RELATION WITH PEPSI COMPANY INTERNATIONAL:

Pepsi Company listed in New York Stock Exchange. In Pakistan, there is 10 units of Pepsi Company. Shamim & Company is franchised by Pepsi Company on these terms & conditions. Pepsi Company has got a quality standard and has improved parameters to maintain and improve quality.

TERTIAN IS FIXED BY PEPSI COMPANY:

Pepsi Company is responsible for advertisement of its product.

PROFIT OF SHAMIM & COMPANY:

HISTORY
Shamim & Company was established in 1967, as prorate limited company. It started production in 1968. At first it was become by -up factory as 7-up was its initial product. Shamim & Company was named after the nephew of Allah Nawaz Khan Tareen the real owner of Company. Currently Alamgir Khan Tareen is its managing Directors Chairman who is the son of Allah Nawaz Treen.

TERRITORY
Shamim & Company covers the widest territory in Pakistan. It does not only cover Multan. Division but the areas of Quetta are also included in its territory.

PRODUCTS
The first product of Shamim & Company was 7-up. But the Company is producing 4-products: Pepsi Cola Mirinda 7-up Teem Mirinda green was also it product but it failed to get adequate response from customers as it was not according to their taste and there was no proper publicity or advertisement for it.

PRODUCT DESIGNING
All products have been designed by parent company i.e. Pepsi International. So Shamim & Company is not involved in product designing.

MAIN OPERATION
Operation is a process that transforms inputs into finished goods and services. Shamim and Company has its main operation as: To convert empty-returned bottles into filled bottles and to distribute them to retailers.

MAIN OBJECTIVES
The two main objectives of Shamim & Company are: To provide the customers, a quality-products, along with maximization of profits. The continuous improvement in quality.

UNIQUE FEATURES OF SHAMIM & COMPANY

The Company has following distinguishing features: Shamim & Company is the biggest soft-drink manufacturer in Pakistan. Shamim & Company covers the largest area/territory among al Pepsi Companys franchisees in Pakistan. Shamim & Company has won quality awards at international level.

DEPARTMENTS:
There are six main departments of Shamim & Company. Production Department Finance Department Sales Department Shipping Administration Marketing Department Personnel

OPERATIONS STRATEGY:
Pepsi Company international and its franchisees basically follow consumer driven operation strategy i.e. the strategy which focuses at consumers needs & wants. This strategy begins which Market analysis:

MARKET ANALYSIS:
The main consumers of Shamim & Company are: Youngsters Middle Social Class So marketing compaign of Pepsi products focuses on these two mentioned segments. The direct customers of Company are retailers and after it consumers are indirect customers.

Coca Cola Company is the major competitor of Pepsi at worldlevel. Similarly in case of Shamim & Company, its major competitor is Multan Beverages Company. Producing the products of Coca-Cola, Fanta & Sprite.

CORPORATE STRATEGY
GOALS
As earlier discussed, the main objective or goal of Company is to satisfy the customers needs along with maximization of profits.

CORE COMPETENCIES
The core competencies of Shamim & Company are: Well-trained & experienced workforce. Systems & Technology. Financial & market know-how of its managers. Well supportive facilities.

COMPETITIVE PRIORITIES:
Shamim & Company is producing standardized products. So Company profits of Shamim & Company are as following:

COST
Due to standardized products, Company has the priority to minimize the per unit cost & total cost as well.

QUANTITY
Shamim & Company wants to maintain a consistent quality of its products i.e. the product, which is produced here, must meet the designer specifications.

TIME
Shamim & Company meets its delivery-time promises i.e. The Company pays most attention to delivery -on- time to satisfy customers & retailers needs on the time, which they want.

FLEXIBILITY:
Since Shamim & Company does not focus the unique demand of customers & products are standardized, So Company works for volume flexibility i.e. Company is able to accelerate or decelerate the rate of production quickly to handle large fluctuations in demand.

FLOW STRATEGY:
There are three possible flow strategies, which is organization can adopt.

FLEXIBLE FLOW STRATEGY

Under this strategy, employee & equipment are organized around process. This strategy is for low-volume or customized products.

LINE FLOW STRATEGY

Under this strategy equipment & employee are organized around the product or service. This strategy is for high volume or standardized products.

INTERMEDIATE FLOW STRATEGY.

The strategy is mixture of above both strategies but with some dominant flows. Product or service volumes are relatively high and system is capable of handling several customer orders at a time.

FLOW STRATEGY IN SHAMIM & COMPANY:

Shamim & Company work with Line flow strategy where people equipment are organized around the product as product is standardized & high-volume production is there.

STRATEGIES BASED ON FLOWS:

There are 3 strategies based on three flow strategies.

MAKE-TO-ORDER STRATEGY
Its for line-flow strategy & high volume production.

