Role of 3rd party logistics in Haier warehouse at Hyderabad

Submitted to

GITAM SCHOOL OF INTERNATIONAL BUSINESS

Faculty Guide Company Guide

Dr.Shahazadi Begum Shaik Mr.Venkata Ratna Rao

Assistant Professor – Marketing Branch Logistics Manager

Submitted

By

Mohammed Naseer Khan (1226114117)

MBA (IB) 2014-2016

GSIB

GITAM UNIVERSITY

VISAKHAPATNAM

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 DECLARATION
I hereby declare that this Dissertation / project titled “Role of third Party Logistics in Haier
Warehouse at Hyderabad “is an original and bona- fide work, carried out towards partial
fulfillment of my MBA (IB) Degree.

I also declare that no part of this dissertation / project has been published or submitted as a
project representation for any degree or diploma by any individual, institute / university.

(Mohammed Naseer Khan)

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 CERTIFICATE

This is to certify that the project report entitled “Role of 3rd party logistics in Haier Warehouse
”, is prepared by Mohammed Naseer Khan, (Reg. No.: 1226114117) as part of the Summer
Internship Program, in partial fulfillment for the award of degree of Masters of Business
Administration by GITAM School of International Business(2014-16), GITAM University,
Visakhapatnam. The report is bonafide work carried out by him under my supervision and
guidance and it has not been submitted by any other person before.

Dr.Shahazadi Begum Shaik

Assistant Professor – Marketing

GITAM School of International Business

GITAM University, Visakhapatnam.

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 ACKNOWLEDGEMENT

I express my sincere thanks and deep sense of gratitude for the inspiring guidance and support
rendered by my research guide, Mr. Venkata Ratna Rao, Branch Logistics Manager, Haier
Warehouse at Hyderabad.

I am thankful to Mr. Benzon John, H.O.D (logistics) who gave me permission to do my

internship training for the project, whenever needed, and to all the office staff who have directly
or indirectly contributed to the success in this project.

I thank my Internal Guide, Dr. Shahazadi Begum Shaik, Assistant Professor GSIB. GITAM School of
International Business for imparting me the necessary knowledge wherever needed and for guiding
me as to how to go about with this project.

Finally, I am grateful to many employees, workers and all transporters who shared valuable
information that helped in the successful completion of this project.

(Mohammed Naseer Khan)

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 Index

Sr. No. CONTENTS PAGE No.

1 DECLARATION i

2 ACKOWLEDGEMENT ii

3 COMPLETION CERTIFICATE ii

4 COLLEGE CERTIFICATE iv

6 INDEX v

7 EXECUTIVE SUMMARY vi

8 CHAPTER-1 INTRODUCTION 10

9. CHAPTER-2 INDUSTRY/ SECTOR REVIEW 26

10. CHAPTER-3 COMPANY PROFILE 46

11. CHAPTER-4 DATA ANALYSIS & INTERPERTATION 75

12. CHAPTER-5 RECOMMENDATION 84

13. CHAPTER-6 REFERENCES 85

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 EXECUTIVE SUMMARY

The study involves analysis of third party Company transportation reports like VDR
(vehicle detention report), MIS report, 3PL transportation reports and sales data analysis
of years 2012, 2013 and 2014.The logistics department depends upon the sales and
marketing department which leads the logistics plan of goods from the plant. The
information was collected from south zone at Haier warehouse Hyderabad.

The project involves active participation in collection of complete and up to date

information. The project discusses about various factors of how the 3PL is controlling the
cost of transportation at local and upcountry markets. This project shows the supply chain
of Haier and logistics network all over the country. As per my observations the Haier
Company should invest more in advertising in future and avoid the dumping of the goods
in the warehouse in order to control the cost. I suggest the plant manufacturing
department should coordinate with the sales department in terms of its orders from the
dealers to avoid the transportation cost and avoiding the halting of trucks at the
warehouse. The Haier warehouse at Hyderabad is synonymous with safety handling the
bulk storage of the goods, documentations, safety and cleanliness, policies and
regulations, inbound and outbound operations of the warehouse. The Haier warehouse is
very accurate in its operations of loading and unloading of the goods and inbound and
outbound operations which boost the Haier Company in its transactions of the goods to
its dealers. The Haier warehouse is a strategic unit located in the industrial area of
Hyderabad which is very convenient to all the local dealers in Hyderabad. Thus Haier
warehouse has nodal points to handle the increasing demand of Haier products.

“Third-party Logistics is simply the use of an outside company to perform all or part of
the firm’s materials management and product distribution function.”

The continuous inflow of disposable income and the advancement of technology, the
need for the varied consumer durable goods are increasing. This in turn is leading to a
strong competition among the different consumer durable brands available in the nation
as well as the price gap between the same consumer goods of different companies are

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 narrowing down. Day by day these goods are becoming cheaper. The rural and urban
market of consumer durables has been growing at a rate of around 15 % on an average.

The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong
Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is
one of the world’s leading white goods home appliance manufacturers. Under the
leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in
over 15,100 different specifications under 96 categories. Haier products are now sold in
over 100 countries around the globe.

The last chapter deals with the data analysis and interpretation of the sales reports and
data collected from the year 2012, 2013, 2014 of Haier to estimate the sales for future
years. The other reports like monthly inter stock report, vehicle detention report; aged
stock report and transportation report were also used to analyze the 3PL role in Haier
warehouse at Hyderabad.

The main objectives of this study are:

1. To understand the supply chain operations and distribution network of the Haier
appliances private ltd warehouse in Hyderabad.
2. To determine the cost control in supply chain and in all aspects of logistics of
Haier warehouse.
3. To understand the inbound and outbound operations of the warehouse.
4. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad
by referring all the reports and analyzing it.

Need of the study:

The research study was totally exploratory because the study was fully of findings as it was
collected information from the branch logistics manager and 3PL transporters regarding the 3PL
operations in Haier warehouse operations of transportation, loading and unloading operations,
inbound and outbound operations of the warehouse and the services provided by Haier.

Under this study visited to many places such as

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  Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad.

Findings:-

1. The space in the warehouse is less which is not enough to allocate the space for the
products from the plant.
2. There was more inter branch transfers from the warehouse to other hubs which creates
expenses for the company.
3. There was no coordination between sales department and manufacturing department from
the plant which creates higher dumps in the warehouse and aging stock.
4. Haier has no repacking department at warehouse and in other hubs which helps to avoid
carton box damage for imported products.
5. The Haier warehouses have high part loads and low billing of the products which creates
extra costs and time.
6. The Haier warehouses have high halting time for the trucks to unload the goods in the
warehouse which creates expenses, no order quantity and problems with third Party
Transportation Companies.

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 INTRODUCTION

Logistics:-
“The overall management of the way resources are obtained, stored and moved to the locations
where they are required”. Logistics management entails identifying potential suppliers and
distributors; evaluating how accessible and effective they are and establishing relationships and
signing contracts with the companies who offer the best combination of price and service. A
company might also choose to handle its own logistics if it is cost-effective to do so.

Logistics function:

a. Warehousing: Under this goods are stored after manufacturing till the time they are required
for consumption.

b. Inventory management: Goods like raw materials which are required for day to day operations
of the business also need to be properly stored and kept track of.

c. Transportation: Goods need to be transported from one place to another. They may have to be
shipped from supplier location to factory and thereafter from factory to customer.

3PL Logistics:-

“Third-party Logistics is simply the use of an outside company to perform all or part of the
firm’s materials management and product distribution function.”

Third Party Logistics is an industry to which a shipper (owner of transported goods) outsources
various elements of the supply chain to perform some / all logistics management functions
including inbound freight, customs, warehousing, order fulfillment, distribution and outbound
freight.

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Role of 3PL in the Logistics operations:-

Characteristics of Third Party Logistics (3PL):-

1. Globalization :-
Supply chains are increasingly globally (even within manufacturing processes), it requires
greater management of supply chains.
2. Core competencies :-
Manufacturers and retailers are focusing on their core business and outsourcing logistics to
specialized firms.
3. Innovation and management :-
3PL is increasingly sophisticated in supply management making investments realizing
economics of scale.
4. Asset utilization :-
3PL model promotes greater asset utilization like balancing flows and asset sharing alliances.

Types of 3PL:-
1. Transportation based
2. Warehouse and distribution based
3. Forwarder based
4. Financial based
5. Information based

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Main components of 3PL:-

A third-party logistics provider is (abbreviated 3PL, or sometimes TPL) is a firm that provides
service to its customers of outsourced (or "third party") logistics services for part, or all of
their supply chain management functions. Third party logistics providers typically specialize in
integrated operation, warehousing and transportation services that can be scaled and customized
to customers' needs based on market conditions and the demands and delivery service
requirements for their products and materials. Often, these services go beyond logistics and
include value-added services related to the production or procurement of goods, i.e., services that
integrate parts of the supply chain. Then the provider is called third-party supply chain
management provider (3PSCM) or supply chain management service provider (SCMSP). Third
Party Logistics System is a process which targets a particular function in the management. It may
be like warehousing, transportation, raw material provider, etc.

Types of 3PL providers:-

Third-party logistics providers include freight forwarders, courier companies, as well as other
companies integrating & offering subcontracted logistics and transportation services.

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Hertz and Alfredsson (2003) describe four categories of 3PL providers.

 Standard 3PL Provider: this is the most basic form of a 3PL provider. They would perform
activities such as, pick and pack, warehousing, and distribution (business) – the most basic
functions of logistics. For a majority of these firms, the 3PL function is not their main
activity.
 Service Developer: this type of 3PL provider will offer their customers advanced value-
added services such as: tracking and tracing, cross-docking, specific packaging, or providing
a unique security system. A solid IT foundation and a focus on economies of scale and scope
will enable this type of 3PL provider to perform these types of tasks.
 The Customer Adapter: this type of 3PL provider comes in at the request of the customer and
essentially takes over complete control of the company's logistics activities. The 3PL
provider improves the logistics dramatically, but does not develop a new service. The
customer base for this type of 3PL provider is typically quite small.

