Continental Biscuits
Limited (LU)
Project Report
Khalid Ahmed Soomro
Javeria Rab Nawaz
Instructor : Dr. Syed Aamir Ali Shah
12/22/21
Production & Operations
Management
Continental Biscuits Limited (LU)
Contents
Introduction ................................................................................................................................................. 2
Vision............................................................................................................................................................ 2
Mission ......................................................................................................................................................... 2
Brands .......................................................................................................................................................... 2
Competitive Edge ........................................................................................................................................ 3
Strategy ........................................................................................................................................................ 4
Productivity ................................................................................................................................................. 5
Forecasting................................................................................................................................................... 7
Product Design Elements ........................................................................................................................... 7
Production process strategy ..................................................................................................................... 10
Facility layout ............................................................................................................................................ 12
Concept of Quality and Management of Quality ................................................................................... 13
Inventory Management ............................................................................................................................ 15
Supply Chain Management ...................................................................................................................... 16
Issues .......................................................................................................................................................... 20
Recommendation....................................................................................................................................... 21
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Continental Biscuits Limited (LU)
Continental Biscuits Limited (LU)
Introduction
The company was founded in 1984 by Mr. Hassan Ali Khan. Now it’s a joint venture with
Mondelez International with 50.5% shares owned by Mr. Hassan Ali and 49.5% owned by the
other company. From Several decades, CBL is involved in the manufacturing of LU brand. All
the technology and professional expertise were imported from abroad. It became operational in
1986 with 200 employees. First it introduced its powerful brands TUC, Prince and Candy and
they were real hit. Now CBL has a strong portfolio ranging from biscuits to crackers and cream
variants.
The Manufacturing plan of CBL is based in Sukkur, a city of Pakistan. It provides employment
to over 3000 people in this region with head office in Karachi. The manufacturing plant became
operational in 1986, the plant started one production line and now it has expanded to six
production lines which operate round the clock according to customers’ demand.
Vision
” CBL will become Pakistan's most preferred biscuit company by developing powerful consumerloved local and global brands, maintaining world class manufacturing and quality standards,
having superior quality and motivated employees and maximizing shareholder returns.”
Mission
“To be a market leader in Pakistan Biscuit Industry in the next 5 years, ensuring every second
biscuit consumed is proudly made by CBL”
Brands

TUC

Oreo

Prince

Tiger

Zeera Plus
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Continental Biscuits Limited (LU)

