SUPPLY CHAIN MANAGEMENT

Final Project
Acknowledgement
We are very grateful to our honorable professor Mr. Danish Mujtaba who gave us a chance to
work on this project. We would like to thank him for giving us valuable suggestions and ideas.
The accomplishment of this project could not have been possible without the contribution and
support of a lot of individuals contributing to this project. However, we would also like to
express our deep appreciation and gratitude to Mr. Faisal Naseer (Manager), Mr. Waheed Zafar
(Manager), Mr. Majid Hussain (Deputy Manager) for giving us their precious time to let us
know about Dalda Supply Chain.
Above all, we would like to thank the Great Almighty for always having his blessing on us.
 Group Members
Muhammad Saqib Ali (BUS-20F-126)
Namrah Najeeb (BUS-20F-080)
Hamad Khan (BUS-20F-033)
Khansa Asif (BUS-20F-049)
Muhammad Ali Hassan (BUS-20F-061)
Class: BBA-5A
Course: Supply Chain Management
Course Instructor: Mr. Danish Mujtaba
Topic:
Supply Chain Model of Dalda Foods Pvt. Ltd

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S.NO. Table of Content Page No.
1. Introduction 03
2. Philosophy of Dalda Foods Pvt. Ltd 03
3. Product Line of Dalda Foods Pvt. Ltd 03
4. Supply Chain Model of Dalda Foods Pvt. Ltd 04
5. Plan 04
6. Quality & Price 04
7. Sourcing of Raw Materials 04
8. Suppliers 05
9. Single or Multiple Sourcing 05
10. Relationship with Supplier 05
11. Evaluation of Supplier 06
12. Logistics 06
13. Warehousing 07
14. Logistical Drivers 08
15. Cross Functional Drivers 09
16. Framework For Structuring Drivers 11

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Introduction:
Dalda Foods Limited is a Pakistani company that is engaged in the production and marketing of
cooking oils, ghee, and banaspati products. The company was founded in the 1940s and has since
become a household name in Pakistan for its high-quality cooking oils and ghee products. Dalda
Foods Limited is headquartered in Karachi, Pakistan, and has a strong presence in the domestic
market as well as in various international markets. In addition to its core cooking oils and ghee
products, the company also offers a range of other food products, including margarine, bakery
shortenings, and specialty fats. Dalda Foods Limited is committed to producing high-quality
products that meet the needs and preferences of its customers, and it employs state-of-the-art
technology and processes to ensure the consistency and reliability of its products.

Philosophy of Dalda Foods Pvt Ltd:

The philosophy of Dalda Foods Pvt Ltd is centered on providing high-quality, nutritious, and
delicious food products to consumers around the world. We believe in using natural and
sustainably sourced ingredients to create products that are not only tasty but also good for the
environment and the people who consume them. We are committed to ethical and sustainable
business practices, including fair labor practices and minimizing our environmental impact. We
also believe in giving back to the communities in which we operate through charitable initiatives
and partnerships. At Dalda Foods, we strive to continually improve and innovate in order to meet
the changing needs and preferences of our customers. We are dedicated to delivering exceptional
products and service to every person who trusts us with their food choices.

Product line of Dalda Foods Pvt Ltd:

 Dalda VTF Banaspati
 Dalda Cooking Oil
 Planta Cooking Oil
 Dalda Canola Oil
 Dalda Olive Oil
 Dalda Olive Oil Extra Virgin
 Dalda Olive Oil
 Dalda Kolonji
 Pure Dalda Olive Oil
 Manpasand Banaspati
 Manpasand Cooking Oil

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Supply Chain Model of Dalda Foods Pvt Ltd
Plan:
Planning is a very important decision at Dalda Company. As part of the planning process,
decisions are made about the purchase of raw materials. Purchasing is considered a very critical
point for any manufacturing company, so Dalda plans your purchases before you confirm them.
Purchasing plays a crucial role in successful business operations as it includes the purchase of
raw materials, packaging materials and machinery. This is the reason why making purchasing
decisions at Dalda Company is a time-consuming activity.
Dalda has a number of standards that are paramount when planning purchases.
 All quality values must be met.
 The financial constancy of suppliers must be measured before planning purchases.
 Before ordering, check the raw material and packaging materials
 Ensure suppliers do not share confidential company information with competitors.

