COMMECS INSTITUTE OF BUSINESS & EMERGING SCIENCES

Report on Supply Chain Business Model of Table Cutlery

UMBRELLA CORPORATION
WAREHOUSING & DISTRIBUTORS

TABLE OF CONTENTS
INTRODUCTION
MEANIN !" C#T$ER% STAIN$ESS STEE$ 'E(E$!PMENT !" C#T$ER% IN'#STR% IN PA)ISTAN STREN T+S -EA)ENESS MANUFACTURING OF CUTLERY RA- MATERIA$ #SE' AN' RA- MATERIA$ IMP!RTE' PRODUCTION PROCESS (KNIVES) o PR!'#CTI!N "$!- C+ART 0)NI(ES1

Page # 2 2 & * , , . . / 2 3 45 44 42 42 4& 4& 4& 4, 4, 4. 4. 4/ 42 42 43 24 24 22

PRODUCTION PROCESS (SPOON) o PR!'#CTI!N "$!- C+ART 0SP!!N1

UMBRELLA CORPORATION
WAREHOUSING & DISTRIBUTORS

BUSINESS MODEL
STR#CT#RE !" !PERATI!NS

OPERATIONS IN DETAIL
PURCHASING FROM MANUFACTURER/ SUPPLIER o S#PP$IERS TRANSPORTATION o o o o "ACT!RS TRANSP!RTERS 'ISTANCE "R!M PR!'#CTI!N "ACI$IT% MAP

RECEIVING & STORING AT WAREHOUSE o o "ACT!RS !PERATI!NS IN -ARE+!#SE

DISTRIBUTION o o 'ISTRIB#TI!N PR!CESS C#ST!MER $IST

INTRODUCTION
MEANING OF CUTLERY
Cutlery6 in general usage6 is the ter7 applied 8olle8ti9ely to all types of 8utting instru7ents: Cutlery refers to 8utting i7ple7ents6 ;hi8h 8an be used for industrial6 8o77er8ial and do7esti8 purposes: Spe8ifi8ally6 it refers to utensils e7ployed in the household li<e flat;are utensils6 in8luding <ni9es6 spoons for<s and other spe8iali=ed i7ple7ents6 for eating and ser9ing food: The s;ords6 s8issors6 7ani8ure and pedi8ure sets > instru7ents and non?ele8tri8 ra=ors are also 8lassified as 8utlery: It is broadly di9ided into t;o 8ategories i:e: <it8hen and table 8utlery and non?<it8hen and non?table 8utlery: A88ording to International Trade Center@s 8lassifi8ation6 follo;ing ite7s fall under the u7brella of 8utlery: A A A A A A A A A A A A A A A A A Sets of different <ni9esBart 02244451 Table <ni9es ;ith fiCed blades 02244341 !ther <ni9es and s;ords et8 02244321 Po8<et > Pen )ni9es ;ith folding blades 022443&1 Blades for <ni9es 022443*1 +andles for <nifes of base 7etal 022443,1 Ra=ors in8luding safety ra=ors > open blades 02242451 Safety ra=or blades6 blan<s in strips 02242251 Parts of non ele8tri8 ra=ors 02242351 S8issors6 tailors 0224&551 Paper <ni9es6 letter openers6 erasing <ni9es6 pen8il sharpeners et8 0224*451 Mani8ure and pedi8ure sets and instru7ents 0nail files1 0224*251 )it8hen 8hopper6 8lea9ers > 7in8ing <ni9es > other arti8les 0224*351 Table ;are sets plated ;ith pre8ious 7etal 0224,451 Table;are sets ;ithout plating 0224,251 Plated table;are arti8les not in sets 0224,341 Table;are arti8les ;ithout plating 0224,331

