Supply Chain Management in the

“Paint Industry”

A PROJECT REPORT

Under the guidance Of

MR. AMIT ZUTSHI

Submitted by

SEEMA SHARMA
in partial fulfillment of the requirement
for the award of the degree

Of

MBA

IN
Marketing
 Advance Learning Systems, 02882
A-148 Sector- 63
Noida, U.P. - 201307

A Project Report
on

Supply Chain Management in the

“Paint Industry”
BY
SEEMA SHARMA

Executive Summary submitted in partial fulfillment of the requirements for the

degree of
Master of Business Administration
of Sikkim Manipal University, INDIA
 Project Title:
“Supply Chain Management in the Paint Industry”

Organizations identified for the study:

(Berger Paints India Ltd)

(Asian paints India Ltd)

 EXECUTIVE SUMMARY

Supply Chain Management is an area that is used as a

differentiating factor for a lot of companies. Every company in the
world have either improved the Supply Chain Management or are
looking forward to give proper concentration to it. This project will
take a look at the supply chain management of the Paint Industry.
In view of the same the companies which are been covered are
primarily the biggest 2 companies in India. As being No.1 in Delhi,
Berger Paints India Ltd and the follower Asian Paints India Ltd.
The study has only been focused towards the working of these
companies in the National capital region of Delhi. The research has
mainly covered information sourced from some company officials;
covering at least 3 levels of officials, and covered 24 sales officers
of 3 companies (Berger Paints, Asian Paints and ICI paints also for
a better idea of the industry), then onwards there are ASM’s of all
the three companies and RSM’s of only the two focal companies.
After covering the company persons, the next step was to cover, as
many dealers as I can, but due to the time constrain the number
of dealers, which were been covered, were restricted to only 38.

With the discussions to the company persons and the dealers I

was able to gain knowledge that the paint trade in Delhi is
primarily working on 2 things. One is rebates and the other is
credit period. On the basis of both the things the market runs.
In the Project Report I have first explained about the basic concept
of supply chain management. After the same I have explained
about the Indian Paint Industry. Paint trade in India is organized
only to the level of 60% and rest is all un-organized. The
unorganized sector in the Paint Industry is very scattered; Delhi in
all has almost 550 Local vendors. Thus the competition and
usefulness of SCM goes deeper.

After understanding the need then the Report moves to various

areas of the SCM and see how are all these things managed in
Paint Industry as a whole and wherever possible about the two
companies differently.

The second chapter covers the areas of Logistics; logistics, which is

the backbone of any SCM, is covered with various areas. It has
areas like inventory management, order processing, network
planning and many more. In this chapter all the functions are
explained individually and also been accompanied with the paint
trade for that particular segment only.
Moving further to the areas where the heart of any company exists,
the financial aspects, this chapter explains about the relevance of
finance to SCM and SCM to finance. How well the combination of
the two is working together for the Paint Industry.

The further chapter moves towards the forecasting methods and

the importance of forecasting. It shows that how difficult is it to
forecast in the paint industry.
This is followed by the relationship chapter, this chapter talks
about the customer satisfaction and the inter firm relations. This
chapter explains both the things differently and explains how
Asian is trying to take an additional advantage by giving special
kind of services and trying to gain customers goodwill.

Role of sales and marketing in the working of SCM is the next

chapter. This chapter tells us about the importance of human
touch in the technical process. This chapter shows that if there is
no proper human involvement then the whole process might go for
a toss. Thus to have a perfect person at perfect place is as
importance as to have the right market share.

In the next chapter there is discussion about the machine which

has changed the working of the Paint industry. This machine has
made the SCM in the Paint Industry some effective.

Further moving to the final chapter we will talk about the future of
the paint industry and what all changes are going to hit the paint
market and what all effect will be there from the changes.
 TABLE OF CONTENTS

1. BERGER PAINT INDUSTRY’S PROFILE

-ABOUT BERGER PAINTS INDIA

-ABOUT BERGER PAINTS PAKISTAN

-BERGER'S MISSION STATEMENT

-BERGER'S PRODUCTS

-COMPANY’S PLAN
 -DEMAND TREND OF BERGER PAINT INDUSTRY

-MANUFACTURING PROCESS

2. ASIAN PAINT INDUSTRY’S PROFILE

-HISTORY OF ASIAN PAINT INDUSTRY

-INTERNATIONAL OPERATIONS

-ASIAN PAINT’S PRODUCTS

4.SUPPLY CHAIN MANAGEMENT

5.SUPPLY CHAIN MANAGEMENT OF THE PAINT INDUSTRY

-EMULSIONS AND ENAMELS OF BERGER PAINTS.

6. A GLIMPS ON THE INPUT SIDE OF THE PAINT INDUSTRY (RAW

MATERIALS)

- LOGISTICS MANAGEMENT

-ORDER PROCESSING

-INVENTORY MANAGEMENT

-TRANSPORTATION

-LOCATION MANAGEMENT AND NETWORK PLANNING

7.CUSTOMER SATISFACTION

8. ROLE OF SALES IN SUPPLY CHAIN MANAGEMENT

9. ROLE OF MARKETING IN SUPPLY CHAIN MANAGEMENT

10.FUTURE TRENDS IN THE INDIAN PAINT MARKET

11.CONCLUSION

12.BIBLIOGRAPHY

THE TITLE OF THE Project Report

 “Study of Supply Chain Management in the Paint Industry”

OBJECTIVES OF THE STUDY

The objective here is to get an overview of Supply Chain

Management and to know how this concept works in the Paints
Industry, The various steps the companies take to improve the
supply chain management and how successful are they.

Primary objective:

To understand the Supply Chain Management followed at Paint

Industry. To find out the gaps left while implementing Supply
Chain Management in various companies under the paint
industry. Finally to find out the solutions for those Gaps.

Secondary objective:

 To study the various areas of Supply Chain Management in

Paint Industry.
 How they manage Supply Chain.
 Whether they are able to get the maximum out of the Supply
Chain Management and make the highest benefit of it.
RESEARCH METHODOLOGY:

Methodology of the study will be an exploratory research. The

nature of the study is such that it needs to have both the
secondary research as well as the primary one. The Secondary
research will help to gain more and more information about the
companies and the usage of Supply Chain Management in them.
The primary research will make me understand the realities of the
market.

I. INFORMATION SOURCES:

Primary Sources:

The following sources have been identified to provide primary

information regarding the supply chain management of the
organizations under study:
 Employees of the organization in the concerned departments
through
o General Discussions
 Business Associates/ Wholesalers/ Stockiest/ Dealers/ Sub-
Stockiest/ Other intermediaries of the Organization’s Sales
and Distribution network
 Any other individual having association with the organization.
The focus during the research would be towards meeting more and
more channel members of the company not only facilitate our
primary research but in the process collecting authentic data and
verifying the same.

