Beruflich Dokumente
Kultur Dokumente
AT
BRITANNIA INDUSTRIES
Acknowledgement
SARITA KUMARI
Content
Chapter 1:
Introduction
-Need of the study
- Background
Chapter 2:
Research methodology
-Objectives of the study
-Research Methodology (sample size, instrument
used, Methods of data collection)
Chapter 3:
Chapter 4:
Chapter 5:
Chapter 6:
SYNOPSIS
TOPIC: - STUDY OF SUPPLY CHAIN MANAGEMENT AT BRITANNIA
INDUSTRIES.
Chapter 1:
INTRODUCATION:What is supply chain management?
Supply chain management is a process of strategically managing the procurement,
movement and storage of materials, parts and finished inventory through the
organization and its marketing channels in such a way that current and future are
maximized through the cost effective fulfillment of orders.
Elements of supply chain management: - Two main elements
Supply chain management planning: based on optimization theory and the use of
highly sophisticated systems are imperative to arrived at the most efficient
production schedules, distribution plans and transportation plans.
Supply chain management execution: start from date of schedule. Due to various
practical reasons and limitations deviations from the plans are generated. An
execution level decision includes re-planning of the material flows, loading
factors and the margins.
Primary focus of SCM is to serve consumers with excellent goods and services
against minimum possible costs and response times. It based on sophisticated IT
systems and knowledge workers.
Chapter 2:
RESEARCH METHODOLOGY:The non-exploratory research methodology will be used for thesis writing.
OBJECTIVES:
Analyze the effects of supply chain management on Britannia industries
process.
Supplier Chain management in Britannia industries visa priyagold
biscuits.
To provide possible strategies for better implementation in SCM in
Britannia industries.
RESEARCH INSTRUMENTS:The secondary data will be collected through internet, books and the materials
published in journals and magazines.
SCOPE OF THE STUDY:
In competitive scenario how to increases the business with the implementation of
supply chain management.
LIMITATIONS:
Not private datas or primary datas which really give correct information.
Chapter 3:
Descriptive works on the other biscuits producers companies.
Chapter 4:
Data analysis & Interpretation
Base on the secondary datas which will be collect through internet, magazines,
books etc.
Chapter 5:
Suggestions & conclusions
Chapter 6:
Bibliography & Annexure
INTRODUCATION:
In todays rapidly changing business environment, ever greater demands are being
placed on business
4. Deliver This is the part that many insiders refer to as logistics. Coordinate the
receipt of orders from customers, develop a network of warehouses, pick carriers
to get products to customers and set up an invoicing system to receive payments.
5. Return The problem part of the supply chain. Create a network for receiving defective and
excess products back from customers and supporting customers who have problems with
delivered products.
Strategic decisions: strategic decisions are made typically over a longer time
horizon. These are closely linked to the corporate strategy (they sometimes the
corporate strategy), and guide supply chain policies from a design perspective.
Strategic network optimization, including the number, location, and size of
warehouses, distribution centers and facilities.
Strategic partnership with suppliers, distributors, and customers, creating
communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party
logistics.
Product design coordination, so that new and existing products can be
optimally integrated into the supply chain, load management
Information Technology infrastructure, to support supply chain operations.
Where to make and what to make or buy decisions
Align Overall Organizational Strategy with supply strategy
Tactical decisions:
location
production
inventory
transportation (distribution)
Location Decisions
The geographic placement of production facilities, stocking points, and sourcing
points is the natural first step in creating a supply chain. The location of facilities
involves a commitment of resources to a long-term plan. Once the size, number,
and location of these are determined, so are the possible paths by which the
product flows through to the final customer. These decisions are of great
significance to a firm since they represent the basic strategy for accessing
customer markets, and will have a considerable impact on revenue, cost, and level
of service. These decisions should be determined by an optimization routine that
considers production costs, taxes, duties and duty drawback, tariffs, local content,
distribution costs, production limitations, etc. Although location decisions are
primarily strategic, they also have implications on an operational level.
Production Decisions
The strategic decisions include what products to produce, and which plants to
produce them in, allocation of suppliers to plants, plants to direct customers, and
direct customers to customer markets. As before, these decisions have a big
impact on the revenues, costs and customer service levels of the firm. These
decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities. Another critical issue
is the capacity of the manufacturing facilities--and this largely depends on the
degree of vertical integration within the firm. Operational decisions focus on
detailed production scheduling. These decisions include the construction of the
master production schedules, scheduling production on machines, and equipment
maintenance. Other considerations include workload balancing, and quality
control measures at a production facility.
Inventory Decisions
These refer to means by which inventories are managed. Inventories exist at every
stage of the supply chain as either raw material, semi-finished or finished goods.
They can also be in process between locations. Their primary purpose is to buffer
against any uncertainty that might exist in the supply chain. Since holding of
inventories can cost anywhere between 20 to 40 percent of their value, their
efficient management is critical in supply chain operations. It is strategic in the
sense that top management sets goals. However, most researchers have
approached the management of inventory from an operational perspective. These
include deployment strategies (push versus pull), control policies --- the
determination of the optimal levels of order quantities and reorder points, and
setting safety stock levels, at each stocking location. These levels are critical,
since they are primary determinants of customer service levels.
Transportation Decisions
The mode choice aspects of these decisions are the more strategic ones. These are
closely linked to the inventory decisions, since the best choice of mode is often
found by trading-off the cost of using the particular mode of transport with the
indirect cost of inventory associated with that mode. While air shipments may be
fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile
shipping by sea or rail may be much cheaper, but they necessitate holding
relatively large amounts of inventory to buffer against the inherent uncertainty
associated with them. Therefore customer service levels and geographic location
play vital roles in such decisions. Since transportation is more than 30 percent of
the logistics costs, operating efficiently makes good economic sense. Shipment
sizes (consolidated bulk shipments versus Lot-for-Lot), routing and scheduling of
equipment are keys in effective management of the firm's transport strategy.