!n the other hand 7odern 8utlery in8ludes a great nu7ber of arti8les ;hi8h are not stri8tly 8utting instru7ents6 but ;hi8h6 o;ing to their 7ore or less inti7ate relation to table or po8<et 8utlery6 are 8lassed ;ith su8h arti8les for 8on9enien8e sa<e: A steel table or 8ar9ing for<6 for eCa7ple6 is an i7portant arti8le of 8utlery6 although it is not a 8utting tool: So7e of the 8utlery ite7s are prepared to ser9e the de8oration purpose su8h as s;ords of different <ind:

STAINLESS STEEL
+enry Brearley ;as the in9entor of stainless steel: Brearley ;as loo<ing for steel ;ith better resistan8e to erosion6 not 8orrosion: The first true stainless steel ;as 7elted on August 4&6 434&: It 8ontained 5:2*D 8arbon and 42:2D 8hro7iu7: At the ti7e6 8utting <ni9es ;ere 7ade of 8arbon steel ;hi8h had to be thoroughly ;ashed and dried after use6 and e9en then rust stains ;ould ha9e to be rubbed off using Carborundu7 stones: Today stainless steel is a generi8 ter7 for a fa7ily of 8orrosion resistant alloy steels 8ontaining 45:,D or 7ore of 8hro7iu7: Stainless steel@s one uniEue ad9antage o9er 8arbon steel is its high resistan8e to 8orrosion: This resistan8e to 8orrosion is due to the naturally o88urring 8hro7iu7?ri8h oCide fil7 for7ed on the surfa8e of the steel: !9er a period of years a stainless steel <nife 8an literally be ;orn a;ay by daily use and by being re? sharpened and ;ill still re7ain stainless: Sil9er plated 8utlery ;ill e9entually ;ear through to the base alloy6 but stainless steel 8utlery 8annot ;ear through:

Develo !e"# o$

C%#le&' I"(%)#&' *" P+,*)#+"

The 8utlery se8tor is an i7portant one: The industry stru8ture refle8ts that it is purely SME in nature6 and is la8<ing in 7odern te8hnology: The 7aFor portion of this industry is situated in the lo8ality of -a=irabad6 Na=i7abad and Allahbad in uFran;ala distri8t: There are approCi7ately &55 units present in this region ? about half of the7 are registered S7all and Mediu7 Enterprises 0SMEs1 ;ith Pa<istan Cutlery > Stainless Steel #tensils Manufa8turers > ECporters Asso8iation 0PCSS#MEA1: 2,6555 people are asso8iated dire8tly or indire8tly to this se8tor produ8ing ,555 pie8es per day 7anually: Cutlery Cluster of -a=irabad is re8ogni=ed all o9er the ;orld for its produ8ts: This is situated in the North of $ahore at the Triangle of 8ities of uFran;ala6 Sial<ot and uFrat: There is high 8on8entration of s7all?s8ale 7etalBlight engineering industrial units: These are 7ainly 8on8entrated at its suburb areas: The 8utlery Industry fa8ed serious 8risis after partition be8ause the 7ain business 8enters ;ere Bo7bay6 Cal8utta and 'elhi: As the largest ho7e 7ar<et ;as lost6 the finan8iers i77igrated to India: But the hard ;or<ing labor for8e and 8rafts7en re8aptured their fa7e ;ithin a 9ery short span of ti7e: The 8utlery industry in Pa<istan is one of the se8tors ;hi8h ha9e failed to benefit fro7 trade liberali=ation: The 8utlery industry falls under the S7all and Mediu7?si=ed Enterprise Category: Though 8utlery eCports in8reased by 44:* bet;een 2554 and 255&6 the rate of gro;th of eCports has de8reased progressi9ely sin8e 22:.D in 4333?2555:

STRENGTHS

 Cluster a8tors are ;ell 7oti9ated: 455 D eCport oriented industry: S<illed labors are a9ailable be8ause of 8utlery training institute of

Pa<istan at -a=irabad: Co7parati9ely ;ell?organi=ed se8tor: Platfor7 of 8utlery asso8iation is a9ailable for produ8t de9elop7ent > for sol9ing the 7utual differen8es:

WEAKNESSES
Poor infrastru8tures li<e roads and tele8o77uni8ation +igh 8ost of utilities bills su8h as Ele8tri8ity6 Sui #ndue interferen8e of 9arious

as 0Natural as1 et8:

o9ern7ent 'ept: Cut throat 8o7petition a7ong business 8o77unity of this se8tor: $a8< of Euality 7anufa8ture: $a8< of design syste7 > designers for the 8utlery industry:

MANUFACTURING OF CUTLERY

RAW MATERIAL USED

Stainless Steel Ca7el Bone Re8y8le brass road 'ensified ;oods

IMPORTED
Stainless Steel 0+igh Guality1 Steel ;ire Magnetite self dressing ;heels Plasti8 'ensified ;oods

PRODUCTION PROCESS

P&o(%-#*o" P&o-e)) (K"*ve))

+) C%##*"./ In the first step the 7etal sheet ;as 8ut into different pie8es

depending upon the si=es of <nife blades: 0) S#&+*.1#e"*"./ The blades ;ere straightened 7anually during the pro8ess:

-) H+&("e))/ The blades ;ere hardenedH an essential pro8ess reEuired for the sharpness of blades: () S%&$+-e G&*"(*"./ Surfa8e grinding 7a8hines s7oothed the surfa8es of blades on both sides: e) E(.*"./ The pro8ess ;as used to 8arry out both 7anually and through 7a8hine ;or< to de9elop the edges of <ni9es: $) H+"(le M+,*"./ +andle 7a<ing ;as perfor7ed 7anually in t;o stepsI +andle 7a<ing > "iCation: .) Pol*)1*"./ Se7i?finished <ni9es ;ere then sent to the polish depart7ent: 1) Cle+"*"./ After polishing pro8ess6 <ni9es ;ere 8leaned by <erosene oil andBor ;ood brada:
i1 I") e-#*o"/ The produ8ts ;ere then passed through the inspe8tion phaseH

produ8ts ;ere 8he8<ed a88ording to the standards pres8ribed by the 8usto7ers: 2) P+-,+.*"./ The <ni9es ;ere then pa8<ed into 8artons and gift boCes of different si=es:

P&o-e)) $lo3 -1+&# o$ K"*ve)

P&o(%-#*o" P&o-e)) (S oo")

+) S*4*"./ Stainless Steel sheets ;ere 8ut into the reEuired si=es through Cutting press:

0) D*e C%##*"./ After si=ing6 the pie8es ;ere brought to the die se8tion6 ;here a88ording to the produ8t reEuire7entsH the sheets ;ere further 8ut and dra;n to gi9e basi8 shape: Presses ranging fro7 &5?455 tons ;ere used in this se8tion a88ording to the produ8t spe8ifi8ations: -) G&*"(*"./ After 8utting > dra;ing6 the ite7s ;ere brought into the grinding se8tion to s7oothen the rough edges and re7o9e any eCtra 7aterial6 if present: () Be"(*". +"( S1+ *"./ S7all ite7s as spoons6 for<s et8 ;ere brought into this se8tion ;here the final shape of produ8ts ;as a8hie9ed: e) S#&+*.1#e"*". +"( S#+! *"./ +andles of spoons ;ere straightened and shaped in this se8tion: Sta7ps of brands ;ere also fiCed here: $) A--e))o&*e) F*5+#*o"/ Plasti8 or steel a88essories ;ere fiCed in this se8tion depending on the styleBdesign: .) Pol*)1*"./ The produ8t surfa8e ;as s7oothened and proper shine ;as gi9en in this pro8ess: 1) F*"+l I") e-#*o"/ Guality of the produ8t ;as 8he8<ed during the final inspe8tion phase in addition to any 7inor re;or< if reEuiredH failing ;ith the ite7 ;as reFe8ted and sent ba8< for 7aFor re;or<: *) P+-,*"./ The produ8t ;as then pa8<ed a88ording to the reEuire7ent of buyer:

P&o-e)) $lo3 C1+&# (S oo")

UMBRELLA

CORPORATIO N
WAREHOUSING & DISTRIBUTORS

B#SINESS M!'E$
S#&%-#%&e o$ O e&+#*o")

OPERATIONS IN DETAIL
PURCHASING FROM MANUFACTURERS6 SUPPLIERS
Ma<ing a pur8hase is not an easy tas< in any <ind of business setup: Pur8hase is the one of the 8ore fun8tion of any business:

"or #7brella Corporation it is essential to 7a<e a pur8hase in an effi8ient and s7art ;ay: #7brella 8o: is one of the biggest ;arehousing > distribution 8o: in )ara8hi: The produ8t in ;hi8h 8orporation deals is table 8utlery: The pur8hasing dept: of #7brella 7a<es pur8hases dire8tly fro7 the 7anufa8turer of 8utlery in -a=irabad6 Na=i7abad and uFran;ala lo8ated near $ahore6 PunFab: The three 8ities 7a<e a 8luster in ;hi8h the best 8utlery ite7s are produ8ed: The first obFe8ti9e of #7brella ;as to identify its supplier: The 8orporation de7ands for the best supplier in the 8luster:

SUPPLIERS
4: I7perial Cutlery 2: +abib Cutlery &: A?4 Cutlery *: Pa< Ala7 Cutlery

-a=irabad -a=irabad Sial<ot Sial<ot

After the sele8tion of suppliers the neCt tas< that #7brella has ;as to negotiate 8ontra8ts: #7brella signed long ter7 8ontra8ts ;ith the suppliers on 9arious ter7s > 8onditions: These 7anufa8turers ha9e eC8ellent 7ar<et reputation and they are stable in ter7s of finan8e: They are fleCible and ready to a88ept any 8hallenge su8h as huge orders et8: #7brella <eeps all the re8ord of their suppliers and 7aintains 8o7plete data of pur8hase and pay7ents and all the infor7ation they about the7:

TRANSPORTATION
The se8ond fun8tion of #7brella 8o: is to transport its pur8hased goods fro7 8luster to its ;arehouse in )ara8hi Juna Mar<et: The best 7ode of transportation for the 8utlery produ8ts is the 7otor transport as it is faster than any other6 has lo; 8ost6 benefit of door to door deli9ery and pi8< up6 and 8an be hired for s7all ship7ent as ;ell:

FACTORS
The $+-#o&) that #7brella had to underta<e for transportation areI

4: LAW ORDER/ la; and order situation 8an@t be predi8ted as a 7atter of fa8t:

The 8orporation has to 7anage its supplies by ta<ing so7e 7easures to the la; and order situation that 7ay arise at any ti7e and due to ;hi8h the ship7ent 7ay delay to se9eral nu7ber of days: The 8orporation al;ays <eeps suffi8ient a7ount of 7er8handise in its ;arehouse to o9er8o7e su8h issues6 ;hi8h 7eans #7brella pur8hase its goods before they are out of sto8<:
2: CLIMATE/ Cli7ate 7ay also delay the ship7ent to se9eral nu7ber of day

and the sa7e 7easure is appli8able for this fa8tor as in the $A- > !R'ER:
&: THEFT/ the ship7ents of u7brella are al;ays of 7ore than Rs:& 7illion6 in

8ase of any theft the transporters doesn@t ta<e any responsibility6 so6 the insuran8e is al;ays 7ade to the ship7ent:
*: ACCIDENTS/ The 7ost unpredi8ted fa8tor in ;hi8h loss o88ur to both the

transporter and to the pur8haser6 for o9er8o7ing this loss the pur8haser al;ays 7a<e insuran8e of their goods:

#7brella Corporation has to hire the pri9ate transporters0& P$1 for the deli9ery of goods to its ;arehouse: The best transporters ;ho ha9e the eCperien8e and also responsible are sele8ted by the 8orporation and signed 8ontra8ts:

TRANSPORTERS
The 7aFor transporters of the region areI
4: Shadab goods transport 2: +aFi a=i= goods transport &: Sial<ot K )ara8hi goods transport *:

uFran;ala 8ara9an transport

,: $ahore united goods transport

DISTANCE FROM PRODUCTION FACILITY

The distan8e fro7

uFran;ala to )ara8hi is 4&44 <7 fro7 N?, and it ta<es approCi7ately 4, hours and 4* 7inutes dri9e: approCi7ately 4, hours and &3 7inutes dri9e:

The distan8e fro7 -a=irabad to )ara8hi is 4&*3 <7 fro7 N?, and it ta<es

The distan8e fro7 Sial<ot to )ara8hi is 4**2 <7 fro7 N?, and it ta<es

approCi7ately 4. hours and 25 7inutes dri9e:

All in all the ship7ent ta<es 25 hours 7aCi7u7 to rea8h )ara8hi if dri9en 8ontinuously ;ith 8ouple of stops6 other;ise it 7ay ta<e &5 hours 7aCi7u7 if dri9ers ta<e sleep in bet;een: The 8ost of transportation is Rs: 4,5? 255B 8arton: If 8ontainer is transported the 8ost is fro7 Rs: *5555 to .55556 a88ording to the si=e of 8ontainer:

MAP

RECEIVING AND STORING AT WAREHOUSE

-arehouse of #7brella Corporation is lo8ated at Juna 7ar<et )ara8hi: The ;arehouse is pri9ately o;ned and has an area of ,55 sEuare yards: The ;arehouse has no partition: The offi8e of #7brella Corporation is lo8ated on the first floor on its ;arehouse: "or #7brella ;arehouse lo8ation ;as 9ery i7portant fa8tor as the business depends on the lo8ation of ;arehouse:

FACTORS
The fa8tors that ;ere obser9ed during the lo8ation of ;arehouse are as underI
HUB OF BUSINESS/ Juna 7ar<et is a hub of ;holesale business and the

pla8e ;here al7ost e9erything is a9ailable6 setting up ;arehouse on this lo8ation is profitable and has long ter7 9alue:
COMPETITIVE MARKET/ The 7ar<et is 8o7petiti9eH ;arehouse of

#7brella is best suitable in this pla8e as #7brella has the ability to gi9e 8o7petition to the entire 7ar<et ;ith respe8t to its 8utlery ite7s: A88ording to the business 7odel no su8h distributor li<e #7brella eCist in that lo8ation6 all those ;ho eCist are s7all shop<eepersB ;holesalers ;ho ha9e 9ery s7all ;arehouse and sell goods on relati9ely high pri8es as 8o7pare to #7brella be8ause #7brella pur8hase 7er8handise in huge Euantities so they ha9e the best 8o7petiti9e ad9antage of lo; pri8e:
COST EFFECTIVE/ The lo8ation gi9es the e8ono7y to the operating 8ost of

;arehouse:
AVAILABLE SERVICES/ the ser9i8es reEuired to operate the ;arehouse are

easily a9ailable at Juna 7ar<et su8h as se8urity guards6 s;eepers6 transportation6 labor if eCtra needed6 ban<s are also a9ailable for any transa8tion:

 REGULATORY CONCERNS (ENVIRONMENT)/ there are no su8h

8on8erns ;ith respe8t to en9iron7ent and #7brella al;ays ta<es the responsibility in sa9ing the en9iron7ent fro7 getting polluted: The lo8ation is good and suitable for business:
WORKFORCE AVAILABILITY/ Juna 7ar<et is the lo8ation ;here

;or<for8e is al;ays a9ailableH in 8ase of any eCtra reEuire7ent of labor due to eCtra orders the labor is a9ailable and 8an be easily hired:
CUSTOMERS/ Custo7er is the 8ore fa8tor for running the business6 Juna