Secondary Sources:

The following sources have been identified to provide

secondary information about the organizations under study:

 Literature on sales and marketing

o Research publications
o Books by Renowned authors
o Business magazines and journals
 The Internet

II. DATA COLLECTION TOOLS:

Though there are numerous tools available for Data Collection, we

have identified the following tools to be used for the purpose
during the course of the project:
 Group discussions
 Personal Interviews
 BERGER PAINT INDUSTRY’S PROFILE:

Berger Paints India Limited (Berger Paints) has selected Oracle

Applications to manage its operations across nine manufacturing

units and its 10,000–strong dealer network across India. Berger

Paints will also use Oracle Applications to support its future

growth. With the help of Oracle Applications, Berger Paints expects

to reduce product development cycle time and introduce new

products faster into the market, in line with the company’s goal to

keep pace with changing customer preferences.

“Oracle has proven itself to be a single vendor with a complete

stack of products to address the applications, middleware and

database requirements of Berger Paints India,” said

Mr. Subir Bose, Managing director, Berger Paints. “We chose

Oracle Applications as it fit our IT needs to support the company’s

growth plan and vision.”

“Oracle’s expertise in process manufacturing and business

analytics was another deciding factor for us to choose Oracle

Applications. It will help us identify trends in customer preferences

and design products to meet changing customer taste,” Mr. Bose

added.

“With Oracle Applications, Berger Paints can track market

dynamics and meet market and customer requirements faster and

more efficiently,” said Subhomoy Sengupta, senior director,

Applications Sales, Oracle India.

Berger Paints will use Oracle Applications modules including

Advanced Supply Chain Planning, Trade Management, Process

Manufacturing, Procurement, Financials, Order Management,

Logistics and Human Resources Management. With Oracle

Applications, Berger Paint aims to streamline its supply chain,

optimize inventory utilization, track effectiveness of sales

promotions and enhance customer service by using Oracle

Applications.

About Berger Paints India:

Berger Paints India Limited was established in the year 1923 and

is one of the largest paint companies in India, offering paints for all

purposes – decorative, automotive and industrial and protective.

Apart from that it offers painting solutions such as Lewis Berger

Home Painting – making wall painting a delightful experience for

consumers and Prolinks – for paints professionals. The Company,

its associates and subsidiaries have 9 factories in India and

facilities abroad. It operates more than 80 depots in India in

almost all the States and its trade name Lewis Berger carries the

hallmark of its colorful lineage, tradition and signature quality.

About Berger Paints Pakistan:

The name of Berger has been associated with paints

manufacturing for more than two centuries. in Pakistan, Berger
has been the pioneer in organized paint manufacturing and was
the first company to introduce premium quality paints in Pakistan,
Berger stated its operation in Pakistan in 1950.

Berger paints Pakistan becomes a public limited company in 1974,

when 49.38% of its share was acquired by Pakistani investors,
while the remaining 50.62% were held by the U.K parent company,
Jenson & Nicholson limited. Soon afterwards, Jenson & Nicholson
limited was taken over by Hoechst, one of the world’s major
manufacturers of chemicals and allied products.

Slotrapid limited, a U.K based company with diversified business

interests, acquired the control of Berger paints Pakistan limited in
1991.

Berger paints launched its second paint manufacturing facility in

2006 located in Lahore, this is a state-of-the-art plant geared to
incorporate the latest technologies to produce paints and coatings
for a variety of applications.

BERGER'S MISSION STATEMENT:

1. We will vigorously promote and safeguard the interests of our
employees, our shareholders, our suppliers and all our others
business associates.
2. We will achieve corporate success through an unwavering
commitment to provide our customers high quality products to
their ultimate satisfaction.

BERGER'S PRODUCTS:
 1.Acid Catalysed Wood Coatings:

Berger’s acid catalyzed coatings are suitable for a wide variety of applications
and are available in a range of solid contents, allowing flexibility to achieve the
solvent emissions directive legislation.
For advice on meeting

2.Hydroshield Exterior Wood Coatings:

Developed in Europe by our team of specialist chemists to withstand one of

the world’s harshest climates, Becker Acroma’s HydroShield range of high
performance water-based exterior joinery coatings offers long-lasting, high
quality results every time.
3.Nitro-Cellulose & Pre-Cat Wood Coatings:

Berger’s nitro-cellulose and precatalysed products offer a range of solutions

for your end use applications.
For advice on meeting VOC legislation or further guidance on products and
application, talk to Becker Acroma or your local distributor.

4. Polyurethane Wood Coatings:

Berger’s polyurethane products meet the latest regulations .

5.Uv-Curing Wood Coatings:

UV curing products cure almost instantly, produce exceptionally durable
surfaces and have excellent stacking qualities. They are also safer to handle
than conventional solutions when handled correctly.

6.Water-Based Wood Coatings:

For years Becker Acroma has been leading research and

development in the area of waterborne lacquers and paints - driven
by our concern for the environment.

Company’s Plan:
Firstly the company’s plan includes sales forecast followed by the
planning of material

Procurement and planning for other processes.

Basically Forecasting is done for different products based on two

bases as follow:

a. Quarterly basis: On quarterly basis the sales forecast is done

one quarter earlier. Suppose if they need the required target in
August they do the sales forecast two quarters earlier in between
January and March.

b. Monthly basis: On monthly basis the sales forecast is done

one month before, they check the inventory if there is sufficient
amount of stock available in that than they are meeting with the
forecast requirements, but in case if there is a shortage in
inventory they increased their production till the time they meet to
their required target.

Demand Trend of Berger paint industry:

High Demand

Months:

-October, November, December, January , June, July.

Reason:

-Due to marriage Season, E-id season and Diwali and other festival
season.

Low Demand

Months:

February, March, April, August, September

Manufacturing process:

1 Acquisition of material:

The procurement department controls store and it is issued as per the

production schedule.
2 Charging:

In this process the raw material is put in to machines in different batch sizes.
Minimum of two hundred and onwards.

3 Grinding:

Here the solid raw material is put in to grinder in order to make a paste of
that to mix it in liquid raw material.

4 Mixing:

This is the last process of manufacturing, they’re liquid and paste and other
material like bonging, gloss, and base is added.

5 Quality check:

Quality of the product is checked in all terms it include color, shine , base ,
drying time.

6 Filing:

After the paint is cleared by the quality control then it is filled. Order of tins
provide at the same time when production schedule is made.

7 Storage:

In last the tins of the paint is stored in the warehouse located in the factory.
ASIAN PAINT INDUSTRY’S PROFILE:

Type Public BSE: 500820

Industry Paint

Headquarters Mumbai, India

Revenue Rs 6,680.94 Crore (US$ 1.42

billion)
 Profit Rs. 1,256.09 Crore (US$ 267.55
million)

Website www.asianpaints.com

Asian Paints BSE: 500820 is India's largest paint company based

in Mumbai. It operates in 21 countries and has 29 paint
manufacturing facilities in the world servicing consumers in over
65 countries. Besides Asian Paints, the group operates around the
world through its subsidiaries Berger International Limited, Apco
Coatings, SCIB Paints and Taubmans..

