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Our company name is Zymo Cosmetics. As what the name describes cosmetic, our companys industry is a cosmetic industry. Cosmetic industry is a very dynamic industry. This industry is based on some core components of business like marketing, supply chain, distribution requirement planning and so on. Because of the fast changing demand of the customers, this industry is very dynamic and it is very difficult to forecast or to understand the exact requirements of the customer. That is why in this industry the flow of information and the working of a supply chain is very important. Besides supply chain, Distribution Requirement Planning is also equally important. Our project will try to explain some of the features of this industry.
CHAPTER 2 INTRODUCTION OF COMPANY
The company Zymo has been established in 2009. To build long-standing faith and rapport with shoppers and customers by giving valuable goods and facilities in the areas of cosmetology, dermatology, oral care, hair care, baby care and herbal care at rational value with full reliability and it will create win-win situation. The Group of Zymo involves skilled and advanced Directors, Financiers, passionate company employees, quality aware and familiar Lab Workers dedicated Manufacturing Superintendents, active and expert Employees, supportive Dealers and our extremely pleased national as well as foreign Shoppers and Customers. Company's administration group involves qualified and expert staffs in the areas of cosmetics, cosmeceuticals, pharmacy, engineering and business management. The synchronization among management group, organization staffs and workers create situation as if it is home. The interaction of vigour, eagerness, desire and novelty confirms a very good arrangement of quick achievement which is well-adjusted with familiarity.
Company has established principles of Face and Body lotions which are used for clean and lenient skin and they gave very good results. Company's principles involves items for greasy and parched skin.
These products are available in different quantities such as 50gm, 100gm,150gm,250gm,500gm,1kg,5kg and in a 100kg container as a raw material for other company.
The above products in this group have a common formula for making and there are basically two types of ingredients which make these products that are BASIC and ACTIVE INGREDIENTS.
These ingredients are the basic or the base ingredients which are same in the above products.
These are the specific ingredients which are not same in the above products. All of the above products are having some different effect which makes them different from other products in the group. Active ingredients are those raw materials which make them different from others, and it is difficult to develop or to find these ingredients.
From all the above products, we have selected a specific product named Pimple Care Face Wash.
Ingredients: Aqua, SLES, CAPB, Carbomer, Active Globules of Vit. E & Tea Tree Oil, Aloe Vera, Perfume, Salicylic Acid, D-Panthenol, Triclosan, Allantoin
Basic ingredients: Active Globules of Vitamin E, Aloe Vera, D-Panthenol, Allontoin, SLES, CAPB, Carbomer, Perfume and Aqua.
Active ingredients: Tea tree oil, Salicylic acid and triclosan.
Excellence- the Leading Concern
Company's production department involves effectively organized clean equipments, very good and attractive setup and smoothly going labour atmosphere which carries required equipment, essential engineers and information for producing and procuring globally okay excellence and wrapping supplies.
Each and every items which are being produced at Zymo are sanctioned by FDA of Gujarat, India.
Trials of every manufacturing lot are thoroughly and perfectly verified in the company's lab when manufacturing takes place and after that at consistent breaks.
Company's resource dealers are marketplace heads in national and global marketplaces.
The resource stock is examined for excellence at consistent breaks.
CHAPTER 3 LITERATURE REVIEW OF SCM
If we see an old tradition, a supply chain procedure an item was established to be produced and it would be supplied via producers-distributor-wholesaler-retailer sequence. Now if we see a present supply chain situation, facility and item regaining have been combined and become two key mechanisms, they are: item management, modules management and resources management at the time of regaining procedure. As per an expert, reverse logistics is run by numerous services like struggle and advertising objects, straight financial objects and relations with the situation.
The word 'supply chain' was invented in middle of seventies. Banbury (1975) practiced 'supply chain' word for transfering an electrical energy to the customer. Oliver and Webber (1982) debated the probable advantages of mixing interior industrial working of procuring, producing, S&D in a unified structure. Stevens(1989) has distincted SCM as a mixing of industry workings which involve the stream of resources and data in the logistics of the organization. Relations among dealers are suitable portion of supply chain procedure.
In the era of 1970, material requirements planning (MRP) had been established and executives understood the effect of vast WIP stocks on engineering rate, excellence, merchandise progress and distribution lead-time. The strong world wide rivalry in the era of 1980 enforced business to propose less-cost, high-grade and trustworthy items having good elasticity. Producers used Just-In-Time (JIT) and other management programs to recover production effectiveness and cycle time. The growth of SCM sustained in the era of 1990 also because business advance protracted finest practices in handling company resources to involve strategic dealers and the logistics tasks. Almost all producers and vendors are implementing the idea of SCM to recover productivity and usefulness through the supply chain.
