t a p a l m a k e s t e a t i m e t e r r i f i c

A hot cup of tea at 7:30am at the breakfast table just before rushing out for the office and not forgetting to drop the kids to school; in the afternoon after a stressful morning at work; while sitting in the garden with friends at 6pm in the evening; at night with family enjoying precious moments; on a late Sunday morning in bed- Tea is an integral part of our lives. And Tapal is the favorite tea brand for people in Pakistan. Here is why…

TABLE OF CONTENTS

1. Introduction

2. History/Background

3. Product Information

4. Organizational hierarchy

5. Setup Location

6. SCM Hierarchy

7. Functions

7.1. Planning7.2. Suppliers7.3. Production / Manufacturing / Imports & Exports7.4. Warehouse7.5. Logistics7.6. Distribution

8. Support from Departments

8.1. IT8.2. Marketing8.3. Sales8.4. HR8.5. Finance

9. Recommendations & Conclusion

DISCOVERY OF TEA

In 2727 B.C Chinese Emperor Shen-Nung was boiling drinking water when a few leaves of a wild tea tree blew into the royal bowl. He discovered that the leaves imparted a delightful flavor to his water; and so it became his fLavored drink.

It is probable that tea was first cultivated in China, though it is possible that people in Thailand and Burma have used it for as long as the Chinese have. The China tea plant was taken to Japan in about AD 800, where it was regarded as a medicine for several hundred years, until green tea was developed to become a popular beverage. Tea was introduced into England, as a gift from the British East India Company, in about AD 1660 and to rest to Europe soon thereafter.

By the end of the 19th century, China still supplied the bulk of the world’s tea. In 1886 it exported 136 million kg, of which 77 million kg went to Britain; while India produced 40 million kg. But within a few years India moved ahead of China in world trade. Ceylon (Shri Lanka) emerged as a tea producer in 1867 and Java (now part of Indonesia) in 1878.

Today traditional tea growing countries of China, India, Indonesia, Sri Lanka and Japan have been joined by many others in South America (Argentina, Brazil, Peru, Ecuador) and Africa (Kenya, Uganda, Tanzania, Malawi, Rwanda, and Mozambique)

INTRODUCTION

TAPAL’s SUCCESS STORY

The journey of Tapal's remarkable success is the combined efforts of three dynamic generations of the Tapal Family. In 1947, Tapal started out as a family concern under the personal supervision of its founder, Adam Ali Tapal.

Against tough competition Adam Ali's unique blend, later named Family Mixture, became a hot favourite and eventually the largest selling brand in the unorganized tea market. From this auspicious beginning, Tapal moved from success to success introducing tea brands to suit every taste and pocket, sold from its retail outlet in Jodia Bazar, Karachi. The quality of Tapal teas soon became legendary and people from all parts of Karachi started lining up at the outlet to purchase tea. For their convenience, tea distribution was initiated to retail outlets around the city. The company continued to grow under the management of the founder's son, Faizullah A. Tapal.

Today Tapal Tea is managed by the founder's grandson, Aftab F. Tapal. After studying abroad, Aftab Tapal returned to Pakistan to introduce professional management and unique production ideas to the business. A well trained tea taster and tea connoisseur himself, Aftab Tapal introduced new tea concepts and developed a wide range of tea blends catering specifically to the tastes of people throughout Pakistan. His progressive outlook resulted in giving further strength to the foundation of quality laid by his family.

Making a modest beginning over half a century back , today Tapal has become the largest, 100% Pakistani owned tea company in the country. It has modern tea blending and packaging factories, warehouses equipped with state-of-the-art equipment and a team of highly dynamic professionals headed by Aftab Tapal himself.

Tea Market 100% Branded Tea 50% approx.Unbranded Tea 50% approx.

Tapal’s market share 25-30%Unilever’s 35%Others 30%

FORMULA FOR SUCCESS

Tapal's success has astounded many. However no magic formula lies behind its growth other than hard work, dedication and of course unique tea blends. As a result, Tapal has won the hearts of countless tea drinkers across the country.

Tapal's deep rooted culture and core values differentiate it from its competitors. It is built on sound principles and practices; not dominated by a group of individuals. Their greatest assets are its people; and the consistency of principle and policy give the direction.

