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
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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
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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
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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.
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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
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SKU
Decorative
Inventoried
Non-Inventoried
Industrial
Inventoried
Non-Inventoried
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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.
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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.
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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.
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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.
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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.
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Cont..How to order required products:
1. NI Requisitions
2. DSO (Depot Stock Order)3. RCO (Rate Contract Order)
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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.
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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.
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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
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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.
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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.
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Delayed product differentiationDelayed product differentiation
( An alternate to traditional( An alternate to traditionaldistribution system )distribution system )
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Traditional differentiationTraditional differentiation(Factory)(Factory)
BaseBase
FactoryFactory
MadeMade
ShadesShades
Delayed ProductDelayed Productdifferentiationdifferentiation
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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.
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Components of a DTS Computer
Tinting Machine
Gyroshaker
Printer
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1. Showcases the complete range of 1820
shades from the newAsian Paints Colour
World Colour Universe
The Colour Palette
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