Demand flow
strategy
Collaboration
strategy
Supply chain
strategy
framework
Technology
integration
strategy
Customer
service
strategy
The response that maximizes the firms profitability and growth should be
determined.
Customer
Demand
&lead-time
mgt
Manufacturing
analysis
Purchasing
Supply chain
management
Transportation
Inventory mgt
& control
Materials
management
Cost benefit
and analysis
decisions. These models typically assume a "single site" (i.e., ignore the network)
and add supply chain characteristics to it, such as explicitly considering the site's
relation to the others in the network. Simulation methods are a method by which a
comprehensive supply chain model can be analyzed, considering both strategic
and operational elements. However, as with all simulation models one can only
evaluate the effectiveness of a pre-specified policy rather than develop new ones.
It is the traditional question of "What If?" versus "What's Best?"
local taxes) is maximized through the design of facility network and control of
material flows within the network. The cost structure consists of variable and
fixed costs for material procurement, production, distribution and transportation.
They validate the model by applying it to analyze the global manufacturing
strategies of a personal computer manufacturer.
Finally, Arntzen, Brown, Harrison, and Trafton [1995] provide the most
comprehensive deterministic model for supply chain management. The objective
function minimizes a combination of cost and time elements. Examples of cost
elements include purchasing, manufacturing, pipeline inventory, transportation
costs between various sites, duties, and taxes. Time elements include
manufacturing lead times and transit times. Unique to this model was the explicit
consideration of duty and their recovery as the product flowed through different
countries. Implementation of this model at the Digital Equipment Corporation has
produced spectacular results --- savings in the order of $100 million dollars.
Clearly, these network-design based methods add value to the firm in that they lay
down the manufacturing and distribution strategies far into the future. It is
imperative that firms at one time or another make such integrated decisions,
encompassing production, location, inventory, and transportation, and such
models are therefore indispensable. Although the above review shows
considerable potential for these models as strategic determinants in the future,
they are not without their shortcomings. Their very nature forces these problems
to be of a very large scale. They are often difficult to solve to optimality.
Furthermore, most of the models in this category are largely deterministic and
static in nature. Additionally, those that consider stochastic elements are very
restrictive in nature. In sum, there does not seem to yet be a comprehensive model
that is representative of the true nature of material flows in the supply chain.
inventory management approach. The thrust of the rough cut models is the
development of inventory control policies, considering several levels or echelons
together. These models have come to be known as "multi-level" or "multiechelon" inventory control models.
Multi-echelon inventory theory has been very successfully used in industry.
Cohen et al. [1990] describe "OPTIMIZER", one of the most complex models to
date --- to manage IBM's spare parts inventory. They develop efficient algorithms
and sophisticated data structures to achieve large scale systems integration.
Although current research in multi-echelon based supply chain inventory
problems shows considerable promise in reducing inventories with increased
customer service, the studies have several notable limitations. First, these studies
largely ignore the production side of the supply chain. Their starting point in most
cases is a finished goods stockpile, and policies are given to manage these
effectively. Since production is a natural part of the supply chain, there seems to
be a need with models that include the production component in them. Second,
even on the distribution side, almost all published research assumes an
arborescence structure. Each site receives re-supply from only one higher level
site but can distribute to several lower levels. Third, researchers have largely
focused on the inventory system only. In logistics-system theory, transportation
and inventory are primary components of the order fulfillment process in terms of
cost and service levels. Therefore, companies must consider important
interrelationships among transportation, inventory and customer service in
determining their policies. Fourth, most of the models under the "inventory
theoretic" paradigm are very restrictive in nature. Mostly they restrict themselves
to certain well known forms of demand or lead time or both, often quite contrary
to what is observed.
Market summary:
Indias food-processing sector, though still developing, contributes 14
percent to the manufacturing GDP (5.5 percent of aggregate GDP), produces
goods worth Rs. 2.8 trillion ($64 billion), and employs 13 million people.
Much of Indias food-processing industry is small-scale and involves very little
value addition, although in recent years several multinational food-processing
companies have started operations in India. A plethora of internal restrictions,
including (a) prohibition on foreign direct investment in retail, (b) prohibitions on
contract farming, (c) barriers to interstate commerce based on revenue and food
security concerns, (d) some of the highest taxes on processed foods in the world,
and (e) inefficient in infrastructure and marketing networks seriously constrain
growth of the sector.
The almost year-round availability of fresh products across the country,
combined with the consumers preference for fresh products and freshly cooked
foods has dampened demand for processed food products. The level of
processing varies across segments ranging from less than 2 percent of the
production in the case of fruits and vegetables to over 90 percent in nonperishable products such as cereals and pulses. In the latter, however, processing
involves very little value addition, and is mostly confined to grading, cleaning,
milling, and packing; with negligible use of additives, preservatives, and flavors.
Level of processing in perishable products:
Product
Fruits
vegetables
Milk
Meat
Poultry
Marine fisheries
Shrimp
22.0
0
0
9.0
1.0
37.0
21.0
6.0
10.7
1.4
Entry strategy
It is essential to survey existing and potential markets in India for products
before initiating export sales. The Office of Agricultural Affairs in the American
Embassy New Delhi (see Section V) and market research firms in India can assist
new exporters. If the US companies do have products of promising sales potential
in India, they can either set up a base in India or appoint distributors or agents.
The Indian government encourages foreign investment in the food-processing
sector. Hundred percent equity participation or joint ventures with Indian
companies are possible. Tax benefits and incentives are available to companies
setting up operations in Special Economic Zones (SEZ).
o Determine through surveys that their potential customers are, and
where in India these customers are located
o Recognize that agents with fewer principals and smaller set-ups often
are more adaptable and committed than those with large
infrastructure and big reputations.
o There may be a conflict of interest where the potential agent handles
similar product lines, as many agents do.
