SHABBIR TILES SUPPLY CHAIN MANAGEMENT

RESEARCH REPORT

SUPPLY CHAIN MANAGEMENT

SHABBIR TILES

Supervised by:

Mr. Asad Nizamani

Submitted by:

Syed Akbar Shah

Sajjida Rez

College of Management Sciences PAF-KIET (city campus) Karachi

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ACKNOWLEDGEMENT

First of all, we would like to say Alhamdulillah, for having the strength and health to do this

project work.

We wish to express our sincere gratitude to Mr. Asad Nizamani, Course Instructor, for

providing us an opportunity to do our project work on supply chain management.

We are thankful to SHABBIR TILES and specially Mr. Faysal Nadeem, Senior Manager

Material Management & Production Planning for the coordination, guided tour of the plant

and providing information about the company.

TABLE OF CONTENTS

Topics Page No.

Acknowledgement

Corporate Profile

The Stiles Emporium

Vision Statement

Mission Statement

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Market Analysis

SCM Flow Chart

Critical Materials and Suppliers

Purchasing

Manufacturing

Distribution

Inventory

Forecasting

SCM Risks

ERP

New Product Introduction Process

Key Performance Indicators KPI

Core Competencies

Grey Areas

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SHABBIR TILES

Corporate Profile

SHABBIR TILES & CERAMICS LIMITED (STCL) is founded by the House of Habib (www.hoh.net) in 1978 with strategic and technical collaboration of Agrob Anlagenbau GmbH of West Germany. It was the first private sector enterprise in the Ceramic field in Pakistan.

The products of the company are offered under the brand name, Stile. The STCL plants (Unit 1, Unit 2), based in Karachi, incorporate the latest European technologies & techniques to manufacture high class products that conform to European standards. The Company is utilizing its full production capacity of about 12 million Square Meter per year to manufacture Porcelain and Ceramic tiles of international quality in different sizes and colors, employing the latest


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technology and state-of-the-art machinery imported from Italy and enjoy leading position in the Ceramic Tiles industry in Pakistan.

Stile Emporium

Further, to provide maximum services to STILE Consumers under one roof, the Company has opened company operated outlets all over Pakistan named as the Stile Emporium.

Shabbir Tiles and Ceramics Limited has dealer and distribution network throughout Pakistan with its sales offices located at Karachi, Lahore, Multan, Faisalabad, Islamabad, and Peshawar. The company is headquartered at Landhi, Karachi.

The Company is listed at Karachi, Lahore and Islamabad Stock Exchanges and is also member of Karachi Chamber of Commerce & Industry, Pakistan Ceramics & Sanitary Manufacturer’s Association, Pakistan Sanitary Merchants Association and Landhi Association of Trade & Industry.

Vision Statement

“While enhancing our "Stile" Brand as a Market Leader, Focusing our Human Capital, continues to delight our Customers in the field of Building Materials, Offering Best Quality Innovative Products at Prices Be-Fitting Stile Brand. Improving Efficiency, Conserving Energy and being Environmental Friendly. Taking into account the Stakeholders Interest”.

Mission Statement

Our Mission is to maintain our position as the leader in the tile industry in Pakistan and for this purpose we will continue to focus on:

We are committed to quality products and will provide our customers with innovative sizes, designs and color scheme that they will be delighted to have and shall provide them with excellent services to earn their loyalty We shall treat our employees fairly and shall provide conducive working environment for them to learn and to grow with the company The company shall earn adequate profits for its progress and growth and for providing reasonable return to its stakeholders


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Market Analysis

The tiles manufactured at the two units include Wall and Floor tiles with the following specifications:

Wall Tiles

12x20 inches

10x22 inches (Gorgeous Collection)

10x13 inches

8x12 inches

8x10 inches

8x8 inches

Floor Tiles

Porcelain Floor Tiles

Polish Tiles

Valentino Series

Glazed Tiles

Ceramic Floor Tiles

They are competing with Master Tiles (prime competitor), Karam Ceramics, National Tiles and Sonex. Shabbir Tiles are market leaders in Wall tiles and Ceramics with 50% market share, each. The company is contributing with 30% market share Porcelain tiles to the industry.


