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3.

TABLE OF
CONTENTSHISTORY .....................................................................................................................
.................. 5K & Ns
BACKGROUND..............................................................................................................
5COMPANY MISSION ...................................................................................................................
6MARKET ORIENTED MISSION .................................................................................................
6K & Ns GOALS AND OBJECTIVES ..........................................................................................
6SWOT ANALYSIS OF K& Ns.....................................................................................................
7BUSINESS PROCESSES & PRACTICES ....................................................................................
9 Poultry Breeding ......................................................................................................................... 9
Hatching ...................................................................................................................................... 9
Broiler Growing ........................................................................................................................ 10
Feed Milling .............................................................................................................................. 10
Poultry Processing .................................................................................................................... 10
Ready-To-Cook and Fully Cooked Chicken Products.............................................................. 11
Distribution System & Chicken Stores ..................................................................................... 11
Quality Assurance Lab .............................................................................................................. 11
Poultry Diagnosis & Research Institute ....................................................................................
11STRATEGIC SUPPLY CHAIN PLANNING..............................................................................
12K & NS COMPETITIVE STRATEGY.......................................................................................
13K & NS SUPPLY CHAIN STRATEGY .....................................................................................
14K & Ns MARKETING STRATEGY ..........................................................................................
14FRAMEWORK OF SUPPLY CHAIN IN K & Ns .....................................................................
16K & NS DISTRIBUTION NETWORK ......................................................................................
17DISTRIBUTION OF K & Ns PRODUCTS ................................................................................
17DISTRIBUTION CHANNEL OF K & Ns PRODUCT ..............................................................
17Quaid-i-Azam School of Management Sciences Islamabad 3
4. CHANNEL BEHAVIOR CONFLICT .........................................................................................
18MARKETING SYSTEM ..............................................................................................................
18TYPE OF VMS .............................................................................................................................
18FRAMEWORK OF K & NS DISTRIBUTION ..........................................................................
19K & Ns FRAMEWORK OF NETWORK DESIGN DECISION ...............................................
20STORING PROCEDURES ..........................................................................................................
21REASONS WHY K & Ns MAINTAIN RAW MATERIAL INVENTORY? ............................
21WAREHOUSE/STORING MANAGEMENT SYSTEM ............................................................
21PRACTICES OF KEEPING GOOD INVENTORY MANAGEMENT ......................................
23INVENTORY HEALTH - IMPORTANT FACTORS TO BE CONSIDERED TO
AVOIDINVENTORY .......................................................................................................................

........ 23TRANSPORTATION
NETWORK .............................................................................................. 24 Direct Shipment
Method ........................................................................................................... 24BROILER AND
OTHER RAW MATERIALS ........................................................................... 26K & Ns
SUPPLIERS ....................................................................................................................
26PRODUCTION METHODS ........................................................................................................
26SOURCING STRATEGIES & PROCUREMENT PROCESSES ...............................................
26SELECTING 3PL SERVICE PARTNER ....................................................................................
27ROLE OF REVENUE MANAGEMENT ....................................................................................
29K & Ns REVENUE MANAGEMENT LEVERS .......................................................................
30MARKETING INFORMATION SYSTEM .................................................................................
31PRICING STRATEGIES .............................................................................................................
31IT IMPORTANCE in K & Ns .....................................................................................................
33INFORMATION SHARING BETWEEN K & Ns SC PARTIES ..............................................
34 Challenges Faced by K & Ns ..................................................................................................
34Supply Chain Management of K & Ns 4
5. INTRODUCTION HISTORY The year 1964, Pakistan was a young independent nation
forging ahead towards a dream, self-sufficiency in food production. Malnutrition remained a
major problem and one out of four children died before attaining the age of five. 80% of the
ailing children were affected with diseases caused by protein, vitamins and minerals deficiency.
Poultry production, the quickest and least expensive way of filling the protein gap was planned
to overcome malnutrition. Backyard poultry farming has to graduate to a more professional level.
In January 1964, a young man, Khalil Sitar, still a college student, had a vision to foresee a need
to establish a poultry farm. His interest led him to start a broiler farm of 1, 000 chicks. Little had
he known this flock was to become the foundation stone of K& Ns? This was the simple,
inspired and nationalistic beginning of K&Ns with a single minded objective of providing better
nutrition for health and happiness of the nation & Ns BACKGROUNDK&Ns is the founding
pillar and beacon for Pakistan poultry industry- started in 1964 with a single minded objective of
providing better nutrition for health and happiness of the nation. Building on years of poultry
expertise, and a commitment to food-safety, K&Ns integrated all poultry production activities
under one umbrella to ensure quality and food-safety by managing and controlling all stages of
production It is a marvelous food industry located at Rewind. It deals with poultry processing. K
& Ns Poultry processing is integrated business containing essential components like breeder
farms, hatchery, and broiler growing farms, feed mill and poultry processing plant. K & Ns is
main supplier of eggs in Pakistan and is the biggest poultry industry in Pakistan. Formerly K
&Ns food was M.ARTAL Poultry Intl Private Limited. M.ARTAL was Belgium base. It was
registered in Holland. M.ARTAL Poultry processing plant started work on August, 03, 1998.
6. GRANAASIA. Business projects of M.ARTAL in Pakistan were Harrys bread, Aiwa mineral
water, KFC restaurants and poultry processing. Poultry processing was integrated business. But

unfortunately their projects in Pakistan were failed. So first they sold Harrys bread, then
KFC,then Aiwa mineral water to Nestle and at last poultry processing project to K & Ns foods
on January 2002. Now K &Ns foods poultry processing business is flourishing day by day.
Today with our undeterred commitment to food-safety, customers repose confidence in us to
provide them safe and healthy chicken. Their trust in K&Ns and endorsement as Pakistan
favorite Chicken honored us. COMPANY MISSION Driven by its basic values in pursuit of
perfection, K&Ns is committed to have superior products and unmatched service through
devoted people and consistent development. MARKET ORIENTED MISSION Providing the
best hygiene and nutrition for the health and happiness of the nation being our very first
promised makes us remain stick to our commitment to the customers rather look for what one
may call better for ones self. The increasing demand of our products all over the country
explains the worth; our promises are getting through our valuable customers & Ns GOALS
AND OBJECTIVESK&Ns has set a single minded objective for providing better health and
nutrition for the nation. In order to achieve this objective K&N Built on years of poultry
expertise, and a commitment to food-safety, K&Ns integrated all poultry production activities
under one umbrella to ensure quality and food-safety managing and controlling all stages of
production. Four basic objectives of absolute integrity, enthusiastic diligence, continuous
improvement and high quality maintenance are at the core of all operations which provide an
impelling urge for attaining perfection. Driven by its basic objectives in pursuit of perfection,
K&Ns is committed to have superior product and unmatched service through devoted people and
consistent development. Supply Chain Management of K & Ns 6
7. Absolute Integrity High Quality OPERATIONAL Enthusiastic Maintenance Diligence
OBJECTIVES Continuous Improvement SWOT ANALYSIS OF K& NsIn order to gather
useful information about its position in the market and commercial viability,K&Ns use SWOT
analysis to determine various factors which may improvise the overallstandard, quality and brand
equity while growing in competition to other production units inPakistan.In its quality assurance
cell, the company maintains a check and balance on methods of salesdistribution, new business
ideas and strategic options, such as entering a new market orlaunching a new product in its
product line, changing its suppliers and outsourcing its services.A few points necessary to be
included in this section are given in coming sections.Strengths The company is now a producer
of its own unique type which produces various categories of products segmented for different
chunks of population while remaining in lowest costs.Quaid-i-Azam School of Management
Sciences Islamabad 7
8. Along with the developed brand identity and trust reposed by customers, K&Ns has
established its name in international market as well. This is driven by a factor of self production
plants which are self sufficient to produce ingredients and helping materials by themselves for
K&Ns finished products. Another factor is the strong supply chain through its distribution
channels. These factors are the basic strengths of our product inherited from the company setup.
The unique taste and first time introduction in the markets have a vast scope in the product line

of its nature.Weakness Though no company is a perfect in business activity performances yet