Company profiles
Indian food processors may be divided into the following main categories:
Large Indian companies that have their production base in India or
neighboring countries (for tax-saving purposes)
Multinational and joint-venture companies that have their production base
in India
Medium/small domestic food-processing companies with a local presence
Small local players in the unorganized sector
Company Name
INDIAN COMPANIES
Products
Godrej Foods Vegetable oils, fruit juices, tomato
Ltd.
paste, soy beverages
Dabur
India Fruit juices, cooking paste, honey
Ltd.
Mother Dairy Dairy products, ice cream, canned
Dhara
vegetables, fruit juices, cooking oils
Amul
Dairy products, ice cream, chocolate
ITC
Hindustan
Lever (HLL)
VH Group
Britannia
Industries
Parle Products
Nutrine
Confectionary
Company
Weikfield
Products
Company
Rasna (Pioma
Industries)
Haldirams
UB Group
Marico
Industries
MTR Foods
Punjab
Markfed
Vista
Processed
Foods
Dynamix
Dairy
Industries
MULTINATIONAL/JOINT VENTURE
COMPANIES
Company Name
Cargill
Products
Soft drinks, potato chips, snack
food, fruit juices
Vegetable oils
Heinz
Kelloggs
Bunge
Nestle
Cadbury
Coca Cola
Pepsi
Agro
Tech Branded vegetable oils, branded
Foods
wheat flour, snack food, popcorn
(ConAgras)
Pillsbury
Wheat flour, cake mixes
GlaxoSmith
Kline
Perfetti
Health drinks
Wrigley
Chewing gum
Lotte
India Confectionary
Corporation
Ltd. (Parrys)
McCain Foods French fries
Adani Wilmar Cooking oils, bakery shortenings
Ltd.
The
Solace Soy nuggets
Company
Sector trends
Production:
The food-processing industry in India has undergone big changes over the
last six to seven years, in terms of types, variety, quality, and presentation
of products, which is mainly a result of the liberalization that led to foreign
direct investment (FDI) in the processed food sectors.
Most food-processing sectors have been brought under the liberal,
transparent, and investor-friendly FDI policy, which allows 100 percent
FDI.
However, the small-scale farming system in India, marketing problems,
lack of grading and standards, poor distribution channels, and onerous
government policies continue to pose problems for the processing industry
to source the right type of raw materials and to discourage more investment
in the sector.
Nevertheless, the proportion of FDI in the food-processing sector to total
FDI into India is low, constituting about 4 percent of total FDI inflow from
1991 to 2004.
Several multinational companies, including US-based companies like
Pepsi, Coca Cola, ConAgra, Cargill, Heinz, Kelloggs, IFF, and Mars (pet
food only) have entered the Indian food-processing industry with
significant investments.
Indian food and beverage companies are expanding their operations to
neighboring countries like Bangladesh, Nepal, Sri Lanka, Commonwealth
of Independent States countries, and the Middle East.
Takeovers and mergers are beginning to occur in the Indian foodprocessing sector, leading to consolidation.
Consumption:
The following factors influence the type and quality of inputs in processed foods:
A large and an exceedingly wealthier middle class are creating growing
demand for a wider variety of high quality processed foods.
The changing age profile (sixty-five million people expected to enter 20-34
year age group by 2010) and increasing exposure to western-type products
and lifestyles.
The market entry of several multinational food-processing companies and
ingredient suppliers.
The increasing number of fast food chains.
The recent trend toward a healthier lifestyle has generated a niche market
for diet, healthy, low-calorie, and non-fat food products.
The increasing urbanization and growing number of working women.
A slow but steady transformation of the retail food sector in cities.
Competition
Indias domestic industry is the primary competitor for US food-processing
and ingredients suppliers in India. India, with diverse agro-climatic conditions,
has a production advantage in many agricultural goods, with the potential to
cultivate a large range of agricultural raw materials required by the foodprocessing industry. India is a major producer of spices, spice oils, essential oils,
condiments, and fruit pulps. Significant variations in food habits and culinary
traditions across the country translate into a competitive advantage for small and
medium local players, who are familiar with local food habits and markets. Some
Indian food-processing companies have increased market share by decreasing
product prices. High import duties on processed food and food ingredients make
imports relatively costly. Existing domestic food laws restrict the use of several
ingredients, flavors, colors, and additives, thus posing an additional challenge to
US exporters interested in the Indian market.
Foreign competition to the United States is mostly from countries in closer
geographic proximity to India, such as Australia and New Zealand. Suppliers
from other countries often supply inferior goods at cheaper prices in comparison
to those available from the United States. European suppliers are major
competitors in the food ingredient sector. Several foreign firms, including some
from the United States, have started operations in India.
After all these, find out that in India there are lots of scope for organized
sectors like ITC, BRITTANNIA and PRIYAGOLD to increase the business by
applying supply chain management process for right quantity on right time to
right customer.
BACKGROUND:
HISTORY OF BISCUITS:
Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching
on biscuits, but do they know how biscuits began? The history of biscuits can be
traced back to a recipe created by the Roman chef Apicius, in which "a thick paste
of fine wheat flour was boiled and spread out on a plate. When it had dried and
hardened it was cut up and then fried until crisp, then served with honey and
pepper."
The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and
'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term
for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers
which, because of their low water content, were ideal food to store.
As people started to explore the globe, biscuits became the ideal travelling food
since they stayed fresh for long periods. The seafaring age, thus, witnessed the
boom of biscuits when these were sealed in airtight containers to last for months
at a time. Hard track biscuits (earliest version of the biscotti and present-day
crackers) were part of the staple diet of English and American sailors for many
centuries. In fact, the countries which led this seafaring charge, such as those in
Western Europe, are the ones where biscuits are most popular even today. Biscotti
is said to have been a favorites of Christopher Columbus who discovered America
Making good biscuits is quite an art, and history bears testimony to that. During
the 17th and 18th Centuries in Europe, baking was a carefully controlled
profession, managed through a series of 'guilds' or professional associations. To
become a baker, one had to complete years of apprenticeship - working through
the ranks of apprentice, journeyman, and finally master baker. Not only this, the
amount and quality of biscuits baked were also carefully monitored.
