02-05-2011, 09:51 AM
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PREFACE
The report briefly explains the supply chain involved in the production of biscuits and confectionary products. Parle or the Parle Parivar team is one of the world renowned brands which have the second largest brand stand in the market. They manufacture different kinds of products which not only have quality but also they work upon on the customer satisfaction on their need base. It is India’s number “1” brand which produces biscuits having top variety mix. They have not only concentrated on a single set of customers but an eatery for all ages are what it actually projects itself.
Parle Parivar which has a plush of customer relations and also is a base for strong people management having its strength in its name itself. Parle-G or Parle Glucose biscuits, manufactured by Parle Products Pvt Ltd, are one of the most popular biscuits in India. Parle-G is one of the oldest brand names as well as the largest selling brand of biscuits in India. For decades, the product was instantly recognized by its iconic white and yellow wax paper wrapper with the depiction of a young girl on the front. Counterfeit companies have attempted to recreate and sell lower quality products of similar names with virtually identical package design.
1. LOGISTICS: DEFINITION
The term logistics could be used to cover all aspects of movement, storages of material and to deliver the material to the user. For a manager the definition would mean involving movement of goods both in the inbound and outbound sides. It is responsible for both incoming goods and distribution of goods to the next member of the supply chain and to the end consumer. In almost all cases, the logisticians design and manage the company’s distribution system, which consists of warehouses, distribution points and transport systems. Logistics can play a major role in shaping and determining the nature of the overall corporate response to exploit market opportunities.
Once a logistics decision is taken, the implications of that will be high level of services in terms of product availability and delivery. Failure of logistics will affect the company repute and overall affect the market share. Therefore, in a nutshell one has to understand the importance of logistics and its related decision, since it’s the key to effective supply chain management, and also the first step towards building a strong market position.
1.1 INTRODUCTION OF SUPPLY CHAIN
Supply chain consists of a group of organizations connected by a series of trading relationships. the group covers the logistics and manufacturing activities from raw materials to the final consumer.
1.2 SUPPLY CHAIN MANAGEMENT
A simple definition would be; an integrated, synchronized and a closely knitted chain which links all the supply interacting organization in a two way communication system in order to maintain a high quality of inventory in the most effective manner.
It can also be defined as:
An integrated system that helps in managing the flow of distribution channel
from supplier to the consumers.
SCM is a systematic method designed to manage the flow of information,
materials and services both inbound and outbound, i.e. from the supplier to
manufacturer to the end customers.
It’s a strategic coordination of all the related business functions within a
particular firm and across businesses within the supply chain, in order to improve
performance of the individual companies and of the supply chain.
It is associated with all the activities encompassing the upward and downward
movement of goods and materials from the nascent stage to the production
stage and to the consumer. SCM is integrating these activities under one control
for better management and for attaining substantial and sustainable advantage.
It can be better achieved through better coordination and relationship.
It’s a concerted effort of all in the channel to develop, design, manage and
implement value added services towards ultimate customer satisfaction.
Integrating men, technology, information, finances and material under one roof is
the ultimate aim of this SCM system.
1.3 DESIGN AND MANAGING THE SCM
Internal functions and external suppliers constitute a company’s supply system, which are involved in identification and fulfillment of requirement for equipment, materials and key services in an optimized manner. Supply management is the foundation to successful supply chain management. It can create a tremendous impact on any company’s bottom line more than any other business function. In case the supply chain is not positively been addressed there is bound to be problems in the firm. Integration of these services and managing them under one head is therefore the key to an effective supply chain system in the organization.
The principle phases of supply chain management are:
What are the requirements and its generation?
Sourcing
Pricing
Post-award activities
These phases are all interrelated and interdependent and cannot function in isolation. The generation of requirement phase is the most important of all the phases, since; almost 85% of the cost of materials, services and equipment is designed during this phase. However, the irony is that supply management is not a contributor to this phase in particular but assumes greater role for the next three phases, i.e. sourcing, pricing and post award activities.