Candi

Gala

Bakeri

Wheatable

MilcuLu

Bakeri Range
o Bakeri Nankhatai
o Bakeri Coconut Cookies
o Bakeri Butter Cookies
o Bakeri Bistiks
Competitive Edge
It has competitive edge of nostalgic taste, value and quality.
Taste
First, they have built a nostalgic taste among their consumers. Those who taste it first time, they
become its loyal customers. For instance, its one product named Prince is favorite of all kids
because it gives them a unique taste of chocolate. (General Manager, LU). Another product Tiger
carries a heritage of childhood memories with its energetic taste along with economical i.e. more
biscuits in 5-10 PKR.
Quality
Second, they have zero compromise on quality. For instance, its products like Wheatable and
NanKhatai are known for their quality. Most of these two products are exported to countries like
Australia, USA, UK and Middle East.
Location
They are located in sukkur which is an important edge over competitors. Because from sukkur,
there are direct roots to all major locations/provinces so this decrease the transportation costs.
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Continental Biscuits Limited (LU)
Strategy
They have a mix of strategies depending upon the target market and specific product. They
devise different strategies for different segments and for different products.
Low Price
First, focusing on the lower class demographic, they cater this class with their low price products
like Tiger. Needless to say, they focus quality here too, but more emphasis on cost and volume.
Responsiveness
Second, they value their customers and include their feedback in production of specific products.
For example, when the prices of raw material increased, LU decreased the size of prince biscuits
but didn’t change price at first. But when they got overwhelming feedback from their customers,
they found that customers want the large sized biscuits, and are willing to pay 10 PKR. As a
result, they increased the size of biscuits and adjusted the price (General Manager, LU).
High Quality
Third, focusing on the middle class and above middle class demographic they practice the
strategy of quality by catering them Nan Khatai, TUC, Wheatable. They charge comparatively
high price too for their quality products means it practices High Quality/High Price Strategy.
Newness
They practice this newness strategy too but it is not more functional. They implement reverse
engineering concept by collecting their competitors’ products and studying them deeply to get
some insight about what would be their next step, and what they are good at.
Variety
They work on variety strategy too. For instance, they produce variety of Oreo Biscuits for
various customers.
In addition to it, they render sugar free biscuits to diabetes patients….
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Continental Biscuits Limited (LU)
Competition
They have a fierce competition with English biscuit manufacturer (EBM) and Bisconni in the
market. CBL has 32% market share.
Productivity
They measure production productivity with the help of machine productivity because it is an
automated process where each production line works separately. However, some part is done
manually which includes part of packaging more specifically boxing and loading in vehicles.
Machine Production
The production line is run without any break unless the required output is achieved. Most of the
time lines work continuously for days. Each production line has separate productivity depending
upon the nature of product. The productivity was in the hand of production manager who could
increase the speed of production to meet the demand at times.
Headcount Efficiency Measure
They measure productivity using headcount where each person works for 6 hours and produces
15 kg biscuits. Each day three shifts are held, so per day total productivity is measured by sum of
three shifts. Total 3000 employees work there with almost 1000 people per shift. Each shift has
productivity of 1000*15= 15000 kg/15 ton per shift.
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Continental Biscuits Limited (LU)
Efficiency
They are highly inclined towards effective use of resources. They practice such activities which
help them achieving more efficiency, for instance Proactive Maintenance, Reduce Downtime,
etc.
Proactive Maintenance
It practices proactive approach to increase more efficiency by replacing most used machinery
parts prior their due time because they don’t want to hold the process in case if it breaks down.
Reduce Down Time
In case if its production line breaks down, it resolves it quickly to meet the target and projected
output.
Multiple Products on Single Production line
It has such long production lines which are used for more than two products. They just change
the cutting, designing, and texture part of the line. For instance, we saw that they were producing
wheatable biscuits on the same production line where they produce Gala biscuits. This shift in
parts help them use their resources more efficiently.
Separate Personnel for separate Production Line
It hires separate personnel for separate production lines. It has eight production lines working
presently. Each line has a quality manager and a production manager. Because it doesn’t burden
any one employee, but gives him a whole line to work more productively.
Waste Management
Where the biscuits are cut into specific shapes, the remaining stuff is gathered at one place and
again used in production to save waste. It has metal dictator for all production line which dictates
metal in the cookies and throw it in the box. Other broken or damaged cookies are ground into
animal feed and sold to market.
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Continental Biscuits Limited (LU)
Forecasting
It uses mix of forecasting techniques: qualitative and quantitative.
Quantitative
It checks the population increase rate in the regions where its products are sold. As General Manager
(LU) explained that if the population increases by 10%, we increase the production by 3-4% percent to
meet the increased demand.
Qualitative
The marketing department visits nearby schools and asks random students about their favorite biscuits
and use the collected data for forecasting the future demand. (General Manager, LU).
Covid.19 breakdown
At first when the Covid.19 hit Pakistan, and the government went for closure of the businesses. LU closed
production for a few days but government approached again, and told for resumption of production
because people are confined to homes so they would be more dependent on cookies. And they started