CHAPTER 4 LITERATURE REVIEW OF DRP
Distribution Requirement Planning offers the foundation to integrate supply chain stock data and delivery events with MPC system. Need of DRP is in movement handling of resources among organizations, storerooms, distribution centers. It supports to handle the stock movements, this thing MRP does in manufacturig. DRP associates organizations in the supply chain by giving scheduling proceedings which transmit request data from source to destination and on the other side also. DRP enables firms to collect information which includes resident demand situations to change the prediction and to report existing stock situations. DRP offers information to manage delivery service and database for constant talk with the consumers and the remaining persons of the company.
DRP AND MANUFACTURING PLANNING AND CONTROLLING:
Demanad management is the association between manufacturing and the market. Plans which are derivatives of DRP data and delivery needs are the foundation to manage the logistics system. DRP repeatedly corrects changes in demand, giving stock from fundamental warehouse to distribution centers where there is a need. DRP is associated to the logistics system,
By helping in determining vehicle capacity planning
By helping loading
By evolving vehicle shipping
By defining warehouse capacity
By providing information precisely, e.g. when availability will be upgraded and supply can be projected
DRP is usually used with MRP system. It can be considered as the addition of MRP in the logical opinion. DRP, beginning from consumers' desires is used to resolve delivery complications of physical resources based on period, capacity and place in movement. As with MRP, gross necessities involves real consumer orders, predicted demand or mixture of both, scheduled receipts are the goods the distributor thinks to obtain from orders that already have been released while goods that already have been received and entered into inventory establish the on-hand inventory balance.
In most companies, DRP starts from inside, linking it's production units to it's field warehouse units. When the DRP records originate in a warehouse or distribution center, they start at the independent-demand interface; that is, they are derived from forecasts. Because customers of the distribution centers make their own decision ordering decisions, demand is independent of the firm's decisions. From the the independent-demand interface point on, decisions are under company's control. Timing and sizes of replenishment shipments, manufacturing batch sizes and purchse order policies are all under management control. The DRP approach allows us to pick up all the detailed local information for managing physical distribution and for coordinating with the factory. However, careful attention to actual customer demand patterns may be useful in tailoring these forecasts to local conditions.
Sales and operations
Logistics system modules
Requirement Planning boundary
A sound established DRP systems supports organization in anticipating future requirements in the field, demand and supply of item should be matched nearly, efficiently arrange stock to satisfy customer service requirements and quickly regulate to the whims of the market place. In addition DRP system support important logistics savings through better planning of transport capacity requirements and posting of shipment.
The above diagram shows that DRP makes a linkage between customer and demand management through MPS. In the back end DRP shows the linkage to the vendors. DRP starts in the market place and helps in doing the demand management. The basic functionality of DRP is, it reduces the fluctuation between forecasted demand and actual demand. MPS in MPC framework will do the same thing of forecasting the demand but with the help of DRP company can understand the demand from the customer side. DRP maps the demand from downward means from customer till to the manufacturer. This type of knowledge for the company give the opportunity of make-to-knowledge. DRP would be more efficient and work very well if the company is using Vendor Managed Inventory System. DRP delivers information to manage the distribution services and the database for constant talk to consumers and other than the consumers in the company. Demand management is the association between manufacturing and market place.
Basically DRP records the following things:
Predicted requirements (Gross Requirements)
In transit (Scheduled Receipts)
Projected available balance (Available)
Planned shipments (planned order releases)
Records several warehouse inventory
To study SCM and DRP analysis of Zymo Pvt. Ltd.
Research and development phase
Food and Drug Administration (FDA) approval and certification
Future vision of a company
LIMITATION OF THE PROJECT:
At that point of time the main customer of Zymo are in foreign countries. The major wholesalers and distributors of the company are also in foreign countries. So, it is very difficult for us to collect the data.
Company did not provide the statistical data.
We are not doing the internship project.
Haven't got the permission for more than five visits of the company.
Not possible to conduct meetings with managers of the different managers.
DETERMINING SOURCES OF DATA
After adopting a particular type of research design, the next step is to identify the sources of data from where to get the required information. There are two types of sources of data.