History of Asian Paint Industry:

The company has come a long way since its small beginnings in
1942. Four friends who were willing to take on the world's biggest,
most famous paint companies operating in India
at that time set it up as a partnership firm. Its started in
Kapadwanj in the Kheda district in the state of Gujarat as a
collection of small plants. Over the course of 25 years Asian Paints
has became a corporate force and India's leading paints company.
Driven by its strong consumer-focus and innovative spirit, the
company has been the market leader in paints since 1968. Today it
is double the size of any other paint company in India. Asian
Paints manufactures a wide range of paints for Decorative and
Industrial use.
Vertical integration has seen it diversify into products such
as Phthalic Anhydride and Pentaerythritol, which are used in the
paint manufacturing process. Asian Paints along with PPG Inc,
USA, one of the largest automotive coatings manufacturer in the
world has begun a 50:50 joint venture, Asian PPG Industries to
service the increasing requirements of the Indian automotive
coatings market. Another wholly owned subsidiary, Asian Paints
Industrial Coatings Limited has been set up to cater to the powder
coatings market which is one of the fastest growing segments in
the industrial coatings market. This wholly owned subsidiary of
Asian Paints has entered into a tie-up with Canada-based Protech
Chemicals which is one of the top ten powder coatings companies
in the world for technological know-how in the area of powder
coatings.

International Operations:

Asian Paints operates in 22 countries across the world. It has

manufacturing facilities in each of these countries and is the
largest paint company in ten overseas markets. Asian Paints
operates in five regions across the world viz. South Asia, Southeast
Asia, South Pacific, Middle East and Caribbean region through the
five corporate brands viz. Asian Paints, Berger International, SCIB
Paints, Apco Coatings and Taubmans. In ten markets, it operates
through its subsidiary, Berger International Limited;
in Egypt through SCIB Paints; in five markets in the South Pacific
it operates through Apco Coatings and in Fiji and Samoa it also
operates through Taubmans.

The countries that Asian Paints has presence are as follows:

South Asia : Bangladesh, Nepal, and Sri Lanka
South East Asia : China, Malaysia, Singapore and Thailand
Caribbean Islands : Barbados, Jamaica, Trinidad and Tobago
Middle East : Bahrain, Egypt, Oman and United Arab Emirates
South Pacific : Fiji, Solomon Islands, Samoa Islands, Tonga and
Vanuatu

Asian Paints’ increased cash flow to help fund capacity expansion:

A look at the annual report of Asian Paints Ltd shows that fiscal
2010 was an extraordinary year for the company, not just because
its consolidated net profit doubled, but because its cash generated
from operations rose by 2.4 times to Rs1,063 crore.
Asian Paints’ inventory and debtors both increased during fiscal
2010, but creditors increased much more. The rise in cash flows
came in handy to fund its expansion projects. After around Rs350
crore of capital expenditure in fiscal 2010, it has enough money
left, with around Rs624 crore in investments (mostly liquid) and
Rs105 crore in the bank. Its loans actually declined in a year when
it stepped up capital investments. It also recently announced a
Rs735 crore paints and intermediates project in Maharashtra.

During fiscal 2011, its capex outlay is estimated at Rs250 crore

and will remain high for the next few years as the Maharashtra
project is due to start production in fiscal 2013.
Asian Paints’ expansion plans will allow it to meet growing demand for paints in-house. During
fiscal 2010, nearly one-third of its production was outsourced. Based on stand-alone results, its
total paint sales rose by 16% in volume terms, while in value terms, sales rose by a lower rate
of around 15%. This may be partly explained by the company passing on excise duty cuts (as
part of the government fiscal stimulus package) and lower raw material prices to customers or
even a shift in product mix. Thus, net sales rose by 20% due to a lower excise burden,
compared with the 15% increase in gross sales.

Asian Paint’s Products:

1.Acrylic Wall Putty: 2. Apcolite Premium Gloss Enamel:

3. Apcolite Premium Satin Enamel: 4.Apex Ultima:

5.Asian Paints Apex: 6. Asian Paints Apex Dholpur

Tex:
7.Asian Paints Pu Exterior Matt: 8. Decoprime Wall Primer:

9.Knifing Paste Filler: 10.Melamyne Glossy:

11.Melamyne Palette Glossy: 12. Premium Semi Gloss

Enamel:
 13.Pu Exterior Glossy: 14. Pu Interior Glossy:

15.Royale Glitter: 16. Royale Play:

17. Royale Play Dune: 18. Utsav Enamel:

19.Wood Primer: 20. Exterior Sealer:

 SUPPLY CHAIN MANAGEMENT

When we think of Supply Chain Management the first thing which

comes to our mind is logistics and movement of the material. We
all have a misconception that Supply Chain Management only
works from the company end to the consumer; it creates a better
platform for the product to reach the market. Before we start
learning about how the supply chain works in the paints industry
let us first learn about what is Supply Chain Management exactly
is and which all areas it covers.
Supply chain management is the management of supply chain.
Thus to manage a supply chain properly we must first understand
what supply chain is all about. This effort to cover all the areas in
the market is called Supply Chain. Supply Chain is the one that
starts from purchases of raw material of our raw material supplier
and finishes at making the product available to the end customer.

A supply chain is a network of facilities and distribution options

that performs the functions of procurement of materials,
transformation of these materials into intermediate and finished
products, and the distribution of these finished products to
customers. Supply chains exist in both service and manufacturing
organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm.

A very simple supply chain for a single product, where raw

material is procured from one supplier, transformed into finished
goods in a single step, and then transported to the ultimate
customers.

Supplier SPECIFIC COMPANY Customer

Basic Supply Chain

It is really difficult to explain a supply chain without a particular

industry. It does not end here; supply chain even differs within the
industry. Different companies in an industry even have different
kinds of supply chains and they may be managing it in different
manner. To give you a generalized view let us see a part of supply
chain that is generally common in all the companies .

Third party ULTIMATE

Supplier logistics supplier CUSTOMER

Initial SPECIFIC COMPANY Customer

Supplier
A part of Supply
Chain

This is just a part of the supply chain. Imagine that this figure has
45-50 Initial suppliers, 10-15 Suppliers who are making the raw
material available to the company. On the other hand if there are
some logistics companies, a number of distributors, a huge
number of dealers dealing with them and a un-countable number
of customers. This all can be accompanied with the Institutional
selling, bulk selling which has different pattern and direct
marketing. With having all this in one diagram I feel that it is
almost impossible to build a diagram that can explain all that.

Over the decades, management of the supply chain has moved

through three distinct phases, from decentralized
(functional/departmental), to centralized (corporate planning and
purchasing), and finally to a combination of both.

