44782537 asian paints final ppt 120418005359 phpapp01 [repaired]

7/31/2019 44782537 Asian Paints Final Ppt 120418005359 Phpapp01 [Repaired]

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Supply chain management inAsian Paints


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Introduction

Started in 1942 by four entrepreneurs:

Champaklal choksey,Chimanlal choksey,Suryakant Dani and

Arvind Vakil asASIAN OIL & PAINTS COMPANY.

Within three years, their turnover reached 3.5 lacs.

Started with a strategy Going to where Consumer is.

In 1967, Asian paints became the 10th largest paint companyin the world.


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Asian Paints- Today


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International Operations

Caribbean Islands

Barbados, Jamaica,Trinidad & Tobago.

South Pacific

Fiji, Tonga,Vanuatu, Solomon &

Samoa Islands.

South Asia

Bangladesh, Nepal& Sri Lanka.

South East Asia

China, Malaysia,

Singapore &Thailand.

Middle East

Bahrain, Egypt,Oman &

United Arab

Emirates.


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Paint Industry

Paint industry estimated at Rs. 135bn.

Unorganized sector accounts to 35% of paintmarket.

Volume growth estimated at 15%.

Indias share in the world paint market is 0.6%.

Per capita consumption of paint in India is1.2kg/annum.


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Product Categories
http://www.asianpaints.com/index.aspxhttp://www.asianpaints.com/index.aspx


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Supply chain of Asian Paints

Headquarters in Mumbai

4 Factories

18 Processing Centres 350 raw material and intermediate goods suppliers

140 Packing Material Vendors

6 Regional Distribution Centre

72 depots are integrated


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Elements of Supply Chain

3000 SKUS

RAW

MATERIALS

PACKAGING

MATERIAL

KEY SUCCESS

FACTORS

FLEXIBLE

OPERATIONS

LOWER

OUTPUT TIME

LOW DELIVERY

COST

4 PLANTS

6 RDC

35 JOB WORK

CENTRES

77 DEPOTS

15000 DEALERS500 INDUSTRIAL

CONSUMERS


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Raw material Requirements

Paint Industry is raw material intensive with RW

being 70% of production costs.

300 types of raw materials used in manufacturingprocess

The most critical ones are

Titanium Dioxide (TiO2) 30 %

Phthalic Anhydride (PAN) 20 %

Pentaerythritol (PENTA) 15 %


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Backward Integration

Asian Pain produces PAN and PET

(35 % of production costs)

Competitors are importing these parts till now

Benefits :Backward integrations

immunizes Asian Paints to the fluctuation in the prices

Material is transferred at low cost to Asian Paints

equips the company with the ability to meet sudden surges indemand

1/3rd production is sold to other companies. This gives strategicedge to Asian paints.

O b d L i i


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Outbound Logistics Distribution Network

Four manufacturing facilities are supported by Six

Regional Distribution Centers (RDC) and Seventy-

seven depots.

Each RDC and depot is taken by Asian Paints onlease and then further assigned to a C&F Agent.

Distributing the Asian Paints products to the 14,500

dealers all over the country.

There are 4 depots of Asian Paints in Mumbai and

73 outside Mumbai.


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ANKLESHWAR

PLANT

KASNA

PLANT

PATANCHERU

PLANT

BHANDUP

Secunderabad

based location

Delhi basedlocation

Bangalore

based

location

Chennai

based

location

Ahmedabad

based

location

Kolkata

based

location

77DEPOT

CENTRES

ASIANPAINTS

HEADQUART

ERS

MUMBAI

Distribution Network


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Movement of paints and hazardous goodsincluding raw materials have a series of safetychecks to be adhered to, starting with a materialsafety data sheet.

All materials transport from factories to thedepots is insured through a blanket insurance

policy, which fixes a minimum liability for loss,damage, pilferage or leakage upwards of Rs.10,000.

