CASE ANALYSIS

CASE NUMBER .4

SUPPLY CHAIN
INITIATIVE
AT
“APR LIMITED”

Submitted To:
Mr. N S Uppal

Submitted By:

Supply Chain Initiative at APR Limited Page 1

 Atul Jain
Kavita Deora
Sahil GABA
Sandeep Khowal

TABLE OF CONTENTS

S.NO. TOPICS PAGE

NO.

METHODOLOGY

OBJECTIVE OF THE STUDY 04

CHAPTER. 1. INTRODUCTION

1.1 BACKGROUND 05

1.2 BUSINESSES 05

1.3 REQUIRED WOOD 05

05
1.4 SUPPLIER
06
1.5 WOOD CONSUMPTION
06
1.6 FUTURE STRATEGIES

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 1.7 APR LIMITED SUPPLY CHAIN 06

CHAPTER. 2. FINDINGS

PROBLEMS 07

CHAPTER. 3. SIX DRIVERS OF SUPPLY CHAIN

3.1 FACILITIES 08

3.2 INVENTORY 09

3.3 TRANSPORTATION 10

10
3.4 INFORMATION
11
3.5 SOURCING
11
3.6 PRICING

CHAPTER. 4. DISCUSSION QUESTIONS

QUESTION NUMBER .1. 13-18

QUESTION NUMBER .2. 19-26

27-29
QUESTION NUMBER .3.

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CHAPTER. 5. CONCLUSION

RESULT OF THE STUDY 30-31

BIBLIOGRAPHY 32-33

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 OBJECTIVE

• To understand strategic role of supply chain.

• To understand drivers of supply chain performance.
• To develop capabilities for analytical analysis of supply chains.

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 1. INTRODUCTION

1.1 Background

APR Limited was a diversified Taper group company engaged in a number of

businesses. Our Unit is one of the best in South East-Asia for manufacturing
dissolving Grade pulp.
Rayon grade pulp accounted for 70 percent of the company turnover. The
pulp manufacturing plant was located in the remote area at Kamalapuram of
Warangal District & is away by 120 km from Warangal in Andhra Pradesh.

1.2 Businesses

APR Limited engaged in a number of Businesses like,

– Pulp
– Packaging
– Soya meal and
– Leather footwear

1.3 Required Wood

The company was currently using two types of wood - namely,

1. Eucalyptus
2. Casuarina

1.4 Supplier

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 The company procured wood from a number of wood contractors who
sourced wood from different places.
Casuarina:
It was sourced from various parts of Andhra Pradesh.

Eucalyptus:
60% of eucalyptus was sourced from Andhra Pradesh, 20% from Karnataka
and the balance 20% from Uttar Pradesh.

1.5 Wood Consumption

The Company was currently using two types of wood in the proportion of
60:40 for procuring one ton of pulp; the plant needed about 4.2 tons of wood.

1.6 Future Strategies

In early 1995, the company decided to make substantial investment so as to

double its capacity by 1997 end from 150 MT of rayon pulp to about 300 MT per
day. The company had further plans to increase the capacity so as to reach to the
level of 500 MT per day by 2002.