their production and got more orders than usual because people started saving cookies in their homes for
their kids and themselves.
Resource Availability
It has its own resource of flour where it grinds the floor as per the product type. Its flour mills cater the
supply of floor to its production plant. It buys sugar from nearby suppliers who charge comparatively
lower price. Other material like coco powder and chocolate powder are imported from countries like
Malaysia.
Product Design Elements
Product Development – R & D
The company has a separate department of research and development through which they are
constantly working on new product development and product improvement. They have a new
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Continental Biscuits Limited (LU)
product development officer whose sole purpose is to work on innovation. The CBL will soon be
launching Chips. For this, they have installed machinery and equipment.
Human & Cultural Aspects
The company develops the hygienic products and ensure complete quality. The workers in
production follow proper SOPs. They cover their heads, faces and wear an overall to avoid
contact with the products so the products do not contaminate. Also, when the biscuits on the
conveyor passes through a large oven, they are baked at high temperature i.e. 180 to 200 degree
Celsius. In this process, all the bacteria die and after that, workers avoid physical contact with
the products until they are packaged. All this is done for the employees and consumer safety.
Three Rs Consideration
CBL is certified from ISO 14001, So it ensures all waste, material and processes are sustainable
or environmental friendly and recyclable.
CBL operates on different sustainability principles and one of them is 3Rs.
Reduce
The waste limit of company is 3% and they try to minimize this waste by different strategies. For
example, the burnt biscuits are crushed and used to make animal feed. Moreover, the broken
biscuits are crushed, packaged and sold. For example, Crushed Oreo biscuits are further used in
Oreo shakes and crushed candy biscuits are used in trifles.
Reuse
The same machinery is used every time for the production and whenever there is any technical
problem, the parts are repaired or replaced by new one.
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Continental Biscuits Limited (LU)
Recycle
The products are not dismantled and reused in the production due to health and safety concerns
but equipment and machinery are recycled frequently.
Standardization
The firm product different kinds of standardized biscuits in high volume. This reduces the time,
costs, and resources. Moreover, the process and products are easy to handle and easy to fill
orders.
Product Quality
CBL has a department of quality assurance and quality officers are always monitoring the
products. There are different methods through which they keep the check on products’ quality.
Quality of products is checked on each step through the process. They have certifications like
ISO 9000, ISO 14000 and other food authority certifications for producing standard products.
Manual Check
The workers stand beside the conveyor belt with some distance and manually check the moving
biscuits, if the biscuits are broken, worker pick them and add to baskets which are crushed later
and used for different purposes.
Automated Machine detectors
There are automated metal detectors which detects the metal pieces in the biscuits. If any metal
is detected, the machines turns on the alarm and the biscuit is dropped from the conveyor.
Laboratory Testing
The frequently tests the biscuits in laboratory to know the root cause of any problem occurred
and then trace it back to improve the process as well as product and avoid further damages.
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Continental Biscuits Limited (LU)
Kano Model – Quality Types
Basic quality
The product (biscuit) must be in presentable former not broken. If it is in broken, then it will lead
to dissatisfaction but the presence of this quality does not feel.
Performance quality
The products of the company offer performance quality. The satisfaction or dissatisfaction
generate the equal effects. For example, the customer wants the same taste of Prince, TUC, Oreo
and candy. The presence of the same taste will lead to satisfaction and the absence will lead to
dissatisfaction.
Excitement quality
When the company increase the size of product (biscuits) or decrease the price, then it causes the
excitement and higher satisfaction of customers.
Customer participation
The marketing department of the company frequently conduct surveys about the products.
Whatever the feedback they receive, they use it in the production, because ultimately what
company aims to satisfy customers.
Production process strategy
Capital intensity
They use mix of equipment and labor. According to the GM of CBL, they don’t rely solely on
the machines. There is function that human can perform. For example, loading and unloading of
raw material or finished good, packaging and quality inspection etc.
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Continental Biscuits Limited (LU)
Process flexibility
The processes are flexible enough to change if there is any need to modify the design, volume or
the technology. They are quite up-to-date. All the machinery is imported from EU countries
which are efficient.
Process type
Repetitive Process
The process type is repetitive. Every product line has low variety but high volume. If we see the
whole product mix, then the variety is high. Standardized products are produced and per unit cost
is low but the volume is high. The assembly is resumed after every 4 to 5 hours’ wash. The
scheduling and handling of products are routine.
Batch Process
It also has the batch process. Where there is variety in products line. Products are produced in
batches.
Sustainable production considerations
The company is socially responsible and consider sustainable production. The resources they use
are non-polluting and they provide safe and healthy environment to employees. The amount of
waste is less which is 3% and they even try to reduce this waste by various techniques.
Level of automation and technology
If we rate the level of automation and the manual work on a scale, then we can say that 80% is
automated and 20% work done manually. They believe that if they fully automate the plant then
there will be loss of employment which will affect the community. As a part of their CSR
activities, they have a workforce of 2500-3000.

