aditya ops backgroung

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Supply Chain Management

Supply Chain Management is the most Important strategic

aspect of any business enterprise.The supply chain has basically four components:

Production : where businesses focus on how much to produce, where to

produce it, and what suppliers to use.

Inventory : where businesses decide where to store their products, and

how much to store.

Distribution : where businesses address questions about how their

products should be moved and stored.

Payments : where businesses look for the best ways to pay suppliers andget paid by customers.

Supply Chain is basically Getting the right thing at right

place at right time in better faster and cheaper way



Asian Paint Group

India¶s Largest PaintCompany for nearly 4 decades

Asia¶s 3rd Largest PaintCompany and Leader in 11

Countries

Operates in 30 Countries ,with 30 paint mfg facilities

with capacity of 440mnlitres/annum

Group revenue of over US $851 million and market

capitalization of Us $ 2.5Billion

Asian Paints



Why Supply Chain Management ?

Supply ChainManagement

Over 450 RawMaterials

Manufacturingover 1200

SKUs

16 OutsideProcessing

Centres

7 PaintManufacturing

Plants

7 RegionalDistribution

centres

78 SalesLocations

Over 250Active

PackagingMaterials

Over 25000Retailers

Over 500IndustrialCustomers



Supply Chain Management In Asian

PaintsAsian Paint has harnessed the powers of state of art supply chain system using cutting

edge technology to integrate all its plant , regional distribution centre , outside

processing centre ,and branches in India.

The supply chain runs through a wide spectrum of functions right from materials planning

to procurement to primary distribution. It has played a pivotal role in

Improving operational efficiencies and creating agile procurement, production and

delivery systems.

It has also enhanced the flexibility of operations,

Lowered output time and reduced delivery costs,

Improving customer-servicing levels and profitability.

The Supply Chain Management is backed by IT efforts that help the company in forecasting,

deriving optimal plant, depot and SKU combinations, streamlining vendor relationships,

reducing procurement costs and scheduling production processes for individual factories.



Supply Chain Management in Asian

PaintsAsian Paints implemented i2 Factory Planner, i2 Demand

Planner, and i2 Supply Chain Planner, parts of i2 SCM.

SAP for ERP and Microsoft Navision for Global Operations.

i2 Supply Chain Planner



SKU

Decorative

Inventoried

Non-Inventoried

Industrial

Inventoried

Non-Inventoried



Supply of Deco. SKUs

Class 1 & 2

Based on the fortnight wise sales forecast of each SKU, in the SupplyChain Planner, the Stock on Hand, the System will draw up a DispatchPlan / (or Allocation Plan) for each Sales Office for all Deco. Inventoried

SKUs. The Dispatch Plan gives quantities of each SKU, to be dispatchedto the Unit, during a particular fortnight.

Class 3

In the normal course, the Sales Office / Stock Point is not expected to

have stocks of tinted SKUs. The shades will be tinted from therelevant bases, after receiving orders from customers.



Class 4

There are many SKUs which have an insignificant demand at Company leveland whose stocks the Company would not like to carry across all the SalesOffices / Stock Points. They are therefore classified as Non-Inventoried SKUs.However, these SKUs may have high localized demand in selected regions,which for strategic marketing reasons the Company may like to cater to.Class 5

Class 5 SKUs are of special interest to Marketing Function, and are usuallynew product / shade / pack, which require continuous monitoring. Their salespredictability is low. However they serve specific purpose as their movementand acceptance in the market is being studied.

Class 6

These are non-inventoried both at Company and Region Level. Often these are

Product / Shade / Pack which have been dropped or which have been madenon-inventoried for want of adequate demand. These can be requisitionedonly against specific orders, by raising an N.I. Requisition.

Supply of Deco. SKUs« Cont.



Industrial SKUs

Industrial SKUs do not come under the purview of the MPDS. Supplies of

Industrial SKUs are mainly order driven and are covered under Industrial Logic

System. For supply purposes the classification followed is a slight variation on

Inventory Classification 7, 8 and 9 and are as follows:

Class 7 SKUs - Standardised and Inventoried

Defined by predictable sales, substantial, continuous movement. Design is

approved by the customer. Supply is based on the next one month concrete

estimate and next three month provisional estimate given by the unit.



