Project Details

Name of the company: Bisconni Pvt Ltd.

Type of project: Supply Chain Analysis.

Duration of project: 8 weeks (from May 1 to December

15, 2010)

Number of group members: 2

Area under research: Karachi

Ismail Industries Limited

We are the largest confectionary company in Pakistan manufacturing a wide range of

confectionary, biscuits and snacks under the brand names of Candyland,Bisconni and snackcity
respectively.Our lasting relationship with our customers reflects our commitment to quality and
satisfaction of customers around the globe.

We have dedicated R & D department to keep abreast with latest trends in the industry, Strict
Quality assurance program are conducted at all levels so as to ensure proper and safe product
delivery to customers.

CANDYLAND

Candyland has advanced technology and is the only confectionery manufacturer in Pakistan to
invest in such an extensive range of machinery. Our continuous expansion reflects the
company’s commitment to its consumers, working to build customer expectations and striving
to exceed every time.

Bisconni

At bisconni, a wide variety of biscuits and cookies are produced. The company has established
itself as a major player in the biscuit industry in Pakistan in a short span of time and is
continually expanding its range of products.

Snackcity

Snackcity is our latest expansion in the food items. The company has invested in the world’s
best machinery to manufacture potato chips and other savory snacks. Since its inception in June
2006, Snackcity have gained great popularity among consumers.

Our Market

Besides being the largest local producer we are also the largest exporter of confectionery. Our
clients include buyers from Australia, South Asia, Africa, Middle East, Far East, Europe and USA.
Ismail Industries Limited, the parent company of CandyLand and Bisconni has successfully
catered to the diverse needs of a large clientele, with a wide range of food products. Many IIL
buyers have successfully expanded and diversified through the IIL product line.

Chocolate Chips

Marketing Strategy – Mass Market

 Process View
 a) Push view is used

 Cycle View
a) Manufacturing cycle
b) Procurement cycle

Manufacturing cycle
o Order Arrival
o Production Scheduling
o Manufacturing and Scheduling
- Receiving of manufactured goods to the packaging department
- Continues process (production carries on throughout a week, 6 days in a week.
- Production Order has been sent by G.M Productions
- Production quantity has been decided by the Marketing department along with the
director in a meeting, which has occurred on monthly basis.

Procurement cycle
o Order Components
1. WishBox company Produces delivery carton, according to the following dimensions:
- (470mm x 370mm x 335mm) Dimension carton for 24 gm pack
- (395mm x 370mm x 400mm)dimension carton for 54 gm pack
- (460mm x 405mm x 350mm) for dimension carton for 90 gm pack

2. Zain Packaging industries makes boxes, which has been used in 90 gram (family pack).

3. Merit packaging prepares wrapper and foiling Packaging

Packaging Status:
24 gms make a ticky pack - 24 packs make a box and 18 boxes make a carton of Bisconni
Chocolate Chips biscuit.
54 gms make a half role pack - 6 packs make a box and 24 boxes make a carton of Bisconni
Chocolate Chips biscuit.
90 gms make a family pack and 96 boxes make carton of Chocolate Chips biscuit.

o Shipment/ Delivery
Company ships the goods to the international department.
Company supplies goods to the distributor warehouse directly

Logistics Status:
24 gm pack-(470mm x 370mm x 335mm),
 460carton comes 20ft
 980carton comes inside 40ft
  1150cartons inside 40ft HC
54 gm pack-(395mm x 370mm x 400mm),
 460carton comes inside 20ft
 975carton comes inside 40ft
 1145cartons comes inside 40ft HC
90 gm pack-(460mm x 405mm x 350mm),
 415carton comes inside 20ft
 875carton comes inside 40ft
 1030cartons comes inside 40ft HC

o Receiving
Receiving of goods to the International department.
Receiving of goods to the Distributor.

• Efficient supply chain strategy

• Multiple Products of biscconi hence Flexible supply chain strategy
• Product life cycle - Maturity level

Production Size
• CHOCOLATE CHIP T.PACK-192,800 manufactured in a day
• CHOCOLATE CHIP HALF ROLL- 144,681 manufactured in a day
• CHOCOLATE CHIP 96 BOX- 14,200 manufactured in a day

Production carries on throughout 6 days a week

• TOTAL CHOCOLATE CHIP- 351,680/ year
• Means 1000 cartons/ day

SUPPLY CHAIN IS BASED ON SIX DRIVERS, BROADLY DIVIDED IN TWO DRIVERS:

Logistical Drivers:

1. Facilities

2. Inventory (Stock)

3. Transportation

Cross Functional Drivers:

4. Information
5. Sourcing / purchase

6. Pricing

All these six drivers are measured on the basis of efficiency and responsiveness.