ASSEMBLE TO- ORDER STRATEGY

Its for intermediate flow strategy. The components exist in organization but they are assembled on order.

MAKE-TO-ORDER STRATEGY:
Its for flexible-flow strategy & customized product or services.

APPLICATION ON SHAMIM & COMPANY:

Shamim & Company works under make-to-stock strategy as it holds items in stock for immediate delivery, thereby minimizing customer delivery times. This strategy causes the competitive priorities of low cost & consistent quality for the Company.

DECISION-MAKING:
In Shamim & Company major decisions e.g. about product development or product design or advertisement etc. are made by its franchiser Pepsi Company like decision for launching Mirinda Green, was made by Pepsi Company. The manager of Shamim & Company while making decisions about itself, different techniques like break-even analysis & other softwares. Normally the departments make independents. Decisions, but for some main issue or major problem, all departments leads jointly make decisions.

PROCESS:
In Shamim & Company resources are organized around product as Company adopts fine-flow strategy. Company can change production according to demand fluctuations. Process is same for all products i.e. Pepsi Cola, 7-up, Mirinda & Teem. No pant is fixed for a certain product Pepsi Cola has largest production as it has highest demand among all products.

PRODUCT SWITCH OVER:

On the same plant, which switching over to another product (e.g., from Pepsi Cola to 7-up) the plant washing detergent washes called TSP.

PROCESS STAGES:
1ST STAGE (GETTING TREATED WATER):
Lime, Farris Sulphate (for iron) & chlorine are added to raw/hard water & it goes in chemical tank where carbonate and bi-carbonate settle down, & we get treated/soft water.

2ND STAGE (PREPARATION OF SIMPLE SYRUP):

Simple Syrup is made by mixing up sugar into water after pasteurization of water at 80 C. After stay for a time period, this simple syrup is filtered & then cooled down at 19 C. Water is heated/boiled & avoids germs-growth at normal temperature like 32 C to 35 C

3RD STAGE (PREPARATION OF FINISH SYRUP):

Now this simple syrup goes into syrup storage tanks. Concentrate & flavor are added to simple syrup & it is called finish syrup.

4TH STAGE (WASHING EMPTY RETURNED BOTTLES):

Empty returned bottles pass through steam under 57 C to 77 C, then these are cooled down. This process-step takes 45 minutes. Now bottles are washed by Caustic-Soda. TSP and water. Now a light-test is conducted for these treated bottles, where the bottles pass through a light.

5TH STAGE (FILLING SECTION):

Now syrup & treated water come to Carbo Cooler in which NH3 (Ammonia) chips, are used for cooling purpose. Co2 gas also comes in Carbo Cooler. After a flow-mix in Carbo Cooler, the resultant drink comes into filler where empty washed bottles are filled.

6TH STAGE:
Now bottles come to Crowner where these are crowned then bottles pass through a light test to have a check for overfilled, underfilled or any deficiency.

7TH STAGE:
After passing through printer, the casing of bottles is made, & at last shipping hand over is there.

LOCATION:

Shamim & Company is situated near MDA (Multan Development Authority), on the road leading to Nishtar Hospital i.e. District Gaol road.

Selection of Location:
The major factor was proximity to markets in selection of location.

LOCATION ANALYSIS:
The location described above is favorable for Shamim & Company due to following factors:

MARKET RELATED FACTOR:

Shamim & Company has proximity to its major market i.e. Multan City which has been declared by Pepsi Compan7 \

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CAPACITY:
Capacity is the max. Rate of output for a facility. The facility can be a workstation or an entire organization.

HOW SHAMIM & COMPANY PLANS ITS CAPACITY:

In Shamim & Company, capacity planing is based upon demand analysis & demand forecasts. Normally Sales department, analysis demand & forecasts the demand. Then facts and figures about demand are delivered to General Manager Technical, who plans capacity.

PLANTS:
There are 4th manufacturing plants, which are imported by from Germany, and these plants are used according to season. So their usage very from 4th plants to 1-palnt.

CAPACITY INFORMATION:
Avg. output rate =15000, cases per day per plant. Here 1 day =24 hours and 1case = 24 bottles.

Maximum or peak capacity =20,000, cases per day per plant. Effective capacity = 15,000 cases per day per plant. Utilization (peak) = per plant.

Utilization (effective) = per plant.

Capacity cushion =100% Utilization (peak). =100% - 75% = 25% per plant. Capacity cashion is large one, which costs money, but Company is able to meet any feature demand.

EXPANSION IN CAPACITY:
In start, there was only 1-manual plant having capacity of 2000cases per day. But now due to:

Increase in market size (population) Increase in demand,

There are 4-plants in Shamim & Company in just 33-years. These 4-plants are automatic coitn effective capacity of 15000-cases per plant per day.

