FINAL PROJECT ON SUPPLY CHAIN OF COTTON

BY PRODUCTS

SUBMITTED TO MR. IDREES AWAN

SUBMITTED BY TEHREEM ALI

ARSHIA MASOOD
USAMA BAJWA
M. SOAHAIB

BBA HONS. 7TH SEMESTER

Supply chain management

EXECUTIVE SUMMARY

This report is about the supply chain of cotton factory. We

visited Nooshahi cotton traders. And we have focused on the
supply chain of byproducts of cotton factory. Furthermore, the
statistics and processes of ginning, pressing, oil mill are
described and the description of suppliers and buyers is also
provided.

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Table of contents

• Introduction of Nooshahi
traders---------------4
• Product
description---------------------------------6
• Suppliers---------------------------------------------
-11
• Facility-----------------------------------------------
--12
• Inventory--------------------------------------------
--13
• Transportation-------------------------------------
--14
• Customer
experience-------------------------------15
• Buyer-------------------------------------------------
---16

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NOOSHAHI COTTON TRADERS

Nooshahi Cotton traders is located in khanpur and it is dealing in ginning of cotton. we have
chosen it for aou research of supply chain.
Nooshahi 's owner is Mr. Haji Faqeer Muhammad. it is working since 2001.

Nooshahi's cotton season is from august to february. during this season they perform following
activities.
• weight process
• heaping
• ginning
• pressing
• sarjan
• oil mill.
PRODUCTS OF NOOSHAHI PRODUCT TRADERS:

• Oil cake
• seed oil
• cotton bails

ORDER SIZE:
One bail is consisted of 160-170kg
200 bails per trolly
per bail cost is about Rs.48000/-
SUPPLY CHAIN STRATEGY:
The supply chain strategy used by this factory is cost effieciency. they are using cost efficient
modes of transportation and purchse material in bulk.
SUPPLIER OF NOOSHAHI COTTON TRADERS:

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nooshahi purachses its raw material from two sources basically.

• farmers
• punjab corporation Gallahmandi

mostly purchase is done from punjab corporation. and 25% cotton is purchased directly from
farmers.

Bargaining power:
there is no bargaining power of supplier. basicallly the rates of cotton are fixed.
the inventory is purchased once in start of season of cotton.

Nooshahi
Suppliers
traders

buyer Retailers/

distributors

BUYERS OF NOOSHAHI COTTON TRADERS:

• Oil cake is purchased by farmers and shops. it is a finished product and it is having
manufacturer with customer pick up .
• bails are sold to textile mills
• Oil cake is purchased by ghee manufacturing mills and brick factories.

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Supply chain of Nooshahi in by products of

cotton
WHAT IS COTTON?

Cotton, belonging to a family that includes hibiscus and okra, produces a natural vegetable fiber
used in the manufacture of cloth. Cotton produces sweet nectar that attracts a variety of
destructive insect pests, including the boll weevil, bollworm, armyworm, and the red spider. In
addition to insect pests, there is also a very destructive fungus, called the wilt that attacks the
root system of the cotton plant.
DESCRIPTION OF PRODUCT
Cotton is a major world fiber crop. It is grown under a very broad range of climates, soils
and cultural practices. Prior to the introduction of man-made artificial fibers, it was only
the raw material from which human clothing and other necessary textiles were
manufactured. Cotton is the main cash crop and Pakistan is the fourth largest cotton
producer in the world. The largest cotton producing country is China followed by USA,
India and Pakistan
However the current demand for cotton exceeds supply and Pakistan meet a part of its
raw cotton requirement through imports. It produced about 14 million bales of lint (PCGA
report) and 780 kg of lint per hectare. Cotton provides raw material to 450 textile mills,
1221 ginning factories and 5000 oil mills. Approximately 65 per cent of Pakistan's annual
export income comes from textile sector. Similarly other industries, such as
pharmaceutical, soap, chemical and feed industries also rely on cotton by-products.
Besides this, cotton is an occupation of 1.5 million farming families and provides job to
50-54 per cent of labor force. Therefore cotton is known as the life blood of Pakistan
economy.
GINNING UNITS IN RYK
There are 156 Ginning units out of which 149 unit are currently operating in the Cotton
Ginning Cluster Rahim Yar Khan.

GINNING PRODUCTION PROCESS AT RAHIM YAR KHAN

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The cotton ginning is performed in Rahim Yar Khan between September and March.
Once harvested, seed cotton might be directly sold to the ginner, though it is generally
going through one or two middlemen’s hands before it eventually reaches the ginnery
gate. The brief production process flow of cotton ginning is as follows:

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COTTON GINNING PRODUCTION FLOW

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RAW MATERIALS AVAILABILITY AND REQUIREMENTS

Raw cotton is the main raw material for the ginning industry. Rahim-Yar-Khan is at the
top in production of cotton in Pakistan. Cotton is mainly raised in irrigates area on the
alluvial plains of the Indus river, sowing being performed in March-April for the Sindh
province and in May-June for the Punjab where 80% of the total crop is planted.
Harvesting is achieved from August to February.

Oil extraction
After ginning the seeds presents in cotton are separated and they are prcessed in oil extractor
mill. In which the seed oil is separated and the remaining material of sed is called seed cake.
Which is the used
as fertilizer and
also as food for
animals. It is sold
to farmers and
dairy farm persons.

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COTTON STATISTICS OF RYK (15,02,2011)

Distric Arriva Pressin No.of bales sold Total Stock Stock Arrivals as
t name l in g in bales of of on
bales bales sold unsold ungin 15.02.201
b/s ned 1
b/s
T.C. Exporter textile
P s s
RYK 10129 100697 0 3200 97465 97785 29118 6000 1,272,582
75 5 7 7
Source: PCGA

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Supplier
Nooshahi mostly purchase its raw material from Punjab cooperative Gallah Mandi Khan pur.
And some of the material is purchased from the farmers. But less than 25% is purchased from
farmers. Nooshahi avoids to purchase directly from farmers as it effects their bargaining power.
In Gallah mandi the rates of cotton are fixed. And it is more near to their facility.

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Facility
Nooshahi is having facility in khan pur . including plants and ware houses. The cost of facility is
fixed as it is their personal property and they achieve economy of scales so it don’t cost to them
so much. In facility the functions of weighing, ginning, bundling, oil extraction etc are performed
. moreover warehouse are their for storing cotton bundles and by products of cotton.

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Inventory
Inventory cost of Nooshahi is not so high . but it can vary as the prices of raw material is
changed by the govt or current scenerios. The inventory is purchased in bulk . so the handling
cost is somewhat high. But they don’t have to put extra effort. The only threat they have is of fire
. for which they have insurances.

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Transportation
Transportation cost varies with petrol prices. The inventory is placed close to supplier but their
customer textile mills are in gujranwala. However the customers of seed cake are local farmers.
So transportation is not a issue.

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Response time
The response time is fast . as the product seed cake is made in anticipation of customer demands.
It is having push process.

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Time to market
Time to market is low because very less middle men are involved. So as the seed cake is
extracted it is ready for sell.

Customer experience:
Customer experience is not so much good. As they are providing no additional services to
customers.

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Buyers of seed cake

The remaining of seeds after extracting oil from them is called seed cake. Which is
used as food for cattles. And also as fertilizers. So farmers purchase this seed cake
for their crops and the dairy farm owners.

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