1.7 APR Limited Supply Chain

MATERIAL FLOW MONEY

1. FINDINGS INFORMATIO

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1. International pulp prices dropped by about 40 percent because in the
beginning of 1997, the government slashed custom duty on rayon pulp from
25 to 10 percent.
2. Holding Inventory of 6 Months of wood stock at its wood yard, during the first
three months the moisture content would come down at the rate of 4 to 5
percent per month. Subsequently, with every month the moisture content
would come down at the rate of 1 to 2 percent per month.
3. As there was shortage of woods in Andhra Pradesh Region, the company
had no choice but to accept the terms dictated by suppliers.
4. Wood Contractors asked for increase in rates so as to compensate them for
the increase in waiting time at the company, many trucks come during the
night and wait outside the factory gate.
5. Material Handling Cost is very high.
– One point in time the company was paying about Rs. 10 million to the labour
contractor for the material handling of wood.
– If a truck unloaded at the wood yard and material was subsequently brought
to the chipper, it would result in extra material handling costs of Rs. 100/ton.
– The company employed contract labourers who were paid on the piece rate
basis.
1. Each Chipper only one truck could be unloaded at a time because truck
unloading required special equipment.
2. There is no systematic pattern of Truck Arrival. Truck Arrival pattern would
change drastically on a day-to-day basis.
3. Production Personnel changed their chipping schedules frequently during the
day and rarely followed the schedule that they would have given to the wood
yard personnel at the beginning of a day.
4. Lack of coordination with various departments personnel because of this
problem they did not follow the schedule.
5. No material accounting at the wood yard.
6. Unloading of a truck required about 1.5 to 2 hours because they unloaded the
trucks manually.
7. There may not enough demand in the RG pulp market.
1. SIX DRIVERS OF SUPPLY CHAIN

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 Drivers determine supply chain performance. For each driver, managers must
make tradeoffs between efficiency (cost) and responsiveness.

Six Drivers of Supply Chain are as follows

1. Facilities
2. Inventory Logistical Drivers of Supply Chain
3. Transportation
4. Information
5. Sourcing Cross Functional Drivers of Supply Chain
6. Pricing

3.1 FACILITIES

Places within the supply chain where inventory is stored, assembled, or

fabricated. Decisions on location, capacity, and flexibility of facilities have a
significant impact on performance.
APR Limited

Facilities

There are two type of woods were used in APR limited Eucalyptus &
Casuarina in proportion of 60:40
These woods were coming from three states Andhra Pradesh, Karnataka and
U.P
There could be 6 trucks which unloaded at a time in wood yard.
APR limited had a big wood yard having enough space and it had sufficient
tractors.

Problems

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 Unloading of trucks at wood yard took huge time because they did it
manually.
At each chipper only one truck could be unloaded at a time.

3.2 INVENTORY

All of the raw materials work in process (WIP), and finished goods within the
supply chain. Inventory policies can dramatically alter a supply chain’s efficiency
and responsiveness.
APR Limited

Inventory

Raw Material : Holding about 6 months of wood stock.

Work in Progress : It would go according to the wood chipping schedule.

Likely wood chipping schedule

SCHEDULE TYPE OF WOOD MT
CHIPPER 1 8:00AM TO 1:00PM Casuarina 125
CHIPPER 2 7:00AM TO 1:30PM Eucalyptus 230

CHIPPER 1 4:00PM TO 7:30PM Casuarina 150

CHIPPER 2 4:30PM TO 9:30PM Eucalyptus 260

CHIPPER 1 10:30PM TO 1:30AM Casuarina 105

CHIPPER 2 11:30PM TO 5:30AM Eucalyptus 185

Finished Goods : 250 MT per day

Problems
APR limited was holding Inventory of 6 Months of wood stock at its wood
yard, during the first three months the moisture content would come down
at the rate of 4 to 5 percent per month.
More inventory in wood yard increased material handling cost.

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3.3 TRANSPORTATION

Modes and routes for moving inventory throughout the supply chain.
APR Limited

Transportation

✔ In APR limited they are using truck for transport purpose.

✔ APR Limited was sourced Eucalyptus from Andhra Pradesh, Karnataka &
Uttar Pradesh & Casuarina was sourced from various parts of Andhra
Pradesh.

Problems

There is no systematic pattern of Truck Arrival. Below there is truck arrival

pattern on a day. Truck arrival pattern would change drastically on a day-
to-day basis.

Expected truck arrival pattern on a typical day

Eucalyptu
s Casuarina
06:00 - 08:00 8 5
08:00 - 10:00 14 7
10:00 - 12:00 18 10
12:00 - 02:00 10 6
02:00 - 04:00 10 6
04:00 - 06:00 6 4
06:00 - 08:00 4 2

3.4 INFORMATION

Data and analysis regarding inventory, transportation, facilities, and

customers throughout the supply chain. It is potentially the biggest driver since it
affects all the other drivers.

