Supply Chain Management-1
Supply Chain Management-1
Group Assignment
Name Index No
D.K.D.M.G.T.D. Rathnasiri Bmgt-558/2844/20-01/0004
D.D. Gallage Bmgt-558/2844/20-01/0006
R.S. Dharmarathna Bmgt-558/2844/ILFS20-02/0003
C.D. Jayasinghe Bmgt-558/2844/ILFS20-02/0007
B.L.S.L Bandula Bmgt-558/2844/ILFS20-02/0008
CINEC Campus
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CONTENT
Topics Page No
1. Introduction ..............................................................................................................3
2. About Chello daires .................................................................................................4
3. Company hiererchy ..................................................................................................6
4. Sources of Chello daires ..........................................................................................9
5. Stock keeping of Chello .........................................................................................14
6. Warehousing of Chello ..........................................................................................16
7. Tranportation of Chello..........................................................................................17
8. Three main parts of Chello ....................................................................................21
• Up stream ...................................................................................................21
• Middle stream ............................................................................................22
• Down stream ..............................................................................................23
9. Forecasting of Chello .............................................................................................24
10. Conclusions ............................................................................................................28
11. Students work breakdown ......................................................................................28
INTRODUCTION
In this report we are about to discuss what are the three main supply chain
activities of Chello dairy products (PVT) Ltd. Including the supply chain
management, forecasting, warehousing, stock keeping and company hierarchy. In
addition to that we are about to focus what are the three main parts which are up
stream, middle stream and down stream of Chello dairy products (PVT) Ltd.
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ABOUT CHELLO DAIRY PRODUCTS
CHAIRMAN’S MESSAGE
Chello has now become its peak giving more than 300
employees for facilities. Hello is learning from the bitter past,
not only revamped the organization but adhering to the modern trends has infused young blood
to management with the professional skills. Finally, I would like to share the glory of Chello
with my family members, directors and employees of the firm. The key–strength throughout
Chello’s history has been its emphasis on quality and I should further declare “maintaining
quality” standards is our religion.
.
To be the Leader in Enriching Sri Lanka’s Dairy Sector By
providing the best quality produce for all Sri Lankans
OUR MISSION
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CHELLO DAIRIE’S PRODUCTS
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COMPANY HIERARCHY
The whole employee network at Chello dairy products (Pvt) Ltd = 3500 Employees
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The company expects the following duties and responsibilities to be fulfilled by the
respective departments.
Expected duties and responsibilities to be fulfilled by the sales and distribution department
• Process invoices
• Prepare balance sheets
• Update internal systems with financial data and more
• Perform cleaning activities such as dusting, washing milking machines and mopping.
• Perform minor fixes such as repairing broken locks, filling gaps on walls etc.
• Check control panels and electrical wiring to identify issues and more
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The main leading positions and personalities at Chello Dairy products (Pvt) ltd
CHAIRMAN
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SOURCES OF CHELLO DAIRY PRODUCTS
With the associastion with NADeP, IFAD (investing in rural people) And integrated dairy
development programme, Chello dairy products has taken their opportunity to promote the
farming concept for a villagers. They have chosen selected areas and build up milk collecting
centers in around those areas.
NADeP and private institutions recognized by the government also contribute to this process.
Accordingly those organizations provides necessary knowledge and financial facilities to the
famers. Mainly they use the concept called P4, which has achieved good income and living
condition for the farmers. So, the P4 concept is here.
according to the relationship between the farmer and the institution. NADeP and Chello dairy
products together provides the necessary infrastructures to the farmers. So, lawn mower, water
tanks, milk collecting pots, cows and farm houses for cows are provided to the farmers under
this assistance. In addition to that the also provided all the necessary knowledge and help to
maintain the farm.
The picture above shows the total amount of money invested for 100 farmers in Hambantota,
Godakawela areas. It was a valuable opportunity for dairy farmers in those areas.
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An equipment distribution ceremony
Milk collecting pots
Lawn mowers
A machine used to keep milk fresh
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Chello dairy products have 10 milk collecting centers in the island wide. The freshness of milk
assured as using milk collected 35,000 liters per month milk collecting centeres from
Dambulla, Thabuththegama, Kanthale, Galnawa, Kahatagasdigiliya, godakawila, Puththalama,
Thanamalwila, Welikanda and surrounding areas.
Thus also sustaning the dairy farmers, as well as there are about more than 4500 dairy farmers
in work on connecting this company. The specially thing is 15 – 18 liters of fresh milk collected
from ne farmer per day. The process at the farms are further enhanced and made efficiennt
through the use of cutting edge technology heavy duty tractors, slurry bowsers and fertilizer
spragers are among collection of modern machinery that are used by the farms. So like this
chello dairy product’s infastructure development has created significant employement and
economic opportunity for rural farmers and offer hope fir renewed dairy cultivation.
