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Supply Chain Management in Asian Paints
Supply Chain Management in Asian Paints
Asian Paints
Introduction
• Started in 1942 by four entrepreneurs:
Champaklal choksey,
Chimanlal choksey,
Suryakant Dani and
Arvind Vakil as
“ASIAN OIL & PAINTS COMPANY.”
Bahrain, Egypt,
Barbados, Jamaica,
Oman &
Trinidad & Tobago.
United Arab
Emirates.
Headquarters in Mumbai
4 Factories
18 Processing Centres
350 raw material and intermediate goods suppliers
140 Packing Material Vendors
6 Regional Distribution Centre
72 depots are integrated
Elements of Supply Chain
3000 SKU’S KEY SUCCESS 4 PLANTS
FACTORS
FLEXIBLE
OPERATIONS 6 RDC
RAW
MATERIALS LOWER
OUTPUT TIME 35 JOB WORK
LOW DELIVERY CENTRES
PACKAGING COST
MATERIAL 77 DEPOTS
500 INDUSTRIAL
15000 DEALERS
CONSUMERS
Raw material Requirements
• Paint Industry is raw material intensive with RW
being 70% of production costs.
KASNA
PLANT
PATANCHERU ASIAN
BHANDUP
77 PLANT PAINTS
DEPOT HEADQUART
CENTRES ERS
MUMBAI
Depots (77)
Depots (77)
Dealers (14500)
Dealers (14500)
Conditions
Projected profitability of the proposed location
The standing of the dealer in the local market
The past records of the dealer (banking and
trading history)
The presence of other dealers in the vicinity and
the projected impact on their volumes
The competition scenario at the location
The distance of the proposed location from the
nearest factory etc.
Distribution Strategy
Facts:
• Lowest inventory cost in industry
• Avg inventory level of 28 days sales against
industry avg of 51 days
• Translates into 45 % lower inventory costs
• Stock of finished goods is only 7% of net sales
half the industry average
Inventory Management
Asian Paints allowed
• 15-21 days credit for dealers in major towns
• 22-30 days credit dealers in upcountry regions
• A cash discount of 5 per cent. This was paid for all outright cash purchases.
It was given whenever payments were received within 24 hours of the supply/invoice. In
respect of outstation accounts, the payments have been
made in advance by draft in order to be eligible for the cash discount
Supply Chain Re-engineering
• Raw materials comprise 60% of the value chain which require accurate forecasts
• Constant updation of BOM and Routing called for frequent changes in the
Procurement procurement planning process
Manufacturing
Distribution
Procurement