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APR Limited

Information

Wood procurement data was managed by procurement personnel, the wood

yard was managed by stores personnel and the chipper was managed by
production personnel. Maintenance personnel was managed to replace blunt knives
with sharpened knives at the chipper.

Problems

Lack of coordination between the various departments personnel.

3.5 SOURCING

Sourcing is the set of business processes required to purchase goods &

services. Managers must first decide which tasks will be outsourced & those that will
be performed within the firm.

APR Limited

Sourcing

✔ Truck to purchase the woods from different states.

3.6 PRICING

Pricing is related with that how much a company will charge for Goods &
services that it makes available in the supply chain. Actually pricing affects the
behaviour of the buyer of the goods or services which can affect supply chain
performance.

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 APR Limited

Pricing

Company have no choice but to accept the terms dictated by suppliers in

pricing fixed rate ton.

Prices were ruling at about 35000 per MT dropped to a level of about 25000
per MT.

Company is paying about 10 million to the labour contractor for the material
handling of woods and extra material handling cost 100 per ton.

Problems

Very high material handling costs & extra handling cost.

International Price dropped by about 40 percent.

Question No. 1

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 As Saloni Yashpal, what would you do to address the wood logistics problem?
Where would you focus your attention and solution efforts?

Solution

As Saloni Yashpal various wood logistics problems that would come across our way
are as:

1. BACKROUND

Reduction of custom duty on rayon has led the company decide to make
substantial investment so as to double its capacity from 150 MT to 300 MT per day.
Further increase the production upto 500 MT per day.

2. WOOD LOGISTIC PROBLEM

2.1 PLANNING
The company purchased wood in the form of logs, which were converted into
wood chips before being fed into a digester. The company had two chippers and two
separate silos for eucalyptus and casuarinas. The proportion of the wood instead of
being fixed based on factors like availability of wood.
Therefore as the ratio not being fixed led the company to vary it according to
the availability of wood , as a result of which if the eucalyptus logs are forming a
ratio of more than 60% then the chipper had to wait for a long time as the ratio is
changed . As a result of such decisions trucks had to wait in long queues till early
wee hours and at the same time contractors demanded more money which in turn
led to the cost increment?
Holding six months of inventory was a standard practice followed by the pulp
and paper industry. Wood did get affected with time and the plant yield usually
would be lower if wood was stored for a longer period of time.
Hence there was no proper planning of inventory holding, lead time and the
company didn’t follow a standard practice.

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2.2 PROCUREMENT
The company usually had two kinds of contracts with the suppliers who
supply the wood. In one kind the price of wood is based on its moisture content. The
contract price would mention the price for having wood say, 10 percent moisture.
The actual moisture content in the wood would vary from one truck to another.
Based on the sample collected at the time of receipt, the quality control personnel
would estimate the actual moisture content in the incoming wood and the supplier
would be paid accordingly. Another kind of contract involved fixed prices per ton of
wood irrespective of moisture content in the incoming wood. The company would
like to get wood based on the first type of contract, but suppliers insisted on the
latter type. As there was shortage of wood in the Andhra Pradesh region, the
company had no choice but to accept the terms dictated by suppliers.
Hence while not giving heed to the demand of suppliers the Company was
hitting their own shoe as sourcing from far away regions like Karnataka and UP for
almost all the wood logs would lead to cost increment. Moisture content had no
specific quality problem.

2.3 TRANSPORTATION
A steady stream of trucks would arrive at the gates of the company, each
carrying about 10 MT of logs. Each truck was weighed at the weigh bridge and
depending on the schedule and availability of chipping schedule logs would be
unloaded. The company would prefer if the truck was unloaded directly at the
chipper. Because if a truck unloaded directly at the Woodyard then it would lead to
extra material handling costs of about 100 per ton . At each chipper only one truck
could be unloaded at a time
And the balance material was bought from the Woodyard using the tractor
which could carry capacity of two tons of material. Unloading at the chipper can be
done only when the chipper is operational. At the Woodyard they had capacity to
unload a maximum of six trucks at a time. Unloading of a truck required about 1.5-2
hours. For all the material handling costs contract labourers were employed who

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were paid on piece rate basis. Labour contractor were paid Rs 10 million for the
material handling of wood.
Hence, handling of trucks carrying heavy logs of wood was one of the major
areas of concern for the Company. This lead to a daily problem of trucks standing in
long queues waiting till morning for their turn to come.