Production Facility
The raw material ingredients used for the production of chocolate chips are as follows:
Wheat flour, starch, sugar, hydrogenated vegetable fat, chocolate chips, coca powder, skimmed
milk powder, baking soda, ammonium bicarbonate, lecithin, salt, nature food color.
These ingredients are procured from different suppliers of both local and international repute.

Bisconni follows a FIFO method of production scheduling; namely, the first materials that
are supplied are the first to be used in the production processes. Bisconni does not like to
overstock finished goods, thus they aim to optimize the production process so as to minimize
the stocking of finished goods. Production is carried out on a daily basis, and the levels of
production are determined from past sales information that the sales and marketing
department supplies to the production floor managers.
Raw material delivery
The delivery period for raw materials falls between two and five days. During the onseason,
raw materials are delivered through local supply channels and thus take less time to be
delivered. Yet during the off-season, because raw materials are sourced from foreign suppliers,
the time for importing increases the delivery period.(in case of flour shortage).
Raw materials are converted daily during the production process, thus the work-inprocess
inventory does not extend to more than one day.
Before the production processes take place, all raw materials are assured by Bisconni ’s
quality assurance department.
Inventory
Bisconni has emplied a specific inventory management techniques in the stocking of its
raw materials or finished goods. A specified level of inventory is maintained,which may vary in
numbers depending on availability and seasonal factors. A synchronized inventory management
system is at work which stays in contact with suppliers of wheat flour,poultry items and other
major ingredients. A continuous inventory level updation takes place on daily bases thus
notifying the production team of bisconni as well as suppliers about respective inventory stock
levels. This system helps Bisconni in keeping a low level of raw material stock and thus makes it
possible for delivery of raw material just in time.
Bisconni follows a policy of maintaining one day of finished goods stock in their inventory.
This along with their raw materials inventory are the only inventories that contribute to the
total inventory pool, as the work-in-process inventory is converted on a daily basis.
Locations
Bisconni have independent distributors in every region of Pakistan. Beside the primary
warehouse in HUB Karachi,the company has its own warehouses in all 5 provincial capitals, and
thus supplies the product to its primary distributors/stockiest in major cities of Pakistan.
Bisconni employs regional sales managers who are responsible for the management and
efficient supervision of all its distributors. Market segmentation is carried out in-house and
then relayed on to distributors by the sales managers with specific instructions on distribution
and handling aspects.

Transportation
Logistic concerns are out sourced mostly,the delivery of raw material from suppliers to bisconni
production facility is the responsibility of the suppliers, while the finished goods inventory
which leaves the factory after production goes by company owed trucks to the 5 provincial
warehouses.

Information
The effective procurement and utilization of information is outsourced by Bisconni to
research firms in this case (Orientedge UM). There is one sales representative who is
responsible for garnering information on past performance, and the perceptions of wholesalers
and distributors. He does this by conducting surveys and studying historical data. This
information along with the data provided by research firms, allows Bisconni to take informed
strategic business decisions.
All the daily reports of inputs and outputs are fed into an inventory management software
that manages the efficiency and effectiveness of Bisconni’s inventory and stock keeping
processes. Meetings are conducted regularly to utilize information in an effective fashion, and
discussions on the raw material price hikes and foreign exchange rates,which the company is
curently facing allow the management to better gauge their performance and improve.

Combination of responsiveness and efficiency

The right combination of responsiveness and efficiency in each of these Cross Functional and
logistical drivers allow Bisconni’s supply chain to increase throughput while simultaneously
reducing inventory and operating expenses. Essentially a trade-off, Bisconni can gauge their
position on the supply chain as relative to these five drivers, and manage them to the optimum
level.
Bisconni maintains that it seeks to align its supply chain so as to find the best payoff
between responsiveness and efficiency.
 SUPPLY CHAIN
DRIVERS

Production Inventory

Information

Transportation Location

Supply Chain Participants

The channel members in Bisconni’s supply chain include their suppliers, their suppliers’
suppliers, local intermediaries, distributors, wholesalers, and retailers.

