Name: Deepanshu Srivastava (2007 – 2009)

Title: A critical analysis of supply chain management with focus on Paint Industry” An analytical view of the Sales and Marketing side (Case Study: Asian Paints India Ltd. and Berger Paints India Ltd.)

Summary

Supply Chain Management is an area that is used as a differentiating factor for a lot of companies.

Every company in the world has either improved the Supply Chain Management or is 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 Delhi. 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 global region of Delhi. The research has mainly covered some company officials;

in the company officials even I have tried to cover at least 3 levels of officials, thus for the same

effort I have covered 10 sales officers of 3 companies (Berger Paints, Asian Paints and Nerolac

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 no of dealers,

which were been covered, were restricted to only 25.

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 thesis 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 organised only to the

level of 60% and rest is all un-organised. 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 thesis 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.

Objectives

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.

To study the various areas of Supply Chain Management in Paint Industry.

To study Supply Chain Management of Asian Paints and Berger Paints.

To conduct a comparative analysis between Asian Paints and Berger Paints.

To find out gaps left while implementing Supply Chain Management in companies under the

paint industry.

To suggest the areas of improvement.

Findings

Findings from company employees:

The information through the questionnaire from the company employees are as follows-

The supply chain in Asian paints and Berger Paints are managing the supply chain with

Close partnership with supplier, JIT supply, e-procurement, EID, many suppliers.

Companies are managing the supply chain in general is very successful.

Companies need to do in order to manage its supply chain better are JIT, EDI, e-

procurement, outsourcing and plan strategically. So that they can do better in the field of

product and vendor management. Also as they have many suppliers so it is helpful to them.

Yes, the companies have different warehouse for products.

Yes, the companies have clear logistic plan.

ERP, SCM, JIT, E-Commerce are the systems which are currently in use, in your company to

support Supply Chain Management.

Using Better quality of information and better quantity of information benefited greatly to the

organisation flexibility reduced lead-time in production it also helpful in cost saving and

forecasting and resource planning ,better operational efficiency, reduced inventory level

which is also helpful to increasing the sale

The company do not having a much problem with using these systems somewhere they have

very less problem.

Findings from vendors and dealers:

I met some vendors and distributors of the company, the information through the questionnaire I

get, were as follows:

The vendors and the distributors were happy with the company, because maximum time the

company delivered the product on time. Some of the vendors are not somehow happy with

the product delivery.

The product quality of Asian Paints is good than the Berger Paints as the shopkeepers told

us but they are happy with these two brands performance in the market.

Yes, every distributor and shopkeeper wants more product portfolio so that they can fulfill the

customer demand and their needs about the paint.

Every shopkeeper has multi brand store but they have both of them (Asian Paints and Berger

Paints) because these are market leaders and their demand is high in the market

Many of the shopkeepers using Tinting Machine, because they told that this is very useful to

mix the paint and make new color paint.

Distributors told that vendor management of the company is good; they provide the product

at time.

Some of them have the different storage for different products.

Conclusion

The supply chain is very important aspect of the business, basically when you are in the

manufacturing industry. The demand of paint is very high in the market because of customer choice

become broad and they give more priority to the decorative paints and also the real estate is

booming sector. So providing the right product at right time to the right person is very important in

today scenario, as these two companies are doing well for their supply chain management to be

good for the market so that they don’t have any problem in future in inventory management and

logistic management.

The supply chain system includes 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, 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.

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.

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.”

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 the market will 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 needs 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 3rd grade paint in a proper manner and a 1 st grade paint in

not a proper manner then he will be able to get a better result from the 3 rd 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.

Suggestions

Both of the companies are doing well, they both have their own supply chain management

and logistic management but somehow they are lacking because of many unorganized

companies, who are sharing their market.

They have to go through JIT so that they can find the raw material at time and use it for

manufacturing the paint.

They have also to provide raw material of product to the distributors so that they can make

the paint of the color demanded by the customer at the same time by tinting machine.

They have to go through RFID so that they can track the consignment, and demand will

verified easily and fast.

They can also improvise their e-procurement to do better in the field of supply chain

management.

They have to provide more and more tinting machine to the dealers so that they can do

better and provide color demanded by the customer.

The above article was extracted from dissertations by the students of Skyline College. Skyline College is

amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR)