Supply Chain Management First Draft Term - V

FORE School of Management SCM Group 10 28/11/2019
Supply Chain Management

Term - V
Submitted to:
Prof. V.K. Gupta
Submitted by: Group - 10
Rahil Mehta - 271152

Rajagopalan Ganesan - 271154
Rohit Varma - 271156
Sagar Dua - 271157
Sandeep Thakur - 271159
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Table of Contents
Industry Brief 4
Market Size 4
Government Initiatives 5
About Panasonic India 7
Products and services 7
Competitor Analysis 7
Panasonic Supply Chain 9

Perceptual map of the modern more-informed online consumers 10
Multichannel distribution of Panasonic: 11
Location of Panasonic Dealers in Delhi NCR 12
Primary Activities 12
Inbound Logistics 13
Operations 13
Outbound Logistics 13
Marketing and Sales 14
Services 14
Secondary Activities 14
Firm infrastructure 15
Human resource management 15
Technology development 15
Procurement 15
7) Strategic Fit 16
9) Implied Uncertainties 16
10) Study of warehouse operations: 18
Key Performance Indicators 18
Warehouse Layout 19
Current system in the organisation: 19
Collection Flowchart - Panasonic India IPR Framework 20
Service organisation 21
Use of technology in the distribution structure 21
Providing solutions for each step of the logistics process: 21
Promotional Support given and expected 22
Margins at each level 25
ROI for Primary Channel partners - Distributor 25
Coverage Plan of distribution channels 26
Infrastructure required by distributors / dealers 27
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Major points of conflicts envisaged 28

Plan for conflict management
11) Upstream & Downstream SCM
12) 3PL
13) Outsourcing 29
References 33
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Industry Brief
● The growth in India’s consumer market would be primarily driven by a favorable
population composition and increasing disposable incomes
● Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 from US$ 1,983 in
2012. The maximum consumer spending is likely to occur in food, housing, consumer
durables, and transport and communication sectors
Market Size
● The growing purchasing power and rising influence of social media have enabled Indian
consumers to splurge on good things. Import of electronic goods reached US$ 53 billion
in FY18
● Indian appliance and consumer electronics (ACE) market reached Rs 2.05 trillion (US$
31.48 billion) in 2017. India is one of the largest growing electronics markets in the
world. Indian electronics market is expected to grow at 41 per cent CAGR between 2017-
20 to reach US$ 400 billion
● As of FY18, washing machine, refrigerator and air conditioner market in India were
estimated around Rs 7,000 crore (US$ 1.09 billion), Rs 19,500 crore (US$ 3.03 billion)
and Rs 20,000 crore (US$ 3.1 billion), respectively
● India’s smartphone market in 2018 grew by 14.5 per cent with a shipment of 142.3
million units. India is expected to have 829 million smartphone users by 2022
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● Index of Industrial Production (IIP) has grown 5.5 per cent year-on-year between April
2018-March 2019
Government Initiatives
● National Policy on Electronics Policy was passed by the Ministry of Electronics &
Information Technology in February 2019.
● A new Consumer Protection Bill has been approved by the Union Cabinet, Government
of India that will make the existing laws more effective with a broader scope.
● The mobile phone industry in India expects that the Government of India's boost to
production of battery chargers will result in setting up of 365 factories, thereby
generating 800,000 jobs by 2025.
● The Union Cabinet has approved incentives up to Rs 10,000 crore (US$ 1.47 billion) for
investors by amending the M-SIPS scheme, in order to further incentivise investments in
electronics sector, create employment opportunities and reduce dependence on imports
by 2020.
● The Government of India has allowed 100 percent Foreign Direct Investment (FDI) under
the automatic route in Electronics Systems Design & Manufacturing sector. FDI into
single brand retail has been increased from 51 percent to 100 percent; the government is
planning to hike FDI limit in multi-brand retail to 51 per cent.
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About Panasonic India
Panasonic makes available in India its wide range of consumer electronics, home appliances like
LCD & plasma TVs, DVD players, home theatre systems, smartphones, cameras, camcorders,
car audio systems, air conditioners, washing machines, refrigerators, microwave ovens,
automatic cookers, vacuum cleaners and a wide range of system products including
communication ones like mobile phones, high definition video conferencing, professional audio
video products like broadcast cameras, projectors and displays, business solutions including
printers, whiteboards and security solutions. Panasonic aggressively focuses on market research,
product innovation and talent hiring in India for work in areas like energy, water, remote access
and food. The company currently has a workforce of about 12,500 in India.
Panasonic has recently been designated India as regional hub to drive growth and build deeper
inroads into the fast emerging Asiatic, Middle Eastern and Western economies. Starting from
India, the company wants to create a knowhow to address consumers who are based out of India
and then take the knowledge to emerging markets. India is the sixth strategic region which takes
care of SAARC nations, Middle East Asia and Africa.
Products and services
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● Home appliances like LCD & plasma TVs, DVD players, home theatre systems,
smartphones, cameras, camcorders, car audio systems, air conditioners, washing
machines, refrigerators, microwave ovens, automatic cookers, vacuum cleaners
● Wide range of System Products including communication ones like mobile phones
● High definition video conferencing, professional audio video products like broadcast
cameras, projectors and displays
● Business Solutions including printers, whiteboards and security solutions
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Panasonic Supply Chain
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Perceptual map of the modern more-informed online consumers
Distributor:
● Distributors play a vital role in smoothly connecting manufacturers and customers. They
can expedite response times, enhance a company’s reach, and even create value-added
packages that complement a company’s product offering or scope
● Without distributors, either the buyer or seller would have to perform these functions,
adversely affecting the bottom line
● Distributors have staff to deal with issues like specifying and sizing components, improving
efficiency, and troubleshooting failures.
● Distributors can respond quickly to customer demand-crucial in today’s competitive
environment because of local geographic areas and trust among the retailers.
Dealer:
● Dealer sources and stocks bulk goods and sells them to retailers at a low price.
● They warehouse these products and have a catalogue for retailers to purchase products
and sell them to their customer base. The Dealer does not deal directly with the public
customer. They deal directly with licensed retailers.
● They can set margins and mark-ups for the end consumer and quickly access inventory
to stock stores.
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Multichannel distribution of Panasonic:
Multi-distribution channel is used by Panasonic to make its products available to the customers.
Distributing through authorised showrooms & service centres, retail outlets, direct sales channel,
resellers, distributors and OEM’s (Original equipment manufacturer) are helping the company in
reaching the customers with its offerings.
The company also follows the policy of distributing goods through an effective and consistent
channel consisting of wholesalers, retailers, outlets and consumers.
Warehouses:
Panasonic India has 28 warehouses and out of these four are designated as regional hub.
These are:
● Delhi (Headquartered in Gurgaon)

