Warehouse

The role of warehousing in the process must not delay products time delivery but contribute to the products safety. Occupational Safety and Health Administration (OSHA), provides a set of rules that warehouses must abide by to make them offer services as per prescribed standards. Warehouses can be owned by the organization, public or privately but the supply chain, which requires the services of warehouses. Demand for extra warehousing facilities due to unforeseen circumstances such as damage and warehousing restructuring must not lower the quality of services delivery.

Warehousing performance must be improved by initializing a number of strategies. Storage of goods and products in pallets form will reduce the time involved in loading and offloading. Pallets storage method involves a number of storage methods that enable warehouse to make efficient use of space available. Cross docking technique is a cost and time effective process in warehousing. It involves direct delivery of products to the customer. It comes with a number of added advantages such as the reduction of material handling.

Products that are subjected to long periods of handling may have their quality compromised by the time they reach the customer. Cross-docking minimizes such instances and eliminates the need for storage. Products such as pharmaceutical materials, drugs, perishable goods are best delivered directly to the customer (Cunningham, 2001). This is because they are not only fragile but also cannot sustain long periods of handling. Their quality is thus best maintained when they are cross-docked. Organizations that lack warehousing capacity are best suited in making use of this technique.

Firms can make use of less than truck-load techniques to improve on supply chain management. Supply chain system involve instances where products are transported using various modes of transit such as air, water, road and rail. Applying road as a mode of transport in ferrying goods is beneficial and cost effective. Road trucks do not need time-tables to transport materials as in the case of air and rail modes. It therefore saves valuable time and reduces safety risks associated with long delays.

The less than truckload (LTL) is therefore important in enhancing quality service delivery. A shift from traditional and conventional methods of manufacturing to lean manufacturing is a notable innovation that has enriched efficiency in supply chain management. The concept of lean manufacturing is an innovative product system born out of Toyota. Japanese car manufacturer, Toyota, acquired various techniques from the United States that minimized on waste factors of production such as labor and material. Apart from reduction in wastes, lean manufacturing also enhances quality.

Principles of lean manufacturing such as sourcing raw materials from close locations on manufacturing and production of quality products on sites that are closer to customers ensures reductions in related costs and time (Gonzalez, Monge & Rao, 2006). Lean manufacturing optimize human resource, makes use of cheap and ensures high quality service delivery. The combined effect is a complete exploitation of few resources for greater rewards in profits and bonuses. Manufacturers that adopt lean manufacturing in supply chain management systems therefore move closer to competitive advantage.

The introduction of tactical chain management systems and tactical planning for supply management are vital techniques to companies in satisfying customer demands. Techniques and management planning systems that adopt technology as a tool have higher chances of satisfying customer demands. The process of tactical planning in supply chain involves taking into consideration advances in technology that are best suited to dealing with enforceable future challenges. Such innovative approaches in supply chain management eliminate risks of failure to satisfy customer demands that translates to loss of business.

As stated In the reading, CT businesses were actually comprised Into five groups including the following: Canadian Tire Retail, Canadian Tire Financial Services, Candida Tire Petroleum, Paratroopers, and Mark’s Work Warehouse. Initially, this group network services, development tools, and applications. As explained in the reading, the systems at Canadian Tire Retail included POS (point-of sales) systems which were networked to the Canadian Tire Retail data center. The systems at Mark’s Work Warehouse, on the other hand, operated differently and remained separate from the other CT corporations.

While Canadian Tire Retail ran IBM-AS/400 systems in stores, ACTS utilized IBM ERRORS with Intel- Based workstations. Paratroopers and Canadian Tire Petroleum’s daily transactions were relayed directly into the corporate network from their point-of-sale systems. The Canadian Tire Corporation’s IT department operated and supported over a hundred different mainframe, server, desktop development and integration tools, ten different hardware platforms, 14 operating systems, seven database management systems, and over 450 different production applications.

Perhaps the most crucial role was that of Andy Wine, Chief Information Officer/Chief Financial Officer. Wine led the strategic plan in 2002 (and going forward) to develop the first IT strategy document in many years. Michael Banks was hired as Director of Marketing IT which came with the responsibility of creatively partnering more with Canadian Tire Retail. Bridget Martens was assigned as Business Intelligence Manager in early 2003. She was given the responsibility of coordinating the business intelligence program as it began.

These individuals played key roles in the development of the business intelligence initiative at Canadian Tire Corporation. The implementation of a data warehouse involved laying out a vision to be “an agile IT team, aligned to business priorities, operating a simpler technical environment with the appropriate standardized processes” (Hagglers, 2003). In order to achieve this vision, many requirements were necessary to move forward. First of all, Canadian Tire Retail’s image had historically reflected that of a wholesaler, and the IT group had the challenge of changing this image to that of a retailer, rather than a wholesaler.

In order to do this, the team realized that more data was necessary in order to analyze data as a retailer. They were required to look at data on a more analytical basis, analyzing the product, store, and margin trends (Hagglers, 2003). In order to do this, the IT group built the II in which data was extracted, transformed, and loaded from a variety of sources. This was the essence of building the data warehouse: to consolidate the date into one main system where the information could be analyzed to help form critical business decisions.

The requirements laid out in this vision actually prompted the development of four programs from the periods of 2003 to 2005. The first program involved implementing a CIO governance program. The second program, provided “organizational and people capabilities” (Hagglers, 2003) ND specified key services that the IT group would need to be able to support to the organization. The third involved process improvements which helped to organize an annual IT strategy planning process.

The fourth program involved technological direction which “laid the foundation for re-architecture the organization” (Hagglers, 2003). The areas of business intelligence and data management, application deployment, integration and messaging, standardization and simplification, and security deployment were five areas that required immediate attention. For this season, these areas also serve as requirements for the data warehouse and business intelligence initiatives to take place.

Canadian Tire Corporation is an example of a company in distress whose current architecture and infrastructures did not suffice for longevity and success. The case study further details the Journey of CT, along with its web of networked businesses, as it attempted to change business strategy in an effort to create a more enhanced system of data warehousing and business intelligence. 5 References Hagglers, N. & Mister, D. (2003). Business Intelligence Strategy at Canadian Tire [Case Study]. Vive Management Services.

Reading through the case study I have found that SF is a very active company in terms of the movement of goods within the business. Their demand fulfillment system hosts most of the logistical activities. Looking over figure 1 you can see 2 definite independent logistical channels. The Channel on the right shows how the Map stocks move from the print planning to the Printing lines, the printed maps move to the Bulk store. Broken down orders are then taken to the Picking area. The channel on the left displays how the customers’ orders and trade orders meet up with the Million inventory control system.

The system is in constant communication with the right hand side channel making sure there Is enough stock In place. Through a bar coding system, using hand held scanners, Million automatically finds the requested orders in the Bulk store, a picker then brings it down to the picking line. The goods are then packed and dispatched using a contracted logistics service provider. The movement of goods within SF have both a manual and an automated system working together to produce maximum output.

The printing department has the most activity, as much as 4 hours can be spent on setting up Just one machine with he majority of time spent on configuring the plates and ad]gusting the colors. Once set up, the printing machines work two seven-hour shifts, each producing as much as 8000 maps per hour. The company has four printers with two deferent printing machines, Alpha and Beta. The Alpha machines are older and less efficient, with almost twice as much time needed for set up whilst, only producing half as much output compared with the Beta machine.

Nonstop et al, 2003:170). SF has two fairly distinctive levels of demand. The first is a lower level, where monthly sales volume accounts for only 5% and 7% of the annual total and a second, landing procedures department use as much as 12 months lead time in preparation for new maps and stock replenishment. The team determine the need for placing a map (stock) on the printing schedule as much as 6 months in advance. They aim to deliver a batch of printed maps to the Bulk store 3 months before stock is projected to run out.

Holding 12 months of inventory can be expensive. Warehousing for storage including rent and utilities, Insurance and taxes on inventory finance for the stock, and stock losses due to shrinkage/deterioration are Just a few costs for holding inventory over a long period. Inventory optimization www. Sap. Com Accessed 2. 1. 2007 Moving over to the left channel of figure 1 we see more activity coming in from customers and trade orders. SF aim to have dispatched the customers order within three to four days of receipt, with an 88% performance target regularly being exceeded.

Only over the busy Easter months have SF had problems with delivery times, this was mainly due to their contract logistics service provider. SF should have forecasted from previous years that Easter was the busiest time and so they should have hired more transport through their logistics providers. The company uses an Electronic Data Interchange (DEED’) for their customers to place orders. Only 50%-60% of the orders are EDI with the remaining orders being keyed in to Million by hand. This process is slow, not cost effective and can generate errors.

Use of this channel is limited to a small amount of Cuff’s largest customers. Here I think is Cuff’s biggest downfall. According to Stock, If the EDI was available to all the customers, Million, the system used to generate the EDI orders to the warehouse would be working independently without the need of any keyed in manual orders. This would save time and money, (Stock, 2001) The final logistics operation happens in the picking area. Once the maps have been made, they are stored in aisles with the maps arranged by country and then by numerical order.

When an order comes through scan guns will find the order and tell the pickers exactly where the maps are stored using an onboard display. When the entire order has been picked, the scan gun is uploaded into Million, allowing the system to reorder the necessary stock. The order is then packed and palliative and is ready to be dispatched. Discuss how the use of various IT applications contribute to enhancing efficiency of the logistics processes. Are there any areas which could be further developed using Carters Sans Frontre’s distributes nearly 5 million maps a year throughout Europe.

This figure would not be possible without the use of IT within the organization. SF uses a very sophisticated order processing system, a SAP R/3-based system called ‘In the face of continual growth, the increased turnover, and an increasingly global and competitive market, Million adopted a simple strategy – improve efficiency and manage costs by integrating and streamlining its retail, manufacturing and distribution businesses located around the world’. Strategy behind Million www. Sap. Com Accessed 2. 1. 007 Million receives an order via Electronic Data Interchange (DEED’). Saunders states that, “EDI is the transfer of data between different companies using a File Transfer Protocol (FTP) connection and is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information. It is unmanned, reduces paperwork and reduces error”. (Saunders “The purpose of EDI is to eliminate duplicate data entry and to improve the speed and accuracy of the information flow by linking computer applications between companies” (Emailing, M.

A. ,1992: 17) An order number is then produced generating a pick list; this is then downloaded into hand-held barded scanning guns that inform operators which maps to pick up and where they are stored. Emailing argues bar-coding is a very useful form of an IT application. Varying widths of bars represent letters and numbers, they are simple to use, accurate and quick, and they can store large amounts of information and can produce instantaneous transmission of information giving greater central control and inventory reduction. (Emailing, M.

A. 1992) Once the order has been packed and is ready for distribution, the scanning guns are uploaded back into Million for the system to re order and replenish stock. This is known as the order processing technology capable of processing ongoing data through data management. Supply chain management is a focal topic in business today. Render has defined “supply chain management” as the integration of activities that procure materials and services, then transform them into intermediate goods and a final product, and deliver them to customers. Render. 1997:64) Million seems to be a very useful tool in this industry. Although the company is not utilizing the system to its maximum potential, unfortunately for SF, only 50% of orders are received by DEED’, with the remainder arriving by other channels either fax, telephone, post or e-mail. These orders then have to be typed manually into Million, this is not a cost effective method as man hours are wasted inputting data. The reason for the low percentage of orders flowing through EDI is mainly due to the customers who are placing the orders.

Many large companies have an electronic data costly to install and implement. Companies that have EDI installed may also find there system is not compatible with Cuff’s, Million. In terms of this application enhancing efficiency and contributing to the business, the Million system can identify and fix simple mistakes in an order such as replacing superseded codes with current numbers. Around 97% of all orders pass smoothly through the process.

This is somewhat beneficial as it means less man hours are spent fixing small errors. The Surveying and Design Division use another form of IT application. When it comes to printing the maps, the design division need to set up the printers manually as mentioned above, and one printer can take as long as 4 hours to perfectly align the colors and set up. The case study notes that the Alpha printers are old and can only reduce half of the amount to that of the Beta printers output.

If SF invested into 2 new printers where the color alignment was loaded automatically and gave out the same output as the Beta printers, SF would save 8 man hours every time a new line was uploaded, whilst generating twice the amount of maps to that of the Alpha machines. One way for Carters sans Frontre’s to significantly reduce manual labor throughout the warehouse would be for the whole operation to become automated, transforming the warehouse using an automated highboy narrow aisle laser navigated rack stacking system.

The picking area would become obsolete, with the break through technology of a fully automated laser navigated forklift in the warehouse. Million would simply receive the order from the customer then immediately send the information to the automated warehouse, the unmanned cranes would set to work pulling off the right pallets with no error, they would then send them down a large set of rollers called a ‘hydra foil’ and within minutes the order will have been created ready for distribution.

Of course not all warehouses will have the infrastructure to house an automated highboy and the cost would be very expensive. The other problem may be order quantities, if a customer only wanted half a palette of each map, the cranes would not be maximizing output as they would have to be hand picked in order to make half pallets. (Bowers, D. 1996) What actions should be taken by the company to reduce stock levels and improve customer service levels? Holding inventory is a very costly procedure.

When looking over the way Carters Sans Frontre’s hold there inventory, I think there is room for improvement. A single map could be held in bulk storage for as much as 6 months. In the case of maps where ewe roads and motorways are constantly being updated, that map will become obsolete 6 months down the line. I suggest that SF move to a more efficient way of at the time they are needed, the system coordinates supply and demand using a pull system, where customers demand the orders and those actual orders are used for production.

This is a more efficient way of holding much less inventory. SF host their production on a pull system based on forecasting previous demand; instead, they should use real time data as this would increase stock turnover. (Porkier, C. 1996) There are a number of different solutions SF could take to reduce inventory. Firstly, they could think about moving from a storage warehouse to a cross docking operation, this uses less storage, lower lead time thus resulting in faster delivery.

Secondly they could use a shared user warehouse, enabling overheads, electricity, rent and insurance to be divided. Thirdly they could priorities fast moving and more popular maps by producing more, whilst reducing the size of slower moving, less popular products. As I mentioned before, they could use warehouse automation. This significantly improves speed and efficiency reducing the amount of people employed. Although all of the above are definite solutions for Cuff’s inventory problems, in reality the cost factor may be too large.

The Kimball Lifestyle is the recommended approach to design, develop & deploy he DO/BI, as described in aforementioned text book (eBook). The illustration at Figure 1 summarizes main stages from the Lifestyle. Figure 1: The Kimball DO/BI Lifestyle The Kimball method helps to explain business requirements adding value to an organization. The company must realize this value add, acknowledge it and then decide to implement the solution. (MS. Com, n. D. ).

Issues and Process involved in Implementation of DO/BI system Dimensions Business Processes Date Transaction Client outlet Category Type Product Venue Budget Events_organize x Celebrity Booking Advertisement Books Sale Book Distribution Commission payment The Data Warehouse Bus Matrix The main process involved is the development of the Data warehouse Bus Matrix, as it was highlighted in the earlier section. The Enterprise Data Warehouse Bus Matrix is the data framework for the enterprise data warehouse.

The Figure below shows the bus matrix for Jar Bookstore: Data Model Design The Kimball method provides practical approach land selects the right physical model based upon how usable and flexible it is and how is its performance & maintenance. Almost all these type of models are classic star schemas, as shown in Figure 3. The complete information of a process is its central fact table. Its like a first normal form or ‘De-normalized’ dimension tables, which surrounds the fact table.

Then there are details or dimension tables which can be joined with integer keys called ‘surrogate keys’. This is shown in the below figure. Some researchers call for the normalized, third normal form model at lowest level in data warehouse as this provides Max flexibility. The dimension or detail table bear an analogy to this as will be shown in the subsequent analysis in the later sections. (MS. Com n. . ) Figure 3: An orders business process star schema Star Schema Model Here is a design of star schema, with clear dimensions with Primary an Foreign Keys.

As per the Kimball Method, the star schema represents the Normalized Source Tables. As per the model, the “dimensions are the objects that participate in an organization’s business processes. We generally model these as one table per object. Building the dimension in the TTL system involves joining the various normalized description and hierarchy tables that populate the dimension attributes and writing the results into a single table. (Thorniest, W, 201 1) RED Diagram to provide a complete overview of the Online Bookstore.

Data warehouse requires designing Fact tables and dimension tables. As provided earlier the fact table is the central table within star schema of a data warehouse. A fact table contains basic, raw and De-normalized data. For the Jar Bookstore there are three types of facts: (Thorniest, W, 2011) 1. Additive: these are summed up data 2. Semi-Additive: Semi-additive facts that can be summed up for some data only 3. Non-Additive: Non-additive facts are facts that cannot be summed up. In the context of Jar Bookstore we illustrate each these three types of facts.

The first example assumes that we are a retailer, and we have a fact table with the follows Eng columns: Date Store Sales Amount This table records the sales amount for each product in each store on a daily basis. This data is extracted in the excel sheet as well and will be analyzed in the later sections. The Jar Bookstore has the following fact table: Date Books Current Balance Profit_Margin The object of this table is to record the current balance for each account at the end of each day (DOD Balance).

Case Study 8. 1 Sedgman Steel * Background * Sedgman Steel Inc. : * North American Co. (diversified) * Annual Sales of $1. 7 billion * Syracuse Plant * Produces cut to length steel tubing and steel sheets to the automotive industry. * Customers provide specs for orders (eg. chemical comp. , thickness, diameter, etc. ) * Raw Materials supplied from 3 sources. * Tubing from sister co. (internally sourced. * Steel coils used for steel sheet production multisourced (2 Co. * Physical Distribution * JIT (Just In Time) to customer base. * Policy * Materials required 2 weeks prior to production * Procurement headed by Director of Materials Management (Isaac Theisen) * Alice McKenzie is the Production Material Control Supervisor * Resposibilities are * Incoming/outcoming transportation * Inventory control * Production planning/scheduling * Fill rates Asked to investigate large amount of current on hand raw materials inventory * Purchase spend made by Syracuse plant was$ 65-75 million/year * Purchasing manager @ facility was closely involved with sales to ensure sales pricing was in line with purchasing costs. * Inventory of raw materials on hand is $20 million * Issues * Too much raw materials inventory on hand * Inventory is piling up rather than beign used as constant rate of production. * Data Analysis * $20 million in raw materials inventory Warehoused next to facility in 50,000 sq ft building * Fehr Logistics Company (FLC) contracted to run inventory and logistics (3PL) * Contract specified # of staff to be employeed and working hours * Alice’s visit * Warehouse is full with both types of raw materials * Trucks waiting to be unloaded * 5 staff working when 8 typically was the regular staff running warehouse operations * Delivery of Raw materials was to be at least 2 weeks prior to production * Customer orders based manufacturing Fehr logistics controlled inbound transportation * Decision Criteria * Lowering Cost * Lowering Amount of inventory * Maintaining production flow * Meet time frame established * Compliance with poilicies * Alternatives * Do nothing * Ensure 8 staff are working warehouse at all times fulfilling FLC’s contract obligations * Suspend buying of raw materials for a short period of time until a good chunk of raw material is used up. Build new purchasing processes for forcasting and shipping requirements from suppliers * Refuse shipments of current PO’s so surplus raw materials can be used up. * Absolve contract with FCL due to lack of competancy and hire a new 3PL to replace of FCL. * Request Return of Good approval from suppliers to get inventory close to optimum production standards. * Assumptions * FLC is not fulfilling their contract obligations * Purchasing has not forcasted correctly or purchased demand amounts in line with production schedules.

Omega 40 (2012) 827–846 Contents lists available at SciVerse ScienceDirect Omega journal homepage: www. elsevier. com/locate/omega Review Cross-docking: State of the art Jan Van Belle n, Paul Valckenaers, Dirk Cattrysse KU Leuven, Department of Mechanical Engineering, Celestijnenlaan 300B, B-3001 Heverlee (Leuven), Belgium a r t i c l e i n f o Article history: Received 23 June 2011 Accepted 17 January 2012 Processed by Pesch Available online 25 January 2012 Keywords: Cross-docking Logistics Classi? cation abstract

Cross-docking is a logistics strategy in which freight is unloaded from inbound vehicles and (almost) directly loaded into outbound vehicles, with little or no storage in between. This paper presents an overview of the cross-docking concept. Guidelines for the successful use and implementation of crossdocking are discussed and several characteristics are described that can be used to distinguish between different cross-dock types. In addition, this paper presents an extensive review of the existing literature about cross-docking. The discussed papers are classi? d based on the problem type that is tackled (ranging from more strategic or tactical to more operational problems). Based on this review, several opportunities to improve and extend the current research are indicated. & 2012 Elsevier Ltd. All rights reserved. Contents 1. 2. 3. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827 When and how to use cross-docking? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 Cross-dock characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830 3. 1. Physical characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831 3. 2. Operational characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831 3. 3. Flow characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831 Literature review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 832 4. 1. Location of cross-docks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 832 4. 2. Layout design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 4. 3. Cross-docking networks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 4. 4. Vehicle routing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834 4. 5. Dock door assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834 4. 6. Truck scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 837 4. 6. 1. Single strip and stack door . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 837 4. 6. 2. Scheduling of inbound trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839 4. 6. 3. Scheduling of inbound and outbound trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840 4. 7. Temporary storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841 4. 8. Other issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 842 Conclusion and research opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844 4. 5. 1. Introduction Cross-docking is a logistics strategy nowadays used by many companies in different industries (e. g. retail ? rms and less-thantruckload (LTL) logistics providers). The basic idea behind crossdocking is to transfer incoming shipments directly to outgoing Corresponding author. Tel. : ? 32 16322534; fax: ? 32 16322986. E-mail addresses: jan. vanbelle@mech. kuleuven. be (J. Van Belle), paul. valckenaers@mech. kuleuven. be (P. Valckenaers), dirk. cattrysse@cib. kuleuven. be (D. Cattrysse). 0305-0483/$ – see front matter & 2012 Elsevier Ltd. All rights reserved. doi:10. 1016/j. mega. 2012. 01. 005 n vehicles without storing them in between. This practice can serve different goals: the consolidation of shipments, a shorter delivery lead time, the reduction of costs, etc. The role of cross-docking in industry even seems to increase [1–4]. In a traditional distribution center, goods are ? rst received and then stored, for instance in pallet racks. When a customer requests an item, workers pick it from the storage and ship it to the destination. From these four major functions of warehousing (receiving, storage, order picking and shipping), storage and order picking are usually the most costly.

Storage is expensive because of the inventory holding costs, order picking because it is labor 828 J. Van Belle et al. / Omega 40 (2012) 827–846 intensive. One approach to reduce costs could be to improve one or more of these functions or to improve how they interact. Crossdocking however is an approach that eliminates the two most expensive handling operations: storage and order picking [5–8]. A de? nition of cross-docking provided by Kinnear [9] is: ‘‘receiving product from a supplier or manufacturer for several end destinations and consolidating this product with other suppliers’ product for common ? al delivery destinations’’. In this de? nition, the focus is on the consolidation of shipments to achieve economies in transportation costs. The Material Handling Industry of America (MHIA) de? nes cross-docking as ‘‘the process of moving merchandise from the receiving dock to shipping [dock] for shipping without placing it ? rst into storage locations’’ [10]. The focus is now on transshipping, not holding stock. This requires a correct synchronization of incoming (inbound) and outgoing (outbound) vehicles. However, a perfect synchronization is dif? cult to achieve.

Also, in practice, staging is required because many inbound shipments need to be sorted, consolidated and stored until the outbound shipment is complete. So, this strict constraint is relaxed by most authors. Cross-docking then can be described as the process of consolidating freight with the same destination (but coming from several origins), with minimal handling and with little or no storage between unloading and loading of the goods. If the goods are temporally stored, this should be only for a short period of a time. An exact limit is dif? cult to de? e, but many authors talk about 24 h (e. g. [5,7,11,12]). If the goods are placed in a warehouse or on order picking shelves or if the staging takes several days or even weeks, it is not considered as crossdocking but as (traditional) warehousing. However, even if the products are staged for a longer time, some companies still consider it cross-docking, as long as the goods move from supplier to storage to customer virtually untouched except for truck loading [3,13]. Many organizations use a mixture of warehousing and cross-docking to combine the bene? ts of both approaches [1].

A terminal dedicated for cross-docking is called a cross-dock. In practice, most cross-docks are long, narrow rectangles (I-shape), but other shapes are also used (L,T,X, . . . ) [5]. A crossdock has multiple loading docks (or dock doors) where trucks can dock to be loaded or unloaded. Incoming trucks are assigned to a ‘strip door’ where the freight is unloaded. Then the goods are moved to its appropriate ‘stack door’ and loaded on an outbound truck. Mostly, there is no special infrastructure to stage freight. If goods have to be stored temporarily, they are placed on the ? oor of the cross-dock (e. . in front of the dock door where the departing truck is or will be docked). However, it is possible that the cross-dock contains for instance a pallet storage, certainly if cross-docking is combined with warehousing. Fig. 1 presents a schematic representation of the material handling operations at an I-shaped cross-dock with 10 dock doors. Incoming trucks are either directly assigned to a strip door or have to wait in a queue until assignment. Once docked, the freight (e. g. pallets, packages or boxes) of the inbound truck is unloaded and the destination is identi? ed (e. g. y scanning the barcodes attached to the goods). Then, the goods are transported to the designated stack door by some material handling device, such as a worker operating a forklift or a conveyor belt system. There, the goods are loaded onto an outbound truck that serves the dedicated destination. Once an inbound truck is completely unloaded or an outbound truck is completely loaded, the truck is replaced by another truck. Cross-docking corresponds with the goals of lean supply chain management: smaller volumes of more visible inventories that are delivered faster and more frequently [14].

In the literature, several other (possibly intertwined) advantages of cross-docking compared with employing traditional distribution centers and point-to-point deliveries are mentioned (e. g. [2,3,6,15,16]). Some advantages compared with traditional distribution centers are: cost reduction (warehousing costs, inventory-holding costs, handling costs, labor costs); shorter delivery lead time (from supplier to customer); improved customer service; reduction of storage space; faster inventory turnover; fewer overstocks; reduced risk for loss and damage.

Some advantages of cross-docking compared with point-to-point deliveries are: cost reduction (transportation costs, labor costs); consolidation of shipments; improved resource utilization (e. g. full truckloads); better match between shipment quantities and actual demand. Fig. 1. Material handling at a typical cross-dock. These advantages make cross-docking an interesting logistic strategy that can give companies considerable competitive advantages. Wal Mart is a well-known example [17], but also several other companies have reported the successful implementation of cross-docking (e. . Eastman Kodak Co. [14], Goodyear GB Ltd. [9], Dots, LLC [18] and Toyota [13]). Although cross-docking has already been applied in the 1980s (e. g. by Wal Mart), it has only attracted attention from academia much later and mostly during the recent years. For instance, more than 85% of the academic papers found by the authors are published from 2004 on. During these years, a considerable number of papers have been published and because of the growing interest from industry [1–4], the authors expect that still more research on this topic will be performed the coming years.

The objective of this paper is to present an overview of the cross-docking concept. First, guidelines for the successful use and implementation of cross-docking will be discussed. Further, several characteristics will be described to distinguish between different types of cross-docks. Next, the paper will provide a review of the existing literature about cross-docking. The discussed papers are classi? ed based on the problem type. These problems range from more strategic or tactical to more operational problems. This review can help (future) cross-docking J. Van Belle et al. Omega 40 (2012) 827–846 829 practitioners to ? nd the correct literature to start or improve their cross-docking operations. Without a proper implementation, it is impossible to bene? t from the above-mentioned advantages. Based on the provided review, the authors try to identify gaps of knowledge and interesting areas for future research. The term cross-docking usually refers to the situation in which trucks or trailers1 are loaded and unloaded at a cross-docking terminal. However, the operations to handle freight at a harbor or airport are sometimes very similar.

At a harbor for instance, containers are unloaded from a ship and temporarily placed onto the quay until they are loaded onto another ship or onto a truck. An airport can also be seen as a kind of cross-dock for transferring passengers and their baggage. In the literature, several papers can be found that deal with similar problems as encountered in crossdocking, but speci? c for harbors or airports (e. g. how to determine the layout of an airport terminal [19,20], how to assign airplanes to gates [21], etc. ). These papers are not taken into account for the literature review presented here.

The paper focuses on the typical cross-docking in which goods are transferred between trucks at a cross-dock. The speci? c application or industry (e. g. less-than-truckload (LTL) or courier, express and parcel (CEP) industry) is not important, as long as the applied material handling can be considered as cross-docking. To the best of our knowledge, only two papers present a review of cross-docking papers. Boysen and Fliedner [2] discuss papers about the truck scheduling problem and provide a classi? cation of the considered problems. The approach taken ere is however more general and several problem types related to crossdocking are discussed, including the truck scheduling problem (see Section 4. 6). Agustina et al. [22] provide a general picture of the mathematical models used in cross-docking papers. These models are classi? ed based on their decision level (operational, tactical or strategic) and then subdivided by problem type. However, another classi? cation is presented here as the authors do not completely agree with the proposed classi? cation (the considered problem types and the assignment of papers to problem types).

For instance, Agustina et al. [22] do not consider vehicle routing and temporary storage and the papers about cross-dock networks are discussed in two different sections (transshipment problems and cross-docking network design). Also, some papers about dock door assignment are discussed in the section about cross-docking layout design. In addition, the review presented here is more extensive; more papers are included and the papers are discussed in more detail. This paper also includes a general overview of cross-docking and describes several cross-dock characteristics. The paper is organized as follows.

The next section discusses in which situations cross-docking is a suitable strategy and deals with the requirements for a successful implementation. In Section 3, the characteristics are discussed that can be used to differentiate between alternative cross-docking systems. The literature review is presented in Section 4. The discussed papers are classi? ed based on the problem type they deal with. The conclusions with opportunities to improve and extend the current research are summarized in Section 5. Fig. 2. Suitability of cross-docking (adapted from Apte and Viswanathan [1]). 2.

When and how to use cross-docking? Although cross-docking is nowadays used by many companies, it is probably not the best strategy in every case and in all circumstances. This section brie? y describes the existing 1 In the following pages, the terms truck, trailer and vehicle will be used interchangeably. literature that gives some guidelines for the successful use and implementation of cross-docking. Apte and Viswanathan [1] discuss some factors that in? uence the suitability of cross-docking compared with traditional distribution. 2 A ? rst important factor is the product demand rate.

If there is an imbalance between the incoming load and the outgoing load, cross-docking will not work well. Hence, goods that are more suitable for cross-docking are the ones that have demand rates that are more or less stable (e. g. grocery and regularly consumed perishable food items). For these products, the warehousing and transportation requirements are much more predictable, and consequently the planning and implementation of cross-docking becomes easier. The unit stock-out cost is a second important factor. Because cross-docking minimizes the level of inventory at the warehouse, the probability of stock-out situations is higher.

However, if the unit stock-out cost is low, the bene? ts of cross-docking can outweigh the increased stock-out cost, and so cross-docking can still be the preferred strategy. As shown in Fig. 2, cross-docking is therefore preferred for products with a stable demand rate and low unit stock-out cost. The traditional warehousing is still preferable for the opposite situation with an unstable demand and high unit stock-out costs. For the two other cases, cross-docking can still be used when proper systems and planning tools are in place to keep the number of stock-outs to a reasonable level. Some other factors that can in? ence the suitability of crossdocking are the distance to suppliers and customers (higher distances increase the bene? ts of consolidation), the product value and life cycle (a larger reduction in inventory costs for products with a higher value and shorter life cycle), the demand quantity (a larger reduction in inventory space and costs for products with a higher demand), the timeliness of supplier shipments (to ensure a correct synchronization of inbound and outbound trucks), etc. [1,23,24]. Some authors use a more quantitative approach to study the suitability of cross-docking. For instance, Galbreth et al. 6] compare the transportation and handling costs between a situation in which a supplier has to ship goods to several customers with only direct shipments and a situation in which also indirect shipments via a cross-dock are possible. For the second situation, a mixed integer programming (MIP) model is proposed to determine which goods should go directly from supplier to customer and which goods should be shipped via a cross-dock to meet the (known) demands. The transportation costs are modeled in a realistic way: ?xed for truckload shipping, while the less-thantruckload shipping costs are modeled using a modi? d all-unit discount (MAUD) cost function. The holding costs at the customers are proportional to the quantity and the holding time between arrival time and due date. The costs for the two situations are compared under varying operating conditions. The authors conclude that cross-docking is more valuable when demands are less 2 It is assumed that the demand quantities are small, otherwise point-to-point deliveries are more suited. 830 J. Van Belle et al. / Omega 40 (2012) 827–846 variable and when unit holding costs at customer locations are higher.

On the other hand, it is less valuable when the average demands are close to truck load capacity. Other quantitative approaches make a comparison between a situation with a cross-dock and a situation with a traditional distribution center. For instance, Kreng and Chen [25] compare the operational costs. Besides the transportation and holding costs, the production costs (more speci? c the setup costs) of the goods at the supplier are taken into account. When a cross-dock is used, more frequent deliveries to the cross-dock are required and the batch size needs to be smaller, which causes higher setup costs.

Waller et al. [26] look to both situations from an inventory reduction perspective. Schaffer [8] discusses the successful implementation of crossdocking. When a company wants to introduce cross-docking, the introduction should be prepared very well. If the necessary equipment is already available and because cross-docking seems simple, one easily assumes that cross-docking can be implemented without much effort. However, cross-docking itself is quite complex and requires a high degree of coordination between the supply chain members (e. g. the timing of arrival and departure).

So, the requirements for successful cross-docking should be understood thoroughly and the implementation should be planned carefully. In [8], Schaffer elaborates on six categories of requirements for a successful implementation. According to Witt [13] and to Yu and Egbelu [27], software to plan and control the cross-docking operations (e. g. a warehouse management system or WMS) plays an important role in the successful implementation of cross-docking. The required (automated) hardware for a cross-docking system (material handling devices, sorting systems, etc. ) might come off the shelf and is easily available today.

But the software needs to be tailored to the speci? c requirements and is in general relatively less developed, although it is as important as hardware to cross-docking success. This is also con? rmed by a survey among professionals who are involved in cross-docking and who denote IT system support as a key barrier to effective cross-docking [3,4]. Hence, the system requirements need to be carefully de? ned and studied in order to prevent installing the physical system to discover afterwards there is no information and communication system in place for successful operation.

This software system can only work correctly if it is fed with accurate and timely information. Compared with regular distribution, the information ? ow to support cross-docking is signi? cantly more important [24]. For instance, to coordinate the inbound and outbound trucks to the appropriate docks, the arriving time and the destination of the freight need to be known before the physical arrival of the goods (e. g. via advance shipping notice (ASN)). Several information technology tools are available to realize this information ? ow, e. g. lectronic data interchange (EDI), shipping container marking (SCM), bar-coding and scanning of products using universal product code (UPC) [1]. Regardless of which technology is chosen, the supply chain partners must be able and willing to deliver the required information via this technology. A good cooperation across the supply chain can make or break the cross-docking implementation [8,13,24]. docking [1,29]. In a two-touch or single-stage cross-dock, products are received and staged on the dock until they are loaded for outbound transportation. Usually, the goods are put into zones corresponding to their strip or stack door (see Fig. 3).

In the case of a multiple-touch or two-stage cross-dock, products are received and staged on the dock, then they are recon? gured for shipment and are loaded in outbound trucks. In a typical con? guration, the incoming freight is ? rst put in zones corresponding to the strip doors. The goods are then sorted to the zones corresponding to the stack doors (see Fig. 4). Another distinction can be made according to when the customer is assigned to the individual products [30]. In predistribution cross-docking, the customer is assigned before the shipment leaves the supplier who takes care of preparation (e. g. labeling and pricing) and sorting.

This allows faster handling at the cross-dock. On the other hand, in post-distribution crossdocking, the allocation of goods to customers is done at the cross-dock. Still some other distinctions are possible. The German supermarket retailer Metro-AG for instance distinguishes sourceoriented and target-oriented cross-docking based on the location Fig. 3. A single-stage cross-dock in which the products are staged in zones corresponding to the stack doors (adapted from Gue and Kang [28]). 3. Cross-dock characteristics Several characteristics can be considered to distinguish between various types of cross-docks (and cross-docking).

A common distinction made in the literature is based on the number of touches [3] or stages [28]. In one-touch cross-docking, products are touched only once, as they are received and loaded directly in an outbound truck. This is also called pure cross- Fig. 4. A two-stage cross-dock in which the products are staged in zones corresponding to the strip and stack doors and are sorted in between (adapted from Gue and Kang [28]). J. Van Belle et al. / Omega 40 (2012) 827–846 831 of the cross-docking terminals relative to suppliers and customers [31].

Napolitano [32] distinguishes several types of cross-docking based on the intended use and in [29], eight different crossdocking techniques are listed. In this section, several characteristics are described that can be used to distinguish between different cross-dock types. 3 Note that real world characteristics of the cross-dock are considered, and not the properties from a speci? c decision problem related to cross-docking. For the papers included in the literature review (Section 4), the characteristics of the considered cross-docks will be listed in tables according to the characteristics described here. However, the structure of Section 4 is not based on these characteristics, but on the considered problem type. The characteristics can be divided into three groups: physical characteristics, operational characteristics and characteristics about the ? ow of goods. 5 In the next sections, these groups will be described in more detail. 3. 1. Physical characteristics The physical characteristics are characteristics of the crossdock that are supposed to be ? xed (for a rather long time). The following physical characteristics are considered. Shape: Cross-docks can have a large variety of shapes.

The shape can be described by the letter corresponding to the shape: I, L, U, T, H, E, . . . Number of dock doors: A cross-dock is also characterized by the number of dock doors it has. In practice, cross-docks range in size from 6 to 8 doors to more than 200 doors, and even a cross-dock with more than 500 doors exists [33]. In the literature, sometimes the number of dock doors is limited to only 1 or 2. In these cases, the idea is not to model a realistic cross-dock, but to gain some insight by studying a simpli? ed model. Internal transportation: The transportation inside the crossdock can be executed manually (e. . by workers using forklifts) or there can be an automated system in place (e. g. a network of conveyor belts). The available infrastructure will of course be dependent on the type of freight that is handled in the cross-dock. For instance, LTL carriers handle mostly palletized freight and so make use of forklifts. Conveyor systems on the other hand are among others used by parcel carriers, as they deal with many (small) packages. A combination of both transportation modes is also possible. 3. 2. Operational characteristics Some operational decisions can in? uence the functioning of the cross-dock.