TQM & KAIZEN

"Never compromise on quality" has been the motto at Tapal since the very beginning. This commitment to quality has resulted in a high level of customer satisfaction and unflinching brand loyalty. In December 1997, Tapal Tea became the first Pakistani Tea Company to earn the ISO-9001 certification: a symbol of the highest international quality standards. Again in December 2000, Tapal acquired the ISO9001: 2000 certification, making it one of the first few companies in the world to achieve this milestone. In addition to the standard requirements, the ISO9001: 2000 certification system includes requirements for environment improvement, concepts of TQM (continuous improvement) with major emphasis on consumer requirements and satisfaction.

QUALITY POLICY

The Management and the employees of Tapal Tea (Pvt.) Ltd. are committed:

• To produce products that meet the customer's requirements & expectations.• To fulfill the requirements and effectiveness of the quality management system through continual improvements.• By constantly reviewing / updating the relevant quality objectives of

products & processes.• To participate as teams or individually towards the improvement of processes, personnel, environment & ethical values.

LEADERS IN INNOVATION

Always on the move, Tapal Tea is honored to have taken the lead in a number of areas in the tea industry. Tapal has been:

• The first to introduce soft packs in the country.• The first tea company to introduce metal-free tea bags.• The first to develop an entirely new blend and category-Tapal Family Mixture (the mixture of leaf & dust).• The first to invent the highly successful brand Danedar Leaf Blend.• The first to market Kenya teas in Pakistan. • The first tea company to be awarded the ISO 9001/2000 Quality Certification

As a step towards backward integration Tapal has begun tea plantation at Shinkiari in the northern region of Pakistan. This project aims at providing jobs, saving the country's valuable foreign exchange and is a significant step towards self-sufficiency. Tapal is also the 1st national tea company to export tea to the UAE, Canada and USA. This is again a pioneering step towards increasing value-added exports and is also a fast developing source of foreign exchange for the country.

PIONEERS OF SOFTPACKING

Technology is also harnessed at Tapal to benefit the consumer. From the very beginning, Tapal realized the importance of importing innovative technologies such as the soft packing process. A fully automatic facility was established where soft packs were produced for the first time in Pakistan. At this facility tea is blended and packed in hygienic conditions, untouched by human hands whilst the soft packing technology keeps tea fresh and packaging costs economical. The success of these soft packs has been such that other tea companies have also followed Tapal's lead and launched some of their brands in soft packaging.

RESEARCH & DEVELOPMENT

Tea blending and tasting is both an art and a science and Tapal prides itself on having mastered both the aspects. Tapal has judged the

senses and keenness of the taste buds of their patrons, resulting in the creation of various well-known brands. Aftab F. Tapal is a well-trained and highly experienced tea taster of the country and is recognized as a qualified tea specialist worldwide. Tapal's tea managers have been trained at home and abroad in this very rigorous and specialized discipline, and have frequently travelled to leading tea-producing countries searching for better teas. Tapal is a research-oriented company. It subscribes to and conducts various researches in the area of retail audits, consumer behavior, media planning and product development. This research is used for continuous improvement in product quality, brand positioning and communication according to the changing requirements of the consumers. Consistency and quality are the two keystones of Tapal's production policy, and the Quality Control Department at Tapal ensures that flavor and freshness is never compromised. That's why all the brands, whether Danedar, Tapal Special or Tapal Family Mixture, always taste exactly as expected; retaining aroma and freshness till the last sip.

STATEMENT OF COMMITMENT

To satisfy our stakeholders and as a guiding principle to our business; be a Benchmark for Quality, Creativity and Ethical values.

Achieve leadership in all categories of ourCore business and diversify in areas whichCompliment the core business.

TAPAL

“ENGAGED IN SOCIAL ACTIVITIES”

Over the years Tapal has not only provided quality products, but has also fulfilled its social responsibility of being a good corporate citizen by actively participating in community service activities. The company has continuously sponsored the arts, social welfare projects and sports within Pakistan.

~ The Tapal Cricket Club, started in 1988 has become one of the most popular and reputable sports clubs in Karachi and has many cricketers and professionals as its members. Tapal has also sponsored fund-raising events for the Pakistan Medical Association such as marathons, walks etc.

~ As part of its rural marketing program, Tapal conducts various welfare activities in towns on an on-going basis such as providing fans and furniture for schools, installation of litterbins for a cleaner environment and providing street lights to municipal committees of small towns where such infrastructure is not available. Tapal provides support to communities at the time of crisis due to natural calamity during which the company distributes free tea to the affected people.

~ Tapal has also recently completed the restoration of the 100 year old Jampur Gate in the town of Jampur in Punjab. This project is a symbol of Tapal's active participation in the country's development and preservation of its rich cultural heritage. This spirit is also evident on national days such as 14th August and 6th September when Tapal celebrates with the nation by taking out a cavalcade.

