ESTIMATING THE LENGTH OF A SUPPLY CHAIN FOR AN FMCG COMPANY Akhil Gupta Doni Riba Saurabh Kispotta Ravi Shankar Batta Nitesh Duhan
OVERVIEW
0 9 /2 6 /1 0
Sector: FMCG Product: Soap Bar
M B A -
M a n
t
a g e m e n
2
o f S e rv ic e s , F M S
Demand Recognitio n, production decision
Ordering Raw Materials
Raw Materials Recieved
Inventory
0 9 /2 6 /1 0
Processin g M B A -
M a n
a g e m e n
Packaged t and of S stored er
Cons umer s
Large Retailers Retailers
Wholesaler s
Distributor s
v ic e s , F M S
Warehouse s 3
DEMAND RECOGNITION, PRODUCTION DECISION 0 9 /2 6 /1 0 M B A -
M a n
t
a g e m e n
4
o f S e rv ic e s , F M S
RAW MATERIALS
0 9 /2 6 /1 0
The raw materials in bar soaps are fats, fatty acids and inorganic water-soluble bases Fats are extracted from mutton tallow, beef, coconut, palm and palm kernel oils After extracting the raw material it goes to a treatment plant to make it pure.
M B A -
M a n
t
a g e m e n
5
o f S e rv ic e s , F M S
PROCUREMENT OF RAW MATERIALS
0 9 /2 6 /1 0
Oil as a raw material procured from suppliers For purification of oil
M B A
Strategy A: Supplier provides purified oil Strategy B: Company purifies itself
-
M a n
t
a g e m e n
6
o f S e rv ic e s , F M S
0 9 /2 6 /1 0
Strategy A Cost increased Time duration lesser
M B A -
M a n
Strategy B Cost reduced Time for processing increased
t
a g e m e n
We chose strategy A Lead time between ordering of raw materials and supply : 1-3 weeks
7
o f S e rv ic e s , F M S
PROCESSING OF SOAP
0 9 /2 6 /1 0
It takes two days for processing of a soap M B A -
M a n
t
a g e m e n
8
o f S e rv ic e s , F M S
PACKAGING AND STORE
0 9 /2 6 /1 0
Individual soaps are packed in plastic foils Individual boxes are then put in a box of 72 each For building up of inventory packaged soaps are kept in the store The packets are then transported to the different warehouses in the country
M B A -
M a n
t
a g e m e n
9
o f S e rv ic e s , F M S
FACTORY TO WAREHOUSES Factory
1-3 weeks
Company Warehouse
0 9 /2 6 /1 0 M B A -
M a n
t
a g e m e n
o f S e rv ic e s , F M S
10
WAREHOUSE WEEKS Company warehouse
Distributors
0 9 /2 6 /1 0
1-3 weeks
M B A -
M a n
t
a g e m e n
o f S e rv ic e s , F M S
11
DISTRIBUTORS
0 9 /2 6 /1 0
Retailers
1-3 weeks
M B A -
M a n
t
a g e m e n
o f S e rv ic e s , F M S
12
Demand Recognitio n, production decision
Ordering Raw Materials
Every month
Raw Materials Recieved
Inventory
2-5 days
2-5 days
Cons umer s
Retailers
1-3 weeks Large Retailers Distributor Wholesaler s
Processin g M B A
1-3weeks
1-3 weeks
0 9 /2 6 /1 0
s
1-3 week
-
M a n
a g e m e n
Packaged t and of S stored er
Warehouse s
v ic e s , F M S
13
SCM LENGTH
It takes about 5 to 13 weeks after the demand forecasting has been made/orders placed
0 9 /2 6 /1 0 M B A -
M a n
t
a g e m e n
o f S e rv ic e s , F M S
14
HUL HUL’s distribution network is recognized as one of its key strengths -- that which helps reach out its products across the length and breadth of this vast country. Distribution network is one of the key strengths that help them reach their products across the length and breadth of this vast country It has 2000+ suppliers and associates 7,000 stockists and direct coverage in over 1 million retail outlets across India. To meet the ever-changing needs of the consumer, HUL has set up a distribution network that ensures availability of all their products, in all outlets, at all times. HUL boasts of placing a product across the country in less than 72 hrs.
0 9 /2 6 /1 0
M B A -
M a n
t
a g e m e n
o f S e rv ic e s , F M S
15
Wholesaler s and large retailers place order
Ordering Raw Materials
Raw Materials Recieved
Inventory
0 9 /2 6 /1 0
Processin g M B A -
M a n
Packaged t and of S stored er
Kiosks
Consumer s
wholesaler s
Distributor s
Retailers
a g e m e n
Warehouse s
v ic e s , F M S
16
Large Retailers
HUL – CHANGING TRADITIONS 0 9 /2 6 /1 0 M B A
Kiosks -
M a n
a g e m e n t
Warehouse
Distributor
Retailers
o f S e rv ic e The CONSUMER s , F M S
17 Large
0 9 /2 6 /1 0 M B A -
M a n
THANK YOU
t
a g e m e n
o f S e rv ic e s , F M S
18