These operational constraints lead to the following characteristics. Service mode: According to Boysen and Fliedner [2], the service mode of a cross-dock determines the degrees of freedom in assigning inbound and outbound trucks to dock doors. In an exclusive mode of service, each dock door is either exclusively 3 Some of the characteristics described here are similar to the characteristics used by Boysen and Fliedner [2] to make a classi? cation of truck scheduling problems. However, they [2] consider not only real world characteristics, but also characteristics of the (mathematical) models. At least for the papers in which these characteristics are described, i. e. , in which real world details of the cross-dock are considered (Sections 4. 5–4. 8). 5 This classi? cation is rather vague. For some characteristics, it is not clear in which group they ? t best or they can be assigned to multiple groups. For instance, temporary storage is considered as a ? ow characteristic. However, temporary storage can also be seen as a physical characteristic (storage is not possible because of space constraints) or operational characteristic (it can be an operational decision that storage is not allowed, e. . to avoid congestion inside the cross-dock). dedicated to inbound or outbound trucks. If this service mode is used, mostly one side of the cross-docking terminal is assigned to inbound trucks and the other side to outbound trucks. A second mode is mixed mode. In this mode, inbound and outbound trucks can be processed at all doors. These two modes can also be combined. In this combination mode, a subset of doors is operated in exclusive mode while the rest of the doors is operated in mixed mode. Pre-emption: If pre-emption is allowed, the loading or unloading of a truck can be interrupted.

This truck is then removed from the dock and another truck takes its place. The un? nished truck has to be docked later on to ? nish the loading or unloading. 3. 3. Flow characteristics The characteristics of the ? ow of goods that have to be processed by a cross-dock can be very different. The following characteristics are distinguished. Arrival pattern: The arrival times of the goods are determined by the arrival times of the inbound trucks. The arrival pattern can be concentrated at one or more periods if the inbound trucks arrive together at (more or less) the same times.

For instance, a cross-dock in the LTL industry serving a certain geographical area usually receives freight at two periods. Goods that have to be transported from inside that area to another area are picked up during the day and all pickup trucks arrive in the evening at the cross-dock. The goods are then sorted during the night and the outbound trucks leave in the morning. To simplify the problem, several papers assume that the inbound trucks arrive together (at the beginning of the time horizon). On the other hand, freight from outside the region but destined for that area arrives in the early morning and is then istributed during the day. Another possibility is that the arrival pattern is scattered and the inbound trucks arrive at different times during the day. The arrival pattern has an in? uence on the congestion of the cross-dock and on the scheduling of workers and resources. Departure time: The departure times of the trucks can be restricted or not. In many cases there are no restrictions and the trucks leave the cross-dock after all freight is loaded or unloaded. However, it is also possible that the trucks have to depart before a certain point in time, for instance in order to be on time for a next transportation task.

In this case, there can be restrictions imposed on the departure times of the inbound trucks only, so that these trucks have to be unloaded on time. In a similar way, it is possible that only the outbound trucks have to leave the cross-dock before a certain moment. 6 For instance, in the parcel delivery sector, the outbound trucks usually leave at a ? xed point in time. Parcels arriving late have to wait until another truck departs for the same destination. It is also possible that both inbound and outbound trucks have restricted departure times.

Product interchangeability: The freight handled at a cross-dock is in general not interchangeable. In this case, all products are dedicated to a speci? c destination7 or a speci? c outbound truck (pre-distribution). Information about the destination or the dedicated truck is normally known before the products arrive at the cross-dock. It is however also possible that interchangeability of products is allowed (post-distribution). In this situation, only the type of products to be loaded on the outbound trucks and the corresponding quantity is known (see footnote 7).

When the products are interchangeable, usually some value-added activities (e. g. labeling) need to be performed. 6 This point in time can be dependent on the (due dates of the) actual load of the truck. 7 The assignment of the products to a speci? c outbound truck is then an operational decision. 832 J. Van Belle et al. / Omega 40 (2012) 827–846 Temporary storage: In pure cross-docking, the arriving freight is directly transported to outbound trucks, so no storage is needed. In practice however, this is rarely the case. In general, the goods are temporarily stored on the ? oor of the cross-docking terminal (e. . in front of the stack doors) or even in a (small) warehouse. However, it is possible that goods are not allowed to be stored. For instance, if refrigerated products have to be cross-docked in a non-cooled terminal, these products have to be directly moved from a cooled inbound to a cooled outbound truck. 4. Literature review Cross-docking practitioners have to deal with many decisions during the design and operational phase of cross-docks. These decisions can have a serious impact on the ef? ciency, so they have to be carefully taken. In the literature, several decision problems are studied.

Some of these problems are more concerned about decisions with effects on a longer term (strategic or tactical), while others deal with short-term decisions (operational). This section gives a review of the existing literature about crossdocking problems. The literature review is structured according to the basic planning process a manager, wanting to start with cross-docking, is confronted with. The ? rst decisions that have to be taken during the planning process are strategic decisions: where will a cross-dock (or crossdocks) be located and what is the best layout of a cross-dock.

Once the cross-dock is available, it will be part of a supply network (with one or more cross-docks). A tactical decision that has to be made then is how the goods will ? ow through the network to minimize the costs, while making supply meet demand. Next, the manager is faced with the operational decision (although it has also tactical aspects) of vehicle routing: before arriving at the cross-dock, freight has to be picked up at various locations, and the goods have to be delivered to multiple locations after consolidation at the cross-docking terminal.

Other operational decisions deal with the assignment of trucks to dock doors or the scheduling of the trucks, and with the location where goods will be temporarily stored. Of course, the manager will also be confronted with problems that are not speci? c for cross-docking: the scheduling of the internal resources for the loading and unloading of the freight (e. g. the workforce), choosing the best staging strategy and determining an optimal truck packaging sequence. The next sections describe the cross-docking problems dealt with in the literature.

Only the problems that are speci? c for cross-docking are considered. First, the strategic decisions are discussed: the location of cross-docks and layout design. The tactical problem of cross-docking networks is described next. Further, the operational decisions are handled: vehicle routing, dock door assignment, truck scheduling and temporary storage. Finally, some papers that study other issues related to crossdocking are discussed. 4. 1. Location of cross-docks The location of one or more cross-docks is part of the design of a distribution network or supply chain.

An important strategic decision that has to be made concerns the position of these crossdocks. This problem cannot be handled isolated from the decisions that determine how the goods ? ow through this network. The determination of the ? ow of goods is discussed in Section 4. 3, but problems that also involve a decision about the location are considered here. The problem where to locate facilities (e. g. distribution centers or plants) has attracted a considerable amount of attention. 8 The papers discussed in this section determine additionally the optimal ? ow of goods through the network.

Moreover, they regard the facilities to be cross-docks because they explicitly take individual vehicles into account or because temporary storage is not allowed. A ? rst study about the location of cross-docks is performed by Sung and Song [34]. In the considered problem, goods have to be transported from supply to demand nodes via a cross-dock (direct shipments are not allowed). The cross-dock can be chosen from a set of possible cross-dock locations, each with an associated ? xed cost. The demands are assumed to be known and there are two types of vehicles with a different capacity and cost. The aim is to ? d which cross-docks should be used and how many vehicles are needed on each link in order to minimize the total cost. This total cost consists of the ? xed costs of the used cross-docks and the transportation costs. The authors present an integer programming model of the problem. This model is very similar to the model presented by Donaldson et al. [35] and Musa et al. [36] (discussed in Section 4. 3) and similar simplifying assumptions are applied. Compared with these two papers however, the approach of Sung and Song [34] does not consider direct shipments but does include the location decision.

Because the problem is NP-hard, a tabu search-based algorithm is proposed to solve the problem. The solutions determine how the goods ? ow through the network. Based on this ? ow, the number of vehicles can be derived by solving a subproblem. Some computational experiments are performed on generated test instances and indicate that the proposed algorithm ? nds good feasible solutions within a reasonable time. Sung and Yang [37] extend this work and propose a small improvement to the tabu search algorithm.

The authors also present a set-partitioning-based formulation of the problem and propose a branch-and-price algorithm based on this formulation to obtain exact solutions. The computational results show that this algorithm gives better results in terms of the number of (smallscale) problem instances solved and the required computation time compared with the results obtained by solving the integer programming model with the optimization software package CPLEX. ? ? Gumus and Bookbinder [38] study a similar problem, but now direct shipments are allowed and multiple product types are considered (multicommodity).

The facility cost for each crossdock consists of a ? xed cost and a throughput cost charged per unit load. The transportation cost also has two components: a ? xed cost for each truck and a variable cost per unit load per unit distance. A last cost that is taken into account is the cost for intransit inventory. In this approach, the synchronization of inbound and outbound trucks is not taken into account. The authors provide a mixed integer programming model of the problem. By solving several smaller problem instances optimally (with the optimization software packages LINGO and CPLEX), the in? ence of several cost parameters is studied. The authors conclude that the optimal number of cross-docks is an increasing function of the ratio between the (? xed) truck cost and the (? xed) facility cost. A different approach is taken by Jayaraman and Ross [39]. They study a multi-echelon problem in which goods (from multiple product families) have to be transported from a central manufacturing plant to one or more distribution centers. From there, the goods are moved via cross-docks to the customers. The problem is tackled in two stages. In the ? st stage, a strategic model is used to select the best set of locations for the distribution centers and cross-docks. The authors provide an integer programming formulation that aims to minimize the ? xed costs associated with operating open distribution centers and cross-docks and the 8 Several references can be found in the papers discussed in this section. J. Van Belle et al. / Omega 40 (2012) 827–846 833 various transportation costs. Demand splitting is not allowed: customers have to be assigned to single cross-docks while crossdocks have to be assigned to single distribution centers only.

In the second stage, an operational model decides upon the quantities of each product type that need to be transported via distribution centers and cross-docks. The model tries to minimize the transportation costs while satisfying customer demand. This model is less restrictive than the ? rst model (it relaxes for instance the demand splitting assumption) and can be executed once the open distribution centers and cross-docks are determined with the help of the ? rst model. Both models are more simpli? ed compared with the previous approaches.

For instance, individual vehicles are not considered and the transportation cost is proportional to the quantity to ship. The authors propose a simulated annealing approach to solve larger problem instances. The computational experiments on generated problem instances indicate that the heuristic gives results with a deviation of about 4% of the optimal solution (obtained with LINGO), but 300–400 times faster. In [40], the same authors present two other heuristics to tackle the problem. Both heuristics are based on simulated annealing but use an extra mechanism to avoid locally optimal solutions.

The ? rst heuristic makes use of a tabu list, the second heuristic allows a sudden re-scaling of the ‘system temperature’. For both heuristics, the solution quality and computational performance are tested for different ‘cooling schemes’. The experimental results indicate that the simulated annealing heuristic combined with tabu search gives better solutions in slightly more time. Bachlaus et al. [41] also consider a multi-echelon supply chain network, including suppliers, plants, distribution centers, crossdocks and customers. The goal is to optimize the material ? w throughout the supply chain and to identify the optimal number and location of suppliers, plants, distribution centers and crossdocks. The problem is formulated as a multi-objective optimization model that tries to minimize the total cost and to maximize the plant and volume ? exibility. Because of the computational complexity of the problem, the authors propose a variant of particle swarm optimization (PSO) to design the supply chain. Some computational experiments are conducted and the results show that the proposed solution approach gives better results than a genetic algorithm and two other PSO variants. his at the cost of additional corners which reduce the labor ef? ciency (two inside and two outside corners for T, four inside and four outside corners for X). An inside corner renders some doors unusable, while doors around an outside corner have less ? oor space available to stage freight. So, these additional corners are a ? xed cost, which begins to pay off for larger docks. It is however not always easy to predict which shape is better, because this also depends on e. g. the freight ? ow pattern. Other papers deal with the design of the storage area where the freight can be temporarily staged (on the ? or or in racks). In many cases, the freight is placed in several parallel rows and the workers can move between these rows. Vis and Roodbergen [16] deal with the operational decision where to temporarily store incoming freight (see Section 4. 7). The proposed algorithm can also be used during the design phase to determine the optimal number of parallel storage rows and their lengths. The (single-stage or two-stage) storage area can also be organized in parallel lanes directly next to each other which can only be accessed at both ends.

Gue and Kang [28] make use of simulation to study the behavior of these so-called staging queues. The results suggest that, for a single-stage storage area, it is better to have more short lanes than fewer long ones, at least when the workers follow a rational approach. The results also indicate that two-stage cross-docking has a signi? cantly lower throughput than single-stage cross-docking. 4. 3. Cross-docking networks Some authors do not study problems concerning a single cross-dock, but consider a network that contains one or more cross-docks.

The aim is to determine the ? ow of goods through such a network in order to reduce costs, while making supply meet demand. The research of Lim et al. [42] extends the traditional transshipment problem. The transshipment problem consists of a number of supply, transshipment and demand nodes. The arcs between these nodes have different capacity limits and costs. The objective is to ? nd a minimum cost ? ow that meets all demands and the capacity constraints. In the extended transshipment problem, storage is allowed at the transshipment centers.