Phased Evolution of Supply Chain Management

Phase 1: Phase 2: Phase 3: Combination of

Decentralized Centralized both centralized and

(Functional or (Integrated) decentralized

Departmental)
Supply  Done in  Shift to a  Collaborative

functional areas business planning

Chain
 Ineffective process focus  Extension of the
Planning
due to limited  Increase planning process beyond

information. in effectiveness the enterprise to include

 Difficult to due to contract manufacturers,

implement standardization key customers and

Standardization of information suppliers

around the across the

enterprise. enterprise

 Integrate

d supply chain

planning:

demand

forecasting,
 planning &

scheduling

Supply  Execution is  Most of  Decisions taken at

generally in a the decisions the most appropriate

Chain
reactive mode made on an level in the organization
Execution
 Decisions enterprise wide  Greater proportion

often made by area. of collaborative, pre-

functional  Limited emptive Decisions

managers and key collaboration

Associates  The

functional

manager might

not be happy

with the

decisions

made.
Phase 1—Departmentalized or functional supply chain

management:

Organizational structures from the fifties to the late eighties can be

characterized as a series of functional and geographical areas.
Executive management’s attempts at centralized supply chain
planning in such an environment were ineffective due to the lack
of standardization of business information, poor data integrity and
analysis support, disparate technology systems, and incentives
that did not promote sharing of information. Supply chain
execution decisions were made by a core set of managers within
each functional area with minimal thought about repercussions in
other areas. Decisions were reactive and based solely on criteria
that were applicable to the particular functional area.

Phase 2—Transformation to integrated supply chain

management:

In the late eighties and early nineties, with the advent of BPR,
corporate leaders started seeing the benefits of aligning their
organizations, along with the associated business objectives and
performance incentives for executives, to underlying business
processes. Advances in technology and lower cost of computing
increased the penetration of enterprise-wide transaction systems
such as ERP systems. Standardized business information and a
coherent set of metrics from different businesses, functional and
geographical areas were now readily available to senior managers.
With the introduction of advanced planning and scheduling
systems, supply chain optimization became a feasible option. This
led to an increase in the effectiveness of increasingly centralized
supply chain planning processes. The planning process was more
integrated and driven by cross-functional teams with an objective
to look at the enterprise as a whole. Leading corporations across
all industries started realizing that to reap the full benefits,
demand forecasting, supply chain planning, and production
scheduling ought to be treated as an integrated business process.
Sales and operations planning programs, where cross-functional
teams periodically meet to determine the best course of action,
became popular.

Phase 3—Transformation to value networks:

Today, the Internet is unleashing a powerful phenomenon—

collaboration—that is affecting the supply chain. Integrated and
centralized supply chain planning will become even more effective
as the majority of inputs to the planning process will flow bottom-
up through the enterprise, and an increasing portion of it will
originate from the end customer. Pertinent information will be
adjusted and reviewed by relevant players based on new
developments. Demand forecasts will be routinely updated by sales
representatives based on the latest customer information and
eventually by the end customers themselves.
Let us now see that how is the supply chain management
works in the paint industry. In short we can say that how the
paint trade works.

The Indian paint industry has come a long way from the days
when paints were considered a luxury item. Today the awareness
level on benefits of paints is relatively high and people have started
making paint as a part of their life. India is a favorable proposition
for a lot of trades and a lot of world leaders have already or wants
to start operations in India. Paint industry is one of these
industries, where leaders of the world are looking at companies
like ICI has already entered and companies like Sherwin Williams
also are looking for some entry gateway in India. Factors due to
which these companies are interested in coming to India include:-
 The awareness level on benefits of paints is relatively high
and people have started making paint as a part of their life
 The low per capita consumption of paints (currently 0.5
kilogram and has a huge potential to grow as per the world
average),
 Growth in construction sector (it is being offered industry
status) and
 Growth in the auto/white goods market respectively spurring
demand for decorative and industrial paints.
 The industry has also witnessed increased activity in the
industrial variety of paints with the entry of MNCs in auto,
consumer durables etc., which has been gaining steadily over
decorative paints in the last one decade, by having such fast
growth the industrial sector has been able to gain a good
 market share. Right now the market share of industrial paint
is close to 30 % of the paint industry.

This paint industry of India comprises of organized as well as

unorganized sector, which can also be called small scale sector.
Approximately 60% of the production is contributed by the
organized sector. The unorganized sector in the paint industry is
having a big number of players running nearly 2000 small-scale
units. We can say that one cannot count the number of players
running in a particular market. This trade is so dynamic that after
every few days one can hear a new name in the market.

With having so many competitors in the market one has to be very

accurate in the market, this is because being a high technical
product one cannot judge the quality of the product at the time of
purchasing. The production of Paints is not a very expensive affair,
which is because we have so many players in the market. Thus to
show the differentiation in the product wither one have to wait for a
few years or he can give a better service and get the perception about the
quality of the product in the customers mind.

In the organized sector, leading from the front is market

leader Asian Paints which leads the market to the market
share of 54% of the organized sector and over 15000 dealer
networks and it is increasing its network by concentrating in the
semi urban and rural areas for more penetration in the market.
Two very close companies with the name of Nerolac and Berger
are followed Asian Paints, these companies have a market share
of 17% and 16% respectively. After all this fourth in the major
organized sector is ICI Dulex, which is gaining control with a very
fast pace.

The Paints Industry mainly consists of emulsion paints, enamel

paints, pigments, printing inks, synthetic resins and many
more products.

The paint trade in India is divided in two segments Industrial

paints and Decorative paints.

Automobile manufacturers are the biggest targets of the Industrial

paints segment as they are the one who has the maximum
demand in this segment of market. It is very difficult to study the
supply chain of the paint industry in the industrial segment, as
there is a different set of works for every customer or every set of
customers. Every customer in this segment is such big that the
company has to change the working style as per the customer.

Decorative is market which leads the Indian paint industry and

which needs all the efforts on all the sides. This is one segment of
the market that needs all the efforts of all the functions of the
market as in this segment the market covers whole India. The
product range which one company covers in the market is also
huge in the organized sector companies. As we have already
discussed that the product range of a paint company covers
emulsion paints, enamel paints, pigments, printing inks, synthetic
resins and many more products.
Let me explain this with a example of taking Emulsions and
Enamels of Berger Paints.
Paint
EMULTIONS (water-based)
Exterior Wall Finishes
Interior Wall Finishes
 Rangoli Super Emulsion
 Luxol Silk Emulsion
ENAMELS (solvent-based)
Synthetic Enamels
for Exteriors & Interiors
 Luxol Hi Gloss
 Butterfly Enamel
 Luxol Luster Finish
 Luxol Satin finish
 Luxol Rich Mat Enamel
 Butterfly Furniture
Enamel
 Antisol Roof Enamel
 Wood Primer
 BP Cement Primer
  Bison Emulsion
 Bison Distemper
 Jadoo Distemper
 Castle Distemper
 Weather Coat
 WalMasta
 Durocem
 Jadoocem
 Happy Wall Putty

A GLIMPS ON THE INPUT SIDE OF THE PAINT INDUSTRY (Raw

Materials):

The industry is raw-material intensive. Of the 300 odd raw

materials, nearly half of them are imported petroleum products.
Other major raw materials titanium dioxide, phthalic anhydride
and peutarithrithol constitute 50 per cent of the total cost.
Besides, this, there are other raw materials such as castor, linseed
and soybean oils, turpentine and pigments. Majority of the inputs
in paint industry are sourced through big industrial houses and
the raw materials used are standardized across the industry with
limited substitute available and very limited scope for players to
switch suppliers. Materials like titanium dioxide, phthalic
anhydride, peutarithrithol and petroleum products are imported
and they constitute nearly 30 per cent of their raw material
requirements and the raw materials cost sums up to a whopping
70 per cent thus changes in import policies can affect the
industry. For imported petroleum products, any deficit in global oil
reserves affects the bottom-line of the players. Raw materials such
as castor, linseed and soybean oils, turpentine and pigments are
procured from the local players which are easily available in the
market and thus decreasing the bargaining power of the suppliers.

Further are the expectations of the product in the market which a

company has to fulfill in the market. To be successful in the
market paint should provide number of things. Let us now take
exteriors and study that what all is needed out of an exterior paint.

Qualities of an exterior Paints :

 Durability
 Finish
 Anti-fungal properties
 Dirt pick-up resistance
 Ease of Application, no curing required
 Wide range of shades
 Cost
 LOGISTICS MANAGEMENT

Logistics Management is that part of Supply Chain Management

that plans, implements, and controls the efficient, effective forward
and reverse flow and storage of goods, services and related
information between the point of origin and the point of
consumption in order to meet customers' requirements.

Logistics Management activities typically include inbound and

outbound transportation management, fleet management,
warehousing, materials handling, order fulfillment, logistics
network design, inventory management, supply/demand planning,
and management of third party logistics services providers. To
varying degrees, the logistics function also includes sourcing and
procurement, production planning and scheduling, packaging and
assembly, and customer service. It is involved in all levels of
planning and execution – strategic, operational and tactical.
Logistics Management is an integrating function, which
coordinates and optimizes all logistics activities, as well as
integrates logistics activities with other functions including
marketing, sales manufacturing, finance and information
technology.

'Logistics' is the process of designing, managing and improving

such supply-chains, which might include purchasing,
manufacturing, storage and, of course, transport. The Modern
business logistics sets out to deliver exactly what the customer
wants - at the right time, in the right place and at the right price.
Very often transport is a major component of the 'supply-chain'
which delivers to the customer the goods and services needed.

 Order Processing
 Inventory Management
 Transportation
 Location management
 Network planning
 Warehousing
 E-commerce
 Channel Bonding

All the above areas come together and make the output which is
known as the logistics management.

Order Processing:

As a very old saying is that demand derives the supply of a

product, thus it will not be wrong to say that demand derives the
logistics system, if there is no demand there is no reason of a
logistics system to exist. Time duration that is been used by a
company to complete the order processing is very important for
any company. This time duration is one of the factors to find out
the reaction time for any happenings in the market.

Order processing includes order preparation, order transmittal,

order entry, order filling and order status reporting
INVENTORY MANAGEMENT:

At the same time where inventory so important to the company it

can even present threat to corporate profitability to the consumer.
The capital that is invested in keeping the inventory can be
invested at any other place and the profits can be made to the
company
Manufacturing entities have inventories for raw products, products
in the production process, and finished products. In addition there
are often warehouses or distribution centers between the different
levels of the supply chain. Inventories are costly. Binding capital in
inventories prevents the company from investing this capital in
projects of higher return. The holing cost inventories are therefore
often set as high as 30 - 40% of the inventory value! In addition it
is desirable to avoid so-called dead inventory, i.e. inventory that is
left when a product is no longer on the market.

TRANSPORTATION:

Transport remains a major component of most supply-chains.

Certainly limitations of, or restrictions to, transport caused by
congestion, taxation or legislation will drastically affect the design
and operation of supply-chains. Logistics services and other
transport companies need to understand logistics and supply-
chain management in order to tailor their services to meet their
customers' needs.
Transportation is the only area that works at all levels of the
supply chain. It is taken as critical that if a company has good
transportation planning and they can work it out optimally then
the supply chain of the cooperate has a high probability of being
good.

Berger Paints works on a format that the factory directly sends

the product to the sales depot, which will sell the products to the
dealers, and it is sold in the market by them.

The structure of Berger can be seen with a diagram:

Factory
1

Factory
2
Factory 6
Depo
Factory 3 t

Factory 7

Factory 4

Factory 5

This is how Berger paints manages to transport the material from

factory to the depot. In this diagram majority of the requirement of
the depot is been fed by factory 1 and factory 2. This is because
the transportation from the factory to the depot is cheapest in
comparison to other factories. Thus the cost efficient factory is
providing the material to the depot. Still there are some products
that are not in a very regular demand, thus these products are not
been manufactured in all the factories and is been transported
from the factory that is manufacturing it. This is done to keep the
production cost down.

Asian on the other hand is working the pattern of having Regional

distribution center (RDC) and further having carrying and
forwarding agents (C&F).

Their structure will be Factory 1

Factory 3
Factory 2

RDC

C&F Agent
C&F Agent C&F Agent

LOCATION MANAGEMENT AND NETWORK PLANNING:

For any company to be good in logistics management it is very

important to have a proper location of their depot and to have
proper location of the dealers they are associated with.
To be located close to the market as a depot and to have dealers in
the proper market is the dream of any company. Every company is
trying hard on working with dealers, who have highest footfall in
their shops. Thus this is one of the most critical areas for any
company. If a company is working with these kinds of dealers then
they can promote their sales in a better manner.

Both the companies have placed their depots very close to the
markets; in a city like Delhi both the companies have 5 depots in
all the areas of Delhi.

As on date Asian is leading in the two, Asian is known for having

most of the retailers working with them and Berger is known for
having most of the distributors in their hands.

The major advantage that Asian is getting out of it is that the

product gets consumed quickly and they again have space in the
market to sell. The turnover rate of Asian is better than Berger in
the market. As Berger paints products goes from the distributors
to the dealers and then to the final customer. Thus the logistics of
Asian Paints is better in the manner that one of the most
important area.

Let us first move to Berger Paints, which have to take care of

all the areas at a depot level. Let us first see that what all
restrictions are there to which a depot manager has to take
care of:
Credit Limit to a dealer:
 • Credit limit are of two kinds one is the credit limit in
term of money or can be said as in Rupees. And
another can be the case as credit limit in days. Both
are very different but have a very close relevance. On
one side credit limit in Rupees. is the amount of
product given to a dealer without paying the amount
for the same. On other hand the limit in days is that
the dealer can pay the amount in x number of days.
There is a limit for every dealer in the companies as
per the working pattern of the company. This is been
decided on the size of the work that a dealer is doing
with the company and the relation that the company
has with the dealer. At both the sides there is a
amount of capital involved in it. Let us understand
this with a example. Let us assume that at a
particular depot there are 200 Dealers working with
the company and every dealer is on an average
working for around 2 Lacks with the company. Thus
if the company is giving even one day as credit limit
to all the dealers then the company has to go for an
additional investment for around 4 Cr. So this
explains the importance of having the credit limit in
hand and in control.