pricing strategies have been the pinching element in companys market positioning. Though the
products are cost effective as we take quality under consideration yet most of the products are
targeted for the upper class of society. We can use appropriate and differentiated pricing strategy
to avoid this weakness ofOpportunities As K&Ns majorly operates in Pakistan, a country where
distribution of products is limited to specific areas within an urban sector hence grooming their
product of under such circumstances has always been an opportunity for K&Ns. By improving
their Distribution channels as well as pricing strategies for , can give a robust increase in brand
equity and can promote their product demand overall in the market.Threats Threats are always
there in poultry oriented firms so K&Ns keeps an eye on new competitors in dealing with
different products related to chicken and poultry. At present the only threat is the diseases spread
amongst broiler chickens which can be prevented by establishing medic control at breeding
premises of company.Supply Chain Management of K & Ns 8
9. K & Ns Business Processes & PracticesBUSINESS PROCESSES & PRACTICESPoultry
BreedingK&Ns maintains layer and broiler parent stock populations in different regions of
Pakistan.Layer parent stock farms are located in the south and broiler parents are bred in the
coldermountainous northern region. Both types of parents are housed at isolated breeder
farms.K&Ns operates several strategically located hatcheries covering all day-old chick markets
toensure delivery of high quality layer and broiler day-old chicks to commercial
farmersthroughout PakistanStrict bio-security measures are taken at all farms to reduce the risk
of disease transmissionthrough mechanically and physically transferred disease causative agents.
Careful attention ispaid to bird health, vaccination, weightiest and selection to maintain healthy
and uniformbreeding flocks. Hatching-eggs are cooled down inside air conditioned, humidified
egg-rooms,packed and dispatched in sanitized and environment-controlled vehicles to company
ownedhatcheries located throughout Pakistan.HatchingAll hatcheries are equipped with most
modern cooling, heating and humidification systems toprovide a uniform and consistent hatchery
environment independent of varying outdoor weatherconditions. Incubators from worldrenowned manufacturers are installed at all hatcheries andtheir performance data is recorded and
monitored by a computerized incubation monitoringsystem.Upon arrival from breeder farms,
hatching-eggs are candled at all hatcheries to remove eggs,which may have cracked during
transit. Sanitation and hygiene is enhanced by mechanicallytransferring eggs from one type of
tray onto another until chicks are harvested from hatchers.Maximum care is exercised while
handling, reconstituting and administering vaccines usingQuaid-i-Azam School of Management
Sciences Islamabad 9
10. proper techniques and modern equipment. To ensure chicks get off to the healthiest start and
stayprotected from viral diseases, they receive inject able and spray vaccinations at the
hatchery.Broiler GrowingIn addition to supplying day-old chicks to farmers, K&Ns is also
engaged in broiler growing atcompany owned farms to produce broilers for our poultry
processing plant. Under the watchfuleye of our own poultry nutrition, health and housing

specialists, they grow-up in large, clean andairy houses equipped with state-of-the-art heating,
cooling and ventilation equipment. Thechickens freely strut around, breathe fresh air, eat at will
and drink fresh, cool and pure water.We really mean pure water as our chickens do not drink
water from troughs, which can lead towater contamination.Feed MillingTo ensure consistent
performance with high standards, our chickens really live on a healthy andwell balanced diet. It
is based on: natural grain products such as corn, corn gluten, rice andwheat; oil seed meals such
as soybean, canola and sunflower; fish; oyster shells supplementedwith multi-vitamins and
minerals.Feed is always tested by our quality assurance lab to ensure it is wholesome because
K&Nsdoes not compromise on quality. Feed is also supplied to our day-old chick customers
andgrowers for realizing the profit potential of K&Ns quality day-old chicks.Poultry
ProcessingAt our state-of-the-art poultry processing plant, only healthy chickens are used to
produce highquality, safe and healthy chicken products. Chickens are Halal slaughtered by hand
(IslamicZabeeha) strictly according to The Shariah.After Halal slaughter, chickens are processed
in the most hygienic and automated manner.During processing, the birds are washed inside out
and our veterinarians constantly examine thebirds to confirm they are wholesome. Cleaning is
constant and each evening the entire operationis completely washed and sanitized. Only after
very thorough inspection, the plant beginsSupply Chain Management of K & Ns 10
11. operation each day. All chickens pass through veterinary inspection to confirm they
arewholesome.Ready-To-Cook and Fully Cooked Chicken ProductsSome chickens are used for
preparing our ready-to-cook and fully cooked chicken products usingstate-of-the-art meat
preparation and production equipment. Choicest meat is carved and selectingredients are added
to our premium chicken meat, for preparing flavorful high-quality productssuch as burger patties,
nuggets and kababs. Our world-class value-added chicken products areindividually quick frozen
using Individual Quick Freezing (IQF) Technology.Distribution System & Chicken
StoresProducts are stored at -21C to maintain freshness. Packed products are moved into
K&Nssanitized refrigerated trucks for distribution to ensure uncompromising quality control.
K&Nschicken products are available at K&Ns Chicken Stores and leading retailers and also
deliveredto quality and food-safety conscious institutions such as hotels, restaurants, airlines,
clubs andinternational restaurant chainsQuality Assurance LabK&Ns state-of-the-art Quality
Assurance Lab monitors the entire integration process, fromlivestock to feed and on to
preparation of ready-to-cook & fully cooked products. The entireintegration process is monitored
and regulated to ensure K&Ns chicken products arewholesome, safe and healthy.Poultry
Diagnosis & Research InstituteWith the assistance of US Agency for International Development,
K&Ns Poultry Diagnosticand Research Institute was established in collaboration with Pakistan
Agricultural ResearchCouncil. It is a very well equipped and state-of-the-art disease diagnostic,
feed and feed rawmaterial testing laboratory which provides invaluable service to Pakistans
poultry industrythrough research and extension service in close coordination with K&Ns
Advisory Service.Quaid-i-Azam School of Management Sciences Islamabad 11