Production is fully automated.
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Continental Biscuits Limited (LU)

Packaging automated as well as manual

Loading and unloading of material/inventory is manual

Quality inspection is automated as well as manual
Facility layout
The facility layout is designed in such a way that produces goods efficiently. It means there is
minimum material handling and movement of workers. Due to which the time and costs reduces
significantly.
Product layout
The type of layout in the factory is product layout that uses standardized operations for achieving
high volume and smooth flow of products/process. In this type, skilled or semi-skilled workers
are used or labor specialization is low. The processes are routine and machine-paced.
Some of the picture from CBL plant are following:
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Continental Biscuits Limited (LU)
Concept of Quality and Management of Quality
For providing customers with quality, premium and healthy products, CBL has a QAD (Quality
assurance department which shows that the company’s operations follow International standards
for food safety and quality and are certified from international bodies.
Moreover, the company has a halal certification for all the products it is offering. It is certified
from Pakistan National Accredited Council (PNAC), a member of International Halal integrity
Alliance (IHI) and World Halal Council (WHC). Moreover, CBL is certified from ISO 14001, So
it ensures all waste, material and processes are sustainable or environmental friendly and
recyclable.
Total Quality Measurement (TQM)
Continental biscuits have taken various initiatives towards the maintenance of safe and healthy
work environment and has involved everyone in the company towards this effort.
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Continental Biscuits Limited (LU)
Continuous improvement
The company ensures customer’s satisfaction at every
Policies on Quality, Food
Safety, Environment and
Health Safety (ref
IMS/01/MP001)
possible level and working on continues improvement
of products, processes and policies. It is open and
provide transparent information about the operations so
that operations can be improved.
Competitive benchmarking
They have a benchmark of English biscuits Manufacturers
(Peak Freans), Bocconi & candy Land, and Mayfair. EBM
has the largest market share in Pakistan and then CBL is the
Ensure customer satisfaction with high
quality, safe and halal food products.
Comply with all applicable legislations,
regulations and mutually agreed
customer requirements related to
Quality, Health, Safety, Environment,
Food safety & Halal food.
Consider QHSE and Halal Food Safety
risks and their significant impacts while
making business decision.
2nd largest biscuit manufacturing company.
Use clearly defined QHSE & FS
objectives at all organizational levels.
Employee empowerment
It empowers its employees by giving them the authority to
make decision. For example, if QAO finds that a particular
biscuit is not up to the mark then Quality officer stops the
whole production line until the fault is removed. It has got
ISO 45001:2018 (OH&S) management system
certification for having safe and healthy work
environment in all its facilities. CBL encourage all the
employees to identify the and control hazards which
contributes to the improvement of work environment. It
also provides training and development opportunities to
workers.
Team approach
All departments work ion collaboration while
designing, manufacturing and the products and
processes. They have integrated management system
(ICM).
Provide safe and healthy working
condition to all stakeholders for the
prevention of work-related injuries,
incidents, and occupational illnesses.
Protect the environment through
environmentally friendly processes which
include reduction of natural resources
consumption, controlled emissions and
recycling of waste.
Monitor and evaluate our performance
by means of periodic reviews and audits
for continual improvement.
Ensure open communication and provide
transparent information about our
operations and performance that
promote and increase mutual trust
among all stakeholders.
Encourage all employees and
contractors to participate in identifying
and controlling hazards and enable them
to contribute to improve work
environment.
Provide training and development
opportunities to our employees to
maintain job competence focused on
developing a culture of excellence.
Knowledge of tools
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Continental Biscuits Limited (LU)
The company makes sure that employees has complete knowledge about the tools. For this
purpose, they conduct different training sessions for the employees to learn about different
techniques and tools. CBL’s development opportunities.
Supplier quality
If they find the quality of flour, sugar and other item substandard, they simply reject it and use
this as raw material. Further, the company makes sure the protection of people who work in
supply chain and it is SEDEX certified company. Moreover, it deals with those suppliers only
who are halal, health and safety and environment certified.
Quality at the source
Every worker is responsible for his or her work in the work setting.
Suppliers as partners
CBL seeks partnership with different suppliers in the process.
Application of Quality Tools
CBL use different tools for the Quality check of the products which are manual as well as
automated like metal detectors.
Inventory Management
Inventory counting system
The Company has a perpetual inventory counting system in which every product has a barcode
which makes it easy to keep the record. Also, workers do physical count of the inventory after
every periodically.
Inventory costs
CBL has various costs which includes holding/carrying cost, setup cost, raw material ordering
cost.
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Continental Biscuits Limited (LU)
Classification system
The inventory of CB is classified as