STRATEGY:
Shamim & Company follows Expansionist strategy as it uses frequent and large jumps in capacity.

ECONOMIES OF LARGE CAPACITY:

Shamim & Company large capacity enjoying following economies of scale: Reduced costs of purchased material by having discounts on heavy/large purchases. When output rate increases utilization rate also increase and per unit cost decreases in large capacities because fixed costs are spread over more units. In large capacity, Company gets more experienced workforce so productivity is increased & so cost is reduced.

DISECONOMIES OF LARGE CAPACITY:

Shamim & Company also faces following diseconomies of scale (large capacity). Its difficult to manage large capacity. It required more capacity. Forecast for demand is less accurate.

SIMULATION ANALYSIS:
In the process Simulation, we use a model to reproduce the behavior of system & to find solution of a complex problem. This model consists of different variables or alternatives. Shamim & Company has a Research dept. which works with Simulation Analysis. There are MIS-people to handle simulation system.

LAYOUTS:
Layout is physical arrangement of economic activity centers within a facility. An economic activity centre can be anything that consumers space. In other works Layout is physical arrangement of people, equipment or activities.

APPLICATION IN SHAMIM & COMPANY:

Shamim & Company works with Product Layout type, as resources are arranged around the products route. Computer application is also there in making layouts.

SOME LAYOUT, IN SHAMIM & COMPANY:

Some main layouts in Shamim & Company are following: Layout of plants. Layouts of Equipment.
Manufacturing layout. Office layout. Retail layout. Distribution & warehouse layouts.

Forecasting: Patterns o Demand: Demand for products of Shamim & Company follows Seasonal Pattern i.e. repeatable pattern of increases or decreases in demand, depending on the time of season. Factors affecting demand: External factors: Now-a-days, the biggest facotr affecting demand of products (of Shamim & Company) is the Competitors action & frankly speaking the action/policies of Coca Cola Company e.g. there effective advertising companies etc. Govt.s rule & regulations about taxes & prices also influence the demand by affecting the price of products. Internal factors: 3-main internal factors affecting demand are: Price. Advertisement. Distribution. Design of Forecasting System: 1. Deciding what to forecast: Level of aggregation: In Shamim & Company forecast in made about all four products separately. Units of Management: Forecasting is made in terms of Cases where 1 case = 24 bottles Type of Forecasting Technique: In Shamim & Company forecasting is made for short-term period i.e. for a quarter (3monts). In Shamim & Company, the base for forecasting is precious data about sales, which is provided by sales department. After analyzing the data, the forecast is made. Executive Opinion is also used in forecasting i.e. Opinions, experience & technical knowledge of related managers. So forecasting in Shamim & Company is a blend of analysis of data & executive opinion. Supply Chain Management: Supply-chain management aims at synchronization of a firms activities/ functions and those of its suppliers to match the flow of materials, service and information with customer demand. Application of Shamim & Company:

STRUCTURE:
The structure of Shamim & Company is more inclined towards segmented structure as most of the decisions are made independently by all the departments & only in case of targeting (demand etc.) there are joint decisions.

SUPPLY CHAIN:

SUPPLIES OF RAW MATERIAL

Shamim & Company has independent supply-Chain entities i.e. All dept. normally make independence decisions. Customers & suppliers are not involved in decision-making.

MODE OF PLACING ORDER:

Telephone is used about in all case, to place order for acquisition of raw material.

SUPPLIER SELECTION:
The first priority is given to Quality while selecting suppliers, by Shamim & Company. Price is considered after quality & delivery time at last.

SUPPLIER RELATION:
Shamim & Company its suppliers have cooperative orientation b/w them. Its main reason may be that Shamim & Company does not focus on price mainly but quality & Shamim & Company in only biggest customers of its suppliers normally.

SOLE SOURCING:
Sole sourcing is not there in Shamim & Company, as Company does not placc orders to only one supplier for a particular item.

DISTRIBUTION:
PLACEMENT OF FINISHING GOODS INVENTORY: Shamim & Company is involved in forward placement of finished goods inventory, i.e. its rocates the stocks closer to customers. Advantages from forward placement gets following advantages. Reduction in transportation cost Fast delivery times

TANSPORTATION MODE
Roads are the biggest/ main transportation mode in distribution ofr shamim & co. Trucks are normally used for distribution. So distribution is very flexible due to use of light way-transportation. SCHEDULING, ROUTING & CARRIER- SELECTION. The area / territory of shamim & co is divided into many sectors/regions. For every region, there is RSM i.e. regional sale manager, who is involved in scheduling/ routing making by survey of outlets. & carrier selection decision

INVENTORY MEASURERS.
Shamim & co normally measurer inventory in terms of weeks of supply. Where weeks of supply = Inventory Management in Shamim & Company:

Shamim & Company has pressures for low-cnrentory because: Shamim & Company wants to provide fresh products to its customers. Holding cost of imentory is high. High cnventory causes high tax also. TYPES OF INVENTORY IN SHAMIM & COMPANY: cycle- inventory. Anticipation inventory but at very minimal level as products are not stored for a long-time period. SAFETY STOCK AT MINIMAL LEVEL. Pipe-line inventory is also there which is dependant upon suppliers rlability & lead-time pipe line cnventory/Buffer Stock = dh Where d = demand during unit of lead time. H = length of lead during time. Supplies are distant normally, so Company has to maintain a considerable amount of Buffer-Stock. INVENTORY REDUCTION TACTICS: Cycle inventory is going to be reduced by increasing repeatabling. Shamim & Company always tries to make good forecasts about about demand is suppliers-delays to reduce safety stock. Suppliers of Shamim & Company are not habitual of delaying in case of Shamim & Company, as Company cant afford any delay.

INVENTORY CONTROL SYSTEM: Shamim & Company was periodic pervious System i.e. P-system for inventory management. So inventory is reviewed normally on weekly basis. Some time daily revieres are also mede. Each month the store prepares Monthly consumer ption reports. REORDER PT: For two main items reorder Pts. Are as following: Sugar is reordered when it is left for only 100-batched. Concentrate is ordered for 2 a 3 times a year. INVENTORY RECORD ACCURACY: Store managers is responsible for inventory record accuracy. He personally revieuer inventory on daily basis & some times. Production also reviews inventory even on daily basis. REPLENISHMENT: For some items e.g. concentrate, flavor etc., Shamim & Company experiences instantaneous replenishment & for some items, e.g. sugar etc. co. experiences non-instantaneous replenishment i.e. Company receives orders in installments. QUANTITY DISCOUNTS: Company buys bulk-quantities, so it enjoys quantity discounts also, by which cost is reduced & profit margin less and price becomes creative. AGGREGATE PLANNING:

 Aggregate plan is a statement of production rates, work-force levels and inventory holdings on estimates of customer requirements & capacity limitations. Since Shamim & Company is a manufacturing co., so its aggregate plan is also called production plan. Unit of plan:- Aggregate plan is expressed in terms of no. of cases. Which are also called SKU (stock keeping units). K& 1 case = 24 bottles PLANNING HORIZON: Aggregate plan is mostly prepared for a period of one year, but sometimes, it is also prepared for 3-4 years. STRATEGY FOR AGGREGATE PLANNING:Shamim & co. follows chase-strategy as it follows demandpattern-Demand for chamim & co.s products is seasonal. So due to seasnality fo demand & chasing ofdemand, the co; adopts following alternativdes.

REACTUVE ALTERNATIVES The reactive alternatives are the actions that are taken to cope with demand requirement. WORK FORCE ADJUSTMENT: Company has 2-types of employees: Employees at permanent basis. Employees at contract basis The employees at contract basis are hired & fired in peak & slack seasons respectively.

WORK-FORCE UTILIZATION:
OVERTIME: Normally there is not the tendency of over-time in Shamim & Co. as management thinks that productivity of workers is reduced during overtime. UNDER TIME: The permanent workers are also paid, the under time but the workers on contract-basis are paid on the basis of working hours so under time is not paid to them. VACATION SCHEDULE: Shamim & Company gives incentives for vacations in slack-season. Vacations are given on the basis of labor-laws in Pakistan.

Company does not adopt aggressive alternatives, as co has not complementary products creative pricing.

LINEAR PROGRAMMING:
Linear programming is not normally applied in Shamim & co. or if it is applied, than at a very minimal level. Objective Functions : Maximize

pi = price per case

xi = No. of cases i = 4-products of Pepsi, Mirinda, 7-up, Team

Constraints are in terms of budgeted resources & capacities.

MATERIAL REQUIREMENT PLANNING (MRP):

Material requirement planning system enables business to reduce inventory levels, utilize labour and facilities batter and improved customer-service. IN PUTS TO MRP: BILL OF MATERIAL (BOM): BOM is a record of all the components of an item, the parent component relationship and usage quantities derived from engineering & process designs. The simple BOM for Shamim & Companys product is as following.

End item

= 1-case of bottle

Purchased items = raw material cases Intermediate items = Bottles, Syrup Sub-assemblies = Bottles, Syrup

INVENTORY RECORDS:
In inventory records, Shamim & Company, uses to order after variable periods of time and of variable quantities, depending upon: Item with highs load time is Sugar Item with lowest load time is Co2

MASTER PRODUCT SCHEDULE (MPS):

MPS, details about production of end times items within specified period of time. In Shamim & Company, MPSs are prepared normally on weekly basis.