Supply Chain Management
Transportation
Presented by
• Muhammad Milad
• Dilawar Sadiq 38049
Submitted To
Sir Zeeshan Ahmed
Ganatra
ISMAIL INDUSTRIES LTD.
• Ismail Industries Limited is one of the largest food
companies in Pakistan, manufacturing a wide range
of confectionery, biscuits, snacks and packaging films
under the brand names of CandyLand, Bisconni,
SnackCity and Astro Films respectively
• Established in 1988
• Company converted into public Ltd. in 1989
• Exports; 40 above countries, mainly in USA, Europe,
Australia, Africa, Far East and the Middle East
Transportation
Introduction
• Transportation is a key function of supply
chains which runs from suppliers through to
customers or stores.
• With successful transportation execution, inventory
can be kept lean and can be moved in and out of a
warehouse quickly and efficiently. This improves
warehouse efficiency, reduces overall lead time and
saves money on storage.
Process View
• Warehouses: HUB, Lahore, Port Qasim, Gidani
• Their transportation is outsourced
• Ismail industries deals with two major process of
transportation:
• Primary Movements
• Secondary Movements
• Primary: in this process they deliver products from
Factory to Warehouses and uses 40-45 ft containers
• Their main goal is to use FCL strategy
• Mode of transportation is by ROAD
• Secondary: In this process they deliver products from
Warehouse to Distributors and uses 16-20 ft trucks
• They target one route per container, and club their stock
if needed
• It also uses railway
KPI: Turnaround Time
• Purpose: To check the efficiency of movements of targeted
trips
Calculation :
Total Trips May19 : 3.8/vehicle
Targeted trips: 5/month/vehicle
Result : 24% behind success.
• Strategy: Avoid more than 100 hrs to achieve targeted trips.
• They use TMS tracking management system to track each
vehicle
• Frequent follow ups and actively reporting daily on trips to
avoid unnecessary waiting, stops to secure time wastage.
KPI: Cost of Transportation
• Purpose: Minimize Total cost of transportation.
Calculation :
Total Transportation Cost : Rs 6095036
Travelled km : 97850
Cost/km : Rs 62.28
Target / Km : Rs 55.
• Strategy: Concentrating on FTL movements.
• Consolidate LTL for the orders come under 300km radar ensuring
route planning.
• They use PSO alert system to keep track of fuel consumption of
each vehicle in transit.
• Agreements with vendors for fuel per vehicle is limited.
KPI: Load ability
• Purpose: To reduce LCL trips and increase FCL trips to achieve the
maximum trips
Calculation:
Total FTL : 85%
Total LTL : 15%
Target : 100% FTL
Result : 15% behind to achieve target
• Strategy: Depending on the volume of goods, truck or container
capacity is decided.
• Mostly focuses on FTL to reduce variable cost and to avoid dead
freight.
• They reduce LCL with 5% rate every year
Challenges
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Fuel rates
Damage of goods
Return of goods
Climatic conditions
Increasing regulations
Commoditization of carrier pricing
Challenges
• Fuel rates: rise and fall of fuel prices causes high cost
• Damage of goods: Due to LCL or poor handling of goods
causes damage
• Loss on returned goods: Exchange on return goods
causes loss to company
• Climatic conditions: heavy rainfall or other weather
condition can causes barriers in the routes which
consume time
• Increasing regulation: Not fulfilling regulations on hours
of service, safety, compliance requirements is a hassle
• commoditization of carrier pricing: pricing competition
Achievements
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Partner/Customer Relations
Minimum product damage
Delivery performance
Freight economy
Setting clear KPI’s
Acheivements
• Partner/customer relations: Ismail industries have good
relationship with vendors due to good terms of contracts
• Minimum product damage: strict policies has decreased
the damaged of products
• Delivery performance: On time deliveries due to proper
planning
• Freight economy: by adopting measures such as freight
consolidations, route planning, transport selection and
load utilizing
• Setting clear KPI’s: focused on setting right key indicators.
Conclusion
• Learning and Findings :
• Manager must account inventory cost when selecting
a mode of transportation.
• It is important driver because products are rarely
produce and consumed in same location.
• Enables trade between people, essential for
civilization development.
• Must be future ready and innovative.
• Keep upgrading transportation standards.
Conclusion
• Align transportation strategy with competitive
strategy.
• Design a network that can handle e-commerce.
• Use technology to improve transportation.
• Design flexibility into the transportation network.
Business Proposal
Best for best
• Ismail Industries is dealing with 2 vendors Celerity and
Agility Logistics.
• We observed that Celerity is serving best in numbers
achieving turnaround time by 86% contributing in
overall efficiency and affectivity.
• Ismail must shift more business towards Celerity which
will help them in achieving monthly target of trips per
vehicle and help to reduce their cost drastically.
• For better accountability, cost saving, negotiation
benefits, better efficiency, quicker delivery.
Business Proposal
Business Forecasting
• Ismail Industries should give business projections for
at least 6 months in advance to each vendor to attain
favorable pricing and reservation of vehicles.
• This forecasting should be done to predict future
outcomes based on past and management insight.
• It will help both the parties in budgeting, planning
and estimating future growth.
Business Proposal
Maintenance of Vehicles
• We observed their was some transaction
mismanaged by the vendors due to vehicles broke
down during transaction caused failure in achieving
targeted trips.
• Ismail Industries must restrict vendors to carry out
routine maintenance of their vehicles and record
must be maintained and evaluated to secure
maximum incidents and timely deliveries.
Business Proposal
Lock Fuel Rates
• Since the uncertainty in Fuel rates is the major
problem nowadays, Ismail Industries must lock their
rates by setting monthly projections with PSO.
• It will lead them towards the best utilization of given
budged and avoid major fluctuation.
THANKS FOR
ALL