These centers can be considered as cross-docks because the aim of the model is to minimize or eliminate holdover inventory. Moreover, this problem takes supplier and customer time windows into account and considers the capacity and holding costs of the crossdocks. All shipments have to pass via a cross-dock, so no direct shipments are considered. Similar to the original problem, the objective is to minimize the total cost (transportation costs and holding costs) while meeting demand and respecting the time windows and capacity constraints.

If multiple departures and deliveries within a time window are allowed (multiple shipping– multiple delivery), the authors show that a time-expanded network can be used to formulate the problem as a minimum cost ? ow problem (MCFP) which can be solved in polynomial time. For other cases, the authors prove that the problem is NP-hard. For the special case when only one delivery or departure is allowed within a time window and the departure and arrival times are ? xed (single shipping–single delivery with ? xed schedules), a genetic algorithm is developed by Miao et al. [43].

This heuristic gives better results (in terms of solution quality and computation time) than solving the integer programming formulation of the problem with CPLEX (with a time limit). Chen et al. [44] study a similar problem which they call the multiple cross-dock problem. The major differences are that supplies and demands are not-splittable and that different products can be considered (multicommodity ? ow problem). Also, transportation time is in this approach not taken into account. 4. 2. Layout design Once the location of a cross-dock is determined, another strategic decision that has to be made is to choose the layout of the cross-dock.

The layout is interpreted as the dimension and shape of the cross-dock, as well as the dimension and shape of the internal cross-dock areas and their arrangement. Bartholdi and Gue [5] focus on the shape of a cross-dock. Most existing cross-docks are long, narrow rectangles (I-shape), but there are also cross-docks shaped like an L, U, T, H or E. The crossdock shape is sometimes determined by simple constraints (e. g. size and shape of the lot on which it will stand), but in this paper the focus is on how the shape affects cross-dock performance.

Several experiments are performed in which the labor costs (estimated by the total travel distance)9 are measured for different shapes. The experiments suggest that an I-shape is the most ef? cient for smaller cross-docks (fewer than about 150 doors). For docks of intermediate size, a T-shape is best and for more than 200 doors (approximately) an X-shape is best. Cross-docks with a T or X-shape have a greater ‘centrality’. However, they achieve 9 Here and in the following pages, the travel distance is the distance traveled (by workers, forklifts, . . ) in order to transfer the goods internally from the inbound to the outbound truck. 834 J. Van Belle et al. / Omega 40 (2012) 827–846 An integer programming formulation of the problem is provided, together with a proof of its NP-completeness. The authors propose three heuristics (simulated annealing, tabu search and a combination of both) to solve the problem. These heuristics provide better solutions than those obtained by solving the integer programming formulation with CPLEX, within only less than 10% the time used by CPLEX.

Among the three heuristics, tabu search seems to give the best results. The previous studies represent the shipment of goods as ? ows. Individual transportation units are not considered and the transportation cost is proportional to the quantity to ship. However, to take advantage of consolidation, the vehicle transportation cost should be taken into account. A ? rst approach that does consider the transportation vehicles explicitly (and this is why the authors regard it as cross-docking) is taken by Donaldson et al. [35].

In the considered problem, the goal is to determine whether to route freight directly from suppliers to customers or via a cross-dock and how many vehicles should be scheduled on each transportation link in order to minimize the transportation costs. Compared with the previous approaches however, this problem is more simpli? ed, e. g. storage at the cross-docks is not considered and the synchronization of inbound and outbound trucks is left out of the problem. The authors eliminate links with a large transportation time in an attempt to consider time windows.

However, when the due dates at the destination nodes can vary for the different goods, it is possible that the vehicle allocation of an obtained solution violates the due dates in practice. The authors present an integer programming model of the problem. Because the problem is dif? cult to solve with branch-and-bound algorithms, an alternative approach is proposed. In this approach, an iterative procedure is used in which either the integrality restrictions on the links from origin nodes to the cross-docks or on the links from the cross-docks to the destination nodes are relaxed.

This relaxation heuristic provides near optimal solutions in an acceptable time. The authors used this approach to compare several scenarios (with a different number of cross-docks at different places) for the network design of a postal service company. The same problem is also studied by Musa et al. [36]. They propose an ant colony optimization (ACO) heuristic to solve the problem and show that this heuristic gives in a short time slightly better results than a branch-and-bound approach (with the optimization software package LINDO) that requires a much longer time.

The approach of Ma et al. [45] takes most of the above-mentioned concerns into account. The so-called shipment consolidation problem (SCP) considers supplier and customer time windows and also the transportation times between the network nodes. Moreover, storage at the transshipment centers (cross-docks) is taken into account, shipments can be transported directly to their destination or via a cross-dock and the transportation cost accounts for the number of trucks. However, only one type of products is considered (single commodity).

Again, the objective is to minimize the total cost (transportation and inventory cost) while satisfying the constraints imposed by the time windows. The authors present an integer programming model of the problem and show that it is NP-complete in the strong sense. Therefore, the authors propose a (two-stage) heuristic algorithm to solve the problem. The basic idea of the algorithm is to consider ? rst trucks that can be fully loaded and then to ? nd solutions that combine several smaller loads that are not considered yet. In the ? st stage, a full truckload plan (TL plan) and an initial less-than-truckload plan (LTL plan) are constructed. In the second stage, this initial LTL plan is improved iteratively by using a metaheuristic (squeaky wheel optimization or genetic algorithm). The computational experiments indicate that the proposed heuristic gives competitive results compared to CPLEX (with a time limit) within a much shorter time. 4. 4. Vehicle routing Freight destined for a cross-dock needs in many cases to be picked up at various locations, and has to be delivered to multiple locations after consolidation at the cross-dock.

Both the pickup and the delivery process can be seen as a vehicle routing problem and some studies consider cross-docking and vehicle routing simultaneously. A ? rst approach is taken by Lee et al. [46]. The aim is to ? nd an optimal routing schedule for pickup and delivery (within the planning horizon) that minimizes the sum of transportation cost and ? xed costs of the vehicles. It is assumed that split deliveries are not allowed and all pickup vehicles should arrive at the crossdock simultaneously to prevent waiting times for the outbound trucks. While this can be a valid constraint for some cases (see Section 3. ), this is not generally true. The authors present an integer programming model of the problem, which however seems unsatisfactory to solve the described problem. A tabu search algorithm is proposed to ? nd solutions. This approach corresponds to the solving of two vehicle routing problems (one for pickup and one for delivery). The second routing problem can only start when the ? rst one is ? nished and the complete process has to be ? nished within a certain planning horizon. Liao et al. [47] propose another tabu search algorithm to solve the same problem. Wen et al. 12] study the so-called vehicle routing problem with cross-docking (VRPCD). In this problem, orders from suppliers have to be picked up by a homogeneous ? eet of vehicles. These orders are then consolidated at a cross-dock and immediately delivered to customers by the same set of vehicles, without intermediate storage at the cross-dock. During the consolidation, goods are unloaded from the inbound vehicles and reloaded on outbound vehicles. The unloading must be completed before reloading starts. The authors assume that the duration of the unloading consists of a ? ed time for preparation and a duration proportional to the load size. It is also assumed that if the delivery will be executed by the same vehicle as used for pickup, the unloading is not necessary (independent of the sequence in which the vehicle is loaded during the pickup tour). A time window is de? ned for all suppliers and customers and orders are not splittable. In the case without consolidation, the solution of this problem can be found by solving two vehicle routing problems (one for pickup and one for delivery). Because of the consolidation however, the pickup and delivery routes are not independent.

Only trying to minimize the distance of the pickup and delivery routes is not suf? cient, the exchanges of orders at the cross-dock also have to be taken into account. These two aspects usually con? ict with each other. The authors present a mixed integer programming formulation of the problem in which the objective is to minimize the total travel time of all vehicles. This formulation contains many variables and constraints, so the authors propose to use tabu search embedded within an adaptive memory procedure. This method is tested on realistic data involving up to 200 supplier–customer pairs.

Experimental results show that the algorithm can produce solutions less than 1% away from the optimum within short computing times (less than 5 s) for small problem instances. For larger instances, the gap with a lower bound is less than 5% while the computation time stays below 5 min. 4. 5. Dock door assignment When an inbound or outbound truck arrives at the cross-dock, it has to be decided to which dock door the truck should be assigned. A good assignment can increase the productivity of the cross-dock and can decrease the (handling) costs. So, the dock door assignment problem tries to ? d the ‘optimal’ assignment of inbound and outbound trucks to dock doors. It is assumed that there are at least as much dock doors as trucks, so each truck will J. Van Belle et al. / Omega 40 (2012) 827–846 835 Table 1 Characteristics of the papers discussed in Section 4. 5. An ‘n’ indicates that not a single value of the characteristic is valid, but that all values can be used, ‘ns’ indicates that a characteristic is not speci? ed. Paper(s) Shape No. of doors n n n n n n n n n n n n Internal transport Manually Manually Manually Manually Manually n Service mode Exclusive Exclusive Exclusive Exclusive Exclusive Exclusive

Exclusive Exclusive Mixed Exclusive Mixed Exclusive Interchangeability Temporary storage Yes No ns ns ns Yes ns Yes Yes ns ns ns Peck [48] Tsui and Chang [49,50] ? Bermudez and Cole [51] Cohen and Keren [52] Oh et al. [53] Bartholdi and Gue [54] Gue [33] Brown [55] (semi-permanent) Brown [55] (dynamic) Bozer and Carlo [56] (semi-permanent) Bozer and Carlo [56] (dynamic) Yu et al. [57] I I n I I I I n n n n n Manually Manually Manually Manually Manually Manually Truck Destination Destination Destination Destination Destination Destination Destination Truck Destination Truck Destination e assigned to a different door and time aspects are not taken into account. If this condition is not ful? lled, the dock doors can be seen as (scarce) resources that have to be scheduled over time. This is the so-called truck scheduling problem. Both problems can be quite complex due to the number of doors and the dynamic nature of the problem. This section deals with the dock door assignment problem, while truck scheduling problems are discussed in Section 4. 6. The assignment of dock doors can be executed on a mid-term or short-term horizon [2].

Several papers solve the assignment problem on a mid-term horizon. Then, each dock door serves a speci? c inbound or outbound destination for a longer period of time (e. g. 6 months). 10 All trucks coming from the same origin or having the same destination are assigned to the same dock. Such a ? xed assignment is easier for workers because they know exactly to which dock door they need to ship each load, but it comes at the expense of a reduced ? exibility. Even if a ? xed assignment is used, it is important that the dock doors are reassigned when there is a signi? cant change in the shipping pattern.

When data about the inbound trucks are known far enough in advance, the assignment of the trucks can be solved on a shortterm horizon. The trucks itself are assigned to the dock doors based on the actual freight ? ow. This ‘? oating dock’ concept is put forward by Peck [48] who studied the material handling operations in an LTL terminal. Such an assignment implies that the workers are every day confronted with a different door for the same destination and have to take care that the freight is loaded into the correct truck. The use of modern information technology (e. g. ar code or RFID scanning together with a WMS) can be useful for this end. A combination of both is also possible. Several papers consider a cross-dock in which destinations are assigned to stack doors (so the outbound trucks are assigned on a mid-term horizon), while the assignment of the inbound trucks is done on a short-term horizon. The characteristics of the cross-docks considered in the following papers are summarized in Table 1. As time aspects are neglected and there are enough available dock doors, the preemption, arrival pattern and departure time characteristic are not relevant here and are not shown.

In his dissertation, Peck [48] develops a detailed simulation model of an LTL terminal and tries to assign the trucks to dock doors in order to minimize the travel time11 of the shipments. It is assumed that the travel time to transport the products between This includes that the cross-dock operates in exclusive service mode. Here and in the following pages, the travel time is the time required to transfer the goods internally from the inbound to the outbound truck. 11 10 two trucks can be expressed as a function of the distance, based on the actual contents of the trucks and the required means of transport (2-wheeler, 4-wheeler or forklift).

The designation of doors as either strip or stack doors is ? xed beforehand. The problem is formulated as an integer programming model and because of the computational complexity, a heuristic (greedy balance algorithm) is provided to solve it. Simulation shows that his heuristic improves an assignment based on experience and intuition. Another early study about the assignment of trucks to dock doors is performed by Tsui and Chang [49]. In this paper, a crossdock is considered in which no storage is provided; all shipments go directly from inbound to outbound trucks.

The problem is solved on a mid-term horizon, so the origins and destinations have to be assigned to dock doors, not the trucks itself. The designation of doors as strip or stack doors is ? xed. The assignment problem is formulated as a bilinear programming problem that tries to minimize the travel distance of the forklifts (the number of forklift trips required to carry a certain load is assumed to be known). To solve it, the authors propose a simple heuristic method to ? nd a local optimum.