2.4 MAINTENANCE
In the actual pressurized environment of day to day operations it was difficult
to understand how decisions were taken by the various departments, how they
interacted with each other .There was no material accounting at the Woodyard.
Truck arrival pattern would change drastically on a day to day basis. Production
personnel also changed their chipping schedules frequently on a day to day basis.
Production personnel also changed their chipping schedules frequently during the
day and rarely followed the schedule that they would have given to the Woodyard
personnel.
Thus there was no maintenance regarding the chipper schedule, truck arrival
pattern, Woodyard material accounting problems and if the Company targeted
increased production this would lead to the problems like mismanagement of all the
activities as already when the production is 250 MT long queues of trucks keep
waiting for their turn and in return they are demanding for more price of their wood.
In addition there is no maintenance for High Inventory which in turn would lead to
loss of production due to reduction in cellulose content .Hence maintenance of the
logistics problem would keep a check on the various issues arising and would keep
a quality control check on all the variations occurring due to deviations occurring.

3. ADDRESSING THE PROBLEM

3.1 UNDERSTANDING THE SITUATION

Understanding the ongoing situation would be the first priority as it would help
make a complete view of the system and it would help as
– Understanding the complete situation.

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 – Overview of actually what is happening.
– Making note of all the areas of problems concern.
– Having actual facts and figures collected.
All the above would help in making a note of real situation going around in the
Company.

3.2 MEETING VARIOUS DEPARTMENTS PERSONNEL

Managing effective logistics involved coordinating with various departments.
Unless we got involve all of them, we would not be able to make any headway.

Woodyard personnel were managed by procurement personnel, the

Woodyard was managed by stores personnel and the chip was managed by
production personnel. We should involve maintenance personnel to replace blunt
knives with sharpened knives at the chipper, which affected the daily chipper
schedule.

3.3 SUPPLY CHAIN MANAGEMENT INITIATIVE

Apart from the above two perspectives, the company also has to face
pressures on the price front. With the opening of the economy the RG pulp market is
quite vulnerable to changes and as the custom duty on rayon pulp has reduced, this
has affected the price realization at the market place. So in future if the capacity
would increase up to 500 MT it would pose focus on below points.

3.3.1 Managing logistics of incoming material

With the increased capacity, the company has to procure more material and
manage traffic of about, on average 150 trucks on a daily basis.

3.3.2 Managing multiple products and multiple grades

Demand in the RG pulp market may decrease further so the Company will
have to look at alternative markets like paper industries, pharmaceutical industry
and textile industry.

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 3.3.3 Managing logistics so as to reduce inventory and handling related
costs and simultaneously improve customer service
Since currently company is holding high amounts of inventory of 6 months so
it is also incurring high handling costs above 10 million.

3.4 CONDUCTING WORKSHOPS FOR SENIOR & JUNIOR MANAGERS

As there is no coordination among the various departments’ personnel
therefore conducting workshops might be helpful for binding them in one group and
shifting their focus towards the company’s problems and its targets.
It would make them understand supply chain management, procurement,
manufacturing, marketing, and corporate planning.

3.5FOCUS ON THE PRIMARY ACTIVITIES OF VALUE CHAIN

Making all the departments understand the importance of various activities
involved in value chain will give them insight as
- Planning for inbound logistics of wood
- Raw material Mix
- Inventory Planning
- Coordinating inward movement of wood with chipping schedule
- Planning for outbound logistics of finished goods
- Supplying of pulp to various other industries like textile, paper
and pharmaceutical.
- Managing manufacturing and marketing interface
This would involve examining various ranges of issues involved in managing
multiple products and grades from manufacturing and marketing angles.

