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An overview of Supply chain management

A supply chain is a network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the production, delivery, and sale of a product to the consumer. The supply chain is typically made up of multiple companies who coordinate activities to set themselves apart from the competition. A supply chain has three key parts:
y y y

Supply focuses on the raw materials supplied to manufacturing, including how, when, and from what location. Manufacturing focuses on converting these raw materials into finished products. Distribution focuses on ensuring these products reach the consumers through an organized network of distributors, warehouses, and retailers.

Supply chain management can be divided into three main flows:


y y y

The Product flow includes moving goods from supplier to consumer, as well as dealing with customer service needs. The Information flow includes order information and delivery status. The Financial flow includes payment schedules, credit terms, and additional arrangements.

Material flow
Procurement MoQ

In this assignment we are going to cover supply chain for exports of dehydrated onions by JAIN IRRIGATION. Intoduction of Jain irrigation: Jain irrigation is an entity which operates in micro irrigation, plastic pipes, plastic sheets and food processing. It is multinational organization based in Jalgaon in the state of Maharashtra in India. Jain irrigation systems limited manufacture number of products including drip and sprinkler irrigation systems and components. Jain irrigation segments its business in six major categories. 1. Agriculture 2. Irrigation Systems and Components 3. Pipes 4. Plastic Products 5. Renewable Energy 6. Food Processing: is further classified into three sub categories. A. Dehydrated Onion & Vegetables: Standard and speciality. b. Fruit Purees c. Catalogues, Literature (PDF)

Based on the activities, it is evident JSIL involves itself in all the aspects of the value chain by involving in enhancing production, productivity and a well defined supply chain.

Parties and stakes involved /topic change JISL sells its dehydrated onions under the brand name Farm Fresh. They have set up two 100% export oriented units, one in Jalgaon with the capacity of 300 MT per day and other one in Baroda with the daily capacity of 120 MT. Company is currently working with 1900 farmers over 3785 acres which is about 2 acres per farmer. Costumers: Jain irrigation is into business to business to business sales with the buyers in the United States and European countries. Dehydrated onions are used in soup dry mixes, pizza topping, sauces and other food preparation. Major clients of Jain irrigation are industries like Food companies such as Kellogs, Kraft and Sysco Corporation and many other companies ranging from medium to large scale. Production planning: Jain irrigation anticipates its sales from the previous years performance. As onions is crop which is available in both Kharif and Rabi season managing the cycle is more convenient as compare to one seasonal crop. Also the important factor in deciding the production requirement by the Jain irrigation is that companies place their annual or at least half yearly order well in advance so that these companies can also make their production and financial planning ( most common practice of agriculture based industries which are procuring from outside).

Flow chart:

Order received

Production planning

Farm production-booking

Booking with Maersk line

Harvesting submission of shipping instruction

Sorting

Storage

Calling for containers from ICD

Dehydration and milling

Packing

Stuffing

Dispatch

Surveyors report

Shipped on board

Import formalities

Repackind and cosilidation at port

Final delivery

1.Order received Harvesting-

2. production planning

3. Farm production-booking

4.

5.Sorting (post harvest management) 6.storage 7.Dehydration and milling(processing center ) 8. Dispatch 3a. Booking with Maersk line b submission of shipping instruction

6c Calling for containers from ICD d. Stuffing e. surveyors report f. shipped on board repackind and cosilidation at port. G. final delivery g. import formalities f.

PROCUREMENT In house Procurement: As Jain irrigation undertakes contract farming which means it does not buy separately from market unless there is the case of contingency. Hence Jain irrigation does not under goes into any sort of direct procurement. However Jain irrigation does under take movement of products from its contracted facilities hence it can be termed as in house procurement. Procurement: Products like fertilizer and pesticide are bought from the outside market on basis of requirement during farm production. Primarily required fertilizers and pesticides are order in advance with the major wholesalers and distributors of the state. Orders placed in such a way that they receive pesticides or fertilizers on point of production cycle when they are required so that their inventory handling is minimum. This helps Jain irrigation in anticipating cost and supply. Farmers capital/subsidy However Jain irrigation have set up their own splinkers and pipes but water is supplied from the local government bodies. Government bodies have set up canal