Quality & Price:

The company is always looking for suppliers who offer quality products at a reasonable
price. Both the item, i.e. quality and price, are mutually important to the Dalda Company
and the company never underestimates either. Quality items are the main focus of the company
that Dalda customers want to buy. Dalda is always looking for suppliers who can provide them
with high quality raw materials, but price is also the main factor when purchasing.
Total Quality Management is considered an important part of the company's supply chain due to
operational health issues. Total Quality Management is the essential part of every
purchasing decision. With every purchase, the Quality Assurance department randomly checks
the quality of the shipment from their suppliers and whether the shipment does not conform to
the standard, the entire shipment goes to its suppliers back.

Sourcing of Raw Material:

Dalda Foods sources its raw materials from both local and international suppliers. Its raw
material is divided into two sections. The first is the packaging of raw materials such as
bottles, bags, cans, cartons and kegs etc. The raw packaging material is purchased from local
suppliers. While the raw material of production is the second part of raw materials. The raw
materials for production come from international and reputable suppliers because
Dalda believes in offering the highest quality to its customers. Dalda Foods does not focus on
individual supplier and they buys from different suppliers at the same time, so that the supplier
dependency at Dalda Company is very low.
Some Suppliers and Vendors of Dalda:
 USCS
 ECES

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 Smart Movers
 Haqq Engineering

Suppliers

Dalda Foods Ltd main focuses on providing the highest quality products to its customers.

For this reason the main standard when choosing suppliers is quality rather than price, as Dalda
does not to compromise on quality. Dalda analyzes the reputation of the suppliers on the
market because they do not want to take any quality risks and want to offer their customers
qualitatively risky products. In addition, the company take into account the production capacity
of the supplier before selecting them. Dalda also checks the main supplier and when the supplier
works with their competitors, they don't work with them because they want to produce the
highest quality products on time at the best available price.

Single or Multiple Sourcing

The Dalda company does not depend on one supplier. The reason is the insecure situation in
Pakistan. Dalda relies on more than one supplier and the work contribution b/w the providers is
distributed in their available capacity and their performance. Therefore, the degree off privately
of the company secret information also counts.

Relationship with Suppliers:

Dalda has tried to build a strong relationship with its suppliers. A relationship characterized by a
strong bond of trust and mutual understanding that results in long-term benefits for both parties.
The relationship with suppliers is essential for the company as they provide it with material with
which it manufactures finished product. Sometimes vendors offer you additional benefits such
as exceptionally long credit, delivery before due dates when
required, innovative ideas, etc. You also need to take care of your vendors to build strong
relationships. 
Dalda Company constantly reviews the performance of suppliers and employees who deal
with suppliers. Compliance with the performance by employees and suppliers is constantly
monitored and controlled by the management. If the employee has such an interest that it
will cost the company, such an action will be continuously monitored and there will be strict
guidelines for this action, e.g. If such a conflict arises and the Company resolves it, the Company
will penalize the party involved.

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Evaluation of Supplier
To ensure good quality, the company continuously evaluates the performance of its
suppliers based on four elements:
 Confidentiality: A factor that measures supplier loyalty by being loyal to the company
and not disclosing personal information outside of the company or competitors.
 Commitment: Measures the commitment to quality, quantity of product or
material provided by the shipments. 
 Quality: Dalda evaluates its suppliers based on the quality they deliver and Dalda always
encourages suppliers who perform well and deliver the best quality products.
 Price: In the end, the provider evaluates the price of the material they provide.
The company approves the best and most reasonable offers from suppliers.