Damage Stock:
 • Damaged stocks has always been a big problem for
the paint industry as the products are such that the
damages are very common in transit thus one has to
take care that it is been reduced to the minimum
level

Non-moving Stock:

• These are those stocks that have not moved from a

long time and are lying at the depot only. As these
stocks are consuming a lot of money in them in the
face of inventory cost, capital, a part of profit which
will be there after sales and many other minor areas.

Material Returns:

• Material returns are even more dangerous than

material not sold as this material is also carrying the
cost of transportation from the depot to the
customer and return. This material is also needed to
be controlled because these returns generally are
harming the relations with the customers also.

Cheque Returns:
 • A stock is consider sold only at that time when the
payment of that stock is received. As with the view to
this line a cheque return is considered to be product
not sold but still is lying at somebody else’s place or
even is sold further in the market.

Invoice cancellation:
• This is one area which is reducing the credibility in
the market as either the customer doesn’t want the
product now are it is because of some fault of the
company. In both the cases the company is losing
relation as well as the sale, which always harms.

Delay in depositing cheques:

• A delay in depositing cheques will result to a delay
in clearance. It can be treated as an additional
capital is been delayed to get cleared and is further
not available for investments.

Transportation cost:
 • The transportation cost from the depot to the dealers
end is a very crucial part as the order of a dealer
varies from 1 Lt’s to 10,000 Lt’s, thus when the
order is less then the transportation also has to be
paid as per the expenses he is bound to get. Thus we
need to take care of the transportation expenses in a
proper manner.
These are some of the most important areas that have to be given a
proper priority so that company doesn’t loose some money, which
can be used for further growth of the company. If these areas are
handled in a proper manned then the company can grow at a very
faster rate in comparison to otherwise.

Now when the discussion moves to the market leader, Asian

Paints, then we can see that they don’t have to take care of all the
issues they only have to deal with few of them as all other
processes are been outsourced by Asian paints to a local vendor or
to a centralized one. A few of the areas where even Asian has to
worry about are

• Credit Limit to a dealer

• Material Returns
• Cheque Returns
• Invoice cancellation

Thus from this discussion one thing which is understood is that

with the market leader Asian Paints is making more expenses for
the processes but still feels that the payment is justified so that
various areas can be controlled in a better manner.

FORECASTING:

“Predicting current and future market trends using existing data

and facts. Analysts rely on technical and fundamental statistics to
predict the directions of the economy, stock market and individual
securities.”

Sales forecasting is a difficult area of management. Most managers

believe they are good at forecasting. However, forecasts made
usually turn out to be wrong! Even after having such results the
managers are forced to look well ahead in order to plan their
investments, launch new products, and decide when to close or
withdraw products and so on. The sales forecasting process is
critical for most businesses.

Supply chain initiative such as quick response, effective customer

response, collaborative planning forecasting and replenishment
and vendor managed inventory all of these rely on the forecasting
to help plan and manage operations more effectively.

Let us now move to the Paint industry and understand how is

the forecasting in the particular trade.

As it was been discussed in the first chapter that there are many
products, which are been covered by a company in the paint, trade
thus it is very important to have an accurate amount of forecast. If
at any level the forecast goes wrong then he might lose either sales
or he has to bear an additional cost for having the stuff available at
the time it is needed. To make all the products available at all the
time for the customers is a very costly affair as to do so one has to
carry huge amount of inventory, which will charge carrying cost,
capital, which is been blocked in the inventory, and also the
products are getting older in the Godown.

The planning in Berger is done twice a year, once it is done for the
first 3 months of the year which is January, February and March.
The other planning is done for the rest of 9 months. The planning
is then been divided in month wise and then unto the territory
wise level. This exercise is called phasing. In this phasing exercise
one has to forecast for all the SKU’s (Stock keeping units) that can
be divided in product name, color and pack size.

The planning is also done at a dealer wise level and is been

communicated to the dealer at the beginning of every month.
There are many schemes run for various fast running products,
these schemes are generally a cash discount through credit notes
or given in the system of some gift. For every dealer to achieve the
discounts or gift they have to qualify the criteria, which is
generally based on the forecast made for the particular dealer. if a
dealer is not able to qualify for the scheme, then he will not be able
to enjoy the benefits of the scheme and thus at times he is not able
to make himself competent in the market.
In the case of forecasting Asian Paints has a upper hand as they
have a better technology in their hands. Asian paints have
implemented ERP in their working from i2. They are able to get the
market data very accurately and so do they can plan things in a
better manner but at the same time as been discussed that the
forecasting now a days is more of a human factor than the
technical factor. To forecast a market in a better manner one has to
have good knowledge of the market and also to have a insight
about what the competitor is doing, one who has the better idea of
all this is able to do things in a better manner and is able to get
better results. In the present days Asian has a bigger problem in
having fight with ICI as their rivals as they both are having a
strong presence in the same segment, they both are more
aggressive in the emulsion market as they both feels that
emulsions are the future of the paint industry. Thus it is very
difficult to forecast in a better manner. Asian most of the time
works on the targets of the dealers, they have targets or all the
dealers, these targets are based upon the performance on the last
year sales. As also in Berger, Asian also gives additional benefits on
achievements of these targets. One thing that is different in Asian
is that they have a very keen eye on what the market is going
towards, as they don’t prefer having surprises. Asian always keeps
a check on the product lifting of every dealer, through which they
can come to know about the dealer in a better manner as to is the
dealer selling as in the retail market or he is selling the stuff to
other dealers also. This can be seen as if one dealer who is lifting
300 liters of Paint in a week and another is lifting 20 liters.
Suddenly if 300 liters person stops buying and the person having
20 liters shoot his order then they come to know that the stock is
been transferred by the second dealer to the first dealer. They at
Asian Paints does not stops at the point by thinking that the lifting
is still the same but they work on the reasons of having such kind
of activity, they prefer to check the reasons and try to get the
things back to their own control. Asian Paints prefer that their
products in the market should not be wholesaled but should only
be retailed. This helps them to keep the control in their hands only
so that one dealer will not be able to harm them to a high volume.