7ar<et is hub of business6 and all type of 8usto7ers approa8h to Funa 7ar<et as this 7ar<et has the Euality in lo; pri8e of high Euality produ8ts and ease and possibility of bul< buying: The 8usto7er is al;ays there in this lo8ation:

OPERATIONS IN WAREHOUSE
RECEIVING/ The preparations for the goods that ;ill arri9e is done 4 hour

before as the dri9er infor7s in our offi8e ;hen he is near )ara8hi: The goods are re8ei9ed at the ;arehouse dire8tly:
UNLOADING/ The unloading of goods is done by the ;arehouse per7anent

labor ;ith 8are: The unloading of goods approCi7ately ta<es *?/ hours:
STORING/ 'uring the unloading6 the goods are sorted and si7ultaneously

stored at their allotted pla8es in the ;arehouse:

RECORDING & PHYSICAL COUNT/ The ;arehouse 7anager6 during the

unloading and storing pro8ess starts re8ording the goods and 7a<es their physi8al 8ount a88ording to their nature and adds into the in9entory: This pro8edure is also done ;hen an order is shipped to the buyer:
INFORMATION UPDATE/ All the infor7ation regarding re8ei9ing6 addition

or subtra8tion of in9entory6 their nature6 the pla8e 9a8ant et8: are re8orded by ;arehouse 7anager and he stores all that data in 8o7puter ;hi8h has

spe8iali=ed soft;are for this purpose6 that soft;are analy=e the date and <eep e9erything up to date6 and tra8< all the infor7ation a9ailable: The infor7ation is only a88essible to the ;arehouse 7anager and to the offi8e ;here deals are done:

DISTRIBUTION
DISTRIBUTION PROCESS
ORDER PLACEMENT/ The order is pla8ed at the offi8e lo8ated abo9e the

;arehouse and for registered 8usto7er they ha9e the fa8ility to pla8e order on phone or through e?7ail: The 8ontra8ts fro7 super 7ar<ets are self ordered as they reEuire deli9ery in e9ery * days or 45 days or 25 days et8: so they don@t ha9e to pla8e order e9ery ti7e they need goods6 they soft;are itself pla8e order for the7:
TERMS & CONDITIONS FINALI7ATION/ The ter7s and 8onditions are

finali=ed for e9ery ne; or real?ti7e 8usto7er regarding deli9ery6 7ode of transportation6 ti7e of reEuire7ent et8: but for the registered 8usto7er or store the 8ontra8t on8e signed itself is ter7s > 8onditions:
INFORMATION PROVIDED WAREHOUSE MANAGER/ -hen order is

pla8ed and pro8edure is 8o7pleted the infor7ation about the order is pro9ided

to the ;arehouse 7anager for ship7ent of goods ;hi8h in8ludes Euantity6 Euality and spe8ifi8ations of goods:
TRANSPORT/ The transport is either arranged by the 8usto7er or #7brella

fa8ilitates its 8usto7ers by pro9iding transport6 it is stated in ter7s > 8onditions: The pri9ate transporter is hired for deli9ery of goods as they pro9ide the best ser9i8e at reasonable 8ost: "or registered 8usto7er the transport and ti7ely deli9ery is responsibility of #7brella:
RECORDING/ during the pro8ess of loading of goods the re8ording of

in9entory is done and data is input by ;arehouse 7anager in the 8o7puter soft;are:
!rder is then loaded to transport 9ehi8le and sent to its destination: #7brella guarantees the deli9ery ;ithin & hours after the departure of goods

fro7 the ;arehouse to any lo8ation in the 8ity:

CUSTOMERS LIST
Ne; Ja7ali

ift Center ift +ouse

Bhai Jan Store China Cro8<ery +ouse Ma<ro Metro Naheed Super Mar<et +yperstar