Formation of QCL

QCL was a new company which spun off from its parent, the Rs. 230
crore Alaknanda Sugars.
Which is in the hands of Prem Tiwari who is son of parent company
promoter Seth Aloknath Tiwari.
He immediately started recruiting a band of professionals to run QCL.
Instead of depending on people deputed from parent company, he
recruited people from other organizations.
The top level team is of five general managers who are in charge of
marketing, sales, production, finance, personnel, were all are young
professionals.

 The firm was limited to doing business out of six depots in north India where the
operations of the parent company were located.
They were keen to expand its geographical reach, Vijay Sood was specially
recruited to set up nationwide operations as Senior Manager logistics.
They were keen to expand its geographical reach, Vijay Sood was specially
recruited to set up nationwide operations as Senior Manager logistics.
And then it had depots in all the major towns in India, and the product range also
grown from 5 to 15.
And soon he moved quickly to set up systems for reporting, forecasting, and
evaluating logistics performance, and was promoted as GM logistics.

Case Introduction
Quality Confectionary limited manufacturer of the sweet tooth range
of hard boiled sweets
It started with 5 SKUs and increased to 15 after 3 years of span
It has a well established distribution network of 25 depots in different
towns in India
Introduced a new brand Choc-Elite in the market
Choc-Elite could not succeed in the market

Effective operations of QCL

Professional hired from other organization when the firm was started
Firm was started in the north region where operations of parent company were
already established
Starting product notched a turnover INR 2 crore within five years of inception
Efficient logistics senior manager lead the turnover from 20 crore to 60 crore,
variants from 5 to 15 and number of depots from 6 to 25 in two years
Efficient systems for reporting, forecasting and evaluating logistics services

QCL Supply Chain Management In a nutshell is

Right Product

Right time

Right Quantity

Right place

Right Quality

Right value

Measuring performance
Performance of logistics is measured on two parameters:
Service Level
Proportion of the target Made available to each depot, measured SKU wise.
Service level-90% should be maintained.
Inventory Efficiency
Closing Inventory at each depot as a proportion of its next months forecast
Inventory Efficiency-0.33 should be maintained.

Problems in the case

Low service level at some locations
Expired stock lying at various locations due to less shelve time of the new product
Nature of the product could not cope up with existing logistics system
Retailers were not ready for keeping too much stock
Changed distribution and informal forecasting system lead to decrease in sales by
50%
At some locations there were stock outs and at other accumulation of expired
stock
Parameters of logistics team went down

Sales figure at the

end of month
(with 10 day
closing stock)

A firm
target for
allowed
between
the next month

For shipment to
depots

Tentative target
for the month
after next

For drawing up
production plan

(20% variance
tentative and firm target)

Weekly sales forecast, actual sales, service level and inventory efficiency for ChocElite
W1
town

Forecas Actual
t

Service
level

Inv
efficiency

Expired
stockouts

Mumbai

20

220

78

0.8

Delhi

250

240

92

Calcutta

180

150

100

1.2

Chennai

150

100

100

1.5

Bangalor
e

120

110

89

1.1

Month wise sales forecasts V/s actuals, service levels and inventory efficiencies for
sweet tooth range
Month

Tentative Final
forecast forecast

Actual sales Service

level

Inventory
efficiency

October 1996

800

800

701

90

0.44

November
1996

750

700

696

88

0.50

December
1996

750

750

728

89

0.37

January 1997

800

800

838

88

0.35

February
1997

850

900

872

86

0.31

March 1997

1000

1200

1442

92

0.14

Recommendations
Production plan and shipping can be made effective if it is related with growth
rate of actual sales of different towns
An ERP system can be established for effective forecasting and ordering adequate
quantity of product
Decreasing the lead time between the manufacturer and the company depot.
Increasing the number of trucks facility from depot to Retail stores for fast
delivery with in time.
Marketing Campaign to increase the sales.

Region wise actual sales

Week

Mumbai

Delhi

Calcutta

Chennai

Bangalor
e

220

240

150

100

110

280

280

160

120

130

350

300

190

150

140

420

360

240

180

170

480

420

260

220

200

520

460

280

250

230

570

530

320

290

280

620

570

360

320

330

Thank
You..