● Mumbai (Bhiwandi)
● Chennai (Guindy)
● Kolkata
Factory Locations:
● Haryana
● Uttar Pradesh
● Chennai
● Mumbai
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End Customers:
The customers who will buy the products from the dealer or through modern trade.
Manufacturer → Warehouses → Wholesaler/ Distributor →

Dealers → End Customer
Location of Panasonic Dealers in Delhi NCR
4) Value Chain Analysis
Primary Activities
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The primary value chain activities of Panasonic are directly involved in producing and
selling the product to targeted customers. Analysis of primary value chain activities can
improve the performance of Panasonic as explained below.
Inbound Logistics
It is important to develop strong relationships with suppliers as their support is necessary to
receive, store and distribute the product. Without analysing the in-bound logistics,
Panasonic can face various challenges in product development phases. Analysis of in-
bound logistics requires a company to focus on every aspect of transformation from raw
material to finished product. Some examples of inbound logistics are retrieving raw material,
storing the inputs and internally distributing the raw material and components to start
production.
Operations
The importance of analysing operational activities raises when raw material arrives, and
Panasonic is ready to process the raw material into the end product and launch it in the
market. Some examples of operational activities are machining, packing, assembling and
testing. Equipment repair and maintenance also falls into this category.
It includes both- manufacturing and service operations. Analysis of operational activities is

important for improving productivity, maximising efficiency and ensuring the competitive
success of Panasonic. The increased productivity can help Panasonic to achieve consistent
economic growth, increase profitability and set a powerful basis for competitive advantage.
Outbound Logistics
Outbound logistics include the activities that deliver the product to the customer by passing
through different intermediaries. Some outbound logistics activities are material handling,
warehousing, scheduling, order processing, transporting and delivering to the destination.
Panasonic can analyse and optimise the outbound logistics to explore competitive
advantage sources and achieve its business growth objectives.
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Because, when outbound activities are timely managed with optimal costs and product
delivery processes put a minimum negative effect on the quality, it maximises the customer
satisfaction and increases growth opportunities for the firm. Panasonic should pay specific
importance to its outbound value chain activities when its offered products are perishable
and require quick delivery to the end customer.
Marketing and Sales

