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PLAN-O-CHAIN

2019

Supply Chain Case Study


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Ground Rules – Nestlé Plan-O-Chain Case Study


Eligibility

 The competition is open only to 2nd year students and participation via teams
 Each team to not have more than 3 members and 1 member cannot be a
part of more than 1 team.
 In case of more than one sub-competition (4Ps/Ingenium/Plan-o-chain) is
being launched on your campus, a team can participate only in one of the
sub-competitions.
 At maximum 1 student who is currently on exchange Programme can be a
part of the team.
 No team can have more than 1 PPO holder at the time of registration

Submissions

 The case study would be rolled out on 1st August 2019 (23:59 hrs.).
 All teams must provide the following details with their submission (mandatory):
o Name of the team
o Names of the members of the team
o Email id of One point of contact
o Contact numbers of all members of the team
 Solution should be provided in PDF format in not more than 10 slides (including
title slide)
 Please submit to your place-com SPOC for Nestlé.
 Last date for Submission – 15th August 2019 (23:59 hrs.)

What is in store for you?


Selected teams will get to present their solutions to Nestlé Panel at their campus on
dates that will be communicated subsequently.
Top 3 teams across campuses get a chance to present their solutions to the
Management Committee of Nestlé India at Nestlé House, Gurgaon.
Team Prizes:

 Campus Winners : Cash Prize of 50K


 Nationals Runners Up : Cash Prize of 1L and PPIs
 Nationals Winners : Bragging Rights, a Bounty of 2L and PPIs

Individual Prizes:
PPI offers to the individual participants may be given.

Best of Luck!
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Customer Service and Quality Focus are central to Nestlé DNA and an efficient and responsive
Supply Chain is an enabler to achieve these objectives. Effective Supply Chain Management
is integral to the business and plays an essential role in boosting customer service, reducing
operating costs and increasing profit leverage for the company. Efficiency in Supply planning,
transportation and warehousing can be a source of competitive advantage for the company
and help delight customers and consumers by bringing to them fresher products every time,
everywhere.

The Culinary segment of the company aims at providing tasty food coupled with health and
wellness. The central strategic pillar for Growth & Innovation in the culinary segment is Maggi
Noodles. Maggi Noodles is one of the biggest categories for Nestlé India (54% Volume
contribution) and is the market leader in its category. You have been hired as a Consultant for
Nestlé India to help them optimize the Noodles Supply Chain network.

PART 1:
The current month is December 2020. Maggi Noodles are manufactured at 5 plants and
delivered to 27 Distribution centers all over the country, bringing about complexities in the
Supply of the product. Below are the details of SKUs for Maggi Noodles.
SKU 1: Existing SKU with 14% YoY growth
SKU 2: Existing SKU with 13% YoY growth
SKU 3: Existing SKU with 17% YoY growth
SKU 4: Multigrain Noodles, New Product Launched this year. Estimated growth of 15%, however
currently growing at 5%
SKU 5: Asian Flavor, Launch planned in November’19. Estimated YoY growth of 25%

The manufacturing locations and production capacities for Noodles are given in Appendix 1.
Please note the following constraints for any working:
1. FG Inventory Opening in any month to not exceed 17 days
2. FG Inventory Opening in any month to not fall below 13 days
3. Daily Output is limited to 280 Tons

The demand at distribution centers is given in Appendix 2.


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You have to a design a supply footprint for Maggi Noodles including Supply Network, as per
the demand given in Appendix 2. Feel free to make reasonable assumptions for designing the
network and document the same.

PART 2:
With the projected growths, recommend the strategy to ensure supply continuity and propose
changes (if needed) in supply footprint for Noodles for 2023.

PART 3:

We are now in year 2023 and with the demand situation in sight, the Noodles factory in Goa is
going through a major transformation, which includes redesigning storage area and relooking
at inventory norms and the material flow for the premises. Company sees this as an opportunity
to increase efficiency in order to maintain high Customer Service Levels. The factory operates
for 24 hours, all days of the week. The warehouses are operated in 2 shifts. The trucks are
unloaded at the unloading area everyday as per factory production requirement and finished
goods are not kept for more than 24 hours.
Below is the map of the factory area:

RM: Raw material, PM: Packaging Material, FG: Finished good


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Details of raw materials:

Requirement Lead
Raw in Kg for time Shelf Pack Conversion Storage
Source Form
Material every 100 in Life size to Pallets condition
cases of FG days
50 kg
bag
20
RM 1 65 Domestic 30 Powder or 25 25 Ambient
days
Ton
Tanker
15 50 kg
RM 2 20 Domestic 30 Powder 25 Ambient
days bag
25 Ton
Tanker
RM 3 10 Domestic 30 Oil 1 year or 200 Drums: 4 Ambient
ltr.
drum
25 kg
RM 4 3 Imported 90 Powder 1 year 40 Ambient
bag
9 50 kg Cold
RM 5 2 Domestic 30 Powder 25
months bag Storage

