Table of Contents Page No. Executive Summary....... 3 Company Profile......4 Introduction..........................................................................................................4 Mission.................................................................................................................4 Vision...................................................................................................................4 Objectives..............................................................................................................4 Competitors.......4 Operation Strategies.............................................................................................

........4-5 Differentiation........................................................................................................4 Low Cost Leadership...............................................................................................4 Quick Response.......................................................................................................5 Main priorities of a Company...............................................................................................5 Key Areas of Operation Management.............................................................................5-13 Product and Service Design...5-6 Process and Capacity Design6 Layout Design...........6-8 Supply Chain Management.... 8-9 Inventory Management...9-10 HR and Job Design.10-11 Scheduling.. 11 Maintenance.11 Location11-12 Total quality management...12-13 Recommendations and Conclusions13-14 References...............................................................................................................15 Appendices16-17

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Acknowledgement: First of all thanks to Allah Almighty who helped us to carry out this project with great dedication and then we take this opportunity to express our profound gratitude and deep regards to Mr. Aamir Hameed who is General Manager of Sales in Multan and Ms. Abida Ellahi for her guidance towards this final term project, also. Lastly, we are thankful to our parents, brother, sisters and friends for their constant support without which this project would not be possible.

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Executive Summary: Shamim and Company private limited was incorporated in Pakistan in the year 1967. It is a franchise of Pepsi Cola International which trades in carbonated soft drinks. Mr. Allah Nawaz Khan Tareen was the founder of concern. Production operations were started in 1968 and initially it was known as 7- up factory. Its major products are: Pepsi Cola 7- up Marinda Mountain Dew The aim of this study is to figure out and assess the strategies, operations and organizational structure at Shamim and Company Private Limited Pakistan. The study begins with companys profile covering a brief introduction of company, its mission, vision and objectives. Later on companys major competitors are discussed to assess companys performance as compared to competitors. Following the discussion about competitors next come the companys operational strategies encompassing: Low cost Leadership Differentiation Quick response Then come the major part of study referring towards the relevant key areas of operations management. After elaborating key areas in detail we end up this study with recommendations and conclusions.

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COMPANY PROFILE: Introduction: Shamim and Company (PVT). LTD. initiated its work in Pakistan in 1967 but production commenced a year later. It is a part of huge global group Pepsi Cola International and is owned by Mr. Allah Nawaz Khan Tareen. 7-up was its initial product and other three (Marinda, Mountain Dew, Pepsi Cola) were introduced afterwards because formerly it was associated with 7-up and in 1973 it contracted with Pepsi Cola. The concern having four plants at Multan, Sahiwal, Mian Wali, Rajan Pur, Bahwal Nagar and Khan Pur makes it the biggest soft drinks manufacturing unit in Pakistan. It captures more than 70% market share in economy and has sound financial health. Company is enjoying high brand name and customer loyalty due to super quality products. Mission: To become worlds leading product company striving for quality food and beverages. Vision: We were Number One and we will be Number One. Objective: We manage through well qualified, devoted and diligent employees. The central idea is to instruct them according to the varying technology and automated surroundings, and gratifying their requirements and requisites. Improving the plant makeup and fitting of the new machinery are other proposals. It is planning to raise its sales personnel and expansion in its infrastructure in future. COMPETITORS: 1. Coca- Cola 2. Ammrat Cola 3. Makka Cola 4. Gourmet Cola OPERATION STRATEGIES: Differentiation Strategy: Differentiation is low but company is continuously putting efforts to bring changes in products to satisfy customer needs. Focus is to bring innovation and hence take high risk as compared to other competitors which is also a main success of the company. Low Cost Strategy: The firm cant take on low cost approach by reason of low profit margin. Also it is unable to reduce prices to much an extent because that will hinder its ability to meet operating and non-operating expenses. Under this situation tough competition exists between businesses and they are forced to charge same prices.