Logistics
Transportation of raw materials from large suppliers: They tend to focus on the variable time
when the customer needs to receive their product without delay. To achieve his promise, logistics
management strategies involve the circulation of products or services and useful knowledge;
Logistics also involves the movements of people and energy. It also includes storage and
transportation activities. What “Dalda Foods Pvt. Ltd” is involved in the movement of its
raw materials and finished goods and routinely employs 3PLs.
Usually they have contracted with other transporters. Their agreement with the
transporters includes that materials enter the manufacturing facility and then, after being
converted into finished goods, are transported from the manufacturing site to their warehouses by
the same transporters. In general, they cover these two types of transportation activities
with different techniques, and their effective timing is very good, both in material
supply and finished product distribution. From Dalda's stock porters
distribute their finished products according to the needs of retail stores or other distributors.
In general, Dalda Foods Pvt. Ltd has a good relationship with its logistic providers which is
mutually beneficial. Dalda Foods SA Ltd has outsourced their transport function and the term of
their logistics contract is long term and depends on one year, but recovery is done twice a year
due to fluctuations in energy costs and other conditions. The transport takes place according
to the potential of the transporters.
Transportation prices are included in the price of products. The actual charge of
the transportation fare has not been disclosed due to security concerns and company
policy, but includes approximately ten to fifteen percent of the transportation cost. At Dalda
Foods Pvt. Ltd they do not plan their transportation functions. The transport takes place
after the need-based replenishment. When demand decreases, your transport decreases and vice
versa, as is the case in the month of Ramadan, your transport also increases faster than other
months of the year. No less than 70 to 80 tons of goods are usually transported in the Karachi
region.

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The delivery program of Dalda is very secure, they circulate their products throughout
Pakistan. They have all the necessary information about their transporters that deliver their
items. At Dalda Foods Pvt Ltd the organization uses to handle the appropriate level of items
storage according to the potential of the transporters used for the transportation. As their
items are circulated in the industry, they have certain loss/damage requirements to some degree.
The organization does not care if the defective items exceed this class, then your insurance
provider will reimburse you for any items. Dalda Foods Pvt Ltd manufacture that are insured.
However transporters are still forced to take the necessary measures to ensure that goods are safe
during transport. In situations such as urgent orders and retailers/wholesalers were running out of
stock, Dalda Foods Pvt. Ltd try to provide their item in first.
If the organization encounters difficulties with this, it counteracts this by identifying the
additional stock in the other nearest retail stores that are making available to the retailers and
wholesalers who have run out of stock in order to the negative no-stock scenario. Generally a
good decision from Dalda Foods Pvt. Ltd have outsourced their logistics needs to a specialist
company rather than doing it themselves. The main benefit they achieved is reducing the number
of cash outflows that would otherwise occur if they maintained their own transport fleet.

Warehousing
Dalda Foods Pvt Ltd owns some of its warehouses, particularly the larger ones, while others are
outsourced to third parties. The terms of the contract are renewed once a year, which is standard
business practice. Dalda Foods Pvt. Ltd operates a total of 11 warehouses across Pakistan.
Three of the main camps are located in Karachi, Lahore and Swat areas. In addition, Dalda
Foods Pvt. Ltd never applied any location strategy, in particular it is only based on the fact
of large urban areas. Dalda Foods Pvt. Ltd does not use Hi-Fi technology in its warehouses, all
operations are carried out manually.
The reason for not using advanced technology is the high cost of installation, and the
company does not see this as necessary, although it uses the service of stacker trucks to move
goods within the warehouse. A very simple first-in-first-out inventory management method
is used. Dalda Foods Pvt Ltd has no plans to hold a large or very small amount of stock. They
have traditional storage potential based on past patterns and forecast requests; They generate the
estimated potential, except for the month of Ramadan, when their sales increase by 30-
40%, so they generate more stock before Ramadan to cover the unwanted demand in Ramadan.

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 DRIVERS OF SUPPLY CHAIN

LOGISTICAL DRIVERS:

FACILITIES:
Dalda Food Company provide Premium brand in the Market, such as Quality, UNESCO quantity
of Vitamins, Offer VTF. This company also provide different facilities to customer like their
Quality, different Price Low and High to target the customer, Product is available in every store
easily. The company is always looking for suppliers that offer quality products at reasonable
prices. Both items, quality and price, are important to his Dalda company, and the company does
not underestimate either. Quality items are the main focus of the company that Dalda customers
want to buy from. Dalda is always looking for suppliers who can provide quality raw materials,
but price is also a major factor when purchasing.
Total Quality Management is considered an important part of the company’s supply he chain due
to operational issues. Total quality control is an important part of every purchasing decision. For
each purchase, quality assurance department will randomly check the quality of the shipment
from the supplier, and if the shipment is not up to standard, the entire shipment will be returned
to the supplier.
Available at every store. The production of Dalda are available now in all over the Pakistan. At
the binging these product were available only in the big markets. They have an 11 or 12
distribution center in the different cities. Who have 20% extra safety stock, so they can easily
supply there product in different general store. But many area of Pakistan it’s still not available it
market because it is premium brand who has high price.
According to me, Dalda’s Facilities are EFFICIENT because it is premium brand, their product
is sale on high price and also their product is not available on everywhere, they can target are
target those market who give high amount of product also due to high price of product most of
the people cannot buy their product. They charge high price due to great quality of their product.
Also their product are mostly available on urban area but less in rural area.