Why Use 3PL?

BECAUSE SOMEONE ELSE CAN DO IT BETTER

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Even if you have resources available, another organization within the supply chain may be able
to do it better, simply because its relative position in the supply chain, supply chain expertise and
economies of scale.

TO SHARE RESPONSIBILITY
3PL companies can share responsibility for managing global supply chains, keeping customers
and stores properly stocked, and delivering the perfect order every time.

TO RE-ENGINEER DISTRIBUTION NETWORKS

Logistics outsourcing can be a quick way to re-engineer distribution networks to meet global
market demands and gain a competitive edge. Did you know that you can drill into the history of
each SKU number tracked by P3PL and view when and to where every piece was shipped, when
new stock arrive and how many?

B ENEFITS OF USING A 3PL

 Reduced total delivered cost for your customer

 Local expertise in new markets
 Improved customer service through shorter shipment times
 Reduced inventory costs through better management
 Cost benefits through volume shipping discounts
 Improved focus on core competency
 Increased shipment visibility
 More scalable logistics operation and cost model
 Improved variety of technology and service
 Risk reduction

3PL and its functions

Originally, 3PL means outsourcing logistics activities including transportation and Warehousing
to outside firms, which are not a consignor or a consignee. However, it is not common 3PL
practice to outsource a single activity of logistics independently, but to outsource multiple
activities from the firm's strategic point of view.

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3PL (or 3PL provider) has the following features at present:
1. Integrated (or multi- modal) logistics service provider
2. Contract-based service provider
3. Consulting service provider

Evolution of 3PL:-

Early 1900’s to late 1950’s- introductory period-single service

Late 1950’s to mid 1960’s- Awareness period – Separate service

Mid 1960’s to late 1970’s- necessity period – integrated service

Late 1970’s to mid 1980’s- integration period –combined service

Late 1980’s to mid 1990’s- differentiation period – incorporate service

Late 1990’s today – corporate period – corporate service

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First, a 3PL provider is regarded as an integrated logistics service provider. IT-related activities
for controlling goods flow such as order processing, and inventory Management, among others
are also included in the function of the 3PL provider.
However, the 3PL provider need not provide all the services solely. The 3PL provider can
outsource some activities to sub-contractors.
A 3PL provider can be classified into the asset-based and the non-asset-based. The 7 asset-based
3PL provider owns some assets, particularly transport-related assets such as trucks, warehouses,
etc., while the non-asset-based 3PL provider does not own such assets, and usually relies on sub-
contractors’ assets. Examples of non-asset 3PL providers include forwarders, brokers, marketing
companies, and information system management companies.
Second, the service of 3PL is contract-based. Recently, a contract was written about the way to
share responsibilities assuming various situations in detail. Such strict contract would make
reliable relationship between the parties, and strengthen the alliance. Third, offering consulting-
services to the firms is an important feature of the 3PL. The 3PL provider can make various
advises to answer customers’ requirements concerned with marketing strategy, information
system configuration, cooperative transportation, etc.
Role of 3PL in Supply Chain Management:

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3PL GROWTH DRIVERS IN INDIA:-
1. Strong GDP growth
2. Increased FDI inflows
3. Consolidation of raw materials from the vendor’s
4. Better infrastructure
5. Goods and service tax (GST)
6. Logistics parks/ FTWZs
7. Organized structure of the logistics industry
8. Increasing presence of MNCs in India.
9. Entry of MNC 3PL players in India
10. Increasing need to focus on core competency.

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3PL Market Structure in India

The 3PL market in India is comprised of two segments: the first one is asset based in which
assets like trucks, distribution centers and warehouses are utilized in supply chain management,
and the second one is non-asset based. There is a significant difference between the nature of
Indian 3PL and its counterpart elsewhere, especially in the U.S., Table 1.

Table 1: Comparative Analysis of 3PL in India and the U.S.

Parameter USA India

Usage of 3PL 71% 55%

Common activities Warehousing (73.7%) Outbound Transportation (55%)

outsourced Outbound Transportation (68.4%) Inbound Transportation (52%)

Freight bill payment (61.4%) Custom clearing and forwarding (51%)

Inbound warehousing (56.1%)

Reasons for not Control would diminish (63%) Poor infrastructure of provider (81%)
outsourcing Costs would not be reduced (63%) Inability to respond to changing needs

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 (81%)

Service commitment would not be Unreliable promised from providers

met (48%) (80%)

Logistics is a core competency Concerns about capability of providers

(44%) (77%)

Necessity of e- 72% 67%

commerce

Collaborative 82% 14%

relationship

Gain sharing is 80% 6.6%

important for
relationship

Considerable amount of research on the topic of the implementation of 3PL in different countries
has been published in academic and trade journals. Viewpoints of both users and service
providers have been considered to identify the major issues, industry dynamics, current status
and future prospects of the 3PL industry. However most of the research is descriptive in nature
and does not go into in-depth statistical analysis of survey data. In the present study Indian 3PL
providers’ service dimensions are analyzed in terms of the key success factors and growth
strategies using various statistical tools.

Obstacles for 3PL in India:

 Inefficient Logistics operations.

 Multiple tax structures.
 Inadequate logistic infrastructure.
 And unorganized nature of the transport industry.

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Warehouse management:-

Warehousing Management is one of the important aspects of 3 rd party logistics companies;

where companies are store their stock in large warehouses in proper manner. A warehouse is
a commercial building for storage of goods. Warehouses are used
by manufacturers, importers, exporters, wholesalers,transport businesses, customs, etc. They are
usually large plain buildings in industrial areas of cities and towns and villages. They usually
have loading docks to load and unload goods from trucks. Sometimes warehouses are designed
for the loading and unloading of goods directly from railways, airports, or seaports. They often
have cranes and forklifts for moving goods, which are usually placed on ISO
standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing
materials, spare parts, components, or finished goods associated with agriculture, manufacturing
and production.

Warehouse Management System

A warehouse management system (WMS) is a software application that supports the day-to-day
operations in a warehouse. WMS programs enable centralized management of tasks such as

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tracking inventory levels and stock locations. WMS systems may be standalone applications or
part of an Enterprise Resource Planning (ERP) system.

A warehouse management system (WMS) is a key part of the supply chain and
primarily aims to control the movement and storage of materials within a warehouse and
process the associated transactions, including shipping, receiving, put away and picking.
The systems also direct and optimize stock put away based on real-time information
about the status of bin utilization. A WMS monitors the progress of products through the
warehouse. It involves the physical warehouse infrastructure, tracking systems, and
communication between product stations.
Need of the study:

The research study was totally exploratory because the study was fully of findings as it was
collected information from the branch logistics manager and 3PL transporters regarding the 3PL
operations in Haier warehouse operations of transportation, loading and unloading operations,
inbound and outbound operations of the warehouse and the services provided by Haier.

Under this study visited to many places such as

 Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad.

The main objectives of this study are:

5. To understand the supply chain operations and distribution network of the Haier
appliances private ltd warehouse in Hyderabad.
6. To determine the cost control in supply chain and in all aspects of logistics of
Haier warehouse.
7. To understand the inbound and outbound operations of the warehouse.
8. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad
by referring all the reports and analyzing it.

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Research methodology:

Research design:

The research consisted of various steps

COLLECTION OF DATA

SECONDARY DATA

DATA SORTING AND ANALYZING

DATA PRESENTATION

DATA INTERPRETATION AND RESULTS

Sources of data:

The study was carried out by collecting data from secondary sources.

Secondary data:-

To collect the secondary data the corresponding database were checked and the necessary
information was collected.

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a. Research reports

b. Articles

c. Newspaper articles

D. internet

e. Monthly Magazines.

f. Haier official website.

g. Haier journals.

h. Customer Database provided by Haier.

i. Excel forecasting method

j. tables, charts and graphs in excel

Limitation of the study:-

1. Less number of employees in the warehouse in order to collect more information.

2. Due to time constraints the study has been restricted to secondary data only.
3. Due to the restrictions of the company some of the data cannot be included in the reports.

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 INDUSTRIAL REVIEW

Introduction of consumer durables goods in India:-

The continuous inflow of disposable income and the advancement of technology, the need for
the varied consumer durable goods are increasing. This in turn is leading to a strong competition
among the different consumer durable brands available in the nation as well as the price gap
between the same consumer goods of different companies are narrowing down. Day by day these
goods are becoming cheaper. The rural and urban market of consumer durables has been
growing at a rate of around 15 % on an average.

Growth prospects:-
India is likely to emerge as the world’s largest middle class consumer market with an aggregated
consumer spend of nearly US$ 13 trillion by 2030, as per a report by Deloitte titled 'India
matters: Winning in growth markets'. Fuelled by rising incomes and growing affordability, the
consumer durables market is expected to expand at a compound annual growth rate (CAGR) of
14.8 per cent to US$ 12.5 billion in FY 2015 from US$ 7.3 billion in FY 2012. Urban markets

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 account for the major share (65 per cent) of total revenues in the Indian consumer durables
sector. In rural markets, durables, such as refrigerators, and consumer electronic goods are likely
to witness growing demand in the coming years. From US$ 2.1 billion in FY 2010, the rural
market is expected to grow at a CAGR of 25 per cent to touch US$ 6.4 billion in FY 2015.