Raw material (flour, sugar, oil etc.)

Work in process (biscuits on conveyor’s belt)

Finished goods (biscuits)

Tool and supplies
Inventory ordering (how much and when)
As soon as the workers feel the need to order the inventory after the stock out or huge demand,
they immediately order the inventory. Usually, the company keeps some safety or extra stock
which is used to fulfil the demand in uncertain times.
Supply Chain Management
CBL's business and client satisfaction are dependent on its supply chain department. Its
production, distribution, and sales operations are supported by the supply chain department's
knowledge and capabilities. SCM is also important for enhancing its customer service and
satisfaction. Supply chain specialists pull up their sleeves and get to work, whether it's dealing
with day-to-day product flows or coping with an unanticipated rise in demand. They identify
issues, devise inventive solutions to challenges, and figure out how to get our items to market
distributors under duress. CBL Supply chain department encompasses the planning and
management of all activities of the supply chain department at CBL is responsible for the
planning and management of all production, conversion, and logistics management activities. It
also covers coordination and collaboration with channel partners, such as suppliers,
intermediaries, third-party service providers, and customers, at CBL. The supply chain
department, in essence, integrates supply and demand management within and between
businesses. The Supply Chain department at CBL is an integrating role tasked with connecting
important business operations and processes within and across firms to create a unified and high-
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Continental Biscuits Limited (LU)
performing business model. It coordinates processes and activities with and across marketing,
sales, production, finance, and information technology, and it encompasses all of the logistics
management functions mentioned above, as well as manufacturing operations.
Benefits and risks associated with outsourcing
LU outsources most of the business activities to local and international market. It completely
outsources the procurement of packaging stuff, packaging itself by local workers, wheat, sugar,
eggs and other necessary raw material. They buy these raw material from open market where
they see minimum costs. The benefits with outsourcing to LU are:
 First, it is because of advantage of a supplier’s expertise. Its suppliers have competitive
advantage in producing core activities which LU can’t get on so it uses suppliers’
advantage as its own advantage.
 Along with it comes lower labor cost because where LU production is based, there is a
high competition of employees so it benefits LU in getting competitive and lower cost
labor.
 Second, it has benefit of focusing on its core function too. Because For, if LU starts
working on secondary activities, it will forgo its primary and core activities so due to
advantage of suppliers’ expertise, it outsources it and it saves him working on its core
functions.
 It has also a benefit of risk sharing because if its sales or demand fall down, it may stop
its production and can save the cost by not ordering from its supplier the raw material.
 Lastly, it helps LU to expand easily outside of the home country. As it orders coconut oil,
chocolate powder, dry milk from Malaysia and Indonesia.
The risks associated with outsourcing are:
 First, it may have issue of longer lead time because LU can only rely on its suppliers but
can’t be confident enough to minimize lead time if the inbound procurement reaches late
or lack OTIF (On Time In Full)
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Continental Biscuits Limited (LU)
 Second and the most important risk is quality because General Manager told, when
interviewed by us, they can’t compromise on quality of their cookies, so they need high
quality intake. Thus, they prepare a few ingredients themselves.
 Due to long distance of outsourced entities, it may take more time to reach raw material.
Additionally, it would take more increased effort required to manage the supply chain
 Lastly, the risk of disclosing business knowledge with competitors from outsourced
activities remain high every time.
Supply Chain Structure
Following is not the actual supply chain framework cited from LU, but is more similar to its
supply chain mapping.
Supplier relationship development and management
LU maintains a good relationship with its suppliers as it has made a code of conduct for its
suppliers which ensures suppliers’ commitment working with LU. Our suppliers and partners are
an important component of our ecology and success, as they aid in the development and
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Continental Biscuits Limited (LU)
maintenance of our brand. As a result, it is critical that all MDLZ Suppliers and Partners agree to
and uphold the highest levels of ethics, integrity, values, and operational principles. It has a
separate Supplier and Partner code of conduct which comprises on following commitments.
 Comply with applicable law, regulations, pledges and MDLZ Policies
 Deal Honestly with the Government
 Treat People Fairly and Respect Human Rights
 Embrace Social and Environmental Responsibility
 Make HIGH QUALITY Food that is Safe to Eat
 Meet Relevant Animal Welfare Standards
 Keep Accurate Books and Business Records
 Market Responsibly
 Compete Fairly and Conduct Business with Integrity
 Protect and Respect Private and Proprietary Information
Logistic
Transportation, inventory, warehousing, material-handling, and packaging, as well as security,
are all part of logistics. Logistics is a supply chain channel that adds the value of time and
location usefulness.
Customer Relationship Management
LU is more customer-centric in nature because it values customers’ voice. As told by General
Manager of LU that when they shortened the size of Prince Biscuit, the consumers started
complaining about its size. Then, LU revised its production with the former size with slight
difference in offering price. The LU marketing team visits different school to collect feedback
and work on it.
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Continental Biscuits Limited (LU)
Issues
 The first issue which we found was of inability of forecasting need. They used
forecasting with the help of population growth per year. The growth in population was
measuring the demand of cookies. This could help us out in demand forecasting, but what
if Covid.19 situation or change in interest of consumer alter the demand.
 Second, there was issue of breaking more cookies when chocolate coded cookies were
made. Because the size of biscuit was very thin when they were moved to the stage of
chocolate coding. So many biscuits were in broken condition, and it was waste of
cookies.
 Third, there was issue of inventory management. They buy supplies from open market so
it may cause problems for LU when the price, hoarding or scarcity occur in market.
 Another issue is poor distribution system in main city Sukkur, where its production plant
is working. I visited a general store and its owner was complaining about availability of
its Gala Biscuit. I heard him telling that they were not getting their due orders despite
rendering a huge chunk of market.
 One more issue was of metal dictator and its technique to separate cookies with metal.
When it detected any metal in any biscuit, it alarmed first. Then the whole row of about
10-12 inches wide with all biscuits regardless of metal or not was made to fall down. This
technique resulted in more waste.
 Lastly, there is a packaging issue in its cookies. Because sometimes its cookies are sold
in broken form either because of retailer’s careless or packaging default.
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Continental Biscuits Limited (LU)
Recommendation
 We would suggest to use more up-to-date forecasting techniques like regression
calculator, average moving forecasting or exponential smoothing. Because these
techniques render more accurate results than the one used by LU.
 We would suggest to fatten the size of cookies before they are moved to second stage
of chocolate coding because this would help in prevention of breakage of cookies.
 We would suggest LU must have its long-term suppliers because it would keep LU
production on the go regardless of any mishaps in market.
 We would suggest LU to fasten its distribution channel because it is the core of
increasing sales. If cookies of LU are unavailable in the market, its potential buyers
and brand preference people would move to other alternatives. And this shift may
result in downfall of size and shrinking of its market portion.
 There must be a more suitable technique of spotting and removing cookies with
metal. For instance, there should be a magnate which just catches only to those
biscuits which are containing metal.
 We would suggest LU to revise its packaging or look into it because its cookies are
sold in broken form. So we suggest to use transparent coated plastic which hold
cookies in it. Like as, LU uses inside tray with NanKhatai Biscuit.
 Lastly, we would suggest LU to come into the market of producing cookies sort cake
like the new super cake. It is a new opportunity here so it must start from now to
move into that direction.
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Continental Biscuits Limited (LU)
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