POM ASSIGNMENT

ASIAN PAINTS LTD.

SUBMITTED TO:

RAVI KUMAR

SUBMITTED BY:

MADAN LAL BLR 0907033024

ASHISH KUMAR BLR 0907033030

PRASHANT TYAGI BLR 0907033190

DIVESH JOSHI BLR 0907033012

MBA_14_C
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Table of Contents
Executive summary:................................................................................................................................3

Introduction:............................................................................................................................................5

Company Background:............................................................................................................................5

Supply Chain Management of Asian Paints:...........................................................................................5

Value chain analysis of Asian paints:.......................................................................................................6

Operation strategy of Asian paints:.........................................................................................................7

Project Management...............................................................................................................................9

Manufacturing Process..........................................................................................................................10

Customer Relationship Management in Asian paints:...........................................................................10

Six sigma:..............................................................................................................................................12

Enterprise Resource Planning:...............................................................................................................12

Conclusion:............................................................................................................................................13

References.............................................................................................................................................14

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Executive summary:
This project report deals with the various kinds of strategies used by the Asian paints ltd. The
main objectives of the Asian paints study are to define and to understand the various process
management, production management and operation management strategies. In this report we
cover the customer relationship management, supply chain management, product manufacturing
process, six sigma, ERP and various types of technologies like i2 and Nap used by the Asian
paint. After going through a deep study at Asian paints we found that Asian paints mainly focus
is on supply chain management and on customer relationship management. We also study Six
sigma and enterprise recourse planning in production and operation management at Asian paints
and related it to the practical implementation in an organization and how it creates edge
competencies in an organization. This study provides a big idea about operations in an
organization and its related functions. It will help us to understand the pros and cons of
implementing these tools. How these tools helps to achieve quality assurance, relationship with
customer and supplier.

The methodology, which we are using in this project are study of all related topics through
journals and books. The data is secondary and this taken from relevance websites.

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Introduction:
The topic is production and operations management, the units which we have to study in this is
Supply Chain Management, Customer Relationship Management Enterprise Resource Planning,
and six-sigma. It is important to better understanding of these topics because in this globalized
world and competitive business which requires perfection in their operations and services.
Implementing all these tools in the organization is important to obtain a better position in the
market.
We have chosen Asian paints company. With analysis of these topics we will understand what
the benefits of these technology tools are and why Asian paints use many of them.

Company Background:
Asian paints are an Indian company. In India Asian paints is the largest paints company and
also the third largest in Asia. In the world Asian paints is 10 largest in decorative segment. In
1942 Asian paints was established by four friends. They have very little knowledge related to
paints. Present time Asian paints have 27 manufacture units in different 22 countries and 5
regions. Asian paints globally has five brands Asian paints, Apco coating, SCIB paints
Taubmans and Berger International. It serves customers in 65 countries. Due to innovative spirit
and consumer focus it is market leader in India from 1968. Asian paints manufacture a wide
range of for decorative and industrial use. It offers more than 8500 variety of colors to the
customer. Asian paints are highly customer oriented and understands the importance of
customer. Present time in India.[ CITATION ind10 \l 1033 ][ CITATION his10 \l 1033 ]

Asian paints is ahead of other competitor because of its customer driven strategy, innovative
sprite and extensive use of technology. In 2008 total revenue was $54.63 billion. It is more than
double the size of its nearest competitor. It has more than 2500 store keeping unit (SKU’s),
integrated SAP ERP and i2 SAP solution. Asian paints restructured themselves into growth,
decorative and international unit and adopt ERP and SCM technology. In future it aims to
become 5th largest company in the world in decorative paints sector.[ CITATION Asi02 \l 1033 ]

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Supply Chain Management of Asian Paints:

Supply chain management is a process which starts from purchasing material from supplier
and distribute finished goods or service to the end customer. The objectives of SCM are system
and service orientation. The needs for supply chain management is to improve operations, reduce
transportation cost, manage inventory in proper way.