The English, Scotch and Dutch immigrants originally brought the first cookies
to the United States and they were called teacakes. They were often flavored with
nothing more than the finest butter, sometimes with the addition of a few drops of
rose water. Cookies in America were also called by such names as "jumbles",
"plunkets" and "cry babies".
As technology improved during the Industrial Revolution in the 19th century,
the price of sugar and flour dropped. Chemical leavening agents, such as baking
soda, became available and a profusion of cookie recipes occurred. This led to the
development of manufactured cookies.
Interestingly, as time has passed and despite more varieties becoming available,
the essential ingredients of biscuits haven't changed - like 'soft' wheat flour (which
contains less protein than the flour used to bake bread) sugar, and fats, such as
butter and oil. Today, though they are known by different names the world over,
people agree on one thing - nothing beats the biscuit!
The inspiration for fortune cookies dates back to the 12th and 13th Centuries,
when Chinese soldiers slipped rice paper messages into moon cakes to help coordinate their defense against
Mongolian invaders
smaller quantities are hand weighed and added into the mixing bowl for each
batch of dough to be mixed.
2. The ingredients are then mixed to form dough in the mixing bowl according to
a specific mixing procedure.
3. The dough is then tipped into a hopper and gravity-fed into the dough sheeting
section of the machine. In this process the dough is fed through various rollers to
form a sheet of dough. Depending on what type of biscuit is being produced, this
process varies.
4. Different forming techniques are used to get the required shape and size of the
piece of dough which will form the biscuit.
5. The raw biscuits are transported through a gas-fired oven on a metal conveyor
band where they are baked to form fresh, warm and deliciously smelling biscuits.
While still hot, the savory biscuits are sprayed with oil and one of a number of
types of flavoring is added to produce what is required for that particular biscuit.
6.Biscuits are baked rather than fried, so the oil merely assists the flavour
particles to cling to the biscuit surface. The flavored biscuits then travel along a
cooling conveyor in order to cool off.
7. Once the biscuits have been cooled, they are packed into wrappers, cartons and
cases, ready for distribution to one of the warehouses
8. Quality checks are conducted at key points in the process to ensure process
control and product quality is constantly maintained at a high standard.
9. The finished product is then transported in cases to state-of-the-art distribution
warehouses. Stock is loaded as per delivery orders and sent to the various
customers
Britannia Industries:
Britannia Industries Limited is an Indian company based in Kolkata that is
famous for its Britannia brand of biscuit, which is highly recognized throughout
the country. The Company's principal activity is the manufacture and sale of
biscuits, bread, Rusk, cakes and dairy products like cheese, butter and milk. The
brand names of biscuits include Vita Marie Gold, Tiger Variants, Nutri choice
Junior, Good Day, 50 50 variants and Good Morning. Its Non-Executive
Chairman is Mr. Nusli Wadia, and Chief Executive is Ms. Vinita Bali. The
Britannia's fame is largely acknowledged through the colorful Britannia logos,
Indian cricketers such as Virender Sehwag, and Rahul Dravid wear on their bats.
Britannia's controlling stake is jointly with Groupe Danone and Nusli Wadia.
Groupe Danone is one of the leading players in the world in bakery products
business. The Company is based in the Indian city of Kolkata.
Britannia Industries Ltd (BIL) -- one of India's leading food companies & a
leading manufacturer of biscuits in the country has always been the pioneer in
product innovation. Biscuits contribute to nearly 90 % of Britannia's total
turnover, the rest coming from a rapidly growing portfolio that includes Cakes,
Bread and Rusks. Britannia is synonymous with 'biscuits' and its brands like
MarieGold, Good Day, 50-50, Treat and Tiger have become household names in
the country.
Company overview:
The story of one of India's favorite brands reads almost like a fairy tale. Once
upon a time, in 1892 to be precise, a biscuit company was started in a nondescript
house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The
company we all know as Britannia today.
The beginnings might have been humble-the dreams were anything but. By
1910, with the advent of electricity, Britannia mechanized its operations, and in
1921, it became the first company east of the Suez Canal to use imported gas
ovens. Britannia's business was flourishing. But, more importantly, Britannia was
acquiring a reputation for quality and value. As a result, during the tragic World
War II, the Government reposed its trust in Britannia by contracting it to supply
large quantities of "service biscuits" to the armed forces.
As time moved on, the biscuit market continued to grow and Britannia
grew along with it. In 1975, the Britannia Biscuit Company took over the
distribution of biscuits from Parry's who till now distributed Britannia biscuits in
India. In the subsequent public issue of 1978, Indian shareholding crossed 60%,
firmly establishing the Indianness of the firm. The following year, Britannia
Biscuit Company was re-christened Britannia Industries Limited (BIL). Four
years later in 1983, it crossed the Rs. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In
1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new
corporate identity - "Eat Healthy, Think Better" - and made its first foray into the
dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion
further fortified the affinity consumers had with 'Brand Britannia'.
Britannia strode into the 21st Century as one of India's biggest brands and
the pre-eminent food brand of the country. It was equally recognized for its
innovative approach to products and marketing: the Lagaan Match was voted
India's most successful promotional activity of the year 2001 while the delicious
Britannia 50-50 Maska-Chaska became India's most successful product launch. In
2002, Britannia's New Business Division formed a joint venture with Fonterra, the
world's second largest Dairy Company, and Britannia New Zealand Foods Pvt.
Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global
rated Britannia 'One amongst the Top 200 Small Companies of the World', and
The Economic Times pegged Britannia India's 2nd Most Trusted Brand.
Today, more than a century after those tentative first steps, Britannia's fairy
tale is not only going strong but blazing new standards, and that miniscule initial
investment has grown by leaps and bounds to crores of rupees in wealth for
Britannia's shareholders. The company's offerings are spread across the spectrum
with products ranging from the healthy and economical Tiger biscuits to the more
lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of
almost one-third of India's one billion populations and a strong management at the
helm means Britannia will continue to dream big on its path of innovation and
quality. And millions of consumers will savoir the results, happily ever after.
Companies values:
The Britannia values are those guidelines that help us add value to the life of the
consumer.
Energize your Body and Mind - This is Britannia's Promise to the Consumer All our actions should ensure that this promise is delivered to the consumer.
Optimized delivery to the AW, the retailer and the end consumer is how we can
deliver this value to the consumer.
Organizational efficiency for healthy eating - This means that the retail
relationship management has to be extremely effective so as to minimize costs
and maximize coverage and range in each store.
Laddering Innovation - There has to be a stretch in the implementation of newer
approaches to access the existing and new consumers.
Horizontal Empowerment- which in case of the sales function, translates to
confident interaction with all customers and consumers such that the company is
represented in the best possible manner.
is heavily dependent on commodities like wheat and sugar. The hedging activity
will help control costs. It is now implementing a commodity buying strategy for
managing input cost," added Wadia.
According to him, the focus on cost control and supply chain management
yielded savings of Rs20.2 crores in 2004-05. BIL has already appointed KPMG
for supply chain management. "KPMG is looking into 48 projects like efficient
procurement of raw materials, manufacturing and distribution logistics etc," said
Wadia.
The chief executive officer of Britannia, Vinita Bali, said the company was
looking at new distribution channels like malls. "The company is investing around
15-20 per cent of revenue from a brand into brand promotion," she said. "Our
company has six power brands in the portfolio each exceeding Rs 100 crore in
annual sales," she added.
Meanwhile Field Marshal Sam Manekshaw, one of the hero's of 1971 IndoPak war, is stepping down from the board of Britannia Industries. The eminent
soldier served in the board of BIL for more than a decade. "He intimated to the
company that he does not seek reappointment. The company will not propose to
fill up the vacancy in the forthcoming annual general meeting," an official said.
BRITANNIA Industries has sure come a long way from being a company with
a stodgy but well-recognized brand name and an inconsistent financial
performance in the mid-1990s.
After a thorough overhaul of the operational structure, a revamp of its product
portfolio and an ambitious foray into new areas, such as dairy products and snack
foods, the company has managed to turn in robust financial performance over the
past four years.
The stock market has also taken notice; re-rating the stock, pushing up its price
earnings multiple from 14-15 times in 1997 to around 30 times now. The stock
now ranks among the preferred investment options within the universe of FMCG
companies. So, what has driven Britannia's valuations and what are its prospects?
which faces competition from a host of local brands, apart from national players
such as Pepsi Foods and Haldirams.
However, in both dairy and snack foods, Britannia outsources manufacturing.
Therefore, should these forays fail to contribute on the expected lines; Britannia's
losses would be restricted to its investments in product promotion. A proposed
foray into bottled water, which was on the cards earlier, appears to have been put
on the hold.
With Hindustan Lever and Nestle India also planning to expand their presence
in the confectionery segment, the threat to Britannia in this segment could be
potent. Of course, Britannia also does have the option to draw from the product
portfolio of one of its parents, Groupe DANONE, one of the largest food
companies in the world.
However, unlike Nestle or Hindustan Lever, Britannia has seldom drawn from
the parent's product portfolio for its domestic product launches. And Groupe
Danone, which controls 36 per cent of Britannia's equity, does not hold a majority
stake in Britannia.
A `Kwality' acquisition
As to the threat from the slowing sales growth in biscuits, Britannia's recent
acquisition of an equity stake in Kwality Biscuits should provide some spark to
the performance over the next one year. The purchase, which cost Rs 30 crores,
would have made but a small dent in Britannia's overall cash flows. (Britannia
generated operating cash flows of Rs 97 crores in 1999-2000)
the Britannia Industries stock, which now trades at a price-earnings multiple of
around 30 times its earnings for 2000-01 (based on nine-month per share earnings
of Rs 17), should offer scope for reasonable capital appreciation over a three-year
period. Investors can use any decline in stock price in keeping with market trends
to build exposures to this stock.
SHAREHOLDERS can hold the Britannia Industries stock; given its relative low
valuation visa other FMCG players. At its current price-earnings multiple of about
15 times its trailing 12-month earnings, the stock valuation is at a discount to
other FMCG peers, which are hovering at 20-22 times. However, significant price
appreciation on the stock is unlikely in the near term. The company's numbers for
the June quarter display a continuing trend of decelerating sales growth,
suggesting loss of market share to rivals in the biscuit business.
Profit growth has been outpacing sales growth due to cost savings. This is
likely to continue as the company ramps up production in the newlycommissioned manufacturing facility in Uttaranchal and reaps tax savings. The
company's ongoing buyback programmed may also provide a stable underpinning
to the stock price.
Duet Treat, and buoyancy in rural market growth a key market for the Tiger
brand.
Triggers:
Investors should also watch for a couple of additional triggers to the Britannia
stock price. The company has been steadily shrinking its equity base through
buyback of its shares from the open market. The fourth tranche of the latest
buyback program was concluded in 2004-05, at a maximum price of Rs 650 per
share. Announcements on the next tranche of buyback, if any, are awaited.
If Britannia decides to continue with its open market buyback program, it
would be a positive for the stock, as buybacks have proved to be good tools to
protect against downside in stock prices for other FMCG stocks.
Second, Groupe DANONE, one of Britannia's overseas co-promoters, has
recently been the object of speculation about a possible takeover. Though nothing
concrete has happened, any possible consolidation of DANONEs food business
at the global level with another strong FMCG player could have implications for
Britannia Industries. Shareholders need to watch out for developments on both
these fronts, so that they can be factored into the investment decision.
the new generation a healthy and nutritious alternative - that was also delightful
and tasty.
Thus, the new logo was born, encapsulating the core essence of Britannia healthy, nutritious, and optimistic - and combining it with a delightful product
range to offer variety and choice to consumers.