Some of the top consumer durables brands in India are:

 LG
 Nokia
 Philips
 Samsung
 Sony
 Whirlpool
 Blue Star
 Carrier
 Godrej India
 Hitachi India Limited
 Sharp India Limited
 Tata
 Toshiba India Private Limited

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 Videocon
 Voltas

About Consumer Durables:-

Consumer durables refer to those consumer goods that do not quickly wear out and yields utility
over a long period of time. Some of the popular and common examples of these kinds of items
are electronic goods, kitchen appliances, home furnishings and leisure equipments etc. Consumer
durables can be broadly categorized into the following 3 heads:

White Goods: White goods mainly include air conditioners, refrigerators, washing machines,
audio equipments and speakers.
Brown Goods: This kind of consumer durables mostly include kitchen appliances like chimneys,
electric fans, grinders, iron, microwave ovens, mixers and varied other cooking ranges.
Consumer Electronics: Some of the mostly used consumer electronic goods are DVD players,
MP3 players, mobile telephones, telephones, VCD players etc.

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Consumer electronics in India:-

According to a McKinsey 2005 report, while Food and Grocery took the highest share of wallet,
and electronics took only a mere 5%, the proportion of spending on electronics was definite
bound to increase by 2015 and also the growth rate for the share of organized retail in the
electronics segment was set to increase from 15% to a astounding 45% in 2015. A graph
representing the share of wallet to the share of organized retail is shown below.

List of consumer durables' brands in India

Many of the national as well as multi-national brands are involved in the business of consumer
durables in India. Apart from the famous brands, some portion of this market in the nation has
even been captured by some unbranded consumer products. However, to name a few of the top
consumer durables brands in India are:

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LG:
Starting their business from 1st October, 1958, LG Electronics is known for consumer goods like
air conditioners, CDMA handsets, DVD players, home theatres, optical storages, radios etc.

Nokia:
This brand name is famous for their innumerable products related to mobile telephones and is
one of the leading mobile telephone brands in India. This brand has got a flair for introducing
new models updated with the latest technologies, which meets the requirements of the modern
tech savvy people of the country.

Philips:
Philips Electronics India Limited is one of the leading consumer durable companies that have got
different kinds of consumer durables in the national market. Some of the popular Philips'
consumer durables are television sets, music systems, personal care items, household products,
lightings, telephone handsets, computer products and accessories etc.

Samsung:
Commencing its operation in India during the month of December in 1995, Samsung is presently
enjoying a turnover of more than U. S. $ 1 billion. Famous for their products like washing
machines, refrigerators, color monitors and televisions, this company is headquartered in the
capital city of New Delhi. Their design center is located at different parts of the world though.
The “made in India” Samsung products are even exported the Middle East as well as SAARC
countries.

Sony:
The Japanese company Sony Corporation started their business operations in India from
November, 1994. Comprising of more than 7000 channel partners and 215 Sony Worlds, this

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brand is one of the leading consumer durables' brands in India, who offers goods like color
televisions, music systems, mobile telephones, laptops and many more.

Whirlpool:
Headquartered in U. S. A., Whirlpool is one of the most recognized home appliances' brands in
India. Apart from holding a share of above 25 % in the national market, this is said to be the
biggest refrigerator and the 2nd biggest washing machine brand in the nation.

Some of the other popular consumer durable brands in India are as follows:

 Blue Star

 Carrier
 Godrej India
 Hitachi India Limited
 Sharp India Limited
 Tata
 Toshiba India Private Limited
 Videocon
 Voltas
Growth prospect of consumer durables' market
With the continuous inflow of disposable income and the advancement of technology, the
need for the varied consumer durable goods are increasing even in the country of India. This
in turn is leading to a strong competition among the different consumer durable brands
available in the nation as well as the price gap between the same consumer goods of different
companies are narrowing down. Day by day these goods are becoming cheaper. The rural and
urban market of consumer durables has been growing at a rate of around 15 % on an average.

Segment Definition:-

In general consumer electronics refers to a variety of electronic equipment used by private

customers. This industry can be divided into many segments:

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1. ‘Traditional’ Consumer Electronics: audio and video equipment

2. Computing Devices: Computers, Calculators, Laptops

3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum
cleaners, grinders, etc

4. Personal Care: Hair Dryers, shavers, electric toothbrushes.

In addition to this, the emergence of telecommunication has lead to the convergence of mobile
technology into the consumer electronics industry and hence this paper will only deal with
traditional consumer electronics, mobile phones and computing devices which can be termed as
Brown Goods as per industry definitions. Henceforth in this paper consumer electronics will
refer to Brown Goods.

Current and future issues of consumer durables segment:-

Indian Retail Sector and Consumer Durables Segment

Within retail industry, customer appliances are worth of Rs. 297,285 million with a YOY
growth rate of 13.3%. Traditionally the unorganized retailers dominated consumer durables
segment but huge growth potential is attracting large corporate organizations to expand their
retail operations into this territory. Until recently majority of sales in consumer durables were
originating from urban centers but with change in demographics and increasing exposure, the
growth in sales volume from rural areas are projected to be higher than urban areas. With the
revival of western economy after the recession being slower than anticipated, large global
retailers are also looking forward to expand their business in India. Also with increase in
awareness, Indian customers are increasingly demanding more value for money both in terms of
quality of durables and convenience of buying.

Using the PEST framework and scenario based approach we aim to create an understanding of
the state of the retail sector and consumer durables segment in India at present and to develop
a clearer picture of how the consumer durables retail market would shape out towards the end
of this decade.

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Union Budget

The Rs 50,000-crore consumer durables and electronics industry was unequivocal in its praise
for this year's Union Budget. The government rationalized duty structures in the Budget,
responding to long-standing demands of companies operating in the space. In the exercise,
domestic manufacturing is expected to get a boost. "The reduction of customs duty on 22 items
(which go into the manufacture of various products including TVs, refrigerators, washing
machines, air conditioners and microwaves) as well as a reduction in tax on royalty will
encourage indigenous manufacturing and technology proliferation," said Manish Sharma, MD,
Panasonic, India & South Asia, and current president, Consumer Electronics and Appliances
Manufacturers' Association (CEAMA). According to CEAMA, almost 40 per cent of goods sold
in the consumer durables and electronics market are imported. Those that are made here are
basically assembled using imported parts. While this is not expected to change overnight,
companies say, the government's efforts are laudable, since it seems committed to promote its
'Make in India' drive.

Anirudh Dhoot, director, Videocon Industries, and past president of CEAMA, says, "For long,
the industry felt neglected because measures were simply not adequate. What this Budget has
done is changed that perception. There have been definite measures taken in this Budget, which
will create the environment or climate for manufacturing. That is the key."

The government has specifically targeted LED TVs, one of the largest consumer electronic
categories in the country, reducing customs duty on organic or OLEDs from 10 per cent to zero.
This, says Dhoot, was something that TV manufacturers were demanding, since OLEDs are
expected to gain traction in the coming months. Dhoot says customs duty on backlights used in
LEDs has also been abolished - from 10 per cent to zero. "Bulk of the components in LEDs is
imported. By reducing customs duty, assembling costs will reduce. While manufacturers stand to
gain from this, consumers benefit because we could pass these savings to them," Dhoot says.

The appliances segment too got a favorable push. Kamal Nandi, business head and executive
vice-president, Godrej Appliances, says, "Of the 22 items that see customs duty reduction, there

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are two that appliance manufacturers were demanding. This includes magnetrons, a key input
used in microwave ovens, and components used in the manufacture of refrigerator compressors.
While we are yet to assess the impact of this on our business, at the outset these steps are
welcome."

Even LED light and lamp makers have a reason to cheer because excise on components such as
LED drivers and metal core printed circuit boards or MCPCBs have been reduced from 12 per
cent to six per cent. The move comes in the wake of the government's effort to push energy
conservation in the country. In January, Prime Minister Narendra Modi had launched a scheme
for LED bulb distribution under the domestic efficient lighting programmed in Delhi as well as a
national programmed for LED-based home and street lighting.

AC makers like Videocon and Voltas focus on institutional sales due to slowing
retail growth

NEW DELHI: Air-conditioner makers such as Videocon, Voltas and Panasonic, hit by untimely
rains this summer, are betting big on the business-to-business segment, or institutional sales, to
push their products in this financial year.

"Taking into account both commercial refrigeration products as well as room ACs, 25 to 30 per
cent of our volumes is expected from the B2B segment this year," said Pradeep Bakshi, president
and chief operating officer, (UPBG & MCED), at Voltas Ltd.

The company has dedicated sub-verticals to look after institutional sales of various product
categories. Voltas is also looking at cash & carry formats of modern trade partners, who are
aggregators for the B2B segment.

Panasonic is working closely with developers, architects, interior decorators, project

management consultants, services consultants, companies, retail chains and the hospitality
industry.

Demand for air-conditioners from the commercial segment is catching up fast with an increasing
number of offices, stores and business apartments being set up. The growth of the retail,

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hospitality and commercial sectors has boosted demand as they involve large-scale application of
ACs, said Vipin Agrawal, general manager and head - CAC at Panasonic India Pvt Ltd.

"We are looking at selling around 15,000 units through B2B vertical this year, and generate
revenue of about Rs 750 million," Agrawal said.

Videocon, which is looking to double its market share to 12 per cent in the overall air-
conditioning market, says its targets can be achieved through the B2B segment. The company
plans to sell overall 4.5 lakh units this year, valued at about Rs 1,100 crore.

The realty sector is one of the biggest growth opportunities, said Videocon Industries COO (air-
conditioners) Sanjeev Bakshi.

According to Videocon's research, there are 1.6 million houses that will be delivered this year,
which will be ready for possession. On an average, one AC will be fitted in each house, said
Bakshi.

To drive the effort, the Indian home appliances maker has formed a separate vertical that will
only look at B2B sales.