Here, the data required are collected for the first time by the researcher in order to study about a particular topic.
In this study, we have used Primary Data Collection method. We have undertaken the Personal survey of the employees by Interview Method on our topic of research and then getting that Interview done on employees of Zymo Pvt. Ltd.
We also have done the personal meetings with the managers regarding our project topic and they provide us related data.
Information which have been collected prior for different purpose are called secondary data in the hands of the marketing researcher. Such data are not collected for the first time.
SUPPLY CHAIN OF ZYMO
Before explaining the supply chain of a company, we must have to explain what exactly supply chain is. Supply chain is a flow of three things. They are:
On these three things supply chain depends.
Business work flow of Zymo Cosmetics
The above diagram is trying to explain the rough view of business workflow, so that the report will explain the different aspects of the business flow. In the company, order will be received by B to B portal. After receiving the order the R&D department will formulate a particular formula for that order. After that the company will take the Food & Drugs Administration (FDA) permission. Once the certificate of permission for that formula has been granted, the sample for that product developed and sent for the testing purpose. When the testing is approved the production will start.After completion of the production the finished product will be sent for packing. After that random checking of the product lot will be done to find out the quality of the product lot. At last, product will be sent to the 3rd party logistics companies for the final delivery of the product.
SCM solutions can distribute excessive standards to enterprise's current systems. Execution of these resolutions will help in realizing very great ROI and will have marvellous effect on firm's business.
Market is the place where the organizations can post their goods for sale. A refined shopping cart will be combined into the electric market in order to automate the procurement procedure.
Interior Messaging Structure Intricate Messaging Scheme permits a member of the B2B portal send and receives messages from other members and the business.
Directory of Companies is a citation of all recorded connections of the B2B portal either by corporate group or by alphabetical order.
Product Content Adding System Product adding tool depends on either easy-to-use wizard or simple but detailed forms allows workers to integrate goods or facilities with correct and up-to-date data.
A B2B portal supports international purchasers connect with international dealers and vice versa. An example of B2B can be a plastic-bag engineering enterprise supplying plastic bags to a textile mill for filling their finished goods.
List of B2B portals that company is using to get the order are as following:
Topic 2: Research and Development phase(R&D)
This is the main phase of the development of the product. In this phase after receiving the order from the customer, the role of R&D will start. The R&D will develop the different formulas which can fulfil the requirement of the customer eg. In face wash there are different types i.e. pimple care, neem, whiting, moisturising, oil reducing etc. After the development of the formula the formula sends to the FDA of Gujarat for the approval. After getting the certification approval from the FDA Zymo orders the raw material from the different vendors to make the finished products.
After receiving the certificate of the approval the production house of Zymo will make some samples for the checking of products and give them to the customer who ordered that product and if the customer is satisfied by the product the production process will starts.
Topic 5: Vendor Rating
Zymo uses B2B portal for selecting its vendor. But on portal there are lot of companies available and the best one among them as per the company past experience Zymo rate them on basis of 5 points. 5 are the maximum or the best and 0 is the minimum or worst supplier. These points are given on the following basis:
Delivery schedule adherence
Topic 6: Lead Time
It is a time period which the supplier takes to deliver the raw material to the Zymo. The lead time is around 25 to 30 days. Company which make the ACTIVE ingredients and the company which makes the specific packaging materials for private labelling will took the maximum time period, because these raw materials are very specific and hard to produce.
Topic 7: Transportation
From vendors place to production house the raw material is transported through different transportation mode. The mode is selected as per the safety requirement of the product. There are following types of transportation mode available:
Currently Zymo is using only private carrier mode that are trucks and rail, because all the raw materials are taken from the Indian vendors only.
Topic 8: Delivery Risk
The whole risk of transporting raw material from vendor's position to production house is on vendor. If any thing will happen with the product the vendor is responsible for that damage. Vendor will consider this risk when he sets the price for the Zymo at the time of giving quotation to the Zymo.
Topic 9: Inbound logistics
Inbound logistics is the management of raw material after receiving it from the vendor. Inbound logistics includes checking of stocks, management of stocks, labelling and bar coding of stock, free flow of stock from warehouse to the production department.
Zymo is a cosmetic company and there is a particular rule in our Indian Law for the inventory warehouse in cosmetics industry i.e. the company must have to put their inventory within the company premises. If company wants to put their inventory in a different place which is not in the production premises, the company has to take the permission from the excise department of India. Zymo is currently storing his inventory within the production premises; he does not have his separate warehouse.