Global partners:
The Wadia Group of India along with Group Danone of France is equal
shareholders in ABIL, UK which is a major shareholder in Britannia Industries
Limited. GROUPE DANONE is an International FMCG Major specializing in
Fresh Dairy Products, Bottled Water and Biscuits/Cereals. One of the World
leaders in the food industry, these are some of the laurels it possesses:
Through its three core businesses (Fresh Dairy Products, Beverages and
Biscuits and Cereal Products), GROUPE DANONE is committed to improving
the lives of people around the world by providing them with better food products,
a wider variety of flavors and healthier pleasures. Its dominant position
worldwide is based on major international brands and on its solid presence in
local markets (about 70% of global sales come from brands that are local market
leaders).
GROUPE DANONE is recognized for the dynamism and strength of its brands:
Integrity
Team Orientation
People Development
Learning Orientation
Customer Orientation
Quality Orientation
Drive for Results
Entrepreneurial Spirit
System and Process Orientation
Communication
Company releases:
Britannia reports robust top line growth of 24%. Mumbai, October 28th, 2006:
Britannia Industries Ltd. (BIL) has delivered its 4th Successive quarter of 20%+
growth.
Net Sales Revenue at Rs. 550 crores represents a growth of 24%. Profit after
Tax declined by Rs. 23 crores for the quarter, impacted by unprecedented and
inordinate inflation of 15% - 20% in commodities like wheat, sugar, milk and
edible oils. Biscuit prices to the consumer have remained firm for the last 5-6
years. Cost effectiveness and technical efficiencies have significantly absorbed
the extraordinary inflation in all input costs. Net Profit is also impacted by the
onetime exceptional income of Rs. 117 Mn available in the previous period (six
months ending Sep 05) that did not re-occur in the current period.
The accelerated trajectory of 20%+ top line growth continued this quarter as
well with all of the company's key brands - Good Day, Tiger, 50:50 etc., and
categories, like bread, cakes and exports, posting double digit growth, in excess of
40%.
Specifically:
This quarter's growth of 24% continues the accelerated trend achieved over
the last four quarters - with the Company consistently growing more than
20% each quarter for the last 4 quarters.
To meet the high rate of growth, the Company is also investing in
augmenting its manufacturing capability with plans to invest over Rs. 150
crores in infrastructure.
Britannia has led the industry in innovation bringing delightful, 'new to the
market' offerings like 50:50 Pepper Chakkar, MarieGold Doubles, Chota
Tiger, Good Day cup cakes. The range of Festive Packs under the
"Greetings" umbrella has doubled sales this Diwali.
Consistent with its strategy of innovation, Daily Bread in which Britannia
had acquired a strategic stake, has opened its first Italian frozen dessert
parlour 'DeLuca's Gelato Italiano' in Bangalore.
Milestones:
1892
1910
Advent
1921
1939 44
of
electricity
sees
operations
mechanized
1978
1979
1989
1992
1993
1994
1975
1997
1999
2000
2001
2002
2003
2004
2005
Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Dividend Percentage
40.00
40.00
50.00
55.00
45.00
55.00
75.00
100.00
110.00
140.00
150.00
Bonus History
Year
1961
1966
1968
1971
1976
1984
1987
1990
2000
Brand milestones:
Bonus Particulars
1 equity share for every 2 shares held
4 equity shares for every 10 shares held
2 equity shares for every 3 shares held
2 equity shares for every 3 shares held
7 equity shares for every 10 shares held
2 equity shares for every 5 shares held
2 equity shares for every 5 shares held
1 equity share for every 2 shares held
1 equity share for every 2 shares held
Overview:
The success of Britannia lies in its strategy of identifying high value
opportunities and capitalizing on them through relevant and differentiated brands,
supported by an effective and efficient supply chain. The fountainhead of this
strategy is Brand Building, i.e. increasing consumer relevance, preference and
purchase. The key drivers are availability, presence, and merchandising for brands
that offer consumers a satisfying experience across a variety of consumption
occasions, and price points that represent good value for money.
As a corporate, Britannia has worked for the benefit of all stakeholders shareholders, consumers, dealers, suppliers, bankers, and employees. It has
established an excellent track record in terms of its financial performance and
dividends distributed to its shareholders. This has been adequately demonstrated
with the Company's top line growing from Rs. 7,523 mn in 1997 to Rs. 18,179 mn
in 2006 -a growth of 142% over the last 10 years. The net profit grew even more
significantly at 718% from Rs. 179 mn in 1997 to Rs. 1,464 mn in 2005-06,
giving a CAGR of 26.30%.
As of 31st March 2006, the issued and paid up capital of Britannia amounts to
23,890,163 equity shares having a nominal value of Rs. 10/- each. The
shareholder base is about 23,000 in number.
Britannia's shares are listed at the Bombay Stock Exchange, National Stock
Exchange and Calcutta Stock Exchange.
As part of the promotion, a life-size Tiger mascot visited select schools and
distributed the 3D collection to the lucky children. They even got to photograph
themselves with their favorite Tiger! This exciting offer ran at retail stores across
the country. Buzz was created with in-store display materials like attractive
dispensers and branded posters all based on the Alti Palti theme. The Alti Palti
craze caught on like wildfire amongst the kids - just like Britannia Tiger biscuits!
Recent Developments
A new initiative taken by Britannia, to cater to all the taste fads of the
consumer, seeks to widen the range of its snack foods. This will be Britannia's
biggest challenge in the next few years. Meanwhile in existing categories of
biscuits and baked products, innovation will be the key principle.
A host of new flavors and food-formats, as never seen before in the Indian
market, are due to enter the market in 2004. Thus, Britannia will continue to
define the Indian market in biscuits and other food products.
Promotion:
The role of promotions for Britannia is especially important in this highly
fragmented and competitive market. Today, the company prides itself on
communication that is innovative, yet constantly able to strike a chord in the
consumers' hearts and minds. Britannia's promotions have virtually redefined
consumer expectations from this category.