CUSTOMER SATISFACTION

CUSTOMER SATISFACTION in The paint industry and its

analysis:-

In the paint industry the involvement is very less to the product

as it is not the product which is in direct contact to the end
customer, the product is used by a applicator who is generally a
painter. It is in hand of a painter to give a product a desired
output, if a painter is will to work on the product from his heart
then he can give the product a better output than the company
claims to have as he knows that what is the right move and what
is not appropriate to be done. Thus in this case it is very important
to keep a painter knowledgeable on how to use the product in a
proper manner and also to keep him happy with the products.
Thus in the paint industry the painter is equally important that to
a customer.
As when we compare the companies like Berger and Asian which
are two market leaders then we look at a very opposite story as
they both are very opposite in their working. At one side is Berger
Paints who is mainly concentrating on the dealers network and
likes to give heavy discounts or supports to the dealer network
they have as they feels that if the dealer is happy with them then
he will stock only the products they are providing. The further
result will be that the dealer will be working on the painters he
have and convince him to apply that product. This will finally help
them making their product reach maximum number of houses. As
the result they are able to take lead in a number of markets, one of
them is Delhi, which is the biggest market in India as far as the
paint industry in India is concerned. The company even after
having services like Home Décor, which is a service provider for all
the solutions for a home in the paint concern, the perception in
the mind of consumer is that the product is more of value for
money product. Now keeping this picture in mind the company is
trying to change the perception in the mind of consumers with a
initiative to change the branding and the services which they are
providing. The company is now changing the brand name from the
previous name generally used as Berger Paints “Colors of Joy” they
are now moving to something like Lewis Berger “Paint your
imagination”. Thus with having all the initiative and also are
starting the products like illusions which is a paint that looks like
a wallpaper they might be able to change the perception in the
mind of a customer. By this work they are also hoping that they
will improve the market share of Berger paints in the next few
years.
On the other hand is Asian Paints who is the market leader for
India as a whole. They are more of customer centric and they
prefer to work more on the promotions for the products. With the
heavy spending on promotions they want that on the name of
paints every customer should remember only one name “Asian
Paints”. They have even kept their advertisements in the T.V.
keeping that thing in mind and always kept the tagline the same
“Har rang kuch kehta hai”. In fact they are the only company that
is promoting the Brand Asian as a whole, other companies like
Berger and ICI are always willing to promote one of the product
that is been provided by their bucket. With having so much
interest in the customer centric they even go for demonstrations
whenever a customer is not satisfied or is confused to choose the
products.

The role of sales in Supply Chain Management:

Given that the role of the contemporary salesperson is changing

dramatically and that in many situations, the old models of selling
are simply outdated, ineffective, and counterproductive to supply
chain management goals and objectives

While most sales organizations focus on pre purchase activities,

supply chain partners focus on managing relationships and
conducting post purchase activities to enhance supply chain
performance. The sales force is well positioned to implement,
facilitate, and coordinate many supply chain management
activities. In short, the supply chain sales force should be involved
with any supply chain activity that goes beyond organizational
boundaries. More specifically, the sales force should be an integral
part of implementing cooperative behaviors (i.e., joint planning,
evaluating, and forecasting), mutually sharing information, and
nurturing supply chain relationships to be effective at their new
role, the supply chain sales force must gain new expertise in
logistics and supply chain management. Salesperson logistics
expertise is defined as a customer’s perception of a salesperson’s
knowledge, experience, or skills relevant to logistics issues.
Salesperson logistics expertise concern the seller’s and supply
chain partners’ logistics operations, systems, and processes at
both tactical and strategic levels. Thus, salesperson logistics
expertise includes internal (company) logistics expertise, external
(supply chain partner) logistics expertise, tactical logistics
expertise, and strategic logistics expertise. While the logistics
manager may be the primary person designing logistics solutions,
the salesperson is likely to be the primary person representing the
supply chain partner’s needs and requirements. For effective
teamwork and innovative solutions, salespeople and logistics
managers need to be able to communicate effectively and work
together on supply chain management issues.

Role of marketing in supply chain management:

Choosing which marketing channel, or channel of distribution, to

use is a major decision in the development of a marketing strategy.
The major role of marketing channels is to make products available
at the right time at the right place in the right amounts. In most
channels of distribution, producers and consumers are linked to
each other through a marketing intermediary. Of the two major
types of intermediaries, retailers purchase products and resell
them to ultimate consumers, and wholesalers buy and resell
products to other wholesalers, retailers, and/or organizational
customers.

Marketing channels serve many functions. They create time,

place, and possession utility by making products available
when and where customers want them and by providing
customers with access to product use through sale or rental.
Marketing intermediaries facilitate exchange efficiencies, often
reducing the costs of exchanges by performing certain services and
functions.

Marketing channels also form a supply chain, a total distribution

system that serves customers and creates a competitive advantage.
Supply chain management involves manufacturing, research,
sales, advertising, shipping and most of all, cooperation and
understanding of tradeoffs throughout the whole channel to
achieve the optimal level of efficiency and service.
Channels of distribution are broadly classified as channels for
consumer products and channels for business products. Within
these two broad categories, different marketing channels are used
for different products. Although consumer goods can move directly
from producer to consumers, consumer product channels that
include wholesalers and retailers are usually more economical and
efficient. Distribution of business products differs from that of
consumer products in the types of channels used. An example of a
direct distribution channel, which is common in organizational
marketing today, is the use of industrial distributors. Most
producers have multiple channels so that the distribution system
can be adjusted for various target markets. Two types of multiple
channels are dual distribution and strategic channel alliances.
A marketing channel is managed so that products receive
appropriate market coverage. Marketers can choose the type of
coverage, intensive distribution, selective distribution, or exclusive
distribution.
Although many marketing channels are determined by consensus,
some are organized and controlled by a channel captain. To attain
desired objectives, the channel captain must possess channel
power. Channels function most effectively when members
cooperate. When they deviate from their roles, channel conflict can
arise.
Integration of marketing channels brings various activities under
one channel member's management. The two types of integration
are vertical channel integration and horizontal channel integration.
Integration has been successfully institutionalized in marketing
channels called vertical marketing systems (VMS), which may be
corporate, administered, or contractual.
FUTURE TRENDS IN THE INDIAN PAINT MARKET:

THE ROAD AHEAD….

The future of any trade is Environmental Changes has been

divided into two parts one is the Macro level and other is the
Micro level. Let us now understand both of them separately.

Macro Level Changes

Environmental changes happening in our country

– GDP growth at around 6-7%
– Increasing prosperity of rural segments
– Lowering of customs duties
– Entry barriers dropping: New MNC’s entering the
market
– Increased spending on Infrastructure projects
– Fragmentation of television audiences
– Automobile explosion
– Increasing consciousness of environment and health
– Low Interest rates
– New Technology

Micro Environmental Changes…

Individual Level
– Increased disposable incomes
– Family structure changing to nuclear families
 – Increasing incidence of double income families /
Increased Inherited wealth
– Increased awareness: Internet / Television
– Income tax breaks: On housing
– Increased expectations from products and services
– Further let is now see all the factors that are affecting the economy
as a whole of affecting the paint industry as in specific.