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Packwell company, Rathmalana
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Crystal Pack, Kandy
• Yogurt cups
• Curd cups
• Jelly cups
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STOCK KEEPING
Stock keeping unit is the unit in inventory management, which used to manage, coordinate and
achieve trade-offs in multiple activities that make up the supply-chain process.
Stock keeping are highly important and commonly used by retail stores, warehouses and
product fulfillment centers as it has many keys uses such as,
Stock keeping has an exceptional contribution to a company’s revenue. This leads to cross-
selling opportunities, ultimately it increases company’s profit margin. So, stock keeping is very
much important to the companies. So, when talking about our targeting company Chello dairy
products,
The factory of Chello dairy products (pvt) ltd located in Godakawela, Ratnapura. Their main
raw material is the milk that need for their production. They have network of 4,500 milk
farmers for their production. For collect milk, they establish milk centers with the sponsorship
of government. They maintain those milk collecting centers in Dambulla, Kanthale,
Godakawela, thambuththegama, Kahatagasdigiliya. From these centers they usually collect
35,000l per day.
This production usually date only for 5 days. Need to complete the entire process within five
days which means 5 days for whole process including get milk from the animals, take milk to
milk collecting centers in Dambulla and other places, send bowsers (tankers) to those centers
to collect milk and take them to their main factory in Godakawela. Then do production process
inside the main factory and need to send Colombo by the next day. Then in Colombo, need to
start distribution by morning and distribute goods to each area and give orders to the agency
points as within the day to be given to customers. So, it means they lead a huge process to give
healthy products to the customers.
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When talking about keeping stocks, there are specific time period which need to keep raw
materials as stock. Stock keeping time is very important because if keep more time period
than estimated then perishable raw materials like fruits, milk, flowers will obsolesce.
• As their main raw materials, have milk which collect from different milk collecting
centers. So, milk comes as main raw material for the production, usually keep stocks
for milk for 2 days.
• Then keep packing items as stocks after milk, for packing items keep stocks usually
for 3 to 4 months.
• Other than those keep labels as raw materials and those usually for 2 months. Prices,
manufacturing dates and expiring dates usually get changes after 2 to 3 months
especially for perishable products like dairy. So cannot keep more time than that.
So, these go as their main stock. After that even though the life time of some products are
for 2 weeks, life time of Chello products is averagely for one month.
After making a product, keep it in the main stock for 3 days and then send them to ware houses.
This happens especially because these are perishable goods. Chello yoghurt needs to cool under
instructed cooling capacity. If the yoghurt is not fully cooled successfully, if the cool chain got
damaged in the middle of the cooling process, then the product will be rolled. So, keep 2 to 3
days in main stocks before send them to warehouses.
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WAREHOUSING
A warehouse is a building for storing goods that used by manufacturers, importers, exporters,
wholesalers, transport businesses, customs. There is more importance in warehousing
including,
Same goes Chello dairy products as well specially with the perishable goods.
In the previous stock keeping part identified that after producing keep products 2 to 3 days in
main stock before send to the warehouse. So, after 3 days products are sent to the warehouses.
Mainly in current Chello has 3 warehouses and they are located at,
• Ownership-
In these warehouses stocks are usually kept for 3 days. A primary delivery comes to warehouses
for every 3 days. So, in all places keep stocks for 3 days. Then from there start delivery vehicles.
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Then these go to the shops and products need to complete its process within a month. That
means within a month (1st to 31st of month) these products need to either sell or return. Happen
one of these two options. After that the operation of that product will be over.
Chello dairy products keep in warehouses within huge containers. In their warehouses 3 main
operations are happened.
In company warehouses, once they received products, direct operation will launch from the
warehouses. All the vehicles and employees are owned by the company.
Other than that, for distribution centers, they appoint separate person and he does primary
distribution. Then these are not Chello Dairy’s own warehouses. Chello company has
responsibility only for their private distribution. Beyond that they have no responsibility.
Also, in the warehouses there are issues that they have to face most in current context of the
country like, fuel shortage, power cutting.
Even though they have flaws they continue to manage it and continue their upper, middle and
downstream of the supply chain and deliver healthy products to the customers.
TRANSPORTATION
What is Transportation?
Transportation in a supply chain refers to the movement of products from one location to
another, which begins at the start of the supply chain as materials make their way to the
warehouse and continues all the way to the end user with the customer’s order delivered at the
doorstep.
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The Transportation Process of Chello
Chello dairy have a huge production process which was doing within five days. Below diagram
shows you the process of Chello Dairy Company.
