in
half, leaving the other half unoccupied. The firm was generating 5000 units a day at half
capacity. The factthat the facility was not specifically designed for the business, meant that the
job and locationwere not equally suited to increase efficiency. Before the business moved in
and began operations, the structure was there. As a result, a lot of storage space was wasted. The
businessrequires a specially designed facility or must make greater use of its current structure if
it wants to make the best use of its resources. In order to fully map out the actions being
performed as well as the flow of information and products at each stage, blueprinting along with
value stream mapping can be used. Secondly, the transfer of production material between
production processwas being done manually through trollies, it was leading to blocking and
starving in the process. The installation of conveyer belt would remove these issues as the
products would betransferred in a flow without the dependence on any manual labor.
Due to the large number of paid vacations that employees are permitted, one of the major
problems is employee absenteeism. The number of employees needed at each station in the
production line frequently falls short due to employee absenteeism. As a result, everyday time
is lost attempting to balance the amount of labor required at each station with number of
employees present. A consistent and dependable supply of the necessary personnel must be
present at the allocated workstations in order for the company to effectively utilize its line
balancing to achieve efficiency. Hiring contract employees who are readily available to work
55
during the needed hours is one option to address this problem. Because hired part-timers do not
enjoy the same entitlement to paid leave, this would reduce employee absenteeism. But being a
young business, Orient Apparel cannot afford to hire all of its employees as contract workers
rather than full-time employees, who guarantee the company's ability to complete and execute
orders on schedule. Orient Apparel can opt for a mix of both highly skilled full-time workers
and a number of contractual workers as well. Another suggestion is that management reduce
the number of paid leave days available to employees. Rewarding employees for high
attendance and performance may be one of the most effective, yet least expensive, strategies
for Orient Apparel. They must devise a method for consistently rewarding and recognizing
good attendance. in order to reduce absenteeism and ensure that line balance is successful and
that the quantity of workers required at each work station is the correct fit.
They now employ a process technique called the product focus strategy. Their modern
machinery enables them to create enormous volumes of items in a uniform way. However, as
a result of the fast fashion business, their requirements have changed, and they now have to be
able to adapt and tweak their machinery to generate a flexible variety of designs. This is
necessary since they must consistently make various goods owing to shifting fashion trends.
This indicates that they must switch to a mass customization process approach that enables
them to generate a large number of different products. This method enables quick, inexpensive
production that meets the ever-changing needs of the consumer. They can do this if they
maintain their process design adaptable to fashion changes. Another approach to do this is to
modify their product design, i.e., if they had a limited number of product lines and parts that
could be combined in different ways that suit various designs and orders. They should also
work with responsive partners. They now outsource the product finishing; however, these
collaborators must be able to alter their workflow to accommodate the creation of customized
items. They also lack a conveyor belt, which is a problem. Semi-finished products are manually
moved from one workplace to another. This lengthens the turnaround time and goes against the
company's core values of reducing resource waste and constant development.

56
Appendix
Company’s Mission

Achieve and maintain market leadership in the production of denim apparel.

Produce work of the best quality.
Achieve success through ongoing improvement.
Meet and exceed the clients’ expectations.
Be ethical in their actions and work as a team.
Ensure a good return to stakeholders and uphold moral and social responsibilities.

Company’s Vision
Through innovation as well as service excellence, we inspire whole world to discover new
possibilities for a better and safer future.
Company Hierarchy

GM

Senior Quality Production

HR Manger Accountant Engineer Manager Manager

57
 Time and Action Plan – Exhibit 1

Oct Oct Oct Oct Nov Nov Nov Nov Nov

Date 10 15 20 25 2 2 4-8 8-10 25

Order
receiv Fab
ed, ric Prod
and uctio Fabric Cutti Stitch Press Final Deliv
Opera Trims and
ordere Tri n Inspect ng ing Inspect ery
tion Packi
ms Proc ion ion
d, ng
Fabric in- ess
ordere hou
d se

Capacity Utilization – Exhibit 2

Activiti No. of Shif No. of Avera Capaci Capaci Capaci Dema Utilizati
es worke t worki g e t y (per t y (per t y (per n d o n Rate
rs (per n g time hour) week) month
hou days for )
r activity
)
1 30 12 6 2 900 64800 259200 144000 56%
2 20 12 6 1 1200 86400 345600 144000 42%
3 15 12 6 1 900 64800 259200 144000 56%
4 22 12 6 1.5 880 63360 253440 144000 57%
5 65 12 6 5 780 56160 224640 120,00 53%
0
6 42 12 6 3 840 60480 241920 120,00 50%
0
7 35 12 6 2 1050 75600 302400 120,00 40%
0
8 15 12 6 1 900 64800 259200 120,00 46%
0

900*= (2/60)*30
64800*=900*6*12
259200*= 64800*4
56%*= (144000/259200)*100

58
Flow Chart of Manufacturing Process – Exhibit 3

1 min 1min 1.5 mins

Denim Marker
fabric from making
Spreading
batch with
pattern Cutting

Sewing or
joining 5 mins
parts

Washing
3 mins

Finishing
2 mins

Inspection
1 min

59
 Folding
and
Delivery
Packing

1 min

60
Miro Board

61
 MUHAMMAD ABUDLLAH SALEEM
Lahore · +923333911350
abdullaahsaleem@gmail.com · linkedin.com/in/abdullaahsaleem

Growth is the underlying passion that drives my business acumen and entrepreneurial
spirit.

I am currently pursuing MBA degree at Lahore School of Economics. I have always

been interested in the business field and I am currently seeking opportunities related to
the same field. I believe that the skills that I have attained from the dynamic environment
and competitive university and business life define me and I am looking forward to
implementing and polishing them in any opportunity that I receive.
I am a passionate and result oriented professional, having in depth knowledge about
modern tools and technologies. Highly organized individual who believes in
empowerment and team work, highly adaptable, fast learner and effective
communicator. Striving to give 100% to the work I do and my goal is to build strong,
long term mutually beneficial relationship with the individuals I work with in the field.

62
 WALEED SAJJAD
Lahore · +923004600109
Rwsk29@gmail.com · linkedin.com/in/waleed-sajjad-7bb651201/

I am currently enrolled as an MBA student in Lahore School of Economics (LSE),

pursuing an Postgraduate degree. I am interested in business field and am currently
seeking opportunities related to the same.

I am always curious about things and enjoy learning. I also love solving problems and
fixing errors. I am a detail oriented person and I keep my goals and tasks organized to
maintain productivity.

I believe that the skills that I have attained from the dynamic environment and
competitive university & business life define me and i am looking forward to
implementing and polishing them in any opportunity that I receive.

63
Cotton Web by Nayab Gohar and Noor ul ain Zaka

On June 30th, Waseem Akhtar, CEO, and director of Cotton Web realized the order delay issue
of one of its major clients. Lead time has been the major issue for Cotton web, affecting the
client relationship and reputation of the company. Pakistan’s textile sector has already been
receiving backlash regarding the lack of efficiency, the increase in the cost of raw materials,
and the high pressure of meeting deadlines. In this immensely competitive environment will
the cotton web be able to streamline its supply chain management processes?
Textile industry in Pakistan:
The textile industry in Pakistan is the 3rd largest sector of the economy. It plays a vital role in
driving economic progress, job generation, and poverty alleviation among others. It has been
estimated that the textile industry accounts for about 43% of total exports from Pakistan. The
textile industry represents more than 40% of industrial employment in Pakistan and accounts
for nearly 25% share of the GDP.
Textile Industry plays an important role in driving economic progress and poverty alleviation
as well as creating employment opportunities within the country’s economy by generating $22
billion dollars worth of revenue annually with around 2 million people employed across
different sectors which includes 900,000 engaged with spinning activities alone.
The increase in raw material prices is because of the poor economy and inflation. The textile
industry mainly uses Cotton, Silk & synthetic fibers (nylon, polyester, acrylic) as its raw
material.
Pakistan's cotton production rose from 160,914 tonnes in 2005–06 to 182,961 tonnes in 2006–
07 due to productivity improvements and increased area under cultivation. Pakistan ranked 4th
among cotton producers with a total production of 461,000 bales (as on March 31st, 2018).
Denim and Bottom wear Manufacturing in Pakistan:
Denim is a fabric made from cotton by passing the woven textile between two metal rollers to
create characteristic blue, gold, and white stripes. The process of leaving indigo-dyed threads
in white cotton produces an inexpensive and popular denim fabric.
Pakistan has a significant history of producing denim for clothing manufacturers all around the
world, which includes Levi Strauss & Co., Gap, and Benetton, as well as other "high-end"
international brands. Similarly, Cotton web’s is one of the key manufacturers of denim and
bottom wear in Pakistan.
Overview of the company
Cotton web established in 1998 is a bottom-wear manufacturing company. They have around
5800 skilled employees and have 495,000 sq. Ft covered production area. They have their
headquarters in Lahore. Moreover, they have also had an office in Karachi and UK.
Mission statement
“We, as a team of professionals, consciously commit to deliver on our promises in a disciplined
way.”
Vision statement

64
“A Globally recognized first-choice supplier for our buyers, known for our innovative products
and Best Practices.”
Key Partners
They mainly export the garments to different brands such as H&M, Guess, DKNY Jeans, GAS,
NEXT, Tommy Hilfiger, Zara, Mango, Levi’s, Kiabi, etc. they mainly deal with processing,
stitching, and dying of the Fabric and converting it into garments. For now, Cotton web doesn’t
deal with backward processes of making yarn or fabric. They deal with business-to-business
sales/purchases and are a customer-oriented company.
According to the customers’ requirement Cotton web purchase the fabric, cut it, stitch it,
process wash it, put on special effects, pack the garment, and further ship it from Karachi to
Europe and USA.
Levi’s is one of the major customers of Cotton web. Levi’s places the order in advance; which
includes the type of fabric, design, and details of the garments to be manufactured.
Phase I: manufacturing samples
Role of Supply chain
The number of garments produced by the cotton web is estimated to be around 1 million per
month. There are a number of departments that are involved in the supply chain of the cotton
web. For ordering raw materials, first, the customers through the information to the sales
executives and the following processes are initiated by the designated departments:
Marketing and sales department:
This department approaches and pitches the customers to order and gives them the chance to
manufacture their garments.
Sales executives then take the order from the customers; customers tell the executives all the
specifications regarding the garments. Details regarding the thread, buttons, zippers, trims,
labeling, tags, digital printing, embroideries, embellishments, packing, etc.
Sales executives provide and forward customer data to the supply chain department. The
supply chain is given the role of providing the samples to sales so that they send them to
customers and get the bulk order approved.
Supply chain
The supply chain department will start to work on fulfilling further requirements for
samples/garments to be manufactured. It will overlook the list of suppliers that will provide
them with the best quality raw materials.
Criteria for selecting the supplier
It takes a lot in choosing the supplier. Firstly, the supplier needs to be certified. Quality and
delivery on time are the priority. Lastly, the price is negotiated, and whoever fits the criteria is
the company chooses them.
The manufacturing of samples takes up to 10-30 days before submitting it to the clients.
Phase II: Bulk orders:
After the sample is approved by the clients, the order is locked, the timeline for the order is set
and the payment is unblocked (SAP Software), the client will order in bulk. In this process

65
Cotton web will quote their rates per piece to the client the Sales department forwards the bulk
order to the Supply chain. After filling the raw material requirement, the Supply chain will
provide the order information to the planning department. All the supply chain information is
managed through ERP software.
Planning Department
The time for dispatch, quantity, and specifications is communicated to the planning department.
This information is provided via the centralized computerized system of Cotton web.
Manufacturing
The details of the order are moved to the Manufacturing department. The manufacturing
department consists of a cutting unit, stitching unit, dyeing unit, and finishing unit. After the
client’s order is complete, the garments are packed and moved to Store and Quality Assurance.
Storing and Quality assurance:
The Store is responsible for counting the products and keeping a check if the purchase order is
fulfilled as per the requirement of the client. The Quality assurance will make sure that products
are without defects and are made as per quality standards set by the client.
Criteria for selecting the supplier
It takes a lot in choosing the supplier. Firstly, the supplier needs to be certified. Quality and
delivery on time are the priority. Lastly, the price is negotiated and whoever fits the criteria the
company chose them.
The export department
In the cotton web business model, the export department is not part of the supply chain. After
the products are completed and approved by the quality control department, they are loaded in
trucks. Trucks will ship the inventory to Karachi and then the inventory will be handed over to
the client’s agents. There are various payment contracts with clients. Some clients pay in
advance and some clients want 30 days of credit, 60 days of credit while some pay on time of
delivery.
the payment terms with clients are mostly dependent on a past relationship. If it’s a new client
they prefer payment in advance.
Major issues with the supply chain
The main issue arises when the sample from clients is approved and now its time to purchase
the material in bulk from the supplier. The supplier is already occupied to fill in orders for other
company that it takes time to respond to the needs of every company. So, when the lead time
increases the process slows down and deadlines are not met. For instance, the supplier said that
he already has orders for several factories and would not be able to deliver on time because of
capacity so, we need more time. Due to this problem, the relationship with clients in risk.
Waseem Akhtar, “On April 1st, Cotton web’s marketing, and sales department received an
order from one of its major clients (name not to be mentioned). The client required exquisite
details and digital printing on the garments for the winter collection. As cotton web has to
procure all the detail and finishing material from its suppliers, the suppliers were unable to
provide fancy buttons and zippers for the garment. This left us on a knife’s edge and it was
difficult for us to change the supplier. Fortunately, due to good and long-term client relations
we were able to communicate this issue with the brand. Of course, they understood, but the

66
last-minute supply issue was a real eye-opener for us. This made us realize how important
streamlining and in-house production is essential for the Cotton Web.
Another issue is quality, at times the supplier could not fulfill the exact quality specifications
that were sent by the company. For example, variation in color or type of fabric. All of these
problems were increasing the cost and with increasing cost the negotiation with clients was
getting difficult. General Manager Cotton web gave insight regarding the issue they face in
terms of the quality of fabric they outsourced.
“The problem arises when the fabric was examined by the Inspection and Quality Assurance
department. I remember it was a summer afternoon in mid-July when I received a call from the
quality manager that the entire batch of fabric is made of 80% cotton and 20% polyester instead
of 100% cotton. The client specifications are clearly communicated throughout the system of
both company and its supplier. Clearly, the supplier sent us the mixed, low-quality material,
God knows why? But all in good times, as our quality assurance is prompt enough to recognize
the difference between the fabrics and ensure the client’s requirement.
Recommendation
One way to tackle the problem is to develop a fabric weaving plant, as the major raw material
for making bottom wear is cloth. The excessive increase in the cost and delay of procuring
fabric puts a high constraint on cotton web’s finances and supply chain. The in-house
production of raw materials like fabric and other detail materials like zippers, thread, buttons,
belts, etc. will give Cotton web complete control of its supply chain processes. The problem of
lead time would be reduced as they will produce the raw materials solely for themselves and
costs would be under control. Due to the future in-house facilities, quality aspects and client
expectations would be addressed and managed as well. As they would have complete control
over the product from raw material to the final product.
Manager “The stronger the base from the start, the more impact on the final product would be
much stronger”
Short term Solutions
As acquiring from suppliers is the major problem for Cotton Web, it is not easy for them to
develop/build a manufacturing unit immediately. So, what the company can do is incentivize
or have an agreement with the best-chosen suppliers to only fulfill and prioritize their orders.
This will help the company to decrease the lead time but will consequently increase the costs
for Cotton web. The company is well versed if they want to implement this trade-off.
Moving forward: Sustainability and CSR
Cotton web has been actively involved in sustainability efforts. The implementation of a robust
ecosystem is well-addressed by the company. To generate electricity for the machinery they
have their own solar system plant. 20% of their energy needs are fulfilled through green
channels, which is planned to be increased up to 40%. Moreover, water is the main ingredient
for the dyeing and finishing of denim, Cotton Web is making significant efforts to save and
recycle water through its reverse osmosis (RO) and water Effluent Treatment Plant (ETP).
They are also thoroughly adopting green chemistry, and ensure that the chemicals they use for
the fabric finishing are user-friendly for their clients, employees, and end users. They have
their sustainability certification from Higg Index, ISO14001, OEKO-TEX, WRAP, BCI, etc.
Cotton web is vigorously engaged in fulfilling its corporate social responsibility, this is done
by collaborating with NGOs, Schools, and institutions and arranging workshops/training for

67
people in underdeveloped areas. They collaborated with The Hunar Foundation, The Citizens
Foundation and are also involved in an onsite vaccination drive for their employees and their
immediate family.

68
 Appendix:
Table 1:

Materials Machine Methods

Less no of machinery Delay in acquiring

Limited options materials
for production

Outsourced Raw material Complicated product design

Distorted Supply
Chain and Increase in
Lead Time

Lack of innovative Limited Capacity Suppliers’ inefficiencies

products of suppliers and delays

Environment Measurement People

Figure 1: Cause and effect Fishbone diagram in accordance with suppliers

69
Table 2:

This figure shows Order Process flow for Cotton Web

70
Table 3:
Manufacturing Process:

71
72
Miro board

73
 NAYAB GOHAR
Eden Avenue Extension house no 84 & 85, near new airport road Lahore
03248427260
nayabgoharlse@gmail.com

My name is Nayab Gohar. I am 23-year-old and currently I am doing MBA from Lse.
After my graduation, I want to secure a job at a reputed marketing agency, As, my
interests were always in marketing. If I talk about my long-term goals, I want to have
my own business in future as successful as my fathers.
I am a self-motivated and disciplined soul. I am always keen to upskill myself by
learning new things whenever I get a chance. I am an adventurous person; I love to
travel. Other than that, I love sports during my school time I was in every sport.

74
 NOOR UL AIN ZAKA
House no 1OO5 Sector K DHA Phase 6 Lahore · +92332783297
Noorulainzaka101@gmail.com ·https://www.linkedin.com/in/noor-ul-ain-zaka-
6238b2212/

My Name is Noor ul Ain, I completed my bachelors from Lahore school of Economics

with Majors in Marketing and minor in Media studies. Being a daughter of an Army
officer, I travelled almost whole of Pakistan, switched different schools and made a lot
of connections. Currently I am pursuing MBA from Lahore School of Economics and
will be graduating next year.

75
Section C

76
The London Store: Overcoming the Dynamic Environment by Ali Butt and
Urfa Ahmad

“Are we ready for a change? I don’t know. No one really knows. You need to make a choice:
do we keep going or do we start again?”
Mr. Hazik Yousaf
CEO The London Store

Hazik Yousaf, CEO of The London Store, nervously paced around his office wondering
what his next step would be. The fluctuations in the Pakistani rupee were posing as a challenge.
The political instability, COVID19 and constant currency fluctuations were gnawing at the
base of his business. Just when the organization would move towards a boom, it would be
brought down by the ever-changing, uncertain conditions of Pakistan.
The dynamic society was not his only challenge. His dependency on his supplier was
increasing, which posed a threat for the future. Customers were becoming more demanding, as
there was a shift in consumer trends. At the same time, there was no set measurement of
demand, fluctuations were common. Despite all this, his supply chain was becoming a
hinderance. He knew he needed to take a step, before everything went spiraling out of control.

1. Personal Shoppers: A Viable Service Business

In the last twenty-seven years, there has been an increase in online shopping and E-
Commerce. By 2022, the E-Commerce industry had made sales up to $5.5 trillion (Guniyol,
n.d.). By 2023, it is expected to increase by a further 12.2% (Mohsin, 2022).
Recent changes in the world and the increased digitalization have made way for consumers
being comfortable with the idea of online shopping. Especially since it allows them to shop out
of their geographical boundaries. Not only this, consumers now have a lot more convenience
and ease, such as making purchases from their smartphones. (Mohsin, 2022) Younger
generations, in addition to this, are more tech savvy, which can be seen from the fact that 80%
of the consumers ranging between 25-30 did more online shopping.
This booming E-Commerce has made way for new business ideas and services that might
not have existed before. One of them being personal shoppers. Personal shoppers act as agents
who purchase the products on behalf of others. Although the idea of personal shoppers is not
fairly recent, the digitalization and use of E-Commerce has allowed for the services to grow
and establish into a viable form of business. Consumers have been slowly moving towards the
purchase and consumption of high-end fashion brands (Danziger, n.d.). Exhibit 2 provides with
the details on how the luxury fashion retail consumption has been on an increase over the years
(Hyde, 2021). The brands that consumers may want, might not be geographically available in
their areas, and the organization might not ship directly. Personal Shoppers, therefore, become
the intermediary that help consumers get the products they demand for some commission.
For Pakistan, the concept can be seen growing over the years. The start of these businesses
can be seen through social media channels, where individuals provide the consumers with a
chance to order products from specific countries, for example, one company would only cover

77
United Kingdom, one would cover The United States, etc. Although the concept is fairly new,
it gained a lot of interest during COVID times, and the service has been increasing ever since.

1.1 COVID’19 – An Outlook

The pandemic became the reason for devastation in all forums. Millions of people lost
their lives, families were disrupted, and the world changed within months. Even for businesses,
COVID’19 brought on their own set of challenges: supply chain disruptions, halting of
operations, lack of labor and production, resulted in catastrophic events ("COVID-19:
Implications for business," 2022).
However, it opened new avenue as well. It made way for the acceleration of digitalization
throughout the globe. Organizations were pushed towards having to digitalize themselves to
ensure that they are not shutting down. It not only changed how the organizations behaved, but
changed the consumers as well. Businesses and consumers are now in a position, where they
navigate through new challenges, and new beginnings (Amankwah-Amoah et al., 2021).

1.1.1 New Beginnings

Within one year until 2020, E-Commerce global retail increased by 17%. This
highlighted the trend towards increased online shopping for the consumers. Due to the
lockdowns, restrictions and the travel bans, consumers were more readily digitalizing
themselves, in order to somewhat retain what they had before the lockdown ("How COVID-
19 triggered the digital and e-Commerce turning point," 2021).
The London Store also found their way amidst the peak of COVID’19. They were able to
understand the increasing trend of online shopping, as well as how consumers spending habits
have been changing. Keeping in mind this, they were able to start off their operations, in 2021,
just when COVID’19 was starting to become normalized, as the vaccines came into existence,
and travel-bans were being lifted.

2. The London Store

2.1 Company Background

The London Store came to be from a classic Hermès Oran Sandals. In 2021, a friend
desperately needed a Hermès Oran Sandals. It had become a new obsession, so Mr. Yousaf
took things into his own hands. Knowing a family member was travelling, she placed the order
and soon enough the friend had her sandals, and Mr. Yousaf had his idea.
“I bought another pair for my mother. It has become a symbol of a new
beginning. Every time I look at it, it reminds me of far I’ve come, and
how it all took one pair of sandals to push towards starting this.”

It was not long after, he had been taking orders from his friends and fulfilling them to
meet their needs. Mr. Yousaf was able to identify the market gap of consumers needing certain
brands, and not being able to order them online since an address within their delivery locations
was necessary to provide. Unlike other personal shopping services, The London Store tried to
focus on luxury brands that were difficult to get, even for other personal shoppers, such as
Hermès, Louboutin, Loro Piana, Gina, etc. What started off with a small commission of 5%,

78
allowed him to increase his earning by 15%-20%. Still being a university student, he was able
to not only pay for his education, but make way for his necessities.
Starting with some savings, he was able to hire a personal shopper as their supplier, in
the UK. The personal shopper was more of a partnership relationship, since he provided them
with the necessary sourcing services. This helped him remove his reliance on family travelling
and gave him much more control over the frequency of orders, and shipments times. When the
relationship was established, Mr. Yousaf formulated his business through social media, and
officially started The London Store. Although, initially there were concerns about the
credibility, his reviews and repeating customers were able to earn him a good stable and
positive position in the market. By the start of 2022, Mr. Yousaf not only had his loyal
customers, but he could see the increasing orders, and customer base.
“I know this is not a traditional industry. I know the business is not
always very stable, but Pakistani consumers are changing their tastes.
A few years ago, everyone had made peace with the fact some brands
are just out of our reach, and now everything you could ever want can
be delivered to you in about 2 weeks. Pakistani consumers love spending.
Our whole persona is on showing a certain image, and the more they
spend, the more we grow.”

With the relaxing travel restrictions and import bans, The London Store was soaring high
with success. They were able to expand their operations from Lahore to all the cities of
Pakistan.
2.2 Order Fulfillment Process
The London Store carries out the following steps to fulfill a particular order. The process
flow diagram can be found in Exhibit 7.
Step 1: The customer places an order to the organization. They are required to give the
details on the product attributes, brand, and their personal information. In addition to this, 50%
advanced payment is required to confirm the order. 50% of the payment is done once the order
is received by the customer. Prices are subject to the fluctuations in the rupee.
Step 2: Once the order is placed, the company then sends the information to their supplier.
The product is then either purchased, or ordered online, depending on what is the faster option.
The product needs to be acquired within the first five days of order placement.
Step 3: Once the product is received, it is sent through DHL to Pakistan, where The
London Store receives the product. The order delivery cost is generally accounted for in the
initial order payment by the consumer.
Step 4: Once the product reaches Pakistan and to the warehouse of The London Store, it is
packaged and then dispatched to reach the consumer within three to five working days.

2.3 Competitors – Old and Emerging

Personal shopping services started to emerge during the pandemic, and quickly became
popular within Pakistan. The London Store was one of the few pioneers in the market, which
allowed them to gain the first mover’s advantage. However, it was not long before they could
see other similar organizations popping up, and increasing market competitiveness. The one
way that The London Store was able to differentiate themselves was through the product

79
variety of high-end luxury goods, which might not be easily accessible to anyone. However,
they knew this could only be provided for a particular niche.
As the things started to normalize. The personal shoppers were not the only competitors
that The London Store had to face. They had to navigate their way through the re-opening of
retail outlets. Especially those businesses that provided their consumers with omni-channel
purchase. Being a solely online store, even with things normalizing was posing to be a long-
term challenge for them.
The bigger fashion retail brands, such as Sapphire, Khaadi, etc., were not only managing
their online stores, but they gave their consumers the chance to shop in-person as well. To add
to this, these brands were also providing with delivering in numerous countries. The London
Store may have been providing with certain up-scale brands, but with the choices in the market,
and alternative could have been easily found, at the third of the price.
Thus, the market was getting competitive, and The London Store needs to find ways that
would not only sort out their supply chain issues, but help them stand amongst the numerous
competitors.

3. Sourcing and Supplier Relationship Management

London Store currently has one supplier in the UK that ensures the ordering, purchasing
and shipping of products to Pakistan. The supplier selection was a tedious process, which
required intense involvement of Mr. Yousaf, since the business hinges on supplier relationship
management.

3.1 Selection Process

For the selection process, three areas were stressed upon: information coordination, lead
time, and flexibility. In addition to these three major aspects, pricing of the suppliers, exchange
rates, etc., were also taken into consideration. Each supplier was checked on these elements
and scored. The final selection was done of the supplier that received the highest score.
3.1.1 Information Coordination:
The most important element that the London Store focused on was information
coordination. Their supplier was based in the UK, thus, information flow between the two
parties was crucial for the effective procedures. There was a need for constant communication,
due to the nature of the job, because specific consumer needs have to be taken into account.
3.1.2 Lead Time:
The London Store promises to provide their customers with their products within two
weeks of them placing their order. Low lead times for the consumers to get their global brands
have allowed them to differentiate themselves in the market. There are other businesses that
are slowly moving into the personal shopper industry, but they have not been able to meet the
short lead times that The London Store is providing. Thus, lead times became one of the most
crucial elements of the business.
3.1.3 Flexibility:
The third important aspect was flexibility. Since the notion of the service was highly
customized, there was no accurate forecasting of what the consumer would want. Basic
forecasting was done through historical data, but each order is different from the other. Thus,
supplier flexibility and ability to manage the differing order sizes became one of the key
elements in supplier selection.

80
4. Issues Faced by The London Store
Personal shopping industry is heavily reliant on relationship management. Good
relationships with the suppliers ensure that the company is able to adequately carry out their
operations. It provides them the ability to meet the changing needs of the consumers, and be
able to manage the fluctuations in demand. The London Store has ensured that the suppliers
are managed effectively. Their focus is on maintaining and ensuring long-term relationships
based on trust. Both parties involved work in a way favorable to each other. The supplier is
able to get market competitive revenue percentages, while The London Store is able to fulfil
their needs of speed and flexibility.
However, having a single supplier is a double-edged sword. Although it ensures greater
relationship management, and better productivity based on it, on the other hand, dependency
increases which can cause supply chain disruptions. Mr. Yousaf does admit that this increases
the dependability on the suppliers, and this is an issue that they have been facing in the recent
times.
In addition to their supply chain disruptions, the company was also facing the issue of
numerous competitors in the markets. They were now not only competing with other online
stores, and personal shopping services, but they were competing with physical stores as well.
These stores resulted in the splitting of the consumers that shopped online, which again caused
a strain on the profitability of the organization.
The reasons as to why The London Store is facing these issues can be divided into two
major parts: internal and external.
4.1.1 Internal:
Due to the single supplier relationship, the bargaining power of the supplier has
increased, which is a major issue that The London Store is facing. To carry out the tasks, the
supplier now demands a higher commission, and wants it variable depending on the type of
product. These terms become a major issue due to the deteriorating rupee, which impacts the
overall costs of the company. The dependency on the single supplier has led to the situation,
where the supplier is aware of the control that it has on the organization. Although, the
organization is still able to meet their customer expectations, the cost is continuously increasing
over the time, reducing the overall profitability.
Secondly, the lack of an omni-channel approach, the company now faces many issues.
They cannot sustain their customer base just through selling online. There is a huge potential
target market, that prefers to shop in-person, especially given the nature of the Pakistani
society, which is left un-tapped. Thus, the use of strictly online channel is resulting in them
losing out from other brands that do provide the omni-channels to their consumers.
4.1.2 External
The external issues of the organization are due to the geographical distance between the
firm and the suppliers. The brands that are demanded by the consumers are generally located
in areas, where the organization cannot operate on itself. Thus, it makes the supplier selection
a difficult process, since there is little to no physical contact with the suppliers. This causes for
the concerns of credibility, and the lack of checks and balances on the suppliers.
In addition to this, Pakistan has fluctuating macro-economic situations. Just recently on
19th May 2022, a ban on the import of luxury items was place. Although the ban was lifted
within a span of two months, but it did cause severe supply chain disruptions for The London
Store, and they had to halt their ongoing operations. This aspect also puts them in a negative
position, when it comes to their competitors, who produce their own products within Pakistan.