Impact of Changes…
Factors
– GDP growth at around 6 –7 %
– Family structure changing to nuclear families
– Income tax breaks: On housing
– Low Interest rates on loans

Impact
– Increased demand for new houses -- generic growth of 10
to 12 % for decorative paints for the next 3 to 5 year
period.
– Expanding base of the paint industry -- the new homes
will enter the re-painting cycle in 2 to 3 years

Factors
– Lowering of customs duties
– Entry Barriers dropping: New MNC’s entering the market

Factors
– Increased disposable incomes
– Increasing incidence of double income families /
Increased Inherited wealth
Impact
– Demand for high end products like interior & exterior
emulsions will continue to grow at a rapid pace
– This trend will be more evident in exterior coatings, with
the category continuing to grow at more than 20% for
the next 3 years
– The trend to experiment with new colors, product
categories and services will increase – essentially to elicit
the “Wow effect”

Factors
– Increased expectations from products and services and
companies
– Increasing incidence of double income families

Impact
– Companies will be forced to introduce new products and
services to satisfy the customers
– Companies will need to start looking at providing
customers with complete solutions rather than piece
meal options as the customers no longer have the time
co-ordinate the entire process
– The tinting machine will become de rigueur for all shops
and this will lead to factories being geared to produce
bases only especially with wall coatings.
Factors
– Increasing prosperity of rural consumers

Impact
– This will open up the demand for basic products like
enamels, distempers and primers
– Lower price points , small pack sizes and pouch packing
will become increasingly popular in these markets

Factors
– Increasing consciousness of environment and health
– Increased awareness: Internet / Television

Impact
– Companies will be forced to become more socially
responsible with respect to production and waste
treatment, etc.
– Products will have to adopt environmental and health
friendly formulations
– The range of products will have to be diversified to bring
India on par with the developed paint markets

Factors
– Fragmentation of television audiences

Impact
– The media spend levels for national companies will
become much larger to cater to a fragmented audience
– Media planning will become increasingly complex for pan-
Indian players
– New alternative methods of reaching consumers will have
to be found
– Fragmented markets will allow Regional players to focus
promotions on a small area to strengthen their presence
compared to the national player in that market :
Advantages of Concentrated resources

Factors
– Increased spending on Infrastructure projects

Impact
– Protective coating products will most probably see the
advent of new technology
– Demand for these products will also go up substantially

Factors
– Automobile explosion / White goods
– Low Interest rates
 Impact
– Low loan interest rates and attractive financing schemes
have led to a splurge on purchases of vehicles and white
goods
– One of the highest growth rates in the automotive
coatings market in the world – 1 million plus cars, 18%
growth – 26% + growth in two wheeler segment - OEM
market booming
– The organized second hand market is also gathering pace –
demand for refinish segment will perk up.

Factors
– New Technology

Impact
– New products are likely to be introduced in the Indian
market. Some such likely products are:
• Exterior Coatings with a 10 +year durability
• Faux Finishes for interiors
• Non-drip paint
• Single Coat Finish
• Multichrome paints
• UV cured Coatings
• Water based specialty coatings in automotive and protective
segments
 CONCLUSION

The next generation of supply chain systems will include supply

chain process management or event management capabilities.
These capabilities will enable close to real time, event based
escalation of relevant pieces of information through the
organization to appropriate individuals, who will then execute
decisions to minimize organizational impact and/or leverage
opportunities created by this event. As an example, a production
scheduler based on real-time in-transit inventory information will
proactively mitigate (by adjusting production schedules, etc.) the
unintended consequences of a raw material shipment not arriving
on time. However, that same piece of information combined with
the detection of a supply demand imbalance, spotted by detecting
a spike in the price of a related commodity in the spot markets,
can lead senior managers to conclude that the supplier may have
suffered a major outage in one of its units. Resulting strategies,
potentially system-recommended, could involve the following
options: confirmation of the event with the supplier, an
examination of the possibility of replacing the material, or an
assessment of the impact on downstream value chain coupled with
an evaluation of alternate suppliers.

Real-time visibility of the supply chain, combined with a

monitoring and an event-management system, will increase the
proportion of decisions that are taken preemptively to minimize
unintended consequences or exploit unforeseen situations.
Increasingly, key decisions will be made by cross-functional teams,
chosen explicitly with the right skill set mix, and sometimes
assembled just for the purpose of solving the problem at hand.

The demands for supply chain efficiency will emphasize a

combination of both centralized and decentralized structures
and approaches—collaborative and centralized planning with
decentralized execution—requiring real time visibility for
monitoring and rapid response mechanisms for event-driven
management involving close to real-time problem escalation and
remediation. Effective management of supply chains will occur
through the deployment of integrated organizational team
structures at multiple levels—executive through senior and middle
management—executed through physical and/or virtual facilities
such as “war rooms.”

As in one of the previous chapters we have seen that the

controlling of such a huge bunch of products is very difficult and
is not possible to attain a optimal formula to get all the products at
the right time, at the right place and also at the right price, which
is one of the key area’s on which the paint company works.

The first area where the industry has to move is that they have to
make the customer involved in the process of purchasing the
products; in fact the industry should try and make paint as a
product that should be a part of a person’s life. This should be
done as a person is spending most of the time in a day in his office
or at his home and he is only able to see the colors of the walls.
This has also been proved scientifically also that the colors that
are surrounding us have a major effect.

By doing the above they will first be able to create demand in the
market, which will finally force the dealers to stock the product in
the market. This will improve the reach of a company in the market
and will create presence in the market.

By creating the presence in the market a company can create

fast turnover of the product. i.e. the product will quickly get
cleared from the dealers counter which will finally help the
company to quicken the whole process and this will lead to an
effective supply chain management. A company if have the fast
moving of the products from the counter can even plan things in a
better manger as on the forecasting front. This company can very
well forecast that what will the market be demanding in this
particular period. The existing system of paint industry, which
mainly runs on the rebates base, will also not affect the player;
this is because of the market demand that is been created in the
mind of a customer.

For getting best results of the promotions a company also need

to educate the customer as to how to use the products. This is
needed because of the painter involvement in the final output of
the product. if a painter works well on the paint then only the
paint will give the best result. As also been discussed earlier that if
a painter uses a 3rd grade paint in a proper manner and a 1st grade
paint in not a proper manner then he will be able to get a better
result from the 3rd grade paint. This is the reason that a company
needs to educate the customer also so that the customer will be
well equipped to supervise the whole process and will be able to
notice about the mistakes made by the painter.

In addition to educating the customer a company also needs to

educate the painters in a better manner, a big initiative is to be
taken as to make a better class of painters in the country. This is
needed as that by improving the whole class of painters one is
improving the whole paint industry. Painters are the first point of
interaction for the paint industry, even to many they are the only
level of interaction for getting the work done. To improve this some
of the companies have taken the initiative as by introducing Home
Décor by Berger Paints and Home Solutions By Asian Paints.
These two services that are been provided by these the companies
provides all the painting services to the customer. This service
starts from giving quotation to the customer to shifting the stuff
back to the places where it was before the painting work started.
This all will be take n care by a well-educated executive of the
company. By providing all these services companies are trying
to improve the customer satisfaction by getting the products
from a company. This is one of the most important focuses of the
supply chain management.
 BIBLIOGRAPHY

Primary knowledge of the subject was been taken from the books

1. Supply Chain Management

 By John T. Mentzer

2. Supply Chain & Logistics 2002

 From the ET Intelligence Group (Mainly used

the paint industry section)

Further knowledge was been gained from the full site of companies
like

1. i2
 www.i2.com

2. The Council of Supply Chain Management Professionals

 www.cscmp.org

3. Supply Chain Council

 www.supply-chain.org

4. Economic Times Strategic Marketing

 www.etstrategicmarketing.com