Report on WMS in Tapal Tea

MOHAMMAD ALI JINNAH UNIVERSITY (KARACHI)
Report on Analysis of INVENTORY MANAGEMENT
of TAPAL TEA through WMS
Group Members
Fahad Khalid
Adeel Arman Zaidi
Presented to:
Sir Zulfiqar Ahmed Farhan
Course Title:
Business Process Re-Engineering

EXECUTIVE SUMMARY
Tapal tea (Pvt.) Ltd. faced some problems which were detected by the supply chain
department, warehouse manager who was under pressure by the supply chain department.
The case underlines the problems faced by the company. Throughout the year 2005 till 2013,
over stock, failure decisions, poor racking system high inventory cost and the region could not
meet the sales quotas or sales were below expectations while the selling expenses were also on
the rise. Thus it was make the team to analyze the situation and come up with suitable
solutions.
While analyzing the case, we detected some discrepancies in the company’s operations.
• Implementation of “FIFO”
• Timely Storage in Racking system
• Damages of cartons
• Active and efficient dispatches
• Pilferage doubt
• Immediate Receiving at Dock
• Identification and traceability of stock
• Stock movement within the warehouse.
• FG Stock Aging.
• Daily stock verification.
• No return monitoring stock
• Error Prone
• Time consumption
• The territories were not adequately covered.
• Friction between distributors because of Territory Overlapping.
Some initiative took by the management but it is not run efficiently. The solutions to the
problems we suggested are as follows:

• To revise the system so that the SAP could be better taken care of. This
way even expense would decrease. Visibility efficiency would be made and no extra
time required.
• There was a problem relating the dissatisfaction of the customers that can be eliminated
by training of the sales representatives so that they know how to best approach your
customer and even help in finding new prospects.
• Sales representatives who are using manual record eliminate such a practice as it
creates slash or POS system due to it accurate data or information gather that is
helpful for good decision making.
• Due to WMS easily eliminate the above mention lacking and employee empowered by
the system.
All these solutions help in reengineering the process and WMS help in taking the accurate
record and cost minimizing of inventory holding and damages and sales will help in achieving
the sales quota of the company. The sales representatives should be under strict surveillance so
that no such practices should increase that will affect the sales of the company in anyway. Or
put the reputation of the company.

TABLE OF CONTENTS
1. Introduction to Tapal Tea:......................................................Error: Reference source not found
2. Brands of Tapal Tea…………………………………………………………………………………….……4
3. Warehousing at Tapal Tea………………………………………………………………………….…….7
4. ERP used by Tapal Tea for Inventory Management:……..………………………………….8
5. Need of Re-engineering Process:.................................................................................................8
6. SWOT Analysis of Tapal Tea: ……………………………………………………………………….…10
7. Competitor’s information and SWOT Analyis:………………………………………………...12
8. Impacts of WMS in Tapal Warehouse:......................................................................................11
9. Conclusion:.................................................................................................................................15

Introduction:
• Tapal conception dates back in the year of 1947 when their forefathers laid the foundation of
Tapal tea as a family concern under the personal supervision of its founder Adam Ali Tapal.•
The story of Tapal started with his formulation of a unique tea blend, which was later named
family mixture which became a hot favorite, and eventually the largest selling brand.• Tapal
moved up the ladder of success by innovating and introducing different tea brands to suit every
taste which were sold from its retail outlet in Karachi’s Jodia Bazaar.• The company continued
to thrive and grow under the management of Fazullah A. Tapal, who started tea distribution to
retail outlets around the city for the convenience of the people.• Innovating its way through its
near-60 year history, Tapal is presently the largest, 100% Pakistani owned tea company in the
country.
• It has set new standards for modern tea blending and packaging factories, warehouses
equipped with state-of-the-art equipment and a team of highly dynamic professionals headed
by Aftab Tapal himself.• The first to invent the highly successful brand Danedar Leaf Blend. The
first to market Kenyan teas in Pakistan.• Tapal is also the 1st national tea company to export
tea to the UAE, Canada and USA.
Brands of Tapal Tea
Tapal Danedar• First introduced in Pakistan in 1987.• The name ‘Danedar’ suggests a blend
consisting of premium quality Kenyan granules.• Especially created to suit the local taste buds
combining a lively flavor with a rich color and a distinct aroma.• Tapal Danedar enjoys a
leadership position in the Tapal portfolio by catering to diverse income segments, from single
serving sachet users to large households.• Sachets: Rs 3 & Rs 5 sachets.• Hard pack: 30 gms,
100 gms & 200 gms.• Economy pack: 400 gms & 1000 gms.• Jar: 450 gms.