Assume that there is no difference in cost on the basis of Pack size


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Details of Packaging Material:

Requirement
Packaging Lead Shelf Pack Conversion
for every 100 Source Form
Material time Life size to Pallets
cases of FG
30
Laminate 2000 Kg Domestic Roll 1 year 750 kg 36
days
10 1000
Shipper 100 units Domestic Bundle 1 year 300
days Units

Shipper Dimensions: 470*288*380 mm


Pallet dimension: 1200*1000*150 mm
50% of packaging materials are received in Pallets
Inbound & Outbound: Truck capacity is 1500 cases
The Case weights are as follows:
SKU 1 SKU 2 SKU 3 SKU 4 SKU 5
6Kg 7Kg 8Kg 10Kg 9Kg

You are required to work out the below details, keeping cost effectiveness in mind:
1. Material Requirements and procurement pack size strategy as per production and
inventory norms for RM and PM
2. Map the material flow across the plant
3. Complete Storage solution for the factory warehouses including number of docks,
storage space, manpower requirements for warehousing, method of storing different
Raw materials, Packaging material and Finished Goods based on cost benefit analysis.
You are free to make reasonable assumptions and state the same.
4. Opportunities for use of Technology in Warehouse.
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PART 4:
The new Multigrain Noodles launched this year has not received the kind of Consumer
response that was anticipated. It is a strategic product for the company and is considered a
future growth pillar that resonates with the shift in consumer preference. Recommend a
Demand Generation & Growth Strategy for this variant.
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APPENDIX

Appendix 1: Plant locations for Noodles and daily outputs (in metric tons):

Plant Bhatinda Goa Haridwar Mysore Baddi

SKU 1 Y Y Y Y Y

SKU 2 Y Y Y Y Y

SKU 3 Y Y Y Y Y

SKU 4 Y Y N N N

SKU 5 Y N N N N

Daily Outputs 40 65 75 55 45
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Appendix 2: DC wise demand for Apr ’22 (in metric tons)

S. No. DC SKU 1 SKU 2 SKU 3 SKU 4 SKU 5


1 Aslali 70 200 175 25 10
2 Bangalore 50 150 150 25 7
3 Bhiwandi 300 380 450 70 20
4 Chennai 70 150 75 15 5
5 Cochin 20 75 20 5 2
6 Cuttack 15 100 100 20 5
7 Goa 15 20 10 2 1
8 Guwahati 125 50 25 5 2
9 Hasangarh 300 450 300 50 15
10 Hyderabad 5 125 150 20 10
11 Indore 40 100 75 10 5
12 Jaipur 75 275 125 20 5
13 Jammu 75 75 10 2 1
14 Kochi 10 50 10 2 1
15 Kolkata 75 120 260 40 10
16 Lucknow 110 240 100 15 5
17 Modinagar 150 250 125 20 5
18 Nagpur 40 100 30 5 2
19 Patna 35 70 60 10 4
20 Payal 210 300 140 20 5
21 Raipur 20 50 30 5 2
22 Ranchi 35 70 75 10 4
23 Rishikesh 100 70 20 5 1
24 Salem 75 150 50 10 5
25 Silchar 20 20 10 4 1
26 Siliguri 50 30 25 5 2
27 Vijayawada 15 49 56 5 5
Total 2105 3719 2656 425 140
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Appendix 3: SKU-wise Demand for the period Jan ’21-Jun’22 (in metric tons):

SKU 1 SKU 2 SKU 3 SKU 4 SKU 5


Jan-21 2000 3500 2500 410
Feb-21 1850 3238 2313 370
Mar-21 1900 3325 2375 380
Apr-21 2000 3500 2500 400
May-21 1975 3456 2469 395
Jun-21 2100 3675 2625 420
Jul-21 2000 3500 2500 400
Aug-21 2150 3763 2688 430
Sep-21 1950 3413 2438 390
Oct-21 2000 3500 2500 400
Nov-21 2050 3588 2563 410 15
Dec-21 1750 3063 2188 350 30
Jan-22 2155 3771 2694 431 50
Feb-22 1950 3413 2438 390 100
Mar-22 2000 3500 2500 400 110
Apr-22 2125 3719 2656 425 140
May-22 2075 3631 2594 415 160
Jun-22 2225 3894 2781 445 150

Note: Please limit the number of slides to 9 (excluding Title slide) and take suitable
assumptions wherever required (and state the same).