3.6 SIMULATION EXERCISE

It would manually simulate a day’s activity and would require participants
which again will help them bind so that they coordinate among themselves.

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Simulation would help in calculating the various drawback areas like waiting of truck
at all resources and calculating the costs of all the materials bought from Woodyard
by tractors.

3.7 FOCUS AREAS

While focusing on above aspects we would also like to focus on the some
major aspects. As on validation of this data, expansion would be a much easier
phenomenon
– Invest in one more weigh bridge
– Invest in two more chipper
– Increase silos capacity for chips
– Invest in two more special equipments
– Reduce the time required to replace blunt knives
– Invest in integrated information system

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 Question No. 2

What options exist? What would you recommend? Why?

Solution

In the beginning of the fiscal year 1997, the government slashed custom duty
on rayon pulp from 25 to 10 per cent. Subsequently the international pulp prices
dropped by about 40% putting the company under tremendous pressure. So the
company not only had to gear up for doubling the production level, it also had to cut
its costs substantially.

To increase the Rayon production the first focus would be on the wood
consumption i.e. Wood Logistics problem as the company was holding about 6
months of wood stock at its Woodyard.

Various options which exist are:

– Maintaining fixed proportion of wood (60:40)

– Fixing the contract with the Suppliers
– Removing the Quality Check Personnel
– Maintaining good relations with suppliers
– Invest in one more weigh bridge
– Invest in two more chippers
– Invest in two more special equipments
– Increase silos capacity for chips

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 – Use better quality of knives
– Reducing the time required to replace blunt knives
– Invest in integrated information system
– Accounting of the material at the Woodyard
– Source Casuarina wood from villages of Karnataka
– Less variation in truck arrival pattern
– Less variation in chipping schedule
– Proper Interaction with the various departments’ personnel
– Maintaining low inventory
– Avoiding maintaining high inventory
– Maintain proper lead time and Reorder cycle with the Suppliers
– Reduce the material handling costs with the contract labourers
– Reduce the truck waiting time at all the resources (Weigh Bridge,
chipper and Woodyard)
– Reducing the extra loading and unloading costs by tractors.
– Conducting workshops for managers
– Form in charge of various different departments and give them
incentives
– Planning for inbound logistics of wood
– Planning for outbound logistics of wood
– Managing manufacturing and marketing interface

Above all are the various options which exist for the increase in the
production level.

RECOMMENDATIONS

Various Recommendations that exist are:

Maintaining fixed proportion of wood (60:40)

The proportion varied from month to month on the basis of factors like
availability of wood. In the last four years the proportion of Eucalyptus had never
gone below 50% but at the same time there was a month when the company
operated with a high proportion of eucalyptus as 70%.

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 Fixing the contract with the Suppliers

As the suppliers want to be paid on the basis of fixed prices per ton of wood
irrespective of the moisture content in the incoming wood. This would help as
follows:

– Reducing the cost by removing the Quality Check Personnel

– Help maintain good relations with suppliers
– Avoiding the cost of getting wood from far off places

Managing multiple grades and products

As the company would like to expand its RG pulp manufacturing, the demand of the
product may get reduced hence the company should look at other alternatives like
paper pharmaceutical and textile industries.

Holding low inventory (not more than 3 months)

As the cellulose content in the wood did get affected with time and the plant yield
usually would be lower if the wood was stored for a longer period of time. Hence
high holding inventory will lead to

– High carrying costs

– High order costs

As in the first 3 months the moisture content would reduce at rate of 4-5%.So
inventory must not be kept for more than three months.

Conduct Workshops

Since there is no coordination among the various departments’ personnel so

conducting workshops would be helpful to understand the concept of

– Supply chain management

– Procurement
– Manufacturing
– Marketing

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 – Corporate Planning

Moreover it will bind all the members together and help them focus on
company goals and targets.

Invest in Integrated Information System

Such a system would ensure that each and every entity in the system would
have knowledge on real-time basis about the status of the system. This will help all
departments to make optimal decisions on a real-time basis.