"We expect 20-25 per cent revenue should come through this segment this fiscal," said Bakshi.

Industry players assume the growth of air-conditioning in the B2B segment would be 25-30 per
cent compared with single-digit growth in the retail sector. According to analysts, the market in
India for room ACs is 3.5 million to 4 million units, with a penetration of about 3 per cent.

Purchase of ACs by individuals is elastic, depending on weather pattern changes and they may
be replaced with air coolers due to pricing or electricity bill concerns, according to Devangshu
Dutta, chief executive at retail consultancy firm, Third Eyesight. Institutional purchases are more
planned and can provide a significant and long-term buffer to consumer demand, he said.

Lloyd Electric, which aims to corner an 11 per cent share in the domestic AC market, estimates it
can sell 500,000 units through the B2B vertical and generate revenue of Rs 750 crore this year,
according to Nipun Singhal, director, Lloyd Electric & Engineering Ltd. The company plans to
set up new factories and invest in new machinery and technology, said Singhal.

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Haier India to invest Rs370 crore to expand manufacturing facility
Mumbai: Haier India, a wholly owned subsidiary of Haier Group, on Friday announced an
investment of Rs.370 crore to expand its manufacturing facility at Ranjangaon, Pune. Haier
Group, China signed a memorandum of understanding with the Maharashtra government in this
connection.

The proposed investment will scale up manufacturing operations of the company in India by
introducing new product lines like washing machines, air condition, LED panels, water heaters
and deep freezers, apart from refrigerators. By 2017, Haier plans to increase manpower by 120%
to 2,600 employees.

“At Haier Group, localization has been at the core of the business since its inception, which has
helped the company gain market leadership in several countries. We are positive that this
expansion opens multiple opportunity areas not just for Haier but also for our consumers,
employees, dealers and other key stakeholders,” said Eric Braganza, president, Haier India.

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COMPANY PROFILE
The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC.
In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leading
white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang
Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96
categories. Haier products are now sold in over 100 countries around the globe.

Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies
and over 50,000 employees throughout the world. Haier’s focused industries include technology
research, manufacturing, trade and financial services.

The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd.,
a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong.
Qingdao Haier Co., Ltd., also a Haier subsidiary, is listed on the Shanghai Stock Exchange.
On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the
Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing
Olympic Games for white goods home appliances.

Unmatched Home Appliance Product Offerings

Haier’s product categories range from refrigerators, refrigerating cabinets, air conditioners,
washing machines, LED’s, mobile phones, water heaters, freezers and integrated furniture,
among which 9 are ranked market leaders in China, and 3 are ranked among the top 3 worldwide
in their respective industries. Haier is also a world leader in the technology domains of intelligent
integrated home furniture, networked home appliances, digitalization and large scale integrated
circuits.
By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589
software intellectual property rights. Haier’s proposal for safe care water heater technology
initiative was accepted at the 66th IEC Conference in 2002 and Haier dual drive washing
machine technology was included in the 2006 IEC standard proposal. This clearly demonstrates
Haier’s world-class innovation capabilities in product R&D.

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Refrigerators
Haier is one of the world’s largest and most advanced refrigerator manufacturers, producing
over 12 million units of refrigerators and freezers annually at its 20 production facilities
worldwide. Haier consistently applies leading global technologies in the manufacturing of its
products. Haier is the first company to make breakthroughs in integrating fluorine-free, energy-
saving technologies with large freezing capacity, and solve technological problems related to
sterilization. Haier has also rolled out the world’s first variable frequency refrigerator, which is
made of heat insulating material designed for aerospace.

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Household Air Conditioners
At its eight large production bases in China, Haier uses the world’s most advanced automatic
flexible production lines to ensure the delivery of large quantities of highly reliable air
conditioners, which are exquisite in quality and free of defects.
Washing Machines
Haier produces washing machines of 5,000 different specifications under 18 categories, and is
the only company in the world with the capability of large scale production of top load washing
machines (popular in Asia), front load washing machines (popular in Europe), agitator washing
machines (popular in America) and dual-drive washing machines. Haier, with a mission of
“customer-oriented design”, pays great attention to safety, health, and the environmental
concerns of consumers in designing its products. Haier has introduced a series of new hi-tech
environmentally-friendly washing machines, staying ahead of the market trend and
demonstrating the technological innovation capability of the company.
Freezers
Haier produces 1.8 million units of freezers each year. Haier is licensed to supply products for
military provisions, and is the only company to win the bid for three consecutive years. Haier
freezers have received ISO9001 quality, ISO14001 environmental compliance, and ISO12001
metering and testing certification. Haier is also China’s first freezer maker to receive TUV
International Safety Certification, and was the first to receive a no-fluorine certificate from the
United Nations Development Programmed.
Vacuum Cleaner
Developed with the Haier spirit of continuous innovation, Haier dust collectors consistently lead
the trend in the dust collection market. Haier’s dust bag series are innovatively designed to
collect dust from all directions. The user-friendly design includes such features as a speed-
adjustment button on the handle, dust bag design, and lightweight aluminum.

Home appliances for kitchen and bathroom

Integrated Kitchen
Haier integrated kitchen products come with an advanced green safety system, and are equipped
with environmentally friendly material, dust-free digital technology, high-quality sync
installation and one-stop green service channel, thus bringing customers the ultimate green and

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safety experience. Haier Kitchen Company is the only company in its product segment to receive
ISO9001 quality certification in China.
Water Heaters
Haier manufactures water heaters of 300 specifications under 12 categories, including electric
water heaters, gas water heaters, solar energy heaters, and gas boilers, in the categories of
mechanical, electric, and network-based, and with the capacity range of 5-litres to 500-litres.
With the application of high technology, Haier produces water heaters in a wide range and
specifications both for home and commercial use. Haier follows its “Safety-based Products”
philosophy in manufacturing water heaters and leads the industry in safety technologies.
Kitchenware
Haier’s kitchen appliances cover 4 categories: dishwashers （ see above introduction, exhaust
fans, gas cookers and sterilizing cupboards, in more than 300 specifications. Haier Kitchenware
products are based on environmentally-friendly technology, with zero leakage and low radiation.
The products have won environmentally friendly and green product certifications in both China
and the US.
Microwave Ovens
Haier offers microwave ovens in 50 varieties under 8 categories, including mechanical
electronic and digital, and with the capacity range of 17-litres to 40–litres. Haier ovens feature
both stainless steel and painted stoves, and come with top doors and side doors. In
2003, Haier developed the steam microwave oven, taking the lead in the application of new
technology. Haier is committed to manufacturing high-quality, high-tech and environmentally
friendly products, using components made by the world’s top 500 companies. Haier microwave
oven products have received FCC and FDA certificates from the U.S Federation Drug
Administration.

Audio and video products

Color TVs
Growing at an annual rate of 141% over the last 9 years, Haier color TVs are manufactured with
the application of high technology. Haier aims to provide the right products for different
consumer groups, gaining high customer recognition. Haier is committed to strengthening its

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global competitiveness, with the creation of a global supply chain under the concept of
“competitive cooperation”. Haier’s extensive range of products, including traditional
TVs, flat-panel TVs, digital TVs, wireless TVs, touch TVs and 5.1 sound system TVs, aim to
bring more freedom, comfort and greater entertainment to homes and customers.
DVD Players
Haier offers a diverse line of DVD players of exceptional quality. Haier DVD players are
favored by consumers for their performance and after sales service. The products have won a
number of awards for environmental protection and energy efficiency.
Commercial Air Conditioners
Haier has become a well-known global brand for commercial air-conditioners for its strong
R&D, excellent product performance, and marketing capability. Haier delivers commercial air
conditioners, large multi-system air conditioners and large cold-water air conditioning units in 8
categories and 260 specifications, featuring an integration of fluorine-cooling, wind-cooling and
water-cooling functions. Haier’s variable-frequency, variable capacity multi-system central
conditioners, flexible variable-capacity screw compressors, and household variable-frequency
central air conditioners lead the industry trend with their energy efficiency.
Communication and IT products
Mobile Phones
Based on the philosophy that the technology and fashion can co-exist, Haier integrates state of
the- art wireless communication technologies into a complete range of in-fashion mobile phones.
Haier mobile phones include such latest features as GSM/GPRS technology, integrated digital
cameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includes
bar-type phones, clamshell phones, smart phones and the new and unique slim phones.

IT products
Computers (desktop and laptop)
With a special attention to users’ health, and eye-protection, Haier makes desktop and laptop
computers for personal and commercial use in different ranges, including the world’s first laptop
with 2.0 mega-pixel camera. Haier is committed to delivering a full-service package, and offers
free software commissioning. By establishing strategic alliances with suppliers, such as Intel,
Microsoft, China Unicom and China Netcom, and taking advantage of the technology and

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resources of its partners, Haier consistently improves the quality of its computers. In product
R&D, Haier employs a team of top class engineers from the U.S., Japan,
Republic of Korea, and China’s Taiwan region, and has established a strict-quality control
system.
Digital Information Products
Haier offers a number of patented digital information products, including MP3 and MP4. Haier is
committed to delivering personalized products, services and application solutions to meet the
individual needs of users.
Haier Pharmacy
Founded in 1996, Haier Pharmacy is the newest growth area within the group. The product
offerings cover 80 specifications under 60 categories including medical raw materials, tablets,
capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection,
eye drops, etc. The products of Haier Pharmacy fall into four categories of marine drugs, Chinese
medicine, Western medicine and healthcare products, with focused areas of the heart and
cerebral system, digestive system, osteoporosis, diabetes and healthcare, all of which have
received GMP certification in China.

Haier Expansion Strategy Phases at a glance

The phase of Global brand strategy（2005-2012）: Consolidating global resources and creating
a global brand
The Internet era brings segmentation of the market, and the mode of traditional enterprises
featuring “production-storing-selling” can no longer satisfy the tailored needs of users. The
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enterprises must shift from the enterprise-centric sale of products to the user-centric sale of
services. That is, they should shift to the “demand manufacturing and delivery” mode. The
Internet also brings integration of the global economy, and the relationship between
internationalization and globalization is one of logical improvement. Internationalization means
creating international brands with the own resources of the enterprises, while globalization
means making use of global resources to create localized mainstream brands. They are quite
different. Therefore, Haier consolidates the global resources in R&D, manufacturing, and
marketing to create a global brand.
In this phase, the business mode created by Haier to develop consumers in the Internet era is a
“Win-win Mode of Individual-Goal Combination”.
Global Branding Strategy

Haier’s global branding strategy aims at positioning the company as a local brand in different
world markets in conjunction with enhanced product competitiveness and strong corporate
operations. Haier’s international business framework encompasses a global network of design,
procurement, production, distribution and after-sale services. Today, Haier has established 15
industrial complexes, 30 overseas production factories and bases, 8 design centres and over
58,000 sales agents worldwide.

ABOUT HAIER INDIA

Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier
India was launched in India in December 2003 and by August 2004 had an all-India promotion
launched with over 55 products across six product categories -- refrigerators, color
television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also
launched its brand of mobile phones in India.

The India launch was started with innovative products which were designed keeping the day to
day customer needs in mind -- products that will transform the customer's everyday living into
inspired living.“Products that will make your today better than yesterday”. Haier India launched
BMR technology for the first time in India. Even the Double drive is a newly patented
technology.

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The India operations already has an established dealer network of approximately 1600 dealers all
over the country, which is backed by a strong service and after sales service network.

HAIER INDIA VISION

To be the Most admired brand in India providing innovative, state of the art, user friendly
products of lasting value to our customers, to make their today better than yesterday.

 Over 4000 Retail outlets selling Haier products

 21 Planet HAIER (plus some exclusive stores)

 Presence in all major cities

 Brand recall – better than other new brands.

 18 Branch Offices & 25 warehouses.

 6 Direct Service Centers & 135 Haier customer care centers (covering all India)

 24x7 Call Centre

 Present status of Haier considering the time span, is appreciated by the Industry.

Haier plans to invest Rs 370 crore in Pune plant:

KOLKATA: Chinese appliances maker Haier plans to invest Rs 370 crore in its Pune
plant to scale up operations. The company said on Thursday it has signed a
memorandum of understanding with the Maharashtra government in this regard. The
investment will be used to expand manufacturing capacity of refrigerators besides adding
new products, such as washing machines, air-conditioners, LED television panels, water
heaters and deep freezers, to the production line.

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 The investment will enable Haier to strengthen local research and development to
manufacture products more suited for Indian consumers. The company said it also plans
to increase its manpower 120% to 2,600 employees across the country by 2017. Eric
Braganza, president at Haier India, said the expansion in India is a testimony of the
company's commitment to contribute to the government's 'Make in India' initiative. Haier
Electronics on lookout for more logistics acquisitions

Haier Electronics plans new acquisitions to bolster its fast-growing logistics service
business, after the company posted a 19 per cent year-on-year increase in first-half net
profit.

The company, a subsidiary of home appliances giant Qingdao Haier, said the strategy
would help meet demand on the mainland, where more enterprises are expected to
outsource the storage, transport and distribution of their goods to professional third-party
logistics companies.

"The group will reinforce investments and enhance its merger integration capability,
aiming to absorb more third-party logistics teams into the group's platform," Haier
Electronics chairman Zhou Yun Jie said in a results statement to the Hong Kong stock
exchange yesterday.

Total capital expenditure of 367.53 million Yuan (HK$462.05 million) in the first six
months of the year was mainly used for developing its "integrated channel services"
business, including the construction of logistics warehouse projects. The business helps
fulfill the logistics requirements for a wide variety of household electrical appliances and
consumer electronics goods.

In January, Haier Electronics made two acquisitions for an undisclosed sum to build up
its logistics operations. It bought a 60 per cent stake in Shanghai Boyol New Brothers
Supply Chain Management and wholly acquired Boyol Logistics Offshore.

The company entered into a strategic alliance with e-commerce powerhouse Alibaba in
December with the goal of creating industry-leading service standards for the logistics,
installation and servicing of household appliances across the mainland.

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 Hangzhou-based Alibaba invested HK$2.82 billion in Haier Electronics in that deal, with
HK$1.86 billion of that amount put into subsidiary Qingdao Goodaymart Logistics and
HK$965 million used to buy a minor equity stake in the company.

Alibaba also invested in HK$1.31 billion worth of convertible bonds issued by Haier
Electronics in March. They could be converted into ordinary shares at HK$19.334 each
in three years.

Zhou said the net proceeds from the convertible bonds would be used to expand and
upgrade warehousing capacity, develop the company's online-to-offline integration
business, and for potential new acquisitions in the logistics industry.

Ricky Lai, an analyst at Guotai Junan International, said: "Haier Electronics will likely
pursue cooperation with other e-commerce service providers, based on the steady
expansion of online shopping in more cities and villages across the mainland."

The company reported interim net profit of 978 million yuan, up from 822 million yuan a
year earlier, on the back of its integrated channel services business. Total revenue grew
14 per cent to 32.9 billion yuan from 28.9 billion yuan in the first half of last year.

Haier expands China logistics business as 3PL demand grows

HONG KONG — Haier Electronics spent $60 million in the first half developing its
logistics business as the well-known Chinese brand embarks on a bold new strategy to
tackle the increasingly outsourced logistics requirements of household electrical
appliances and consumer electronics.

The company, a subsidiary of mainland home appliances giant Qingdao Haier, told
investors in a Hong Kong Exchange announcement that there is rising demand in China
for third-party logistics as more firms outsource the storage, transport and distribution of
their products.

Haier Electronics chairman Zhou Yun Jie said following investments in two logistics
companies in the first half, the company plans new acquisitions to boost its fast-growing

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 logistics services division. In January, Haier bought a 60 percent stake in Shanghai Boyol
New Brothers Supply Chain Management and wholly acquired Boyol Logistics Offshore.

The group posted a 19 percent increase in first-half profit, banking $160 million, with
revenue growing 14 percent to $5.35 billion.

Haier Electronics’ new strategy gained momentum in the first half after leveraging a
strategic alliance with China’s e-commerce powerhouse Alibaba that was signed in
December. The goal was to create industry-leading standards for the logistics, installation
and servicing of household appliances across the country.

Alibaba invested $361 million, with $239 million injected into subsidiary Qingdao
Gooday Mart Logistics. The e-commerce giant also put $167 million into convertible
bonds issued by Haier Electronics, the net proceeds of which Zhou said would be used to
expand and upgrade warehousing capacity, develop the company’s online-to-offline
business and acquire logistics companies.

“The group has nearly 30 warehouses across the country to provide merchants on
Tmall.com (a unit of Alibaba) with logistics and delivery services that features
warehousing and distribution. Goods will be delivered directly from the group’s logistics
centers to consumers to avoid multiple transfers, which has significantly improved
delivery efficiency and lowered the chances of product damages and customers’ costs,”
Zhou said in a statement.

In China, the “last mile” delivery to online shoppers is an area crucial for the success of
any e-commerce operation, and Haier Electronics is integrating its installation service
business with Gooday Mart Logistics, which it believes will greatly improve service.

Gooday Mart Logistics operates a 24-hour delivery in over 1,500 districts, and in addition
to delivery-at-request and installation-after-delivery services, Gooday Mart also offers
reverse logistics, unpacking and product checks, and scheduled delivery.

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 The acquisition of Shanghai Boyol also expanded the company’s last-mile capability in
the furniture business while allowing it to build a nationwide network and move service
coverage into third- and fourth-tier markets. The upgrade of service capacity is helping
Boyol to build the largest third-party professional furniture installation platform across
the country.

It has allowed Boyol to expand business cooperation with existing customers, such as
IKEA, and bring in new clients such as Yihua Timber and Red Star Macalline.

Zhou said the logistics industry in China would continue its rapid growth in the second
half. “The industry is experiencing large scale consolidation, and more enterprises will
outsource their logistics function to professional third party logistic companies. The
group will reinforce investments and enhance its merger integration capability, aiming to
absorb more third party logistic teams into the group’s platform,” he said.

Alibaba and Haier Create Logistics Joint Venture

Alibaba to Invest $360 Million in Haier Electronics as Part of Deal

BEIJING—Alibaba Group Holding Ltd. will invest 2.82 billion Hong Kong dollars
(US$364 million) in Chinese appliances maker Haier Electronics Group Co., as part of a
deal between the companies to form a logistics joint venture.
The companies said the agreement is aimed at creating a logistics and service network
across China that will deliver and assemble household appliances and other large items.

ENLARGE
An employee walks past a logo of Alibaba Group at its new base on the outskirts of
Hangzhou, Zhejiang province, China, Nov. 4, 2013. EUROPEAN PRESSPHOTO
AGENCY

Alibaba Group, the operator of China's largest e-commerce sites, has been working in
recent years to improve China's logistics industry to provide quicker and more-reliable
delivery of orders from its popular Taobao and Tmall shopping sites.

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 Alibaba founder Jack Ma has said "terrible" logistics are slowing the growth of Internet
retailing in China. The new cooperation is the most recent in a number of steps taken by
Alibaba to bolster China's underdeveloped delivery system. Earlier this year, the
company said it would join with banks, delivery companies and industry competitors to
invest 100 billion yuan, or about US$16 billion, to strengthen China's logistics network
over the next decade.
Though delivery times in China's largest cities can be speedy, the country's vast and
often-mountainous landmass has made it a challenge to get large products such as
electronics and refrigerators to more-distant locations.

To establish the joint venture, Alibaba said it would invest HK$1.86 billion in Haier
Electronics' Goodaymart unit, by taking a 9.9% stake for HK$541 million and
subscribing to convertible bonds. Alibaba also will acquire a 2% stake in Haier
Electronics for HK$965 million. News of the deal helped boost shares in Haier
Electronics as much as 19% to a 14-year high in Hong Kong Monday morning. The stock
closed 13% higher. Haier Electronics is a unit of Qingdao Haier Co. Qingdao Haier's
parent, Haier Group, ranks first in China and globally, according to Euro monitor, in
terms of market share for major appliances, such as refrigerators, washing machines and
large cooking appliances. Haier Group had 27.2% of the domestic market in China last
year, while GD Midea Holdings Co. was No. 2 with 13.5%. Globally, Haier Group
and Whirlpool Corp. each have 9.6% of the appliances market.

U.S. private-equity firm KKR & Co. in September said it would take a 10% stake in
Qingdao Haier for about US$556 million.
Stratigies:-

1. Three phases of haier innovation strategy

a. Brand building (1984-1991)-quality is prominent for haier.

b. Product diversification (1992-1998)-acquisitions of companies with bad management infusing

life into them.

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c. Globalization (1998-2005)-attacking the difficult markets first followed by relatively weaker
ones.

Principles followed for expansion:-

1. Best efforts are made to fully develop the current industry before entering segment of relative
products.

2. Best efforts are made to gain the leading position in the new segment of the industry after a
certain period.

Global Presence of Haier:-

· Trading Companies: 64
· Design Centers: 8
· Industrial Complexes: 15
· Sales Network: Over 58,000

Partners of Haier:-
Haier has established an extensive sales network around the globe. Key partners in perspective
Markets include:
• China: Strategic alliance with Sunning and Gomes chain stores
• America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's, HOME DEPOT, Best Buy,
PC-Richard, Wal-Mart, Sam's, Costco, Brand smart and Target
• Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO
• Europe: Cooperation with KESA, Media Market and Carrefour

Challeneges:-
1. The first and most important thing which Haier needs to do is to, it was found in Customer
survey that still 64% of people surveyed were not aware of Haier, even Dealers who are in
consumer durable business from more than past 20 years are not Aware of Haier.

2. Haier needs to increase the number of BTL (below the line) activities to generate Common
awareness and visibility at grassroots level.

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3. In Ahmadabad market dealers don’t want to put direct push effort on brands that’s why unlike
other cities market where if a dealer deals in LG they prefer not to deals with its direct
competitor Samsung, but in Gujarat every dealer is having collection of brands, they want to be
ready for everything like whatever customer demands they can easily find out in their store.
Currently Haier is available with most of the major dealers in Ahmadabad, Haier needs to focus
on those dealers also where it will not face direct competition with LG and Samsung , a small
and dedicated brand dealer will work not only for margins but they also can see the future
opportunities in form of Haier.

4. Good thing about Haier is that they got somehow success in positioning themselves as a
quality brand the customer survey and the dealer’s survey tells the story about it.

5. Haier should adopt aggressive marketing strategies to cut down competition and visibility at
market place.

6. Appropriate product knowledge should be given by the company to dealers and to dealers to
create awareness towards quality.

7. Overall there is much scope for Haier in Gujarat market. But Brand visibility should be
increased so it can convince dealers and customers like LG and Samsung are more customers
driven, where company demand is initiated by the customers, these company products pulls
demand from the market.

8. Company must have to focus on print ads, because where in the TV ads, a person can see only
if he/she open the TV and if the ads is getting broadcast that time, whereas print ads any person
can see going through the news paper throughout the day.

9. Products should be more attractive refrigerators looks very simple and ordinary especially
direct cool refrigerators Entry level Refrigerators can do better because of price and 190
capacities.

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10. Haier presence in Gujarat market is less compared to their competitors like LG, whirlpool,
Samsung, Godrej it is greater than only Electrolux, one thing is also evident that Haier is present
in major counters with LG and Samsung, Haier also need to focus on those dealers were it will
not face direct competition with LG and Samsung. Competitive strategy should be like this
where first Haier should wipe out
smaller brands compare to LG and Samsung because this brand also have market share larger
than Haier, and Haier is not in competition of LG and Samsung it should target on brands like
Electrolux Godrej , TCL first, so it can compete the bigger brand later on.

Haier BCG matrix:-

STAR

The star has a large market share in rapidly growth industry. The air conditioners are the stars of
haier as they have large market share and business growth rate in the market. They are stars as

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they earn maximum profit for the company and even it has potential to grow and progress
further.

Cash Cows

Cash cows exit in mature, slow growth industry but are a dominant business in the industry, whit
a large market share. Refrigerators were the first product which hair produced and launch
initially. This product runs successfully by getting more market shares in the market and
achieving high growth rate. They financed their business by gathering revenue from the sales of
refrigerators. As it’s a mature product of haier so it’s a cash cow of the company.

Question Marks

Question mark exit in new rapidly growth industry but has low market share. Cell Phones of
haier lay in question mark because they had low market share in this industry. Also they did not
create value among customers like their other products have created. They are at risk, either
these cell phones would be star or dog in future.

Dog

Dog is a poor performer with low market share in slow growth market. I would say Haier has no
product in this segment.

Porter what’s Strategy Framework:-

Haier Activities System:

 Understanding of Markets

 Outstanding Product quality

 Sourcing & Distribution network in place

 Development of Global brand

 JIT delivery (reducing inventory cycle)

51 | P a g e
Haier Competitive Advantages:

 High product quality

 Differentiation in products and services (Thanks to high investment in R&D)

 Single brand management

 Quickly response to shifts in market

Product Life Cycle:-

Haier has passed the introductory stage. It has demonstrated that it is a workable business entity.
It is producing many products and services and has loyal customers. They are solidly based and
profitable. At this time Haier is at the growth stage, where they have achieved success and now
they are trying to take off. They have occupied half of the world and they are planning to invest
in Middle East.

SWOT Matrix:

Haier has quite strong opportunities that can use to expand the market and have the possibilities
to enter new product segments and also to maintain the position. In terms to develop and avoid

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threats situations, the company should use its strengths and turn threats into opportunities at the
same time. It can help the company to increase and expand its position on the market.

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For the first entry product – washing machine as necessary weekly cleaning equipment, it must
have a great opportunity selling on Finnish market. Moreover, Finland has a great life style and
high standard of life and high salary level, the local consumption power is relatively strong. The
demand for washing machine with durable, high quality, energy saving and super silent module
is still the increasing customer need in the long term period. Furthermore, Haier has the
advantages of plenty experiences in European markets, customized product supply and

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innovation spirit, which can help much for 41 Haier enters into a new market. In a whole, the
investment of Finland can be considered in the future business decision making plan.

The Marketing Mix: Ingredients for Success

The marketing mix, earlier known as the 4 P’s, (but now has a few more), is a vital part of any
marketing strategy. This is a tool whereby the marketer takes decisions on what and how a
product should be, where it can be sold, how it should be priced, how it will be promoted, how to
equip the people who are responsible for selling the product… and so on. Getting the marketing
mix right is equally important for the large corporation and the small business owner.
One of the most critical marketing management decisions is that decision of setting the
marketing mix values, and selecting and employing strategy that periodically changes that
marketing mixes in response to changing business environment. The marketing mix problem
involves setting the values of the marketing decision variables; the four P’s; namely, Product (its
quality), Price, Place (distribution and sales-force expenditures) and Promotion (advertising,
selling). Developing an effective marketing mix is important for product planners seeking to gain
competitive advantage in industrial markets. The decision regarding specifying the marketing
mix depends on a set of variables, such as competitor's price, competitor's product quality,
competition level, forecasted sales and others. These types of variables necessitate adoption of
appropriate approaches that can deal with such variables' nature marketing mix mapping is a step
done to achieve this.

Product:
A lot of thought and effort goes into designing a product offering. The most important question,
as a marketer, a person need to ask is whether there is a need for that type of product and how
this product satisfies that need better than those of their competitors. This will force to think of
why that product is unique, and thereby help to evolve that product’s Unique Selling Proposition.

Price:
This element of the marketing mix can be many a strategy’s undoing. A complete understanding
of the financials that drive a business is essential before deciding a pricing strategy. Base your
decision after considering the following – what is the perceived value of your product in the eyes

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of the customer? How price elastic is the market? Do you wish to load overheads on to the new
product, if an existing product line is capable of absorbing them? What is your objective – do
you plan to gain market share on the strength of a rock bottom price or do you wish to create a
premium image targeted at niche customers and price your product accordingly?

Place:
This is probably that element of the marketing mix that has undergone a complete change in
definition. Traditional trading and distribution models have given way to remote or virtual
channels. While reaching the customer may have become simpler, your job as a decision maker
has become that much more complex. You now have a plethora of options to choose from – do
you go for brick and mortar or direct mailing, use the phone or sell door to door? This decision
should, first and foremost, be driven by customer preference and then by other considerations
like logistics and economics. Indeed most businesses rely on a multi distribution channel
strategy.