81
If by any import ban, or macro-economic fluctuation their operations stop, they would be losing
out their customer base to other competitors in the market.
“I understand we have competitors, and things are very
different now from when we started, but I believe that we
organization can survive. We just need to take a sit-back,
re-analyze, and soon we will find a way to establish ourselves
in the long-run.”
4.2 Implications
If The London Store is unable to cater to these issues, it would lead to three major problems:
1. If the supplier decides not to work with the company, it would cause severe supply
chain issues and halt all the operations of the firm.

2. If the supplier demands are met, the organization loses their overall profitability,
and due to the currency deterioration, the profits would continue to decrease with
time.

3. Any import ban would be detrimental to the organization since it would halt their
overall operations, which can result in loss of customers and profitability.

4. The organization would be limited in the brands that they are providing to their
consumers. Currently, they have a single supplier in the UK. Other luxury and in-
demand brands outside of the UK are not being tapped into, which restricts the
overall product variety.

5. They are at risk of losing their first mover advantage, and falling behind the
competitors that are managing their consumers through numerous ways, instead of
just focusing on one.

5. Efforts by The London Store

At the moment, The London Store has not taken into consideration any solutions for the
problem at hand. They believe that since they are focusing on a long-term relationship
management, it would naturally eventually fall into place. Their plan of action involves
negotiations with the suppliers that would help both the organizations come to a compromise
that would be suitable to the both of them. They believe that since the supplier selection is
tedious process, it is better to fix the issue at hand, rather than finding a new supplier altogether
and experimenting with it.
For macro-economic concerns, they are trying to look into different routes, such as keeping
an inventory of the frequently ordered items to somewhat help their operations.
Similar to their supply chain issues, The London Store is not currently making an effort in
trying to find a way to compete with other brands that do provide the in-person shopping
experience, nor are they trying to find a way to keep their regular customers, who have
numerous online alternatives as well.

6. Solutions and Recommendations

The organization is focusing on negotiations with their current supplier to find a mid-way
for the two parties involved in the process. However, there are other solutions that would allow
The London Store to have a greater control over the situation at hand, and make way for better
opportunities.

82
 6.1 Multiple Few Suppliers
Although it has been established that the supplier selection process is a long and tedious
job, it a necessary job that needs to be carried out. Dependency on a single supplier can be seen
directly impacting the profitability for the firm, and posing issues for future disruptions. Thus,
it is necessary to have at least one more supplier based in the UK that would reduce the
bargaining power of the supplier, and ensure that the organization has a greater control over
their operations, even in the worst-case scenario. This would allow for the risk sharing between
the suppliers and the company. Otherwise, The London Store faces a higher risk than the
supplier. In addition to this, the time of orders would increase as well. Since simultaneously
more orders can be placed, increasing the overall frequency.
6.2 New Geographical Locations of Suppliers
Instead of just focusing on the UK, the organization needs to focus on other geographical
locations as well, taking into account the brands that are demanded by the consumers. Possible
locations can include the United States and Dubai, which would allow the firm to have a higher
product variety. These suppliers would also be able to manage the risk, if any other supplier
leaves or is unable to carry out the task. These suppliers can then be contacted to find the
particular product in question in their area, thus retaining the customer and fulfilling the order.
6.3 Partnering with Financial Intermediaries
In addition to this, The London Store should also partner with financial intermediaries,
such as QisstPay and Raast Payments. This would give them an edge over the other personal
shopping competitors, and allow them to increase their customer base. Not everyone is in a
position to place huge sum of payments in one go, the options of installment packages would
give them a chance to place order for the brands that they prefer. The installment packages
would allow The London Store to increase their customer base, and thus helping them stand
out of the competitors as well.
6.4 Re-Defining Strategy
For the organization to be successful, it is vital for it to understand the upcoming
challenges and the market scenario. The previous solutions kept in mind the current strategy of
The London Store, but to excel and establish their organization in the future, The London Store
would need to re-strategize themselves, and make new priorities. The market is changing, and
the business environment as well. They are not in the immediate post-pandemic conditions,
and the world is changing in real-time. Thus, the following steps are crucial for the organization
to succeed in the future:
6.4.1 Merchandizing Business:
The London Store can adopt a new business model, which would shift them towards a
merchandizing business model. For this, a crucial element is keeping a buffer inventory. This
inventory can be kept minimal and of the products that are high in demand, depending on the
historical data. In case of import bans, or severe currency fluctuations, the organization can use
their buffer inventory to ensure that they are not losing out on their customers, or their stopping
their business completely. Keeping an inventory is a costly process, but comparing it to the
cost of losing a customer, it becomes a necessary expenditure. Exhibit 6 provides with a
complete breakdown of the costs regarding keeping an inventory and the cost of losing a
customer.

83
 6.4.2 Omni-Channel Approach
The merchandizing business would help them set the foundation of having a physical
store in the future. Since the nature of the business is highly customized from order to order,
keeping a physical store can pose as a problem. In the long-run, the merchandizing model can
be transformed into a more developed business model that they can follow can be similar to
Daraz, but in a physical setting. The London Store can provide a physical outlet that would
bring together suppliers that would then place their products in that physical store, and share a
certain revenue percentage with The London Store. The suppliers/partners can be the luxury
brand themselves, such as Gucci, Zara, etc.
Having luxury brands as their supplier/partners would eliminate the need of an
intermediary between them, and clear out any potential issues regarding quality. Thus, a
physical store can be an outlet for the frequently ordered brands, while the personal shopping
business can be kept for the up-scale, luxury brands which would be too costly to inventory.

7. Moving Forward
Mr. Yousaf knew that although it was a fairly new business, it had the potential to grow
within Pakistan. Overcoming his current problems and re-designing their strategies and
models, would pave way for them in the future. It would also become a source of normalizing
of the idea of personal shoppers, a completely new industry. The future seemed bright with the
on-set of technology and mass digitalization.
He looked at the time in his office, it was 6pm. He knew he needed to contact his
supplier, and pave the way for future considerations.

84
References
Amankwah-Amoah, J., Khan, Z., Wood, G., & Knight, G. (2021). COVID-19 and
digitalization: The great acceleration. Journal of Business Research, 136, 602-611.

British pound (GBP) to Pakistani rupee (PKR) exchange rate history. (22, 11). Exchange
Rates UK - Compare Live Foreign Currency Exchange
Rates. https://www.exchangerates.org.uk/GBP-PKR-exchange-rate-
history.html#:~:text=Currency%20Menu&text=Highest%3A%20292.85%20PKR%2
0on%2001,PKR%20on%2011%20Oct%202022

Charm, T., Coggins, B., Robbins, K., & Wilkie, J. (2020, August 4). The great consumer shift:
Ten charts that show how US shopping behavior is changing. McKinsey &
Company. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-
insights/the-great-consumer-shift-ten-charts-that-show-how-us-shopping-behavior-is-
changing

COVID-19: Implications for business. (2022, April 13). McKinsey &

Company. https://www.mckinsey.com/capabilities/risk-and-resilience/our-
insights/covid-19-implications-for-business

Danziger, P. N. (n.d.). Forbes. https://www.forbes.com/sites/pamdanziger/2022/03/12/forget-

quality-and-sustainability-high-price-drives-consumer-demand-for-luxury-
brands/?sh=43d1143d3da5

Guniyol, A. (n.d.). Global e-Commerce volume to hit $5.5T by end of 2022. Anadolu
Ajansı. https://www.aa.com.tr/en/economy/global-e-commerce-volume-to-hit-55t-
by-end-of-
2022/2704264#:~:text=The%20global%20e%2Dcommerce%20volume,%2DComme
rce%20Forum%20(WORLDEF)

How COVID-19 triggered the digital and e-Commerce turning point. (2021, March 15).
UNCTAD. https://unctad.org/news/how-covid-19-triggered-digital-and-e-commerce-
turning-point

Hyde, P. (2021, April 7). The luxe factor: A boom in business for personal shoppers. Forbes
Africa. https://www.forbesafrica.com/life/2021/04/07/the-luxe-factor-a-boom-in-
business-for-personal-shoppers/

Luxury goods - Worldwide | Statista market forecast. (n.d.).

Statista. https://www.statista.com/outlook/cmo/luxury-goods/worldwide

Mohsin, M. (2022, September 20). 10 important ecommerce trends to watch for in 2021.
|Where Self Made is Made. https://www.oberlo.com/blog/ecommerce-trends

85
Appendix
Exhibit 1:
Rupee Fluctuations

GBP to PKR
274
272 272.04
270
Currency Exchange

268
266
264.84 264.54
264
262
260 GBP to PKR
259.8
258
256
254
252
13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd
Date

Source: ("British pound (GBP) to Pakistani rupee (PKR) exchange rate history,"
22)

Exhibit 2:
Global Luxury Fashion Consumption

Global Luxury Fashion Retail Revenue

Revenue in $bn

97.23
95.82

92.69
90.58

85.56

2018 2019 2020 2021 2022

Source: ("Luxury goods - Worldwide | Statista market forecast," n.d.)

86
Exhibit 3
Receipt of Order

Exhibit 4
Supplier Scorecard Sample
Supplier Name Overall Rating

Area Criteria Rating Comments Area WeightArea RatingWeighted Rating

Information Coordination Has the ability to constantly stay in contact
Lead Time Cannot exceed the time limit of two weeks
Flexibility Has the ability to manage variable orders
Price Lowest revenue sharing
Quality Consistent performance and delivery
Exchange Rate Area specific

87
Exhibit 5
Most Frequently Ordered Brands
Gucci
Channel
Zara

Exhibit 6
Important Costs of the Company
Inventory Costs
Cost Unit Average Amount
Ordering Cost 10 Rs. 105,000
Holding Cost 10 Rs. 20,000
Total Rs. 175,000
Customer related Costs
Average order spending 60,000 – 100,000
Average revenue percentage 15%
Earnings per customer Rs. 9,000-Rs.15,000

Exhibit 7
Process Flow Diagram

88
Exhibit 8
Miro Board Presentation

89
 ALI BUTT
House 62, Plot 121, Ravi Block, Allama Iqbal Town, Lahore · +92 300 439 1744
Alibutt201312@outlook.com · https://www.linkedin.com/in/ali-butt-9a175a213

Add Picture Here

Hello,

My name is Ali Butt and I am enrolled in the MBA program at Lahore School of
Economics. Before enrolling into my MBA, I was able to complete my bachelors with
a high GPA in my bachelors at the Lahore School. I have always remained at the top of
the class, and pushing myself to achieve more and more as I move forward in life.

Over the years, I have put in the necessary work to enhance my skill set by taking part
in numerous extra-curricular activities. For example, I was the assistant director at
Lahore School Entrepreneurship and Business society, where I was able to manage
numerous business events and take part in idea incubation. In addition to this, I have
interned in various organizations, such as, WWF, Aga Khan Cultural Service Pakistan
and Askari Islamic Bank. These internships were able to provide me with diverse
experiences that helped me shape my view, and enhance my understanding of what is
needed for organizational success.

Moving forward, I wish to make my future in finance. I believe that financial

understanding is a crucial skill that is an important aspect for any organization to
succeed. Good grasp over the financial elements enables better control and
understanding of what areas are needed to be sorted. I am passionate about
understanding each and every process in detail. All the projects that I have been a part
of need to be completed with the utmost perfection because I believe in always giving
my best.

90
 URFA AHMAD
House 829, Street 12, Overseas A, Bahria Town, Lahore · +92 316 411 2947
urfaahmad@gmail.com · https://www.linkedin.com/in/urfa-ahmad-433a1412a

Add Picture Here

Hello,

My name is Urfa Ahmad and I am currently doing my MBA at the Lahore School of
Economics. Before enrolling into the MBA program, I was completed my bachelors
with a double major degree in Finance and Marketing. Throughout my academia, I have
remained at the top of my class. I have this desire in me that pushes me forward, and
drives me to be at the top.

In addition to my degree, I have interned in various organizations, such as Aga Khan

Cultural Service Pakistan and Askari Islamic Bank, as a cross-functional intern, which
has enabled me to have a wider scope of experience. These internships were able to
provide me the necessary understanding of how inter-linked organizational departments
are, and how to fully integrate them to achieve efficiency and success. Other than these
internships, I have made sure that I am part of extra-curricular activities that help me
formulate my leadership and people management skills. During my A-Levels, I was the
General Secretary for an annual event MISAAL, which hosted around 44 events that I
had to effectively manage.

Over the years, I was able to find my passion in the area of research and analysis. I am
passionate and curious about uncovering all the details and understanding each and
every process in detail. All the projects that I have been a part of need to be completed
with the utmost dedication and precision, because I am perfectionist when it comes to
my work.

91
Ms DyeTex: Tackling Poor Dye Qualities by M. Hamza Malhi and Taimoor
Jamshaid
Company Overview
The B2B textile company MS DyeTex, was founded in January 2021 by Mazhar Shafi
Industries. It presently offers expert dying services and supplies dyed yarn for socks, towels,
sweaters, knits, and woven materials. The company trades in cotton, polyester, PC (Poly-
cotton), acrylic, viscose, linen, and stretch yarn among other materials. In addition, the business
offers various dyeing processes, including reactive, disperse, and double dyeing (a combination
of reactive and dispersion), depending on the preferences of the clients. The thread is
outsourced and supplied by the consumers for the purpose of dying when the products are
created to order. The company currently only has one location, which is situated on Bulhar
Road along Rohi Nala in Lahore, but they are confident that successful endeavors in the future
would enable them to grow even more. This company employs about 140 people, of whom 60
are in administration and about 80 are in the production department. The majority of their
orders are for the dyeing of cotton products, and the most popular hues are white, black, and
navy blue. The company exports coloured yarn to a number of nations, including China and
Turkey. Furthermore, they are looking to expand into the production of socks and sweaters.
The CEO of MS Dyetex, Amir Mazshar Shafi, used his networking skills to get the initial
orders for the company. He has worked his entire life in the textile industry, hence creating
valuable connections and networks. But, due to the company being a relatively new entrant to
the market and the nature of business catering to a certain niche, one of the main problems
faced by MS DyeTex was the sourcing of good quality dye for use at a commercial level as
this was the key competitive advantage that they planned to have in the market. Initially, this
problem was identified when MS DyeTex started to receive complaints from customers that
multiple batches of the same order had inconsistency in the shade due to the color fading out.
Moreover, there were also some complaints about the color leaking into the hands of the
customer upon inspecting.
Industry Overview
The dyeing industry in Pakistan has a low market concentration as there are a very limited
number of well-established businesses that provide commercially reliable dying services. This
is because the concept of yarn dyeing as a separate business in itself is a relatively new concept
in Pakistan as this is usually done in-house. Many of the companies in the industry that have
their dyeing plants, are generally operating on a smaller scale and do not have enough capacity
to cater to giant textile companies in the market. On the other hand, all of the big textile
companies e.g. Nishat, Sapphire that have in-house dyeing plants in their facilities. The main
reason that there are not many recognizable commercial specialized dye firms is that there is
not much value in this process as compared to selling finished goods. Taking the route of selling
finished textile products provides a better generation of value for the company. Under these
conditions, MS Dyetex has an advantage of being amongst the first ones to offer yarn dyeing
services on a large scale.
Equipment and Inventory
MS DyeTex has imported most of its machinery mainly from Germany and this decision was
made after much consideration, knowing that Germany has newer and superior technology.
Apart from this, the dye VAT machines were imported from Switzerland. Heavy investments
had to be made to import state of the art machinery keeping in mind that quality was their

92
priority. Due to receiving multiple complaints regarding the dye, they narrowed down their
suppliers. They also started to import powder dye instead of liquid dye. The powder dye was
imported due to a couple of reasons. Firstly, powder dye has a longer life when compared to
liquid dye and secondly, the recipe that is created using that powder dyes the yarn and fabric
much more consistently. These powder dye are imported from Korea, meanwhile other
chemicals are imported from Bangladesh and Europe.
The life of a dye is around 6 months so inventory is kept and ordered keeping this factor in
mind. The colors white, black and navy blue are used regularly as they are the most in demand
so these colors are ordered in bulk and kept in inventory as well. Since when the dye is ordered,
it takes around 2 to 3 months to import it and arrive at the plant in Lahore. The inventory at the
facility is reviewed on a daily and monthly basis as well. There is a separate storage room in
the facility where the inventory is kept and that storage room has only one entry and exit point.
The room also has no windows as there are certain SOPs that are followed by MS Dyetex to
ensure the quality of the dye is not compromised. These dyes have to be stored in a dry and
low sunlight room where the weather conditions have the least chance of affecting them.
The Dyeing Process
One batch can be produced in roughly 8 hours, starting with the raw material and ending with
the finished product. Seven processes are included in all; the processes of soft-winding, dyeing,
drying, heating, rewinding, packing, and shipping. A colour lab is also part of the setup, which
is used to verify the precise colour that the customer requests before producing that colour in
bulk. Exhibit 1 shows the dyeing process flow chart.

Before any bulk production of the dyed yarn, the color that is demanded by the customer is
accurately produced in the color lab, also called the Research and Development Lab by the MS
DyeTex faculty. A certain formula is used to produce the color and it is checked for its color
accuracy in a gray colored room situated within the lab. The room is gray in color because gray
color causes no impact on the intensity of the new color dye produced. Hence, color accuracy
can be determined properly. The color from the lab is then dyed onto a sample and shown to
clients, and only after the client is satisfied, that is when they move to the next step. Then, the
color produced is dyed onto a sample of yarn and then checked for ‘bleeding’. The bleeding
test is where the sample is dipped into water and checked whether the dye leaks from the yarn
into the water or not. After the color is determined and no bleeding of dye is ensured, bulk
production starts.

First, the yarn is rolled onto paper cones when it is delivered by the customers to the company.
These paper cones are put through a process called soft-winding, where the yarn is unwound
from the paper cones and wrapped onto plastic cones. This is due to the fact that the paper
cones would crumble after getting soaked during the dyeing process. The customer's yarn
comes in a variety of yarn counts, which is a gauge of the yarn's quality. The variation in quality
and weight cannot be seen with the naked eyes, therefore, to avoid confusion during the
process, yarns with various yarn counts are wound onto different coloured plastic cones.

The dyeing process is started once the yarn is wound onto the plastic cones. The dyeing process
is carried out in specialized machinery known as VAT machines. These machines, one of which
has 216 spindles, were imported by MS DyeTex from Switzerland. These machines also need
a height of about 27 to 30 metres because they are extremely tall. The VAT machine is loaded
with the dye pigment that was created and examined at the R&D lab. Electricity, steam,
compressed air, and water are other inputs required by the machine. The yarn that is wound
into plastic cones is loaded onto a crane and then shifted into the VAT machines from the very

93
top of the machine after the VAT machine is prepared for use. The cover is then sealed from
the top. The yarn is removed from the machine after at least 6 hours and moved to the next
stage of the process.

The next step in the process is drying which involves two separate machines. By using
centrifugal force, one machine spins the yarn cones at a very high speed to eliminate any extra
moisture. The yarn is dried on the other machine using steam. Both machines have a distinct
purpose. While one machine maintains a constant 3% moisture level in the yarn, the second
machine is designed to provide varying moisture levels in the yarn. The equipment is used in
accordance with the customer's desired degree of moisture. The yarn is then removed from the
dryer machine and sent on to the next step in the process.
The yarn is then moved to the heaters after being removed from the dryers. This will make sure
that the yarn's remaining surplus moisture is eliminated and that the dye is completely absorbed
and applied onto it so that no bleeding occurs.
The yarn is moved to the re-winding process when the drying phase is finished. Before sending
them back to the clients, the dyed yarn is unwound from the plastic cones and rewrapped onto
the paper cones over here. This is due to the plastic cones' high cost and the company's ability
to reuse them throughout the entire dyeing process. As a result, the company puts the yarn back
on the paper cones.
Once the coloured yarn has been wound back onto paper cones, it is then transported to the
packaging facility where the yarn cones are placed in sacks and tagged. These sacks are then
stacked onto trolleys and moved to delivery vehicles to be sent to their respective clients.
Facility Layout
The entire MS DyeTex facility had a loop layout, especially in terms of its production area.
This meant that the production process started and ended from the same point. Exhibit 2 shows
the layout of the entire production facility of MS DyeTex.
Export Process
The major exports of MS DyeTex goes to China, Turkey and Sri Lanka. The company has also
developed certain guidelines that have to be followed in their export process as well. These
SOPs cover all of the processes involved such as export sales contract, letter of credit draft,
shipping and logistics, customs clearance, negotiation of export documents and receipt of
export remittances. Exhibit 3 shows the full export process for the company.
Initially, the sales department finalizes the export order and drafts the export sales contract.
Then the letter of credit is arranged from the customer and then sent to the export department
where it is scrutinized and advised to the sales department if any amendments are required.
After this, the sales department informs the export department of the goods delivery schedule
after which logistics and shipping arrangements are made and goods are loaded by the store
department. Furthermore, the export department then prepares all documents that are required
for customs clearance and are submitted to the exporting agent before the container of goods
arrives at the port. After the ship leaves the port, the export department collects the original
Bill of Lading document as well as prepares all required documents in the letter of credit to
submit in the bank to send further to the customer’s bank. The export department then ensures
the acceptance of the letter of credit in a timely fashion and updates the export register for

94
monthly reports. The exchange rate is then negotiated with the bank and the export payment is
credited and may also prepare and submit documents for rebate if needed.
By-Products

In terms of byproducts, MS DyeTex's primary byproducts include chemical waste, thread

waste, and fluff. As secondary products, thread waste and fluff are frequently sold in the
market. However, due to the fact that they are purchased in the market at a fraction of the cost
of their standard products, the company still considers them as waste.

The firm intends to build a water treatment plant for the disposal of water and chemical waste.
They will be able to use water more efficiently and waste less of it owing to this. However,
there is currently no effective method of disposal for water and chemical waste implemented
by MS DyeTex as of yet.

Other Challenges

When it comes to the issues faced by MS DyeTex, with the passage of time, a few other
problems became apparent that can potentially lead to the company to have inefficiencies in
their finished product as well as inconsistencies in quality and bottlenecks in their entire
operations and production process. Hence, it is crucial for the company to take corrective
actions and become more sustainable as well.
Waste Management
One of the issues that MS DyeTex has been facing ever since the start of its operations is the
inability to dispose of its waste in an appropriate manner. The biggest waste by-product is the
chemically infected water that is a result of the dyeing process in the VAT machines. Huge
amounts of water are required as an input in the VAT machines and after the yarn has been
dyed, this water is then dumped in the ‘naala’ right next to the factory premises. In addition to
this, everytime a different coloured dye is being used in the dyeing process, the water needs to
be changed which is why huge amounts of toxic water is dumped on a daily basis.
Labor
Another major challenge faced by MS DyeTex was the training and retention of labor that was
employed in the facility. As mentioned earlier, the machinery used in the entire production is
state-of-the-art machinery which requires a specific method in order to use it properly. Due to
this, MS DyeTex has to train its employees in order for them to understand and operate the
machinery correctly. Unfortunately, the company faces trouble in retaining this labor force and
the turnover rate has been high. Consequently, the company has to hire and train new
employees, leading to an increase in costs. According to the general manager of operations:

“The labor of any factory or a plant is the backbone of the company and the
backbone of a company needs to be strong and resilient in order to excel.
Unfortunately, the labor in Pakistan generally have a mindset of avoiding work
and finding shortcuts in whatever job they are given to handle. They need to be
constantly monitored or else they tend to slack off and avoid working efficiently.
One of the most critical challenges we faced was to change this type of mindset
of our workforce.”

95
MS DyeTex gives training seminars to educate their workforce on the practices, culture of the
company and especially on how to operate the machinery. These seminars are repeated
throughout their time with the company to keep them motivated. To bring upon a behavioral
change, it was communicated to the employees about what the need of the hour is along with
motivational lectures to boost their morale. Incentives such as performance related bonuses
were also introduced to further keep them motivated and achieve their targets.
Fluff

Another major issue that persists in the MS DyeTex premises is the problem of ‘fluff’. This is
the name given to the yarn fibers that are removed and released in the air during the entire yarn
dyeing process. This fluff is extremely lightweight due to which it is floating in the air as well
as gliding on the floors in almost the entire facility. This fluff is extremely flammable and is a
huge fire hazard for the company which may occur at any point in time. Furthermore, this fluff
is also dangerous for the employees working there as it enters the body through the mouth and
nose while breathing, causing suffocation and throat infections which can make employees,
especially the labor force, sick. This will in turn, lead to labor asking for more sick leaves and
may also contribute to the high turnover rate due to poor working conditions in the facility.

Future Implications

When a custom color is ordered by a client, the recipe for that color has to be created in the lab
and tested multiple times as well. This process requires back and forth communication and
sending of samples back to the client until they are satisfied with the shade of the color and the
quality of the dye. This process can also be identified as a bottleneck in the operation because
this process can take weeks to finalize everything. It depends on the coordination from the
customer as well and it's not as simple as just passing the color requirement of the shade in the
lab. Even after the recipe is created in the lab, the translation of that shade from the lab to the
actual production can also vary.

The quality of a factory or a plant is as good as the quality of its operations and workforce as
well. To counter the problem of fluff in the facility, MS DyeTex can practice good
housekeeping by ensuring timely cleaning so that it may not pile up in the facility and cause
health concerns or hazards. Furthermore, the company may even install exhaust fans across the
facility and attach bags on the outer side of these exhaust fans. This will ensure that all the fluff
is pulled out of the facility and accumulates in the bags that are attached on the outside. This
will not only make sure that the fluff does not remain in the air outside of the facility but these
bags of fluff may then even be reused or sold in the market.
Taking the problem of labor into consideration, it is vital to understand that continuous
improvement is key to making sure that the firm achieves operational efficiency. Even though
MS DyeTex does implement training seminars and certain incentives to its workers, it is
important that the HR department reviews and refines the training as well as incentive strategy
in a timely fashion so that employees feel valued in the firm. This will make sure that workers
remain motivated to work properly and will make sure that the turnover rate not only comes
down but stays down consistently.
Furthermore, to make the whole process more sustainable and reduce the negative impact that
dumping is causing to the environment, MS DyeTex should install a water treatment plant. The
advantage of having a water treatment plant is that the chemical infused wastewater is cleaned

96
so that the harmful chemicals are extracted and the water then becomes much safer to be
dumped into the body of water. Another advantage is that after treating the wastewater, the
same water can be reused for dyeing purposes.
Conclusion
In terms of the core issue of the quality of dye that MS DyeTex faced, the firm resorted to
importing the dye from other countries to maintain consistency in the dye quality as well as
ensure that the problems regarding the bleeding of dye can be resolved. The company also
prioritizes the use of powder dye instead of liquid dye due to its longer life and better
consistency. Since the company strives to differentiate itself on the basis of quality, it cannot
make any compromises in this aspect.

MS DyeTex gives the most priority to the aspect of quality in their entire production process.
Which is precisely why the company resorted to imported high quality dye for their products.
However, taking into account the political and economical instability of Pakistan and its
constantly changing policies and regulations, relying too much on imports for one of the most
important ingredients for their entire production process may not be a smart move. This is
because it may in turn, lead to an increase in production costs or even further delays in imports
because of restrictions and other policies. Due to this, the company should preferably source
out suppliers at a local level to bring down its production costs and increase profitability.

MS DyeTex may devise proper benchmarks to compare the local dye with to make sure that
they procure dye only from the right local supplier. In addition to this, MS DyeTex also needs
to focus on maintaining a strong relationship with only a handful of suppliers instead of
sourcing out dye from numerous suppliers as this will also lead to an inconsistency of the dye
quality and color.

Talking about long-term prospects for MS DyeTex, if all goes well, the company may even
consider putting up a dye-manufacturing plant to make the dye in-house instead of relying on
other suppliers, local or international. This will not only bring down production costs
drastically, but will also make sure that the firm is able to monitor the dye production at every
step to make sure that the dye produced is of the best quality possible.

If this small industry is investigated further, it was found out that almost 75 to 80% of players
from this industry have their setups in Karachi instead of Lahore. This is due to Karachi being
the business hub of the country as well as the export process as well as procurement of raw
material being easier to carry out due to the seaport being nearby. Due to this, when MS
DyeTex makes the decision about expansion, they can consider opening up a yarn dyeing plant
in Karachi as well. This will help the company in increasing their geographical scale of business
as well as capitalize on the massive clientele that existing yarn dyeing companies are catering
to.