Management of Inventory
When the raw material reaches to the company premises by truck there are four persons who are particularly assigned for managing the inventory. First, after unloading the raw material to the right side of the company, the assigned persons match the dispatching list with the cargos available. After that they randomly select any cargo and the check the quality of the material and if they find the quality of material is as per the requirement of company then they start doing barcoding to keep the tracking of raw material.
When the production department give their production requirement to these for persons, they arrange those raw materials from the inventory and provide it to the production department. The production department will communicate the message of inventory requirement to the inventory management persons by four modes of communication i.e. call, e-mail, fax, face-to-face.
Topic 10: Cash flow
There are two criteria of cash flow. They are,
Payment to vendor:When the company places the order for the raw materials, he has to pay 50% of the total amount initially and then after receiving the raw material company has to pay the remaining amount. Initially new vendor does not provide any credit period to the company but once the good relations between the vendor and the company has been developed, vendor provides the credit limit to the company.
Collection from customers: When customer places the order first time ever, he must have to pay 50% of the total amount for R&D purpose but if the customer is a regular customer then he has to pay only 20% of the total amount as a security.After receiving the finished goods, customer has to pay remaining amount.
Topic 11: Outbound logistics
Outbound logistics means the management of finished products which includes inventory management, transportation and so on.
3rd Party Logistics (3 PL):
Zymo is using third party logistics and Clearing and Handling Agents (CHA) for the paper work and the transportation of the goods. Zymo is exporting their product, that's why they have to do a lot of paper work so they have gone for CHA to reduce the lead time. When finished products are ready to be loaded in the truck, excise officer checks the products whether they are as per the order or not and after that he puts the seal on the products and that sealed will be opened only when it is reached to the destination but if the custom officer feels any suspicious thing in the container during transition, he has the authority to break that seal and check the product.
What is forecasting and demand forecasting? How it is important in the company? Let see. Forecasting is an important instrument for preparing strategic demand planning. Demand forecasting is basically an activity of approximating the number of a product or service that customer will buy. Demand forecasting involves the forecast, estimate or approximation of probable demand of the goods over a definite upcoming time period. It can be done by different methods like customer survey via questionnaire, face to face communication, telephone talk, email, fax etc., use of historical data, educated guesses, quantitative methods, time series method, in time series we can include moving average method, exponential smoothing method, trend projection method. No methods are 100% accurate but it is just a guess work for better and easy demand forecasting.
Our company 'Zymo' basically deals with cosmetic products which are seasonal we can say because cream of winter and cream of summer are different. So in our company, demand is a sensitive aspect, forecasting must be proper because demand of seasonal products regularly deviates in market place and also in cosmetics customer taste changes very fast. Our company is facing some what this kind of situation. In our company 'Zymo', there is no good demand forecasting because company is not using methods for demand forecasting in proper and effective manner. So what happens actually is customer needs something else and company produces something else. Due to lack of good demand forecasting sometimes this situation creates in our company. So because of these issues customers are not satisfied sometimes with our product quality and effectiveness and accuracy and if it would continue for long then it may happen that our company has to lose the customers also. This is what our company's study says as of now. Our company has started research work and involve 2-3 employees in this work to improve demand forecasting. In research, our company has found some solution for better demand forecasting to deal with our seasonal product (cosmetics). Study done by company's 2-3 employees is some what like this:
As our company has done lot of research work, it come across with certain methods of demand forecasting through which it can be done in better manner if and only if methods are implemented properly and in a right manner. Methods are like this:
Survey of buyer's intention
Joint opinion also called sales force polling or expert opinion polls
Analysis of time series and trend projections
Use of economic indicators (regression analysis)
Controlled experiments (test marketing)
As demand forecasting is sensitive in our company, we have to take some more care about it in the company. If our company go with any approach mentioned above, our company can do much much better demand forecasting than now. Primary advantage of demand forecasting, our company will get is that it delivers the organization with valued data that our company can use to prepare results regarding future of the company. This is what our study says. All the problems related with demand forecasting our company is facing now, they will be reduced at a stretch and slowly they will be removed. Through this, performance of the company will increase, customer will put trust again and try to purchase the product from our company. By applying above mentioned demand forecasting strategy, our company,
can increase demand forecasting accuracy
can do better balancing of demand and supply
can increase more accurate safety stock levels
can improve delivery performance