To reach out to the Indian consumer, Britannia has successfully leveraged
India's two prime passions - cricket and movies. Britannia addressed these
platforms in a manner true to its unique innovative style. It capitalized on every
Indian's dream to watch a cricket World Cup match and created the 'Britannia
Khao, World Cup Jao' contest in 1999. It based itself on instant gratification.
The entire consumer needed to do was buy packs of Britannia biscuits, scratch
a lucky card and win an all-expenses paid trip to England to watch a World
Cup match. This promotion was so successful that it set a trend that has got
every company scrambling for tickets to take their consumers for the World
Cup. This promotion was repeated successfully in 2002/03 with the destination
of choice being South Africa. Taking the success further was the promotion of
'Britannia Khao, Cricketer Ban Jao' that was fuelled by the need of every
Indian to be a part of the passion called cricket. Britannia followed it up with
another unique promotion; a vehicle that dealt with India's other passion movies. A promotion called 'Britannia Lagaan Match' that revolved around a
movie called Lagaan was based on a cricket match. This promotion gave the
consumer a chance to interact with the film stars and also get to play cricket
with them. The match had over 40,000 spectators and made the headlines of
leading newspapers and news channels.
Britannia promotions have proved to the marketing world that promotions
per se need not be only tactical but could also be strategic - used as a tool to
further brand equity.
Britannia advertising has distinguished itself from competition in terms of
imagery and recall value. The innovation of such communication was
exemplified through the launch of Britannia's salt-sweet biscuit. The brand name
was 50-50 and the consumer was never to upfront that the product was saltsweet. But by just allowing the consumer to decipher the message himself, the
company was able to draw the consumer closer and distinguish the offering from
competition.
Brand Values:
The Britannia brand is all about eating healthy, to lead a better life. It
advocates values that stand for health, hygiene, family, trust and taste. It reflects
the strong link between physical and mental well-being that is so important to a
person, and is typically a result of what one eats. Today, Britannia, driven by a
passion for excellence, manifested by its innovative thinking, has been able to
weave itself into the fabric of the consumer's everyday life. While Britannia
strives to give consumers a healthier life, the consumer on the other hand, has
come to expect innovation from Britannia's offerings - a huge challenge for the
company.
Research methodology
The non-exploratory research methodology will be used for thesis writing.
Objectives:
Analyze the effects of supply chain management on Britannia industries
process.
Supplier Chain management in Britannia industries visa priyagold
biscuits.
To provide possible strategies for better implementation in SCM in
Britannia industries
Research instruments:The secondary data will be collected through internet, books and the materials
published in journals and magazines.
Limitations:
Not private datas or primary datas which really give correct information
In other towns and cities of northern India, Priyagold has become a determining
factor for whatever large players like Britannia and Parle plan to do. From modest
sales of less than Rs 28 crores in 1998, Priyagold has become an Rs 100 crores
brand. And the target this year is Rs 200 crores. "We hope to cross the Rs 400
crores mark by 2004-end, when we'll be selling in the South and the East and
expanding in the West," says Agarwal. That may not impress the DANONEs of
the world, but considering that the growth for Priyagold comes primarily from a
limited geographical coverage, it speaks volumes for the potential of the Indian
market.
Priyagold hasn't succumbed to pressures from mega-brands Britannia and
Parle, which enjoy greater clout due to large product portfolios. Not all
distributors and retailers are happy with big brands, claims Agarwal: "We've tried
to give a healing touch to egos bruised by the arrogant attitude of the MNCs and
large companies." Hand-in-hand with better returns, it can work wonders. And
Agarwal gives margins that are far more attractive than those offered by the large
players. Distributors get seven per cent against 4-4.5 per cent from Britannia, and
retailers get 20-25 per cent rather than an industry average of 10-15 per cent in the
organized sector.
Unlike bigger companies, Agarwal ensures distributors operate in clearly
demarcated territories so they are able to cover all retail outlets in their areas more
efficiently. "This allowed a faster inventory turnover," says Agarwal. At the same
time, Agarwal identified newer segments and flavors where there was virtually no
competition, and launched variants like Kesar Bite, Cheese Crackers and Cashew
Chat Masala.
In the cream segment, which accounts for almost 40 per cent of the total
biscuit market by volume, Priyagold had the regular chocolate, orange and elaichi.
But Agarwal decided to target kids and launched new flavors like butter,
chocolate and strawberry. "We wanted to give consumers a new base of flavors
and train them to experience new tastes," he explains. Today he offers around 20
varieties, and retailers have begun to see Priyagold as an alternative to big brands.
Agarwal has gone more by gut feel and understanding of the consumer, than
relying on marketing textbooks.
In order to emphasize the value-for-money proposition, Agarwal focused on
economy packs and Priyagold was the first to enter the 250 gm segment when its
Butter Bite was launched in 1993. Seeing the success of Butter Bite, Britannia's
Good Day, which sold in 100 gm packs (priced at Rs 10), also entered the 250 gm
segment at Rs 18, the same as the former. Agarwal takes pride in the fact
Priyagold has strength to make big players react. Today Priyagold biscuits come
in 100 gm, 250 gm and ATC packs. When Britannia introduced its Marie sachet
of two, Priyagold responded with a pack of four at the same price of one rupee.
Last year, Agarwal decided to take the brand to up market retail shelves in Delhi
to attract consumers in the upper income strata. But resistance came from large
retailers in localities like Greater Kailash and Panchsheel Park. In a bid to
convince them Agarwal undertook a complete packaging overhaul across the
entire range. Agarwal convinced big-time retailers to let Priyagold set up a
counter and was even willing to pay them says a big Priyagold distributor. The
results were good, if not amazing the brands found a place in swanky outlets,
like Morning Stores in Delhi. Although he hiked Priyagold advertising budget
from Rs 5 crores last year to Rs 7 crores, Agarwal believes smaller players will
not be able to match resources of national marketers and MNCs when it comes to
frills and imagery. "It's more essential to improve processes in your back-end
operations to convince people about quality and hygiene," he says. That's surely
one thing consumers evaluate while considering local brands.