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Quick Response Strategy: Enterprise is quite receptive in this respect. On certain events they give different proposals to customers in order to increase sales. Customer complaints are also handled carefully. Main Priorities of Company: There are two main priorities of firm that helps it to contest morally with competitors in the market. 1. High Performance Design Performance of product matters a lot and directly affects the brand positioning in consumers mind. Firm provides bottling assistance to Pepsi Cola which has a strong image in society due to good quality and taste. Through a market research it is found that sweet taste is very much liked by people of this region thats why Pepsi is leading soft drink in Pakistan. On the other hand Coke is a global leader but comes on number second in terms of market share in Pakistani market. So, we can say that Pakistan is a huge market for Pepsi Cola International and is earning a lot of revenues. So, Shamim & Co. is involved in designing products for companies who already have high performance, demand, good reputation and market share. 2. Consistent Quality: The second strong and great aspect is that its production fulfills all the good quality standards as according to the PCI standards. The damaged bottles or low quality bottles are not dispatched in the market. Each and every step related to quality is checked strictly because they dont compromise on it as it serves as a competitive edge for them. The concern has a lot of checks and balances on all output levels. KEY AREAS OF OPERATION MANAGEMENT: 1. Product Design: Product and service design decision is taken by the upper board. Demand for new product is explored by production manager in terms of raw material, machinery operations, and quality. Finance department assesses financial feasibility. Trial size production is piloted. Feedback from consumer in terms of contentment and companys capability to meet the requisite helps in determining to produce new product. Shamim & co. faces intense competition with Coca Cola Company on quality. Company adopts standardization policy for product design keeping in view human health concerns. Drinks are available in different sized bottles ensuring the requirements of individuals and households. Attractive and sensational packaging gets special focus of company.

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Recommendation: Besides taking into account concerns about health, hazards of soft drinks like cancer are there, so company may consider reducing such elements or try to explore alternatives. Being a major distributor, scope is there for manufacturing of juices. As it is franchise of Pepsi, so can also deal in distribution of LAYS leading towards a new target market along with beverages. Most of the promotional schemes introduced by the Pepsi Cola are same and standardized for all the regions of Pakistan. So, organization should recognize the different schemes of different regions and then launch new products. More schemes to get customers view or feedback that helps to get knowledge about customer wants and preferences can be started. 2. Process And Capacity Design: For process continuous supply is critical and process is automated. It is flexible and production on plant can be changed within one hour. Production is of large scale and covers a wide area for the distribution of the product. Their plants are capable of producing round the clock. Company operates 4 plants with the capacity of 50,000 crates in each day and annual production is 500 million drinks. Capacity of plants is increased in summer season as the demand for drinks rises and to cater customers. Productivity=crates produced per day/No. of labor*hours =50000/(100*12) =41.67 crates produced per labor hour Recommendation: Improvement of plant structure and fitting of the new machinery can increase its production to cater more customers. Required to have continuous check on changes in market and then adjust their capacity accordingly. If a certain area is not giving fruitful results may switch to another as they are distributors and have coverage of wider space. 3. Layout Design: Facility or physical layout of plant, backup facilities and building is provided by the parent company. Carriage costs with the plant are low. Physical layout provides concentrated employment of available area by enhancing expenses. Some main layouts are:

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Facility Layout: After selecting the location company designs a building, picks the suitable procedure technology, tools and arranges it in a manner so that it has maximum potential to meet the determined demand of business. Experience and well-versed opinion are valuable guides to layout decisions. Computer models are present to aid in workplace layout. Tools involved effects the layout. Facilities crafted helps in effective operations in the organization. Plant layout: Every single production plant comprises of filler, chiller, washer, crown fixer and conveyer. Process layout: Firstly in plant, syrup tank is fitted from which syrup moves and on the other side water treatment tank exists from which water moves. Both are assorted at a definite ratio in one chamber then this solution moves to carbon cooler .In this cooler inclusion of carbon dioxide takes place in the syrup at low heat. Then it is passed to filler and chiller where this mixture is inserted in unfilled bottles and crown caps are put on it. In the next stage end product moves towards packing machine through conveyer and then bottles are packed with great care. Office layout: Office layout is based on the interrelationships among three primary factors: employees, flow of work through the various work units, and equipment. Company is having office layouts in major cities and provides supervision to employees. Retail layout: Retail outlets are selected after detail market analysis. About 220 retail outlets are present in every area of Pakistan even their outlets are also in far flung area to target each segment. Distribution & warehouse layouts: Two warehouses are present where raw inventory is kept. Small godown also exists in factory premises for temporary keeping of finished products and then is transferred to main ware houses. From where these end products are supplied to distributors. Company chose distribution channel on the basis of targets achieved and geographical area cover by them. Recommendations: Company prefers work force which is based on that area and possibility is there of forgoing skilled labor resulting in bearing cost that otherwise would be minimized. Company main manufacturing facility is in Multan that is in very congested area, so need to have it in remote area. Office layouts of company are in Faisalabad and Lahore. There is need to have it in other major cities.

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Company provides very limited information of its layout while its parent company discloses. In process layout workers rarely ware mask, gloves and safety glasses so they must use to ensure their safety and strict instructions should be given to them. As it is franchise of Pepsi, manufacturing facilities are not of same level of parent company. Advanced machineries and tools are required to be efficient. 4. Supply Chain Management: Supply chain of company comprises of following entities: Suppliers Product Manufacturers Distributors Retailers Customers Raw material used in making drinks is not provided by one supplier but more than one to avoid out of stock situation in high demand season. Sugar is supplied by the sugar manufacturers of the region. Concentrate is supplied by the franchiser situated in industrial region of Hattar. Company purchases carbon dioxide from outside suppliers during summer season when demand increases. In winter season CO2 is prepared within the premises, which is enough for the full capacity of two plants. Company has a very well-established distribution channel capturing entire franchise areas. Due to the high potential of the area many distribution channels were established. Sale director is accountable for each and every activities of the distributor who takes care of inventory availability and all contingencies. Sales force training is also a duty of sales supervisor. Raw material includes: Labels Plastic Bottles Glass Bottles Glue Pallets and shells Cartons Layer Pad Case Pad

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Suppliers are bound to deliver material on the terms and conditions mentioned by PEPSI. They propose eye-catching margins to the distributors, so they get ready to hold companys brand .Company has wide set-up of Distributors and highly trained sales personnel to market place and dispense products in entire southern Punjab which is a place that covers approximately 150,000Sq.k.m. It serves inhabitants of more than 20 million communities through 220 plus outlets. A full business package is provided to retailers of company which includes horizontal and vertical bottle coolers, place of buying advertisement, cash credit. Recommendations: As like distribution of product that is forward integration, company may consider to get into backward integration and produce raw material for others along with producing for itself. This can assist in giving a wider perspective of others beverage manufacturers and improvements can be made. Natural water is integral for company and is becoming rare with passage of time, so must try to do water exploration projects or take part in environmental concerns like Nestle. 5. Inventory Management: Inventory is vital to many corporations because it helps the company react quickly to customer demand, which is significant part of economic strategy. Stock of raw material or partly processed merchandises can support an organization accomplish the manufacturing series in a considerable quicker. The more effective an inventory scheme, the healthier it is to cope with its means and to contest successfully. Various inventory structures need contract recording to have record of each order under which items are added or drawn from the current record. Shamim Company is following FIFO method in inventory and in finished product issuance due to the nature of raw material. They have two godowns for inventory. Inventory monitoring is done at the close of every month; supply point makes a monthly utilization report that contains the list of entire inventory items which were utilized by the production division during the month. Recommendations: Classification of inventory can give a more clear perspective for inventory management. Application of ABC approach can be helpful for handling inventory. On basis of approach mentioned, check can be maintained on inventory regarding documented and physically present inventory. Time period and products per day need to be allotted for audit

