BPR at Asian PaintsCase Study

Group 2

Pinki Bhattacharjee 102Jerry Tomy 161

Rahul Bhardwaj 122Swastik P 137

Company Profile

• Largest paint manufacturer in the country and top 10 in the world

• Faces competition from 12 organized and over 2000 unorganized players

• Current Annual turnover of - Rs 5650 Cr.

• Pioneers in the field of customized paints and home painting solutions

• Has offices in 22 countries, and its 30 paint manufacturing facilities service consumers in over 65 countries

Supply chain of Asian Paints

• Owns 3 of the 5 layers of the supply chain (viz. the paint factories, the regional distribution centres and the sales depots)

• Sells directly to over 25000 retailers and OEMs

• IT integration across the entire chain except the retail outlets

Pre-BPR Scenario

Forecasting

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

•Relied on home grown solutions for planning and implementation

Procureme

nt

•Raw materials comprise 60% of the value chain which require accurate forecasts

•Constant updation of BOM and Routing called for frequent changes in the procurement planning process

Manufactur

ing

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

Distributio

n

•Had to maintain inventory levels for all 3000 SKUs

•Customer choice limited to number of SKUs

Supply Chain Re-engineering

Objective

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

Enabling IT across the Supply Chain of Decorative Paints

• Distribution– Paint dispensing machines

• Altered the production pattern from shades to producing bases• Reduced inventory and Eliminated redundancy of stocks• Approx. 11000 color tinting machines including multiple machines

across some counters• Has helped expand the range of shades for each product category,

offering a choice of shades to consumers in the hundreds. • For the retailers it has eliminated the sales loss for want of

range/desired shade

– i2 distribution planner used to develop distribution schedules based on constraints

• 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 produced to 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 unit planning of production schedules

• Procurement– i2’s factory planner used to identify the raw material

and packing materials and who to source it from

– Also provides the ideal formulations required for manufacturing products

– A better materials planning system allows the company to create more complex paint formulas

– Helps select the best vendor and manufacturing method for any given situation

Results of BPR

Reduced Finished Inventory cycle from 56 days to 30 days

Business is currently 4 times of that before BPR

Achieved an 87-90 percent service levels for SKU sales at the location levelBuilt a competitive advantage in terms of inventory management

Procurement

Distribution

Manufacturing

BPR

Results of BPR

•Debt to Equity ratio reduced to 0.5 thus making Asian Paints an almost debt free company•Provided Asian Paints to aggressive expand in the domestic and foreign markets through acquisitions

Thank You…