LOGISTIC & DISTRIBUTION MANAGEMENT

LOTUS THREAD COMPANY LTD.

Sanchit Gupta | Vishnu Shankar Shukla

 LOTUS THREAD COMPANY LTD. - About

• Leading thread manufactures in North India with 14% market share

• Annual turnover of 58cr (1992/93)
• Monthly production of 135 ton i.e 9600 cartons
• 125+ yarn variety (cotton, polyester)
• 200+ shades
• More than 2500 Sku’s
 LTCL – Thread making Process

Thread Making
Blow room ~> Carding ~> Ring Frame (twisting / plying) ~> Griege yarn ~> Greige Thread Store (GTS)

Wet Process
Mercerizing ~> Bleaching ~> Dyeing ~> Polishing ~> processed yarn ~> processed thread store (PTS)

Finishing
Hank & Cone Winding ~> Cop Making ~> Spool making ~> tube winding

Packaging
Cellophane Wrap ~> cardboard boxes (as per size) ~> Carton stacking ~> 14 Kgs Avg. (INR 5,000)
 LTCL –Production Planning Schedule

Week 1 Week 3 (20th JAN) Additional Unplanned Demand

Shade wise / Plan discussed 20th FEB
yarn type with production
wise / region
wise

Week 2 (10th JAN) (1th FEB – 2nd MAR)

Plan received by Production and Dispatch
CMO
 LTCL – Problems

• The stock to monthly sale ratio shot upto 2.48 that is working capital costs were eating into company
profit
• Unreasonable marketing forecast lead to huge discrepancies in production plan
• Lead time on production varies from 25-55 days
• Lack of buffer stock at plant side
• Total inventory holding cost id 21.5 laks/month
• Twin problem surrounding both production planning & dispatching
• Item produced were lying dead in regional offices and at the same time additional requirement would
be raised and tagged ”urgent” to plant
• Bad response time in delivery order
 LTCL – Recommended Solutions

• Reduce transit Lead time – create warehouses at Hyderabad, Mumbai & FGS at Patiala

• Organisation structure – Logistics to move under operations command

• Classify and plan production as per Fast/medium/slow moving products

• Transferring intra – Regions

• Outsource Greige yarn (as per quality standards) & Dye in-house

• Better Forecasting system