Promotion:
In a commoditized industry, this is what makes the essential difference. Possibly no other
marketing mix element draws as much attention from strategy makers. Again, let consumer
needs drive your efforts. Does your marketing communication address a specific need of the
target audience? Is the message memorable? Does it spur action? Here again, the entire
landscape has changed from what it was a few years ago. Promotion has gone way beyond mere
advertising and public relations – it is now a highly evolved process, ranging from live events to
internet marketing. In these times of information overload, promotion strategies must pack
sufficient punch to cut through the clutter. The marketing mix is a dynamic entity and needs to
be reviewed and refined periodically. It always helps to stay in touch with the latest
developments. Marketing mix mapping for the brand is done to know the standing of the brand
mapped with their competitors with respect to essential element of marketing mix i.e., product,
price, place, and promotion. It ensures Studying marketing mix strategies of the brand mapped
and reviewed and refined periodically according to market condition and competition
comparative mapping with other major players in the market, finding loopholes and building
effective marketing mix strategy for Haier in Refrigerator and Washing machine segment

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Haier distribution network in India:-

In the above haier distribution network shows the details of each plant and warehouses hubs
distribution networks in India. The Pune plant is the main and largest plant operations of haier in
India which manufacture electronic manufacturing products and refrigerators to hub warehouses
in Mumbai, Kolkata, Delhi, and Chennai which is located at north, south, east, and west of India.
The haier at china imports medical freezers, LCD’s and other consumer electronics to all the
hubs of warehouses in the country. Thus the network distribution shows the clear information of
logistics and distribution networks in Haier India.

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Haier supply chain operation:-

In the above Haier supply chain diagram shows the role of 3 rd party in supply chain,
transportation, warehouse, distributors, dealers and customers. This haier supply chain gives us
the logistics information, cost control and finding out the bottlenecks in the haier supply chain.
The supply chain starts with the Pune plant manufacturing unit which supplies the finished goods
through the mode of road transport which is operated by the 3 rd party company to all the
warehouses hubs in the country. And even after transporting the goods in all the warehouses the
3rd party provides service to haier for transport the goods to the distributors, dealers, outlets and
to customers. Thus this supply chain gives the necessary information and clear idea for
maintaining the supply chain of Haier Company India.

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3PL company of Haier company:-

1. Clearing and forwarding agency will provide man power to warehouse operations as per
government of labor policies.

2. They will maintain warehouse operations as per the Haier guidelines.

3. They will handle the loading and unloading and stacking the stocks which related to
warehouse operations.

4. They will stack the stocks as per the ageing norms of the company.

5. They will take care of fire extinguisher to the warehouse.

6. They will provide transportation facilities to Haier warehouse in Hyderabad in order to move
the goods.

7. They will give fright bill as per transport agreement with HIL.

8. They will also provide service for product labeling, packaging, assembly and kitting.

9. It also provides the supply chain consulting services to the company.

10. They also provide the product order entry, processing and fulfillment.

11. The 3rd party provides fleet management in the warehouse.

12. They will provide customer service through the Haier Company.

13. Haier uses 3rd party courier companies DTDC, Blue dart, Trick on for transferring the
physical documents depend upon urgency of the reports.

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Swamy and sons 3 rd party logistics provider to Haier company:-

.What they do:-

Swamy Sons has earned tremendous goodwill from name brands since 1973 as a committed
C&F Agent. The group has been providing comprehensive logistics solutions by catering to

 Providing warehouse space

 Managing C&F Operations
 Liaison with Government offices and agencies
 Transport and
 Value Added Services
 With strong IT setup that compliments the current C&F scenarios, Swamy Sons always
ensures delight during the engagement.

Best in class CFA Agent with decades of experience:-

 They have major name brands as our customers to date

 They have made liberal investments in robust IT systems that bring precision in Invoicing &
Banking
 There Transport backbone is unmatched. With own and allied fleet, transport goes seamless
at Swamy Sons.

Providing 3PL service to these organizations:-

Colgate Cadbury Goorej Amul Haier Tata sky Bajaj Camlin ETA Godrey Phillips Indian oil
jubilant foodworks LG Saffola Loreal Marico Marlboro MTR Nissin Kellogg’s

CFA warehouse operations:-

 We supply own space or source it based on specific requirements pertaining to security,

environment specifications and proximity to markets

60 | P a g e
 We evaluate the shortlisted spaces for adequate ventilation parking space, area of entry and
exit passages for ease of material handling and vehicle movement.

Handling cases, products, SKU’s:-

 Stocking, handling receipts, dispatch and monitor inventory at the unit desired by the
customer.

Manpower:-

 We decide staff profile for various needs of our clients

 We provide training on customer specific needs
 We ensure legal compliances
Handle spikes in staffing pattern/requirements

Infrastructure:-

 We deploy furniture, equipment, connectivity lines and transport based on the size of
operations.

Information technology:-

Swamy Sons is on ERP using SAP, Oracle, MFG PRO, for and on behalf of the principal
companies. Data entry and generation of MIS for the principals is done on their software
as per their corporate and IT policy.

Value added services:-

 Delivery to distributors on the same day in Hyderabad as that of all orders received up to
1PM
 Settlement of transport claims to up-country distributors within one month

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 Ability to file monthly A2 returns, and complete the sales tax assessment if suitable
authorization is given
 Procuring Licenses for the principals
 Handling Banking requirements at the warehouse level (Collecting DDs, and other
instruments).
 Generating MIS on the principal’s own software, as per their reporting conventions
 Any other customer specific requirements
 Delivering and consulting for turnkey logistics solutions, to enable new entrants to set up
retail chain.
 Disposal of expired stocks as per the legal norms and policies of the principal company

Transport:-

 We own a fleet of vehicles consisting of Autos, Tata A/C, Tata 407s, Tata 607 and DCMs for
local deliveries.
 We affect Local Deliveries on same day if order is received before 1PM.
 Separate vehicles for Modern Trade deliveries
 We have contracts with leading transporters for up country deliveries to any town/village in
Andhra Pradesh, Karnataka and Tamil Nadu.

Manufacturing:-
As a part of our backward integration strategy, we have manufacturing facilities to make custom
build shippers/cases. The manufacturing facility is handled by our group company Shrikant
Containers, located in Uppal, Hyderabad. This is over and above, the normal repacking solutions
that we offer as part of our CFA operations. Logistics solutions providers Swamy Sons provides
Logistic and fulfillment services for small and medium online businesses, which may have the
know-how for creating the product and procuring orders but not for delivery and distribution. For
example, a cottage industry for pickles or eco friendly store may have good reputation for quality
products. They may procure orders by phone or through website. They may not have the
expertise to handle logistics and delivery. That’s where Swamy Sons steps in.

62 | P a g e
Operations of inbound logistics of the warehouse:-
1. When the goods are unloaded from the truck.

2. The Inspection of inbound documents will be done by security officer of the warehouse and he
will enter all stock into inbound register

3. After inspection is done the security officer will submit the inbound report of unloaded of the
goods to warehouse manager (C.F.A.)

4. After checking the document report by the warehouse manager. He/she plans for managing the
space in warehouse.

5. After unloading of goods in the warehouse. The CFA manger will check the MRP stickers
with bar codes stickers on each product and condition of the carton box.

6. Then the warehouse manager submits the document report to branch logistics manager.

7. Branch logistics manager will prepare space management report according to the sales plan.

8. The vehicle Detention report and space management report will be sent to Regional Logistics
Manger /Head Office of logistics.

9. After unloading of the all stocks in the warehouse. The Branch Logistics Manager will send
stock unloading report to all branch sales team.

10. Branch Logistics Manager will manage vehicle detention report daily.

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Inbound operation procedure:-

Start

Entering security
inbound register

Stacking of consignment
in receiving area

Physical verification by
warehouse executive

Is Giving
Update acknowledgement to
consignment
DEPS supplier
correct?

Put inbound no. in

GRN posting by data back side of
entry operator bill/invoice/challan

SKU checking process i.e.

size, quality, color, unit

Labeling bar code level in each box Preparing GRN

(sku), which provide by supplier

Conform SKU wise storing

Closing inbound material into BIN
GRN
process

64 | P a g e
Operations of outbound logistics of the warehouse:-

1. To dispatch the stock in outbound. The logistics department in warehouse need tax
invoice document from the commercial manager.
2. As per the invoice the warehouse manager arranges the trucks as per route plan.
3. After taking the invoice the supervisor of the warehouse moves the stacked stocks from
its place to delivery place as per the invoice as allotted and he/she enters the each
outbound products details in the bin card as per invoice details.
4. After entering into bin card. The Warehouse supervisor officer will start the loading part
along with security officer and they will write down the each unit serial number on tax
invoice.
5. The warehouse manager will check the truck condition (torpholan). After loading the
warehouse manager will arrange the road permit (waybill) for the trucks.
6. After loading the goods in the vehicle the transporter will raise the Lorry copy.
7. Security officer of the warehouse will checks all documents and enter in outbound
register and handover papers to diver.

65 | P a g e
Outbound process:-

Prepare Indent Picked Material Cross Scanning the Picked

Pick-up Checking SKU

Route Planning

Update System

Generation of Invoice

Warehouse delivering process

In Haier warehouse delivering process is 3 types

1) FIFO (Fast in Fast Out).

Here the 1st items which will come to warehouse, it will be going to delivery 1 st .

2) LIFO (Last in Fast Out).

Here the last goods are going to first delivery.

3) FEFO (Fast Expire Fast Out).

Here the first expire goods will be first delivery.

E.g. if some food goods are there for delivery, then it will be delivery first.

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 DATA ANALYSIS AND INTERPRETATION

This chapter deals with the data analysis and interpretation of the sales reports and data
collected from the year 2012, 2013, 2014 of Haier to estimate the sales for future years.
The other reports like monthly inter stock report, vehicle detention report; aged stock
report and transportation report were also used to analyze the 3PL role in Haier
warehouse at Hyderabad.

