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Stratagem 1
Stratagem 1
Vision
Passionately delivering better solutions in household cleaning and health & personal care for the ultimate purpose of creating shareholder value.
No. Of CFAs : 32
2. Packaging Material procurement: Accounts for 30% of total procurement costs. RB deals with total 18 categories in all. Along with 1000 SKUs RB delivers several promo packages and artworks. Main Categories % Procurement Blow moulded Glass Laminates Trays Tin Labels Injection Mould Boxes Balance 40% 12% 12% 12% 5% 5% 5% 5% 4%
Finished Goods procurement: Accounts for 25-30% of procurement costs. There are 26 co-packer units and 17 co-packers producing 23 items in number. Three main products under finished goods are: Liquid Vaporizer- Liquid Vaporiser, Coils and Soaps. These are 75% of the total finished goods procured.
The three divisions in Central procurement - Raw material procurement, Packaging material and finished goods (Co-packers) procurement are run by a divisional head and a team under him. The local plant team structure is as shown below:
Total Shortfall in Months Production is around 15%. Over the period of last 12 months it is observed that 30-40% of the production shortfall is on account of Material availability. Rest of the failures occur due to manpower availability, and machine breakdown and change in plan etc. Deliverable: The company is now wondering whether its decision to decentralize was right or not as the very purpose of decentralization (that central team is more focused on strategic issues) is defeated and there are frequent disruptions in manufacturing due to material availability. A. Describe a strategy that RB should follow to remove this conflict between Central and Local Purchase, so that central teams can devote more time on long term procurement plans and at the same time service levels improve. B. Benchmark the process against global practices or other FMCG companies.
For domestic material both central and factory teams are responsible for inventory levels. MOQ of 50% of the materials do not fulfil the average monthly requirement. If plant orders quantities less than the MOQs the purchasing cost becomes very high. Deliverable: A. For imported materials what should be the ideal safety stocks to be maintained. What should be the reordering point for imported raw materials? Highlight the inventory model which can be used. B. What would be the best responsibility matrix between the central and local procurement teams in terms of Inventory planning and control.
Deliverable:
Propose a strategy to take care of the seasonality of demand which is implementable and cost effective.
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