97
Appendix

Exhibit 1

Process Flow Chart of Dyeing Process

Soft Winding Dyeing Drying Heating

Shipping Packing Re-winding

Exhibit 2

Facility Layout

Drying Heating Re-Winding

R&D Lab

Dye Powder
and Dyeing Packing and
Chemical Shipping
Storage

Soft Winding

Storage of dyed yarn in sacks Entry/Exit

98
Exhibit 3

Process Flow Chart for Exporting Process

SOP For Exports

Sales Department Export Depatment Customer Bank Accounts/Finace Store

Start

Issuance of
LC Draft
Performa Invoice

Scrutiny of LC
Draft

Shipment
Delivery
Schedule

Shipping &
Loading of
Logistics
Goods
arrangments

Customs
Clearance
Phase I

Submit Original
Documents in Dispatch of
Bank/ Original
Negotiation Documents

Submit Export
Book the Export
documents to
Sales
Accounts

Export Payment

Credit the Export

Exchange Rate Update the
Payment/
Negotiation Ledger
Issuance of EPRC

Apply for
Rebate/DLTL

Receive Rebate
Payment

End

99
Employee facial recognition system upon entry Soft-Winding Process

Yarn Prepped to put into VAT Machine VAT Machine

100
 Re – Winding Process
Dryer Machines

101
 Dyed Yarn Packaged and Ready for Dispatch

R&D Laboratory

The Gray Room Machine for creating specific colors

102
 M. HAMZA MALHI
0322-8805595
hamzamalhi7@gmail.com · https://www.linkedin.com/in/hamza-malhi/

I have
completed my bachelor’s degree from Lahore School of Economics with double majors in
Marketing and Finance in 2022. I am also enrolled in the Masters of Business Administration
program in Lahore school of Economics in the graduating batch of 2023. I believe creativity
along with hard work and perseverance is the key to success in life, and that is what pushes me
to give my best in any challenge that I face. I am a fluent and empathetic communicator and I
find it easy to show people my point of view, which also makes me good at solving problems,
working in teams and synergizing with them. I strongly believe in maintaining my work ethic
and like to make sure I complete my tasks with utmost sincerity. I have always been a results
oriented person, which is why I keep a positive approach towards problem solving and give
my maximum effort to complete the given task from the best of my ability. I believe having a
challenge might put you up in a difficult or an uncomfortable position, but having a positive
attitude towards it and getting out of your comfort zone is the best way to learn and grow. It’s
like the famous saying, “If you’re the smartest person in the room, then you’re in the wrong
room”.

103
 TAIMOOR JAMSHAID
0336-6862477
taimoorjamshed@gmail.com · www.linkedin.com/in/taimoorjamshed/

cture Here
I completed my undergraduate education from the Lahore School of Economics with a
double major’s degree in Marketing and Finance in 2022. I am currently enrolled in the
Masters of Business Administration program at the Lahore School of Economics. I
consider myself as a determined and persistent individual who is keen to embrace
challenges of any aspect that are put in front of me. Punctuality and a strong work ethic
are my core beliefs and I do not hesitate to push my boundaries to put in maximum effort
to get the task done in the best way possible. I also believe to possess decent
interpersonal skills and am comfortable in working as a team. I have a strong attention
to detail and make sure that the task at hand is completed in a refined and immaculate
manner. After completing my Masters, I consider pursuing a career in the diverse field
of marketing as I think of myself as a good fit in this area of expertise due to this being
something of particular interest for me as well as having a sense of understanding about
how customers think a certain way about a certain product or service and how to
capitalize on that.

104
BasraTex: The Supply Chain Crisis and Technological Complications by
Munhib Mazhar and Osama Khan
Ever since its inception in 2016, BasraTex has established its presence in the textile industry
from moderate knitwear and garment manufacturing company, catering to domestic orders of
knitwear and garments, to a large exporter catering to the demands of international European
and American brands and vendors. Even during the Covid-19 pandemic, when there were
supply chain disruptions around the world, BasraTex was able to continue its operations and
exported its products to western countries due to the fact that Pakistan’s competitors in the
textile industry (China, Bangladesh, India) had strict and complete covid 19 lockdowns which
forced them to halt their production operations and close down their manufacturing units. As a
result, orders for textile products from western countries shifted to Pakistan which had less
stricter covid 19 safety protocols. However, recent times have not been easy for BasraTex.
Pakistan’s never-ending energy crisis and shortage of raw materials and skilled labor are
contributing to rising costs and increased lead time which have made it difficult for BasraTex
to remain competitive and continue its operations.

Company Overview:

BasraTex was established in 2016 as a manufacturer and exporter of various sorts of sportswear
and knitted garments. Basra Knitwear, the parent company of BasraTex, has been a part of the
Textile Industry of Pakistan since 2003. For over 19 years, the company has specialized in
high-quality knitted fabric and has been supplying ready-to-cut fabric for well-known
European and American brands like Protech, Adidas, Reebok, etc. BasraTex aims to produce
and supply high-quality apparel and garments with creative value additions at every level while
maintaining global competitiveness. Exhibit 1 shows the list of garments and knit fabrics that
the company produces. The company has a production capacity of 75000 garment pieces per
month. The manufacturing units are located in the two industrial cities of Lahore and Sahiwal.
The production lead time ranges from 30 to 45 days.

The following is a detailed examination of the production process of garment manufacturing

at BasraTex. The first step is the procurement of yarn. The company is able to procure yarn
from different textile units of spinning in Lahore for instance Eastern Spinning, Sapphire
Spinning etc. These textile units are exporting firms and that is why the company deals with
them in order to ensure that there is no compromise on quality from the very beginning of the
production process.
Once the yarn is procured, which usually takes up to 2 days, then the next step is where the
fabric is made from the yarn threads. This is accomplished by the weaving process. Once the
fabric is made, the dyeing process is the next step that follows it. Exhibit 3 shows the knitting
machine that uses yarn threads to make the fabric. Knitting machines carry out this process in
1 hour.
The dyeing process is an integral part of the garment manufacturing process which involves
giving an aesthetic look to the fabric. Before dyeing fabrics, preparation steps including
bleaching and scouring are taken. Dyeing involves a number of different chemical kinds, liquid
ratios, and temperatures. In order to get the desired colors and shades of a color in the fabric, a
dyeing recipe is followed. This entire process of dyeing takes up to 3 days so that desired color
and shade is obtained. Once the dyeing process is complete, the cutting process follows it.

105
The cutting process takes up to 12 hours and involves making pattern pieces on the fabric,
choosing layouts, and cutting the fabric in accordance with those layouts. This is a very
technical task that calls for a high level of competence and expertise because even a slight error
in fabric cutting might result in the rejection of an entire shipment. Cutting cloth requires the
cutter to minimize waste, which is the key technical skill needed. The cutting master marks the
cloth that will be used for cutting on the spreading table during the marker-making process in
order to avoid any wastage. The cutting of garment components must be precise and done in a
quantity that will keep the sewing room busy. Fabric planning is an important skill for the
cutting department. The cutting master decides what kind of fabric will be used and how much
fabric will be needed for the particular order during this stage. The choice of fabric planning is
crucial because if correct fabric planning is not done, this puts the entire shipment at risk of
being rejected.
The next step that follows the cutting process is stitching. By using various sewing techniques,
the fabric is shaped into a final product during the stitching process. To guarantee that the
product assumes the desired shape, the stitching stage is of utmost importance. Stitching is a
carefully done task that requires accuracy and attention. Machines that are used for sewing
techniques during the stitching process are run by an operator who must have control of the
machine because the speed of the machine running must be in accordance with the stitch per
length. The operators must have the necessary training and experience to operate the
machine.(Exhibit 4)
After the stitching process is concluded, which takes up to 12 hours for 100 garment pieces,
and the fabric has been shaped into the final product, an inspection is carried out by the
inspection staff to look out for any errors or narrow faults and to ensure no defective pieces are
passed onto the next stage. The inspection team has a vast experience in order to identify the
very smallest of flaws.
The last stage is the packing process where the finished items are packed in poly bags which
are then packed in bales. All garments are packaged in accordance with the buyer's
specifications. The packing workforce has specialized knowledge of export packaging as there
are many differences between local and export packing. Exhibit 2 shows the process flow chart
of the garment manufacturing process of 100 garment pieces at BasraTex.

Industry overview:

Pakistan is the world's third-largest cotton consumer and the world's fourth-largest cotton
producer, thus making the textile industry an extremely important sector of the economy. About
8.5% of the country's GDP comes from it, and it accounts for 40% of manufacturing sector
employment in the country. Moreover, it contributes 60% to the country’s exports hence
proving its significant economic influence. Only for the month of February 2022, the textile
exports climbed by 37% to $1.686 billion from $1.234 billion in February 2021. Exports
increased significantly by 26% to $12.61 billion in the first eight months of FY22 compared to
$10 billion in the same period last year (APTMA, 2022). The chief body known as the "All
Pakistan Textile Mills Association" determines the rules and regulations in the industry. In the
last three years, Pakistan's textile industry has performed incredibly well, even outperforming
the other sectors.

106
Current Challenges

The textile industry has been the backbone of the Pakistani economy. This sector
accommodates the highest proportion of industrial workforce employment along with being
the highest industrial contributor to the nation’s GDP. However, with the pandemic and
political and economic instability, it has become difficult for the industrialists in this sector to
maintain their supply chain due to price fluctuations and national route disruptions. Another
major problem this sector faces is the production of articles with persistent quality which leads
to major clients backing off from the Pakistani Textile Sector.

The energy crisis is a major issue affecting BasraTex and in fact, the entire textile sector. Load
shedding happens frequently; BasraTex had switched to gas to generate electricity for their
manufacturing unit. Regrettably, gas load shedding has also begun in the last few years,
increasing the total cost. Mr. Shazim Basra quoted a loss of 50 percent output due to the energy
crisis, with a very great risk of not only permanent order loss but also buyer diversion from
Pakistan to its competitors. The company is currently producing goods for the upcoming winter
season, and any lag in the schedule of delivery means the chance of losing export markets for
an indefinite period with less chance of recovery.

Shortage of raw materials is a supply chain issue that the company is facing. Accessories e.g.
labels, buttons, zip, etc. which are used in the garments manufactured by BasraTex, are
imported from Taiwan due to their good quality which is unfortunately not available in
Pakistan. In comparison to Taiwan, Pakistan does not have any good sourcing options available
with respect to garment accessories and that is why the company has to import them in order
to maintain the quality standards with respect to their international orders. In the past months,
due to a weak and fragile economic situation in Pakistan, there are limits on the import of raw
materials which has made it difficult for the company to not only maintain its quality standards
but has also forced them to rethink their options. Mr. Shazim Basra does not want to
compromise on quality but at the same time, he has to also ensure that there are no lags with
respect to order delivery. Recently, the company has decided to move to locally available
sourcing options with respect to garment accessories in order to ensure that there is timely
delivery of orders from international buyers.

Shortage of skilled labor is another problem faced by the company. Different stages of garment
manufacturing require different skill sets for instance stitching, quality checking, etc.
Moreover, Mr. Shazim Basra does mention that the location of BasraTex makes it somewhat
difficult to find skilled labor easily since it is located on the outskirts of Lahore. This shortage
of skilled labor not only increases the lead time but has also prevented the company from
effectively utilizing its access to other international marks as it may simply not be able to meet
the order delivery schedule. Therefore, in order to attract as much skilled labor as possible, the
company offers multiple incentives e.g. accommodation, free meals, medical insurance, etc.

Another major issue that the company is currently facing is that with fluctuations in the supply
chain, the company is unable to maintain its inventory or is left with excess inventory. The
major reason identified for this is that since the supply chain is mostly disrupted throughout
the year, the company has to ensure that it has enough stock such that in case an order is placed,
the company should have enough stock in its inventory that they are able to process the order
in the minimum possible time. However, in other cases, there have been times when the
company has had to delay orders by great margins as there was a shortage of the material
required for further processing.

107
Furthermore, the company prefers to locally grow cotton for their production process as it costs
them less and suffices for the preferred quality that the clients demand. However, over the past
few years, the production of cotton has decreased due to the lower farming levels and repetitive
floods within the country. This has led to a shortage of cotton supply in the local market and
so the company faces major issues and has to import cotton yarns or get them through local
dealers that have smuggled them from Afghanistan.

It was seen that the company still operates on the traditional methods, where there is innovation
in terms of machinery but the communication is done manually. This method of
communication begins from the lowest level of the workforce and goes to the top. Moreover,
the management of the workforce is also done manually, where all data is recorded on paper,
and calls are made through telephones and mobile phones. Along with this, there is a huge
compliance problem for the employees. There are certain criteria set by the client about their
outsourced clients, such as Basra Tex, on which the vendor has to fulfill all the requirements.
However, the employees are not educated enough to understand those requirements and show
reluctance towards adapting to those changes required by the clients.

Moving forward…

The company is fond of indulging in vertical integration as it wants to control the majority of
the processes to ensure high quality, the company can gain a competitive edge if they further
integrate into the making of accessories such as zip and buttons. This will bring great benefits
to the company. Firstly, raw materials for making zippers and buttons are readily available
within the Pakistani market, if they install a unit within the country, they won’t have to rely on
importing the buttons and going through the lengthy import process and longer lead times.
Secondly, this can be a major source of achieving competitive advantage as currently, there are
no local manufacturers of such accessories that fall on the criteria of foreign clients.
Additionally, it will reduce the cost to half of what they are originally paying right now. Along
with this, they can further sell to other textile companies that are involved in a similar business
of exporting to other clients.

There is no permanent solution to the supply chain disruptions caused by road closures as it
cannot be forecasted. One of the solutions recommended to the company was that instead of
using local transport, the company can shift to using an air courier rather than transporting
goods through shipping, this will decrease the shipping time by three folds, but however, it will
increase the cost of shipping the product. This sort of facility can be used by the company when
they are running short on their given delivery time, or the local trade routes are closed due to
any unforeseen reason.

Despite shifting to natural gas for power generation, the company now faces the problem of
gas load shedding and so to counter this, it has been suggested that the company shifts to solar
energy, where they can easily shift 70% of their power load on solar plates and consume the
other 30% through getting power from gas generators. Diesel generators are not an ideal option
and can only be used in extreme cases where there is no power supply, however, this will
increase the power supply costs by multiple folds. So, in an ideal scenario, BasraTex can reduce
their cost by moving to solar-powered energy. The energy crisis is a worldwide problem and
shifting to solar powered energy would be a sustainable solution and this method has already
been adopted by many other countries. According to the company’s energy requirements, they
would need to install a solar system of 60 kilowatts which would cost them around Rs. 5.5
million. A major advantage of this to the company would be a 70% reduction in their electricity
consumption from the power supplying company, which will reduce their electricity bill by

108
major folds. Along with that, there will be lesser dependency on the power supplier and hence,
electricity shortage won’t be an issue any longer. The installation of the solar system will work
for the next 25 years without any major maintenance, with a return on investment in 4 years.
This technically means that after the first 4 years, the company will utilize 70% of the electricity
for free for the latter 21 years. This installation will also make the image of the company better
in terms of their sustainability initiatives.

Pakistan has redundant availability of labor workforce, however, this workforce is not educated
and barely skilled. The only solution to this is that once hired, there should be training programs
for the employees and basic education should be provided. Moreover, seminars for character
and skill development should be held. However, instantaneously investing in such an institute
would not be economically feasible, so for this matter, in the short run, the company can
outsource the employee training from companies like ‘Beacon Impex’ or other companies with
training institutes and in the long run, the company can develop its own training institute so
that they themselves can develop skills of the employees that may result in a competitive
advantage for the company in later times. Pakistani labor is very hardworking if it is
incentivized correctly and would prefer a deeper relationship with the employer instead of just
being a regular employee. So, in this case, the managers should be strict but friendly such that
the employees do not feel mistreated. In this way, the company will be able to develop a long-
term relationship with employees along with retaining them for a longer period of time.

As the company is still operating on traditional methods, it was recommended that the company
should digitize itself and in the short term, the company should implement an inventory
management software such as ‘inflow’ or ‘mega inventory’. The reason for the
recommendation of these softwares are made on the basis that both of them are renownedly
used by companies dealing in B2B and are in the manufacturing sector along with them being
cost effective. Moreover, in the long run, it was advised to the company to develop an ERP
system that will help it in managing various tasks that are currently being done manually. The
ERP system will bring great positive change. Firstly, this will enhance the company’s
reporting, as all reporting will be done in real-time, this will improve communication as well
as all channels will be formalized while enhancing customer service as there will be no delays
in communication nor will there be any lag of information. The ERP system will also enhance
their supply chain as the real-time data will provide accurate information about the movement
of products and if there are any issues in the supply chain, the ERP system will automatically
highlight them. Furthermore, the management of inventory can be done better as all the data
will be digitized and the databases would be updated along with the timely placement of orders
to ensure no delays in order placement as well as saving the inventory from dropping below
safety stock levels.

Furthermore, compliance issues were dealt with by the installation of CCTV cameras all around
the facility, through which all processes can be monitored while keeping an eye on all the
employees. The facility initially had manual attendance and there were fabrications in the
records, so to cater to that, a digital attendance machine was installed, which marked the
employee attendance at entry and exit through their thumbprints. Some of the employees didn’t
have prominent thumbprints, so the machine wasn’t able to detect their thumbprints, for this,
they were given RFID-tagged badges which they were able to scan at the entry and exit points.

Another problem that the company faced in its initial phase was that it didn't qualify for the
international standards of a production facility, so to help the company qualify, signboards
were hung around the facility that indicated each process, along with that, markings were done
on the floor to indicate entry and exit paths (Exhibit 5). Moreover, information boards were

109
hung on the walls of the facility that made the employees aware of their rights and also guided
them about what was expected from them at the workplace.

The textile industry however faces other major issues that are causing hindrances at the national
level. Firstly, due to the state bank's exhaustion of financial resources, industries in Pakistan
are unable to get their letter of credit (LC) and so transactions are not being made
internationally due to this, companies aren’t able to import the raw material. This is however
very concerning for the industrialists, as stated by Mr. Basra, “On aggregate, 35% of the textile
industry has been shut down due to the unavailability of the state bank to pay the dollar amount
internationally”. Furthermore, the local production of cotton is too low and cannot fulfill the
demand of the industry. Apart from that, even if they produce cotton locally, the quality of the
crop is not what is desired by international vendors. Eventually, this will cause a major setback
for the industry and may even lead to closure because due to the unavailability of raw materials,
and high production costs, the major clients will pull out of Pakistan and move back to countries
like India and Bangladesh for their production processes. This means that all the benefits that
the sector enjoyed at the time of covid-19 will be now gone, and the textile sector will face a
major setback.

Conclusion:

Mr. Shazim Basra believes that although the solutions suggested would surely help to
overcome the current challenges which the company is facing and would ensure optimization
in supply chain performance, he still believes that national issues such as political and
economic instability would continue to be a hurdle in the success of the company and the textile
sector as a whole.

110
Exhibit 1: BasraTex list of products

Garments Knit fabric

T-shirt, Polo shirt, sweatshirt, golf shirt Single jersey, heavy jersey

Tanks tops Rib, pleated design Rib

Children wear, Night Wear, sportswear Cotton viscose, collar, and cuff made of
cotton

Short and long pant, runners pant Cotton Modal

Jogging suite Pique, Lacoste interlock

Functional wear Polyester Viscose, Polyester, Cotton

polyester

Fashion Dresses CVC

Source: BasraTex company profile

111
Exhibit 2 : Process flow chart of 100 garment pieces

112
Exhibit 3: Knitting machine

113
Exhibit 4: Stitching

Exhibit 5 : Marking and Tagging

114
Exhibit 6: Miro board

115
 MUHAMMAD MUNHIB MAZHAR
House 129-C Fazaia Society Phase 1, Lahore · +92 3464049340
munhibmazhar028@gmail.com · www.linkedin.com/in/munhib-mazhar-7325a2175

Currently, being an MBA student at the Lahore School of Economics, I am always eager to
learn and explore through new opportunities. My ambition is to work in the corporate field
with my best performance and be given a chance to learn, grow and show my skills in the field
of business administration which will help me to be an asset to the organization. I look forward
to opportunities that offer me a dynamic work environment as well as career growth. I love
working in team work, have a clear idea of my future and how it should be going forward to
fulfill the need of the organization. Being an energetic and confident personality with a positive
outlook on life, I am ready to take up challenges with a vision to achieve high career growth
through a continuous learninsg process for getting more experiences

116
 OSAMA KHAN
House 352-A Nespak Society Phase 3, Lahore · +92 3071595479
osamakhan.mbalse@gmail.com· https://www.linkedin.com/in/osamaaek

I am an individual always on the hunt for inspirations. I always seek knowledge, learn
and grow beyond my comfort zone. I am looking out for opportunities to expand my
horizon of thinking along with an unwavering attitude towards discipline and acceptance
of difference in opinion. I am a firm believer of uplifting those I'm surrounded with in
any way that I can, trying to create a positive impact wherever I go. I am a passionate
student of out-of-the-box perspectives and anything which involves data.
Skilled in Supply Chain Management, Business Administration, and P&L Management.
Experienced Owner with a demonstrated history of working in the poultry farming industry.
Strong business development professional with a Bachelor of Business Administration- BBA
focused in Marketing & Finance from Lahore School of Economics and currently pursuing my
Masters in Business Administration with majors in Marketing and Finance.

117
UBL; Service Quality and Digitalization by Laiba Waseem and Zoya Ahmed

After a stellar performance and historic results in the previous year, Khizer Sikander, head of
Service quality sat in his office in Karachi reflecting upon the ups and downs of the past few
years. He was preparing for his meeting with the CEO Mr. Shazad Dada to talk about how his
team has worked on improving operations over the past few years that have led to the improved
performance of United Bank Limited. The most important decision for Khizer was to improve
customer and employee satisfaction, senior members of the workforce complained about issues
that were causing a hinderance in the overall performance. Khizer reflected upon the important
processes to get a better understanding as to how they are lagging behind. The latest reports
indicated that despite the stellar performance, UBL was falling behind as compared to its
competitors, one major area of concern were the latest digital app rankings where UBL was
ranked second, just after Meezan (Exhibit 1).

Company Background
United bank Limited more commonly known as UBL was established on 7th November’1959
with its first branch being in I.I. Chundrigar. By 1960, UBL had expanded its operations with
branches located in Karachi, Lahore, Lyallpur, Chittagong and Narayanganj, which are two
cities in Bangladesh.
Today, UBL is one of the largest banks and financial service provider in Pakistan and a leading
name in the banking sector. It has the largest banking network in Pakistan with almost 44,000
touchpoints including 1400 branches nationwide, 1400 ATMs and 37000 Omni Agents. UBL
has a customer base of almost 4 million customers. The bank became a pioneer in online and
branchless banking with the launch of UBL Omni. In terms of digitalization, the bank has
shifted its focus towards developing a strong online banking network through its UBL Digital
App, the bank was named the Best Digital Bank of Pakistan in 2020 due to its highly
competitive mobile app.

Corporate Strategy
In terms of the corporate strategy, UBL puts added focus on their mission and vision.
Vision Statement:
“To be a world class bank, dedicated to excellence and to surpass the highest expectations of
our customers”
Mission Statement
• “To set the highest industry standard for quality, across all areas of operations on a
sustained basis.”
• “Optimize people, processes, and technology to deliver the best financial solutions to
our customers.”
• “Become the most sought-after investment.”
• “Be recognized as the employer of choice.”

Competitive Strategy
In terms of the competitive strategy, UBL focuses on maintaining a competitive edge in the
industry through its rapid digitalization efforts. The bank was a pioneer in branchless banking
in Pakistan, it focuses on operational innovation to improve its processes in a manner that
makes UBL one of the best Digital Banks of the country. It has a fully dedicated team of
employees working everyday to ensure that the bank improves its digital banking. The bank
won the award for the best digital bank of Pakistan in 2020. Initially it competed based on

118
differentiation as it was the pioneer in branchless banking but soon other banks started
launching their own branchless and digital products, however, even today UBL is maintaining
a competitive edge over most of the banks as it focuses on continuous improvement of its
products and launches new updates to its UBL Digital platform for better performance.
The bank’s new CEO Mr. Shazad Dada took charge after the previous CEO Ms. Sima Kamil
was promoted as the deputy governor of the State Bank of Pakistan. He came with the mission
to make UBL the best bank in Pakistan, with his focus primarily lying towards making
economically beneficial investments that helped the country and improving UBL’s digital
footprint. In his initial meeting with the senior management, he delivered his mission and vision
to them, asking them to shift their focus to improved services, agility, customer satisfaction
and improved performance. Mr. Shazad Dada has had a legacy of committed service, his aim
is to focus on improved services to enhance customer services while also focusing and
encouraging diversity within the organization. His aim is to focus on three key factors that
would ultimately lead to an overall improved performance, these three factors were agility,
performance, and pace.

Banking Industry
The financial sector is an integral sector in the flourishment of any economy around the world,
in the financial sector, banking plays the most significant part and occupies the highest
percentage in terms of assets and overall contribution to the GDP. For Pakistan, the regulatory
authority for Banks is the State bank of Pakistan (SBP), the state bank is responsible for the
fiscal and monetary policies and it regulates all the banks of Pakistan. There are 34 banks
operating in the country which include foreign banks, public sector banks, specialized banks,
and private banks. Private banks are the largest in number.
Trends in the Industry
The banking Industry in Pakistan is a promising industry that has seen growth despite the
economic downturn in the country. The asset base of the overall sector combined grew from
2020 to 2021 (Exhibit 2).
Economic Trends
Economic trends changed not just in Pakistan but worldwide due to the Pandemic that caused
a drastic shift in the day-to-day lifestyle of every person around the world. People started saving
more due to the uncertainty that surrounded their lives, this caused a lot of trouble for many
sectors. However, despite these economic changes, the banking sector still flourished. The
overall economy grew and remittance transactions increased, this was mainly due to the
Government policies that encouraged international remittances. Furthermore, as mentioned,
the asset base grew as well, the government introduced lower interest rates for borrowing for
businessmen that provided a boost to the economy. These numbers indicated that despite a
drastic change in the overall conditions, the banking sector was one sector that did not face a
lot of challenges as people still required their services. Furthermore, investments grew as
people started to think wisely about their spending, these investments saw a major growth
(29%) in T-bills as per the Chartered Institute of Management Accounting (CIMA), this could
be due to the fact that T-bills are Government securities that are risk free and people wanted a
guaranteed return on their investments due to the uncertainty around them.
Technological Trends
The Covid-19 pandemic caused major disruptions throughout the world, companies were
forced to adapt to rapid advancements to stay alive, these advancements were mostly in the
technological aspect. Companies across various industries were had to launch new advanced
ways to sell their products or provide services that complied with the Standard Operating

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Procedures of the Pandemic. In the banking sector, this meant launching products that could
reduce footfall in branches but also retain customers. Majority of the banks in Pakistan worked
a great deal on improving their mobile Applications during this time.
Furthermore, another trend that was seen in the industry during recent years was the increase
in the number of Fintech startups in Pakistan. Startups like SadaPay, that provide services
identical to that of a conventional bank, have gained popularity tremendously, especially
among the younger generation that prefer using these online mobile based platforms for their
financial transactions. These startups act as competitors for conventional banks that are forced
to continuously improve their digital operations in order to stay relevant.
Cultural Trends
Cultural trends relevant to Pakistan include the rise of Fintech startups as mentioned above.
However, one major cultural shift in Pakistan is the increasing popularity of Islamic Banking.
Religion is a very sacred topic in the country, and in terms of some of the banking services, the
concept of interest is a very controversial topic. Hence, there has been an increase in the number
of Islamic banking branches throughout the country. The pioneer of this cultural or rather
religious trend in Pakistan was Faysal Bank that is aiming to become a completely shariah
compliant bank by the end of the year. Faysal bank grew its Islamic banking structure with so
much pace that today it has the largest Islamic bank structure by a conventional bank in
Pakistan with over 400 branches.
Banks like Muslim Commercial Bank (MCB) launched a separate subsidiary known as Muslim
Islamic Bank (MIB), that has a different branch network, similarly, UBL has a separate network
of branches called UBL Ameen Islamic that are led by a separate team of individuals different
than the conventional network. These branches operate differently from the conventional
banking branches with reinforces the growing importance of Islamic Banking in Pakistan.

Processes at UBL
UBL as an organization takes pride in itself for becoming one of the leading banks of Pakistan
in a highly competitive market. The bank focuses on continuous improvement of its processes
in such a manner that it reduces the overall costs for the bank while also increasing the
efficiency. As a banking organization there are numerous processes that the bank performs on
a daily basis which includes account opening, loan requests, cheque book and debit cards
requests, insurance, etc. UBL branches are divided into four categories based on their size,
funds kept, and customer profiles, these categories are Alpha, Beta, Charlie, and Delta
branches.
As an organization, UBL can be labeled as an ambidextrous organization as it adapts rapidly
to the changes in the environment to the extent that it even got a first mover advantage in the
branchless banking category. It not only focuses on process innovation but also focuses on
product innovation. Process innovation includes the improvement of its day-to-day processes
to reduce turn-around time. One such example was the introduction of tablets for biometric
verification in processes instead of doing it the traditional way. Another example was the usage
of their CAPS system for account opening that transfers information almost instantly to
Karachi, where the head quarters are located, for faster results. In terms of product innovation
as mentioned above, the UBL Digital is the biggest example of how the bank is using
innovation. Furthermore, in terms of adapting to trends, the bank launched the UBL Arooj
account for female empowerment aligning itself with the increasing popularity of women
empowerment worldwide.

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Over the Counter Transactions (OTC)
The over the counter (OTC) transactions take place numerous times in a day, each branch has
Universal Tellers (UTs) or Branch Service Officer (BSOs) that are responsible for these
transactions and cash collection. The set standard is 100 transactions per UT which mean that
a branch having a higher number of transactions a day would have more than 1 UT present. In
case of large transactions, the UT is overseen by the Chief Teller (CT) who provides his/her
approval. The cycle time or turn around time for one transaction on average is three minutes.
Hence, the ideal cycle time is as follows:

𝑇𝑖𝑚𝑒 𝑖𝑛 𝑀𝑖𝑛𝑢𝑡𝑒𝑠
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 =
𝑈𝑛𝑖𝑡𝑠
300
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 =
100
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 = 3

Account Opening
The account opening process at UBL is a lengthy process (Exhibit 5), the process starts off
with physical documentation being asked of the customer that is verified (Exhibit 6), the
biometric is taken and verification is done from Nadra. The verified details along with the
system generated account number is sent to the head office in Karachi, after further verification
the go ahead is given. It takes 3 working days for the account to be activated after which further
4 days are required for the delivery of the cheque book, ATM card, and the Welcome Pack.

Service Quality
UBL works continuously on improving its service quality, the bank has a separate department
dedicated to ensuring that the bank maintains its quality standards. The team is led by Mr.
Khizer Sikander who overlooks the entire service quality department from the head office
based out of Karachi, furthermore, each region has its own service quality team, for example,
Lahore has its own service quality department that reports to Karachi but overlooks the day-
to-day tasks on its own to ensure improved efficiency.
ISO Certification
In terms of quality UBL achieved the ISO 9001:2015 Certification by completing and meeting
all the necessary requirements. The bank was the first bank in the country whose compliance
group received this particular certification (Exhibit 3), hence, this reinforces the importance of
quality for the bank.
Employee Empowerment
UBL provides its employees with benefits and incentives to keep them motivated to do well.
The bank has an employee banking portal that provides employees with benefits of using UBL
for their personal financial transactions. Furthermore, each UBL employee is provided with
health insurance which covers their immediate family as well, this includes complete coverage
of medical expenses in case of admission in a listed hospital.
UBL believes in providing its employees with the best benefits to ensure that the employees
are well motivated and satisfied with the bank. Top performers are provided with monetary
benefits, prizes such as Televisions, Phones etc., and even foreign trips for achieving their
KPIs. Moreover, trophies and certificates are given that motivate employees to do well in

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certain campaigns. Yearly bonuses and appraisals are provided to every employee based on the
performance of the past year. Ceremonies and conferences are often held at a tourist destination
for which the bank provides accommodation at a luxury hotel to the employees, this motivates
them to do well so that they can be part of these ceremonies. Furthermore, employees are also
given medical insurance for them and their families.
The bank provides training to its employees at each level, these training sessions include
internal and external training where industry experts come and train junior level employees to
ensure that they do well.

Service quality checklist

To ensure maximum efficiency a service quality check list is maintained that includes
observations over multiple dimensions which include:
1. ATM Services
2. Branch Environment
a. Internal
b. External
3. Floor time
4. Q Matic and Customer Services
5. Locker room
6. CCTV Recordings and Retention
7. Genset
8. SQ General Observations
These check lists (Exhibit 4) are filled by the Service Quality representatives that visit each
branch and grade the branch based on the specified dimensions. The document is known as the
Health Check Report (HCR) for retail operations, going into the details of the dimensions,
ATM Services include cleanliness of the ATM, functionality, frosted glass, overall condition
of the vestibule, maintenance of the checklist, temperature maintenance and many other factors.
For Branch environment the branch timing sheet, availability and vigilance of security guards
are factors included in the external factor whereas, cleanliness of the branch, lighting of the
branch, maintenance of temperature, condition of the furniture, dress code of staff etc., are all
factors that are included in the internal environment. Floor time includes factors such as
whether the staff was available to greet customers or not, whether the staff has adequate product
knowledge or not, and whether or not the floor time duty roster was properly prepared and
maintained. Genset includes factors such as whether the systems are backed up by UPS or not
and whether the generators in the branch are fully operational or not. Most of these items are
marked out of a score however, some items are yes or no questions. The document requires
details of the branch, the name of the Customer Services Manager (CSM), the name of the
branch manager, etc.
Dimensions of Service Quality
UBL focuses on being a reliable banking option for its customers, the company faced a data
breach recently but to make sure that its customers are aware of the reliability of the bank,
every customer was refunded with the amount that was removed from their account. Hence,
despite such a major threat, the customers stayed with the bank as it assured them of how
reliable it is. The bank has been operational for many years and has a wide branch network
which adds to its reliability.

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Furthermore, in terms of the tangibles, each UBL branch has a greeter present to greet the
customer walking into the branch, this greeter further has the responsibility of guiding the
customer and often requires the greeter to fill the deposit slips for the customer to improve
Service quality. Furthermore, each branch has a waiting area with a television so that customers
can sit and wait for their turn. Each branch has a Q-Matic system that generates an automatic
ticket for each customer so that a systematic approach is implemented when it comes to the
transactions.

Current Challenges
UBL faced the major challenge that despite having good numbers in its financial reports there
were still areas where the bank was falling behind. The dilemma faced by Khizer was to cater
to these issues in a way that would improve both customer and employee satisfaction while
also keeping the overall costs at a minimum.
UBL Digital
Firstly, the UBL Digital App was falling behind Meezan Bank’s Mobile App in terms of ratings
as per the latest report of KPMG. This issue with the Digital App was because of poor service
quality, the customer service helpline was taking too much time to respond to issues pertaining
to the App. Furthermore, in terms of setting up the app on a customer’s mobile phone, the
process required the customer calling the helpline and setting it up. This was a slow and tedious
process that ultimately led to customer dissatisfaction as the cycle time for the set-up time for
the app ranged from 5 minutes to up to an hour, at times errors would mean that the whole
process went to waste which led to further frustration from the customer’s side.
In terms of the employee side of the problems, managers complained about the inequal
distribution of sales staff to achieve targets. Each branch was assigned a specific target in terms
of converting customers towards using the digital app, managers often complained about how
they had low number of sales staff available as compared to other branches which automatically
put them at a disadvantage in terms of target achievement.
Customer Transactions
When a customer walks into a UBL branch, the bank bears a cost of PKR 115/- per customer,
furthermore, if that customer proceeds to do an over-the-counter transaction the bank further
bears a cost of PKR 37/- per transaction. Cost cutting is a major factor when it comes to UBL
altering its processes, however, this comes at the opportunity cost of low customer satisfaction.
As mentioned above on average the cycle time for one over the counter transaction is 3 minutes,
however, this time can change drastically if a customer comes in with a huge amount of cash.
Furthermore, if the branch gets a huge inflow of customers this wait time increases drastically
as customers have to wait an additional amount of time in addition to the transaction time.
The bank has a specified number of 100 transactions per Universal teller to maintain quality
however, this is not being implemented in real life as the Universal tellers have to process a
much higher number of transactions per day due to shortage of staff. The bank does not hire
more people in order to cut costs, however, this has serious implications on the overall service
quality as it leaves both the customer and the employees dissatisfied with the bank. Some Alpha
branches have a requirement of 4 UTs due to their size and the number of transactions they
have to cater to however, they are only provided with 2 UTs which causes severe issues as a
lot of the clients of such branches are high net-worth clients.
Furthermore, from an employee perspective, due to shortage of staff these Universal Tellers
are often exhausted due to the added pressure and work. This can sometimes lead to severe

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problems as cash is a very sensitive matter. This also reduces the efficiency of the services
provided as the UTs get tired and eventually the transaction process is slowed down.
Broadly looking at these problems, we can identify that there is a structural issue that is the
root cause, comparing to other banks, banks like Meezan focus on expansion, with the mindset
that branches are eventually going to grow as their business grows, they incorporate this into
their strategy and branch structure. However, UBL focuses on reduced cost and does not take
into account the possibility of future expansion, what this means is that while Meezan might
open a branch with 5 counters with 2 operational in the beginning, UBL would only make 2
counters in their branch leaving no room for future growth and focusing on the current business
only which in the long-term cause issues such as shortage of staff, and lack of availability of
space for new staff members.

Recommendations
UBL has faced a few challenges despite the good financial numbers, hence, it is integral to
cater to these challenges before they have lasting implications. For starters, the UBL Digital
App that won the Best Digital App award in 2020 is now falling behind due to service quality
issues, hence, it is important to use external benchmarking whereby, standards are set according
to the well-established companies in the industry. Considering Meezan is currently the leader,
UBL should adopt a few strategies from them and benchmark their processes accordingly. The
bank has the capability of using technological advancements to its advantage, it has been
observed previously that the bank was a pioneer in technology in the banking sector hence, just
by tweaking a few of its processes and benchmarking it, UBL could regain its position as the
number one app.
Secondly, it was seen that the bank has a shortage of staff which is leading to poor efficiency,
hence, it is recommended that the bank focuses on this issue, this could include providing an
extra overtime to the already available UTs that are overworked, this could serve as a
motivating factor and it could improve quality of the services. Furthermore, rotation of staff
could be done on the basis that branches that require staff urgently could be given staff from
other branches for a short period of time to cater to the increased footfall.
UBL should focus on continuous improvement by implementing the DMAIC Cycle to improve
service quality through a methodological approach. This could help the bank in defining its
objectives in terms of improving service quality for the App as well as the OTC transactions
(D), the bank could then measure certain dimensions like the time it is taking for customers to
get the App activated, the time they spend on call with the customer service representative, the
waiting time for a walk-in customer in branches etc. (M), the errors could then be identified
and analyzed (A), UBL could then take actions to improve these errors (I), and lastly, this could
help the bank in maintaining its quality standards (C).
Lastly, the bank should focus on working on the responsiveness dimension of service quality
as majority of the problems faced were due to high response times. Response time in this case
could include the app activation time, the time spent on call with the Customer Service
Representative of the Helpline or in the case of physical transactions it could include the
waiting time, the time taken to enter and leave the branch etc.

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Exhibit 1: Top Rating Banking Apps

Source: KPMG Banking Perspective 2022

Exhibit 2: Banking Industry Asset Growth

Source: KPMG Banking Perspective 2022

125
Exhibit 3: UBL ISO 9001:2015 Certification

126
Exhibit 4: Service Quality Check List

Health Check Report - Retail Operations

Branch Name & Code: Visit Date & Time:
District Visited By:
CSM Name: BM Name:
Assig.
Section - 1 ATM Services SQ Observations
Score
Section - 2 Branch Environment SQ Observations
Section - 2.1 External
Section 2.2 - Internal
Section - 3 Floor Time SQ Observations
Section - 4 Q Matic & Customer Services SQ Observations
Section - 5 Locker Room SQ Observations
Section - 6 CCTV Recordings & Retention SQ Observations
Section - 7 Genset SQ Observations
Section - 8 SQ General Observations SQ Observations

____________________________ _________________________
Branch Acknowlegement: Prepared By:

Source: United Bank Limited

Note: A full version of the checklist can be provided upon request

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Exhibit 5: Process Flow chart Account Opening

128
Exhibit 6: Account Opening Form; Customer Information

129
Exhibit 7: Miroboard

130
 LAIBA WASEEM

laibawaseem3107@gmail.com · https://www.linkedin.com/mwlite/in/laiba-w-a37646106

After completing my double major’s degree in Marketing and Finance, I’m currently
pursuing masters in business administration from Lahore School of Economics. My
undergraduate degree allowed me to explore multiple different fields in the domain of
marketing and finance that further enhanced my interest. Leading the finance society as
the president was another worthwhile experience as it allowed me to contribute to the
field of finance while learning from great mentors. Furthermore, my past experience as
a sales and marketing intern at UBL allowed me to have first hand experience of the
finance sector and learn about the Pakistan banking sector. It makes me so glad to see
the banking sector and fin tech’s flourishing. Banking and technology is the future and
it is important that we start investing in it. Apart from this, I enjoy digital marketing and
have also received several certifications in field of digital marketing and Data analytics.

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 ZOYA AHMED
Zoyaa.ahmed30@gmail.com · https://www.linkedin.com/in/zoya-ahmed-3b96041a2/

Currently doing my Masters in Business administration (MBA) and with a double

major’s degree in Finance and Marketing from the Lahore School of Economics in my
Undergrad, I was provided with the opportunity to study different courses across
different fields, this also provided me with the experience to work on different
companies in depth. During this time, I developed an interest towards the field of finance
in particular. Moreover, I have always been fascinated with technology, pairing it with
my love for finance I was intrigued when the world around us started to capitalize on
this growing digitalization era with a rise in FinTech Startups and digital banking.
Having an experience of working in the technology sector as the sales and marketing
associate of a cyber-security firm operating out of California, I was given the chance to
have a direct interaction with people of various cultures and ethnicities in the industry
and learn more about the growth of technology and digitization. This paired with my
internship experience at UBL, a key player in the banking sector of Pakistan, and my
love for finance gave me the passion to work on the banking sector in Pakistan and create
linkages between this sector and technology. My hobbies include sports which play an
integral part in driving me to do a better job and keep me motivated, furthermore, I have
various certifications in fields such as digital marketing and Data Analytics that helped
me gain a deeper insight about the rapidly growing technology.

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Ineffectiveness in Cost Management Leading to Reduced Inventory
Turnover – Teflon Metal Ware Industries - Kitchen King by Umar Subhan
and Musa Khan

Daniyal Qadir, Director of Operations of Kitchen King, cookware and bakeware manufacturing
company stared out of the window of the meeting room onto the unloading of special delivery
of highest-grade nonstick coating black paint for the upcoming production of nonstick frying
pan set, holding a receipt of delivery payment in his hands. He had just calculated the difference
between the total raw materials rate required for the production of 450 set of the same set of
frying pan sets order from the Rainbow cash and carry which he did back in February 2020
(pre covid 19) against the average for the order of 480 almost a similar set order from Carrefour
retail company, but with the slight difference of the paint selection which was red top, with
black sides for this one, post covid. The difference was unsettling for him, worrying him about
the upcoming situation of the company and the cost saving methods they may have to go for in
the very future. The difference between the cost of raw materials was nearly two folds, and
considering it as the beginning cost of production and these rates were achieved after days of
negotiation with the vendor was another upsetting situation for him.
Both Daniyal and Finance manager knew they were in the difficult situation, the inventory of
cooking pot sets along with other ready to be delivered bakeware pot sets was high in the
warehouse incurring the cost of storage, and they were facing it difficult to distribute and sell
the stocks, due to increased rate list prices of the stocked goods. Along with this situation, the
cost of the production was very high, maintaining the same quality of the cookware and
bakeware sets was becoming increasingly difficult due to the vendors not supplying the same
grade secondary Aluminum 1100 series ingots and other materials used in the handles and glass
lids, the manufacturing cost of the machines and fire ovens (for baking) was really high in 2022
as compared to two years back, the margins and profit ratios of the company had also decreased
and the demand of the goods was also decreasing due to increased prices which was making it
very difficult for the distribution and selling of goods. This piled up inventory was causing
another problem of reduced cashflows (stuck investment) for the company. The operating cost
was sky rocketing while the net income was decreasing for the company.
The current situation had led Daniyal’s team to experiment with the production methods, the
tried some different materials in the manufacturing which had relatively low cost as compared
to the materials they were already using, and reducing the time allocation for Aluminum
circle/disc manufacturing process, but the methods had not proceeded because these changes
in production caused the reduction in quality of products, resulting in increased defects in the
products as well as the first time ever IMT’s and LMT’s retail customers returning the batch
goods to the company claiming that these products were not up to the quality as compared to
the goods they had been receiving for nearly four decades now.

Company Overview
Teflon metal ware industries was founded in 1977 by two brothers, Muhammad Saleem Afzal
and Muhammad Nadeem Afzal. Muhammad Saleem had been working in the industry of
cookware manufacturing industry for nearly 6 years in Qatar and upon his return in 1975
thought that there was major difference between the quality of goods manufactured and
supplied in foreign countries as compared to the ones which locally produced in Pakistan,

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particularly in Gujranwala. He was able to convince his brother, who already had a workshop
for the manufacturing of machinery (steel tub mixers and motors), mainly for the production
of confectionary goods such as chocolate buntees and jellies to convert the area of workshop
into factory, and raising some equity for investing in machinery and fire ovens (for baking
through heat) by selling some of their owned lands back in the village. They decided to produce
the highest quality cookware products not comprising on anything, nor on the materials used
in production and the production methods. Muhammad Saleem had a mechanical engineering
degree and experience in this field.
By 2004, both owners realized that the company required expansion in terms of space,
advancement in machinery and techniques, research and development department, quality
insuring department and more capital investment as they now had a big name, renowned
products and demand from the major chain stores both local and international and from the
small retail outlets as well. They found a 49,005-square-foot brick warehouse in small
industrial estate-II Gujranwala, with a proper building, space for properly planned factory
overlay, a display center on the one side for the showcase of products. The company moved
into the new factory (previously on Sialkot Road) in 2005.
Kitchen King Cookware is the leading manufacturer of the best nonstick cookware in
Gujranwala and surrounding cities since 1978. Both professional chefs and home chefs have
counted on this company for wide variety of cooking surfaces, styles and sizes, providing them
with quality, longevity, flexibility and so many choices to select the cooking utensil of their
choice. The aim of the company is to deliver innovative designs, producing professional and
food grade cookware. The product line includes anodized pressure cookers, Casseroles, Tawa,
Fry pan, Wok/Karahi, pots and pans and steamers. Kitchen King has the most ISO certifications
in this industry, including ISO 9001, 14001 and 45001.

Industry Overview
Although there were hundreds of cookware companies in Pakistan, Kitchen King was one of
the few that manufactured almost every component of its products from start till finish in-house
with every type of machine available. Many cookware companies picked up formed aluminum
discs from other companies which was already nearly half work done and then processed and
shaped them according to their product line. This increased their dependability on other
companies, who were mainly competitors and producing the same goods more cost effectively.
The cookware industry in Pakistan amounts to $7.54 million in 2022 and this market is
expected to grow annually by 1.35 percent (CAGR 2022-2026). It is very competitive industry,
many manufacturers following the low-cost leadership strategy, minimizing cost in every
segment, many using low graded materials in manufacturing sourced from nearby areas, selling
mainly through the localized bazaars of small cities with high footfall of price sensitive
customers.
Kitchen King on the other hand, his focused-on differentiation strategy, producing highest
quality goods, mainly targeting premium buying customer segment. The distribution channel
mainly consists of local retailers, wholesalers, LMT’s like AL Fatah and Rainbow IMT’s like
Carrefour and Metro, e-commerce website is also very active with the cart option available.

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Competitors for Kitchen King are, Sonex Non-Stick, Bravo Cookware, Casio Metal Industries,
Euro Metal, Ghani Cookware and Golden Fuji industries.

Production Overview (placed before problems faced by company)

Kitchen King’s facility is divided into three main sections: Aluminum Circle/disc
manufacturing, Cookware Manufacturing and Assembly and Packaging. The layout of the
factory is designed according to these three main sections. The production starts with:
i) Aluminum Circle/Disc Manufacturing
Chamber Furnace
The aluminum ingots are placed into the chamber furnace, which is closed from four sides for
even and exact maintenance of temperature of 6600C – 6700C and ensuring zero carbon
emissions. Melting point of pure aluminum is 6600C but as recycled aluminum is used, and
some defected products are also recycled, due to impurities, the melting point varies. It has
capacity of approximately 8 tons and is usually operated at 7.5 tons capacity in each cycle. A
single aluminum ingot weighs 750 kg and 10 ingots are added to furnace in every cycle (7.5
tons). Furnace converts solid aluminum logs into molten state, and that is collected on the other
side into stainless steel collecting vessel. The chamber furnace is operated during one eight-
hour shift, six days a week. Kitchen King typically stored five to six days of aluminum ingots
near the furnace on site, while the remaining were stored in warehouse. Five workers are
present on point, for lifting and placement of ingots into furnace with the help of lifting
hydraulic machine. It takes nearly 3 hours to melt the aluminum from solid to liquid state. The
main purpose of this process is to melt the aluminum from solid into liquid state.
Casting
After furnace process, from collecting vessel the molten aluminum is directed through long
tubular shaped directing tubes into a filter, which filters every contaminant from the liquid
aluminum. The liquid aluminum then flows into vertical rectangular molds, which are eight
molds, in two parallel lengths. Once the filling is completed, molds are closed down (liquid
gets trapped into molds), and molds are then slowly descended down the rails into the ground.
A jacket of cold-water flows around the molds with high pressure in closed area, which
increases as the molds get descended into the ground. After two and half hours of this
continuous process, the liquid molten aluminum is casted into solid state aluminum cast slabs,
which are 25-26 feet in length, the ingots get elongated in this process.
The cast slabs are extracted out of molds, with the help of roof crane lifting system, and some
channeling and alignments from workers. The main aim of this process is to change the
composition of aluminum according to the requirements of cookware and reshaping it, to make
the following processes easier. Each cycle is approximately 2.5 hours long and the casting
operation was currently performed during one eight-hour shift, operating six days a week. The
five workers which previously performed the process of melting, also perform this process.
Investment capital for these two processes for 7.5 tons of aluminum ingots is 11 million rupees.
Shearing Process
In the shearing process, the 25-26 feet long casted aluminum slabs are placed onto a conveyor
belt by the lifting crane and are kept in the heating chamber for some time to heat up the metal.
The purpose is to soften the slabs which will allow the metal to be shaped and formed.

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Then the slabs are sliced into multiple billets after passing through a saw (slicer) which are 1
foot long in size and 3.5 inch in the thickness. A saw also trims the ends and more blades scrape
the top and bottom to remove the impurities. A conveyor repeatedly feeds the shorter formed
billets to heated rollers and guides at the sides to maintain the width while the rollers compress
the aluminum, taking the thickness down to about 3 inches from 3.5. This process of cutting
down the slabs into billets is supervised by 3 workers, one at the feeding end, one looking at
the sizes of the billets and one piles up the formed billets on the side. This process is relatively
short as compared to the first two, taking almost 1.5 hours. This is performed during one eight-
hour shift, operating six days a week.
Hot Ruling
The aluminum billets formed during shearing process, is the main input for this process. This
is called hot ruling, because the billets are heated before they undergo this process. There is a
machine, with a circular rolling rounded steel (like a bulldozer’s front wheel) and is very heavy
weighted. The main purpose is to pass the billets from underneath this heavy rolling machine,
which are already heated. Billets are passed from underneath the roller multiple times, until the
desired level of length and thickness is achieved. The thickness is taken down to about two
tenths of an inch, and the rolling also elongates the billets substantially. It starts of at 1 foot
long, but after rolling of multiple times, the billets are four times the initial length. Therefore,
this process is aimed at stretching the billets and it takes about one hour to convert 25 billets
into stretched sheets which are already undergone through heating process. It takes one worker
to heat up the billets, and one worker to operate the hot ruling machine. The hot ruling is
operated during one eight-hour shift, six days a week. The sheets are then piled up on one side
for the following process.
Scissor Cutting
In this process the pizza cutter style blades first trim the edges of the aluminum sheets and then
cut the previously stretched and elongated sheets into multiple equal sized sheets each
approximately two feet long. These sheets are now way thinner than as compared to the size of
billets which were formed after the shearing process. The important thing in this process is that,
the blades are very sharp with the rotation speed rpm of up to 2500. The sheets are cut through
the sides and then passed on through the other side of machine. This whole machine is fully
automated, with no manual labor required what so ever. The output is shortened sheets, and it
can produce 200 sheets every 15 minutes. The scissor cutter is operated one eight-hour shift,
six days a week.
Cold Ruling
This is almost the similar process as compared to the hot ruling process, with the same machine,
but for this process the aluminum sheets are hot heated, are shorter in length and thickness. The
sheet undergoes the steel roller, rolling over the steel sheets, with a worker holding the sheet
from the entrance side until at least half of it goes under the roller and repeats it multiple times
on one sheet. The main purpose of this process is built strength into the sheets, and stretch the
sheets a little bit more. It requires one worker, just like hot ruling machine.
Circle Pressing
Machinery now pulls in the aluminum sheets forward to a 122-ton punch press. This powerful
press forces the circle shaped metal out of the square sheets, due to the circle shaped heavy
weight dye and the freshly formed circle falls onto a conveyor below. The left-over aluminum

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on the sheets will be recycled and placed into the chamber furnace once again. The circles are
checked by a worker after cleaning and wiping it, making sure it is not bent and does not contain
any abrasions or cuts. This powerful press can press up to 120 circles in one hour and is fully
automated, requiring no manual labor. But one worker is present to make sure the machine is
working properly and for the quality checking process as mentioned earlier. The circle punch
press machine is operated six days a week in two eight our shifts.
Annealing process
In this process the aluminum circle undergoes into the curing oven heated to 1060 degrees
Fahrenheit (the circles get baked) for some minutes. Just the cold ruling process, the main its
main purpose is to build strength into the aluminum circles. Cold ruling-built strength to make
the sheet bear the pressure of 122-ton punch press machine and the annealing process enables
the aluminum circle to bear the 130-ton pressure of press machine which forms the shape of
pot. If this process is missed or not done, then there is chance of bursting, breaking down or
crushing of the aluminum sheet, which results in waste and there is also chance that it can
damage the pressing machine dye head resulting in damage cost for the company. Up to 35 –
40 sheets can undergo annealing process in the window of 15 to 20 minutes. One worker is
required to perform this process and also to check the quality of the sheets right after the sheet
is taken out. Aluminum circle/disc manufacturing process get finished with the annealing
process.
ii) Cookware Manufacturing Process
Pan Pressing Machine
It is very similar to circle pressing machine in size and shape, but the dye present in the middle
is different and it is slightly more powerful. Machinery now pulls the aluminum sheets to a
130-ton pot press. This powerful press forces the metal around a frying pan shaped dye and
then punches out the shape (the central part of the sheet gets depressed and the outer most layer
forms the vertical boundaries forming a pot shape). The freshly formed aluminum frying pan
falls onto a conveyor below.
The pans then ride a conveyor through a washing station where they are cleaned and then
treated with sodium hydroxide. This opens the pores of the metal to allow the enamel coating
to stick to the outside. The shape and form of the pot depends on the pressing machine pressure,
the size and thickness of the circular aluminum sheet. The batch time is varied, based on the
type of pot to be formed, like it is different for frying pan, sauce pan, tawa, pressure cooker etc.
The pan pressing machine was operated in two eight-hour shifts, six days a week.
Tooling/ Edge trimming
In tooling/edge trimming machine the edges of the pot are trimmed, smoothened out and
thickness of the edges is slightly increased with relatively flat edges. This is done by holding a
pot in hand and rubbing the edges against the revolving circular knob.
The main purpose of this process is to prevent any cuts for the people who are going to use the
products, ensuring their safety. This process brings another unique selling proposition for
Kitchen King cookware but it comes at a cost of trimmed wasted materials (spirals) of
aluminum trimmed out of the pans or pots. These are collected on one side and are recycled
back in the melting process. Quality inspection of the pans is done right after this process.
These both things are done by a single worker to bring standardization into the products now
reaching the finishing stages.

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Etching Process
Etching process is specific for those pots or pans which have scratches which are on the surface
and not deep. The etching process is done by hand to remove the scratches and even out the
surface of scratched pans. It is done through the sand paper like material which has some level
of friction on one side. This process is also done by a single worker.
Non-Stick Coating
Sodium hydroxide treatment enabled the enamel coating to stick to the outside and at the same
time it also enables the non-stick finish to adhere to the inside. This process starts by a worker
inspecting the pans and placing them upside down on the spray fixtures. It is an automated line
of spray fixtures running through the closed enamel spraying nozzles. It’s a tight fit to shield
the inside from enamel, and the pans a spinning on the fixtures and twirl by the spray nozzles.
This is to enable an evened-out application of enamel spray on the outside of the pan and it is
followed by a clear glossy coat. The pans are then transferred to the dryer conveyor, which
involves the blow out of the hot air onto the pans drying out any water present in the enamel
coating, changing the color of the pans altogether from the grey to chalk like white color. The
pots are placed again into the curing oven which was previously used for the annealing process,
but this time for reduced duration. The cure toughens the enamel and deepens the color so it
turns dark grey and also it appears to bit glossy.
It than goes through the automated suction machine which attaches to the pan, turns it around
and spray the paint coat to the inside. The spraying nozzles are present applying a special
primer for the enhancement of the adherences of the non-stick coating paint. Three layers of
non-stick coating is applied on the inside of the pan and the suction machine releases the pan
after this process. The pan journeys through the oven once again for the third time, but this
time with reduced oven temperature of 800 degrees Fahrenheit and reduced time for the curing
of the non-stick paint finish.
After the oven the pans go through the washing process, which firstly cools down the pans and
secondly removes any contaminants present on the pans. This non-stick coating process takes
just one hour to complete and two workers for the process completion.

iii) Assembly and Packaging

Hole punching
A worker now holds the pan with both hands’ upside down, and aligns it with lettering on the
bottom and places it alongside the hole punching machine, which punches out the holes on the
side of a pan, in a very precise location. He slides pins into the holes and slots them through
holes in the handle fitting. He then makes use of the rant tool to flatten the pins in order to rivet
the handle to the pan. With this process the manufacturing of a pan is completed and this
process takes 1 minute per pan.
The handles attached on the side of the pan are made out of Bake lite materials which are also
manufactured in house through injection molding machines. It also involves the processes like
casting, shearing and edge trimming.

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Packaging
Carboard packaging is the one of the two things outsourced from the third party in the whole
process, the second being the glass top of the pans which are imported from China. Kitchen
King does not even compromise on the outsourced materials quality and makes sure that they
are getting the top quality. It uses the jumbo lawn sheets instead of bubble sheets which are
relatively expensive, but ensure that the product remains scratch less unlike bubble sheet. The
image of the product and Kitchen king logo and branding is also present on the packaging.