12. STRATEGIC SUPPLY CHAIN PLANNINGThere are four steps which basically form the
plan for our company which could derive results inform of long term company survival. These
for steps are Planning Supply Chain Strategies Step 1 Designing the Business Portfolio Step 2
Setting Company SC Goals & Objective Step 4 Defining the Company Mission Step 4In these
steps, K & Ns aim is to provide the basics of functioning throughout the companiesproduction
process. The long-term missions are to be achieved through setting short-termobjectives. The
products are characterized and allotted weights according to demand andnecessity basis, which
eventually forms the business portfolio.Supply Chain Management of K & Ns 12
13. K & NS COMPETITIVE STRATEGYK & Ns competitive strategy has following core
elements which are kept in mind whiledeveloping competitive strategy.Important: a. We deliver
highly valued benefits to our target customers in our products.Distinctive: We have no strong
competitor and enjoy distinctiveness in the market.Superior: b. We are providing pure hygienic
food in at comparable prices.Communicable: c. The consumers can feel the difference in our
quality, taste, hygiene and prices that are communicable.Preemptive: d. Competitor needs a lot
and lot of hard work to match our standardAffordable: e. Buyer can afford to pay for the
difference.Profitable: f. The difference is profitable both for the company and the
customers.Quaid-i-Azam School of Management Sciences Islamabad 13
14. K & NS SUPPLY CHAIN STRATEGYProduct flow involves the movement of goods from
a supplier to a customer, as well as anycustomer returns or service needs, information flow
involves getting orders. Supply chainmanagement flows can be divided into three main flows: K
& Ns ultimate goal of effective supply chain management system is to reduce inventory (with
the assumption that products are available when needed) K & Ns supply chain management
involves coordinating and integrating these flows both within and among companies. Supply
chain management (SCM) of K & Ns is the oversight of materials, information, and finances as
they move in a process from supplier to manufacturer to wholesaler to retailer to consumer &
updating delivering status, the financial flow consists of credit terms, payment schedules, and
consignment and title ownership arrangementsK & Ns MARKETING STRATEGYK&Ns is
using the marketing concept as its current marketing technique stating that theorganization
should be aware of the needs and wants of the target markets and should bedelivering the desired
satisfaction better then the competitors do in order to achieve theorganizational goals.Product
Concept:This concept says that consumer will favor products that offer the most quality
performance andfeatures and that the organization should therefore devote its energy to making
continuousproduct improvements.K&Ns from the very beginning has focused on providing
better nutrition for the health andhappiness of the nation and we will be keeping the words as
they were before. Quality is ourvery first priority that will make us build strong and profitable
customer relationships.Supply Chain Management of K & Ns 14
15. K & Ns Competitive Strategy To Provide Distinctive, valued, standardize and hygienic food
K & Ns Supply Chain Strategy Aim to reduce in-house inventory as low as possible by
coordinating supply chain partiesEfficiency K & Ns Supply Chain Structure Responsiveness

Facilities Inventory TransportationInformation Sourcing PricingFigure: K & Ns Supply Chain


Decision Making FrameworkQuaid-i-Azam School of Management Sciences Islamabad 15
16. FRAMEWORK OF SUPPLY CHAIN IN K & Ns Raw intermediate Meterial Suppliers
Supplier Own Production/ Outlets/ Distribut Processing Stores ion Industrial Backward
Integration SuppliersSupply Chain Management of K & Ns 16
17. K & Ns NETWORK DESIGNK & NS DISTRIBUTION NETWORKDelivery Methods
from Company to Warehouse and ware house to retailers.K&Ns maintains 3 Distribution
Centers, the Northern (Rawalpindi / Islamabad), Central (Lahore) & Southern Region (Karachi).
o A cold chain feeds the Northern & Southern Regions. Distribution to our Institutional & Retail
partners is also "through & through Cold Chain" as described above.DISTRIBUTION OF K &
Ns PRODUCTSAfter the development of our product our product are distributed into the
market for thesatisfaction and attraction of our consumers. Our product plays a vital role in the
availability ofour services to attract the customers.How to Distribute our Product to Retailer Sell
Directly to Retailers Sell through distributors, which sell a broad range of products to many
retailers Sell through captive distributors, which sell a broad range of products to one chain of
retailers. Sell through distributors, which sell to your targeted customers Distribute to K & Ns
StoresDISTRIBUTION CHANNEL OF K & Ns PRODUCTThe distribution channel of our
product is indirect marketing channel because this channelcontains one or more intermediary
levels.Quaid-i-Azam School of Management Sciences Islamabad 17
18. Cost of Development Of ProductsThe price of our product is based on cost of all ingredient
used because of its low price ourproduct is very popular among customers. Product s Our
product offers consumptions, attention to satisfy desire or need in the marketLevel of Products
Core Benefit: o Providing the good taste. Actual Product o Product includes all ingredients in
packaging according to the core benefit. Augmented Product o Product may provide some
benefits which are related to our product.CHANNEL BEHAVIOR CONFLICTThe conflict of
channel behavior of our product is vertical conflict. Because in this conflict;conflict lies between
different levels of the same product, is even more commonMARKETING SYSTEMK & Ns
products consist of vertical marketing system (VMS) because it is such type ofdistribution
channel in which producers, wholesalers, retailers act as Unified system. So that onechannel
member owns the others, has contracts with them, or has so much power that they
allcooperate.TYPE OF VMSK & Ns products lies in the administered VMS in the vertical
marketing system because thistype of VMS coordinates successive stages of production and
distribution, not through commonownership or contractual ties, but through the size and power
of the parties.Supply Chain Management of K & Ns 18
19. FRAMEWORK OF K & NS DISTRIBUTION K & Ns Manufacturing & Processing Plant
Central (Lahore) Distribution Centers North Central SouthIslamabad/Rawalpindi,Jehl Karachi &
Hyderabad Lahore & Multanum ,Peshawar Regions Region Region K & Ns Stores (67 Stores in