Therefore, Agarwal is pumping money into extensively modernizing his
factory. Surya is setting up a new integrated plant at Surajpur on the outskirts of
Delhi at a whopping Rs 50 crores, which will have flour, oil mill and biscuit
making and packaging units.
Another new plant is being set up in Lucknow at a cost of Rs 20 crores so that
Priyagold can cater to the eastern UP market better. Agarwal is now importing a
state-of-the-art cream sandwiching machine for Rs 5 crores which, he claims,
nobody has in the whole of south Asia. These may be small things for global
giants, but give tremendous joy to Agarwal.
The food marketing and supply chain management group combines expertise in
marketing and supply chain management in the context of the food industry.
Current research is focused on a number of inter-related issues.
One could suggest other key critical supply business processes combining these
processes stated by Lambert such as:
a.
b.
c.
d.
e.
f.
g.
g) Performance Measurement
Experts found a strong relationship from the largest arcs of supplier and
customer integration to market share and profitability. By taking advantage of
supplier capabilities and emphasizing a long-term supply chain perspective in
customer relationships can be both correlated with firm performance. As logistics
competency becomes a more critical factor in creating and maintaining
competitive advantage, logistics measurement becomes increasingly important
because the difference between profitable and unprofitable operations becomes
narrower.
According to experts internal measures are generally collected and analyzed by
the firm including
1.
2.
3.
4.
5.
Cost
Customer Service
Productivity measures
Asset measurement, and
Quality.
The data analysis Base on the secondary datas which I have collected through
internet, magazines, books etc.
DATA ANALYSIS:
As per my analysis I find out these factors in both companies:
Wadia. Groupe Danone is one of the leading players in the world in bakery
products business
Britannia strode into the 21st Century as one of India's biggest brands and
the pre-eminent food brand of the country. It was equally recognized for its
innovative approach to products and marketing.
Britannia will continue to dream big on its path of innovation and quality
The focus on cost control and supply chain management yielded savings of
Rs20.2 crores in 2004-05.
Profit growth has been outpacing sales growth due to cost savings
Net Sales Revenue at Rs. 550 crores represents a growth of 24%.
market share at 31.7% in volume and 38.8% in value for the last year.
As of 31st March 2006, the issued and paid up capital of Britannia amounts
to 23,890,163 equity shares having a nominal value of Rs. 10/- each. The
shareholder base is about 23,000 in number.
Britannia's shares are listed at the Bombay Stock Exchange, National
Stock Exchange and Calcutta Stock Exchange.
Commenting on the performance, Ms. Vinita Bali, Managing Director, BIL
INTERPRETATION:
Britannia industries covering more market share.
Britannia is a global brand and it has global partners like Groupe Danone
SUGGESTIONS:
Among the factors, which have contributed the most towards growth are
market related factors and IT factors like rise in e-commerce and usage of
Internet.
The food and beverage industry has very small margins and is very dynamic
.for these accurate supply chain information is absolutely key, not just for
planning, but also for operational efficiency. Britannia biscuits industries
has a great opportunity to take advantage of the modern technologies
available that can help it to increase the level of customer service, create
new operational efficiencies, reduce risk, and increase profitability. Its still
a vastly untapped area of supply chain management.
The common factors which have contributed towards manufacturing and
service both are rise in e commerce and sourcing out. Globalisation and
Liberalisation policies have benefited the service sector more than the
manufacturing sector.
Improving supply chain processes requires better collaboration between
retailers and suppliers. So keep good relation with them.
The customers today are not very forgiving, referring to the consequences of
missed delivery schedules. If a company was able to manufacture a product
with the right quality and the right price but missed on delivery, the other
two got nullified. So company should deliver on right time. Services should
be standardized.
Managing the supply chain was not just about transportation of goods. It
was about managing the mismatch of stocks, looking at high inventory and
eliminating premium freight, and managing many suppliers.
There is the need for improving infrastructure to take advantage of the wave
of outsourcing.
CONCLUSIONS:
During this thesis I have read lots of material about the organization and
their process of manufacturing the products. I find one similarity between these is
that the organizations want value for their money. They want quality and quick
services. This is because time saved is the money gained. So that organizations
fulfill the requirement of the customers with the satisfaction and make good
relations. Britannia industries also try to give maximum satisfaction to their
customers. The company main motive is to provide the right quality to right
customer at right time with satisfaction. Company is using supply chains to
control the cost.
The Britannia brand is all about eating healthy, to lead a better life. It
advocates values that stand for health, hygiene, family, trust and taste. It reflects
the strong link between physical and mental well-being that is so important to a
person, and is typically a result of what one eats. Today, Britannia, driven by a
passion for excellence, manifested by its innovative thinking, has been able to
weave itself into the fabric of the consumer's everyday life. While Britannia
strives to give consumers a healthier life, the consumer on the other hand, has
come to expect innovation from Britannia's offerings - a huge challenge for the
company.
ANNEXURE:
Financial results:
Websites:
http://www.thehindubusinessline.com.
www.whatiteez.com
http://www.mofpi.nic.in/fpipolicy.htm
http://www.britanniaindustries.htm
http://www.supply-chain.org/.
http://en.wikipedia.org/wiki/Supply_chain_management
http://www.lawson.com/.
Books:
Frontiers of electronic commerce, KOLKOTA. Page-52, 53, 442.
Supply chain management: concepts and cases. page-33- 36
Lee, H. L. and C. billing ton. Material Management in Decentralized Supply
Chains. 835-847.
Lee, H. L., and C. Billington. Supply Chain Management: Pitfalls and
Opportunities. 65-73
Cooper, M. C. and L. M. Ellram. Characteristics of Supply Chain
Management and the Implications for Purchasing and Logistics Strategy.
13-24.
Houlihan J. B. 1985. International Supply Chain Management.22-38.
Lambert, D & Cooper, Industrial Marketing Management. Pages 65-83