DORA CERAMIC TILES

Preparing to Meet Supply Chain Challenges of Tomorrow

A Presentation

By Pulkit & AJ

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Case Study on

Era Business School

Aim & Scope

• AIM – To analyse an organisation’s bid to gain competitive edge through initiatives related to SCM.

• SCOPE – As under:-

– The operating Business Environment.

– Company’s Profile and Progression.

– Challenges.

– Initiatives.

– Outcomes.

– Analysis.

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Operating

Business

Environment

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BE

• Era of progressive lifestyle.

• High growth potential.

• From utility to decorative.

• Long way to go: 0.1sqm vs 3.5 sqm.

• 2% of world production & 0.05% ex.

• 10% of total market.

• Highly competitive and yet unorganised

• 80-85% cap utilisation.

• Johnson, Kajaria, Somany, Bell, Peddar, Orient, Spartek.

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Porter’s 5F

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Competition

Intensive

Org & Unorg

Threat of New

Entrants

High

Power of Buyers

High

Substitutes

Many but Low

Power of Suppliers

Low

Company

&

Progression

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Dora Ceramics….

• 1990 – first plant in Gujarat.

• 50 k sqm annual cap.

• Tax holiday.

• Italian technology – wall & floor tiles.

• Dealer network + B2B.

• 20-25% sales growth in first five years.

• 6% market share.

• 1996- new plant in Karnataka @ 500m.

• Cutting edge dry technology; floor tiles

• Tax holiday continues.

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Progression

• Price advantage.

• Focus mainly on B2B; retail sector neglected while competitors moved in.

• 2001 – bye to tax holiday- price advantage lost.

• Loss of market share.

• Identification of KSFs:- – Product features - Retail

– Product focus - Op focus.

– Cost structure - Brand awareness.

• Technological edge; better value.

• Competitive edge not complete despite implementation of KSFs.

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Challenges

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Inescapable

• Globalisation + increasing customer expectations + Competitive markets.

• Total customer satisfaction must.

• Foresight:-

– Product – More options, quality, P&S.

– Market – Shakeouts, M&A, focus, value.

– Channel – Demanding, after-sales, one-stop solutions and power of retail chain.

– Customer – More knowledge, DIY kits, customisation, one-stop solution.

• Stale = Death in a dynamic environ.

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Intrinsic State

Strengths

*Cutting edge Dry technology

*Market share

*Quality

Weaknesses

*Retail vacuum

*Under-utilisation of cap

Opportunities

*Changing lifestyles

*Growth opportunities

Threats

*Competition

*New price regime

SWOT

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Initiatives

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What Next

• Focus now on to SCM:- – Capacity of dealers – variety and quantity.

– Depot Concept; first mover.

– Careful selection of depot sites.

– Depot outsourced to C&F – merit based.

– Depot responsibilities to include order processing, execution, collection, sample distribution and report generation.

– DRP software and online connectivity.

– DRP integrated with ERP.

– Evaluation based on quality of work, minimum errors, average time for exec, inventory and o/s payments.

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Execution

• 2.25% of sales for logistics.

• Dora responsible for primary freight.

• One 3PL firm per factory. – Dedicated fleet of vehicles.

– Production and demand trends based FC.

– One week in advance.

– Mechanised loading and unloading.

• MRP includes secondary transportation.

• LIS. Generates reports in respect of:- – Order ack - Daily & monthly sales.

– Payment collection. - Rejection data.

– Lorry tracking - Error reporting

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Outcomes

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Effects

• The Change:-

– Order cycle down to 48 hrs from 02 weeks.

– 40 branches, 20 depots, 1000 dealers and 3500 retailers.

– Inventory levels down to 25 days vs 45.

– O/S payments in 45 days vs 65.

– Shorter design time.

– Smarter customer feedback system.

– Introduction of 8-12 designs per month.

– Continuous feedback and performance appraisal for grading C&F agents.

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ANALYSIS

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Analysis

• ‘OT’ utmost important.

• Two trends made DC take notice:-

– Opportunities in terms of growth potential of the market.

– Threats due to competition & cost escalations.

• Holistic formulation of strategy:-

– Design and innovation.

– Marketing.

– SCM – cost cutting, CRM, overcoming hurdles related to blockage in pipeline.

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Way Forward

• Retail-orientation must.

• Optimisation of resource utilisation:-

– Capacity utilisation.

– 2.25% expenditure; efficient utilisation.

– Awareness campaign – in/out.

– Tactical optimisation eg transport routes.

– Operational optimisation – production schedule, transit damages, inventory, waste-control.

• Challenges will never cease; important to visualise what may happen next!

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