Family Mixture• Tapal created a pioneering blend of tea called Tapal Chai in 1947,
later renamed Family Mixture.• It appeals to an ever-growing section of the market and
commands a leadership position in Pakistan’s tea industry.• Is growing rapidly in popularity in
Central and Northern Punjab as well.• Hard Pack: 22 gms, 100 gms & 200 gms.• Economy Pack:
500 gms & 1000 gms.• Jar: 450 gms.
Tapal Tea bags• Another premium offering from Tapal Tea are the Danedar Tea Rounders.• The
only round & string less teabag available in Pakistan.• At 2.5 gms each the Danedar rounders
are specially designed to deliver quality taste in a teapot.• Available not only in Pakistan but
also readily used across USA, Europe & Australia.• Teabags: 100 gms ( 50 envelopes) 200 gms
( 100 envelopes)
Mezban• Tapal Mezban is the second largest selling brand of the company.• First launched in
the mid 1990’s, it quickly achieved popularity in Sindh.• Just a small quantity is enough for
several satisfying cups, making it ideal for homes as well as hot tea shop consumers.• Mezban
truly captures the brand essence of fortifying relationships through hospitality which is a part of
the culture of Sindh.• Sachets: 6 gms ( Rs.3)• Hard Pack: 35 gms, 125gms & 250 gms.• Economy
pack: 500 gms & 1000 gms.• Jar: 220 gms.
Tapal Tezdum• The identity of Tapal Tezdum is rooted in the culture and folklore of Punjab.•
Tezdum delivers a good quality, strong tea that is rich in taste and color at a very reasonable
price.• It is also the first tea brand in Pakistan to be introduced in an attractive and economical
silver foil packaging.• Launched in 2003, Tapal Tezdum equates the strength of the blend with
the moral courage of its user.• Sachets: 22 gms sachet• Hard Pack: 100 gms• Economy Pack :
400 gms
Shades of Green• In the year 2000, Tapal became the first tea company to launch a range of
flavored green teas in the country.• Available in refreshing Jasmine, Lemon, and Elaichi
flavors.• A favorite of health-conscious people.• It helps to soothe and relax you whilst helping
in digestion, enhancing metabolism and aiding in weight loss.• Teabags:1. Jasmine ( 45 gms, 30
envelopes & 90 gms, 60 envelopes)2. Lemon( 45 gms, 30 envelopes & 90 gms, 60 envelopes)3.
Elaichi ( 45 gms , 35 envelopes)• Jar: Jasmine (100 gms)

Ice Tea• Innovators at Tapal decided to introduce Ice Tea to cater to a youthful
market segment.• Initially launching with a Peach Flavored tea in a can, Tapal added a Lemon
and Lime flavor to cater to an market niche• Rich in Vitamin C and antioxidants, it is non-
carbonated, contains no preservatives and is low in sugar as well.• Sachets: 25 gms powder
sachet ( Lemon & Lime, Peach)• Cans: 320 ml ( Lemon & Lime, Peach)
Tapal Instea• Tapal decided to expand its portfolio in May 2009 with its introduction of Instea
in the 3-in-1 instant tea category.• Instea gives a complete tea solution, and seeks to expand
awareness of the concept of immediate, ready to drink tea.• Sachets: 20 gms ( Rs 10)
Warehousing at Tapal Tea
Functions of the warehouse• Handling• Counting• Placement• Replacement• Receiving
Distribution at Tapal Tea• The distribution network at Tapal Tea is divided into 2 divisions.
South Division: Karachi, Hyderabad & Sukkhur. North Division: Raiwind, Multan & Islamabad.
Karachi & Raiwind are the two production plants of Tapal Tea in Pakistan.
Mode of transportation at Tapal Tea• Purchased teas are transported through containerized
shipments from their country of origin to reach the factory in the best condition possible.•
After an order is placed by the distributor a Route plan is devised. Tapal Tea uses three
different models of vehicles to transport its tea to the distributors.• Shehzore (Max. capacity =
150 cartons, Min. capacity allowed = 115 cartons)• Mazda (Max. capacity = 400 cartons, Min.
capacity allowed = 350 cartons)• Hino (Max. capacity = 400 cartons, Min. capacity allowed =
350 cartons)
Logistics at Tapal Tea• In Pakistan, the normal size of containers used in transporting tea is 40
feet.• Tapal Tea gives initiatives & bonuses of different sorts to the owners and asks them to
maximize their container’s size to 50 feet.• This is done so that more stock can be delivered at
one time.• These containers feed the 6 warehouses across the country.