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instead of checking all at month end. Godowns to keep inventory of company are in populated area and there is no parking place for loading and unloading so company has to purchase parking area to save time. In peak season only two godowns are not sufficient to keep inventory so they should purchase more godowns to reduce spacing problems. 6. HR And Job Design: Company hires human resource with vital expertise and made capable to complete the quantifying and implementing method. Improvement of the expertise of excellence controllers is constant course as goods. Company has now serviced new qualified & competent sales personnel & increases share from 70% to 80 and even 90%. On the job training of 4-6 months helps the plant engineers to supervise operations of plant efficiently so that machine downtime is reduced to minimal. On the other side proper employees orientation programs are not designed by the company. Poor response from employees shows that they are not satisfied with the job which results in low motivation due to certain reasons: Low pay. Exclusion of Daily allowance. Overtime amount is given in terms of vacations not in financial terms. Technicians usually do not find a chance to enjoy allowed vacations due to a lot of work so the additional holidays are of no use for them. Outsiders are on top level positions. An employee within the department is promoted to the head technician and sales director level. Technicians also sometimes works as salesman for which they obtain just Rs. 2.50 / cylinder that is very low. Sales targets are set without the permission of staff. Recommendations: There is less culture of team work in a work place and the main problem is also a lack of combination of technician, helper and driver so company should promote team work spirit in workers to increase productivity. Moreover groups should work with full preparation i.e. essential tools and tested equipment. It is also important that when technicians acts as sales person should be paid fairly. There should be staff involvement in setting targets so that they can internalize targets.

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Daily allowance should be given to workers as most of companies are paying it. 7. Scheduling: Forecasting has a main position in scheduling all the activities of the business. It is based on both the qualitative and quantitative techniques. Management of the company wants perfect forecasting of customer demands to formulate schedule for all type of task, to produce final product in time and reduce additional inventory levels which is not required. Accurate forecasting guide schedulers to use plant capacity proficiently cut the production period and decrease excessive inventories. Behind scheduling market research, sales force estimate is done to determine demand. In company demand vary a lot with the change in season i.e. high demand in summer and low in winter. Scheduling of production is done on demand basis. Recommendations: Demand variation is high with respect to seasonal changes; company must focus on other products that are having less seasonal variation to cope up with revenue fall. Continuous check must be kept on market changes and consumer demands. Can use lead users opinions about product because of high usage they can assist in forecasting trends of market. 8. Maintenance: Technicians of a company pay special attention on maintenance of plants and machinery. Immediate repair is done in case of any problem in machine. All the plants of a company in different locations are in good form. Inventory record is also properly kept and company has never faced the problem of raw material shortage. Recommendations: Besides having technician for maintenance, company needs to have advanced machine technology and repairing tools to cope up with technological world. Training courses for machinery maintenance must be arranged for technician. Backup system must be developed to cope up with repairing issues. 9. Location: It is having significant effect on companys capability to contend and on its contact to hazards from exterior influences. In a vibrant marketplace the firm may grow, enhance or rearrange innovative conveniences. Location judgments are crucial owing to succeeding motives. Rivalry

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Budget Unknown outcomes Company is situated adjacent to MDA chowk Multan and its location is not of particular planned worth. It occupies a great region of Southern Punjab. Consequently there is no value of site with respect to the rest municipality of this zone. Any way place is substantial for this city. The site is close to areas where the most of population lives i.e. i Cantt and down town. Thats why conveyance charges of these areas are low. So it can aid its clients excellently and competently. Recommendations: As situated in populated area may face expansion, water and energy issues. Existing location is providing low carriage cost but other indirect costs are not taken into account. 10. Total Quality Management: The enterprise ensures quality at every step in its operations. Quality control department of a company is responsible for following functions: Ensure quality in water treatment (for bottle filling & washing), syrup making (pasteurization room), calibration, regular checking of laboratory and production equipment's, Incoming raw material testing, In process testing, finished goods testing, market complaints handling, market rejections, customer rejections, trade sampling, quality testing of CO2 plant and Boiler. Water Treatment: Water is the core component of the beverage product. All the impurities are removed from it to use it in the process. Water Tests: Alkalinity test and dissolved salt testing is used to verify that water treatment plant is working properly and final treated water for processing meet standards. If high alkalinity exists then that water is not used as it is considered to produce undesirable effects. Ingredients and flavors used in the products of company subject to different quality standard tests to ensure that they are safe for human health. Internationally accepted artificial colors are used in product making to minimize harmful impacts on consumer health. For making quality products company is upgrading the plant structure and installing new machinery. Customer feedback, complaints and workforce input is considered to improve quality. It is also ensured in the company that suppliers provide defect free raw material.