Sales data 2012:-

quantity invoice
16000 13366
14000 12474
12000
10000
8000 6667
6000 4332 4383
4000 1353
2000 105 372 161 561 605 211
0 quantity invoice

Sales Net Value

120000000 106161050
99088881
100000000

80000000

60000000

40000000 30369795 26836690

20000000 8072003 Sales Net Value
1623044
1578001 1663719
147136 1749697 3356906 6045748
0

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In the above analysis of the graphs of sales net value and quantity invoice of the year 2012 data
shows that the refrigerators had great sales turnover around RS.106161050/- with the quantity
sold 13366 units in 2012 was sold in the market. And the second sales LCD had a great sales
turnover around RS.99088881/- with the quantity of 12474 units was sold in the market. The
lowest sale unit was in the year 2012 was digital IT products. Thus it was the interpretation of
the haier sales turnover of year 2012.

Sales data 2013:-

sales net value

140000000 132826344
119979937
120000000
100000000
80000000
54224180
60000000
38360491
40000000
10553412 14366821 sales net value
20000000 2980457 3055873
2439555 20232
0

quantity invoice
16000 13678
14000 10669
12000
10000 7474
8000 5782
6000 3844
4000 682 1009
2000 140 7 46
0 quantity invoice

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As per the above analysis observations of sales data and quantity invoice graphs of year 2013
shows that again the refrigerators had great sales turnover around Rs.132826344/- with the
quantity of 13678 units sold in the market. And the second highest sales were the LCD’s with
the sales turnover of 119979937/- with the quantity of 10669 units sold in the market. The lowest
sales were TV’s.

Sales data 2014:-

quantity invoice
2500 2212 2184
2000
1500 1161 1306

1000
414
500 108 57
24
0 quantity invoice

sales net value

30000000
24691107
25000000
20409138
20000000 17512371

15000000
10220122
10000000

5000000 2303752 sales net value

375421 1257030 146912
0

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As per the above analysis observations of sales data and quantity invoice graphs of year 2014
shows that the home air conditioner had great sales turnover around Rs.24691107 /- with the
quantity of 2212 units was sold in the market. And the second highest sales were the refrigerators
with the sales turnover of 20409138/- with the quantity of 2184 units was sold in the market. The
lowest sales were water heaters. Thus it was the sales analysis interpretation data 2014.

Sales data of 3 years estimation for future forecasting the sales turnover:-

sales estimation data

400000000 378806716

350000000

300000000 283663852

250000000

200000000
sales
150000000

100000000 76915841

50000000 39714125

0
2012 2013 2014 2015

As per the analysis and interpretation of 3 years of Haier sales data and comparing it with each
years of sales the graphs shows that in the year 2013 the sales data was recorded as the highest
sales turnover of the Haier company around Rs.378806716/-. And by forecasting the sales data
of 3 years of 2012, 2013, 2014 as been estimated that the sales turnover can go down in the year
2015 which is not a good sign for Haier Company. So by doing the sales analysis it shows that
all the departments in the Haier Company and even logistics department also depends upon the
sales turnover and marketing department of the company.

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Aging stock report analysis:-

0% Aging stock analysis

1% 1%
0% 0% Commercial AC
3% Cross Division
10%
0%
Freezer
Home Air Conditioner
LCD
Micro-wave Oven
26%
Refrigerator
59%
Small Appliances
Solar Product

0% Washing Machine
Water Heater

As per the above aging stock report analysis shows that 59% units of water heaters are still
stacked in the warehouse which comes under aged stock in the report and shows very less sales
for the water heater and shows high dumping of the water heaters from the plant in the
warehouses. The less aged stock in the warehouse is small appliances and commercial AC’s
were the flow of the goods is more in the market. The aging stock analysis shows the products
which are more sales and less sales in the market. The aging stock also occupies the space in the
warehouse and cost of transporting in the market or other warehouses.

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MIS report of April 2015:-

1800
1562
1600
1400 1270
1200
1000 858
800
600 number of trucks
400
128 144 125
200 4694 48 4599 3 18 1266 55 total transit time number of
0 days
total quantity carried

As per the above MIS report April 2015 shows how 3rd party provider’s gives number trucks to
transport the goods, quantity carried and transit time of days at the warehouses. The above graph
shows that Om Sai transporter which is from the company of Samy and Sons the 3rd party
company which provides service to haier as been recorded the highest service in the means of
transport of trucks to haier warehouse for transporting the goods in local and upcountry of
around 46 trucks as been provided by the 3 rd party logistics company to haier in the month April
2015 MIS report. And the Om Sai transport truck carries the highest units of haier products with
lowest fright charges and to control the cost of transportation. The second 3 rd party transport
company is S.M. carrying corporation company which provides 45 trucks to Haier Company
with units carrying is 858 units. Thus the MIS report shows the role of 3 rd party logistics
company in the haier company.

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MIS report May 2015:

250 220

200
144
150 120 125

100

50 38
18 number of trucks
2 12 3 5 5 3 9 13 11
0 transit time number of days
total quantity

As per the above MIS report May 2015 shows how 3rd party provider’s gives number trucks to
transport the goods, quantity carried and transit time of days at the warehouses. The above graph
shows that S.M. carrying corporation which is a 3rd party transport company which provides
service to haier as been recorded the highest service in the means of transport of trucks to haier
warehouse for transporting the goods in local and upcountry of around 11 trucks as been
provided by the 3rd party logistics company to haier in the month April 2015 MIS report. And the
S.M. carrying corporation truck carries the highest units around 220 of haier products with
lowest fright charges and to control the cost of transportation. The second 3 rd party transport
company is TTC logistics which provides 5 trucks to Haier Company with units carrying is 125
units. Thus the MIS report shows the role of 3 rd party logistics company in the haier company.

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Vehicle Detention report:-

VDR report
3.5
3 3
3
2.5
2
2
1.5
1 1 1 1 1
1
0.5
No. of Days Halting
0

As per the above VDR analysis report which shows the dumping of the goods from plant without
the coordination with sales and logistics departments of the company or due less space in the
warehouse which effect the time of halting of the trucks in the warehouse. The trucks from the
plant which is SM carrying corporation and Nalagarh truck Perators Company is recorded as
more days of halting around 3 days due the low space in the warehouse or low billing from the
sales department. Thus the VDR report shows the vehicle detention time and reporting time of
halting trucks in the warehouse.

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3PL transport analysis in Haier warehouse Hyderabad:-

6000
5465

5000

4000
3040
3000

1880
2000 1620 transporter
1260
1250
870 number of trucks
1000 761
535 KM
235160 89 215 301 360215 195205 14050 86 81 65
160
8 12 10 20 16569 10 12 100171 15 10
5 11 38 7 11 42 6 5 335
0
GUDLAPOCHAMPALLY

NAMPALLY
BEGUMPET

DILSUKHNAGAR
ATTAPUR

MALAKPET

SANTOSH NAGAR
SEC-BAD

VIDYA NAGAR
TADBUND
Ameerpet

KUKATAPALLY

PANJAGUTTA
HASTINAPURAM
KARKANA
BHEL

UPPAL
MOOSAPET
AS RAO NAGAR

KOTI

LB NAGAR
habids

MUSHEERABAD

As per the above transportation report shows the role 3 rd party logistics company which is
sovereign enterprises of Swami and Sons Company provide the trucks around 901 trucks to
Haier company to local and up country were they had transported the goods more to koti area in
Hyderabad where there is more sales and more dealers are located in koti. The 3rd party Logistics
Company had provided the trucks to koti around 301 trucks with units carried is 3389 which
shows the demand for the Haier products for transporting. Thus the transportation report shows
the details of 3rd party logistics in transporting the goods in Hyderabad in local and up country.

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SUGGESTIONS:

1. The sales department and plant manufacturing department should coordinate to

decrease high dumps from the plant.
2. To maximize the warehouse space in order to allocate the space for the higher dumps
of the products from the plant.
3. To reduce the lorry detention time during the process and implementing effective
scheduling process in the loading and unloading of the products from the plant.
4. To minimize and control the inter branch stock transfers as per sales plan.
5. To reduce the late delivery of products to the dealers and customers.
6. To recruit manpower in order to reduce the time of loading and unloading of the
products and to avoid the traffic of trucks.
7. Need to improve in the logistics facilities in the company and maintain the flexibility
within the departments.
8. Need to improve to liquidate the ageing stock daily report in the warehouse.
9. To avoid low quantity billing in order to reduce the expenses in local and upcountry.
10. To appoint repacking department and 3 rd party at every hub only for import stocks
and all warehouses to avoid the carton box damage in order to save time ,reducing
the loss and to control the cost.
11. In global market: Continue Brand Building Initiatives, An individualized brand, the
product quality, adaptability and flexibility and Customer focused firm.
12. In Domestic Market: Continuous Innovation, a home company to customers which
Increases the quality.
13. To avoid the part loads of the goods by the distributor for all the Haier warehouses in
the country.
14. To avoid low billing by the distributors in order to control the fright cost.

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REFFERENCES:-
1. MANAGING SUPPLY CHAINS A LOGISTICS APPROACH BY JOHN .J.
COYLE, 2013, 9T H EDITION.

2. Aghazadeh S.M. (2003), “How to choose an effective third party logistics

provider?” Management Research News, Vol. 26, No. 7, pp. 50-58.

3. Enterprise Information Management, Vol. 18 No. 3, pp. 316-329.

4. Alves, A.R. and Vieira A. (2006), ‘‘SERVQUAL as a marketing instrument to

measure service quality in higher education institutions’’, Second International
Conference: Product Management-Challenges of The Future, Poznan.

5. Bask, A.H. (2001), "Relationships between 3PL providers and members of supply
chains – a strategic perspective", Journal of Business and Industrial Marketing,
Vol. 16 No.6, pp.470-86.

6. Bagchi, P.K., Virum, H. (1996), "European logistics alliances: a management

model", International Journal of Logistics Management, Vol. 7 No.1, pp.93-108.

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