Process Mapping

Procurement and Logistic Process :

Every month with a new draft of FC, material replenishments for M-3 month are planned based on the lead time of different Base Material suppliers as mentioned in table above.This procedure covers the purchases and evaluation of related suppliers for the material categories mentioned as:

Category	Description
Base materials	Adhesive polymer, Aluminum foil, Paperboard, Polyethylene, and Ink
Additional material	Polypropylene film, U-Straw, LS Strip, IS Strip, Tab Strip, Recap, and Slim Cap
Production Consumables	Labels, Ribbons Printing Plates, Tapes, Cores, Stretch Film, Shrink Film, Splash Proof Film, Pallets,  Corrugated Sheets and Boxes
Spare parts	All types of mechanical and electrical spare parts for TPP’s machinery
Other Indirect Purchases	All types of other goods and services related to indirect purchase categories

Procurement and Logistic process is a supervisory control of the purchase of raw material from suppliers and their supply chain up to the factory. Tetra Pak International develops the base materials specifications and does approval of suppliers related to raw materials.

The responsible for developing the specifications for Consumables are Production Manager, Quality Assurance Manager (QAM) and Factory Director (FD). And the responsible for Additional material Requirement are Supply Chain Manager (SCM), QAM and FD.

At website ORBIS approved materials specifications for base materials are available. Both Procurement Manager (PM) & QAM has access to these specifications. Suppliers also obtain these specifications for their record and reference.

The process is categorizes into the Following:

• Inbound.
• Outbound.
• Supply management.

Inbound:

Inbound includes the raw material purchase and imported by factory for the production purpose. Inbound is further divided into the following.

• Purchase of Direct Materials.
• Pack matt Imported.
• Processing, Technical Machinery and Spare Parts.

Out bound:

  It includes all the matters of finished product of the Factory and its Exports.

• Finish Goods Exports.
• Local Finish Goods Dispatches

Supply management:

It includes consumable materials.

• Indirect Goods.
•  Indirect Services.

Purchase of Direct Materials:

Direct materials are those materials which are the base materials of TetraPak Pakistan and are broadly categorized into following items.

• Paper board.
• Alufoil.
• Polymer.
• Ink.

Paper Board:

                               Paper board is a base material used in products of TetraPak factory. It is purchase both locally and globally. Paper Board has 22 different types on the basis of its stiffness and width. Some of these are as follow.

Material No	Description of  Paper  Board	Supplier
R1122-178	Bleached Kraft paper 30mN,1178mm,Billerud	Billerud korsnas
R1136-272	Bleached Kraft paper 1272mm 0mN	Korsnas
R1501-225	Duplex 80mN,1226mm,Packages	BSPL
R1502-273	Dup 150mN,1296mm,KorsnasGavle	Korsnas
R1506-225	Dup 260mN,1228mm	Korsnas
R1607-296	CLC/C BL 30mN,1296mm,MWV	MWV
R1621-129	CLC/C Dup 80mN,1292mm,Packages	BSPL
R1622-296	CLC/C Dup 150mN,1296mm,Klabin	Klabin
R1626-227	CLC/C Dup 260mN,1228mm,KornasFrovi	Korsnas
R1627-629	CLC/C Dup 370mN,1618mm,Kornas	Korsnas
R1656-469	CLC/C Dup 475mN,1568mm,Kornas	Korsnas

The above mentioned are the some of the types of Paper Board .In Pakistan only 80 mN/185gsm Paper board is available ,which is purchase from Bulleh shah Packages PVT limited Lahore. Remaining other types of Paper Board is imported from Billerud Kornas, storaenso, MWV, Klabin. Paper board is base material and used in all products of TetraPak. 

Its stiffness and width gives strength to the product .It has different gauges of paper depending upon the demand of the customers it is utilized in different packaging products (i.e. juices pack manufacturing etc). By MP process its demand is mentioned, on which procurement and logistics executives contacted their suppliers for booking orders (invoice) for the base material to fulfill the requirement of factory manufacturing demand. Procurement Executives give payment to suppliers according to the rules mentioned by the company. Annually 45 thousand Tons of Paper Board is utilized by TetraPak factory Pakistan.