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Firm has been awarded with quality excellence award. It has fully equipped Quality control laboratories. Quality assurers are at home in their jobs. Due to this reason quality assurance efforts are acknowledged by the global management of Pepsi cola. This encourages the company not to compromise on quality. Penalties are faced by franchise if they breach quality standard regulations. Recommendations: Company is not ISO certified as are of view point that Pepsi has good reputation and they are not exporting their products.ISO certification ensures quality so must be adopted. After complete working on 10 operation management decisions of Shamim & Co. we observed that company is very well committed and responsible. After in-depth analysis we have identified some lagging areas for improvement. Rules and Regulations: Company needs to re-define some policies to conduct it operations more effectively. There should be tight policies for implementation of rules and the organization must be sure about their implementation at any cost. Add More Islamic Values: There are strong perceptions about the Pepsi Cola in the minds of Pakistani people that it is a Jewish company and it works to facilitate Israel. Due to this reason most of them dont like it and also prevent others from this, so there is a need to change the perception of the people who believe all this. These perceptions can be demoted by adding more Islamic values in the promotional campaigns of Pepsi Cola. Rewards For Employees: The company needs to motivate its employees by offering more incentives, bonuses, compensations, employees security, good working environment, appreciations .etc. That helps to retain employees and make them loyal. And it can also be in the form of free samples and incentives. Conclusion: From the collected information about the strategies and 10 key operations managements areas of Shamim & Company, we come to know that it is focusing towards continuous expansion especially in fixed assets. That includes building, installing plant etc. and the basic purpose of that is to capture more market share. The concern has very committed staff that is the main

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reason due to which it captures more than 85% market share. Some workers are facing problems and those should be addressed wisely to retain them. It has a very well-establish distribution network that is working in a very effective and efficient manner. So, we conclude that as a whole its operations & strategies are running competently and ensuring long term success but still there is a room for some improvement which we have pointed out by critically viewing their operations. But this is entirely our opinion and may be the operations which we have criticized and the improvements which we have suggested are not supported by their strategy choices.

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References: Retrieved from http://www.scribd.com/doc/55629154/Shamim-internship-Report-Asif-Ali-Khan Retrieved from http://download-reports.blogspot.com/2011/04/pepsi-cola-shamim-co marketing-report.html Retrieved from http://download-reports.blogspot.com/2010/08/retailing-strategies-of-sultan sons.html

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Appendix:

No. Material 1. 2. 3. Pepsi Concentrate Caps & Closures Plastic Bottles

Manufacturer/ Supplier(s) PepsiCo Inc. Ireland & PepsiCo Factory in Hatter Estate. Gatron Pakistan Limited Gatron Pakistan Limited Baluchistan Glass Mills

Approved from Approval at the factory Approved form PepsiCo China. Approved from PepsiCo China. Approved by PepsiCo China. Approved from PepsiCo U.A.E, Dubai.

4.

Glass Bottles Tariq Glass Limited

5.

Carbonated Water

Pakistan Bottlers (Pvt) Ltd.

Organizational structure:

Managing Director

General Manager Technical

General Manager Sales

General Manager Finance

General Manager Operations

Manager Production

Manger Sales & Marketing

Manager MIS

Manager Admin

Manager Quality Control

Manager Research & SIS

Manager Finance

Manager Personnel

Manager Account

Manager Shipping

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Flow Line:

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