Chello Warehouse
Consumer
Above diagram clearly shows you the production process of Chello Dairy Company. So, Chello
Dairy company have 10 milk collecting centers in island wide. Those are; Dambulla, Kanthale,
Godakawela, Thanamalwila, Thambuththegama, Buththala, Kanadakede, Galnaawa,
Kahatagasdigiliya and Buththala. In Milk collecting centers they doing the milk cooling
process. The farmers work under Chello company, they signed for an agreement to give their
raw milk to those milk collecting centers. In farms milking is done under strict hygienic
conditions, according to the best international dairy practices. The cows in their farms produce
an average of 15- 18 liters of milk per day. More than 45000 farmers supply raw milk who are
work under Chello company. There are nearly 120 primary milk collecting vehicles running
under Chello company in island wide.
After collecting the milk from farmers, the raw milk transport to production process at
Godakawela factory located in Rathnapura. In this factory they doing the manufacturing
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process. After three days of manufacturing process, the finished products were distributing to
their warehouses. Which are located in island wide.
For the distribution they have 162 vehicles in islanded. Under that they have 80% of cooling
lorries which are owned by Chello company. In over all vehicles they have 18 ½ feet and 20
feet volume capacity RD and primary vehicles. In these cooling vehicles they transport the
products to warehouses. There are 30 direct drivers work under the Chello company.
As the final process of diary production of Chello they distribute the finished goods, which
were received from the Godakawela factory. Godakawela factory is the main branch of Chello
Pvt Ltd. From Godakawela factory to the warehouses. The main warehouses of Chello
company are; Colombo, Bandarawela, Malabe, Gampaha. For each warehouse they have 8
lorries. Which are used for company distributing, delivery and other purposes. They have
nearly 160 vehicles island wide and Chello each warehouse has 8 lorries. They keep the
finished product stocks minimum 3 days at warehouse. Before complete 3 days they distribute
the products to market.
From Godakawela 10 lorries, from Colombo 8 RD lorries and 6 lorries from Bandarawela
transport finished dairy products to outlets. Chello Dairy company owned 15,600 outlets island
wide. For each outlet they distribute 384 yogurts per month. They have so many wholesalers
and retailers in island wide. Chello company distribute their products to super markets also
named as, Arpico, Keels, Spar in island wide and also Cargills food city outlets which are
outstation in Colombo. There are 500 B2B (business to business) most of were restaurants,
Chello distribute directly their Fresh milk and other products in B2B market also.
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Home Delivery Concept.
Chello home delivery concept is a new innovation of Chello company. The main purpose of
home delivery concept is delivering the superior taste with high quality fresh milk to the door
step. The concept was introduced due to the covid pandemic situation in the country. Happy to
say, Chello company is the very first company started the home delivery concept among dairy
production companies. If I briefly explain the concept; This concept is actually really helpful
for the farmers and unemployed. Chello company invented this concept due to the pandemic
situation in country people had to face many problems. The main thing is travelling restriction
which was imposed by the government. Therefore, Chello think how they distribute fresh milk
for their customers easily. So, they had 35 home delivery vehicles to distribute fresh milk to
the door step. They delivering fresh milk only in Colombo and Gampaha areas. They wish to
increase the areas in future. Chello company doing this not only for revenue, they doing this to
deliver fresh and quality healthy products to their customer hand as a trustful company.
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UP STREAM, MIDDLE STREAM AND DOWN STREAM OF CHELLO
DAIRY PRODUCTS
UP STREAM
Up stream of the chello dairy product’s can be divided
in to main two parts. They are raw suppliers and
component suppliers. Chello dairy products have
received the raw material from the milk farmers around
the island wide. Their main raw material is milk.
Monthly they collect 35,000 liters of milks from the
farmers. Dambulla, Thabuththegama, Kanthale,
Galnawa, Kahatagasdigiliya, godakawila, Puththalama,
Thanamalwila, Welikanda are some areas, that they are
collecting milk. So, raw supplires can be mention as the L.M. Dinesh kariyawasam
milk farmers, who are living in those above mentions Milk farmer
areas. Dambulla
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MIDDLE STREAM
The first thing is, we get the fresh milk from farmers.
And this milk moves on the collecting centers and then
this milk cooled 108 0f (42 0C) to bring the yogurt to
the ideal growth temperature for the starter culture and
the in this cooled milk bring to the company with the
milk bowers. Next move to the heat system, this cooled
milk and a high heat treatment is used to denature the
serum proteins. So then move to the mixture area and
flavors are added to milk after cooling and add the
proteins, fats, sugar, stabilizers, emulsifiers, fruits and
30 minutes mixture this milk.