Ordering Process:

                                       Ordering Process starts when MP process is completed. Procurement and Logistics process tackles the Ordering Process.MP process is performed every month when a new draft of RFC is generated .MP plans the replenishment of base materials for full planning horizon.

In this process the MP give complete details of base material demand required by the factory for the fulfillment of the demands of their customer’s.

Ordering process is divided into following:

• Operation.
• Strategic Liaising.

Operation:

                           MP plans the Replenishment of base materials for full planning horizon. Planning horizon is a process of 16 weeks after the current planning week, where first 12 weeks are for review or expediting or delaying of orders. Any urgent order is placed for a demand seen within these 12 weeks. Remaining 4 weeks (M3 month) are for new month planning and new orders are placed to suppliers for this period.

On the basis of the FC from the MP the Procurement Executive contacts the suppliers for Order placement and details of it are mentioned in supply information sheet.

GIT information and Orders with suppliers:

The Information of raw materials that are on way to factory (In-transit) and details of orders placed to suppliers is provided in the supply sheet by PE on weekly basis. Supply information sheet will contain exact ETA dates to Factory and quantities of shipment with booking and PO number for reference.

Creating New Orders:

•           Analyze materials status from current week till next 16 weeks. New orders will be placed as per lead time defined earlier in the planning horizon.
•          In case an order is required with ETA less than its lead time, check availability of material from supplier & booking at the priority bases. This will be treated as an urgent order & requires an urgent demand creation to supplier & response from them.
•      There can be following situations while analyzing status of desired material.
•            An already placed order’s ETA needs to be delayed.
•       Urgent demand should be shared with SM on earliest basis for placement of order & booking.
•        When demand planning is done for 16 weeks horizon, share it with SM for placement of new orders and/or requesting suppliers for expediting/delaying of already placed orders
•      The planned orders are shared with SM on order planning sheet, showing orders on weekly basis for each material. The information of PO, booking number, material quantity & ETA is shared in order to expedite /delay an already placed order.
•            PE should keep a record of placed orders in Order Placing Sheet.
•      New orders demand planning is shared with Procurement Team for placement of orders.
•      Orders are prepared in SAP and PDF is sent to the supplier by email & copy sent to freight forwarder and Material Planner.
•     PE does the follow up for confirmation of orders with suppliers. Once orders are confirmed with the desired qty and weeks, planning part is completed.
•      In case supplier does not confirm the desired week or qty or partly confirms the quantity, then it is discussed with the supplier. In case we do not reach on a decision, then matter is escalated to Central Base Material team.
•      Depending on our requirements and in consent with Central Base Material Team, orders can be placed to back-up suppliers.
•           In case RFC decreases and extra inventory is appearing during the coming months, than e-mails are sent to the relevant suppliers to hold the quantity planned for shipment and new schedule is provided to the suppliers. Vice a versa practice is adopted when RFC is increased.

Orders & Booking Confirmation:                                         

1.     Upon receipt of demand (normal or urgent) from MP, PE will send emails to all suppliers to look into their production capacity and book production for Lahore factory
2.     PE can send formal Purchase Order very next day via email to suppliers requesting the ETA given by MP.
3.      Based on order confirmations, PE shares info with MP. In case if there is any delay/deviation to requested ETA that is specifically shared with MP.
4.    After that PE do the follow-up with Geodiswilson (forwarder) for timely bookings as per shipping lines nomination shares.Geodiswilson charges Tetra Pak Lahore for their services 85 sek per Container.
5.      PE keeps on tracking urgent shipments on-line and also through forwarder.
6.      In case of any deviation/delay from suppliers or shipping lines during transit, that is shared with PE and next weekly supply sheet is updated accordingly.

Strategic liaising:

In Strategic Liaising the forecast of the company is shared with the supplier, so that the supplier can manage the demand of the factory in time without any delay. And if the supplier is not able to fulfill the demand of the factory, then they can inform the TPP in time so that they can contact other suppliers for the demand of raw material.