ERP used by Tapal Tea for Inventory Management
Tapal tea uses Warehouse Management System a module of SAP for their warehouse
operations across Pakistan.
Benefits of WMS:
A comprehensive warehouse management system helps streamline multiple functions of your
enterprise:
• Receiving – Gain insights into shipments that have been delivered, but that are
not yet at their final location. Make sure items at low stock levels are staged and
put away first, reducing the impact of out-of-stocks and inefficient fulfillment
processes.
• Put-Away – Know the location of all inventory on your shelves. Route your
workers to the right location, set up their picks in the proper order to minimize
travel time, and increase the number of orders they can pick each day.
• Picking – Improve error-proofing and productivity in the picking process. Workers
receive their picks on a mobile device that routes them to the proper location.
Scanning items when you pick them verifies that the right item at the right
quantity is picked.
• Packing – Ensure the accuracy of each order that is picked and reduce material
costs by determining the right sized shipping carton.
• Shipping – See that each order is properly packaged and shipped to the right
destination and delivered on the right date.
Need of Re-engineering Process
Following are the causes that Tapal tea go towards re-engineering their business through WMS
• Timely storage in racking system
Due to Lack of Information over stock Production planning are disturb so not possible timely
storage in a racking system.

• Damage cartons
High inventory become a cause of damage carton they are not doing proper stacking.
• Active & efficient dispatches
They were gathering manual data so they are unable to do active and efficient dispatches
due to late receiving data to the department.
• Pilferage doubt
There is no data to return stock so the return stock is not maintain in a system so the
pilferage doubt.
• Immediate receiving at dock
Department are working in isolation logistic and warehouse are differently doing there
works.
• Identification & traceability of stock
Tapal has not any barcode system or identification and traceability of different stock.
• Stock movement within the warehouse
Due to high carrying inventory stock movement with in the warehouse is hurdle.
• Daily stock verification
Tapal has not any system to connect with distributor so the inconvenient for daily stock
verification.

SWOT Analysis of Tapal Tea
STRENGTHSOFTAPAL
1. Continuous innovation for increased customer value, forexample:
2. First to introduce soft pack in the country,
3. The pioneers of introducing Jasmine Green Tea in Pakistan.
4. The only company to introduce round-tea bags in Pakistan.
5. The only company to develop an entirely new blend andcategory (the mixture of leaf &
dust).
6. Tapal is one company that is catering to the needs of allsegments of the society.
7. Export
8. Tea cultivation
9. Strong R&D team
10. Brand sponsored shows such as musical concerts andcricket tournaments.
11. Good brand awareness in the local target market
WEAKNESSESOFTAPAL
1. It is a major hurdle for Tapal to position its tea abroad in theminds of theconsumers and
encourage them to indulge in brandswitching.
2. Have to import some of their products from other countries,which increase theircosts.
3. Most of the sales are on cash, problem for the distributorthen they can switch
tocompetitors.
4. Tight quality control procedures lead to higher costs and itstime consuming andoften
discontent the suppliers
OPPORTUNITIESOFTAPAL
1. In the long run there is going to be a lucrative market for Ice- Tea and flavored tea.
2. The market growth of the tea-bag market because of itbeing easy to use.
3. Customers are more attracted towards strong taste andquality of tea offered bytea
providers.
4. There are markets in Punjab, N.W.F.P and Balochistan, whichare not as yetexplored by
competition.
5. Duty free tea import from Sri Lanka and Bangladesh andIndia.
6. Green tea market is growing.
THREATSOFTAPAL
1. Strong marketing campaigns of Unilever makes it extremelydifficult for Tapal tocounter-
attack because of low budgets.
2. Unilever as a more established brand name than Tapalworldwide.
3. High import duties encourage smugglers of tea to grow.
4. The unstable rules and regulation of the government hindersthe tea companies.