Problems faced by Company

Cost related problems:
The problems faced by Kitchen King and overall industry, is the rising cost of electricity and
natural gas which has increased by nearly six times over two years. The electricity non-
availability during production hours, causes the company to operate through generator which
further increases the production cost. The demand and consequently sales had been impacted
after covid-19, due to hyperinflation and recession in the economy. The company imports its
main raw material aluminum ingots from countries like Canada, Holland and United Kingdom
and due to rise in the worth of US Dollar and Euro against Pakistani rupee, the cost of the
imported raw material has increased. The increase in the global shipping costs, in case of this
company’s raw materials from Europe to Pakistan, increased from $1300 in February 2020,
close to $16,000 in September 2021 for 40-foot container, impacting the cost of goods sold of
company. The distribution cost of goods, throughout Pakistan is also significantly increased to
the prices of petrol and diesel.
Health safety issues of using non-stick cookware
Teflon is safe and long-lasting material, but if the temperatures exceed 350 degrees Celsius
during cooking, there are chances that non-stick coating layer of cookware will start to break
down and release harmful chemicals in kitchen. If a person inhales those chemicals or eat the
food cooked in a damaged non-stick pan, there is a chance for getting sick or suffering from
polymer fever. People who cook in non-stick cookware, generally know that non-stick is not
safe use, once the layer breaks down. Therefore, people buy double Dutch oven which is made
up of cast iron instead of aluminum, it is slightly heavy with thick walls. This enables it to bear
higher temperatures as compared to non-stick cookware as it is uncoated and does not come
with glass lid. This has another advantage that it can be used in baking ovens with higher
temperatures, as compared to non-stick cookware.
Lack of skilled labor:
Some of company’s machines are not operational right now, as it has decided to follow the
demand fulfilling strategy and not producing goods in advance. Covid-19 in 2020, caused the
company to downsize its working labor force, forcing the company to let go of many
specialized and skilled workers, working for many years and causing the distress in the
remaining workers as well. This is resulting in low levels of productivity, more products quality
related issues due to existing manufacturing skills gap.
Change in consumer trend:
Another important problem faced by the company is that; the period which was previously
considered to be the peak season from September to February for sales and order bookings of

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products, due to the wedding season and the tradition of people to gift cookware and bakeware
in brides’ dowry, has not been that impactful in past couple of years. There can be number of
reasons for this change in sales number during peak season, but according to company the main
reason is the decreased purchasing power of general public due to current economic state of
company.
Outdated machinery:
The mainstream machinery of the company was installed in the late 1990’s and early 2000, and
some of the machines are now either outdated or not giving out the same output as compared
to when they were initially installed. Older machinery also means that there are occasional
breakdowns during the manufacturing and it also adds on to the maintenance time and cost for
fixing the machines. Other companies have been continuously leasing the new machines over
the years and replacing the old ones, but Kitchen King has not followed the same strategy. This
is making it very difficult for the company to maintain the quality of goods, is resulting in high
waste of materials and higher work in progress goods.
Supply chain problems:
Supply chain is very important in the any manufacturing related business, in which raw
materials are converted into finished goods. There is lack of transparency in the supply chain
of this business, there is no tracking of supplier, no performance indicators of distributors,
business relationships, and no analytical data for the information required for informed
decision-making process and business insights.
The company is also facing the issue of inconsistent government policies relating to the
discount offerings in terms of electricity and gas, income taxes and property taxes, inconsistent
government laws (such as company was forced to obtain environmental related ISO
certifications but no authority ever checked it). Company’s holding cost for the inventory is
also high, as it has leased a small warehouse for the storage of finished goods and work in
progress goods increasing the liabilities for the company.
Raw materials:
Lastly, company have to import the glass lids of the cookware from China, which requires the
special type of tempered glass that does not break if glass lid falls on the ground. This import
also increases the cost of goods sold and sometimes delays in the dispatch of orders if glass
lids does not fit properly.

How the company is dealing with the problems

− Kitchen king has moved towards just in time manufacturing model, in which it is not
depending on the forecasting of demand and producing the cookware in advance, but
the manufacturing is now dependent on the orders and demand from the market. It has
resulted in the lean manufacturing and helping in the incorporation of six sigma
principles. JIT has enabled the minimization of the work in progress items, helped in
reducing the inventory holding and carrying cost and in turn lowering operating
expenses. This has also enabled greater control over inventory for the company, and
effective use resources more market opportunities for the company.

140
− As the company is facing major electricity issues, it is taking in consideration a move
towards biogas plant which is a very common alternative source of energy in areas like
Gujranwala, Gujrat and Sialkot. It is an artificial system which turns waste into
sustainable energy which has positive effects on environment as well. It does not
require a major monetary investment, the inputs for energy production are also very
cheap and easily accessible and has only three components; the reception area, a
digester and gas holder. It will enable the continuous energy supply for company and it
will be less effected by electricity shutdowns. It will also bring down the total operating
cost of the company and increase the operating income.

− For the underutilized manufacturing procedures and machines, company has signed
contracts with other companies, offering them to outsource their relative production to
Kitchen king (for underproduced products of KK) as it can produce the highest quality
cookware and this will be beneficial for both parties involved. This will bring more
income for the company and the machinery will be utilized more efficiently.

− Company has been able to locate a national supplier of aluminum ingots, producing
almost same graded aluminum ingots as compared to the one imported internationally,
placed in Karachi. This will reduce the cost of raw materials, cost of goods produced
and operating expenses for the company. Similarly, it has been able to increase its non-
stick paint suppliers from 1 to 3, in the last year, enabling it to negotiate the pricing by
comparing the three, but the company has decided not to increase its dependency on
either one of them.

− Company is now in the planning stage of exporting its goods to United Kingdom and
other European countries and North America which are major markets for cookware
and bakeware products. The difference in the exchange rates will enable increased
returns for the company, but competing and building a brand internationally is very
challenging.

− Company has been able to negotiate deals with a distributor in Peshawar, Faisalabad
and Islamabad, which have been dealing in the same segment of goods. It has also been
able to add a key account, Imtiaz Super Market, which has 25 stores all across Pakistan,
which can help Kitchen King to generate more revenue. Company is also training some
sales representatives for sales on IMT’s and is considering to improve its display areas
in LMT’s and IMT’s as well.

− It has also started the process of adding solar panels and solar energy all over its
production facility supplying energy for its offices, research and development
procedures, air conditioning etc. This will help reduce the cost of electricity for the
company and improve product costing and pricing.

− Company has heavily invested in its ecommerce website development, and has started
to receive orders from there. Website is very important for any business in 2022, and
its importance has increased rapidly after the covid19.

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Future Implications:
The effects of the above-mentioned problems can be the change n the operational timing of the
company, starting early in the day when there is availability of electricity and gas to the
industrial areas and maintaining the production runs accordingly throughout the day. This will
also minimize the use of generators for production, which is very costly due to surge in oil
prices. If these timings change not implemented, then the company will continue to face low
production output, higher products cost.
Kitchen king needs an integrated manufacturing ERP system and software which can cater
specifically to manufacturing related needs. This can provide company with the benefits of
integrated production process, broader view and understanding of entire value chain of the
business and more information for better qualitative decision making. If not done, the business
will continue to suffer the issues related production.
Company should also locate a local producer of high-grade aluminum ingots for the
manufacturing process along with other raw materials used in production, to decrease the
production cost of goods and subsequently increase the net income. Otherwise, the cost of
goods of the company will remain high.
Company can invest in the machinery for producing high-quality stainless-steel water bottles,
aluminum foil food containers and aluminum foils (blocks light, oxygen, bacteria and moisture
to enter food) which are relatively cheap and easy to produce, are in high demand throughout
the year and the company has already expertise and experience in the producing goods from
aluminum.
It needs an inventory management system, which can enable the alerts for the systems of the
company, if any specific raw material, production related materials, work in progress and
finished goods inventory is nearing the reorder point. Similarly, if any product is in over
quantity in finished goods, it can also generate alerts. Benefit is that it will improve the
management of finished as well as raw materials inventory, otherwise company’s inventory
moving problems will continue to exist.
Kitchen king can optimize its supply chain management, revisit its functions of future product
development, product marketing, branding, finance and distribution network. It will need to
optimize its production cycle which can reduce the cost of goods produced and improved
efficiency. Company needs to explore more vendors for the supply of raw materials, more
distributors all across country, increase its sales personnel and offer them incentives depending
on key performance indicators to increase the demand and sales. Company can also move
towards the export of produced goods, as it has sufficient production capabilities, which are
currently underutilized, and has the international ISO certifications, it just needs to find a
reliable international distributor or a partner to sell its cookware internationally.
Inventory Model
Kitchen King uses production order quantity model for inventory management. The inventory
of products builds up when it receives an order from a customer. The inventory reaches a
maximum level after production runs, and then after reaching the maximum level, and then
there is demand part of the cycle in which the product usage (selling to retailer or direct to
customer) takes place with no production.

142
The demand for the products of the company is independent i.e., the demand for one product
available in inventory is not dependent on the demand for another product in the inventory.
The company used the production order quantity method for the inventory with some
assumptions of their own. But it has not been able to properly integrate this inventory model in
the system, and the production has been more and more dependent on the assumed numbers
rather than actual numbers. An extremely important variable for any company in the current
times. The company faces a huge burden due to the holding cost of the inventory as the
inventory turnovers are slow and the demand is fluctuating.
Sourcing and Procurement of Raw Materials
Aluminum
Sourced in the shape of ingots, melted through a chamber furnace to reshape it in a 25-foot-
long log. Aluminum is used because it is energy efficient as compared to other metals, the heat
can evenly spread during cooking process and it is effective with the new techniques such as
induction and heating plates. Aluminum is a natural metal ore extracted out of ground, and
secondary aluminum (after the recycling of primary aluminum) is used. Kitchen King uses the
highest graded Aluminum 1100 series which is imported from Canada, Holland and United
Kingdom.

Bakelite
Sourced to manufacture cookware handles and knobs. This material is an insulator and does
not allow the heat transfer through it. It provides a safe grip to the cooks and is well liked by
the domestic consumers of the products.
Non-stick Coating
It is FDA approved, PFOA free nonstick coating, which when applied to cookware, gives it the
name of non-stick cookware. Kitchen King is the pioneer of non-stick cookware in Pakistan, it
first manufactured its non-stick cookware range in 1978. The differentiating feature of non-
stick coating as compared to other coatings is that it allows to cook food in lesser amount of
oil and prevents food from sticking to the surface.
Glass Lids
Sourced from China, glass lids are tempered and are tested to bear the heat. And if the glass
falls on the floor, there is a high chance that only cracks will appear on the lids and the glass
will not disperse like other glasses, ensuring the safety of users. Glass lids also enable the
monitoring of food that is being cooked unlike the aluminum lids.
Steel Fittings
These are sourced to attach Bakelite handles and knobs to the non-stick cookware. High-grade
stainless steel is used to ensure longevity of the products as this is resistant to the corrosion.

Conclusion
Kitchen King has been able to recover well from the effects of Covid-19, as the industries were
the most affected by it. From the non-availability of raw materials due to issues in availability
of worldwide shipment containers to the inconsistent production schedules, still the company
has been able to manage its output to input ratio, market competitiveness, its core competencies
and has been able to grow as a business. The solutions taken into considerations from the

143
company for the problems it is facing, I think are the right decisions, and some of these has
already started to bring in the results for the company. But I think, what company is still missing
is the product that is cheaper and easy to produce as compared to cookware, can be easily
produced from the current production capabilities, is in demand for all over the year and is very
much related to food category. This can be aluminum foil or aluminum food containers, which
are disposable, can be recycled and help bring in the short-term income for the company.
Another important element which the company needs to consider is the marketing and
advertising for the brand and products. Marketing and advertisements increase the brand
awareness, trial, repurchase and loyalty for the company and this model is crucial for increasing
demand and supply of goods.

144
Exhibit 1: Process Flow Chart Diagram
Throughput time addition in process flowchart

Figure 1.1 Process Flow chart

145
Exhibit 2: Estimated times for the manufacturing 3 piece set of baking which includes
(Wok, Fry Pan and Tawa)

Predecessor Activity Duration

Activity Code Activity Description
Activity (No. of Hours)
A Raw materials arranging None 1
B Chamber furnace process A 2
C Casting Process B 2
D Shearing Process C 1
E Saw Cutting slab into two C 0.5
F Hot Ruling D 0.5
G Scissor Cutting F 1
H Cold Ruling G 0.5
I Heating and slab elongating E 0.5
Aluminum winding into Big
J I 0.25
Coil
Aluminum unwinding,
K J 0.75
squeezing and flattening
L Circle Pressing H 0.5
M Annealing Process L 0.5
N Pan Pressing K, M 1
O Non-stick Coating N 1
Hole Punching and 1
P O
Packaging

146
Pert Diagram

Figure 1.2 Pert diagram

Critical Path: A B C D F G H L M N O P

Critical Path is the longest path in the network diagram and the slack time is equal to zero.

Critical Path: 1 + 2 + 2 + 1 + 0.5 + 1 + 0.5 + 0.5 + 0.5 + 1 + 1 + 1 = 12

147
148
References

ALI.SHAHAB.PK, S. A. |. (N.D.-B). BEST COOKWARE BRAND - KITCHEN KING - ALWAYS A STEP

AHEAD. . . KICHENKING. HTTPS :// WWW.KITCHENKING .COM /

PAKISTAN COOKWARE MANUFACTURERS . (N.D.). GLOBAL MANUFACTURERS.

HTTPS ://WWW. GMDU.NET /JOIN-22-1038-JOIN -15-P1. HTML

PAKISTAN COOKWARE MARKET (2020 - 2026) | TRENDS, OUTLOOK & FORECAST.

HTTPS ://WWW.6WRESEARCH .COM /INDUSTRY -REPORT /PAKISTAN -COOKWARE -MARKET -2020-2026

WIKIPEDIA CONTRIBUTORS . (2022, NOVEMBER 12). CAST-IRON COOKWARE . WIKIPEDIA.

https://en.wikipedia.org/wiki/Cast-iron_cookware

IMAGE FOR PROOF

149
 M.MUSA KHAN
13 Bird wood road Lahore · 03034817814
Musakhannn7@gmail.com ·

FromPicture
being Here
the head boy at Beaconhouse Garden town Lahore to being awarded the service to the
school award at Lahore Grammar school Phase 5. Achievements have always driven me to do
more. My name is Muhammad Musa Khan currently enrolled in MBA program at Lahore school.
Jumping from one achievement to another I build my profile so I can set a strong foot in the
corporate world. Not just my educational profile I have always been keen on achieving something
in sports. This was full-filled when I was selected as the basketball captain of Lahore school 2021-
2022.

There are two things I can ace at any day or any time without hesitating:
1. Sit through an interview
2. Give a presentation.
Team work and people management are the skills I have polished over the years through various
personal experiences. My eagerness to learn more and more has taken me to places I had not
imagined. Since I have always been the one who takes lead in any situation this has polished my
leadership skills. But all these leadership roles and specially basketball has taught me how
important it is to work as a team to win. Curiosity to know more drives my motivation to work
hard. All this is backed up by my extrovert personality that makes it easier for me to reach my
goals. Social responsibility is something I never forget and for that I take one baby step each day
to give back to the society.

150
 UMER SUBHAN
Green City, Barki Road Lahore · 03006462278
omarsubhan4@gmail.com · https://www.linkedin.com/in/umer-subhan-35b94125a

A
dd Picture Here
My name is Umer Subhan, and I’m a student at Lahore School of Economics. I have done my
bachelors from Lahore School in Marketing and Media and right now I am doing MBA. Over the
period of four years, I have been writing many reports on subjects such as Industrial management,
Strategic management, operations management and other courses such as supply chain
management. This has helped me gain useful insights relating to the issues and problems in
Pakistan’s industry. I have also developed my intercommunication skills and presentation skills.
Working in a group as a team member, solving problems and issues, making group work towards
the end goal and also leading a group during projects are a few of my good personal skills.

I try very hard to complete the tasks and assignments and submit my work on time. I am a very
focused person, keeping my concentration on the task, until it is complete. I am enthusiastic,
energetic, self-motivated and a responsible person always trying to achieve perfection in my work.
I like to face new challenges, taking new initiatives and working as a team. I am able to work under
pressure, can manage stress levels well, adapt to the busy environment and produce good quality
work. I can take instructions and guidelines, try to stay organized and keen on learning new skills
and improving the standards. Building good working relationships with my colleagues, listening to
their ideas and how they are working and staying honest and punctual are some of my strong
pursuits.

151
HN Poultry Farm: Qptimizing Stock Keeping in Congruence with Poultry Market
Seasonality by Hafsa Mujaddid and Momina Asad

Hamid Akbar Chattha, the owner of the HN Poultry Farms just got free from the meeting with his finance
manager and feed manager. He is stressed out and is looking at the excel sheets on his laptops while
sipping coffee. Its 3 p.m. and he has a meeting with his new recruit, an intern which he hired to help with
the data entry.
The intern entered the room and Mr. Chatta greets him and jumps to the introduction of the company. He
points out the excel sheet opened in front of him while explaining the output of the farm. He expressed
his concern over the inputs and the increased cost of the feed due to the ban on the import recently and
the increasing costs due to the rising taxes and custom duties levied on the import of poultry feed.
Mr. Chatta does not want to compromise on the quality of the hen by using the locally manufactured feed.
He has to look for alternative to ensure the supply of feed and maintaining the quality standards. He asked
his intern to conduct research and suggest on any short-term solution to cater this problem and ensure the
productivity levels are maintained. The intern, which is a bachelor’s student, comes out of the office and
opens up his email to find the relevant information and data files emailed to him by the manager so that
he begins his tasks.

Industrial Overview

In Pakistan, the poultry production began commercially in 1962 with over 15,000 poultry farms
established till date all over the country. Approximately, the production in Pakistan is 1.94 million tons
of chicken in farms varying from 5,000 to 500,000 broilers.
Poultry is one of the country's largest agro-based sectors, with investments totalling almost over 1,190
billion rupees. The Pakistani poultry industry is significantly narrowing the gap between the supply and
demand for meat protein. With a significant contribution of 1.3% to the country's GDP, Pakistan's poultry
industry is an important and significant part of the country's agricultural industry.
According to the Pakistan Statistical Yearbook 2022, in the year 2010 – 2020, the poultry production rose
by 116%.
Pakistan is now the eighth-largest producer of poultry in the world due to recent significant expansion and
development in the industry and significant farm modernization.
Given that Pakistan's government is spending more economic resources in the poultry business, it is one
of the productive industries with the greatest annual growth rates in Pakistan (about 10-12%), it is likely
that this growth would continue in the years to come. Currently, more than 1.5 million individuals in
Pakistan are employed in this sector.
With the emergence of new technologies, more expenditure is being made in order to meet market
demands and generate substantial profits. Poultry industry is to experience further growth to meet the
growing demands of the market. The production is increasing due to the introduction of breeding in control
sheds with protection to control the disease spread and minimal exposure with the environment to ensure
safe and disease-free production. The use of antibiotics and vaccinations is growing and increased
investments in made of approximately PKR 1.9 billion annually for taking preventative measures and
treatments in poultry farms.

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Current Situation

The country's gross domestic product (GDP) has increased greatly as a result of the poultry industry's
recent 8–10% annual growth rate, but the planned taxes on poultry goods, would undermine all the sector's
efforts to combat poverty.
Contrary to expectations, the measures being implemented to boost tax collection will result in negative
development of the poultry business and generate a fall in its income generation.
A day-old chick, which costs $54 (cost and freight), formerly had a tax burden of Rs486 due to 3%
customs charge and an extra 2% customs duty.
The anticipated 17% sales tax will add Rs1,735 to the cost, bringing the whole tax burden to Rs2,221 per
chick. The increased prices cause an effect on the growth of chicks and well, poultry production is not
possible without chicks.
Like that, the price of poultry feed at the moment is Rs86,200 per tonne, of which Rs8,000 is paid to the
government in taxes and customs.
It is of great concern that the tax on feed will increase by Rs900 per tonne as a result of the increase in
sales tax to 17%.
The removal of the sales tax exemption for vaccines, would drive up the cost of medications for chicks
by Rs. 80 to Rs. 90. All of these actions will raise inflation.
Because taxes on chicken feed, vaccines, and equipment were no different from imposing sales tax on all
forms of poultry farming, the application of sales tax on incubators would also not be good for the poultry
industry's expansion prospects.

Company Background

Hamid Akbar Chattha graduated from Punjab University in 2003 with a BSC degree in Computer Science.
In 2006, he decided to change his field of study and opted for Lahore School of Economics’ MBA program
from which he graduated in 2006. After completing his MBA degree, Hamid joined Logitech for 6 months
but soon realised that his family business needed him.
In the initial years the payback period was very low of about 2 and half years. Margins were quite high,
but the cost of production was low.
Hamid started his poultry business from Alipur Jatta (near Gujranwala) from the inherited land. Initially
he received 2 houses double story but with time he opened up more shed/houses.
HN Poultry Farms has 3 working locations - Gujranwala, Peshawar, and Gujrat, where a total number of
40 to 50 employees work (varies at the time of catching and delivering phase), with almost 300,000 of
broilers sold each year.
Location 1 - Alipur Jatta (Gujranwala): Inherited land with 2 sheds expanded and build 4 more
Location 2 - Peshawar: 1 rented shed
Location 3 - Gujrat: 2 rented sheds

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In the six sheds in Alipur Jatta, about 500,000 broilers are raised in a sequence of 3/4 circles every year.
One breeding cycle lasts 40-45 days, with broilers reaching a weight of 2 kg.
Broilers are raised in two sheds, each with a capacity of 30,000 heads.
The sheds are in the U shaped, with a length of 450 ft and width of 50 ft. Each shed includes an entry area
with electronic control systems for temperature monitoring, ventilation system activation, air heating, and
air conditioning system activation, and sanitary filters are located.

Production Process
Populating
After a preliminary inspection of the microenvironment conditions in the shed to guarantee optimum
temperature and ventilation, one-day-old chicks are transported in wired cages from the incubation farms.

Feeding
The chicken feeding system will supply the required food through two feed lines, which will
include feed silos (storage bunkers positioned outside, at the end of the shed), and circular feeders.
Silos carry, mix and discharge the feed mechanically into the plastic pipes. There are sensors
present in the house which automatically stops the transportation of feed into the pipes when it is
full.
Feed also known as fodder is a mixture of corn, vegetable oil, soy, barley, and important
supplements like vitamins.
Water
Water tank is present outside the shed where using wood it is warmed up to the required
temperature and then transported through pipes and radiators to the shed. The chicks are watered
using four continuous feeding units with a temperature range of 10-12°C. The watering system
includes a pressure regulator as well as a medication and vitamin dispenser. During the first 24
hours, at least 15 mL/chick is consumed. The water systems are cleaned on a daily basis to keep
bacteria away.
Microenvironment Conditions
Temperature: There are 4 coolers per shed that are operated automatically using a digital board
present outside the shed. The temperature that is required according to the season is entered into
the digital board. The airflow then increases or decreases as required to maintain the set level of
temperatures (28 degree Centigrade).
Ventilation: As mentioned above the 4 coolers are used for ventilation as well. There are humidity
and temperature sensors inside the sheds which give information for the automatic
microenvironment control system. Its main purpose is to keep low levels of carbon dioxide,
remove moisture, any dust present and ammonia from the sheds.
Lighting: As the chick grows it requires less and less light to stay healthy and stimulate its
activities. The shed's lighting is powered by fluorescent (energy savers) or incandescent (round)
lamps. For each 200 sq. ft, there is one 60W bulb.

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Vaccination
When the chickens are young and first arrive in the sheds, they are given around 10 to 15 different
types of vaccines either by water or by spraying on them to keep them healthy and avoid any major
disease outbreak that could affect the flock.
There are two types of vaccines, Live and Killed vaccine. Live vaccine covers ND, IB and
Gumboro and is given on day 1, day 7, and day 14-18. Killed vaccine is given on the 6th day and
becomes functional on 27 days, has a 21-day cycle (refer to table 1).
Catching
Feed is withdrawn from the flocks eight to twelve hours before the scheduled processing time. Water, on
the other hand, is available indefinitely unless caught. Typically, teams of employees grab the birds by
picking up two to three birds per hand by one leg in order to catch the birds as efficiently as possible.
Light levels are reduced and rapid increases in light level during catching is avoided, ventilation is
carefully managed and adjusted to prevent heat stress, and birds are captured with care to avoid any harm.
Loading/Delivery

Transportation is usually done with any vehicle that is available and sustainable enough to carry the
chickens safely. Chickens are usually loaded onto the vehicle by slides or by gently throwing them on the
vehicle by the employees.

Process Analysis and Costing

HN Poultry farm utilizes multi-stage process with buff, and they produce matured broiler chick based on
make to stock which meets the expected or forecast demand of the customers.

The broiler chicken process is quite simple. Once the sheds are washed and disinfected, one day old chicks
are brought in which costs around PKR 7,955,700. Meanwhile, feed bags (PKR 37,093,917 plus freight
charges of PKR 608,800), rice husk (PKR 420,250) for chicken’s feed and medicine (on cash – PKR
346,830 and on credit PKR 2,783,070) are bought.

Once the chicken is matured, extra help is hired for catching those costs around PKR 67,550. Monthly
labour wages are PKR 1,581,650, electricity bill is PKR 1,265,520, diesel and coal expense are PKR
355,436 and 216,450, respectively.

There are also some other expenses that include mess expense, personal expense and common expenses
that are roughly around PKR 328,938, 1,050,000, and 448,479 respectively per month (refer to table 3).

In terms of revenue streams, that comes from three main things, chicken sold, extra rice husk and feed
bags sold (refer to table 4).

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Productivity:

To calculate productivity we used the formula, total output over total input:

Productivity = Total Output

Total Input

Total output = 59,532,404

Total input = 54,522,590
Productivity = 1.09

The total cycle time for a day-old chick to be a mature chicken is 40 days. So, the throughput rate is
around 0.025 (1/40) which shows that HN Poultry is quite efficient its terms of its units produced (refer
to table 5).

Key Challenges

The biggest problem that is faced by the poultry industry is the seasonality which affects productivity.
Productivity is affected by two main factors. Firstly, the diseases and secondly, the availability of feed in
Pakistan. The spread of diseases is directly related to the seasons. As the cold weather arrives, the poultry
farm will be hit by diseases as low humidity weather carries the virus. December to March are the
favourable months for the spread of diseases so precautionary preventive measures are to be taken timely.
HN Farms have internal ventilation systems installed to purify the air. However, the warm weather is
comparatively safe, and birds are kept on minimum ventilation where only the gases generated are
vacuumed. The current weather (September – November) is disease–free weather where there is more
placement and overproduction. The birds grow well and up to higher weights. The temperature and
humidity are to be monitored continuously to make sure there is no suffocation otherwise the birds will
not survive, or growth will be stagnant, affecting productivity.

To prevent the birds from diseases, vaccination and anti-biotics are to be provided. The most common
diseases that prevail include ND, IV, H9, H5, Bird Flu, Respiratory diseases etc. Antibiotics are reactional
whereas vaccinations are precautionary. Due to these, the mortality rate spikes up. Vaccines are scheduled
on 7th or 8th day, and they are ordered according to the schedule as they have low shelf life. The vaccines
are imported while now, most of them are available nationally. The problem currently being faced is that
due to certain events in Pakistan, the supply is disrupted. For instance, long marches by a political party
caused a huge impact on vaccinations as well as feed.

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The feed composes of fat sourced and protein sourced diet. The major part is composed of protein based
which is essential for the desired output. For the protein, soybean is used which is imported. Due to recent
developments, there is a disruption in the import cycle due to which there is increased lead time and
massive change in costs. One shed requires 200 bags of feed which is affected by the government
regulations. If any alternate feed is used instead, it affects the quality of the chicken so there is a
compromise on quality to be made as chicken does not meet the 2.5 kg benchmark set. So, the import
bans and increased taxes are a major challenge to be dealt with. Feed is an essential part as the conversion
of chicken produced is measured on the basis on the feed using the FCR (Feed Conversion Ratio). So, the
better the feed, the better the FCR will be. Currently, for HN Farms, the FCR is 25 - 30% per feed pack.

From Table 3:

Cost of one feed bag: PKR 6200

Total bags purchased in 3 months: 5982
Total bags purchased in 1 month: 1994

Feed consumed per chicken = __Total feed bags purchased__

Feed bags consumed per flock
= 1994 / 200
= 9.97

FCR = __Total weight of chicken__

Feed consumed per chicken

= 2.5 / 9.97

= 25.07%

Initially, the HN poultry farm was a secluded area but due to the rapid construction, it is a populated area
now. This is becoming a problem as the far the farm is from the main area, the better it is as there is less
exposure so less risks of catching diseases. So, the birds are kept in complete ventilation due to the greater
exposure they now have to the environment.

Implications

HN Farms has been doing considerably well till date but owing to the prevailing conditions of the country,
it is becoming difficult for the businesses to survive while operating in a single area. Due to the above
157
discussed factors including mainly the shortages faced by the industries, it is important for the HN Farms
to consider diversification. There is a lot of room for growing and expanding beyond the poultry. Utilizing
the existing resources such as land and labour, it can diversify into animals and livestock and make it a
revenue stream by selling its by products such as milk and meat. It can also move towards growing of
vegetables and utilize its farm by harvesting vegetables and selling them commercially.