Evaluation for Base Material Suppliers:

1. According to the TPP’s requirements suppliers are selected on the basis of the quality and the ability to supply products and services.
2. Approved Suppliers list of local and imported in SAP is maintained by PM.
3. On quarterly basis the performance of the base material suppliers are re- evaluated.
4. PM fills the supplier Evaluation form available at Tetra Pak website and provides feedback to TetraPak corporate office according to guidelines’ for suppliers rating developed by TetraPak international.
5. PM on supplier Evaluation portal evaluates and approves the suppliers by applying one or more of the following.
6. Supplier Evaluation Portal is used by PM to evaluate and approves the suppliers.
7. Evaluation is done on the basis of the following.
8. Availability of base material with supplier.
9. Supplier approach towards it.
10. Supplier’s information management.
11. Responses of suppliers.
12. Timeline for documentation.
13. Preparation of meeting.

Evaluation for Local Suppliers:

1.     List of approved suppliers (in SAP) is maintained by SPE in order to place order to local suppliers for TPP and update the list on the basis of their performance.  
2.     Performance of the suppliers is analyzed for the purchased product quality and the rapid response to the claims of the customers.
3.        QA staff is responsible for maintaining the records of the base material and for re-evaluation it is provided to SPE.
4.        On the basis of the following criteria the suppliers are approved and evaluated.
5.      Demonstrates flexibility in case of urgent orders and deliveries.
6.       Good Track record.
7.       Devotion with the ordered product specifications and Quality of product.
8.       Compatibility with company objectives.

Pack matt Imported:

This process includes the import of finished product from other Tetra Pak factory worldwide for the customers. In case of the demand of the customer, if the Tetra Pak Lahore factory is not able to fulfill the demand of customer, then the CSR contacted other factories of Tetra Pak worldwide for the demand booking for his customer. If any Tetra Pak factory acknowledges that they have the desired stock to fulfill the demand of customers then the CSR department of Tetra Pak Lahore booked the order of desired amount mentioned by the customer. After booking the CSR department send PO (purchase order) to factory of Tetra Pak from where they purchasing.

On the issue of PO the CSR then contacts the forwarder and shipping line for follow-up and Email include it is also forwarded to PE. Forwarder Gediswilson issue the bill of lading and email it to PE for the Follow-up. All the shipping documents are sent to clearing agent for on time clearing and daily monitor the shipment for timely delivery to customer. When the whole process is done then the next step is of payment to the suppliers.PE send all the documents to bank for the Payment.

Payments:

The payment is categorized into the following:

1.     Local Payments.

2.     Foreign Payments.

Local Payment:

The procedure of local payment is simple. Local payment is done after the delivery of purchase material. PE sends the cheque through TCS to concerned supplier. Supplier cashes it from the bank.

Foreign Payment:

The procedure of foreign payment includes verification of different documents. Foreign payment is not done directly. It includes verification of different documents such as Invoices ,Bill of lading and airway Bill .PE verify the documents and then complete set of the documents including the custom clearance certificate is send to bank one day before the mentioned date of payment. For foreign suppliers payment Finance department is responsible. Every Friday SM department sends due invoices along with shipping documents to finance department.

 Finance department puts all the invoice related data in excel sheet and returns back to SM for checking of R Block invoices. SM department coordinates with warehouse and finance department for resolving R block issues till Wednesday. On Every Wednesday finance department negotiates the rates with banks and makes the deal with lowest quoted bank. Bank gets all the invoices from finance department and transfers the payment to supplier every Thursday.

Custom clearing agent Bills:

After the Base material and spare parts shipment clearance, custom clearing agent sends 4 to 5 bill sheets to SM department. In the advance running sheet and in tech department spare parts sheet data is entered. After necessary checking, SM department sends these bills to finance. Finance department pays and adjust expenses against advances.

Insurance Bills:

SM department sends invoices to IGI insurance for insurance of upcoming shipment. Insurance company prepares insurance bill on the basis of invoice and send us for checking of premium. After checking the bill SM department sends back the bill to IGI for preparation of final bill. After this, insurance company sends this bill to finance for payment. This process is completed till the last week of every month.

Shipping line payment:

After checking the shipping line invoices and mention the PO no and GD no on the invoices SM department sends these invoices to finance department every week. Finance department pays these invoices on weekly basis. In case of any discrepancy SM department reconciles with the shipping line.

Bill of Entry submission and Issuance of FOB certificate:

After foreign supplier payment, SM department submits bill of entries to Banks and also prepares request letter along with shipping line invoices and sends to bank for issuances of FOB certificate. After issuance of these certificates, SM department sends these FOB certificates to respective shipping line.