Due to climatic conditions, when the weather of Pakistan ismostly hot;consumers
would prefer soft drinks over tea.
Competitor’s information and SWOT Analysis
Lipton, the world’s leading tea brand, was started by a Glasgow-born innovator and
entrepreneur Sir Thomas Lipton in the 19th century. Ever since its inception, Lipton has
successfully provided its consumers with the best quality tea in the world.
Lipton was launched in Pakistan in 1948 and is one of the oldest brands in the country. Our vast
experience in the world of tea blending in Pakistan and around the world means only two
things; Quality & Reliability.
In the modern world, the tea category is often considered to be lacking excitement & thrill.
Lipton plays the role of an energetic brand that aims to modify this perception and redefine the
meaning of tea in people’s lives.
By celebrating positivity in everyday life, Lipton helps its consumers incorporate confidence,
optimism and cheerfulness in their lives.
Lipton’s portfolio in Pakistan consists of Lipton Yellow Label Tea, Lipton Mega Daane, Lipton
Teabags, Lipton Green Tea and Lipton Flavored Tea
Following is the SWOT analysis of Lipton tea.
STRENGTHS OF LIPTON
1. Experienced and quality management.
2. Strong Ethical value (culture and heritage)
3. Strong financial position
4. Strong company image
5. Success of the slogan
6. Quality & variety
7. Effective & attractive packaging
8. Brand recognition
9. Accessibility
WEAKNESSES OF LIPTON YELLOW LABEL
1. High prices of the product
2. Substitute products
OPPORTUNITIES FOR LIPTON

1. Research & development
2. Makes people active
3. Brand is the part if traditional drinking habits
4. Expansion in other areas of country
THREATS FOR LIPTON
1. Strong competition in rural and urban areas
2. Internationally increasing tea prices
3. Political conditions in the country may be obstacle to exports
4. High inflation in the country can negatively affect the brand
WMS impacts on Warehouse Operations:
Early warehouse management systems could only provide simple storage location functionality.
Current WMS applications can be so complex and data intensive that they require a dedicated
staff to run them. High-end systems may include tracking and routing technologies such as
Radio Frequency Identification (RFID) and voice recognition.
Successful WMS solutions are generally designed to merge computer hardware, software, and
peripheral equipment with improved operating practices for managing inventory, space, labor,
and capital equipment in warehouses and distribution centers. Implementation of a WMS
allows a company to increase its competitive advantage by reducing labor costs, improving
customer service, increasing inventory accuracy, and improving flexibility and responsiveness. A
WMS enables a company to manage inventory in real time, with information as current as the
most recent order, shipment, or receipt and any movement in between.
ADVANTAGES FOR WMS USERS
For Management: WMS can help management to access an instant picture of:
• How much inventory exists in the warehouse
• How many orders are currently being shipped?
• What are the stages of processing of pending orders?
• Staff productivity details
• Goods shipped by the warehouse over any given period of time.
WMS BENEFITS

WMS is an invaluable tool for improving your organization's productivity and customer focus.
Here is a list of some of the benefits that you can expect to get.
Visibility
Warehouse Manager has a very clear picture of the status of each customer orders; as a result
he can give a true and accurate feedback to the customers. Information like percentage of
order that has been completed, expected shipment date and problems in meeting schedule can
be passed on to customer for his satisfaction. Advanced shipment notification helps customer
in preplanning his further processes.WMS provides diversified all-embracing reports for almost
any plausible aspects of activities and substantiates the fact that working of Warehouse is made
100% transparent. Each and every activity can be tracked, reported, monitored and
consequently controlled. These reports are web based and are platform independent
applications. Therefore reports are visible to anyone who is willing and authorized to see. This
feature is especially beneficial for multi location Warehouses and sales offices.
Accuracy
The system keeps an intensive check of the goods or a stock unit meant for different customers
and flashes an alarm/warning if the goods meant for one customer are mistakenly placed in
cartons meant for other. Intensive checks are kept at each and every stage which safeguards
against possibilities of errors in inventory records. As the items are systematically stored and
retrieved, no time is wasted in searching for items not in stock and more than one order can be
processed at any given time. This result in the increase of efficiencies, eliminating wastage of
time due to errors.WMS incorporates distinct features for functions to be performed by
Manager or Operators thereby eliminating the chances of wrong data entry. WMS makes
information readily available to only those who have permission to see it. For example the
operators are not entitled to view the important MIS reports. Inventory Managers can track
transactions at a very fine detail to diagnose unexpected sudden changes in inventory. For
example, if we had thousands of pieces of some SKU yesterday and today we don't have any,
then where did they go? Were they shipped to some other customer? Were they sent to some