PRODUCT INFORMATION

A unique combination of high-grown Kenya tea leaves and dust, that gives a refreshing aroma of leaf and strong taste of dust all together in one cup. Tapal Chai Family Mixture is the pride of Tapal developed by the forefathers in 1947 and thus creating a new category of Mixture in the tea market. It is the blend that started

the Tapal success story, and now the other tea companies are following Tapal’s footsteps by entering the market with similar blends. Danedar Leaf Blend Pioneer of the Danedar category in Pakistan, Tapal’s Danedar remains a firm favourite around the country with its grape-nutty appearances, rich golden colour and a strong refreshing taste. In fact its popularity is such that several multinationals have launched their own versions, but Tapal’s remains the original and ultimate Danedar because of its unique colour and taste.

~ Tapal Danedar Leaf Blend

~ Tapal Family Mixture

~ Mezban Super Dust

~ Chenak Kenya Dust

~ Safari Kenya Leaf

~ Gulbahar

~ Tezdum

~ Special Teabags

~ Green Tea `Jasmine`Cardamom`Lemon (launching Dec 2007)

ORGANIZATIONAL HIERARCHY OF TAPAL TEA'

Managing Director 

                          

   Deputy Managing Director   GM Administration

GM Production                Admin. Manager

Factory Managers            GM Supply Chain     Admin Executive

Production Managers      

    DC Manager     Admin OfficerProduction Executives      

    Procurement Manager      Production Officers      

  Planning Manager   GM Finance           Logistics Manager   Accounts Managers

GM Internal audit                Finance executives

Manager internal audit        

    GM Marketing   Finance officersInternal audit executive      

  Brand Managers                 BTL Manager    

GM Sales    Trade operat manager

  Export Market Manager    

Reg. Managers    Insti. Sales Managers

  Brand/BTL executive  Zonal Managers  

      

Project Managers

SETUP LOCATION

~KARACHI FACTORYTapal Tea (Private) Limited, Plot No. 40, Sector 15, Korangi Industrial Area, Karachi - 74900. Tel: 5063891-4 Fax: 92-21-5063890

~RAIWIND FACTORYTapal Tea (Private) Limited, 3 Km, Manga Road, Near Bashir Chowk, Raiwind, District (Kasur).Tel/Fax: 04951-392171

~NORTH REGIONAL OFFICETapal Tea (Private) Limited, 2nd Floor, Block 5, Awami Flats, 4 Usman Block, New Garden Town, LahoreTel: 5868738, 5831593Fax: 92-42-5831942

~CITY OFFICETapal Tea (Private) Limited, Tapal House, Syedna Taher Saifuddin Road, Mohammad Shah Street, Nanakwada, Karachi.Tel: 7737202-4Fax: 92-21-7733912

MD

SCM HIERARCHY OF TAPAL TEA

 

DMD

 GM SCM

                

Distribution Center Commercial       

DC Manager Commercial Manager             Commercial executive  

A.M Warehouse        Commercial officer  

         WH exec Eng.      

    Planning  WH exec FG    

    Manager  WH exec PM    

    Assistant Manager  WH off POS    

    Planning executive  WH off PM    

     WH off FG KHI        

       WH exec HYD   Procurement  

       WH off HYD   Manager  

       WH exec SUKKUR   Procurement executive  

       

WH off SUKKUR  Tech. purchase coordinator  

         WH exec RWD    

     WH off RWD   Logistics

     WH exec MULTAN   Manager

     WH off MULTAN   coordinator

   WH exec ISLOO

 WH off ISLOO

FUNCTIONS

~ INSTITUIONAL SALES

The deputy sales manager is responsible for institutional sales. Targeting various institutions, utility stores, army depot, and now to makro cash n carry too.

~ Planning

` Production planning

` Capacity planning (machinery)

` Materials planning ( MRP is generated by Procurement Manager)

The company is having 52 Stock Keeping Units

~ Suppliers

` Tea buying is done mainly by suppliers in different countries. For example in Sri Lanka there is a market setup on every Wednesday from where the suppliers obtain samples to get them tested and if they are approved, the purchase is finalized through an auction.

` Procurement manager has contractual suppliers in different countries whom he keeps rotating by increasing or decreasing the orders to get lower prices while creating a healthy competition.