Industrial SKUs« Cont.

Class 8 SKUs - Standardised but Non Inventoried

Basically order driven SKUs which are approved by the customer. Supplies either

through Rate Contract Orders (RCO) in which case the Sales Office / Stock Point

does not come into the picture and the billing is raised directly from theManufacturing Plant or through Depot Stock Order (DSO) raised on Industrial

Production Planning - Vakola. DSOs for such SKUs should be sent to the Zonal

Manager ( Industrial Sales ) of the respective Zone. The Production Planning for

Industrial SKUs is coordinated by G B U, Vakola, Mumbai.

Class 9 - Non Standardised and Non Inventoried

SKUs / Products which are at a development stage dependent on activities at

new customer level. For the Industrial supplies, all units can view the Pending

Order Status and distribution is through documents made on the Sales Office /

Stock Point, which may be re-routed through the RDC if necessary.



Orders booked outside MPDSMulti Plant Distribution System ( MPDS ) takes care of the Sales

Office needs of all important and critical SKUs. However, at times,

orders may have to be booked outside the MPDS when:

(i) there is a demand for an SKU not covered by the MPDS.

(ii) there is a sudden surge in demand over and above the sales forecast

for an SKU covered by the MPDS.

(iii) either a non-regular item or a regular item has to be supplied

directly to the customer.



Cont..How to order required products:

1. NI Requisitions

2. DSO (Depot Stock Order)3. RCO (Rate Contract Order)



Guidelines for booking«

DSO

DSO¶s cover both decorative

and Industrial SKU¶s, but one

order should contain only one

type.

The quantity ordered through

DSO should be fixed after taking

into account estimated sale

Dispatch and allocation plans.

NI Requisition

Whenever, there is a demand for

an item, which is Non-

Inventoried, and which is not

available in stock, the Sales

Office has to ascertain thecustomer's requirement, and

should book a N.I.Requisition.

NI Requisition form should be

filed and sent to the plant for

production of required products

RCO

RCO¶s are raised for

Institutional and OEM SKU¶s.

RCO contains price and quantity

details and are directly billed tothe customer.



Regional Distribution CentreRDCs serve the purpose of maintaining adequate service

levels, without having to carry buffer inventory at all units.

They look after the Unit's needs of Class 1,2 and 5 SKUs.

RDC supplies all slow moving SKUs to the depots and

coordinates for Fast Moving SKUs from manufacturing

plants.

RDC classifies SKUs are classified into T A and D,

depending on the movement and predictability of the SKUs at

the depot level.



Regional Distribution CentreManufacturing

Plant

RDC

Depot -1 Depot -2 Depot -3

Dealer -1 Dealer -2 Dealer -3 Dealer -1 Dealer -2 Dealer -3

Dealer -1 Dealer -2 Dealer -3



Regional Distribution CentreThere are 7 RDCs and 1 warehouse across the country.

Each depot is uniquely linked to 1 RDC.

Fast Moving SKUs are supplied directly from the plants.

Slow moving SKUs and very slow moving SKUs are serviced

exclusively through the concerned RDC.

Classification of the SKUs into FM and SM is different for

different RDCs.



Demand PlanningDemand Planning is done using the i2 trade matrix.

The model that is used (Winters model) statistically derives

future estimates looking at 4 years of past data.

10 models based on different parameters are used and themodel that gives least error is used to derive final forecast.

previous year's sales.

previous year's supply situation.

expected growth in the market.

trends observed in the market.

specific strategy planned by us and so on.



Delayed product differentiationDelayed product differentiation

( An alternate to traditional( An alternate to traditionaldistribution system )distribution system )



Traditional differentiationTraditional differentiation(Factory)(Factory)

BaseBase

FactoryFactory

MadeMade

ShadesShades

Delayed ProductDelayed Productdifferentiationdifferentiation



What is a Dealer Tinting System ?

It is a tool that allows the paint dealer to offernumerous shades to his customers without having to

maintain large inventories at his own shop !

Difference between a CW and a Normal asian paintsdealer.



Components of a DTS Computer

Tinting Machine

Gyroshaker

Printer



1. Showcases the complete range of 1820

shades from the newAsian Paints Colour

World Colour Universe

The Colour Palette

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