Invest in one more weigh bridge, two chippers and special equipments

As a result of the Data Sheets for Simulation Exercise following problems

occurred

○ Truck waiting at Weigh Bridge, chipper and wood yard

○ Extra loading and unloading costs
○ Increase in production would be an impossible task

Hence investing in two chippers will help as

○ No more waiting queues for trucks

○ Will reduce extra material costs of contract labourers
○ Will reduce the cost of 100 per ton
○ More quantity of wood can be cut easier

Following is the Scheduling of two chippers of Eucalyptus and Casuarina

SCHEDULE

EUCALYPTUS SCHEDULE

Chipper No. 1

7:00 AM 1:30 PM
to 1:30 to 4:30 4:30 PM to 9:30 PM to 11:30 PM 5:30 AM to
PM PM 9:30 PM 11:30 PM to 5:30 AM 7:00 AM

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 Chipper
1 Operatio
Close Operation Close Operation Close
Eucalypt n
us
6.5 Hour 3 Hour 5 Hour 2 Hour 6 Hour 1.5 Hour

EUCALYPTUS SCHEDULE

Chipper No. 2

5:00 AM 11:30 AM 2:30 PM

to 11:30 to 2:30 to 7:30 7:30 PM to 9:30 PM to 3:30 AM to
AM PM PM 9:30 PM 3:30 AM 5:00 AM
Chipper
2 Operatio
Operation Close Close Operation Close
Eucalypt n
us
6.5 Hour 3 Hour 5 Hour 2 Hour 6 Hour 1.5 Hour

CASUARINA SCHEDULE

Chipper No. 1

8:00 AM 1:00 PM 4:00 PM

to 1:00 to 4:00 to 7:30 7:30 PM to 10:30 PM 1:30 AM to
PM PM PM 10:30 PM to 1:30 AM 8:00 AM
Chipper
1 Operatio
Operation Close Close Operation Close
Casuarin n
a
5 Hour 3 Hour 3.5 Hour 3 Hour 3 Hour 6.5 Hour

CASUARINA SCHEDULE

Chipper No. 2

11:00 AM 4:00 PM 7:00 PM 4:30 AM

to 4:00 to 7:00 to 10:30 10:30 PM 1:30 AM to TO 11:00
PM PM PM to 1:30 AM 4:30 AM AM

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 Chipper
2 Operatio
Operation Close Close Operation Close
Casuarin n
a
5 Hour 3 Hour 3.5 Hour 3 Hour 3 Hour 6.5 Hour

Investing in one Weigh Bridge will help as

– Constant arrival pattern of trucks and outgoing can be maintained

Investing in special equipments will help as

– More chippers require more special equipment to unload the truck at

the chipper.
– Trucks can be sent directly to the chipper if the other chipper is on
rest.

REVISED SIMULATION EXERCISE

Truck Monitoring Sheet

Truck
Monitori
ng
Sheet
Eucalyp Casuar
tus ina

Trucke art dept trucke art dept

d time time d time time
E1 06:00 06:34
E2 06:15 06:49
E3 06:30 07:04
E4 06:45 07:19

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 E5 07:00 07:34
E6 07:15 07:49
E7 07:30 08:04
E8 07:45 08:19
C1 08:00 08:34
C2 08:15 08:49

Weighbridge Monitoring Sheet

weighbridge monitoring sheet

weighbridge operations-1 weighbridge operations-2
truc
truck Start of End of k Start of End of
truck statu operati operati truck stat operati operati
ed s ons ons ed us ons ons
E1 L 06:00 06:10 E1 UL 06:30 06:34
E2 L 06:15 06:25 E2 UL 06:45 06:49
E3 L 06:30 06:40 E3 UL 07:00 07:04
E4 L 06:45 06:55 E4 UL 07:15 07:19
E5 L 07:00 07:10 E5 UL 07:30 07:34
E6 L 07:15 07:25 E6 UL 07:45 07:49
E7 L 07:30 07:40 E7 UL 08:00 08:04
E8 L 07:45 07:55 E8 UL 08:15 08:19
C1 L 08:00 08:10 C1 UL 08:30 08:34
C2 L 08:15 08:25 C2 UL 08:45 08:49

