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salman's Personal

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Salman Siddiqui

on 23 May 2015

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Transcript of salman's Personal

Spare Parts Inventory
Type wise Inventory values

Plant wise Inventory
1.48 Billion Rs.
3.12 Billion Rs.
35 % of total spares part Inventory
65 % of total spares parts Inventory
Total Spare
parts Inventory
4.6 Billion Rs.
Functional Silos
Duplicate Parts
Non-Compliance of SAP
LFC Items
Supply Chain Process Re-Engineering
Re-order Point
As is View
PR-GR (Total Lead Time)
ROP = Lead time x demand
+ Safety Stock (or minimum stock for Type 2)

Long or short lead time (PR-GR) is directly impacting the level of reorder point.
If lead time is longer, ROP triggers earlier or vice versa.

POs Follow Up (LOCAL)

Delays in Inspection
Lack of Ownership
Lack of PO-GR KPIs
Leading to Follow up inefficiencies

Conflict of interest
Lack of accountability
Parts received data (FP)
Parts Received Data (LP)
FP POs follow up is being done manually
KPIs measurement is being done manually.
Stock out problems are occurred due to difference in FRD( Field requirement date) and PO delivery date

Root Cause Analysis
Procurement office’s ‘Vendor orientation’ is the main issue highlighted by the warehouse personnel

This is a symptom of the issue

The major issue is ‘
Lack of Empowerment
‘ of the procurement head office.

Maslow's Hierarchy
Hierarchy for procurement office
Physiological Needs
Basic Need
Simple order Processing
Local Maximization Approach
Safety Needs
Basic Need
Minimal Job Description Fulfillment
Belongingness and Love Needs
Psychological Need
Proactive orientation
Psychological Need
Esteem Needs
Good Communication
Team based approached
Self Actualization
Self -Fulfillment Need
Global Optimum
Open POs Status as on 15/12/14
Total Open Pos =576
Late Pos(Exp) = 289
Not Expired = 287
Total Parts received = 4155

2012-2014(3 years)
2012-2014(3 years)
Total Parts received = 4678

Critical Analysis
Functional Silos :
Production,Warehouse and procurement

Functional silos leading to following Symptoms
Communication gaps
Conflict of interest (Commercial v/s operational goals)

Warehouse personnel have an operational perspective whereas procurement HO personnel seek to achieve the commercial objectives i.e. Vendor relation management, price optimization, Demand Planning.

Integrate procurement responsibilities to a centralized department

Centralized KPIs of Supply chain department.

PO-GR should also be included in the KPIs of Procurement department
Maximum utilization of SAP

KPIs Performance measurement on the basis of SAP data.
FP Open POs follow up based on SAP data.
Difference between FDR date and PO delivery date.
Validation and Audit of SAP
Integrate WH and procurement department under one head.
Strategic Vendor Development

Evaluate the Existing vendors performance.
Identification of alternate vendors.
VMI (Vendor Managed inventory)
Identification of local fabrication Items
Identification of duplicate items
Review items lying in Type-8
14% of Total Value
Average Lateness In days
Spare Parts 4.6 Billion

Packaging :80 million
* Demand During lead Time
Inventory Classification Issues
Local Fabrication Cell
i.e. Particular functional area has responsibility of sourcing,vendor development and evaluation
Muhammad Talal Shafi
Muhammad Salman Abid
Muhammad Israr Anwer
Feroze Parveez
Yusra Siddiqui

The objective of this project was to analyze the factors that were affecting the......

Performance of the procurement and warehouse departments at Engro Fertilizers which included the critical analysis of the key performance indicators (KPIs)

Propose an alternative solution, based on restructuring and re-engineering of the current processes, which could in turn reduce the level of inventory at their main warehouse in Daharki.
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