The authors do not provide test results, but conclude that the found solution can serve as a good starting point for the cross-dock manager. There exist exact algorithms to solve bilinear optimization problems, but these are not very suited for this problem as the same authors mention in Tsui and Chang [50]. In this paper, a branch-and-bound algorithm is proposed to solve the dock door assignment problem exactly. The numerical tests show that this algorithm is however computational expensive. ? Bermudez and Cole [51] deal with a very similar problem, but now there is no ? ed designation for the doors. All doors can have assigned either an origin or a destination. The mathematical model of Tsui and Chang [49] is adapted to take this into account. The objective function minimizes the total weighted travel distance instead of the real travel distance. A genetic algorithm (GA) is propose

Report On Marketing Management K&N’s (Marketing Mix) Submitted To: Madam Shumaila Dilawar Submitted By: Aneela Jabbar BB-08-15 Aqsa Mehmood BB-08-06 Arif Zafar BB-08-8 Rabeea Rafiq BB-08-33 Sahar Naveed BB-08-54 Sana Fatima Malik BB-08-64 Zobia Malik BB-08-19 Dedication We dedicate this work solely to our loving and supporting friends and teachers and those who have ever been praying for our success. Acknowledgements First and foremost, we would like to thank our Creator, Family and Friends for their undying love. We would never have come so far without them.

We would also like to take this opportunity to thank my teacher, Madam Shumaila Dilawar, for her insightful guidance. Last but not least, we would like to thank our friends at Institute of Management Sciences that have always been proved helpful. For everything that is right, credit goes to all of the above. For anything that is wrong, we are culpable. Preface Practical leaning is an essential part of my education and it is the specialty that distinct the department of IMS from others. To have deep understanding of the concepts, only theoretical knowledge does not provide the concrete base. In this report we have bridge that gap.

The knowledge we acquired through this experience will be long lasting. Since we ourselves explored the field o work and analyzed different factors and variables. Introduction of K&N’s K&N’s, a founding pillar and beacon for Pakistan’s Poultry Industry started in 1964 with a single minded objective of providing better nutrition for health and happiness of the nation. Building on years of poultry expertise and commitment to food-safety, K&N’s integrated all poultry production activities under one umbrella to bring you safe and healthy chicken by managing and controlling all stages of production.

The year 1964; Pakistan a young independent nation forging ahead towards a dream: self sufficiency in food production. Malnutrition remained a major problem and one out of four children died before attaining the age of five. 80% of ailing children were affected with diseases caused by protein, vitamin and mineral deficiency. Poultry production, the quickest and least expensive way of filling the protein gap was planned to overcome malnutrition. Backyard poultry farming had to graduate to a more professional level. January 1964, a young man, Khalil Sattar, still a college student, had the vision to foresee a need to establish a poultry farm.

His interest led him to start a small broiler farm of 1,000 chicks. Little had he known this flock was to become the foundation stone of K&N’s? This was the simple, inspired and nationalistic beginning of K&N’s with a single-minded objective of providing better nutrition for Health and Happiness of the Nation. Poultry Breeding K&N’s maintains layer and broiler parent stock populations in different regions of Pakistan. Layer parent stock farms are located in the south and broiler parents are bred in the colder mountainous northern region. Both types of parents are housed at isolated breeder farms.

To ensure strict bio-security, all breeder farms work on the important principle of all-in-all-out to avoid multiple ages at any breeder farm. Breeding stock is housed in environment-controlled houses equipped with most modern ventilation, cooling and heating equipment. Some of the world’s best performances have been achieved at K&N’s. Strict bio-security measures are taken at all farms to reduce the risk of disease transmission through mechanically and physically transferred disease causative agents. Careful attention is paid to bird health, vaccination, weightage and selection to maintain healthy and uniform breeding flocks.

Hatching-eggs are cooled down inside air conditioned, humidified egg-rooms, packed and dispatched in sanitized and environment-controlled vehicles to company owned hatcheries located throughout Pakistan. Hatching K&N’s operates several strategically located hatcheries covering all day-old chick markets to ensure delivery of high quality layer and broiler day-old chicks to commercial farmers throughout Pakistan. All hatcheries are equipped with most modern cooling, heating and humidification systems to provide a uniform and consistent hatchery environment independent of varying outdoor weather conditions.

Incubators from world-renowned manufacturers are installed at all hatcheries and their performance data is recorded and monitored by a computerized incubation monitoring system. Upon arrival from breeder farms, hatching-eggs are candled at all hatcheries to remove eggs, which may have cracked during transit. Sanitation and hygiene is enhanced by mechanically transferring eggs from one type of tray onto another until chicks are harvested from hatchers. Maximum care is exercised while handling, reconstituting and administering vaccines using proper techniques and modern equipment.

To ensure chicks get off to the healthiest start and stay protected from viral diseases, they receive inject able and spray vaccinations at the hatchery. Day-old chicks are delivered to farmers in environment-controlled chick delivery vehicles to maintain quality during transit. After making deliveries, vehicles are washed and disinfected before entering the hatchery premises to avoid any risk of carrying disease causative agents back to the hatchery from the field. Feed Milling To ensure consistent performance with high standards, our chickens really live on a healthy and well balanced diet.

It is based on: natural grain products such as corn, corn gluten, rice and wheat; oil seed meals such as soybean, canola and sunflower; fish; oyster shells supplemented with multi-vitamins and minerals. Feed is always tested by our quality assurance lab to ensure it is wholesome because K&N’s does not compromise on quality. Feed is also supplied to our day-old chick customers and growers for realizing the profit potential of K&N’s quality day-old chicks. Poultry Processing At our state-of-the-art poultry processing plant, only healthy chickens are used to produce high quality, safe and healthy chicken products.

Chickens are Halal slaughtered by hand (Islamic Zabeeha) strictly according to The Shariah. After Halal slaughter, chickens are processed in the most hygienic and automated manner. During processing, the birds are washed inside out and our veterinarians constantly examine the birds to confirm they are wholesome. Cleaning is constant and each evening the entire operation is completely washed and sanitized. Only after very thorough inspection, the plant begins operation each day. All chickens pass through veterinary inspection to confirm they are wholesome.

To keep a continuous check on quality, hygiene and food-safety, random samples are collected from the processing line for lab testing. Some chickens are prepared to ship whole; others are packed as bone-in cuts or boneless products. Products for quality and food-safety conscious institutions – such as hotels, restaurants, airlines, clubs and international restaurant chains – are cut according to their specific requirements and packed in bulk packaging. Products for retail are packed in K&N’s branded packaging and individually weighed, adding another step to K quality control.

Products are then blast frozen at a very low temperature of –30? C to ensure product freshness, taste and food-safety. Ready-to-Cook and Fully Cooked Products Some chickens are used for preparing our ready-to-cook and fully cooked chicken products using state-of-the-art meat preparation and production equipment. Choicest meat is carved and select ingredients are added to our premium chicken meat, for preparing flavorful high-quality products such as burger patties, nuggets and kababs.

Our world-class value-added chicken products are individually quick frozen using Individual Quick Freezing (IQF) Technology. Distribution System and K Distribution stores Products are stored at -21? C to maintain freshness. Packed products are moved into K sanitized refrigerated trucks for distribution to ensure uncompromising quality control. K chicken products are available at K Chicken Stores and leading retailers and also delivered to quality and food-safety conscious institutions such as hotels, restaurants, airlines, clubs and international restaurant chains.

Quality Assurance Lab K state-of-the-art Quality Assurance Lab monitors the entire integration process, from livestock to feed and on to preparation of ready-to-cook & fully cooked products. The entire integration process is monitored and regulated to ensure K chicken products are wholesome, safe and healthy. K Poultry Diagnostic and Research Institute With the assistance of US Agency for International Development, K Poultry Diagnostic and Research Institute was established in collaboration with Pakistan Agricultural Research Council.

It is a very well equipped and state-of-the-art disease diagnostic, feed and feed raw material testing laboratory which provides invaluable service to Pakistan’s poultry industry through research and extension service in close coordination with K Advisory Service. Certifications •K’s ensures food-safety by implementing the HACCP* (international food-safety) System to produce safe and healthy chicken & chicken products. ( *HACCP (Hazard Analysis & Critical Control Points) — pronounced ‘hassap’— is an international food-safety system for preventing microbiological, chemical and physical contamination along the food supply chain. •Quality Management System at K&N’s is ISO 9001:2008 certified. Through this internationally recognized quality management system, K&N’s is able to control and monitor quality specific factors, which ensure consistency in its products and services while assuring customer satisfaction. •Chickens are HALAL slaughtered by hand (Islamic Zabeeha) strictly according to The Shariah. K&N’s slaughtering procedure has been assessed by Darul-Ifta ofJamia Ashrafia and Jamia Naeemia, both authentic institutions for granting Halal certification.

Corporate Social Responsibility K&N’s Advisory Service, a division of K&N’s, provides invaluable service to customers and the industry through the Nation’s widest network of sales, technical and extension service centers’. This division employs the nation’s largest team of veterinarians, nutritionist and highly experienced technical staff, and publishes technical bulletins, brochures, management guides and other advisory literature for customers, and also provides them with practical on-spot technical know-how.

Seminars are organized in all major cities and rural poultry centers where local and foreign experts are invited to address poultry farmers on latest poultry developments. Free of charge vaccination and de-betaking service is extended to customers, and least-cost feed formulations are also provided to farmers. Technical training programmes for poultry farmers are regularly organized and training is also imparted for carrying out vaccination and de-betaking. Through the training process, K&N’s has made a significant contribution to Pakistan’s rural development.

Tens of thousands of skilled and semi-skilled workers have been trained to provide service to industry, and to earn a livelihood for themselves and their families. Marketing Mix These are actually the 4 P’s of marketing. Marketing decisions generally falls into the following four controllable categories. Product Product is the actually offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). While formulating the marketing strategy, product decisions include: •What to offer? •Brand name Packaging •Quality •Appearance •Functionality •Accessories •Installation •After sale services •Warranty Price Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels. Price decisions include: •Pricing Strategy (Penetration, Skim, etc) •List Price •payment period •Discounts •Financing •Credit terms Using price as a weapon for rivals is as old as mankind.

But it’s risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality. Place (Placement) It not only includes the place where the product is placed, all those activities performed by the company to ensure the availability of the product to the targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions. Placement decisions include: •Placement •Distribution channels •Logistics Inventory •Order processing •Market coverage •selection of channel members Promotion Promotion includes all communication and selling activities to persuade future prospects to buy the product. Promotion decisions include: •Advertising •Media Types •Message •Budgets •Sales promotion •Personal selling •Public relations •Direct marketing As these costs are huge as compared to product price, so it’s good to perform a break-even analysis before allocating the budget. It helps in determining whether the new customers are worth of promotion cost or not. Product Features

For customers psychological benefits represent certain benefits they perceive to receive when using the product though these may be difficult to measure and may vary by customer. These benefits address needs such as status within a group, risk reduction, sense of independence, and happiness. Such benefits are developed through promotional efforts that target customer’s internal makeup. Four basic objectives of absolute integrity, enthusiastic diligence, continuous improvement and high quality maintenance are at the core of all operations which provide an impelling urge for attaining perfection.

Driven by its basic objectives in pursuit of perfection, K&N’s is committed to have superior product and unmatched service through devoted people and consistent development K products K have different product lines, but we will discuss only a single product line which is Ready to Cook meal. This category includes: •Nuggets •Chappli kabab •Burger patties •Chicken tempura •Kofta •Combo wings •Croquettes •Haray bharay nuggets •Hot tenders •Fun nuggets K from the very beginning has focused on providing better nutrition for the health and happiness of the nation.

Quality is very first priority that will make them build strong and profitable customer relationships. They are managing and controlling all stages of production in order to ensure 100% safe and healthy production of our product. Our product offers consumptions, attention to satisfy desire or need in the market. Level of Product • Core Benefit: providing the good taste. • Actual Product: our product includes all ingredients in packaging according to the core benefit. • Augmented Product: our product provide some benefits which are related to product just as recipe.

Branding Branding involves decisions that establish an identity for a product with the goal of distinguishing it from competitors’ offerings. In markets where competition is fierce and where customers may select from among many competitive products, creating an identity through branding is essential. It is particularly important in helping position the product (see discussion of product position) in the minds of the product’s target market Brand Names and Brand Marks At a very basic level branding is achieved through the use of unique brand names and brand marks.

The brand name, which may be either the individual product name or a name applied to a group or family of products, is important for many reasons including suggesting what the product is or does (e. g. , Mop-and-Glow). The name is also what we utter when we discuss the product (i. e. , word-of-mouth marketing). The brand mark is a design element, such as a symbol (e. g. , Nike swoosh ), logo (e. g. , Yahoo! graphic), a character (e. g. , Keebler elves) or even a sound (e. g. , Intel inside sound), that provides visual or auditory recognition for the product.

K brand Along with the developed brand identity and trust reposed by customers, K has established its name in international market as well. It is a well-developed and promoted brand. It is a strong brand which is leading to financial advantages through the concept of Brand Equity in which the brand itself becomes valuable. Packaging Nearly all tangible products (i. e. , goods) are sold to customers within a container or package that, as we will discuss, serves many purposes including protecting the product during shipment.

In a few cases, such as with certain produce items, the final customer may purchase the product without a package but the produce marketer still faces packaging decisions when it comes to shipping to the store. Factors in Packaging Decisions Packaging decisions are important for several reasons including •Protection – Packaging is used to protect the product from damage during shipping and handling, and to lessen spoilage if the project is exposed to air or other elements. •Added Value – Packaging design and structure can add value to a product.