Bisconni’s channel members for the raw material ingredients needed in the production of
Choclatechip are, growers and farmers, village intermediaries, cleaners, stockiest, processors,
distributors, wholesalers, retailers of wheat,coco beans, poultry and dairy products and for
import of coco powder, brokers, importers, and international suppliers. Furthermore, for the
sourcing of raw materials needed for the production of the wrappers for Choclatechip, film
manufacturers and printers are also used. A more detailed view of all the participants in
Bisconni’s supply chain network regarding Choclatechip can be appreciated in the later part of
the report dealing with the sourcing section under Supply Chain Operations.
 SUPPLY CHAIN STRUCTURE

SUPPLY CHAIN OPERATIONS

There are four categories of supply chain operations; planning, sourcing, making and delivering.
These four categories organize the supply chain operations

PLANNING refers to all the operations that are necessary in order to actively facilitate the
sourcing, making and delivering of a company’s product. Planning is essentially the backbone of
the entire process, without accurate planning, the entire supply chain network will suffer. It
provides a base from which all other decisions can be made. By covering the several operations
that fall under this category, such as demand forecasting, product pricing and inventory
management, companies can take informed decisions in regards to successfully managing their
supply chains.
SOURCING essentially refers to the processes and activities required by a company to
facilitate the acquisition of materials and other inputs in order to further its business. This
includes all procurements from suppliers and other channel members.
MAKING basically covers all the operations needed to successfully create a product out of
all the given inputs. The three subsets of this category are; product design, production
scheduling, and facility management.
DELIVERING sees that all operations involved with the effective allocation of the finished
product to distributor channel members take place without hitch. Order management, and
delivery scheduling are crucial factors involved in delivering operations, and allow the company
to optimize its delivery channels so as to maximize profits.
Following sections is an analysis of Bisconni’s position relative to these supply chain
operations.
Planning
Demand Forecasting
Bisconni’does not face very irregular demand for its products. In spite of this, they do
witness general changes in demand trends over long periods of
time.(Inflation,increasing income difference in socio economic system of Pakistan)

How chocolate chip is made

The biscuit production process consists of five different stages which are as follows.
 · Mixing

· Cutting

· Baking

· Chilling

· Packaging

Product Range
Bisconni chocolate chips is available in three different sizes
24 gm pack (Ticky pack )
54 gm pack (half role)
90 gm pack (family pack)

Competitors
Direct
Candy chocolate chips by LU and Innovative chocolate chips by Cadbury are direct competitors
of chocolate chips.
Indirect
 LU Chip Munch
 LU Prince Chocolate
 EBM Rio
 EBM Chocolate Sandwich
 Kolson Bravo
 Bakery chocolate biscuits

Market size
 Market Share
others
Kolson
4%
8%

LU
Bisconni 46%
20%

EBM
22%

Ismail Inustries Limited- Biscconi Area: Karachi

Sales Percentage By Product Wise
Butter Bite
Cocount Cookies 3%
Novita wafer 7%
5% Cocomo
22%
Rite
Choclatto 3%
20%

Choclate Chips
33%

Peanut Cookies
6%
Bear Sandwich Treat Eggo
0% 1% 0%
 Ismail Inustries Limited- Biscconi whole
Butter Pakistan Sales Percentage By Product Wise
Bite
5%
Cocount Cookies
11%
Novita wafer Cocomo
3% 20% Rite
Choclatto 3%
13%
Choclate Chips
Peanut Cookies 25%
16%

Bear Sandwich Treat Eggo

0% 4% 0%

Distribution channel of Bisconni Chocolate Chip

(The Place)
 Company
Supper
warehouse
Stockist

Factory

Supper Sub Sub

Stockist Stockist Stockist
Wholesaler
Retailer

Retailer Sub
Stockist
Retailer
Wholesaler
Retailer Retailer Retailer

The distribution channel of Bisconni follows 3 to 5 tire architecture. It follows the supper-sub
concept of distribution. The steps are as followes:
i. First the product produced in the factory which is strategically located to minimise the
transportation cost.
ii. The packed product has been sent to various company depot accurse the country to
distribute and meet the respective market demand.
iii. From the company depot the product has been delivered to the different supper stockist
according to there previously placed order.
iv. Then the goods has been sent to the sub stockist point or in some cases wholesale store.
v. The secondary sale from the sub stockist or from the supper stockist is ensured by the
constant monitoring by the company personal.

Bisconni follows different distribution channel model according to local market demand. Abut
for every model the end goal of the company is to deliver a quality product to the end user.

The Distribution channel of Chocolate chip in Karachi

(Facility location)
 3 Gadap
Gulshan

SITE

Baldia
45 Km
Shah 32 Km
faisal
5 km

10 km

Bisconni Production plant and

company ware house in HUB .

40 Km
40 Km

55 Km

Nazimaba Malir
d
Bin
Qasim

Sub Stockist Point