Supply Chain of Gul Ahmad

Supply Chain:
We have the very strong and effective supply chain management; we have the number
of items that are major component of the Textile Industry that is Cotton, Yarn, Gray, Dyes &
Chemicals, Spare parts, Packing Material, Stitching Accessories, and General Items etc. We
have t he ver y t r ansparent procedur e of t he procurement of t he above i t ems,
Cot t on i s normally a very specific material and the cotton are trade and fluctuate on
daily basis so the forward purchasing is done from the suppliers to avoid any stock out
position. We booked our cotton on the basis of the orders received from the export
and the Local retail shops. The same procedure applies to the Yarn and the Gray
procurement. Dyes & Chemicals are mainly imported and we have the internationally recognized
suppliers like BASF, Clariant, Dystar, Stork etc. they are the quality suppliers and they are also
recommended by our valued customer as well. For the local purchasing such as
chemicals, Packing material and General Items we get the quotations from different
suppliers and evaluate each of them beside the price negotiations and finally to approved
supplier we visit the factory to check either any child labor or any envoi mental violation is
being done at the factory. We are the quality supplier for our customers so we strive to
maintain the best quality.

There is the procurement procedure as follows.
-The request raise from the department or user.-The user prepares the requisition.-The
requisition review by the Store and if the item is available in stock they issue if not
the asked to raise the indent for the item to purchase.-The Indent after scrutiny sends to the
purchase department to get the rates from the approved suppliers.-The purchase order is
made and issued to the selected supplier and the supplier send the items on the agreed
time.-The Store takes the item in the store receiving document and update the stock level.-The
Store department then asked for the store requisition from the user to issue the item
from the store.-Aft er t he del i ver y of t he i t em from t he suppl i er t he payment
summar y i s made as per t he payment terms agreed with the supplier and the cheque is
issued for the payment to the supplier.

Supply Chain Drivers Transportation.
The Transport at i on i s used for several purposes and we have t he mi x of t he
i n-house and outsourced transportation facilities. We used our own transportation for
the delivering to our retail outlets within the Karachi and for other cities and for
fabric / yarn movement within the different units we have the transport contractors for
different locations. We dont keep the single contractor to discourage the monopoly

Inventory Management:

Inventory is the major component of our financial statements and we put more effort to maintain
the inventory for smooth flow of production. We have a full proof inventory movement
systemInvent or y Management s yst em. We ar e usi ng t he wei ght ed aver age
i nvent or y s yst em for calculating the rates of the individual item. But we prefer to use the
FIFO for the issuance of the inventory to different units. We are maintaining the minimum
stock of every item that tell us about the re-ordering of that item and we calculate this
minimum inventory level by considering the maximum lead time and the safety stock. We keep
the sufficient safety stock in our store for Spears and tool and general items as the major item are
imported that takes more time to import and for Dyes and chemicals we maintaining the
minimum stock as per our planning of the next three months orders. As the dyes and
chemicals are highly volatile items and they turn into the dead stock after one year we use
prudent approach for these items. They recommend the average inventory turnover for the
local dyes & chemicals for two weeks and for imported dyes & chemicals for four months
(based on future orders).And for Stores & Spares we broken down the items in three categories
such as Insurance Items (That could be required any time in emergency and we keep
them in stock to avoid any long stoppage of machines, they normally include the critical
parts for the machine and that could take more than 4 weeks to import. Second one is Running
Items that are commonly use spare parts and tool and we keep its inventory as per explain
above and all the spare parts, Tolls and general items are approved in the yearly budgets
department wise.

Pricing:
Our Pricing policy is somehow mixed in connection with the Local and export. We
use Total cost plus pricing for export orders that mean we do pre order costing based on sample
approved by the customer and send them for the acceptance. And for Local we have
pricing based on the market. We have the competition in the Local market as well and
many brands are running so that we consider the market before pricing the product.
Distribution:
Distribution channel are different for Local and Export orders, we have our own transpiration
for the distribution to the retail outlets in Karachi but for the other cities we have
the contract with the transporting companies to deliver to all outlets outside the
Karachi. For export we do
thedi rect shi pment t o t he cust omer. The shi pment dat es and t he dest i nat i on pr
ovi ded by t hecustomer.