group06 asian paints final

8/22/2019 Group06 Asian Paints Final

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Asian Paints Operations

StrategyA study on Distribution and InventoryManagement System

Group -6

Deepthi C PGP-12-104

Diwakar Koushik Ramji PGP-12-106

James M PGP-12-113

Praveen Kumar PGP-12-057

Rajesh P PGP-12-208

Shishir Jindal PGP-12-065


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Agenda

Indian Paint Industry Overview

High Impact operations in Paint Industry Supply Chain

Asian Paints: About the Company

Competitor Analysis Asian Paints v/s Nerolac

Distribution Strategy Of Asian Paints

Cost v/s Service

Competitive Advantage


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Indian Paint Industry

100 year old, 21000Cr INR industry

First player Shalimar Paints Kolkata in 1902

Availability of

Substitutes:

Low to Medium

Buyers Power:

Medium

Entry Barriers:

Medium

Supplier Power:

Medium

Competitive Rivalry:

Medium

Porters Five Forces applied on the Indian Paint Industry


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Major Players in the market

Market shares of major companiesBroad categories of paints in India

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

Asian paints Berger Paints KansaiNerolac

Akzo Nobel ShalimarPaints

10,474.57

2,901.203,375.65

2,162.30

528.64

Sales data of companies

Sales (Rs. Crore)

Operations in the Paint Industry

Indian Paint Industry


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High Impact Operations in the Supply Chain

0

2

4

6

8

10

12

14

16

Raw material

sourcing

Inbound

logistics

Raw Material

Inventory

Productions Outbound

logistics

DC Distrubutor Wholsaler Retailer

ImpactImpact


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1942-67: Evolution Phase - APIL founded on 1stFeb.1942 by 4 friends with the strategy ofGoing where the customer is.

1967-82: Brand extension and consolidation - Innovations spurred, lot of investments inup gradation of technology.

1982-86: Years of excellence - added products to portfolio, brand building initiatives Spectrum of excellence.

1987-97: Moving closer to the customer Painting signifies festivity, joy and plentitude,Celebrate with AP, Lasting beauty, rural reach.

1997-99: Changing rules of the game Business restructuring, ERP, Helpline, Color world,CRM

Asian Paints: History


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Asian Paints

The largest Indian Paint company

Leader in the Decorative segment, 2nd Largest player in the Industrial

Segment Current presence in 17 countries across the world; in 5 regions namely South

Asia, South East Asia, South Pacific, Middle East and the Caribbean regions

Extensive computerized operations incorporation of SAP CRM, BI, Portal

and integrated SCM systems

APs success is a combined result of its Marketing and Corporate Strategies

Prominently, its Distribution Excellence

10 PaintManufacturing

Facilities in

India

350 Raw

material

suppliers

6 Regional DCs

and 72 DepotsRobust

Distribution

System


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Competitor Analysis

Heads Asian Paints Nerolac Paints

Strengths

Market leader in the

Decorative segmentAvailable in the rural and

urban area

High quality MIS

Pricing policy oriented to all

kinds of customers

Leader in the Industrial Paints

segmentTie up with Kansai Paints

provides foreign technology

Main supplier in the Indian

Industrial and automobile

market

Weaknesses

Only 15% share in theIndustrial segment

No foreign tie ups

Low presence in theDecorative segment

Low presence in the rural

areas

Opportunities

Acquiring Market share in the

Industrial Paints sector

Developing market in the

Automobile Industry; which

accounts for 50% of the

Industrial segment

Improve stand in the

Decorative market segment

Capturing the entire Industrial

segment

Threats

Nerolac is advancing in the

Decorative segment

Asian Paints is advancing in

the Industrial Segment


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Asian Paints Distribution Strategy

Wide product range

Extensive distributionBypassed the bulk buyer segment

Enlargement of the distribution function

Large number of dealers and co. depots

Concentrated on semi urban and

rural areas

Channel management

Extensive physical distribution facilitiesDirect to Retail

Large number of retail dealers

Open door dealer policy

High costsNationwide marketing and

distribution

Steps followed by Asian Paints for implementing the new Strategy

Create a large network of Dealers

Establish Company Depots to service those dealers

Create a Marketing organisation to match the distribution


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Distribution Network Requirements

Rural Segment & Semi Urban Segment

Concentration on retail consumers Strong Customer Focus

Short term competitive advantage by increasing cost of doing business

for competitors

Based on consumer insights, changing value drivers of industry

CORPORATE STRATEGY

SUPPLY CHAIN STRATEGY

Supply at right time is focus

Consumer decision was driven byproduct variety

High competition and strong

foothold

URBAN INSIGHTS

Development of Retail Network

Increase in number of SKUs offered Fully integrated & Computerized SC

Highly operational Supply Chain

URBAN STRATEGY


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Distribution Strategy of Asian Paints

DC 1Ankhleswar

DC 1Kasna

DC 1Rohtak

DC 1Chennai

WHOLESALER

S

Plant 1

Plant 2

Plant 3

Plant 4

Retailer

Retailer

Retailer

Retailer

RetailerContract

Manufacturer

PLANTS DC RETAILER

Plant 5


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Balancing costs & Service Levels

Strong Commitment to Distribution cost control

Pricing to suit the average Indian consumer Reduce costs in order to remain profitable

Effective Inventory Management

Inventory level 28 days; Industry average 51 days

FG stock 7% of sales; Industry average 14%

Control of Credit Outstanding

Incentive schemes for Dealers to reduce the large credit outstanding

3.5% discount for Perfection in Payments 5% cash discount for all Outright cash purchases

Achieved credit outstanding of 25 days against industry average of 40 days

IT initiative to reduce Distribution cost

Computerisation enabled Asian Paints to forecast sales for 100 fast moving SKUs

Initiative ensured prompt billing, accurate customer accounting and control of credit

All the factories and 55 depots were linked through C-SAT


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Achieving Competitive Advantage

Asian Paints has successfully managed to achieve both forms of competitive advantage

Differentiation through the product variety in the form of number of variants in

shades and pack sizes

Cost leadership through effective inventory control and distribution


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Road ahead

Conduct primary survey for competitors of Asian paints Nerolac and AkzoNobel

In depth analysis on the inventory held at different stages of the supply chain

Details on the type of logistics used in different parts of the supply chain


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Thank You

group06 asian paints final

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