This still holds second to expanding in the existing area that is production of feed in house. As Pakistan
faces high prices and shortages of soybean, which is a main component for protein feed, it is time to
slowly move to alternatives. Quality can be affected but now a number of other sources are available in
the market which can be tested and used as replacement from the very beginning of chick so that they
become used to it. Some of the alternatives for protein sourced feed include canola meal, oil seed, sesame
seed, pumpkin seed, pulses, insect meal, barley etc. These have somewhat similar composition of protein
and are some replacements as per their sustainability, availability and as well as their protein profile. So,
it is worth considering the production of feed and also the alternatives to make the process sustainability,
cut on cost and less dependent on the external factors.

Using local manufactured feed deteriorates the quality of the chicks in terms of their growth. It increases
the cycle time as the growth is slowed down by the consumption of this feed. The desired weight is not
achieved in the expected time and there are cycles when the chick does not provide enough chicken and
eggs. They also tend to fall sick more frequently and of higher intensity and then other factors are looked
upon to neutralize the effect and ensure the health of the chicks. This, in return, has an impact on the
demand of the product as consumers are not satisfied by it or they have to get sold at a lower price in order
to remove stock up as that will be a waste if the chick dies.

Recommendations

To cater to the problem of import ban on feed, HN Poultry Farm has currently shifted on the local feed
for fat completely due to major gap in the supply chain whereas it is still partially importing protein feed.
As the local protein feed and using the alternate for it, causes extreme quality compromises. HN Poultry
Farms does not want to give up its quality standards as it believes in providing the best to its esteemed
customers. This way, it is still compromising on its productivity. HN Farms are using feed from countries
China, Vietnam and Turkey and is one of the largest importers in the world. HN has shifted to other
countries with less trade terms and regulations to meet the short-term shortage.

Due to the import bans, the feed purchase has been affected. Measures can be taken to import from those
countries with which there are relaxed trade terms. Or however, in future, steps can be taken towards
producing feed which is essential for the hen as there is uncertainty and instability in trade and considering
the prevailing political situation, not much can be said about the future. In the long term, HN Farms can
dedicate one of its lands which is given on rent for the production of protein feed. It will not incur any
land acquisition cost because it has its own lands. The setup cost and raw materials will be required. Most
of the raw materials can be sourced from within Pakistan or it can slowly start importing the required raw
materials and began production in house. It can not only fulfil the demands of its own farm but later on,
can produce on a larger scale and sell it to other farms. Because protein feed is a major ingredient for
animal feed and there is a gap in the market which can be covered.

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The imports are also incurring a higher cost due to the rising exchange rate and devaluation of the
Pakistani rupee, along with the laws and regulations. So, when there is a potential in Pakistan to produce
feed on its own, then it should be utilized. It will be costly and is a huge investment, but it will pay off in
the long run because its benefits outweigh the costs associated with it. So, the changes in import costs, the
increasing lead time, delayed deliveries, meeting laws and regulations, increased taxation, all these
problems can be avoided in the long run when animal feed is completely produced by HN Poultry Farms.

The HN Poultry Farms does not have a dedicated medical team now as they perform the preventive tasks
themselves. However, due to the increasing environmental problems, with smog being the first, the birds
are at even higher risk of catching more diseases especially related to respiration. So, they must have a
medical team now because diseases directly increase the mortality rate, so it reduced the productivity of
the hen. It needs trained staff to look after the birds during all its stages. Now, HN Farm is managing on
their own because they believe that over time, they have learnt the techniques and can handle the problems
on their own. But, with the weather changing, the diseases are likely to spread at a greater rate, so active
care will be required. The air quality is deteriorating every day and new problems arising so to cater for
them, a professional, trained staff is needed in the long run. Even though it will incur a cost, it will
definitely increase the productivity and survival rate, reducing the mortality rate.

159
References

http://www.agrosh.ro/resources/toolip/doc/2019/02/14/1_o4_cs7_casestudy_description.pdf

https://www.veterinariadigital.com/en/articulos/poultry-production-in-
pakistan/#:~:text=This%20sector%20currently%20provides%20work,from%205%2C000%20to%20500
%2C000%20broilers.

https://pakistanpoultryassociation.com.pk/news/an-overview-of-pakistan-poultry-industry-year-2019-
2020/

https://profit.pakistantoday.com.pk/2022/06/06/poultry-industry-growing-fast-in-pakistan-ppa/

160
Appendix

Table 1: Vaccines

Day Disease Type of Vaccine Method

Day 1 IB classic Live freeze dried Spray

Day 1 Gumboro Vector or immune complex Sub cut injection

Day 5 ND Live Spray

Day 5 ND+H9 Killed (full dose) Sub cut injection

Day 18 ND Live (Lasota) Spray

Figure 1: Process

Source: Case Study - AGROSH

Table 2: Critical Path Model

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 Activity codes Tasks Immediate Predecessor No. of days
A inspection of the microenvironment conditions in the shed none 1
B one-day-old chicks are transported in wired cages from the incubation farms A 1
C chicken feeding system supply the required food B 34
D warm water is transported through pipes and radiators to the shed B 34
E Vaccines are sprayed or Injected B 18
F Feed is withdrawn from the flocks eight to twelve hours before the scheduled processing time. C, D, E 1
G Chickens are loaded onto the vehicle F 2
H Delivery is made to the required customer G 1

Figure 2: Critical Path Model

Start A B D F G H

Path 1:
A > B > C > F > G > H = 1 + 1 + 34 + 1 + 2 + 1 = 40 days

Path 2:
A > B > D > F > G > H = 1 + 1 + 34 + 1 + 2 + 1 = 40 days

Path 3:
A > B > E > F > G > H = 1 + 1 + 18 + 1 + 2 + 1 = 24 days

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Data for 3 months (August to October)

Table 3: Inputs Table 4: Outputs

Output
Input Chicken Sold 58,804,404
Electricity Bill 1,265,520 Rice Husk Sold 600,000
Diesel 355,436 Bags Sold 128,000
Coal 216,450 Total Revenue 59,532,404
Mess 328,938
Labour Salaries 1,581,650
Common Expenses 448,479
Medicine On Cash 346,830
Medicine On Credit 2,783,070
Feed Freight 608,800
Catching 67,550
Rice Husk 420,250
Personal Expenses 1,050,000
Chick Purchased 7,955,700
Total Feed Amount 37,093,917
Total Expense 54,522,590

Table 5: Calculations

Cycle Time 40 days

Throughput Rate 0.025
Productivity 1.09

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 Figure 3: Process Flow Chart

(Day 1) (Day 1) (Day 2)

(Day 2)

(Day 2) (Day 2)

(Day 2 - 22)

(Day 2 - 22)

(Day 22 - 35)

(Day 35)

(Day 40) (Day 40)

Made from: smartdraw.com

164
Miro board

165
 HAFSA MUJADDID
Lahore · +92-3458463006
hafsamujaddid@gmail.com · https://www.linkedin.com/in/hafsa-mujaddid/

Hafsa Mujaddid is currently an MBA student at Lahore School of Economics. She has completed
her Bachelors degree in Double Majors in Marketing and Finance from the above-mentioned
institution. She has been a dedicated and hard-working student throughout her educational period.
Her interest lies in the field of marketing and management and she is a keen learner and an observer
who aims to increase her knowledge thought any medium. During her MBA programme, Hafsa
has been given exposure to a number of companies through the allotted projects which are based
on field visits, helping to broaden her horizons to learn beyond what is taught in class. She has been
doing her work whole heartedly to gain the maximum learning and explore different industries and
acquire in depth knowledge about them.
Hafsa, along with her fellow, Momina Asad, has written this case study for the course, Advance
Operations Management under the supervision of Dr. Saba Firdousi. Prior to writing this case
study, she had not such knowledge of the poultry industry, their process and the challenges faced
by them. This provided her with the opportunity to conduct an in-depth analysis of a poultry
company and understand the prevailing conditions and provide them with any sound and applicable
recommendations to incorporate in their model.

166
 MOMINA ASAD
Lahore · 0334-9943160
momina.asad@hotmail.com · https://www.linkedin.com/in/momina-asad-87b0b016a/

Momina Asad is currently pursuing an MBA degree at Lahore School of Economics and has a
background in Marketing and Finance. Her current field of interest is Marketing and Operations.
She likes to keep herself busy by challenging herself to do more and try new things every day.

She is passionate about learning more about different businesses and how they operate.
Continuously reading articles online and having active conversations with her peers, Momina tried
to implement her knowledge to her MBA projects.

Momina wrote this case study along with her friend and class fellow, Hafsa Mujaddid for her final
project of Advance Operations Management under the supervision of Dr. Saba Firdousi. We chose
this industry, as it was something we both had no knowledge about and were eager to discover
what new information we can gather about it and help them in getting better by providing
recommendations.

167
Karim Industries: Inventory Management to Avoid the Short Supply of Medicinal
Requirements by Iqra Khalid and Hamza Iqbal

Karim Industries struggled to operate with proper inventory management techniques to ensure operational
efficiency. The company was facing huge losses due to delayed order booking by the order bookers. These
late purchase orders were, as a result, leading to high holding costs of the inventory. Furthermore, late
orders were being rejected by the hospitals, which resulted in not only a loss of profitable customers but
also huge financial losses. Workers were made to work overtime in order to meet the delays. The
managing director Hamid Bukhtiar discussed the ongoing problem with other members of his team for
possible solutions. While the current operations resulted in the factory’s profitability, finding solutions
to these problems was crucial to ensure operational excellence and future growth. The company had to
decide whether to change to just-in-time inventory or completely change its production structure.

Company Overview

Karim Industries was established in 1985 under the leadership of Mr. Haji Miraj Din. The company started
with a small manufacturing unit in Lahore with a small commercial business but later expanded its
operational capacity and registered with the Drug Regulation Authority of Pakistan (DRAP). Currently,
this surgical dressing manufacturer has one manufacturing unit of almost in the main industrial area of
Lahore. Furthermore, the company has 2 corporate offices in the city. Its founder Haji Miraj Din due to
his immense experience, has extensive knowledge regarding surgical equipment and other medical
equipment which led to the growth and success of the company. The current operations are being
monitored and controlled by his son.
Karim Industries has its manufacturing unit in Raiwand Lahore with almost 33075sft of existing factory
area. The company has also acquired 9200 sft of new land to meet the growing demand. Furthermore, it
is also planned to add a new floor in addition to the ground floor operational facility. (Exhibit 1)

Total Quality Management

Karim Industries ensures strict adherence to the DRAP policies to ensure high-quality management. The
quality control department maintains continuous testing of cotton products at various stages of the
production process. The layout of the facility is designed specifically for this purpose as well. The raw
material is initially taken to the De-dusting area where all the dust particles and impurities are removed.
Next, the raw material is moved in the quarantine department where quality inspection is done to accept
or reject the material for further processing. Rejected material is either returned to the De-dusting area or
back to the vendor. The released material is then moved towards the production line. Furthermore, all the
raw materials are sampled and tested at various stages of the production process in the in-house
laboratories. Once the production is complete, products may be stored for up to 14 days in the facility for
quality assurance before being delivered to the customers.
Karim Industries follows the principles of QAS- Quality, Accuracy, and Service. In addition to high-
quality standards, the employees are given special training to ensure smooth operations. Employees are
instructed to follow strict SOP’s including double masks and hair caps as well. The company director
Hamid Bakhtiar and the owners meet with the employees to ensure the mission and vision of the company
168
is being met. Any complaints and queries are also dealt with. Furthermore, the company ensures strict
adherence with the policies devised by the Drug regulation authority of Pakistan including the minimum
qualifications of its workers which may be BSC or MBA for an accounts manager and Pharm-D for
Pharma managers.
Quality Policy
• Manufacture of quality Pharmaceutical products
• Commit our best resources
• Seek customer satisfaction
• Ensure conformance with customer requirements
• Perform as a team
• Maintain continuous improvement system

Sales Channels

Karim industries has a total of 2 sales channels i.e. Hospitals and distributors. Currently, the company is
dealing with all the major government hospitals in Lahore including National Hospital, CIMS Hospital,
Mayo Hospital, and Lahore General Hospital. Furthermore, Karim Industries also selling its products to
various distributors which then deliver to different retailors in Pakistan. Urgent orders are usually received
from the local purchases or retailors who contact the distributors for urgent delivery. Although the
company has a continuous production system for the distributors, urgent orders are fairly easy to handle
due to the stored inventory in the warehouses. The company manages to keep a safety margin of 50 kg of
raw cotton for such situations.
The raw cotton itself is not absorbent in nature therefore, various chemicals like sulfuric acid is added
during the production process. The company thus relies on its in-house chemists to ensure high-quality
standards are being met along with low costs. Chemical Vendors include Bestway chemicals and Ali Baba
chemicals who have been working with them for more than 20 years.
The demand for surgical supplies varies in the market due to seasonal changes. As winter approaches
more people of older age require the Crepe bandages made in the factory to keep them warm. However,
the demand for the products falls in the northern areas of the country due to the closure of various
dispensaries mainly because of harsh weather conditions. Therefore, demand forecasting is done by the
Head office on the basis of the average outgoings for the past 6 months, 1 year, and 2 years to ensure
adequate inventory is stored in the warehouses. On average, Karim industries maintains a safety stock of
45 days with an estimated demand of 10,000 tons daily.
The Market sales for the company are done through various order bookers that are allotted separate
districts. They are the ones that generate the demand in the market for the products. This demand is then
reported to the purchasing department at the head office which is later transferred to the production
department.

169
Production Process

Karim Industries has a total of 15 cotton products that are used as medical supplies in all major medical
facilities in Pakistan. This results in a high variety of products with high production volume. The
production of such varieties is still cost-effective due to the fact that some products have a similar cotton
base but different active ingredients like chlorohexidine cotton pads for antiseptic cotton pads.
Pakistan is the fourth largest cotton producer in the world. The textile industry as a result is seen to be
growing in the past years. Huge textile industries like Sapphire industries and Saif industries, however,
import bulk orders of raw cotton. This cotton is then distributed to various factories in Pakistan for
refinement. Karim Industries purchases this raw material in bulk from such industries. While the factory
also produces various other surgical supplies, its main focus is on cotton related supplies including Crepe
Bandages, Gauze Swab, Cotton balls, Cotton wool and Cotton bandages.
The raw material stored in the warehouse is initially tested in the quarantine department before being
released for production. This raw form of cotton is then put through a variety of processes including;
(1) Washing (2) Drying (3) Fluffing (4) Flattening (5) Weighing (7) Compact Rolling & Wrapping
(8)Saw Cutting (9) Labelling &Packaging
Washing
The first step in the manufacturing process is opening the bales of cotton and washing them. The washing
of the bales is done in huge containers. On a daily basis, an average of half a ton of cotton is washed. The
entire washing process takes up to a total of 6 hours with 4 workers involved. The cotton is washed with
soda and shampoo to ensure all the impurities are removed. In addition, a brightening agent is also added
which gives it a bright white appearance.
Drying
The washed cotton is then taken out of the washing container with the help of a crane and moved toward
the drying floor. The drying is done in tall containers with sieves. The factory has a total of 2 such
containers that can dry an average of half ton of cotton as it comes out the washing machines. A total of
2 workers are responsible for this process. These workers are given a monthly salary of PKR 22,000.
Fluffing
The fluffing process of production involves the cotton moving through a machine called “Beam sketcher”
where the cotton is fluffed again to give it its soft and fluffy texture. The cotton at this stage is called
beams. This process includes only a single worker fot the input part of the machine and one at the output,
responsible for collecting the cotton and transporting the cotton toward the beam storage section. The
sketcher operates for 6 hours on a daily basis for fluffing the half-ton or 500 kg of cotton.
Flattening
The beams of cotton stored in the storage room in huge balls are then taken inside the main production
area where a huge machine called “Scrature” is operating on a continuous basis for the flattening of the
cotton beams in the form of sheets. One worker is responsible at this stage to put the beams in the machine
while the other ensures proper sheets are made out of it. These sheets are then towards another set of
machines for further rolling of the cotton. These sheet are then stored in the carded section in big piles.
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Weighing
On average, the cotton products produced in the factory has 4 different weights of SKU’s including 50
gm, 100 gm, 250 gm and 300 gm. The cotton sheets are weighed on the weighing machines by 2 workers.
The rolls of cotton are then moved to different sections as to separate each SKU being produced by the
factory. This will separate the small cotton balls from huge cotton bandages or ortho cot.
Compact rolling and Wrapping
The cotton machine is then taken towards the cotton rolling machine where the cotton sheet is spun along
with the packaged sheet to be wrapped around the roll. This machine is operated by 2 workers. One is
responsible for the rolling while the other takes out the rolls. A special pasting glue is also used here to
make sure the wrapper attaches to the cotton roll. It is important to mention that this the only machine in
the factory that is manually operated by one worker and therefore, takes the most time in the production
process. Each sheet is individually rolled in a compact form.
Saw cutting
The cotton rolls are then moved toward the saw-cutting area where the long rolls are cut into smaller
sections according to different SKUs. This requires a total of 2 workers who work to cut the rolls. The
cutter machine used in this process requires a change of its blades after 2-3 days to ensure smooth cutting
of the rolls is done. On average, 500 kg of rolls is made through this machine. The workers on this machine
are paid Rs200/ hr salary. Testing of these roll samples is also done to ensure total quality management
before passing them to the packaging area of the factory.
Labeling and Packaging
The labeling and packaging is done differently for every SKU. The process of label pasting requires 3
workers while packaging may be done by one worker. Every cotton SKU is labeled and put into plastic
packages before being shifted to the finished goods section where they are stored in huge bags. These
finished goods are then subjected to “In process quality check” (IPQC). Only after being cleared are the
products moved to various cartons. 3 workers are designated entirely for this process. The factory can
produce a daily of 500kg of such cartons. Each carton is sealed by the workers and stacked in the FG
Section where they are stored for a maximum of 14 days before being delivered to the customers. The
distributors and hospitals both have their own pick up services while the factory offers delivery for out
station customers only. Each delivery van has one driver and one loader of the company.

Case scenario

The factory, for the purpose of continuous production, has a specific stock of inventory in its warehouses
at all times to avoid any stock-outs. However, recently the company is facing delays in its operations.
Karim industries recently discovered that the original order given by the customers was being delivered
late to the production department of the company. This, as a result delayed the start of the actual
production process. The company had already forecasted the demand of its products and therefore, stored
the minimum demand of 45 days in its storage area but due to the increased waiting time for the order to

171
arrive, the company has to ensure the proper maintenance of the inventory in hand and therefore resulting
in higher holding costs.
Karim industries is known in the market for its high-quality products. Its quality check department ensures
at various stages of production, that the product is according to the policies and standards. However, since
the company is facing the issue of late orders, the quality check is being more and more difficult as orders
have to be rushed in the production system. The main issue for the company was the fact that they received
2 reminders from the customers for late orders and after the third warning the order was rejected and to
delivered back to the manufacturers. Since hospitals are mainly dealing with bulk orders, the rejection of
such large quantities is growing troublesome for the company. Furthermore, the workers who normally
worked 8 hours daily are made to work over-time due to meet the demand. The company is evident to
find a solution to the reduction in their lead time for customer satisfaction.
Although the company has an independent inventory model where the demand of one inventory was not
dependent on the other, it still faces issues in inventory handling. High levels of inventory not only results
in higher operating costs but also impacts the prices at which the products are being sold to the customers.
The pharmaceutical industry is a competitive industry in Pakistan and due to a large number of
competitors, the company is under a serious threat of losing profitable customers.
Karim industries is currently using the Production order quantity model for their inventory management
while dealing with the orders placed by their distributors on a continuous basis. The entire production
process involves the production and sale of the products simultaneously. The main objective for the
company is to reduce to the holding and the total cost of the production. The demand was at a majority of
times, known especially for the distributors. However, for the hospitals, this may vary. As a result, the
company starts production once the order is delivered to the production unit. Therefore, demand
forecasting is done for the inventory specifically for the hospitals.
Karim industries was facing high holding costs not only in the storage of raw materials but also in the
storage of finished goods. The 14-day period for storage is usually the maximum time the cartons were
put in the storage area. Furthermore, due to the fact that the distributors and hospitals are responsible for
their own pickups, any delays would put the factory at a loss. 10,000 cartons are stored in each warehouse.
Any additional storage is done in rented warehouses. Karim industries also identified a bottleneck in the
rolling and wrapping part of its production process due to the fact that it was manually operated. The
rolling and wrapping of the individual rolls took about 6 hours of a daily shift to produce only 2000 unit.
Therefore, the flattened sheets of cotton were placed in huge piles in the factory for days before they could
be rolled and wrapped after being weighed. This was also one of the issues that needed to be addressed in
order for the company to improve operational efficiency and reduce the lead time for their customers.
The company uses a periodic system of inventory checks to ensure proper amounts of inventory is being
stored in the warehouses. The inventory is usually stored in excess to meet any urgent demands by the
distributors. Furthermore, it uses the two-bin system where two separate areas of inventory storage are
done. Once the first bin is completely utilized, only then the second part is used. This results in the proper
calculation of the amount of inventory being used for different customers.

172
Reasoning and Implications

Storage of returned orders was an issue for Karim Industries as now they saw an increase in their holding
costs. Due to the continuous production of orders for the market and finished goods storage, Mr. Bukhtiar
needed to rent warehouses to store the excess inventory.
The reason behind the problems identification is rooted in the delay of orders as told by Mr. Bukhtiar.
The problems at hand are easily identifiable. Looking at the process flow we can easily identify the
bottleneck and the area where the process needs improvement. The delay in orders can affect not only the
profitability but also the overall perception of the company. The short supply has affected sales in a way
that the production costs and holding costs are a loss at the end of the order. Another reason to improve
efficiency is that some hospitals are changing their status to non-profit organizations. Due to this Karim
Industries cannot collect tax from them and have to pay for the complete tax amount. The increase in
wages due to overtime workers are also a major reason behind the problems. All of the problems that have
been identified are related to lead time reduction and better utilization of inventory. As inventory includes
the direct and indirect materials purchased which go into rejected orders, hence all the efforts should be
directed towards reducing the costs and better inventory management. It is evident that ordering process
needs to be streamlined so that the production can be scheduled on time to eliminate the problems of short
supply. Karim Industries does not have a proper ordering system. For the distribution market system, the
demand is forecasted and production is done accordingly. For the hospitals, production is done when a
pull is generated. There is not a proper channel comprised of order bookers and production scheduling.
This leads to poor inventory management and waste of resources. Furthermore, as there is only one person,
Mr. Naveed Ali, who handles all of the inventory management of Karim Industries. The inventory
management is comprised of active pharmaceutical ingredients (API), packaging materials, purchase
inventory, mechanical machinery and raw materials etc. Due to their differences in procurement, the
restocking can be a bottleneck as well which can not only conflict with the inventory management but can
add a stop to the production process as well.
In the future, if Karim Industries does not handle their inventory in an efficient manner, they can suffer
huge losses which can put them out of business. Growing competition can provide better alternatives and
due to the nature of the surgical industry being stringent about their regulations, accumulation of bad
image can be devastating for the company. In the midst of tax burdens and unexpected bans, Karim
Industries needs to have a sound operational plan in place which is based on sound inventory management
for better efficiency.

POQ Calculation

The inventory management model that would be most suitable by Karim industries is the Production order
quantity model which has the following two assumptions:
1. The units of cotton are being produced and sold simultaneously in the factory.
2. The inventory build-up of the raw material starts after the order is received by the production unit
in the factory.
3. The demand and the lead for the surgical dressings are known and constant.
173
The basic formula for calculating the Production order quantity for the company is:

2 DS
Q*p =
H 1 − (d p )

Where D is the demand of the products, d is the daily demand, S is the setup cost, H is the holding cost
and p is the daily production.
The setup costs for the daily production process involve the costs involved in the line clearance after each
batch order is completed. 2 workers are employed for this purpose with a salary of Rs. 200/hr. In addition,
the workers assigned the responsibility of cutting the rolls in the production process also work on an
hourly basis. The total set up cost is calculated to be Rs.2700.

Absorbent Cotton
Annual Demand (D) 4680000
Annual Production (P) 1872000
Set up cost 2700
Holding cost 6900
Daily demand (d) 15000
Daily production 6000

The annual holding costs that are calculated with relation to the order received are calculated to be
Rs.5900.

Holding Cost
Rent 3333
Salaries 2400
Electricity 167
Total Cost 5900

The above information was used for the calculation of the Production order quantity which came out to
be 2078 units of absorbent cotton.

Remedies

One remedy that Mr. Bukhtiar has implemented is to add an order booker for both the market and the
hospital orders. The order booker is responsible for going to hospitals and markets, taking the orders and
then giving the purchase order to the factory for the production directly. This has failed as the order booker
is only completing his daily benchmark of orders on phone and there is no middle place for the assortment
of orders. For example, an order from one hospital is started without taking into account the off-days and

174
the delays caused by the ongoing market orders. The order booker not working above his pay grade cannot
forecast and schedule orders in their respective dates so this created another issue.
Karim Industries has not looked at the short-staffed inventory management department as they currently
have their hands full with delayed orders and increasing costs. They are making ends meet by focusing
on production only.
Another issue is that due to a primitive process flow which is not flexible to accommodate two different
kinds of orders. Meaning that the idea proposed in the later half of the case needs the hospital orders to
be qualified as POQ orders. Similarly, the company has not focused on reducing their lead times which is
stressing their resources and costs.

Conclusion

Karim Industries needs process flow improvement for better efficiency. The information provided in the
case serves as a trigger for staggering performance. Karim Industries needs to implement a smart training
system along with financial system adjustments. The inventory management system needs to be fixed to
decrease waste and leakages. There needs to be an implementation of inventory management software
which periodically updates inventory precisely. There needs to be a team of 4-5 people hired solely for
inventory management as only Mr. Naveed Ali is not enough to manage the inventory of mechanical and
chemical materials simultaneously. A team working on separate domains of inventory such as API, Raw
material, Purchase inventory and mechanical inventory can have better lead times and better inventory
management. There would be a reduction in delays and inventory shortages.
Karim Industries needs to streamline its ordering system. A systemic ordering needs to be implemented
where the order bookers need to report all orders to a Purchase Order officer in the head office. The PO
officer will be responsible for managing orders, acting as the link between the purchaser and factory, and
managing lead times.
Karim Industries needs to implement a strict lead time reduction because this can not only improve their
inventory management which in turn offers better availability of medical supplies but it can also decrease
their holding costs.
Lastly, Karim Industries are following a non-functional forecasting and order quantity method which is
flawed because the orders of the hospital are variable. The cost of labor is also variable and should be
added in the setup cost. The demand forecasting is based solely on the conventional production-inventory
management system and there is overproduction due to a failure to account for varying quality costs at
various points in time, as well as the production run length. The current daily production is of 6000 units.
However, the ideal POQ calculated should be 2078 units.
The remedies stated above not only focus directly on inventory management but also focus on other
domains which influence the inventory management. A reduction in lead time is crucial for better
utilization for inventory which can in turn work towards the end goal of avoiding short supply of medicinal
requirements.

175
Appendix

Exhibit 1

176
 Returned to
Process flow Vendor

Quality
Raw Approval

Material De-dusting
Bale
Opening and
Moisturizing

6hrs/500kg

Beam Storage Cotton Fluffing Cotton Drying

3hrs/500kg 6 hrs/500kg

Weighing Rolling and

Flattening the
according to pack wrapping
beams
size
500kg/13hrs
9hrs/500kg

Labelling & Saw cutting

Shifted to FGS
Packaging according to
size

500kg/6hrs 500kg/6hrs

177
Miro board

178
 IQRA KHALID
0323-4235046
iqrakhaled@gmail.com · https://www.linkedin.com/in/iqra-khalid-lse/

Picture Here

Currently enrolled as an MBA student in the Lahore School of Economics, I am a self-motivated

individual who is continuously working on herself as a student to gain the skills and confidence
needed to tackle the corporate environment. I think of myself as a hardworking student who can
perform extremely well under stressful conditions. Team management and multi-tasking are some
of my strong suits. I am the kind of person who likes to interact with others as I feel every
interaction can be a great learning opportunity. In the past 4 years of my bachelor’s in LSE, I have
done several internships in companies like PEL and Sindh Bank ltd. since I like to keep myself
productive. I have also been actively participating in various extracurricular activities. Due to the
fact that I graduated with a degree in accounting and finance, I have a strong interest in various
financial management roles. However, I find supply chain management and operational
management intriguing as well. Furthermore, I have done certifications in Digital Marketing and
Graphic Designing as well. I become really passionate about anything I get into and try to do it to
the best of my abilities. I believe that every experience in life has taught me something new and I
look forward to exploring more in the future. I have a set of goals for my future and will continue
to work hard for them to turn into my reality.

179
HAMZA IQBAL
485-Sector A1 Township, Lahore. · 0335-1142552
hamzaiqbal3338@gmail.com · linkedin.com/in/hamza-iqbal-627114201

180
 ‘Vehement, Vivacious and Versatile.’
Mr. Hamza Iqbal was born on 20th October, 1998 in a small village of Mailsi, District Vehari. He
completed his early and high school education from Multan and Lahore respectively. He completed
his Bachelors with Double Majors in Accounting and Finance from Lahore School of Economics
in 2022. He is currently enrolled in Masters of Business Administration in Lahore School of
Economics. He has done a couple of internships at a corporate level the most recent one being a
sales and marketing internship at Pakistan State Oil. He actively participates in volunteer activities
and has been a keen representative for the Lahore School CSR society. Exhibiting his leadership
skills in his teenage years, he formed an NPO named (RABOL) on Facebook with his peers solely
for volunteer work. He is adept at public speaking and extempore presentations. He has been
acknowledged by his peers as a confident, ambitious and a skilled delegator. He has been former
council member in Lahore School Arts Society and Lahore School Photography Society. He is
skilled at writing business research reports and presenting them. He also has a Digital Marketing
Certification from Lahore School of Economics. When not working, He likes to travel, read
mythological genres and watch sitcoms.