1.4 LOGISTICS: INBOUND AND OUTBOUND
Let us now take a closer look at the logistics both inbound and outbound. This is the most intricate part of the system of SCM. If the goods don’t reach in time and they are of inferior quality, an entrepreneur earn a bad name too. So why give the consumer a chance? Plan it in a way that one can ensure both quality and quantity in a reasonable time frame. Take for example 7 days trucker’s strike in 2004. It was bad for economy of the country and above all worse for those manufacturer’s who couldn’t deliver goods on time. A strike or a bandh as we call it in India is a happy situation for the fleet owners but a bad time for the drivers, mill owners, small timers, laborers, suppliers, manufacturers and the consumers. That is the reason contingency planning plays a predominant role in shaping our SCM system.
2. ABOUT THE BISCUIT INDUSTRIES
The Indian bakery industry is dominated by the small-scale sector with an estimated 50,000 small and medium-size producers, besides the 15 units in the organized sector. Apart from the nature of the Industry, which gravitates to the markets and caters to the local tastes, the industry is widely dispersed also due to the reservation policies (relating to the small scale industries) of the government.
The two major bakery products, biscuits and bread, account for 82% of all bakery production. The unorganized sector accounts for about half of the total biscuit production estimated at 1.5 million tons. It also accounts for 85% of the total bread production and around 90% of the other bakery products estimated at 0.6 million tons. The last includes pastries, cakes, buns, and others.
Biscuits are estimated to enjoy around 37% share by volume and 75% by value of the bakery industry. The organized sector caters to the medium and premium segments, which are relatively less price-sensitive. The organized sector is unable to compete at the lower price range due to the excise advantage enjoyed by the informal sector.
The organized segment in biscuits has witnessed a steady growth of about 7.5%, conforming broadly to the growth rate of GDP. Bakery industry in India is the largest of the food industries with annual turnover of about Rs. 3000 Crores. The biscuits are becoming quite popular in rural areas as well. Nearly 55% of the biscuits are consumed by rural sectors.
The biscuit industry in India comprises of organized and unorganized sectors. The FBMI represents the organized biscuit industry consisting of small scale, medium and large biscuit manufacturers located in all zones and all states of the country.
The biscuit industry is been experiencing steady growth of 14-15% annually. In 2008, the growth exceeded 16% mark on account of exemption from Central Excise Duty on biscuits. The Industry estimates project a 17+% growth of the industry. The sentiments are sedate in lieu of the economic downturn that has hit the entire country. The FMCG sector on its part too is reeling under this slump.
PREFACE
The report briefly explains the supply chain involved in the production of biscuits and confectionary products. Parle or the Parle Parivar team is one of the world renowned brands which have the second largest brand stand in the market. They manufacture different kinds of products which not only have quality but also they work upon on the customer satisfaction on their need base. It is India’s number “1” brand which produces biscuits having top variety mix. They have not only concentrated on a single set of customers but an eatery for all ages are what it actually projects itself.
Parle Parivar which has a plush of customer relations and also is a base for strong people management having its strength in its name itself. Parle-G or Parle Glucose biscuits, manufactured by Parle Products Pvt Ltd, are one of the most popular biscuits in India. Parle-G is one of the oldest brand names as well as the largest selling brand of biscuits in India. For decades, the product was instantly recognized by its iconic white and yellow wax paper wrapper with the depiction of a young girl on the front. Counterfeit companies have attempted to recreate and sell lower quality products of similar names with virtually identical package design.
1. LOGISTICS: DEFINITION
The term logistics could be used to cover all aspects of movement, storages of material and to deliver the material to the user. For a manager the definition would mean involving movement of goods both in the inbound and outbound sides. It is responsible for both incoming goods and distribution of goods to the next member of the supply chain and to the end consumer. In almost all cases, the logisticians design and manage the company’s distribution system, which consists of warehouses, distribution points and transport systems. Logistics can play a major role in shaping and determining the nature of the overall corporate response to exploit market opportunities.
Once a logistics decision is taken, the implications of that will be high level of services in terms of product availability and delivery. Failure of logistics will affect the company repute and overall affect the market share. Therefore, in a nutshell one has to understand the importance of logistics and its related decision, since it’s the key to effective supply chain management, and also the first step towards building a strong market position.
1.1 INTRODUCTION OF SUPPLY CHAIN
Supply chain consists of a group of organizations connected by a series of trading relationships. the group covers the logistics and manufacturing activities from raw materials to the final consumer.
1.2 SUPPLY CHAIN MANAGEMENT
A simple definition would be; an integrated, synchronized and a closely knitted chain which links all the supply interacting organization in a two way communication system in order to maintain a high quality of inventory in the most effective manner.