and irrigation system at places also Jain irrigation actively participated with government in order to set up extensive irrigation system. PROCESSING Farm production: Contract farmers working with the company have to adopt the specific package of practices. JISL employed agriculture graduates, who serve as the gram sevaks to monitor the production with farmer in the contract area. One gram sevak manages about 60 acres. There are around 60 gram sevaks employed by company. They regularly monitor the fields at the time of planting, spaying, harvesting etc. If there is expectation of an outbreak of any disease or pest they arrange for the timely spraying. Harvesting and packaging: When the onion bulb matures, the green tops weaken just above the bulb and fall over the (neckfall). When neckfall begins, irrigation is stopped. When more than 50% of the tops are down the bulbs are harvested along with the leaves by hand pulling from beds. The harvested crop allowed to cure in the field for about 3-4 days, after which the roots and tops are clipped and filled in the bags of 35-40 kg capacity. Curing is the drying of neck, roots and outer scale tissues which prevents the disease infection. After Field curing produce is collected and move to processing center. Company provides bags to farmers to so that produce can be bring to processing center with minimum damage. Post harvest management: In dehydration plant, grading and sorting is undertaken to separate the onion bulbs that are damage or do not meet requirement. Health and size of the bulb are the two important criteria for sorting; very small bulb <35mm are rejected. Storage: Onions can be stored for nearly 10-12 months in cold stores by proper temperature and humidity. Processing center: The raw material after going quality inspection and sorting goes for dehydration. Dehydration is placed such as it ensures maximum retention of flavor aroma and taste. Dehydrated flakes are then carefully milled into different fraction at its state of art milling facility ensuring strictest sanitation, food safety and hygienic conditions. During milling the product under goes metal detecting and color sorting at the last stage and then packed in the bag in box. Tracking: Elaborate marking, labeling and recorded system have been set up for the complete traceability. This activity is carried to ensure proper dispatch of the right product to right costumer after reaching port of discharge. DISTRIBUTION

Booking with Maersk line: Jain irrigation has a total sea contract with the Maersk line. All the consignments of the Jain irrigation are routed to destination by Maersk line. Jain irrigation place their bookings right at the time of Farm production. Jain irrigation is the key client of the Maersk line hence they can place booking either on phone to their local office or by sending mail to their representative from Maersk line which was Suryaksh and Roopa swaminathan during the period of September to febuary. Calling for container from ICD: Container is called from the ICD when the produce is reached in the processing center so that by the time dehydration and milling of the produce is completed and product is ready for stuffing containers reach their factory premises. Jain irrigation have clear instruction to Maersk line that containers should reach in morning as JISL sent their container by evening. Stuffing: After internal quality check and receiving the quality certificate from the FAO inspector packaging of the product is completed product is packed in the bag in box. Bag inside the boxes are designed as per the guild lines of the customer and within customs rules where as outer box is completely labeled as Jain irrigation. Surveyor report: Inspector from central excise inspects the goods loaded and creates the surveyor certificate which is used further by master marine to create gate-pass and filling Export general manifest. Also as Jain irrigation undergoes store door movement agent of Maersk line is present there who creates mate receipt stating the condition in which goods are handed over to him. This mate receipt is further used in creating bill of lading by Maersk its copy is given to JISL. Container movement to port: Containers are further moved to port where they either placed in CFS or placed directly in port depending upon the arrival of the vessel. Submission of shipping instruction: While container is on the move JISL submit their shipping instruction via Edi format where draft copy is manifested and sent to JISL for approval. In case of any correction they send their request for correction and after correction approves it. Shipped on board: After the vessel have arrived the port containers get loaded on the vessel invoice get generated as Jain irrigation have credit account with Maersk line its bill of lading get automatically generated by the Maersk line system. Bill of lading have shipper as Jain irrigation at india and consignee as their distribution office at the overseas market. Arrival notice: Four day prior to vessel arrival arrival notice sent to the Jain irrigation subsidiary at the destination office.

House b/l manifest: This practice takes place Jain irrigation does not take container in their custody and directly handed over to the consignee. It is done when there is no packaging and sorting required in bonded warehouse. Custom clearance: In all case payment of duty and freight payment is pre-paid at the origin but in few cases when exam is carried by custom and agriculture department they have to pay $200 for the same to customs at the port. Surrenduring original b/l: In general practice Jain irrigation goes for seaway b/l for which originals are not required to surrender where as in some cases where negotiable bill of lading is required by client usually for l/c purpose then they surrender original b/l at Charlotte office. Claiming of shipment: Jain irrigation does not take their shipment into their warehouses they consolidate and repack the bags where ever required and directly dispatch it from the port warehouse by dray movement. Truck (Dray) movement of Jain irrigation handled by their own trucks or if required the use Maersk domestic dray services. Jain irrigation is so efficient in doing this that they move container before 3 days of demurrage and return empty container before 5 days of detention.

Benfits /porters 5 model diagram Availability of quality products: By providing guidance and facilities to farmers led to production of required and quality produce. Jain irrigation have extensive Research and development department which continuously working to gain agronomical advantages. Bargain power over suppliers: According to Michaels porter five forces model Jain irrigaition increase its bargain power over supplier (farmers) by reducing their cost of production and also reduce risk of farmers hence Jain irrigation wins loyalty of farmers. Industry competion: With its constant and controlled supply of raw produce Jain irrigation has advantage in terms of price and quality. Currently no competitor has acess to compete with the production capacity and supply of Jain irrigation. Gaining advantage from Maersk: Jain irrigation send all its shipments through Maersk line this provides added advantage to Jain irrigation in terms of pricing and timely delivery (as no matter what Jain irrigation get container and there shipment never rolls).

Reducing warehousing and inventory cost: Jain irrigation dispatch their goods from origin in such a way that they coincide with the delivery plan. At destination Jain irrigation does not need to take their goods to warehouse which reduce their warehouse establishment management cost and inventory handling cost. Timely delivry: Well defined supply chain ensures the timely delivery to the costumer .