Suppliers of tea are from countries such as:

Sri Lanka

KenyaIndiaChinaMauritiusMalaysiaTunisia

` Filter papers for teabags are also imported whereas all the packaging material used is local and is ordered as needed from various suppliers.

~ Production / Manufacturing / Imports & Exports

` Production Units = 3 2 in KHI1 in Raiwind

` Capacity of the production units in KHIfactory 1 with 8 machines = 22-25 tons approximatelyfactory 2 with 30 machines = 110-120 tons approximately

` Production plan is floated on each Wednesday stating the required production for the next week.

` Commercial department deals in buying the tea from suppliers which is then imported and are being cleared from the customs on arrival at the ports

` The marketing department handles the exports to various countries which are listed below:

`` U.S.A`` U.K`` Saudi Arabia`` U.A.E`` Russia

~ Warehouses

` Tapal has 6 warehouses

` 4 of the warehouses are owned whereas 2 are rental

The warehouses support each other or balance by shifting the finished goods among themselves to rule out the possibility of surplus or shortages. If any unit is not performing up to the mark, the others make sure that it does not disrupt smooth operations.

~ Distribution

Tapal has a distribution network spread across Pakistan, from Karachi to Khyber with over 400 distributors. Extensive training programs are provided for the devoted sales personnel. The popularity of its fine brands is unabated, making it the No 1 national tea company in Pakistan.

` A wide network of 467 distributors across the nation

` 86 distributors in Karachi only

` Ex-employees contributed tremendously in building a vast distribution network

` Competition with Unilever lead to further strengthening the distribution network

` There are 6 warehouses under the control of the Distribution Center Manager

~ Ordering Process

` Order sheet submitted by distributor along with the pay order to Tapal

` As soon as the order is booked, a memo is sent to the concerned warehouse and the order is delivered in approximately two days subject to the location.

SUPPLY CHAIN MANAGEMENT CYCLE

Raw MaterialKarachi Warehouse

Production Department

Sri Lanka  Kenya BlendingIndia  China PackagingMauritius  Malaysia WarehousesTunisia KHI

HYDSUKMULLHRISL

Support from Departments

In order to attain efficiency of the supply chain management system, we rely on other departments cooperation and coordination to build team work which leads to integration and strengthens the whole unit.

~ Information Technology

` As we know that technology has replaced the old methods of keeping records and now most of the operations are done via different applications which are used to reduce time and increase performance.

` Oracle Financial is used for replenishment of orders and keeping updated records on the system gives a current status of the various transactions and components.

` SKU development

` Trade offers / Approvals

` Documentation is all online applications

~ Marketing

Tapal has endeavored to make its marketing activities as attractive and interactive as possible, forging a direct link with the consumers. The recently introduced Tapal Road Show has a huge fleet of beautifully decorated trucks conducting the road shows. These trucks are fabricated with a kitchen, a state of the art sound system and a side door which converts into a stage. Vans are used for conducting merchandising activities and POS splash. Mobile Video Units are used for projecting promotional and entertainment films.

` Commercial department facilitates imports from different countries and custom clearance

` Exporting to different countries

` BTL

` Sponsors events (for example: Dawn Lifestyles)

` Media buying

` Promotions

~ Sales

` Provides sales forecast

` Annual Operating Plan (not efficient as projected & actual differ)

` Operating plans

` Appointing distributors

` Liaison with distributors

~ Human Resources

Tapal's management philosophy is based on the traditional values of the Tapal family. This mix of tradition and innovation has become the hallmark of the winning Tapal strategy.The company is managed by a dedicated team of highly qualified and experienced professionals with diverse experience. Some of the key features of the management philosophy are:

~ Accessibility-Open Door Policy

~ On-Going Training & Development

~ Discipline & Respect at every level

~ Participative Management Style

~ Performance Appraisal System

~ Excellent Employee Compensation

~ Finance

` Costing

` Payments

` Order booking Cycle

` Accounts receivable/payable dealing with distributors

` Financial projections and forecasts

` Replenishments P.S: Cash sales only!

Recommendation and Conclusion

The journey of Tapal's remarkable success is the combined efforts of three dynamic generations of the Tapal Family. In 1947, Tapal started out as a family concern under the personal supervision of its founder, Adam Ali Tapal.

To win the confidence local consumers, tapal need to revitalize the image of TAPAL in local market. Although Tapal is a potential challenger to unilevers but their SCM procedures are still immature.Tapal is using Oracle They have to switch to SAP for all their procedures. As per resource marketing and Sales Department’s forecast present something else but actual demand is far different from their projections.