other warehouse of the company to be shipped from there? Or did they get lost
or were picked away? WMS helps answering such problems.
Resource planning and productivity
By keeping track of the operator's and staffs' activities, their productivity can be monitored.
This aspect is of particular importance in case of productivity based remuneration schemes.
When deciding for automation, one of the major concerns of management is that they have to
hire technical people at all levels and retrain the existing workforce. But in WMS the programs
are so designed that no special skills are required to operate the system even at lower level.
Programs for shop floor are specifically designed to run on hand held radio frequency terminals
and emphasis is on scanner based data inputs. Therefore same workforce can very effectively
be used for implementing WMS. Automation and streamlining of processes ensures that
operational bottlenecks are eliminated and productivity increases. As a result all resources -
man, machine, and money are utilized to their optimum level. Apart from the system no
additional manpower or special machinery is required in order to automate the process for an
efficient and proper handling of the goods. Efficient tracking of warehouses activities are
possible with WMS as it provides a comprehensive set of web-enabled reports detailing all the
activities happening in the warehouse and their effect on the inventory management. WMS
also helps to detect bottlenecks in operations, which can increase the overall throughput of the
warehouse.
Order Processing
More than one order can be processed at any given time helping in better resource utilization.
Inventory Holding Cost

The main goal of WMS is controlling and streamlining the flow of inventory in a
profitable and productive manner thus optimizing all resources. Payback period of WMS
project will be very short because we are addressing the warehousing area where at-least 60%
of organization's working capital is tied. The results of such savings are immediate and
apparent.
Optimal Level of Inventory
In an average business around 60% of the working capital is tied down in the inventory; the
percentage is even higher in trading business. In an ideal situation warehouse should maintain
optimal level of inventory at any given time avoiding both under and over stocking. If the
Warehouses are overstocked that means excess working capital is tied in inventory which is
dead money. Under stocking leads to delay in customer orders and even cancellation of orders
at times. Thus actual picture about the inventory status in the Warehouse have valuable
financial and strategic implications. WMS not only streamlines the flow of inventory but also
tracks the inventory at various levels of processing thereby enabling decision makers to view
actual picture of inventory at any given time and take appropriate steps.
Better Revenue Realization
Companies often loose considerable amount of revenue due to:
• Excessive / under stocking as explained above
• Incorrect tendering due to inaccurate knowledge of available stock
• Over / under shipping to customers.
• Wrong consignments.
• Inaccurate billing.
• Delay in order processing leading to order cancellation.
• WMS helps in controlling these losses to a large extent.
Orders and Stock Planning

The warehouse management can determine how much inventory exists in the various stages of
processing unlike in non-automated warehouse management. The reports generated during
checking processes enable policy decision to be taken about the reliability of the suppliers.
Sales people can determine how much inventory is available and can relate better to the
warehouse staff thus bettering their Customer Relationship levels. Customer Managers can
reserve inventory for a customer thereby ensuring that it will not be shipped to anyone else.
Warehouse Operations Ease and Speed
WMS eases the operator's task and makes the data input process fast, increasing the overall
efficiency of the operator. Some programs like Locating and Pulling are especially designed to
run on hand-held radio frequency terminals. These terminals make the task of pickers and
locators easy, as these are easy to carry. Modern WMS programs have been coded with extra
emphasis on scanner based data input to minimize the need for keyboard or mouse input.
Conclusion:
After thorough analysis of situation, we have achieved all the required activity through system
generated document & New warehouse orientation step by step jobs created and given to time
to time have been Successfully completed conclude that proper warehouse management
system meet our present requirement of proper inventory management.

Report on WMS in Tapal Tea

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