Value chain analysis of Asian paints:

In India Asian paints have 2 chemical plants, 18 processing center, 140 packaging material
vendors, 380 raw material supplier and intermediate supplier, 6 regional distribution centers and
72 depots. Connecting all of them was a huge task but with implementing i2 supply chain
management Asian paints control it successfully. Asian paints have in house research and
development teams. Which is comprised of 140 members from around the world? Which have
115 scientists and 7 doctorates who work to deliver innovative products for the customer. Asian
paints SCM is considered the best in India.[ CITATION Sup10 \l 1033 ]

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SCM of Asian Paints are as follow.

Facts related to Asian paints SCM-

ASIAN PAINTS LTD.

 Using i2 SCM integrated technology in all its- plants, manufacturing units, outside
processing centers, distribution centers and in all branches in India.
 Using State-of-the-art supply chain system.
 SCM runs through wide spectrum of functions starts from material planning.
 SCM enhanced flexibility of operations.
 Reduced output time
 Reduced delivery cost due to effective control on inventory and efficient SCM.
 Improved customer satisfaction level.
 Increase profitability of the company.
 Supply chain management played a transforming role in improving operational
efficiency.
 Asian paints have supplier portal include automatically digital documents exchange
facility which improve effectiveness and efficiency with the supplier. [ CITATION Man10 \l
1033 ]

Operation strategy of Asian paints:

OPERATION:

Material plays an important role for producing paint. That’s why 60% of the cost of value chain
of Asian Paints goes to materials. On a classic day, Asian Paints administrate 800 vendors, who
distribute 15,000 types of materials, which are used to produce around 25,000 SKUs in different
types of varieties. This company has spread itself in allover country, with 8 manufacturing plants
and around 19,000 retailers. After company’s significant growth, it felt that only care of
expansion and introducing new product affected negatively. So it concerned MDM (Master Data

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Management). They found solution with SAP Netweaver that bring new product as soon as
possible.

EXISTING Master Data:

Talking about using new materials, than company’s heritage move towards MDM. Which was
physical, but it caused regularly errors and cost risen. Company gives situation that; they do not
have combined business process for creating material data in company. This thing made it harder
for Asian Paints to change Business rules. They lost business time because of incomplete master
data, because time for introducing new product was gone, while getting master data.

Quick extension of Master Data to New Locations:

Reducing maintenance cost by, automating the extension of master data. First they collect the
master data and then enter it to spreadsheet with business rules. So it was time consuming. But
after using this SAPNetweaver it took less time and also the works could get done, which took
couple of days to be done, now take only few hours. Company felt a enormous benefit by using
it.

Error Free Entry of New Master Data:

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As per the rules that, SAPNetweaver will permit Asian paints to create new maser data, without
ensuing errors in applications by consumers. They also have some powerful researches to catch
those errors. So now they have capability to see, think and solve the problems. It was useful to
give more benefits to company.

Extending the MDM Repository for Growth and Better Workflow:

It was the time when Asian Paints was moving towards Vendors, customer master data and
vision. They are also looking for new users. Company says that by the help of SAPNetweaver
they want to face more responsibilities and new creation as well as fortification of master data.

Project Management
Many companies have a project management office that helps them deliver on their goals and
objectives. Project can be too big too complex, depending upon the company profile.

Supply Side: This reveals about the mode of supply and distribution of products.

The important factors that help in directing the supply side are as follow,

Distribution

Distribution network plays different roles in different scenarios; it is totally separated in case of
decorative paints to the industrial paints. As India posses’ huge market and distribution network,
so this becomes important requirement for any of the company in paint business.

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Outsourcing

Presently many organised companies in the paint business especially for decoration, faces tough
competition with those of unorganised companies, which uses cheap paints like enamels and also
distemper. In order to tackle this situation, organised companies outsources (20-30%) portion of
their production.

Import Scenario

Due to the conducive Indian climate conditions, imports have no threat to Indian companies.

Many big players in industrial paints have tie-up with the global companies for acquiring new
technology and expanding market. From the past eight years, reduction on import duty from
40%-15% stops the supply from global market.