Chipper Operation Sheet

For Eucalyptus

chipper operations
sheet Eucalyptus Eucalyptus
Chipper Queue Chipper 1 Operation Chipper 2 Operation
time time
of of Start of End of Start of End of
truck joinin leavi trucke operation operatio truck operati operatio
ed g ng d s ns ed ons ns

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 E1 06:10 06:30
E2 06:25 06:45
E3 06:40 07:00
E4 06:55 07:15
E5 07:10 07:30
E6 07:25 07:45
E7 07:40 08:00
E8 07:55 08:15

For Casuarina

Casuarina Casuarina
Chipper 1 Chipper 2
Operation Operation
Start of End of End of
operation operation Start of operation
Trucked s s trucked operations s

C1 08:10 08:30
C2 08:25 08:45

Chipper Wood Management Sheet

chipper wood management sheet

Chipp Chipp
er 1 er 2

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 Wood Wood Wood Wood
receiv receive receiv receive
ed d from ed d from
Time Direct Woody Time Direct Woody
Slot ly ard Slot ly ard

Wood yard Management Sheet – I

Woodya Unload-1 Unload-2

rd Operation Operatio
queue s ns
Star Start
t of End of of End of
Truck id Op. Op. Truck id Op. Op.
06:1
E1 0

Wood yard Management Sheet – II

Unloa Unloa Unloa Unloa

d-3 d-4 d-5 d-6
Opera Operat Opera Opera
te e te te
Sta Sta
Start End Star End rt End rt End
Truck of of Truck t of of Truck of of Truck of of
id Op. Op. id Op. Op. id Op. Op. id Op. Op.

Question No. 3

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In what way the simulation exercise suggested by Saloni Yashpal would help APR in
attacking the wood logistics problem?

Solution

The Simulation Exercise suggested by Salnoi Yashpal is:

Truck Monitoring Sheet

Encalyptus Truck Data Casuarina Truck Data

Truck Arrival Departure Truck Arrival Departure
ID Time Time ID Time Time
ID E1 06:00 07:48
ID E2 06:10 07:51
ID C1 06:25 08:40
ID C2 06:40 07:45
ID E3 07:00 07:45
ID E4 07:20 09:37
ID E5 07:30 08:02
ID E6 07:40 08:19
ID C3 07:55 08:36
ID C4 08:10 10:05

Weighbridge Monitoring Sheet

Weigh Bridge Queue Weigh Bridge Operation

Time
Time of Start of End of
Truck Truck of Leavin Truck Truck Operatio Operatio
ID Status Joining g ID Status ns ns
ID E1 LOADED 06:00 06:08
UNLOAD UNLOADE
ID E1 ED 07:38 07:45 ID E1 D 07:45 07:48
ID E2 LOADED 06:10 06:18
UNLOADE
ID E2 D 07:48 07:51
ID C1 LOADED 00:00 06:35
UNLOADE
ID C1 D 08:20 08:24
ID C2 LOADED 00:00 06:50
UNLOAD UNLOADE
ID C2 ED 08:35 08:36 ID C2 D 08:36 08:40
ID E3 LOADED 07:00 07:12

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 UNLOAD UNLOADE
ID E3 ED 07:37 07:40 ID E3 D 07:40 07:45
ID E4 LOADED 07:20 07:32
UNLOADE
ID E4 D 09:32 09:37
ID E5 LOADED 07:30 07:32 ID E5 LOADED 07:32 07:40
UNLOAD UNLOADE
ID E5 ED 07:55 07:59 ID E5 D 07:59 08:02
ID E6 LOADED 07:40 07:51 ID E6 LOADED 07:51 07:59
UNLOAD UNLOADE
ID E6 ED 08:14 08:16 ID E6 D 08:16 08:19
ID C3 LOADED 07:55 08:02 ID C3 LOADED 08:02 08:12
UNLOADE
ID C3 D 08:32 08:36
ID C4 LOADED 08:10 08:12 ID C4 LOADED 08:12 08:16
UNLOADE
ID C4 D 10:01 10:05

