Engro Foods Limited - Supply Chain Review

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Supply Chain Review
Engro Foods Limited
Waqas Ali Tunio
Institute of Manufacturing Engineering & Management
Pakistan Navy Engineering College (PNEC),
National University of Sciences & Technology (NUST), Karachi – Pakistan (waqasalitunio@gmail.com) (www.waqasalitunio.tk)

Abstract: This supply chain review is regarding the Engro Foods Limited. Waqas Ali Tunio (waqasalitunio@gmail.com) (www.scribd.com/waqasalitunio)

Supply Chain Review – Engro Foods Limited, Pakistan

Waqas Ali Tunio

Executive Summary
This review extensively presents the supply chain review of Engro Foods Limited. Engro’s entrance in dairy was with a view to not only utilize the existing opportunity in the market, but they went on t o increase the raw material (milk) in joint venture wit h UNDP to bring awareness in local public of interior Sindh so that they can nurture their cattle better with Livestock development programs, which will not only increase milk yield in the region, but will also help utilize the livestock potential, as existing milk was either not available for packaged milk processing due to transporation issues or lack of milk processing companies in interior Sindh or was not of the quality which was required by EFL. By locating plants in Sukkur and Sahiwal, Engro has showed a carefully planned and executed supply chain. Supply network was efficiently designed benchmarked with improvements based on Nestlé’s successful strategy and the milk collection centers and contracted dairy farms are the suppliers to EFL that are located close to ensure uninterrupted supply of milk without any delay or detriment to milk. Moreover, it has reduces the cost of transportation and most importantly of the refrigeration requir ed for milk transportation.

Issues encountered by EFL include, but not limited to the following: 






Lack of Reliable Transport System and its Monitoring
Demand Supply Imbalances
Lack of Control over Distribution Channels
Lack of Knowledge amongst Farmers
Infrastructure Issues
Law & Order Situation (esp. in Karaci - the key market)

Engro Foods believes making suppliers as partners and reinforces its strategy of forming long -term relationships with its suppliers by winning their trust and loyalty, esp. by helping them in difficult time. Continuous improvement in the distribution network is yet another success factor for Engro Foods which include feedback from suppliers on milk collection centers, from distributors on bad batches of products, customer feedback on existing products.

Special thanks to:





Cdr. Dr. Akmal Attaullah, Professor at National University of Sciences & Technology - Pakistan Mr. Riazuddin Qureshi, Senior Inspection Planning Engineer at ADCO (former Senior Engineer @ Engro Fertilizers Limited)

Mr. Yonus Siddiqui, Vice President at Supply Chain Association Pakistan (SCAP) (former Head of Supply Chain at Engro Polymers & Chemicals Limited)
Mr. Shahzad Soomro, Assistant Manager Purchase at Engro Foods Limited – Pakistan

2

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Supply Chain Review – Engro Foods Limited, Pakistan

Waqas Ali Tunio

Contents
Executive Summary ............................................................................................................................................. 2 Introduction ........................................................................................................................................................ 5 Supply Chain at Engro Foods ................................................................................................................................ 5 UHT Milk Market ................................................................................................................................................. 5 Map of Pakistan and Location of Typical Farms...
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