Nova Pack: Inventory Management and Cash Flow Crisis by Farhan Ahmad,
Muhammad Haseeb and Muhammad Mubeen Nawaz
Problem at Hand
After the formation of Nova Pack Pvt. Ltd. in 2009. Muhammad Shahbaz, the CEO started his
business from 1 blow molding machine with a capacity of 10 ton per month. Initially buying raw
material from the importers in Karachi and Lahore. With the increase in demand, machinery was
added to the unit and the techniques to conduct business evolved over time and the company started
to import its own raw material by the year 2017. Capacity for operations is not a problem for the
company as they have ample land to expand their operations. But the company’s forecasting for
181
 demand remains a challenge till date. The number of competitors over the years have increased 20
folds with small scale competitors competing at lower operational costs. And adjustable quality
based on demand of the customer. The company is unaware of the total cost, holding cost and
setup cost. Forecasting and inventory storage is entirely based on historical data due to which
inventory of finished goods keeps on piling up, resulting in limiting the cash flow for further
growth as inventory occupies cash of 150 – 200 million. Using the historical data, Nova Pack starts
its production of plastic bags for each SKU and after building a certain level of inventory of
finished goods, which is always more than the predicted demand, the company builds up their
inventory and stops the production process and when the inventory reaches a certain level the
production starts again to fulfill their orders. Nova Pack’s production unit is unable to work at its
full capacity mainly because of its decrease in demand over the years. Now the company needs to
cater to its inventory of finished goods and utilize its resources in a better manner.

Company Overview
Nova Pack is a plastic sheet company providing different SKU’s to more than three hundred
companies across Pakistan. It started back in 2009 as manufacturer of plastic sheets used in
construction and development, with time they expanded their operations and started catering to
agriculture, foam and textile industry in 2017. The main focus of Nova Pack was to make the best
quality products for its customer at a lower price through economies of scale. As it is one of most
saturated markets in Pakistan, this USP (Unique Selling Point) allowed Nova Pack to have a
competitive advantage over a lot of plastic manufacturers. After COVID the demand of the
industry started fluctuating and Nova Pack hasn’t been able to recover their demand since.
The most selling products of Nova Pack include plastic packaging, plastic apron, garbage bags,
printed plastic packaging, LLE white sheet, Black merching sheet. The company is moving
towards digitalization in all the various company departments. They’ve made portals of all the
employees for the development of HR. Sales of every individual are on their portals and the order
cannot be generated without the HOS (Head of Sales) confirming the order. They’re planning to
use Oracle for their inventory management and SCM, to increase the operations efficiency and
effectiveness.

Industry Overview
The plastic industry is the provider of raw material and packing to various industries thus
contributed to 15% of the GDP. Imports of Polyethylene and polypropylene are mainly from Saudi
Arabia, UAE, China and Oman. Plastic polymers’ import date back to the early 1970’s, with some
hand molding machines operating in Lahore. In 1980’s Pakistan Plastics Manufacturers machinery
for the molding machine started in 1980’s with the first Polymer industry processing unit
established in 1982 in Lasbella, Karachi. In 1988, Plastics Technology Center (PTC) was formed
by the Federal Chemicals & Ceramics Corporation Limited (FCCCL).1 The processing ofPET
bottle manufacturing became popular in 1993 and the number of plastic processors increasedto
6000 companies across Pakistan. Membership for PPMA reached a higher number of 700
companies. In 1999, Engro Asashi Chemical was established with foreign investment of US$80
Million to set up a plant of 100,000 tons PVC on Port Qasim. In 2003, Polypropylene import
increased up to 68% in one year alone. Due to government implications companies started setting
182
 up recyclers at their own factories to reduce cost and help the environment in the long run. In 2008,
government reduced the income tax from 4.5% to 1.75% on the plastic sector and reduced
commercial imports duty from 6% to 4.5%. Plastic industry employees more than 2.5 million
workers with a total domestic investment of more than Rs.500 million (See Exhibit 1). Pakistan
annual demand of plastic products is 36,651 metric tons, the value for which is Rs.2.38 billion as
the use of plastic products has increased over the years.2 Total plastic processing units in Pakistan
is approximately 11000 with various small, medium and large sized units.

Nova Pack Portfolio

During the visit, Manager mentioned about the portfolio of Nova Pack and the umbrella of SKUs
under each category. The production line comprises of 7 types of Plastic goods that were further
categorized according to the length and gauge of the plastic roll. Nova Pack has total of 21 SKUs
stated in table 1 below:

Table A: SKU Portfolio of Nova Pack

Plastic Family Size

Plastic Sheet for packaging 12 inch
Plastic Sheet for packaging 24 inch
Plastic Sheet for packaging 36 inch
Plastic Apron 24 inch
Garbage Bags 24 inch
Garbage Bags 36 inch
LLE white sheet 12 inch
LLE white sheet 24 inch
LLE white sheet 36 inch
Printed Plastic Packaging 12 inch
Printed Plastic Packaging 24 inch
Printed Plastic Packaging 36 inch
Black Merching Sheet 24 inch

1
Source: Punjab Board of Investment & Trade (PBIT)

2
Source: pt Profit

183
Production Process
Before the production starts, it is necessary to make the raw material, plastic granule in this case,
available in the storage of the production house. Plastic Granule has different types that Nova Pack
uses in its production, types are listed below:
• Sabic 118
• Borough
• Tasni
• AramCo
Raw material is entirely imported as there is no production of plastic granule in Pakistan. Nova
Pack has its own Import fleet for granule and prefers to do so in order to achieve their strategic
goal of being cost effective and competitive in the market. It has a lead time of 45 days when the
import is done by the company itself. Whereas, Nova does have the option to buy the raw material
from a local importer. In this case, the lead time is of 1-2 days. So there is a tradeoff between price
and lead time in these options. Once the Raw material is procured, it is inspected and weighed, and
transferred to the store. Master batch is also needed as the raw material which is procured fromLocal
vendors in Lahore.
The production is based on the concept of Job Order System. Once company receives the order, it
is fulfilled from the finished goods inventory stored, and if, the supply is low then the production
starts for the remaining delivery. Different types of plastic granule is procured from the storage
according to the production demand and mixed according to the pre-defined recipe of the SKU in
demand. Nova Pack has 3 mixing machines for this purpose which takes about 30 minutes to
prepare the granule for 200 Kg batch. Once the recipe is ready, molds according to the product
requirement are adjusted to the blowing machine. If the production requires a different mold to be
installed, it takes around 2 hours to turn off the machine and heaters, let the installed mold cool
down and, then 3 workers change the mold and the production resumes.
Once, mold is fitted, the mix is transferred to the blowing machine where mixed recipe of granules
are added to the vessel and further blown to make the final product. This is the final step, after
that, the final product comes out of the machinery. Moreover, final product is further modified and
shaped through manual labor. The sheets are rolled on a cubic cardboard and weighed. Workers
weighing the rolls ensure that each SKU are of 22 Kg. Once the product is packed, it is transferred
to the storage and is stored there until the company receives an order for it.
When the company receives an order, the finished goods inventory is transferred from store
according to need, loaded into trailer and Net weight of the trailer is noted before dispatch of the
batch. Workers involved in the production process are on daily wages instead of being employed
on fixed salaries.

184
Cost Calculation
In order to calculate the POQ for Nova Pack, costs were identified after analyzing the production
and inventory management of the company.
Holding Cost
3 SKU’s were selected for the per unit holding cost occurring at Nova Pack. The SKU’s include:
• 60 inch Plastic Sheet (4 Gauge)
• 60 inch Plastic Sheet (6 Gauge)
• 60 inch Plastic Sheet (8 Gauge)
In order to calculate the Holding cost variables were identified. Firstly average finished goods
stored in the inventory of the company were converted it in kilograms from metric tons, as SKU’s
that are being measured in kilograms. Further the kilograms were converted into number of SKU’s
to identify the holding cost per unit. Knowing the width and length covered by a SKU, the square
feet area per unit were calculated. Then cost was identified for keeping the average inventory by
knowing the per Marla rate (rent) on Sheikhupura road. (Holding Cost per unit is given in the table
below).
Table B (Holding Cost of each SKU)
SKU’s 60 inch (4 Gauge) 60 inch (6 Gauge) 60 inch (8 Gauge)

Holding Cost Per Month 37.65 37.65 37.65

(h)
Holding Cost per year 451.8 451.8 451.8
(H)

(Calculations are given in Exhibit 3)

Setup Cost
In order to calculate setup cost variable factors incurring the costs during the machinery setup
required before the production of a SKU batch (As explained in the production process). They are
using the same type of machines and processes for production, so the setup cost comes out to the
same for each SKU.
For calculation the only variable factor involves the labor working on daily wages. Three workers
are required per machine to change the molds of the machine necessary to start the production of
a different SKU (The mold is changed when the color or size of the SKU is changed).
Table C (Setup Cost for each SKU)

SKU’s 60 inch (4 Gauge) 60 inch (6 Gauge) 60 inch (8 Gauge)

Per Hour Wage 250 250 250
Setup Cost (2 hrs.) 500 500 500

(Calculations are given in Exhibit 4)

185
Inventory Management
Now, in order to make sure Nova Pack produces according to the forecasted demand, suggestion
is to use Production Order Quantity Model. It has to be made sure, before making a suggestion,
that the Production process fulfills the basic assumptions of using Production Order Quantity
Model. Which is stated below:
1. Used when inventory builds up over a period of time after an order is placed.
2. Used when units are produced and sold simultaneously.
3. Demand and lead time are known but not constant.
The formula for calculating POQ is as follow:

Q* 2DS
p

Where:
D= Annual demand
S= Setup cost
H= Holding cost
d= Daily demand
p= Production per day
The annual demand for Nova Pack is 1049 rolls per SKU, and the assumption is the company has
same annual demand for all three SKUs in question. Setup cost, as mentioned in the Cost
Calculation heading, comes out to be Rs 500. Whereas, annual holding costs comes out to be
Rs.451.8 that is derived after taking market data into consideration.
Daily demand comes out to be 87 rolls per SKU. This was calculated by dividing monthly demand
divided by 26 where Sundays are considered to be a Holiday. For calculation of daily production
rate p, same procedure is used. It comes out to be 122 rolls per SKU.
After calculations, using the above stated data, Production Order Quantity comes out to be 90 rolls/
day for each SKU.
Table D (Projected POQ)

SKU’s 4 Gauge (60 inch) 6 Gauge (60 inch) 8 Gauge (60 inch)
Daily Demand Rate 87 87 87
(d)(rolls)
Daily Production Rate
(p)(rolls) 122 122 122
Annual Demand(rolls) 1049 1049 1049
POQ (rolls) 90 90 90

186
Implementation
As mentioned in the problem at hand, Nova Pack has no forecasting system and relies on historical
data for their production. Moreover, Nova pack has its production rate of 3172 rolls per month, or
122 rolls per day. Whereas, the average demand Nova Pack receives is 2262 rolls per month or 87
rolls per day. The company keeps on producing at its full capacity and inventory piles up,
afterwards the machines are shut down. This results in cash being stuck for holding the inventory.
Company should produce at the optimal quantity calculated in POQ section. Instead of producing
at its maximum capacity and beforehand, company should start producing when the order is
received as they are following Job Order System. As the company has excess capacity of producing
23 tons per day so being out of stock wouldn’t be a problem to deal with. Moreover, instead of
producing at full capacity from start, company should produce at the POQ rate calculated. Which
comes out to be 90 rolls per day or 2340 per month. As the demand is 87 per day, this production
rate will ensure that there are no stock outs or excess cash stuck in the inventory stored. This
procedure would clear the cash from inventory and would result in funds available for Marketing
and Branding of the company in order to increase the demand for it.

Recommendation

• The ban on use of plastic bags in Pakistan by Pakistan Environmental Protection Agency on 22nd
July, 2019 has caused major disruptions in the plastic industry of Pakistan.
• The company needs to diversify its portfolio into other sectors apart from the plastic processing.
This issue might have a major impact on their company as well in the near future.
• The use of biodegradable chemicals should be added to the production process in order to provide
a sustainable environmental implication.
• Nova pack should gain the IOS certification 14001 which protects the environment as well as the
IOS 9000 which helps in the better quality management for the company.

187
 Exhibits

Exhibit 1 (Plastic Industry Overview)

Exhibit 2 (Production Process)

\Carry Raw
Mixing of Adding raw
Material to raw material to (120 mins)
Prod. Area material vessel

Installing mould
(45 days) (30 mins) (10 mins)

Sheet
Storage Weight Cutting
rolling

(1 min) (10 secs) (10 mins)

188
Exhibit 3 (Holding Cost Calculation)

SKU 4 Gauge (60 inch) 6 Gauge (60 inch) 8 Gauge (60 inch)
Average Finished Goods
(Metric Tons) 20 20 20
Average Finished Goods (Kgs) 20000 20000 20000
Production per Month (No. of
rolls) 909.09 909.09 909.09
Length in ft. 4545.45 4545.45 4545.45
Area sq. ft. 7454.55 7454.55 7454.55
Area sq. ft. (after stacking) 1490.91 1490.91 1490.91
Marla area per SKU (after
stacking) 5.48 5.48 5.48
Area (in Kanal) 0.27 0.27 0.27
Per Kanal Rent in Sheikupura 125000.00 125000.00 125000.00
Per Kanal Rent Cost 34226.52 34226.52 34226.52
Holding Cost per month (Rolls)
(h) 37.65 37.65 37.65

189
Exhibit 4 (Setup Cost Calculations)

Variable labor cost per month 4 Gauge (60 inch) 6Gauge(60 inch) 8 Gauge (60 inch)
Per day wage 1000 1000 1000
No. workers 3 3 3
Total wage 3000 3000 3000
No. of hours 12 12 12
Per hours wage 250 250 250
Setup cost (2 hours) 500 500 500

190
References

Khan, S. (n.d.). (Publication). Plastic Industry of Pakistan: Prospects and Challenges amid
Coronavirus Crisis (2nd Ed.).

Bunerii, A. (2021, September 6). Plastic use skyrockets as imports surge to over 36mt.
ptProfit. Retrieved November 22, 2022, from
https://profit.pakistantoday.com.pk/2021/09/06/plastic- use-skyrockets-as-imports-
surge-to-over-36mt/

6 kanal commercial ware house for rent in Lahore sheikhupura road. Buy Sell Rent
Homes &Properties In Pakistan - AARZ.PK. (n.d.). Retrieved November 28, 2022,
from https://www.aarz.pk/rental-property/6-kanal-commercial-ware-house-for-rent-
in- sheikhupura-road-lahore-for-rs-500-lac-164110
 2

MUHAMMAD HASEEB
03214691817
Haseebsattar.6@hotmail.com · LinkedIn: https://www.linkedin.com/in/muhammad-haseeb-
49979616a/

I completed my Matriculation back in 2016 with 97%. Then I got enrolled at Forman Christian
College and completed my Fsc Pre-engineering with 87%. I joined Lahore School of Economics
in 2018 and graduated in BBA (Double majors- Marketing and Finance) with a GPA of 3.7.
Currently I am enrolled at Lahore School of Economics’s MBA program batch of 2022-2023. I
have completed three internships during my BBA. The first one was in Guard Rice in 2019. I was
working as a marketing and sales intern. Then I joined United Engineers and Contractors as a
business development intern in 2020. My latest experience is in the POL sector. I worked at Servo
Motor Oil as a marketing and sales intern which is situated in Multan. I have always been a merit
scholarship holder throughout my educational career. My interests include following activities at
Pakistan stock exchange. I am familiar with SAP business one software and adept at using
Microsoft office.

2
 3

FARHAN AHMAD
0323-4707562
Farhan.ahmad7562@gmail.com · https://www.linkedin.com/in/farhan-ahmad4

This is Farhan Ahmad, currently enrolled in MBA 2023 – Lahore School of Economics. I
completed my bachelor’s with majors in Finance and Marketing from Lahore School of
Economics in Year 2022 with CGPA of 3.71. I completed my FSC from Forman Christian
College in Year 2018. I have worked with different multi-retail stores based in the UK.

I have worked as Procurement Officer on contract for WIGI Store LTD. My Job description
was to develop Business Relations with Brands to get contracts for resale of their portfolio
at retail store of WIGI Store LTD. Moreover, purchasing and monitoring the of shipments
was one of the important highlight of my JD. Other than that, I have also worked for APICE
Trade LTD as a Customer Service Manager on contractual bases. My job highlights were
to assist customers of APICE Store with the difficulties in the shipments. I also looked over
to the complaint department of shipments and assistance required for refund and exchange
disputes.

I am familiar with Microsoft Office, Digital Marketing and decision making based on digital
marketing campaign results.

3
 4

MUHAMMAD MUBEEN NAWAZ

0323-4211017
mubeennawaz2000@gmail.com

Currently I am enrolled at Lahore School of Economics’s MBA program batch of 2022-2023.

I completed my Matriculation back in 2016 with 87%. Then I got enrolled at Forman Christian
College and completed my Fsc Pre-engineering with 72%. I joined Lahore School of Economics
in 2018 and graduated in BBA (Double majors- Marketing and Finance) with a GPA of 3.38.
I started a business with my brother back in 2017 named Home Furnishers and we’re still running
the business. I’ve done two internships first at Five Star Foam in 2020 and second at Umar Afzal
Motors in 2021.
My extracurricular interests includes sports mainly cricket and strength training, other than that
I’m leading the Lahore School Music Society for two years, and managed a lot of events on the
behalf of my institute.

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SW Enterprises: Plastic World Turning Green by Aaima Sadaqat Rana and

Mahrukh Zaka
Introduction

Salman Waheed enterprises, commonly known as SW Enterprises, is a plastic

manufacturing factory located in Kotlakpat, Lahore. Sourcing raw polymers from the Middle East,
this company had been running successfully since 2002. Started by Salman Javed, a Chartered
Accountant by profession, SW Enterprise was only an effort to generate some income for his
household. Soon enough this flourished into one of the most competitive Plastic Straws and Plastic
Sheets producers in the region. The firm dealt with major MNCs such as Mcdonalds, Coca-Cola
Company, Pepsi, KFC, Maza juices, and a lot of the local firms as well.
While business was going on and revenue was coming in, a lot of operations on-site and
off-site were facing troubles. The economic condition of the world coupled with operational
inefficiency led to an array of complications that resulted in the major major operational problem:
Inventory Pile-Up.
Javed was now at a cross-road, will he be able to fix all the issues and re-align the legacy
of his own business in time or will he wait for economic conditions to smooth over and hope the
business will settle back into place itself?vg

Background of the Company

Prior to setting up their own production unit, Javed Iqbal had a small setup in the Shah
Alam market. Here he sourced various plastic materials such as straws, plastic bags, and sheets
from friends/relatives who owned a manufacturing unit. He then sold these products in the
wholesale market acting as a distribution center. Although business was good as long as it was
working, there were constant problems with supply. Since the entire business relied on sourced
finished products from limited manufacturers, the stability of supply was extremely uncertain and
not feasible in the long term. Eventually, due to trouble with the manufacturer's supply was
completely cut off leading Iqbal to abandon his setup at Shah Alam Market.
With no source of income at home, Salman Javed, son of Javed Iqbal, took up the role of
caretaker. He researched the industry and with the help of expertise from relatives who were
already in the business, he decided to set up their own manufacturing unit at Kotlakpat called ‘SW
Enterprises’. The unit initially only produced plastic straws. Working with only small, local firms
at the beginning, the firm grew its business up to multinationals like Pepsi, KFC, Mcdonalds, etc.
The success of SWE in such a short time led to expansion into another area of plastic

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manufacturing called plastic sheets. These plastic sheets would be used as a lining inside of sacks,
covering up packaging, etc.
The goal of Javed’s firm is simple. As described by Javed himself,

“We aim to provide superior drinking straws that increase the value of any package it is added
to. Because of that we ensure that we design, manufacture, and trade our own drinking straws
which are offered to our customers in a variety of lengths and diameters. All these factors depend
on the viscosity of the product, its form, and the size of the container for which it is needed. To do
this we ensure the best grade of polymers, which at times has caused a lot of problems for us as
well. But at the end of the day, that led to our current position in the market, which is honestly not
easy to beat.”

The firm is now successfully operating with two manufacturing units, both separate for
straws and sheets, in the vicinity of Kotlakpat. The business has been going on since 2002 and
continues to evolve and adapt to the changing trends of the market. Plans for a new office setup
are currently under process.

Plastic Industry of Pakistan

Plastic industry in Pakistan is highly dependent on raw materials that is in the form of
granules that have to be imported from oil-rich countries mainly Saudia Arabia and UAE. These
granules are then molded into different forms for example plastic straws. Local manufacturers in
Pakistan also depend on used plastic for the production of their products. These manufacturers are
using it in the recycled form, violating government laws regarding these processes.
In Pakistan, plastic items can be found in every sector including stationary, restaurants and
the fast-food industry, accessories, appliances, etc. Sometimes these are made up of all plastic and
sometimes a component of plastic is being used in the production. The major challenge faced by
companies dealing with this is the disposal of plastic products. All of them are majorly made up
of non-biodegradable materials which usually take hundreds of years to decompose causing major
environmental issues.
The manager of environmental Assessment at WWF, Nazifa Butt believes that there is a
lack of awareness on the safe usage of plastics among the masses which is the major cause of the
aggravation of the environmental problems. According to the standards, the type of plastics used
must be mentioned on the products and the guidance regarding the disposal should also be
mentioned. Local Producing companies are not following these guidelines and kept on producing
plastic products causing serious environmental problems.
In 2009, Ban was imposed on the production of plastics bag and straws but
companies kept on violating government laws as about 160,000 people were directly and 600,000
indirectly dependent on the plastic industry of Pakistan.

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In 2021, Nestle Pakistan became the first food and beverage company in Pakistan to add
paper straws to their ready-to-drink range giving major competition to the producer of Plastic
Straws.

Setup and Processes

The two manufacturing units are located in Kotlakpat, Lahore. The straws setup which was
the first to come to life is on the main road along a water canal whereas the unit for plastic sheets
is inside a small street, in a house-like space.
The process for both products is roughly the same. It begins with small granules called
linear low-density polyethylene (LLDPE) and polypropylene (PP), which are sourced from
petroleum-rich countries such as the UAE and Kuwait. These small, circular polymers are stored
in a storage room in the same facility in an ambient area in big sacks of 25kg and 50kg. During
the conversion process, these sacks are loaded onto a cart and then wheeled into the manufacturing
area. The granules are then unpacked by one worker from the sacks and poured into an Extruder
Machine (Exhibit 4) so the granules are properly crushed. From here on they move through a metal
tube where they are melted and carried through pipes. The extruding machines are available in two
sizes, 20 kg, and 50 kg. Herein, a certain kind of polymer is also mixed into the extruder which
allows the products to become biodegradable which is a requirement of most MNCs. Cool air is
then blown into the melted polymers which results in the liquid molded into the desired shape.
For plastic sheets, they are loaded onto a large rolling pin where it is rolled into barrels
(Exhibit 6) of a certain weight. These barrels are then loaded into a machine where they are
unrolled, sized, and cut. These plastic sheets are known as “liners” and are used as either a lining
in sacks or covering up packaged items such as boxes, bottles, cans, etc.
For straws, the mixture from the extruding machine is heated and transformed into a pipe-
like form by the same method of blowing cool air through it. This pipe-like form then enters
another lengthy watery course path to cool it down and is then transformed into the shape of a
straw while also having its width altered according to the requirements of the clients. These
requirements may include specifications about the length, diameter, thickness or shape of the
straw. After leaving this watery course the straws are then immediately cut according to the
required length. The cut straws are then passed through a Carrogation machine that adds wrinkles
to the straws according to the want of the clients. These molded straws are finally lined onto a belt
along which it is packaged into plastic sheets forming a consecutive belt of multiple straws
packaged together (Exhibit 7). These are then packed into big cardboard boxes and they are ready
to go.

Supplier Assessment

There were a lot of concerns regarding the exchange rate and taxes while procuring the raw
material so selecting a supplier from the country offering lower exchange rates and duties is the
main aim of the management at SW Enterprises. Moreover, pricing terms are also one of the crucial

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factors for the company. They prefer and choose suppliers with negotiable pricing terms and
conditions. Salman Javed, the CEO of SW Enterprises mentioned that replenishment lead time is
the most important factor, as their clients include KFC and McDonald’s so delivering according
to the standards and time is critical. The supplier with minimum replenishment is being selected
for proceeding further.
As the demand for the product is not constant and the company is involved in continuous
production so supplier flexibility in terms of providing raw materials according to the demand.
Moreover, the quality of the supply is of great concern for the company as maintaining product
quality and continuously improving it is their main goal. They are importing raw materials just
because they want to provide the best quality products to their clients. SW Enterprises selects
suppliers providing them with Grade A granules as this is a factor that affects the quality and life
of the end product.

Problems
Economic problems

Post-Covid and the current political situation have led to the economy of Pakistan
underperforming due to higher prices. An additional ban on imports meant a new range of
problems for the SWE as their primary raw product, polymers, were entirely sourced from the
Middle East.
The US dollar reached Rs. 200 on May 18, 2022. The economic and political conditions
both had been staggering. IMF was not on the side of Pakistan. While things are looking hopeful
in terms of the dollar fluctuations, it is a constant uncertainty so far. In addition, a ban on imports
has led to delays in supply as well as increased costs of raw materials and shipping. Any additional
machinery required, which has to be imported also costs a fortune.
The cost of labor has, in the past few days increased as the government of Pakistan raised
the minimum wage of labor workers to Rs. 25, 000. This is expected to increase even further.
This coupled with the ongoing energy crisis, will make way for increased load shedding as
well. All in all, the economic downturn in the entire country is affecting the industry and no
prediction can be made about stability as of yet.

Transport

The price of petroleum has sky-rocketed since the past few months, increasing the cost of
transportation drastically. This can be owed to multiple factors ranging from the ongoing Russian-
Ukrainian war to the depreciation of the Pakistani Rupee against the Dollar. Since a major chunk
of SWE operations consists of transportation, the impact these price hikes have had are not
negligible.
The result is increased cost of raw materials as they need to be imported from the Middle
East. Once at the port, the process is delayed further as the traditional route is not used. This causes
the price of polymers, which are the main raw material used to increase drastically. Added to this

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is the cost of, delayed order fulfillment and delivery to the customer, which in itself only adds to
the cost, making the entire process tedious and extremely over-priced, while still not ensuring
certainty.

Grading Issue
Polymers’ distinctive and desirable features are a result of both the processing used
to create the product and the molecular makeup of their chemical chains. Composition which
includes the molecular make-up, branching, and cross-linking, in addition to the processing, which
consists of the flow and orientation of the product, are both crucial to the qualities of the finished
product.
About 90% of thermoplastic products usually use the following 4 polymers called,
polypropylene, polystyrene, polyvinyl chloride, and polytetrafluoroethylene or Teflon. Out of
these the one used at SWE is polypropylene and LLDPE. These materials have higher heat
resistance. Their interface is essential to ensure that they enable the performance that is required
of them. The right grade of the product also affects the useful lifetime of the straws and sheets.
Understanding their design and crucialty will only lead to a competitive edge for the manufacturer,
which is exactly what Salman Javed did.
Since the product is sourced from abroad, sometimes there are grading issues that the
company faces. As briefed above, these cannot be ignored and such orders need to be either
replaced, delaying order fulfillment or wasted, increasing the cost of sourcing.

Current Situation

Because of the facility's location in a less developed part of Kotlakhpat, there are frequent
disruptions in the supply chain that directly affect the company's operations. The demand for the
goods is primarily high from April to September each year. As the demand for juices and
carbonated beverages rises as summer approaches, the need for straws also increases. SW
Enterprises produce throughout the year, but as the demand for the product varies greatly
seasonally, it leads to enormous inventory buildup during the off-season. There are instances where
output must grow over the season despite delays caused by mechanical problems, labor problems,
electricity problems, etc to ensure profitable financial results.
In addition to that, due to the economic problems discussed, there are constant
uncertainties in the supply of raw materials as well. Raw material orders placed now often face
delays or at times there might be grading issues due to which sometimes, bulk ordering is done.
This may be done to avoid the issues and sometimes to avail discounts to lower the high sourcing
costs. While this practice saves time and can result in timely order fulfillment to customers, it has
often resulted in inventory pile-up as well. A lot of space is taken up by sacksful of these polymers
increasing inventory costs. These inventory costs include physical space, electricity, risk of
expiry/damage, and becoming obsolete.
The company has significant difficulties as a result of the excess off-season inventory,
including greater handling expenses and cash shortages. Since 2002, the company has been using
the fundamental EOQ model to meet consumer requests and avoid stockouts, but in many

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situations, this hasn't been successful due to a lack of labor and mechanical issues during the
seasons when demand is at its highest. Hence, it failed to strike a balance between inventory
investment and customer service resulting in displeased customers.
One of the biggest challenges faced by the company is producing according to the
requirements of their clients. For example, KFC might need straws with 8.5” long and .24” wide
dimensions and Maza Juice with 7.5” long and .21” wide dimensions. The company now is
regularly producing 1, 000, 000 straws according to the dimensions of the client KFC without even
forecasting demand. Now what happens is that there is a chance that KFC only demands 90, 000
straws, and the rest of the 10, 000 straws are piled up in the inventory causing high inventory
handling costs for the company until they receive another order from the client.
Moreover, the company doesn’t believe in the calculation of the reorder point before they
order their raw materials. They mostly order based on their own assumptions without any
forecasting and predictions which is also causing the inventory of raw materials to pile up higher
than needed.
SW Enterprises' major goal was to maintain product quality with the minimum raw
materials and finished goods inventory pile-up. For maintaining product quality, they have to
procure the raw material from oil-rich countries. As the raw material is imported there are certain
exchange rates and duties on it. To tackle that and to avoid stock-outs in case of supply chain
disruptions they procure raw materials in access without forecasting. To avoid stockout they
incorporate the strategy of procuring in excess but this all leads to the excess inventory of raw
materials and cash shortages.
SWE is not only pilling up the granules but also the other raw materials used in converting
the granules to straws and then packing them further. The other raw materials include cardboard
and wrapping paper for the straws.
The requirements for maintaining the quality of the products are described in Exhibit 12.