Chipper Operation Sheet

Chipper Queue Chipper 1 Operation Chipper 2 Operation

Time
Time of Start of End of Start of End of
Truc of Leavi Truc Operati Operati Truc Operati Operati
k ID Joining ng k ID on on k ID on on
ID
E3 07:12 07:37
ID
E5 07:40 07:55
ID
E6 07:59 08:14
ID
C3 08:12 08:32

Chipper Wood Management Sheet

Chipper 1 Chipper 2
Wood Wood
Wood Received Wood Received
Received from Received from
Time Slot Directly Woodyard Time Slot Directly Woodyard
08:00- 07:00-
09:00 10 08:00 30

Wood yard Management Sheet – I

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 Woodyard Queue Unload 1 Operation Unload 2 Operation
End Start End
Truc Start of Truc of of
k ID of Op. Op. k ID Op. Op.
ID ID 06:1
E1 06:08 07:38 E2 8 07:48

Wood yard Management Sheet – II

Unload 3 Operation Unload 4 Operation Unload 5 Operation Unload 6 Operation

Start End Start End Start End Start End
Truc of of Truc of of Truc of of Truc of of
k ID Op. Op. k ID Op. Op. k ID Op. Op. k ID Op. Op.
ID 08:2 ID 06:5 ID 07:3 ID 08:1 10:0
C1 06:35 0 C2 0 08:35 E4 2 09:32 C4 6 1

EXPLANATION OF SIMULATION EXERCISE

After filling all the sheets of the simulation exercise we come up with certain points
which are as follows:

• As per the table -2 (truck arrival pattern on a typical day) 13 trucks should be
there in between 6:00 AM to 8:00 AM, but this simulation exercise tells us
that only 9 trucks can go inside the premises which show that work is not
going according to the standard.

• Because we are not able to match the actual arrival pattern with standard
arrival pattern, which creates a problem of waiting (queue) the truck outside
the factory which also increases our Handling & Extra Material Handling Cost.

Supply Chain Initiative at APR Limited Page 31

 • In Weigh Bridge Monitoring Sheet we can see that most of the trucks stand in
queue. And because trucks have to wait in queue the supplier is asking, to
increase the cost.

• In Chipper Wood Management Sheet we can see that there is only one truck
of casuarina on slot of 8:00 AM to 9:00 AM. So, it will incur the Extra Material
Handling Cost because we have to supply the material by the help of tractor
and a single tractor carries only 2 Tons of wood and the extra material
handling cost will be 200 Rupees.

This simulation exercise helps APR in attacking the wood logistic problem by
describing the loop holes in the company.

5. RESULT OF THE STUDY

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 By following the above value chain the company will be able to focus at each
and every perspective from the incoming of raw materials to marketing and services.

Inbound Logistics can be maintained by sourcing the material from AP, UP,
Karnataka. Operations maintenance can be done by good coordination among
various departments’ personnel so that any delay or early arrival can be handling
accordingly. Outbound logistics can be maintained by supplying the material to
textile industries, paper and pharmaceutical industries. Marketing interface would
help managing multiple products and grades and accordingly they can be selling to
different customers. Service can be maintained by supplying Rayon Grade Pulp with
short lead time as it would help in incurring fewer costs. On time delivery will help
making customers satisfied and will out step the competitors.

Supply Chain Initiative at APR Limited Page 33

 Procurement will help if suppliers are contracted at fixed prices per ton of
wood and maintain good relations with them as there is shortage of wood in AP. By
developing our technology like chipper, weigh bridge, special equipment will help in
fastening the chipping schedule which in turn would help in quick manufacturing and
meeting the demands of customers investing in Integrated Information System will
give complete real time basis which would help make optimal decisions. H R
Management will be helpful if all the heads of departments are motivated
continuously and there is good coordination among them.

Supply Chain Initiative at APR Limited Page 34

 BIBLOGRAPHY

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Supply Chain Initiative at APR Limited Page 35

➢ Casuarina Tree Book from Google Book.
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