Distribution system of sparco paints

Sparco paints has five distribution centers in Karachi, Peshawar, Gujrat, Lahore, and Rawalpindi.
The distributors are allotted with a large area and they cover large no of customers in the
territory. Distributors did not moved their distribution system to urban and rural areas they did
not want to move outside cities because they are generating huge sales in cities. Distributors are
main controllers in the paint industry.
Elements of Sparcos Distribution Strategy
1. sparco GOES TO INDIVIDUAL CONSUMERS
Customers have wide choice of color ranges and paint is available in different
packing sizes
2. sparco GOES TO SEMI-URBAN AND RURAL AREAS
For enlargement of their distribution system towards rural areas they
increased the no of distributors.
3. sparco GOES RETAIL
When 2,000 different items had to be made available to the consumers, it
automatically meant that the company had to be prepared for high inventory
holding in its various retail outlets

4. sparcos Network of Dealers

In paint segment large numbers of distributors and large network of dealers

play a crucial role.
Sparco paints scored over its competitors with a massive network of 15,000
dealers spread over 3,500 towns across the country. AP has the largest
distribution network among all the players. And a network of 8,000 dealers.

CONTROL OF CREDIT OUTSTANDINGS

The dealers are bound to maintain certain level of inventory with all the variety of products
demanded in the area. To maintain stock credit is needed. Company gives credit to the
distributors for a period of 15-20 days in main cities. The dealer who clears the outstanding
amount in given time is given a cash discount of 5%.
 Relied on home grown solutions for planning and implementation
changing fast
support of historical data/trends as consumer preferences were
Forecasting The demand pattern was difcult to predict even with the

changes in the procurement planning process

Constant updation of BOM and Routing called for frequent
accurate forecasts
Procurement Raw materials comprise 60% of the value chain which require
packs (fve to eight packs)
depending on a product line) in all the
ng
Manufacturi
Manufactured all the shades (30-50
Customer choice limited to number of SKUs
3000 SKUs
Distribution Had to maintain inventory levels for all

Distribution
Paint dispensing machines
Altered the production pattern from shades to producing bases
Reduced inventory and Eliminated redundancy of stocks
Approx. 11000 color tinting machines including multiple machines across
some counters
Has helped expand the range of shades for each product category, offering
a choice of shades to consumers in the hundreds.
For the retailers it has eliminated the sales loss for want of range/desired
shade

Manufacturing
Strategy changed to manufacturing bases thus providing economies of scale

Helps optimize the process such that least inventory is produced to maintain the
expectations of service and safety stock
 Better planning reduces the number of rush orders

Factory Scheduler used for machine by machine and unit by unit planning of
production schedules
Procurement
factory planner used to identify the raw material and packing materials and who
to source it from
Also provides the ideal formulations required for manufacturing products

A better materials planning system allows the company to create more complex
paint formulas
Helps select the best vendor and manufacturing method for any given situation