Major Retailers cities) Customer Customer Customer Customer Customer Customer Quaid-iAzam School of Management Sciences Islamabad 19
20. K & Ns FRAMEWORK OF NETWORK DESIGN DECISIONK & Ns Competitive Phase
IStrategy Competition in the K & Ns Market Supply ChainK & Ns Internal
StrategyLimitationsK & Ns Production, Taxes & IncentivesFrozen and Storing Phase
IITechnologies K & Ns Country DemandCompetition in the Facilities inIndustry Central, North
& South Demand RiskTransportation Costs Region Phase III Infrastructure forK & Ns
Production & K & Ns Poultry Breeding andPocessing Methods Favorable Sites Frozen Meet
Phase IVFactors Cost Transportation & Locations for Delivery to Stores and Processing and
Outlets Delivery Supply Chain Management of K & Ns 20
21. INVENTORY MANAGEMENTSTORING PROCEDURESStoring Procedure is as per the
International standards laid out by WHO for such products. Anin-house developed integrated soft
ware for inventory management is in place to ensure data update & First in First Out deliveries.
REASONS WHY K & Ns MAINTAIN RAW MATERIALINVENTORY?Most of the K & Ns
have raw material inventory warehouses attached to the productionfacilities where raw materials,
consumables and packing materials are stored and issue forproduction on JIT basis. The reasons
for holding inventories can vary from case to case basis. Meet variation in Production Demand
Cater to Cyclical and Seasonal Demand Economies of Scale in Procurement Take advantage of
Price Increase and Quantity Discounts Reduce Transit Cost and Transit Times Long Lead and
High demand items need to be held in InventoryWAREHOUSE/STORING MANAGEMENT
SYSTEMIn K & Ns Supply Chain, Inventory Management and Warehousing/storing form a part
ofoperations intensive function and is one of the key building blocks in the entire chain. Most
ofthe inventory is held at the warehouses and storing as compared to the pipeline, and
theefficiency of the warehouse operations will determine the further supply chain
efficiency.Though it is a normal industry practice now to outsource the warehousing operations
to a 3PLLogistics service provider but K & Ns supply chain management believes to build its
ownwarehouses and cold storages to reduce costs and keep its inventory in safe
environment.Quaid-i-Azam School of Management Sciences Islamabad 21
22. Physical Infrastructures of K & Ns In-house StoresThe building blocks or operational
criteria of K & Ns Warehouse Management System includes Location Structure, roof
height and flooring Design and layout external, utilities and facilities in the premise
Internal layout design, storage infrastructure, material handling equipments Safety
equipments and mechanisms, IT and communications infrastructure, power and backup
services and finally accessibility of the location and availability of labor.IT SystemsA robust
WMS capable of managing inventory and locations which is RF driven or enabled,would be the
backbone of a good efficient warehouse.The Warehouse Management System controls two sets
of operations: 1. On the inventory front, the system maintains inventory in the warehouse at
Zone & individual location level, SKU level, pallet wise, carton wise and unit level inventories
for multiple customers and allows specific inventory attributes and parameters to be built in to

