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8/22/2019 Group06 Asian Paints Final
1/15
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