Manufacturing Process
Cost Structure

The paint industry is basically utilizing more than 300 vivid raw materials including petroleum
by-products for making paint. Broadly the intensive raw materials further divided into three
categories which are shown as

The most important raw material for the manufacturing of paint is Titanium dioxide (Tio2),
constitute about 30% of total manufacturing cost. There are two grades of Tio2, one is rutile
mostly consumed by Paint Company and other is anatase, which is locally manufactured.

The APL Company has a limited and very efficient supply chain of distribution, which can be
illustrated as:

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New Product launch: creating new product is an important aspect keeping in mind with the
changing consumer taste. After every two years, the company launches new product varieties
like Royale play, Kids World and Colour Next for attracting the customers.

Home solution & colour world: APL applies approach of consumer centric in their business.
They have a concept of both home solution and colour world. Painting service is firstly provided
by APL Company.[ CITATION Man10 \l 1033 ]

Customer Relationship Management in Asian paints:

Customer relationship management is an important factor for each organization because
without customer it is not possible to run any business. Customer satisfaction increase value to
the firm and it helps to improve business is an effective way. Now customer is the kings in the
market if customer dissatisfied than it leads loss to the company.

Asian paints is one of the fastest growing company in India. Its customer and company size
increasing continuously. Asian paints has customer not only in India but also from foreign
country. It operates in 22 countries and serves customer in 65 countries. Its customer is from
different background like decorative paints customer, industrial user, and automobile paints
customer. In 2001 top executive realize that they are not able to reach towards end user
consumer and end user consumer responsible for long term growth. Asian paints starts helpline
and received calls from consumer expressing a need for more solution to their home painting
needs. By it Asian paints learn that they had demanding expectations when it came to customer
service.

Earlier it was involve in selling directly through dealers, this lacked visibility into entire
painting process. This situation encouraged Asian paints executive to explore more ways for
direct link to end user customer. After it Asian paints decided to move from product based
manufacturing to service model manufacturing and they started Asian Paints Home Solutions.
With the help of it firm build a service brand by offering value added service in personal color
recommendations.

For achieving all these goals Asian paints needs customer relationship management that could
map the business process of Asian paints home solutions and provide visibility into all customers
interactions. First, it required state-of-the-art call centre capabilities that would include activity

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management for customer calls and activity scheduling, as well as a lead management system
that could prioritize and route leads for proper handling.[ CITATION mic10 \l 1033 ]
After implementation of SAP CRM solution Asian paints provides greater visibility towards
customer. As a result company understands the needs of customer and plan to meet these needs.
In 2006 Asian paints used SAP CRM infrastructure for developing an e-recruitment platform. It
allows employment agencies to review opening and upload job candidate information and
reduced time for filling open positions. Asian paints planning to implement SAP CRM
investment in these areas-
(1). Campaign management,
(2). new market segment- interior designers and architects
(3). complaint handling system- system for handling problems of customer in service and paints.

Benefit of CRM in Asian paints

 More customer satisfaction.

 Established a direct sales channel to customers.
 Improved financial control.
 Gaining online opinion of the business with optimized information.
 Build relationship with community across 30,000 customer sites.

Six sigma:
Six sigma is a tool to improve the quality of process outputs by identifying and removing the
causes of errors (defects). It uses several set of quality management methods. With the help of
Six Sigma organization targets these activity- profit increase, best cycle time, safety, delivery
and, quality improvement. Six Sigma is a tool in which total defect per 1 billion will not be more
than 3.4 with the accuracy of 99.997%. Asian paints are a paints manufacturer company which
does not using Six Sigma presently. Six Sigma is basically applied for high technology products
where 100% accuracy is required.

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Enterprise Resource Planning:

Enterprise resource planning is software that combines the subsidiaries or departments of
operations with the main corporate organization for effectiveness organization. It keeps all
records and information of each department and allows sharing it within effective functioning.