Calculating EOQ

Set-up Cost
The set-up cost of the company includes several important components. The first cost is
the cost of placing an order for the raw materials used in the production. The set-up of the extruder
takes 60 minutes before it starts working. As the production takes place for 24 hours so the unit
production lost during this 1 hour is also considered a set-up cost. Next the process of producing
a single straw which usually takes 10 Minutes. The cleaning of transfer pipes which usually are
filled with water requires 30 minutes. Also, as the straws of different sizes are being produced, so
the adjustments of the blades require 5 minutes too. All of these are included in the set-up cost of
the company.

Unit Cost
SW enterprises usually use product cost and price data to determine the cost per piece of
the straw. The cost of each piece is calculated on the based of full unit cost which includes all the
direct and indirect expenses involved in producing, selling, and delivering the items. The costs are

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the electricity cost, labor cost, rent of the facility, transportation cost, office expenses, and raw
material cost at the time of production.

Carrying Cost Percentage

The carrying cost usually in the case of SW enterprises is 25%. The carrying cost depends
on the investments in the inventory. If a huge investment is there in the inventory, then the carrying
cost will be high. The carrying cost basically includes the storage cost and the discarding of the
granules not up to the quality standards.

Future Challenges

Although the company adheres to the core EOQ model, there are times when there is a
great deal of fluctuation in demand for the items. In addition, supply chain interruptions can lead
to stockouts and delayed fulfillment of client orders. The company's most feasible option is to
adhere to the "Just in time" principle, where products are produced in response to customer
demand. Because the company will know in advance what the demand will be, they will be better
able to use their resources and avoid supply chain disruptions. After that, the inventory will only
be added when a client of SW Enterprises places an order.

Labour
SW enterprises have serious staffing issues that need attention and have to be addressed to
improve the overall quality and timely delivery of the products. As there are no legal agreements
of employment, labor switched towards other companies when paid low. Sometimes, when the
demand for the products and availability of the labor required for producing the product is low.
Hiring new laborers at the last moment and producing the products according to the criteria already
set is a big challenge in itself.

Product Quality
SW enterprises received backlash from its big clients some years ago because of the quality
of the products. For clients like McDonald's and KFC quality of their products, even the raw
materials is very important. In covid times when there was a ban on imports, the company faced
challenges of acquiring the imported granules from the respective countries that were the major
raw material for producing high-quality straws. Disruptions in the supply chain can have a serious
impact on the availability of the imported granules causing major quality management issues and
displeased clients.

Environmental Concerns
The world is increasingly becoming more environmentally conscious. That with the impact
of climate change which is worsening with time is forcing firms and customers to demand more

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green products that are good for the environment. These products come from natural, organic
products and are readily biodegradable, having little to no impact on the planet and its living
beings. Examples of such products in this industry are wooden or paper straws. These concerns
and such a way of consumption can possibly lead to the future decline of the plastic industry.
However, one factor that brings hope is that Pakistan is a developing country that cannot
afford to get rid of affordable alternatives such as plastic bags, and straws for more environment-
friendly options. While this will ensure a steady customer base for the next few years, the moral
and environmental impact of it is unknown.

Pakistan Environmental Protection Agency Ban

In line with the environmental concerns the Pakistan Environmental Protection Agency
(PEPA), which is responsible for setting rules and regulations to conserve the environment,
introduced a law in 2019. Under this new law, the manufacturing, import, sale, purchase and usage
of polythene bags was banned in the Islamabad capital Territory. Only manufacturers and
importers authorised by PAK-Epa could deal in the trade of these products. Non compliance
resulted in heavy fines. This soon spread throughout the country where now using a plastic bag in
not preferred by the masses and shop owners as well.
Although they are still in use and not completely eliminated, policies like this pose a serious
threat to the plastic manufacturing industry itself. International companies, who are clients of SW
Enterprises, are alsogradually adopting an environmentaally protective attitude under which the
first product that is eliminated is plastic. This could result in the eventual shutdown of the industry
in the near future.

Way Forward

SW Enterprises' main focus needs to be on the continuous improvement of the products.

As quality issues have been a major cause of backlash from its clients the foremost priority should
be grading and ensuring quality grade polymers. The company is involved in continuous
production of the straws despite the seasonal demand due to which it is facing major inventory
handling costs. To tackle this issue the company should revert its focus from continuous production
to a more feasible possibility of producing according to the demand of the product from the clients.
This will be helpful in significantly decreasing inventory pile-ups and will reduce the occurrences
of cash shortages.
The inventory model identified by the company considers static and not dynamic
conditions. The company now is focusing on the basic EOQ model, which is not even fulfilling
the assumptions of the fundamental EOQ model. Although the demand is not constant the company
is considering it to be constant. Additionally, the company is adding fixed costs in their
calculations as well whereas that should not be the case in the EOQ model. Moreover, according
to the model followed by the company quantity discounts are not possible but the company is
offering quantity discounts to its clients if they exceed a certain order quantity.

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Calculation of the reorder point will be beneficial for the company. This will helps the SW
Enterprises in decreasing their lead time. The reorder point will let the company know when to
order the raw materials and will alert them when the raw materials they already have are limited
to the production of certain pieces. The Reorder point has been calculated for the reference of the
company (Exhibit 10).
The company should focus on the Production Order Quantity model (Exhibit 9), where the
inventory will only be piled-up in the case when the order is being placed by the clients. The
inventory will be piled up and sold simultaneously. This will help the company in reducing the
inventory pile-up as they will only be producing according to the demand of the clients. The
concept of “Just In time” should be incorporated in which each process produces only what is
needed by the next process in a continuous flow.
An additional benefit to this will be an investment in software that automates the process
of reordering. This will ensure automatic ordering at the right time.
ABC Analysis can be used by the company to effectively manage the raw materials
inventory. This method of analysis basically divided the inventory into classes according to the
dollar value and this in turn helps in decreasing the inventory pile-ups. For example, if the total
inventory price is 10,000,000 so out of this 80% of their raw materials inventory would be of the
granules which come in the form of LLD, LDPE, and PP. These raw materials will be classified
as class A because they are the core components and the others like wrapping paper straws etc will
be classified as Class B, C, and D. This analysis is explained to the company through the example
of McDonald’s where the major raw material like beef and chicken were classified as Class A,
vegetables used by McDonald's as Class B and Tissue paper and Ketchup as Class C. This method
of inventory management helps the company on focusing on the critical parts.
Moreover, the company should also focus on forecasting that will help them in better
maintaining the product quality along with the minimum inventory at hand.SWE should involve
in economic forecasting that will help them in effectively procuring raw materials with a decent
prediction of the inflation rate and money supply. Also, demand Forecast can be beneficial too as
the sales of the existing products will help them in predicting the demand for the same product
further. A quantitative approach to forecasting would be the best option for the company, analysis
of the numeric and historical data will help them in predicting demand effectively.
Furthermore, to cope with the environmental concerns and the controvery around using
plastic products, SWE should encourage their clients to use biodegradable polymers in the straws
that they use. All that has to be done is that a specific kind of polymer is used added initially with
the PP and LDPE in the excruding machine. This helps the product have a limited lifetime, where
it decomposes eventually, eliminating the threat of environmental damage. This will also ensure
that the company is not threatened by potential rules and regulations that ban the use of
polyethylene bags. The paper straw industry can also be explored to be even more safe and
inclusive of clients that require it.

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References

Ahmed, S. I. (2019, May 5). Problems with plastic | Special Report | thenews.com.pk. The
News International. https://www.thenews.com.pk/tns/detail/567702-problems-plastic
National Academies of Sciences, Engineering, and Medicine. 1994. Polymer Science and
Engineering: The Shifting Research Frontiers. Washington, DC: The National Academies
Press.
Pakistan Environmental Protection Agency. (n.d.). Pakistan Environmental Protection
Agency. Retrieved December 15, 2022, from
https://environment.gov.pk/Detail/YmU3MjRmZDgtN2MxMi00NjlhLWI1ODktZjZhMj
Q1ZjgyZDk3
Qureshi, S. (2022, May 22). Tough times ahead for the industrial sector | Political
Economy | thenews.com.pk. The News International.

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Exhibits
Exhibit 1. SW Enterprises Manufacturing Process (Per thousand Pieces)

Activity Code Activity Description Predecessor Activity Duration

Activity (Minutes)

A Extruder Set-up - 60 mins

B Processing of granules in extruder A 1 min

C Melting of granules B 0.5 min

D Adjustment of the Size through air C 0.5 min

E Cooling Process D 1.5 mins

F Adjustment of size and thickness E 0.5 min

via cutting machine

G Adding wrinkles on straws using F 3 mins

Carrogation Machine

H Wrapping of the Straws G 2 mins

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Exhibit 2. Cause and Effect Diagram of SW Enterprises

No Continuous
Forecasting Production

Inventory
Pile-up

High Exchange Bulk

Rates Ordering

Causes Effect

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Exhibit 3 Process Flow Diagram

Exhibit 4 Storage Room

17
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Exhibit 5 Extruding Machines

18
 19

Exhibit 6 Plastic Sheet Barrels

Exhibit 7 Packages Plastic Straws

19
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Exhibit 8 Basic EOQ Calculation

𝟐𝑫𝑺
EOQ= √ 𝑯

D= Annual Demand of the Pieces of the Straws.

S= Set-up Cost
● Order Processing Cost =average cost of labor involved in the process of placing an order for raw materials.
(250*0.8)
● Set-up of Extruder Machine= Cost of the two workers involved in setting up the extruder before the production
begins and also the production loss during 60 mins of extruder set-up. (2*150*70)
● Cleaning of Transfer pipes = the cost of labor involved in cleaning the pipes that are directly involved in the
production process. (2 workers* 30 mins* 300)
● Adjustment of the Blades = The cost of the labor involved in adjusting the blades so the straws can be cut
according to the required dimensions. (2 workers* 5 mins *1080)
C=Unit cost
● Material cost= Cost of the raw materials used to produce straws. (140)
● Labour Cost = Cost of the part-time workers hired for Production Runs.(80)
● Facility Rent = Rent of the place where the production takes place.(30)
● Electricity Cost = Cost of electricity used while producing the straws.(20)
● Office Expenses = Equipment and other supplies used in office work.(10)

i= Carrying Cost
● Investment Cost
● Storage Cost
● Other Carrying Cost
Carrying Cost=Investment Cost + Storage Cost+ Other carrying cost
= 14+1+10
= 25%
𝟐𝑫𝑺
Q*= √ 𝑯

D= 4 million pieces/ per day.

S= 50,000/ per day
H= 25%

Q*= 1385640
The company should order 1385640 units from the suppliers every time the order is placed.
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𝐷 𝑄
Total Cost = 𝑄 ∗ 𝑆 + ∗𝐻
2

= (4000000/1385640)*50000 + (1385640/2)*0.25
= Rs 317543

Exhibit 9 Production Order Quantity Model (Proposed Model)

𝟐𝑫𝑺
Q*p = √(𝑯(𝟏−𝒅/𝒑))

d= daily demand =4000000

p= daily Production rate= 10000000
D= Annual Demand of the Pieces of the Straws = (4000000*30*12)
S= Set-up Cost
● Adjustment of the Blades = The cost of the labor involved in adjusting the blades so the straws can be cut
according to the required dimensions. (2 workers*5 mins*1080)
H= Holding cost
C= Unit Cost
● Material cost= Cost of the raw materials used to produce straws.(140)
● Labour Cost = Cost of the part-time workers hired for Production Runs.(80)
● Electricity Cost = Cost of electricity used while producing the straws.(20)
i= carrying cost
● Cost of discarding the expired products.
● Storage Cost
1+12 = 13%

POQ = 1289006

𝑫 𝑸
Total Cost = 𝑸 ∗ 𝑺 + ∗𝑯
𝟐

Total Cost = (4000000/1289006)*25920 + (1289006/2)*0.13

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= Rs 164219

When the production order quantity model is used, the order quantity has dropped for around 100000 units and less
units would be produced now reducing their costs from Rs 317543 to Rs 164219 and covering up their demand. This
optimal production quantity will reduce unnecessary blockage of cash and excess storage cost.

Exhibit 10 Reorder Point Calculation (Proposed)32

ROP= d*L
= (4,000,000*30) *12 /360 * 15
= 60,000,000 pieces

(SW enterprises should reorder when they have raw materials for the minimum production of 60,000,000 pieces in
stock).

Exhibit 11 Price data

Dollar Price Straws Price (Per 1000 Pieces)

210 300/ per 1000 pieces

244 450/ per 1000 pieces

250 550/ per 1000 pieces

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Exhibit 12 Requirements for Maintaining Quality

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Exhibit 13 Miro Board

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AAIMA SADAQAT RANA

DHA Phase 1, Lahore · 0308-4060141
aaimasadaqat00@gmail.com · Aaima Sadaqat | LinkedIn

Here
As a persistent and hardworking individual, I always strived to bring 100% to everything I do. My goal is to
explore new learning opportunities and expand my knowledge. Ever since a little kid, writing has always been
my passion. I choose writing as a sublimation of my overthinking. I have always been questioning the existence
of things, which I believe helps me find the problems to solve, or at the very least learn something new. Some
of my skills include strong analytical skills, excellent interpersonal skills, Problem-solving skills, Leadership
skills, and attention to detail.

I am privileged to work as an intern in highly reputed firms like Nestle Pakistan, IGI General Insurance Limited,
and Systems Limited. I also have worked as a director of logistics with the Lahore school society of Literature
and as a content writer with the Lahore School Character Building Society. Moreover, I have experience of
writing blogs and content for social media sites which have helped me polish my writing and creativity skills.
Apart from being a student, my hobbies include traveling, writing research, data analysis, and digital marketing.

Currently, I am pursuing a master’s degree from the Lahore School of Economics. During my time as an
undergraduate at LSE, I have been involved in projects and activities that have helped me in polishing my
content writing, data analysis, and analytical skills.
In the next few years, I would love to explore the area of supply chain and operations management as I think
these areas will help me diversify my learnings at university.

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MAHRUKH ZAKA
House 31, st 31, sector F, Askari X, Lahore · 03049165239/03005791682
Zakamahrukh99@gmail.com · https://www.linkedin.com/in/mahrukh-zaka/

Here
Being a Pukhtoon woman who has lived in multiple cities of Pakistan throughout her life has shaped me into
becoming the confident, persistent and optimistic person that I am today. Some of my most vital skills include
excellent interpersonal skills, the ability to fit into diverse environments, strong analytical skills, and keen
attention to detail.
I have been lucky enough to work in the pharmaceutical industry, fertilizers industry, and retail industry with
companies like Wilshire Labs, Fauji Fertilizers Limited, and Carrefour. Due to my interest in Mathematics, I
also have experience teaching foreign students, which has helped me refine my numerical abilities and
improved my verbal communication.
All in all, during my years as an undergraduate I have polished my skills as a graphic designer, content creator,
customer service expert, and data analyst. In my upcoming professional years, I aim to explore supply chain &
distribution and become a digital marketing expert.
Apart from work, I believe everyone must have hobbies of their own that only serve one’s own soul. For me
these hobbies are music, working out, and reading. Learning to play the Ukulele during the Covid lockdown
has been one of my own personal victories.
At the end of the day, humans are capable of all challenges that life throws at them and it is our duty to conquer
them in the best of our ways while being true to our inner values.

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Product innovation in ATM machines while keeping in line with COVID related by Mariam
Usman and Fatima Khan
The dilemma of Covid 19’

On 9th April 2020, Amir Wain (Chairman), Mr Naveed Ali Baig (CEO) Waqas Rauf (Head
of Operations), Mr. Waqas Saleem (Head of Inventory), Mr Simran Arif (Inventory Manager), sat
together to reflect upon the crisis of Covid 19, which was in its initial phase. Things were unclear
and panic had blurred everyone’s vision. It seemed like the world import- export would stop
completely and left the entire top management of Innovative Private Limited extremely worried
and panic stricken. The problem at hand was importing the product from Dubai, Germany and most
importantly China. The company had all its operations in thesecounties and it seemed impossible.
The question at hand was what should be done if international trade shuts down. How will IPL
procure their products from? Will the new ways affect the product quality?

Intense deliberation was being done. The meeting lasted for more than 10 hours and
numerous cups of coffee were consumed. To the point where Mr. Amir worried that he wouldget
a stroke if he had one more cup. Mr. Waqas Saleem had been silently observing the others and
finally cleared his throat and uttered “I think I have it figured”.

The room went silent and Mr. Waqas Saleem began to lay out his plan slowly. “We’ll start
by decreasing our imports from Dubai, Germany and China from 100% to 40%. There are 3 more
methods through which we could make our product’s parts locally available. We can start by locally
setting up an establishment where we can make some of the spare parts. For this, we’ll increase the
technical workforce by 15% and they will be given specialized training to set the operations rolling.
Secondly, we can task some of our engineers with repairing faulty parts which have been sitting in
the warehouse so they can be recycled and the warranty on such machines will be increased.
Thirdly, as we all know that these ATM machines are considered assets for the bank and their book
value decreases over time so those assets could be bought back from the bankand refurbished. Other
than this, instead of ordering spare parts from the 3 main countries for a quarter, we can hold
inventory for the remaining 3 quarters as well which would require a lot of investment and risk but
would save us from the hassle of uncertainty. To hold the inventory, we would be buying 2 more
warehouses in each region.”

The silence felt as if it would never end and then Mr. Amir smiled and said “Where have
you been hiding all of this, Zafar?

Laughter filled the room and looks of approval were exchanged all around. There was a
buzz of energy because they finally had a game plan.

Mr. Amir addressed the room. “Let’s get started, shall we?”

Company background

Amir Wain came from an average income household in Lahore, Pakistan. In his younger
years, he watched his father build a decent business which helped in running their household and
providing for the family. The three major characteristics that Wain learned and liked about his father
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while seeing him build his business was that he was an honest, hardworking man with a great sense
of integrity. Another thing that Mr. Wain learned was to focus on customers.

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Later he went to the United States of America for his undergraduate degree. He was a student
at the University of Texas and was enrolled in the Computer Science and Engineering program.
There he also started a small business with his friend that provided consulting services for software
development.

In 1983, Wain came back to Pakistan to visit his parents on a holiday. While staying in
Pakistan, he was reached out by the Human Resource head of Pakistan Tobacco Company (PTC),
Jalal Kamran, who was Wain’s family friend. Wain Talked about the small business he had back
in the US. Software development was a new concept at that time, especially in Pakistan. This
impressed Mr. Kamran greatly. He requested Wain to come to his office and talk about computers
to the senior management of Pakistan Tobacco Company. Wain accepted the request and put
together a ‘Computer Appreciation Program’. It did not include much technical stuff, rather it was
more conceptual. The presentation included topics such as “what are computers?, “How to use them
along with their benefits?”. The presentation was highly appreciated by the senior managers of PTC.
They then talked to Wain of how and where to get computers. As Wain had an entrepreneurial spirit,
he saw this as an opportunity and told the management of PTC that he’ll provide them with
computers.

For this purpose, Wain traveled to Japan, Korea and Taiwan. He wanted to know what type
of computers were being made; the production, the cost and if it was possible to import them to
Pakistan or not. In 1985, he teamed up with a group of people and started importing computers to
Pakistan. He supplied them to PTC, and later, also to other businesses. With this success he founded
Innovative Private Limited (IPL) in 1987. The company supplied computers and expertise to
various businesses in Pakistan. In the 1990s, Wain entered the power industry, where he sold UPSs.
These products were bought by IPL and then sold. However, they had to wind up this business
because Chinese brands had penetrated the market. They offered cheaper prices. So IPL was facing
losses as customers were not ready to buy from them.

In 2000, Wain then started to provide ATMs and cash counting machines for banks in
Pakistan. This was a huge success, and he also expanded his business to Afghanistan.

Sales Structure

Innovative Private Limited has three offices in Pakistan: Lahore, Islamabad and Karachi
(see exhibit 1), with a workforce of more than 300 people. The company follows a centralized
structure where the decision making power is with the CEO, Mr. Naveed Ali Baig. He sits in the
Karachi office overlooking primarily the sales related decisions that are to be made. The operations
related decisions are made in Lahore by Mr. Waqas Rauf, the head of operations. In all three cities,
engineering teams are present that look after more than 180 cities across Pakistan.

In Pakistan, there are 3 regional sales managers (see exhibit 2) each region also has its own
regional service manager who ensures that quality of the service and product is maintained. They
also look over a team of 60 employees per region who work in after sales services (the call center).
They provide 24/7 customer representatives to deal with any issues. This is also their unique selling
point, which its competitors National Cash Register (NCR) and OPTL are not providing.

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Followed by the regional service manager is the Coordinator. The coordinators are
further clubbed into teams of 7 who manage each region and give assignments to the engineers.
These assignments usually include repair or installation of an ATM machine.

An example of this can be explained with a description of the role of a Coordinator.

Oncea sale is completed with a particular bank, and if the bank faces any issues regarding the
product, they make a formal complaint through IPL call center. The call center at Innovative
(Islamabad) iscentralized and the complaint is received via email or call. Once the complaint is
received, it is transferred/ brought into the notice of the coordinator and it's the coordinator’s
responsibility to designate this assignment to that particular territory’s engineer.

Customer Management

Innovative private limited delivers ATM machines and cash counting machines (see
exhibit 3) to banks located in both rural and urban areas of Pakistan and Afghanistan. IPL
has outsourced its logistics to MNP and TCS. The company has exceptionally fast delivery
in urban areas where the ordered product is delivered to the designated location within 2
hours. However, the delivery time varies greatly for rural areas, where there are no
representatives. The delivery takes around 18 hours. As IPL takes customer satisfaction very
seriously, if the product does not reach the customer (of rural area) within 18 hours’ time;
then the customer has every right to penalize the company and the company has to take
corrective action and pay if need be.

IPL has separate departments for sales and after sales service. This division increases
the ability of providing better customer satisfaction by focusing on one thing (receiving the
complaintand making sure it is passed to the coordinator). Mr. Naveed believes that the success
of the company lies in long term relationships that the company maintains with its customers.
For this very matter, IPL does not stop its services after delivering the product; instead, the
maintenance, installation, parcel placement and regular other after sales services are delivered
to the clients.

This division was impacted due to Covid’19. As the world shut down, so did the
operations of many businesses. It was new for people to adapt to a ‘work from home’ lifestyle.
Especially for that company which provides services to its customers. Catering to banks all
over Pakistan, with government restrictions, had become very difficult. Client complaints were
not met on the desired time; this also impacted the services which banks provided to their
customers. The chain of people which were involved in the process was very long and all of
them were being impacted.

Forecasting

Innovative Private Limited focuses on short term forecasting that ranges from 3 to 6
months. This helps IPL generate more accurate forecasts based on the current situation in the
market. Demand forecasting is done which helps in predicting sales for the products; on the
basis of historical trends whereby the company imports products as per its demand in the past
4 months.This furthermore helps in indicating how much stock should be kept or imported for
the next 6 months. The inventory software SAP helps IPL in doing their forecasting.

During the initial few months of Covid’19, IPL was planning to expand its customer base
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and had secured many deals. Nevertheless, the problem arose during Covid’19 when flights were
canceled. Initially, IPL had kept stock. However, as the world shut down trade, it became
increasingly difficult for IPL to cater to its demand.

Inventory

As of 2022, IPL holds an inventory worth 15 crore. Imported items take 1.5 months to be
delivered and 15000 units were ordered in May. The company uses SAP software for inventory and
warehouse management. This integrates both departments and makes the process of purchasing,
distribution, sales, finance, manufacturing and inventory much easier.

Moreover, a unique number which in the company’s case is the serial number of the final
product is added to the software. When any branch has issues with the product and the spare
part is changed then the entry is registered in the model automatically. All such entries are
recorded and after 3 months the forecast is made based on the most used/ changed part. Similarly,
SAP formulates a trend of the most bought final product e.g GN100 is the most ordered product
by clients, then the inventory head, Mr Waqas Saleem gives purchase order as per the trend being
observed.

Steps towards product innovation

Innovative private limited defeated all odds and has become the market leader in providing
self-service banking solutions. A year ago it seemed impossible to make it out even more successful
from the turmoil that Covid 19 had created but strategizing and planning effectively proved to be
fruitful not just in keeping the operations going but in reducing costs, for Innovative Private
Limited.

In 2022, Innovative Private limited is all set to launch new products which include Cash
deposits. This will not only allow users to deposit cash but would recycle and dispense the cash for
the branch. This will reduce the branch’s dependency on cash replenishment. Moreover, the
company will be introducing slip (paper receipt) replenishment, which will be done automatically
through technological advancements. This might prove to be a breakthrough innovation as no
competitor has done it.

Suggestions

With the situation that IPL was facing, it did a pretty decent job of coming up with ideas of
how to tackle the issues. An upside of this would be that if they go through with this plan, then
engineers and technical experts will have the chance to gain experience and improve their skills.
However, there are some flaws to it. The fact that producing a product locally versus a product that
has been imported by first world countries is a big step. And maybe a step that would take IPL
away from its current product quality standards. The reason for this is, no matter how far Pakistan
has come with its technical expertise, engineers residing/ working here do not have experience in
producing that particular product. This would increase the likelihood of mistakes and defaults.

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Another major issue would be selling it to customers who are accustomed to products with
high quality, which would decrease customer satisfaction. Option 2 and 3 would also have the

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same problem to some extent. But option 4 is best suited, to hold more inventory than initiallydecided.
This option would only require more investment, but that can be arranged by IPL.

As IPL is manufacturing it's spare parts locally, it should focus on product quality and to
ensure that the company should send its labor and engineers to the countries from where they import
products. This will help them get specialized training and match quality standards.

Moreover, as the company is mostly repairing faulty products and refurbishing some
machines so they should work on their software and add additional features to these products such
as intuitive interface, this will allow the user to pinch the screen to zoom in and zoom out and other
touch screen feature, this will also ease the navigation process for the users. Moreover, a mobile
interoperability feature will allow card-less transactions. Customers will connect their phones to the
ATM machine and perform transaction. In this manner, the clients of IPL will be satisfied by the
additional features being provided

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Exhibit 1
Map of Pakistan:

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Exhibit 2
After Sales Structure (Karachi office):

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Exhibit 3
1) Self-serving banking:

DN Series 100D DN Series CS280 DN Series 200H

Monofunction Indoor
Cash Dispenser Lobby Cash Dispenser Lobby Cash
System System Recycler

DN Series 250H DN Series 450H

Outdoor Through-The-Wall Outdoor Walk-up MultiFunction
Cash Recycler Cash Recycle

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2) Currency Technology:

BPS C1 BPS C5 BPS C6

Compact all-rounder in Compact Solution for Setting new benchmarks to move
banknoteprocessing tomorrow’s cash youahead
centers

BPS C2-2 BPS C2- BPS C2-

3 4
Outstanding performance Outstanding performance Outstanding performance
meets compact size advanced flexibility maximum flexibility

BPS M3 BPS M5
Your entry to the high speed Unmatched productivity
world for commerical cash
centers

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Reference

Innovative Private limited. Retrieved from: https://www.innovative-pk.com/

Amir Wain CEO. Retrieved from: Mr. Amir Wain | CEO of i2c Pakistan Pvt Ltd | Meet theCEO–
Full Episode - Bing video

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Miro Board:

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FATIMA KHAN
Building #72, Apartment #7C, Sector B,Askari 11, Lahore · 0322-1411276
Fatima.khann2399@gmail.com
https://www.linkedin.com/in/fatima-khan-6095451a6

Hi. I'm Fatima and I'm a self-driven, goal-oriented person who has lived her life working
hard to overcome all obstacles that life has thrown my way. I am a motivated business
student with excellent interpersonal skills. I would define myself as a lifelong learner. My
skills include, strong decision making power, critical thinking, problem solving, proficiency
in language and excellent communication. I am a data-driven and insightful individual with
a keen interest in analyzing theoretical frameworks. My previous internships have helped
me gain experience in different fields that have further helped me perform well in my job
and my MBA. I am firm believer that everything is figure-out-able.
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MARIAM USMAN
471-XX, Phase 3, DHA- Lahore · 03404239430
umariam067@gmail.com ·
https://www.linkedin.com/in/mariam-usman-199679236/

cture Here

Hello! I am currently a student of Lahore School of Economics, in my Masters program of

Business Administration. I have a very friendly, easy-going personality which helps me get

on well with my peers. Hence, teamwork is not an issue for me. I enjoy subjects on which

a person can have discussions on and could also hear opinions of others. I believe that such

subjects are studied more in depth and an individual’s perspective may broaden. I have done

a few internships previously, whose knowledge has greatly helped me in my MBA program

and will help me further when I look for a job.