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Logistic & Distribution Management: Lotus Thread Company LTD

Lotus Thread Company Ltd. is a leading thread manufacturer in North India with a 14% market share and annual turnover of 58 crore rupees. They produce 135 tons of thread monthly in over 2500 SKUs across 125+ yarn varieties and 200+ shades. The company was facing problems with unreasonable marketing forecasts leading to production plan discrepancies. This caused excess inventory holding costs and delivery issues. Recommended solutions included reducing lead times by adding warehouses, improving forecasting, classifying products by speed of sale, and outsourcing raw material production while continuing final processing in-house.

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Sanchit Gupta
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164 views6 pages

Logistic & Distribution Management: Lotus Thread Company LTD

Lotus Thread Company Ltd. is a leading thread manufacturer in North India with a 14% market share and annual turnover of 58 crore rupees. They produce 135 tons of thread monthly in over 2500 SKUs across 125+ yarn varieties and 200+ shades. The company was facing problems with unreasonable marketing forecasts leading to production plan discrepancies. This caused excess inventory holding costs and delivery issues. Recommended solutions included reducing lead times by adding warehouses, improving forecasting, classifying products by speed of sale, and outsourcing raw material production while continuing final processing in-house.

Uploaded by

Sanchit Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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LOGISTIC & DISTRIBUTION MANAGEMENT

LOTUS THREAD COMPANY LTD.

Sanchit Gupta | Vishnu Shankar Shukla


LOTUS THREAD COMPANY LTD. - About

• Leading thread manufactures in North India with 14% market share


• Annual turnover of 58cr (1992/93)
• Monthly production of 135 ton i.e 9600 cartons
• 125+ yarn variety (cotton, polyester)
• 200+ shades
• More than 2500 Sku’s
LTCL – Thread making Process

Thread Making
Blow room ~> Carding ~> Ring Frame (twisting / plying) ~> Griege yarn ~> Greige Thread Store (GTS)

Wet Process
Mercerizing ~> Bleaching ~> Dyeing ~> Polishing ~> processed yarn ~> processed thread store (PTS)

Finishing
Hank & Cone Winding ~> Cop Making ~> Spool making ~> tube winding

Packaging
Cellophane Wrap ~> cardboard boxes (as per size) ~> Carton stacking ~> 14 Kgs Avg. (INR 5,000)
LTCL –Production Planning Schedule

Week 1 Week 3 (20th JAN) Additional Unplanned Demand


Shade wise / Plan discussed 20th FEB
yarn type with production
wise / region
wise

Week 2 (10th JAN) (1th FEB – 2nd MAR)


Plan received by Production and Dispatch
CMO
LTCL – Problems

• The stock to monthly sale ratio shot upto 2.48 that is working capital costs were eating into company
profit
• Unreasonable marketing forecast lead to huge discrepancies in production plan
• Lead time on production varies from 25-55 days
• Lack of buffer stock at plant side
• Total inventory holding cost id 21.5 laks/month
• Twin problem surrounding both production planning & dispatching
• Item produced were lying dead in regional offices and at the same time additional requirement would
be raised and tagged ”urgent” to plant
• Bad response time in delivery order
LTCL – Recommended Solutions

• Reduce transit Lead time – create warehouses at Hyderabad, Mumbai & FGS at Patiala

• Organisation structure – Logistics to move under operations command

• Classify and plan production as per Fast/medium/slow moving products

• Transferring intra – Regions

• Outsource Greige yarn (as per quality standards) & Dye in-house

• Better Forecasting system

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