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DOWN STREAM
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FORECASTING
Demand management is considered to be the focused effort to estimate and manage customer
needs with the information to shape operations and decisions.
When connecting the estimations of sales predictions in connection with demand management,
we can point out three time periods
• Short term
Next week sales predictions
• Medium term
Next month sales predictions
• Long term
What is forecasting
The main two techniques of forecasting which is been used in the industries
• Qualitative Techniques
• Quantitative Techniques
When considering the forecasting process at Chello Diary private limited, they mainly use the
back data of 4 years and also they have collected back data in connection from month to month.
The Chello dairy marketing plan is normal made from 3 months period, normally the team at
Chello dairy prepares the next year’s forecast in February every year.
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The following steps can be pointed out as the forecasting process at Chello Dairy (Pvt) Ltd.
Step 01
Sales forecast
When this step is considered, the sales forecast will give a idea about the expected production
for the selected period and by using the sales forecast data the purchasing department will
purchase the raw material in the needed quantities and Chello dairy (Pvt) Ltd normally keeps
a buffer stock of 10% to use at any necessity.
Example –
• Cups 100,000
• Lids 100,000
• Labels 100,000
• Buffer stock of all three raw materials 30,000
Step 02
When stating on the second step in the forecasting process at Chello Dairy (Pvt) Ltd it mainly
focuses on the collection of milk. This step is manly handled by the procumbent manager at
Chello dairy. When procumbent manager receives the sales forecast for the year the
procumbent manger will arrange the milk supply in order to fulfill the sales forecast
Example
When the sales forecast says that they expect to sell 100,000 of yogurts during the selected
time period the procumbent manger will arrange the supply of milk (day by day) in order fulfill
the requirement of 100,000 yogurts, and also the procumbent manager will also look into the
quantities which are collected at the collecting centers and if needed the procumbent manger
will take the necessary action to develop the collection of milk at the collecting centers.
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Step 03
This is where the production manager comes in to the practice as when the production manager
gets the sales forecast the production manager will look in to the following areas,
• Machine capacity
• Human capacity (HR aspect)
• Production flow capacity
• Cool room capacity
• Mixing capacity
As the mentioned in the above example the production manager will ensure that the selected
quantity of production can be produced with production capacity of the company.
When Chello dairy (Pvt) Ltd is preparing the sales forecast, they mainly consider the following
two aspects,
If the predicted quality was not slod in the market in the predicted time period they will arrage
promotions for the selected products such a,
They will firstly divide the budget in to four categories and then they will plan the weekly need
quantities (weekly plan), these weekly plans will be mainly based on the previous data and and
the budget is also based on the same data, by using this information they will predict or forecast
the following production quantities,
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When stating about the forecasting techniques which is mainly used at Chello dairy products
(Pvt) Ltd is as follows,
The straight-line method is the main forecasting techniques which being use at Chello dairy.
This method is one of the simplest and most easy method to follow forecasting methods. A
financial manager Mr. Kithsiri Dissanayake will use the historical figures and trends to predict
the future demand, revenue and growth.
When stating about the forecasting model which is used at Chello dairy product (Pvt) Ltd, it is
considered as the time series model where the qualitative forecasting is based on the opinion
and intuition which connects with the mathematical models and historical data. (Mainly used
when new products are launched)
CONCLUSIONS
Chello Dairy Products (Pvt) Ltd was established at Kompitiya, Godakawela in the year of 1995
as a very tiny domestic enterprise. The key strength in its above history has been its emphasis
on quality. From the beginning of Chello has to base on quality, which has in turn-built trust
and loyalty among generations of consumers As a conclusions this report was discussed the
three main supply chain managemnet’s activities of Chello dairy products (PVT) Ltd.
According to that, we have discussed the supply chain management, forecasting,
warehousing, stock keeping and company hierarchy. The main focused area of this
report was, the main three parts of Chello dairy products (PVT) Ltd Up stream,
Middle stream and Down stream.
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Names of our group members in a separate column. For each person, indicate the extent to
which you agree with the statement on the left, using a scale of 1-4 (1=strongly disagree;
2=disagree; 3=agree; 4=strongly agree).
Evaluation Criteria D. K. D. M. D. D. R. S. C. D. B. L. S. L.
G. Gallage Dharmarathna Jayasinghe Bandara
Tharindu
Dilshan
Rathnasiri
Prepares work in a 4 4 4 4 4
quality manner
Completes given task 4 4 4 4 4
or work on time
Contribution 4 4 4 4 4
significantly to the
success of the report
Cooperative and 4 4 4 4 4
supportive attitude
Contributes 4 4 4 4 4
meaningfully to
group discussions
Participated group 4 4 4 4 4
meeting regularly
and arrives on time
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