Asian Paints Company has good reputation in corporate world for professionalism, increasing
share holders equity and fast track growth. It operates in 22 country and serving customers in 65
countries, so use of enterprise resource planning is very important for them. With the use of ERP
they can reduce cost for their operations.

Asian paints used an extensive IT services to help increase profit. Asian paints used enterprise
resource planning solution from SAP. With this IT tools Asian paints runs a well efficient,
organized and structured organization. To ensure that international business keep pace with the
parent company, it is important for each subsidiary to have a well managed business solution.
But all subsidiaries are at the different growth of stage and maturity. Some of them small with
turnover U.S. $ 1 million and using only manual process and large subsidiary are use legacy
transaction system.

Parent company using SAP; s ERP solution but subsidiaries is not mature to use SAP solution
effectively. So implementing SAP solution throughout the enterprise is not justified. Therefore,
after 6 months assessment period Asian paints decided to use Microsoft business solution NAV
3.7 for its subsidiary. Additionally Asian paints implemented Microsoft Dynamics NAV 4.0,
offered hub and spoke model. In this model parent company used 1 business software system
(hub) and it connected with the systems used by its different divisions (spoke) or subsidiary.
[ CITATION Sha07 \l 1033 ]

Benefits

 The hub & spoke model provides service to Asian paints parent company to interact with
its subsidiary effectively and easily and reduce the needs of creating multiple reports.
 With the global addition Microsoft dynamic NAV which support multiple language, tax
and legal structure of a country.
 Reduce IT administration- now all subsidiary are using same process and application.
 Data flow to the regional and parent company are quicker and faster.

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 Financial statement from different subsidiary can be transferred according to the

requirement of parent organization.
 Reduce double reporting- earlier every month subsidiaries spent some hour for creating
reports that show the activity at corporate, regional and country level. But after
implementing Microsoft dynamic NAV this unproductive hour eliminated completely.

Conclusion:
After studying we can say that Asian paints focus on its customer, operation, quality and
improving business. Customer relationship management helps them to understand the needs and
wants of customer and fulfills them in a better way. It increase customer and satisfied them.
Supply chain management reduces extra cost and provides god service to the customer.
Enterprise resource planning allows effective combined manufacturing operation between
different plants.

Information technology plays an important role to grow and generate profits. In India Asian
paints is the only company which has integrated supply chain management (SCM) solution from
i2 technologies and enterprise resource solution (ERP) from SAP technology. The successful
deployment of SCM, ERP portal software and business intelligence from leading company has
helped to efficiency in business and increase transparent and accurate information across the
company.

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References
Asian Paints. (n.d.). Retrieved 01 15, 2010, from maps of india:
http://business.mapsofindia.com/india-company/asian-paints.html

Asian Paints. (n.d.). Retrieved 01 15, 2010, from SAP:

http://www.sap.com/asia/about/successes/pdfs/Asian_Paints.pdf

Asian Paints announces strategy for growth . (2002, 12 14). Retrieved 01 13, 2010, from
prdomain:
http://www.prdomain.com/companies/A/AsianPaints/newsreleases/2002121419666.htm

History. (n.d.). Retrieved 01 14, 2010, from Asian Paints:

http://asianpaints.com/corporate_information/history.aspx

Information Technology. (n.d.). Retrieved 01 13, 2010, from asian apints:

http://asianpaints.com/corporate_information/information_technology.aspx

Khan, S. (2007, 11 29). Asian Paints Benefits with Enterprise SOA. Retrieved 01 14, 2010, from
sap: http://www.sap.com/about/newsroom/press.epx?pressid=8640

Manufacturing Facilities. (n.d.). Retrieved 01 14, 2010, from asian paints:

http://asianpaints.com/corporate_information/manufacturing_facilities.aspx

Microsoft dynamics NAV-asian paints. (n.d.). Retrieved 01 16, 2010, from 2020 software:
http://www.2020software.com/products/Microsoft_Dynamics_NAV_Asian_Paints.asp

Supply Chain. (n.d.). Retrieved 01 17, 2010, from asian paints:

http://asianpaints.com/corporate_information/supply_chain.aspx

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