A STUDY ON SUPPLY CHAIN MANAGEMENT IN GREEN LEAF TOBACCO-ISSUES & IMPERATIVES FOR OPERATIONAL EXCELLENCE
KrishiKosh
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Title |
A STUDY ON SUPPLY CHAIN MANAGEMENT IN GREEN LEAF TOBACCO-ISSUES & IMPERATIVES FOR OPERATIONAL EXCELLENCE
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Creator |
JANARDHANA REDDY, K
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Contributor |
SEEMA
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Subject |
STUDY, SUPPLY, CHAIN, MANAGEMENT, GREEN, LEAF, TOBACCO-ISSUES, IMPERATIVES, OPERATIONAL, EXCELLENCE
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Description |
The project entitled “A Study on Supply Chain Management in Green Leaf Tobacco-Issues & Imperatives for Operational Excellence” was carriedout in Ongole (Prakasham) district of Andhra Pradesh for ITC- India Leaf Tobacco Division Inspite of ITC - ILTD Company existing since hundred years in tobacco leaf procurement businesses it is facing problems of supply chain at different operational levels, which is mainly because of mismatch between supply and demand of leaf tobacco at Aggregate Godowns (AGGs). The company is spending about 20-25% of total procurement cost on leaf supply chain. The Company wanted to have an alternative model which would reduce the overall supply chain cost and also increase the operational efficiency. Therefore this study has been under taken with the following objectives. 8 Main objectives of the project are 1. To study the leaf value chain and comprehend the issues limiting the operational efficiency from bale to box. 2. To study the various cost components involved in aggregation and logistics for cost optimization. 3. To study the impact of operational scheduling on quality of leaf tobacco. In Ongole region, the company has 12 Tobacco Auction Platforms (TAPs) and 8 major Aggregate Godowns (AGGs). Required information was collected from internal sources of the organization through Company’s Management by direct interaction. The collected data has been tabulated and analyzed using simple statistical tools and models like least cost method, transportation model etc. The results obtained from the study have been described here under. Issues limiting the operational efficiency from bale to box From Tobacco Auction Platforms to the Green Leaf Thresher plant (except loading for GLT) all operations are being done manually which is the main constraint leading to a) High cost b) Shortage of labour c) Inefficient time management d) Less operational efficiency at all levels. Due to the manual operations, the shrinkage and physical losses of leaf tobacco is around 0.2% as reported by the company’s internal source. Further, because of lack of clear transportation schedule due to unpredictable flow of varied quantities of tobacco is leading to mismatch between demand and supply at company’s aggregate godowns. 9 Cost components involved in aggregation and logistics of tobacco value chain The following are the different cost items involved in tobacco leaf value chain a) Classification and warehousing at TAP’s level b) Transportation cost from TAP’s to Aggregate Godowns (AGG) c) Classification at Aggregate Godowns d) Hiring cost of Godown e) Transportation cost from Aggregate Godowns to GLT (Green Leaf Thresher- Chirala) f) Shipment cost of rejected quantities from GLT to AGGs . Of all these costs being incurred the major cost item is the transportation of green leaf tobacco from TAPs to AGGs, therefore more emphasis is paid to work out various alternatives to minimize transportation cost. Cost Minimization-Least Cost Method With the existing transportation plan the company is incurring an expenditure of Rs. 162214/- per day towards transportation of leaf tobacco from different TAPs to different AGGs. It is felt that there is a scope for reduction of this cost by bringing in some structural changes and changes in logistics. Further, the existing system is bringing in a mismatch between demand and supply at AGGs which can also be rectified by slightly modifying the activities which thereby improves the efficiency in the system. By using Solver Software tool three alternatives or models have been suggested to overcome the short comings. These are Ideal-I - This model can save Rs 9494/- per day with seasonal saving of Rs 994610/-. Ideal-II - This model can save Rs 8673/- per day with seasonal saving of Rs 908600/- Ideal-III - This model can save Rs 5666/-per day with seasonal saving of Rs 993532/- 10 When shipment scheduled is compared between three Ideal models with existing plan, it is observed that Ideal I appears to be of least cost with Rs.152720/-per day. Impact of operational scheduling on quality of leaf tobacco In general the operational scheduling has less impact on the quality of leaf tobacco according to the existing schedule, but when stocks to be sent are delayed for threshing operation for more than one month at AGGs, colour deterioration has been reported. It is observed that some stocks which were procured at commencement of season have been kept in AGGs (especially at ITT) for a long period showing the colour loss. The following suggestions are given to the company to improve the operational efficiency. 1. Alternate models (Ideal I, Ideal II, Ideal III) which can be viable and feasible for the company may be followed. 2. Mechanizing the godown operations which are the major activities in value chain may be adopted. 3. Stored leaf tobacco at AGGs is being delayed for threshing operations. Therefore, it is suggested to follow the First In First Out (FIFO) inventory management method. |
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Date |
2016-08-11T11:38:54Z
2016-08-11T11:38:54Z 2007 |
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Type |
Thesis
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Identifier |
http://krishikosh.egranth.ac.in/handle/1/72162
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Language |
en
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Relation |
D8098;
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Format |
application/pdf
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Publisher |
ACHARYA N.G. RANGA AGRICULTURAL UNIVERSITY, RAJENDRANAGAR, HYDERABAD.
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