For instance, benefits can be obtained from package structures that make the product easier to use while stylistic designs can make the product more attractive to display in the customer’s home •Visibility – Packaging design is used to capture customers’ attention as they are shopping or glancing through a catalog or website. •Distributor Acceptance – Packaging decisions must not only be accepted by the final customer, they may also have to be accepted by distributors who sell the product for the supplier. •Cost – Packaging can represent a significant portion of a product’s elling price. •Long Term Decision – When companies create a new package it is most often with the intention of having the design on the market for an extended period of time. In fact, changing a product’s packaging too frequently can have negative effects K packaging Each product is wrapped in butter paper, and then packed in sealed plastic bags that are safe for health, and then finally packed in the box. Some chickens are prepared to ship whole; others are packed as bone-in cuts or boneless products.

Products for retail are packed in K’s branded packaging and individually weighed, adding another step to K&N’s quality control. Products are then blast frozen at a very low temperature of –30? C to ensure product freshness, taste and food-safety. Labeling Most packages, whether final customer packaging or distribution packaging, are imprinted with information intended to assist the customer. For consumer products, labeling decisions are extremely important for the following reasons. •Labels serve to capture the attention of shoppers.

The use of catchy words may cause strolling customers to stop and evaluate the product. •The label is likely to be the first thing a new customer sees and thus offers their first impression of the product. •The label provides customers with product information to aid their purchase decision or help improve the customer’s experience when using the product (e. g. , recipes). •In some countries many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, providing nutritional information or including usage warning information.

K&N’s labeling ?K&N’s label is to attract the attention of the customers. ?COLOUR is attractive sharp red which is eye catching. These are the things which are listed on the wrappers ?Ingredients ?Nutrition Facts ?Procedure Nuggets Nutrition Facts Serving Size: 5 pieces (110g) Amount per serving Calories 263 Calories from Fat 147 % Daily Value* Total Fat 16. 30g Total Carbohydrate 14. 2g Fibers 1. 98g Protein 14. 90g Salt 1. 6g25% 5% 8% 30% * % Daily Value based on 2000 Calorie diet. Your daily value may be higher or lower depending on your calorie needs.

Procedure Appliances and utensils vary; adjust heating times accordingly. Do not defrost Karahi (Wok): Preheat oil to frying temperature (180°C). Deep fry frozen Nuggets for 3 minutes, or until golden brown. Oven: Preheat oven to 230°C. Bake frozen Nuggets on a baking sheet (turning halfway through baking) for 5 minutes, or until golden brown PRICING STRATEGIES Pricing is the monetary value of the benefit that a customer is paying to get that particular benefit. So a company is very careful in setting its prices. As we know that there are two types of new product pricing strategies Market skimming pricing •Market penetration pricing For its product K&Ns have selected the market penetration pricing strategy. They apply this strategy to keep their product prices lower so that by doing this we attract a large numbers of buyers and also to gain large market shares. The reason for not using market skimming strategy is that as its product is an eatable product and there is no sense of keeping high prices for an eatable product, because as K&Ns knows that skimming strategies are for luxury products. PRICE ADJUSTMENT STRATEGIES

After penetrating into the market, K&Ns will adopt adjustment strategies in order to increase its sales and attract more customers. Basically these adjustment strategies are according to the taste, culture and the changing situation of the market. Following are the price adjustment strategies. Segmented pricing. Psychological pricing. Promotional pricing. Geographical pricing. International pricing. DISCOUNT AND ALLOWANCE PRICING K&Ns applies this strategy by giving quantity discount to its customers. Quantity Discount: K&Ns gives quantity discount by offering “buy one get one free” offers.

Besides this K&Ns also gives discount to those customers who will buy in bulk or in large quantity. Segmented pricing: K&Ns launched its product in almost all the parts of the country with almost the same prices. They segmented their product price in the following ways. Time pricing strategy: In time pricing K&Ns lowers its prices according to different seasons. It reduces prices in Ramadan season, as its demand is more in that season. Promotional pricing: This strategy involves temporary lowering of the prices of the product below the cost to increase the short run sales.

K&Ns applies this strategy when any one of its competitor lower its product price in order to grab market shares. To compete with them it also lowers its product price so that it can retain its market shares. Geographic pricing: In Geographic pricing K&Ns adopts freight absorption strategy. Freight absorption strategy: K&Ns do not add freight charges to its product price in order to keep its product price lower, as its focus is to capture more customers. International pricing: As K&Ns is not yet internationally recognized so K&Ns do not set international prices for its products.

K&Ns is only serving nationwide so it sets prices of its product nationally. PRICE CHANGES: Some time companies have to initiate price change after developing pricing strategies Because of different reasons, Price change could be a price cut or price increase. Initiating a Price Cut: K&Ns already set a low price for its product but it cuts price of its product if its sales will not increase accordingly, in that situation K&Ns will cut the price in order to increase sales and to capture market shares. Initiating a Price increase:

Once K&Ns product achieved a position in a market and it sets a good image in the consumers mind and has a large number of potential buyers then K&Ns might increase its product price. But its aim is to give good quality product in an affordable price. K&Ns can initiate its product price when its product demand increases and K&Ns cannot supply according to the demand but INSHALLAH this situation will never come because K&N’s has its own poultry and breeding farms. Buyer’s Reaction to Price Changes: Changing in price has a great effect on the consumers mind.

They think that there should be some problem with the product so the company is decreasing its product price or the customers may interpret it as the company is closing its business and they will not offer this product in future. On the other hand price increase also affects the buyers in a way that they think that this product is unobtainable unless they buy it soon. They also think that the company is greedy and they are charging more prices for their product. Competitor’s Reaction to Price Changes: K&Ns is aggressive while changing its product price and has to change its product price according to the competitor’s product price.

So K&Ns keeps its competitors into consideration before lowering or increasing its product prices. Responding to Price Change: If any of the competitors of K&Ns changes the prices it affects its sales. So K&Ns analyzes the change and react to it accordingly. Like if they low their price it will decrease its sales so K&Ns then adopts strategies to increase its sale by lowering its prices, giving discounts or improving quality of its products. PLACE Place include company activities that make the product available to the target customers.

For customers, product and service should be as conveniently available as possible. This includes the strategies, how the organization is going to distribute the product or service to the end users. Distributing the right product at right time is the rule of thumb. Efficient and effective distribution is important to meet all the desired marketing objectives of the firm. If the firm is not understanding or underestimating the demand of the customers and customers are not getting the product due this negligence then it is going to affect the overall profitability of the firm in the long run.

PLACE MIX DECISIONS: Place mix decisions include designing the strategies for the better availability of the product at the right time to the target customers to achieve organizational objectives. It comprises decisions about: •Channels •Coverage •Assortments •Locations •Inventory •Transportation •Logistics CHANNEL OF DISTRIBUTION: Channel of Distribution involves the routes of getting the product from the manufacturer to the ultimate consumer. These channels of distribution are also called intermediaries.

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. Types of channel of distribution: There are two types of channel of distribution of the products or services available. •Indirect distribution: it involves the distribution of the product by the use of an intermediary for example selling the product to the wholesaler and then on the way to the retailers. Direct distribution: it involves the direct distribution of the product from the manufacturing concern to the consumer, without involvement of any third party or middle men. There is an advantage of direct distribution over indirect distribution that the manufacturer gains complete control over the consumer. The following figures depict the two types of channel distribution. INDIRECT CHANNEL OF DISTRIBUTION DIRECT CHANNEL OF DISTRIBUTION Distribution strategies: Depending on the types of the product, there are three major types of channel of distribution strategies available. . Extensive distribution: It is commonly used to distribute low priced or impulse purchase products e. g. chocolates and sweets etc. 2. Selective distribution: Here a small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread. 3. Exclusive distribution: It involves limiting distribution to a single outlet.

The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers. If the manufacturer decides to choose selective or exclusive distribution, then it must select an experienced, creditable and renowned intermediary. COVERAGE: Number of active retail and/or wholesale outlets (relative to a saturation level) that sell a specific firm’s brands in a given market. Required market coverage is achieved by following concentrated marketing, differentiated marketing, or undifferentiated marketing strategy.

Concentrated marketing: Concentrated marketing or niche marketing is market-coverage strategy in which a firm goes after a large share of one or a few segments niches. It appeals to the marketers when company resources are limited. Through niche marketing, the firm achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves and a special reputation it acquires. It can market more effectively by fine tuning its products prices and programs to the needs of carefully defined segment.

It can also market efficiently, targeting its products or services, channels and communications programs toward only consumers that it can serve best and most profitably. It is highly profitable but at same time provides with greater than normal risks as companies solely depend on fewer segments for their business and large competitors can enter the same segment with greater resources. Differentiated marketing: Differentiated or segmented marketing is market -coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

By offering product and marketing variations, companies hope to get higher sales and strong position in each market segment. But there is a drawback that differentiated marketing for each segment bears a lot of cost to satisfy each target segment’s customers. Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion planning, and channel management. Mass marketing: The marketing strategy that provides an opportunity to the organizations to appeal to a wide variety of potential customer is mass marketing or undifferentiated marketing.

Here a firm ignores the market differences and go after the whole market with another. The idea is to broadcast the message to the largest number of people possible. Mass marketing creates the largest potential market that yields to lower cost as it focuses on high sales and low prices. Typically, things which are perceived to necessary or essential to the consumer are subject to mass marketing. On the contrary, mass marketing fails to satisfy all consumer needs and face trouble to compete other firms following better marketing approaches.

ASSORTMENTS: Assortment means the group or collection of products and services offered in the market for sale. It refers to the variety of the offering being available in the market according to the customer’s demand. Role of channel members: Channel members play a vital role in assorting the quantity and variety of the products according to the market and consumer’s needs. Producers use these intermediaries because they create greater efficiency in making goods available to the target markets.

Through their contacts, market insight and scale of operation, they transform the assortments of the products made by the producers into assortments wanted by consumers. Producers make narrow assortments of the products in large quantities, but consumers want broad assortments of the products in small quantities. Marketing channel members buy larger quantities of the products from the producers and break them into smaller quantities and broader assortments wanted by consumers. So, intermediaries play an important role in matching the supply and demand in the market. LOCATIONS:

The location for the sale of the product is analogous to distribution center. A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be re-distributed to retailers, to wholesalers or directly to consumers… A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation.

Distribution centers are the foundation of a “supply network” as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources and inventory as applicable. How a distribution center operates? The way a typical retail distribution network operates is to have centers set up throughout a commercial market. Suppliers will ship truckloads of products to the distribution center. The distribution center will then store the product until needed by the retail location and ship the proper quantity.

Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center. Storage at distribution center: Another important secondary role of distribution center is storage. Many retailers have prioritized having as many items in stock at one time as possible. To conserve space, minimize inventory costs, and maximize the variety they offer the retail might only stock one or a few items of a particular product.

This requires the ability to ship a replacement quickly once an item is sold. By keeping product on hand in the distribution center, the retailer can ship a replacement almost immediately after a product is sold. Storage location and storage containers: Goods (products) arrive and are stored in a distribution center in varying types of storage locations and containers suited to the product characteristics and the amount of product to be transported or stored. These types of locations and containers have specific industry accepted names. There are specialized and various types of containers.

The following is a list of some of the names and characteristics of common storage containers: •Intermodal containers (shipping containers) – are used for the efficient transportation of goods. There are standards that specify the volume and dimensions of containers to facilitate efficient handling. •Pallets- are one of the most commonly used means to store and move product in a distribution center. Pallets are stored on the floor, may be stacked, and may be stored in pallet rack. •Gaylord’s- are large single boxes usually connected or attached to a pallet. Cases and Cartons- are boxes usually containing many items. In distribution centers there is a generally accepted distinction made between the terms carton and case although both are boxes. Goods are received and stored in cartons. Goods are shipped in cases. A stored carton is called a case once it has been picked or pulled for shipment. •Totes- are reusable containers used to hold and transport goods. INVENTORY: Inventory or stock means a list compiled for some formal purpose, a list of goods and materials to the goods and materials themselves, especially those held available in stock by a business.

Manufacturers’, distributors’, and wholesalers’ inventory tends to cluster in warehouses. Retailers’ inventory may exist in a warehouse or in a shop or store accessible to customers. Reasons for keeping stock: There are three basic reasons for keeping an inventory: 1. Time – The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this “lead time. ” 2. Uncertainty – Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods. 3.

Economies of scale – Ideal condition of “one unit at a time at a place where a user needs it, when he needs it” principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory. While the reasons for holding stock were covered earlier, most manufacturing organizations usually divide their “goods for sale” inventory into: •Raw materials- materials and components scheduled for use in making a product. •Work in process, WIP- materials and components that have begun their transformation to finished goods. Finished goods- goods ready for sale to customers. •Goods for resale – returned goods that are salable. Inventory management: Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status. The improvement of inventory management has two parts: the capability of the organization to manage inventory, and the way in which it chooses to do so.

