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an enabler to achieve these objectives. Effective Supply Chain Management is integral to the business and plays
an essential role in boosting customer service, reducing operating costs and increasing profit leverage for the
company. Efficiency in Supply planning, transportation and warehousing can be a source of competitive
advantage for the company and help delight customers and consumers by bringing to them fresher products
every time, everywhere.
The Culinary segment of the company aims at providing tasty food coupled with health and wellness. The
central strategic pillar for Growth & Innovation in the culinary segment is Maggi Noodles. Maggi Noodles is
one of the biggest categories for Nestlé India (54% Volume contribution) and is the market leader in its
category. You have been hired as a Consultant for Nestlé India to help them optimize the Noodles Supply Chain
network.
PART 1:
The current month is December 2020. Maggi Noodles are manufactured at 5 plants and delivered to 27
Distribution centers all over the country, bringing about complexities in the Supply of the product. Below are
the details of SKUs for Maggi Noodles.
SKU 1: Existing SKU with 14% YoY growth
SKU 2: Existing SKU with 13% YoY growth
SKU 3: Existing SKU with 17% YoY growth
SKU 4: Multigrain Noodles, New Product Launched this year. Estimated growth of 15%, however currently
growing at 5%
SKU 5: Asian Flavor, Launch planned in November’19. Estimated YoY growth of 25%
The manufacturing locations and production capacities for Noodles are given in Appendix 1. Please note the
following constraints for any working:
1. FG Inventory Opening in any month to not exceed 17 days
2. FG Inventory Opening in any month to not fall below 13 days
3. Daily Output is limited to 280 Tons
PART 2:
With the projected growths, recommend the strategy to ensure supply continuity and propose changes (if
needed) in supply footprint for Noodles for 2023.
PART 3:
We are now in year 2023 and with the demand situation in sight, the Noodles factory in Goa is going through a
major transformation, which includes redesigning storage area and relooking at inventory norms and the
material flow for the premises. Company sees this as an opportunity to increase efficiency in order to maintain
high Customer Service Levels. The factory operates for 24 hours, all days of the week. The warehouses are
operated in 2 shifts. The trucks are unloaded at the unloading area everyday as per factory production
requirement and finished goods are not kept for more than 24 hours.
Below is the map of the factory area:
Requirement Lead
Raw in Kg for time Shelf Pack Conversion Storage
Source Form
Material every 100 in Life size to Pallets condition
cases of FG days
50 kg
bag or
20
RM 1 65 Domestic 30 Powder 25 25 Ambient
days
Ton
Tanker
15 50 kg
RM 2 20 Domestic 30 Powder 25 Ambient
days bag
25 Ton
Tanker
RM 3 10 Domestic 30 Oil 1 year or 200 Drums: 4 Ambient
ltr.
drum
25 kg
RM 4 3 Imported 90 Powder 1 year 40 Ambient
bag
9 50 kg Cold
RM 5 2 Domestic 30 Powder 25
months bag Storage
Requirement
Packaging Lead Shelf Pack Conversion
for every 100 Source Form
Material time Life size to Pallets
cases of FG
30
Laminate 2000 Kg Domestic Roll 1 year 750 kg 36
days
10 1000
Shipper 100 units Domestic Bundle 1 year 300
days Units
You are required to work out the below details, keeping cost effectiveness in mind:
1. Material Requirements and procurement pack size strategy as per production and inventory norms for
RM and PM
2. Map the material flow across the plant
3. Complete Storage solution for the factory warehouses including number of docks, storage space,
manpower requirements for warehousing, method of storing different Raw materials, Packaging
material and Finished Goods based on cost benefit analysis. You are free to make reasonable
assumptions and state the same.
4. Opportunities for use of Technology in Warehouse.
PART 4:
The new Multigrain Noodles launched this year has not received the kind of Consumer response that was
anticipated. It is a strategic product for the company and is considered a future growth pillar that resonates with
the shift in consumer preference. Recommend a Demand Generation & Growth Strategy for this variant.
APPENDI
X
Appendix 1: Plant locations for Noodles and daily outputs (in metric tons):
SKU 1 Y Y Y Y Y
SKU 2 Y Y Y Y Y
SKU 3 Y Y Y Y Y
SKU 4 Y Y N N N
SKU 5 Y N N N N
Daily Outputs 40 65 75 55 45
Appendix 2: DC wise demand for Apr ’22 (in metric tons)