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http://www.stile.com.pk/products/walltiles/12-20.php

http://www.stile.com.pk/products/ceramicfloor.php

http://www.stile.com.pk/products/glazedfloortiles.php

http://www.stile.com.pk/products/valentinofloortiles.php

http://www.stile.com.pk/products/porcelainfloortiles.php






SCM Flow Chart

Critical Materials and SuppliersTiles are made of Shell Plastic clay along with a combination of Glazing clay, Frit and Stains. The materials, needed for the manufacturing of tiles till making them available to the customer, include shell plastic clay, frit and packaging cartons. 25% of these materials are supplied from


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Vendor (Inbound transportation)

Factory Plant Delivery

Primary transportation

Packaging

Testing

WarehouseProduction

Distribution to sale points/ customers

Secondary transportation

Secondary transportation

Mianwali, Mansehra and Mangopir while 75% are imported from China, Italy, Spain and Malaysia. Stile’s suppliers are:

Asian Trading

Madina Marble

Pak Tribal Minerals

Style Packaging

Box Expert

Engomb

Joysun Ceramics

These suppliers have been providing the materials to Stile and have become trusted partners. New suppliers contact the company with the saleable products and after procedural testing; the new supplier is approved for the provision of required materials. Regular feedback is solicited from the suppliers and appropriate technical and financial support, if required, is provided to the suppliers.

Purchasing

The majority of the items purchased are in the form of raw materials. Approximately 20 tons of different raw materials, 12 tons pallets are purchased. Annual contracts are made with monthly supplies. Stile enjoys a leading position in the market so in terms of dealing with suppliers, it always has the upper hand and it has adopted the policy of double sourcing. The suppliers are usually evaluated on the criteria of services rendered, financial status, lead time and delivery time. Delivery is done at Ex-works.

Manufacturing

Stile has a production capacity of 750,000/hour square units. Marketing people give figures for production depending upon the market demand. Production is done 24/7. If, in any case, raw materials are not available, which is seldom the case, then materials are imported. The company has a safety stock of 2 months.

Distribution


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The finished goods are packed in cartons, then either through emporiums or sales offices (more than 100) are supplied to the customers and exported to Afghanistan and Saudi Arabia. Payment is done to the local suppliers on credit (30-60 days).

Inventory

The inventory comprises of raw materials, work-in-process WIP, finished goods and MRO materials which varies on daily requirement consumption. The inventory is managed by the company but in rainy season, Stile adopts VMI. Safety stock of raw material is for a period of 2 months due to the unstable security conditions in the country. The ABC classifications of the materials are as follows:

Class A 20% item 80% value Frits

Class B 30% item 10% value Glazing Clay & Stains

Class C 50% item 10% value Clay

Forecasting

Annual forecasts are made by the managers with monthly targets to be achieved.

SCM Risks

Stiles have a well-established relationship with their suppliers. In cases of turn-over internal shuffling is done. The only problem in supply chain is the high cost of trucking and transportation.

ERP

The ERP software used by Stile is SAP. It’s aiding in accessing remote information from different sales office, speedy dissemination of data and decisions and performance of on-time operations. Almost 60% of the operations are automated through SAP. The internal requisition procedure is done manually but it is also approaching a hybrid system.

New Product Introduction Process

Stiles have around 600+ designs with a new design being brought in the market every month. Every design should be at least 4000 to 5000 nos.


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Key Performance Indicators

Communication is termed as an indicator of how well Stile is performing and effective and efficient communication is what they are proud of. MRP (SAP) was implemented in December 2010 and it is planning to implement Requisition Module in SAP system by June 2011.

Core Competencies

Quality is what has made Stile a market leader in wall tiles made on Italian technology. The company has controlled mass production and its product is made of 75% imported material and 25% local material and has a finished good stock of minimum 2 months. Stile also has its own Power house.

Grey Areas

Stile has an open-air storage place for the raw material which becomes a problem during monsoon season for which the inventory has to be managed by the vendor. The second problem which it faces is the overhead cost in the form of high transportation charges.


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SHABBIR TILES SUPPLY CHAIN MANAGEMENT

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