It can also be defined as:
An integrated system that helps in managing the flow of distribution channel
from supplier to the consumers.
SCM is a systematic method designed to manage the flow of information,
materials and services both inbound and outbound, i.e. from the supplier to
manufacturer to the end customers.
It’s a strategic coordination of all the related business functions within a
particular firm and across businesses within the supply chain, in order to improve
performance of the individual companies and of the supply chain.
It is associated with all the activities encompassing the upward and downward
movement of goods and materials from the nascent stage to the production
stage and to the consumer. SCM is integrating these activities under one control
for better management and for attaining substantial and sustainable advantage.
It can be better achieved through better coordination and relationship.
It’s a concerted effort of all in the channel to develop, design, manage and
implement value added services towards ultimate customer satisfaction.
Integrating men, technology, information, finances and material under one roof is
the ultimate aim of this SCM system.
1.3 DESIGN AND MANAGING THE SCM
Internal functions and external suppliers constitute a company’s supply system, which are involved in identification and fulfillment of requirement for equipment, materials and key services in an optimized manner. Supply management is the foundation to successful supply chain management. It can create a tremendous impact on any company’s bottom line more than any other business function. In case the supply chain is not positively been addressed there is bound to be problems in the firm. Integration of these services and managing them under one head is therefore the key to an effective supply chain system in the organization.
The principle phases of supply chain management are:
What are the requirements and its generation?
Sourcing
Pricing
Post-award activities
These phases are all interrelated and interdependent and cannot function in isolation. The generation of requirement phase is the most important of all the phases, since; almost 85% of the cost of materials, services and equipment is designed during this phase. However, the irony is that supply management is not a contributor to this phase in particular but assumes greater role for the next three phases, i.e. sourcing, pricing and post award activities.
1.4 LOGISTICS: INBOUND AND OUTBOUND
Let us now take a closer look at the logistics both inbound and outbound. This is the most intricate part of the system of SCM. If the goods don’t reach in time and they are of inferior quality, an entrepreneur earn a bad name too. So why give the consumer a chance? Plan it in a way that one can ensure both quality and quantity in a reasonable time frame. Take for example 7 days trucker’s strike in 2004. It was bad for economy of the country and above all worse for those manufacturer’s who couldn’t deliver goods on time. A strike or a bandh as we call it in India is a happy situation for the fleet owners but a bad time for the drivers, mill owners, small timers, laborers, suppliers, manufacturers and the consumers. That is the reason contingency planning plays a predominant role in shaping our SCM system.
2. ABOUT THE BISCUIT INDUSTRIES
The Indian bakery industry is dominated by the small-scale sector with an estimated 50,000 small and medium-size producers, besides the 15 units in the organized sector. Apart from the nature of the Industry, which gravitates to the markets and caters to the local tastes, the industry is widely dispersed also due to the reservation policies (relating to the small scale industries) of the government.
The two major bakery products, biscuits and bread, account for 82% of all bakery production. The unorganized sector accounts for about half of the total biscuit production estimated at 1.5 million tons. It also accounts for 85% of the total bread production and around 90% of the other bakery products estimated at 0.6 million tons. The last includes pastries, cakes, buns, and others.
Biscuits are estimated to enjoy around 37% share by volume and 75% by value of the bakery industry. The organized sector caters to the medium and premium segments, which are relatively less price-sensitive. The organized sector is unable to compete at the lower price range due to the excise advantage enjoyed by the informal sector.
The organized segment in biscuits has witnessed a steady growth of about 7.5%, conforming broadly to the growth rate of GDP. Bakery industry in India is the largest of the food industries with annual turnover of about Rs. 3000 Crores. The biscuits are becoming quite popular in rural areas as well. Nearly 55% of the biscuits are consumed by rural sectors.
The biscuit industry in India comprises of organized and unorganized sectors. The FBMI represents the organized biscuit industry consisting of small scale, medium and large biscuit manufacturers located in all zones and all states of the country.
The biscuit industry is been experiencing steady growth of 14-15% annually. In 2008, the growth exceeded 16% mark on account of exemption from Central Excise Duty on biscuits. The Industry estimates project a 17+% growth of the industry. The sentiments are sedate in lieu of the economic downturn that has hit the entire country. The FMCG sector on its part too is reeling under this slump.