Certain Issues


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FAST MOVING GOOD SLOW MOVING GOODS

Factory (4)

Depots (77)

Dealers (14500)

Factory (4)

Regional Distribution Center (6)

Depots (77)

Dealers (14500)

Distribution Channel


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Projected profitability of the proposed location

The standing of the dealer in the local market

The past records of the dealer (banking and

trading history)

The presence of other dealers in the vicinity and

the projected impact on their volumes

The competition scenario at the locationThe distance of the proposed location from the

nearest factory etc.

Conditions


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AP bypassed the bulk buyer segment and went

to individual consumers of paints.

AP went slow on urban areas and concentrated

on semi-urban and rural areas.

AP went retail.

AP went in for an open-door dealer policy.

AP voted for nationwide marketing / distribution

Distribution Strategy

I li ti f Di t ib ti


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Going to Individual Consumers Implied Wide

Product Range and Complex Distribution

Smaller Packs proliferated the product depth

further Wide Product range Implied Expensive

distribution

Going retail Implied Deep Involvement inChannel Management

National Marketing necessitated nationwide

organization

Implications of DistributionStrategy


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Inventory Management

Facts:

Lowest inventory cost in industry

Avg inventory level of 28 days sales against

industry avg of 51 days

Translates into 45 % lower inventory costs

Stock of finished goods is only 7% of net saleshalf the industry average


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Inventory Management

Asian Paints allowed 15-21 days credit for dealers in major towns

22-30 days credit dealers in upcountry regions

Incentive schemes to reduce inventory

A special discountof 3.5 per cent - discount for perfection in payments.It was passed on at the end of the year, provided each and every payment throughout theyear was made within the stipulated time norms.

A cash discountof 5 per cent. This was paid for all outright cash purchases.

It was given whenever payments were received within 24 hours of the supply/invoice. Inrespect of outstation accounts, the payments have been

made in advance by draft in order to be eligible for the cash discount


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Supply Chain Re-engineering

To deliver products efficiently to customers

without holding large amount of inventory

To manage cash cycle to free up funding for

aggressive growth by acquisition strategy


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Existing Processes

Forecasting

The demand pattern was difficult to predict even with the support of historicaldata/trends as consumer preferences were changing fast

Relied on home grown solutions for planning and implementation

Procurement

Raw materials comprise 60% of the value chain which require accurate forecasts Constant updation of BOM and Routing called for frequent changes in theprocurement planning process

Manufacturing

Manufactured all the shades (30-50 depending on a product line)in all the packs (five to eight packs)

Distribution

Had to maintain inventory levels for all 3000 SKUs Customer choice limited to number of SKUs

E bli IT th S l


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Enabling IT across the SupplyChain of Decorative Paints

Distribution Paint dispensing machines

Altered the production pattern from shades to producingbases

Reduced inventory and Eliminated redundancy of stocks

Approx. 11000 color tinting machines including multiplemachines across some counters

Has helped expand the range of shades for each productcategory, offering a choice of shades to consumers in thehundreds.

For the retailers it has eliminated the sales loss for want ofrange/desired shade

i2 distribution planner used to develop distributionschedules based on constraints


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Manufacturing Strategy changed to manufacturing bases thus providing

economies of scale

Using i2 Master planner to deicide which plant to manufacture

what product depending on Capacity constraints

Environmental constraints

Key raw materials

Helps optimize the process such that least inventory is producedto maintain the expectations of service and safety stock

Better planning reduces the number of rush orders

Factory Scheduler used for machine by machine and unit by unitplanning of production schedules

Improved processes


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Procurement

i2s factory planner used to identify the raw material andpacking materials and who to source it from

Also provides the ideal formulations required formanufacturing products

A better materials planning system allows the company tocreate more complex paint formulas

Helps select the best vendor and manufacturing methodfor any given situation

Improved processes


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Results of Re engineering

Reduced Finished Inventory cycle from 56 days to 30 days

Business is currently 4 times of that before BPR

Increase in the number of shades from 50 to 1300

Achieved an 87-90 percent service levels for SKU sales at the location level

Built a competitive advantage in terms of inventory management

Procurement

Distribution

Manufacturing


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Thank You

44782537 asian paints final ppt 120418005359 phpapp01 [repaired]

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