manage, allocate or block the inventory. The system also provides options to adapt FIFO method
as the products are perishable. 2. On the Operations front the system manages, controls and
directs all operations including receiving processes, put away processes, order processing,
inventory allocation, picking process, packing process and finally shipment along with inventory
updating. The K & Ns intelligent system guides and helps operations manager to schedule and
manage all operations for various groups and teams simultaneously depending upon the work
load and pattern and thereby manage resource allocation too.Supply Chain Management of K &
Ns 22
23. PRACTICES OF KEEPING GOOD INVENTORY MANAGEMENTGood inventory
Management practices in the K & Ns helps by adding value in terms of havingcontrol over and
maintaining lean inventory. Inventory at K & Ns stores is not too much or tooless. Both the
situations are bad for the K & Ns. Review Inventory periodically and revise stocking patterns
and norms Get into detailed inventory planning - One size does not fit all Study demand pattern,
movement patterns and cycles to build suitable inventory norms for different categories of
inventoryINVENTORY HEALTH - IMPORTANT FACTORS TO BE CONSIDERED
TOAVOID INVENTORYMismatch inventory management on one hand consists of managing
the inventory transactionsand data in the system and on the other it involves physical processes
on the ground.Systems IssuesWhen in case of day-to-day operations, hundreds of transactions
are being processes at both theends concurrently; the system updates may not happen on real
time basis and can lead toinventory discrepancies. Therefore the K & Ns have to daily
reconciliation of all transactionsbetween both systems as well as operations.System Discipline
RequiredAny lack of discipline can affect not only the inventory but effect transactions as well.
ForExample, if for any reason a particular SKU or consignment is blocked at the warehouse and
isnot to be dispatched, the inventory block should not only happen in WMS which controls
flooroperations but in ERP also.System Inventory is Matched with Physical InventoryThe
inventory that is setup and maintained in the ERP as well as WMS should correspond to
theinventory on the shop floor.Quaid-i-Azam School of Management Sciences Islamabad 23
24. K & NS TRANSPORTATION NETWORKTRANSPORTATION NETWORKAs required
for the frozen foods, K&Ns transports its products all the way through Cold Chain,supported by
specially designed own vehicles to maintain temperatures in the required range tomaintain
product quality.Direct Shipment MethodWith the direct shipment network option, the buyer
structures his transportation network so thatall shipments come directly to each buyer locations.
Routing is specified and only thetransportation mode and routing is decided by the supply chain
manager of K & Ns.Suppliers of K & Ns K & Ns Locations Sub urban areas of Broiler Lahore
Manufacturing Site Packaging Raiwind In-house Storage Ingredients Intermediate Distribution
Centers SuppliesSupply Chain Management of K & Ns 24
25. Suppliers Manufacturing /Processing Plant In-House Storing StoresDistribution Centre
Consumer Outlets Retailers Flow Chart: Supply Chain-A Journey of K & Ns from Supplier to
Valuable Consumer Quaid-i-Azam School of Management Sciences Islamabad 25

26. SOURCING DECISIONS 1st CROSS FUNCTIONAL DRIVERBROILER AND OTHER


RAW MATERIALSAlmost 90% of the Broilers for processing are produced at K&Ns own
Poultry farms located inthe suburbs of Lahore. Broilers of course, are our major raw material.
Other than that, manyingredients & spices are procured from within Pakistan & some ingredients
are also imported toproduce the Best Chicken Products for the Health & Happiness of our
consumersK & Ns SUPPLIERSUnder the Supply Chain concept, the suppliers are our Business
Partners & long lastingrelationship is maintained in the mutual interest. Accordingly, K&Ns,
over the period, hasmultiple business partners in the field of Packaging, ingredients & many
other fields.PRODUCTION METHODSDepending upon the type of product, production method
is used. For instance, raw chicken &special cuts are produced on the Automated / Semi
automated lines, whereas, Value addedproducts are produced through Fully Automated Process
in K & Ns processing departments.SOURCING STRATEGIES & PROCUREMENT
PROCESSESAt K & Ns procurement managers manage procurement and sourcing function
both at strategicand operational levels. They are proactively engaged in building supplier
networks, estimating,controlling and reducing costs besides performing other functions and
ensuring service levels.Their job functions are increasing becoming cross functional together
with supply chain andmanufacturing functions.Procurement FunctionProcurement functions in K
& Ns deals not only with procurement of raw materials andcomponents, but also with capital
equipments, project procurement, ingredients procurementSupply Chain Management of K &
Ns 26
27. after market, managing rejections too. Procurement function works closely with
procurementlogistics or inbound supply chain in K & Ns.Procurement Process and Sourcing
StrategyThough interlinked closely, both procurement process and sourcing strategy are not one
andsame. K & Ns sourcing strategy deals with planning, designing and building a reliable
andcompetitive supplier base, determining the strategy for procurement, defining pricing
strategiesand supply chain requirements. The strategy involves integration of its objectives in
line with orconfirming to the objectives of stake holders in operations, finance, Marketing and
distribution.K & Ns sourcing strategy also involves planning to competitive buying sources for
its rawmaterials, components and services along with alternative variables.Shift in Sourcing
Strategic Approach.Advancement in technology and R & D capability of K & Ns has enhanced
leading to shorterproduct life cycles. Lean Manufacturing and cost per unit concept is demanding
that themanagers keep looking to reduce the procurement cost as well as procurement logistics
cost. Bydeveloping a relationship with suppliers in a collaborative mode, buyers are able to get
suppliercompanies to hold inventories for them at buyer location and postpone taking
inventoryownership up to the point of consumption.SELECTING 3PL SERVICE
PARTNERChoice 3PL Service ProviderBesides many companies have been traditionally
transportation providers who have acquiredwarehousing competence and skill sets and are not
warehouse centric or focused players.Domestic Service providers on the other hand would know
the laws of the land better and knowhow things work. They will have the local expertise and
capability to manage operations andresources better. By virtue of them being local and small

players, one can expect better focus andattention.Quaid-i-Azam School of Management Sciences
Islamabad 27
28. Service Provider Capability EvaluationEvaluation of a 3PL service provider involves
understanding of their capabilities both in terms oftechnical competence, operational capabilities
and Management Culture.The evaluation normally consists of Detailed Response document to
RFQ from the 3PL serviceprovider, followed by presentation by the 3PL and subsequent site
visits to the proposed location,site visits to other locations /operations of 3PL, coupled with
customer references. Detailingthese processes becomes important especially in the case of a
bigger project depending upon thecriticality of the project.Management Focus / Involvement and
CommitmentA management interested and focused on CL business is likely to invest into
building a long termrelationship and enhance its competence and deliver better value proposition
to the buyer.Company profile and meetings with management will enable one to assess this
criterion. Theother important and relevant areas to be evaluated are the IT Backbone and
capabilities of the3PL and its experience and expertise in deploying and managing WMS
systems.Supply Chain Management of K & Ns 28
29. PRICING & REVENUE MANAGMENTROLE OF REVENUE MANAGEMENTK & Ns
focuses on the revenue management to adjusts the pricing and available of supply ofassets to
maximize profits because revenue management play a significant role on theprofitability of the
firm. in the high demand seasons, K & Ns try to manage revenue by focusingon the customers
segments and taking the orders in bulk form and then fulfilling them at the righttime. As there is
high demand or bulk of orders from retailer side to distribution centers so ithelps K & Ns to use
efficient way to fulfill these demands and deliver them through the efficientmodes of
transportation. 700 600 500 400 300 200 100 50 100 150 200 250 300 350 Figure: Revenue
Generated by K & Ns Pricing for 1 SegmentQuaid-i-Azam School of Management Sciences
Islamabad 29
30. K & Ns REVENUE MANAGEMENT LEVERSWhereas yield management involves
specific actions to generate yield through perishableinventory management, Revenue
Management encompasses a wide range of opportunities toincrease revenue. A company can
utilize these different categories like a series of levers in thesense that all are usually available,
but only one or two may drive revenue in a given situation.The primary levers are:PricingIt
involves redefining pricing strategy and developing disciplined pricing tactics. The keyobjective
of a pricing strategy is anticipating the value created for customers and then settingspecific prices
to capture that value. K & Ns make decision to charge price against theircompetitors or even
their own products, but the most value comes from pricing strategies thatclosely follow market
conditions and demand, especially at a segment level. Once a pricingstrategy dictates what a K &
Ns wants to do, pricing tactics determine how a K & Ns actuallycaptures the value. Tactics
involve creating pricing tools that change dynamically, in order toreact to changes and
continually capture value and gain revenue. Price Optimization, forexample, involves constantly
optimizing multiple variables such as price sensitivity, price ratios,and inventory to maximize