INVENTORY:
• Dalda’s inventory is RESPONSIVE because it must carry two weeks stock and four
days stock on wheels. Dalda must maintain safety stock to cope up the situation of stock
out. This safety stock is maintained by analysis of past history of data and according to
the potential of company.

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 • Dalda replenish it’s raw material after every three to four months to avoid production
shortfall and situation of shortage or stock out because it can cause sale loss.
• Dalda make weekly planning and make forecast about how much inventory should be
carried.
• Dalda make an annual plan every year and arrange S&OP (Sales and Operational
Planning) meeting in December to lock the volume of January.
• Dalda primary sale: Dalda to Distributor
Dalda secondary sale: Distributor to Retailers

TRANSPORTATION:
The transportation of the Dalda food company is RESPONSIVE.
Dalda use the policy that’s their products reached the consumers in best way and in quickly ,
their first priority to fulfil the costumers need also fulfil or meet market requirements.
Dalda’s Sales force present in market and check required items and then accordingly as soon as
possible place the products in the target location.
Dalda company use the third party logistics 3pl for transportation to fulfilment services and
move the products to outsource elements of the distribution and warehouses.
In Dalda they have not any schedule of transportation functions the occurrence of transportation
according to their need certain replenishment.

CROSS FUNCTIONAL DRIVERS:

INFORMATION:
Vital role play by salesforce, they can survey in daily in market to get daily base information
regarding demand of customer, also that person check competitor product like packaging, price,
quality etc. Another side, Quality insurance department, who can be survey in whole of Pakistan
and buy the product of Dalda and competitor product to check quality, where they stand on it
against their competitor. Also get information of their own product about their packaging,
condition of product. One more team is Invitation Team, they can visit different Expo center like
Dubai Expo center; to get the different idea and information. Dalda Company have also research
and development who can be work daily base, also Dr Aqib zahor, he is look after it with Quality
insurance department and also meeting on weekly based. The salesforce department can get
information about customer, what they demand generate on market like price, duality.
According to me, Dalda Information system is EFFICIENT, because they get information from
those market where they are selling their product and customer can easily buy it. They cannot get
information from rural area because it is not target market according their premium price. They
mostly get information from General store or big shopping mall like cheese up, Imtiaz etc. They

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are mostly focus on Product quality they get information about packaging, condition of product
but they cannot get information that were need is generate on market or not mostly in rural area.
They give ads in social media or TV, so demand is generate on whole Pakistan but product is not
available in different area.

SOURCING:
Dalda’s sourcing is RESPONSIVE because Dalda outsource it’s transportation and give
contracts to third parties. It has approved suppliers, contractors and Distributors. They make an
agreement with Dalda in which it is mentioned that what quality standards vehicle will use,
vehicle must have tracker system, and well trained staff will use in transportation.
Dalda outsource it’s packaging with third party but Dalda’s future plan is to be insource it’s
packaging because sudden changes in plans make problems and insource packaging will increase
flexibility and reduce cost.

PRICING:
Pricing of the Dalda food is RESPONSIVE in nature .
Dalda is a premium brand.
Dalda manufacturing 30% oil and other 70% oil source from outside the country, Dalda buying
raw material (oil) from suppliers and then refining the oil and further manufacturing and value
addition in products and then charge the price accordingly.
The transportation prices are incorporated in products of Dalda , not actual rate of transportation
prices but it’s around 10 to 15 %.

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 FRAMEWORK FOR STRUCTURING DRIVERS

Differentiation Focus

More Towards Responsive with

Adequate level of Efficiency

Supply Chain Structure

Logistical Drivers

Facilities Inventory Transportation

Efficient Responsive Responsive

Information Sourcing Pricing

Efficient Responsive Responsive

Cross Functional Driver

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