For example, a company may wish to install a complex inventory system, but unless there is a good understanding of the role of inventory and its parameters, and an effective business process to support that, the system cannot bring the necessary benefits to the organization in isolation. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs. TRANSPORTATION:

Transport or transportation is the movement of people and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations. Transportation infrastructure: Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations), and seaports.

Terminals may be used both for interchange of passengers and cargo and for maintenance. Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the procedures set for this purpose including financing, legalities and policies. In the transport industry, operations and ownership of infrastructure can be either public or private, depending on the country and mode. LOGISTICS:

Logistics can be classified as an enterprise planning framework for material management, information, service and capital flows. In the words, logistics can be defined as having the right type of product or service at the right place, at the right time, for a right price and in the right condition. The primary goal of the logistics is to effectively manage the product life cycles and resultant efficiency. Logistics does not mean a single work activity but refers to a group of activities performed to attain the goal of a business enterprise that is maximizing the Profits.

This may involve steps like purchasing, planning, coordination, transportation, warehousing, distribution and customer service. Logistics management: Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements. A professional working in the field of logistics management is called a logistician.

Logistics management is known by many names, the most common are as follows: •Materials Management •Channel Management •Distribution (or Physical Distribution) •Business or Logistics Management or •Supply Chain Management PLACE MIX_K: K chicken products are available at K Chicken Stores and leading retailers and also delivered to quality and food-safety conscious institutions such as hotels, restaurants, airlines, clubs and international restaurant chains. It has a strong supply chain through its distribution channels. In Pakistan K is operating in more than 35 cities.

There is very diversity in its distribution. We take the example of Islamabad city . In Islamabad there are many stores as well as retailers in every sector, and only in I-8 there is one K store and 17 retailer’s shops. DISTRIBUTION OF PRODUCT: After the development of product, product should be distributed into the market for the satisfaction and attraction of our consumers. The products play a vital role in the availability of their services to attract the customers. How to Distribute Product to Retailers: K follows the following ways to distribute product to retailers: •Sell Directly to Retailers Sell through distributors, which sell a broad range of products to many retailers •Sell through captive distributors, which sell a broad range of products to one chain of retailers. •Sell through distributors, which sell to targeted customers. Distribution Channel of Product: The distribution channel of our product is indirect marketing channel because this channel contains one or more intermediary levels. Cities in which products are available: In Pakistan, K chicken is available in the following cities. Abbottabad, Bahawalpur, Chakwal, Chiniot, Daska, D. G. han, Dharki, Dina, Faisalabad, Farooqabad, Gujar Khan, Gujranwala, Gujrat, Hyderabad, Islamabad, Jaranwala, Jhelum, Kabirwala, Kamra, Karachi, Khanewal, Kharian, Lahore, Lalamusa, Larkana, Machi ghot , Mangla, Mansehra, Mardan, MirpurAJK, Mirpur Methelo, Mirpurkhas, Multan, Murree, Noshehroferoz, Nawabshah, Noshehra, Okara, Panu Aqil, Peshawar, Pitaro, Quetta, Raiwind, Rawalpindi, Rahimyarkhan, Risalpur, Sadiqabad, Sahiwal, Sargodha, Shorkot, Sialkot, Sukkar, Tandoadam and Wah cant. Promotion Strategies: Promotion is the activity in which the company has a chance to interact with its customers.

To Promote K uses different promotional tools. These tools include advertisements, sale promotions, public relations, personal selling and direct marketing. Advertisements: It uses informative advertising because it is mostly used when introducing a new product. The objective of it is to build primary demand. It will use the persuasive advertising when it has a competition in the market. Sales Promotions: In sales promotions it uses different discount strategies, giving short term incentives in order to increase its sales.

It also introduces sponsorships, memberships and discount coupons. Memberships: K also offers memberships to its customers. The K’s Way Club membership is free. One can enroll by just filling the form, click submit and simply print the Temporary Card. Temporary card: Having enrolled as a new club member, you can use your Temporary card to earn points with immediate effect. Please remember to always present this Temporary Card while shopping at K&N’s Chicken Store for point’s credit into your club account. Club card and pin:

Along with your club Member card, you will also receive a 5-digit PIN (Personal Identification Number). You will need this PIN (along with your club card number) to enquire about your account balance; update your individual club profile online, and for all other club online services. As a new member, it is important to know you cannot use our online services, nor redeem your points, until you have received your PIN. One can also enroll oneself by filling out the Enrolment Form available at all K&N’s Chicken Stores and send it to the company.

One has to detach The K’s Way Club Temporary Card and retain it. After becoming the member, K&N’s offers different discounts, exclusive privileges and other benefits to its members when they collect points. The more they collect, the more they benefit. As a member every time you shop at any K&N’s Chicken Store in Pakistan, you earn valuable points which can be redeemed for free K&N’s products. Number of points: Number of points earned is directly related to purchase amount, K product category and your status within The K’s Way Club. You earn 2. 50 status and award points for every Rs. 0/- spent on Whole Chicken, Designer Cuts and By-Parts. For Boneless products you earn 3. 50 points, while for Ready-to-Cook, Fully Cooked and Deli Line Products you earn 5 points for the same amount spent. Your club status determines whether you will be able to enjoy additional benefits and privileges associated with Silver, Gold or Circle status within The K&N’s Way Club Program. Award points: Award points are earned every time you shop at a K&N’s Chicken Store. As the name suggests, award points can be exchanged for awards, such as free K&N’s products and special discounts.

Award points can also be earned against special K’s product offers and promotions from time to time. Award points do not count towards determining club status. Status points: Status points are earned simultaneously with award points every time you shop at a K&N’s Chicken Store. As the name suggests, status points determine club status and enable you to move towards and/or retain the higher Silver, Gold or Circle status. Certain limited time promotions or special offers may be excluded from status points’ accrual. Executive bonus:

A higher status of Silver, Gold or Circle within the Club also entitles you to an Executive Bonus on award points earned, even for the same purchase amount. If you have Silver status, you earn 25%. Gold status entitles you to 50%, while Circle status gives you 100% Executive Bonus. Executive Bonus is not applicable on Status Points. Member: Once you have reached 50 status points K&N’s welcomes you as a permanent Member of The K&N’s Way Club where a world of privileges, attractive awards and benefits are offered to the customers on their future shopping.

Silver: Attaining Silver status is easy and within reach. To start with, a customer has to earn 25% Executive Bonus award points on every purchase he makes, and enjoy a host of other privileges designed for the Silver members. Gold: A customer has to earn required number of status points and he gets the Gold status The K’s Way Gold members get as much as 50% Executive Bonus award points on purchases, 6 discount eVouchers in a calendar year for attaining or extending the status each time, and other privileges designed only for the Gold members.

Circle: The K&N’s Way Circle status recognizes the loyalty of the exceptional customers. It offers these privileges as an expression of their utmost appreciation for the loyalty of their exclusive ‘circle’ of such customers. For instance, if a customer treats himself to 100% Executive Bonus award points on his purchases, 12 discount eVouchers in a calendar year for attaining or maintaining the status each time and other privileges designed exclusively for their Circle members. Personal Selling It also promotes its product through personal selling.

Personal selling is more effective than any other promotion strategy. Through personal communication, it is easy to persuade someone to buy your product, because in personal selling there is a direct contact with the buyers. Public Relations: To increase its sales it also ties good public relations. K&N’s develops its public relation by doing the work of social responsibility, like wishing happy Eid or wishing any other special event to the customers. Through Public relations it also creates a good word of mouth for the product which is the most efficient way of promoting a product.

Direct Marketing: In direct marketing K&N’s targets its customers through internet, telephone, print media and electronic media (television and radio). Print Media: It promotes its product through print media by advertising its product in newspapers and in different magazines. K&N’s adopts this type of advertising when it wants to introduce some new discount packages or sales offers. Other then advertising in newspapers and in magazines it also advertises its product on bill boards and banners. Electronic Media:

To promote its product through electronic media K&N’s advertises its product on different television channels and on radio stations. To make its product information more convenient and easy it provides its website and 24 hours toll free numbers, through which the customers can contact and also give feedback about the product. The website of K&N’s is http://www. kandns. com Promotion for kids: To make its products favorite among kids, K&N’s introduced a product called “Fun Nuggets”. It has designed special advertisements for children.

As kids are more attracted by cartoons, K&N’s has used cartoon characters like dinosaurs, dolphins and ducks and have given them special names like Din Din, Dolf and Ducky to make their products familiar with kids. K&N’s Cooking show: To promote its product, K&N’s has now brought a dedicated cooking show for quick recipes with answers to all viewers’ ‘how do you do that’ questions, and helpful tips – all at Smart Cooking with K’s! Chef Mehboob Khan is the name consumers trust and count on for reliable and tasteful recipes.

People can now watch him use a wide range of K&N’s chicken products for easy-to-prepare recipes like Lahori Karahi, Chicken Ala Kiev, or Fajita Wraps. Smart Cooking with K&N’s is aired on every Saturday 6:30pm, Sunday 4:00pm and Wednesday 2:00pm, on ARY Zauq. In this winter, to promote its products, K has now offered discounts on its products like Croquettes and chapli kabab. Similarly, in Ramazan, K offered its members to get 50% bonus award points on all of its products. In the same way, it had offered its members price discounts on Haray Bharay Nuggets and Tender Pops in Ramazan.

Other then the print and electronic media the cheapest way to promote the product is through Short messaging service: They have a contract with different cellular companies where they will send K promotional messages to their special numbers. K face book page: K has also created face book page. Now-a-days, many companies, designers and artists are making their fan pages on face book for the advertisements of their products. People go on these pages, learn about the products, give their comments, resolve their queries and recommend these pages to their friends.

In the same way, K has made its face book page to advertise its products. Its face book link is: http://www. facebook. com/pages/KNs-Chicken/120891524596651 Promotion Budget: To allocate budget for the promotion strategies K uses objective and task method. According to this method first it defines its promotion objectives, that why are they promoting their product? After that they determine different tasks to accomplish those objectives and at the end they estimate the cost utilized in performing these tasks. PRODUCT POSITIONING

It is the evaluation of a company’s product’s position that what place it occupies in the market and how customers differentiate it from other products. Choosing positioning strategy To position the product different companies use different positioning strategies. Major competitors: Major competitors of K and N are •Kitchen confidence. •Mano Salva, • seasons canola`s menu •Locally available chicken Kitchen Confidence basically produces frozen products like Chicken Nuggets. Burger Patties, Meat balls, Samosa,Rolls etc. Recently co. has started non frozen item i. e. Bread Crumbs.

Salwa Foods offers an assortment of deep frozen food products for both retailers and food service. The assortment ranges from basic standard products to highly refined ready-made products. Salwa foods have launched its ready to cook items under the name of Mano Salwa. Season’s canola has launched its range of ready to cook food items with the name of menu. But the largest of the competitors that was a challenge to K and N was the locally available chicken in the market. It had the stereotypic advantage of being truly Halal and cheap than any kind of chicken available in packets in frozen form.

Competitive Advantages Following are the competitive advantages that make it different K & N from rest of its competitors. Product Differentiation: We offer a pack of four. Each separately wrapped in butter paper, combined packed in sealed plastic bags that are safe for health, and then finally packed in the box. Service Differentiation: Our product will be accessible and will be available at every outlet of K. Channel differentiation: In Pakistan K is operating in more than 35 cities. There is very diversity in its distribution. We take the example of Islamabad city .

In Islamabad there are many stores as well as retailers in every sector, and only in I-8 there is one K store and 17retailer’s shops. People differentiation: Technology is highly involved in the production so we will hire trained staff, those who knows how to operate the machines. We also hire qualified staff in order to guarantee healthy relationship between customers and retailers. Image differentiation: Since our product comes under K brand name hence a good image will be casted over the consumers. Also K is a symbol of quality; hence will automatically be recognized as a quality product.

Product Chain K are enjoying their own product chain. They have their own breading and poultry forms, from where they get there raw material for their product. Choosing the right competitive advantage •Important: We deliver highly valued benefits to our target customers in our products. •Distinctive: we have no strong competitor and enjoy distinctiveness in the market. •Superior: we are providing pure hygienic food in at comparable prices. •Communicable: the consumers can feel the difference in our quality, taste, hygiene and prices that are communicable. Preemptive: competitor needs a lot and lot of hard work to match our standard else it is not possible. •Affordable: Buyer can afford to pay for the difference. •Profitable: the difference is profitable both for the company and the customers. Selecting an overall positioning strategy Our overall positioning strategy will be focused on More for Less winning value proposition i. e. will offer more quality at less price range and we will focus on the needs and wants of target customers in order to give high customer value and satisfaction POSITIONING STATEMENT

To target the teenagers, working women, hostilities and bachelors, we offer, a ready to eat hot and spicy paratha, with high quality, affordability and accessibility. Conclusion We have come to a conclusion that K is the most superior and famous quality delivering company. Its Promotion through advertising is highly frequent on different TV channels. It has differentiated itself from its competitors by having highly trained sales person with different discount allowances and coupons. It has developed strong bonds with its customers. It