revenues. K & Ns successful pricing strategy, supported byanalytically-based pricing tactics, has
drastically improved a firms profitability.InventoryK & Ns has focused on controlling
inventory, Revenue Management of K & Ns is mainlyconcerned with how best to price or
allocate capacity. First, company can discount products inorder to increase volume. By lowering
prices on products, K & Ns can overcome weak demandand gain market share, which ultimately
increases revenue so long as each product sells for morethan its marginal cost. Overbookings
focus is increasing the total volume of sales in thepresence of cancellations rather than
optimizing customer mix.Supply Chain Management of K & Ns 30
31. MarketingPrice promotion allows K & Ns to sell higher volumes by temporarily decreasing
the price oftheir products. Revenue Management techniques measure customer responsiveness
topromotions in order to strike a balance between volume growth and profitability. An
effectivepromotion helps maximize revenue when there is uncertainty about the distribution of
customerwillingness to pay. When K & Ns products are sold in the form of long-term
commitments, e,and promotions help attract customers who will then commit to contracts and
produce revenueover a long time horizon. When this occurs, K & Ns also strategize their
promotion roll-offpolicies; they begin decide when to begin increasing the contract fees and by
what magnitude toraise the fees in order to avoid losing customers. Revenue Management
optimization provesuseful in balancing promotion roll-off variables in order to maximize revenue
while minimizingchurn.Distribution ChannelsRevenue Management through channels involves
strategically driving revenue through differentdistribution channels. K & Ns different channels
represent customers with different pricesensitivities. Different channels often have different costs
and margins associated with thosechannels. When faced with multiple channels to retailers and
distributors, K & Ns RevenueManagement techniques also help to calculate appropriate levels
of discounts to offer distributorsthrough opaque channels to push more products without losing
integrity with respect to publicperception of qualityMARKETING INFORMATION
SYSTEMPeople, equipment and procedures to gather, sort analyze evaluate and distribute
needed, timelyand accurate information to the marketing decision makers.PRICING
STRATEGIESAs we know that there are two types of new product pricing strategies Price
Penetrating StrategyQuaid-i-Azam School of Management Sciences Islamabad 31
32. Price Skimming StrategyFor our product K & Ns selected the market penetration pricing
strategy. K & Ns apply thisstrategy to keep our product prices lower so that by doing this we
attract a large numbers ofbuyers and also to gain large market shares.The reason for not using
market skimming strategy is that as our product is an eatable productand there no sense of
keeping high prices for an eatable product, because as we know thatskimming strategies are for
luxury products.PRICE ADJUSTMENT STRATEGIESAfter penetrating into the market, we will
adopt adjustment strategies in order to increase oursales and attract more customers. Basically
these adjustment strategies are according to the taste,culture and the changing situation of the
market. Following are the price adjustment strategies.Discount and Allowance PricingWe will
apply this strategy by giving quantity discount to our customers.Quantity DiscountWe will give

quantity discount by offering buy one get one free offers.We will also give discount to those
customers who will buy in bulk or in large quantity.Time Pricing StrategyIn time pricing we will
lower our prices according to different seasons. K & Ns reduces pricesin Ramadan season, as its
demand is more in that season.Supply Chain Management of K & Ns 32
33. IT SYSTEM OF K & NsIT IMPORTANCE in K & NsThe use of information technology
(IT) is considered a prerequisite for the effective control of K& Ns complex supply chains. The
use of IT for SCM purposes can be divided into1) Transaction Processing2) Supply Chain
Planning and Collaboration3) Order Tracking and Delivery Coordination Reduction of Costs
Elimination of Human Errors Transaction Processing Speeding up Information Transfer Volume
of Transactions b/w parties Unpredictable and Supply Chain Planning Logistically and
Collaboration Demanding Environment Project-orientation of the business Order Tracking and
Delivery Coordination In-transit Delivery ConsolidationQuaid-i-Azam School of Management
Sciences Islamabad 33
34. INFORMATION SHARING BETWEEN K & Ns SC PARTIESIT is one of the most
important enabler of the Supply chain in modern complex businessprocesses of K &
Ns.Information sharing can be applied to almost all the core domains ofcorporate operational
activities of K & Ns. Starting from the development chain process whereinformation sharing can
happen in the product design stages and product life cycle managementactivities with both
internal and external partners. In the customer chain processes information sharing is helpful in
formulating customer experience strategies, increase customer service effectiveness and
operations. Information sharing is most effective and least disruptive for all concerned when
done by implementing the available technological tools, which would accomplish the process in
a controlled and secured way thereby streamlining the global supply chain operations.
Collaborative Planning, Forecasting and Replenishment workflows and solutions exist in the
supply chain process of K & Ns to enhance supply chain integration and data sharing across
business activities and K & Ns is effectively use it for their competitive advantage. Additionally,
synchronized and tightly integrated procurement and manufacturing planning activities gave K &
Ns planners the ability to quickly re-plan national based on changes in execution.Challenges
Faced by K & Ns The current challenges that K & Ns is facing in implementing these
workflows really revolve around non-integrated processes and systems with retailers and
manufacturers operating out of their own silo and different planning data. This results in
excessive response times, costs and inventory due to forecast inaccuracy. Retailers on one hand
face stock-outs, material shortages, lost sales and poor customer service to name a few. The gains
achieved were two-fold. On the planning side sharing of mid to long term forecast and
publishing near term requisition forecast to suppliers and receiving supply commits from them
resulted in reduced material shortages and stock-outs at the component level.Supply Chain
Management of K & Ns 34