Group 3

Source Raw Inbound Processing / Outbound

Storage
Material Logistics Manufacturing Logistics

1. Industry Wide Phenomenon due to inflationary pressures

1. Cost of raw material
2. Vendors / suppliers
1. In the vicinity but dwindling in numbers
 Sourcing

1. Industry Wide Phenomenon due to inflationary pressures

1. Cost of raw material
2. Vendors / suppliers
1. In the vicinity but dwindling in numbers due to competition
POTENTIAL ISSUES WITH PROCESSING

• RM procurement increased by 17.64% over 4 years which is accounting to

only ~5% of increased production
• Also conversion cost has increased depicting increase in wastage. (Chipping)

• Market is growing by 10%

C & F and Other
overheads
• S H I F T I N S U P P L I E R S M I G H T H AV E R E S U LT E D I N C H A N G E T H E Q U A L I T Y O F
G O O D S , W H I C H M I G H T H AV E R E S U LT E D I N R I S E I N I N S U R A N C E C O S T S
• H I K E T H E M A N A G E M E N T S A L A R I E S T W I C E T H E PA S T 4 Y E A R S R E S U LT I N G I N
INCREASED OVERHEADS COST
OUTBOUND LOGISTICS

• Proportion of C&F cost has increased ~0.9% although shipping has been
same. (Inflation might be an issue)
Recommendations for the Client
Raw Material costs:
◦ Negotiate with suppliers/look for cost-effective suppliers: balance out margin vs cost ratio

Wastage:
◦ Train employees to improve efficiency
◦ Streamline manufacturing costs
◦ Look at possibility of recycling the wasted raw material
◦ Look at selling the wasted products – added revenue stream