At this stage, Panasonic will highlight the benefits and differentiation points of offered
products to persuade the customers that its offering is better than competitors. Only
producing a high quality product at affordable costs and distinctive features cannot create
value until Panasonic invests on the marketing and sales activities. The sales agents and
marketers play an important role here.
Some examples of Panasonic's marketing and sales activities are- sales force, advertising,
promotional activities, pricing, channel selection, quoting and building relations with channel
members. The company can use the marketing funnel approach to structure its marketing
and sales activities. The marketing strategies can either be push or pull in nature,
depending on the Panasonic’s business objectives, brand image, competitive dynamics and
current standing in the market.
Effective and wisely integrated marketing activities can develop the brand equity of
Panasonic and help it stand out from the competition. However, Panasonic must avoid
making false commitments about product features that cannot be fulfilled by the production
department. It indicates the need to ensure coordination between different value chain
activities.
Services
The pre-sale and post-sale services offered by the Panasonic will play an important role in
developing customer loyalty. The modern customers consider post-sale services as
important as marketing and promotional activities. The power of negative e-WOM due to
poor support service cannot be undermined in the current technologically advanced era.
The company must analyse its support activities to avoid damaging brand reputation, and
instead use it as a tool to spread positive word of mouth due to quick, timely and efficient
support services.
Secondary Activities
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The support activities play an important role in coordinating and facilitating the primary
value chain activities. Panasonic can also benefit from analysis of its support activities as
explained below.
Firm infrastructure
The firm infrastructure denotes a range of activities, such as- quality management, legal
matters handling, accounting, financing, planning and strategic management. Effective
infrastructure management can allow Panasonic to optimise the value of the whole value
chain. Panasonic can control the infrastructure activities (or commonly called overhead
costs) to strengthen the competitive positioning in the market.
Human resource management

Panasonic can analyse human resource management by evaluating different HR aspects,
including- recruiting, selecting, training, rewarding, performance management and other
personnel management activities. The effective HR management can allow Panasonic to
reduce competitive pressure based on motivation, commitment and skills of its workforce.
The company can also achieve its cost minimisation objectives by analysing hiring and
training costs with their relative return. The heavy dependence of Panasonic on employees'
talent will increase the importance of this value chain support activity.
Technology development
In a modern, technological advanced era, almost all value chain activities depend on
technological support. The technological integration in production, distribution, marketing
and human resource activities require Panasonic to realise the importance of technology
development. It can be divided into product and process technological development
activities. Some examples are- automation software, technology-supported customer
service, product design research and data analytics. The research and development
department of Panasonic is classified in this category.
Procurement
The procurement in value chain denotes the processes involved in purchasing the inputs that
may range from equipment, machinery, raw material, supplies, raw material and other items
necessary for producing the finished product. Due to its linkage with multiple value chain
activities, Panasonic should carefully consider its procurement activities to optimise the inbound,
operational and outbound value chain.
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7) Strategic Fit
The Company internationally has partnerships with suppliers to retort to manufacturing activities
on an international gauge. All the procurement activities comply with laws and regulations,
social rules, and corporate morals. There are contact points for suppliers to report the product
values anticipated by customers. Thus, with the unusually competitive market, there is
enormous stress over Panasonic Company to respond timely to the composite customer
necessities by boarding on value chain management creativity. It has such a supply chain
management system that ensures on-time delivery, prominent customer service, and greater
market share based on timely delivery.
Also, it has a good reputation in corporate social responsibility, and while selecting new
suppliers, the company keeps this thing in focus that these suppliers also must practice CSR.
The research for this purpose incorporates features as human rights, manual labor, health and
safety, protecting the global environment, and information safety. To ensure it further, it goes
for the Standard Purchase Agreements that comprise CSR necessities with the dealers. The
company also carries out CSR self-assessments concerning existing suppliers. While choosing
suppliers, it also ensures the safeguarding of Human Rights and Health and Safety of Labor
along with satisfying Green Procurement. To have decision making fast, The Panasonic
Corporation is maintaining the fast-paced supply chain. Technology and skillset are the main
features added to the supply chain of The Panasonic Corporation. There are combined systems
and gears that are enhancing alertness in the supply chain.
9) Implied Uncertainties
Panasonic can avail the cost advantages by reducing the costs associated with the value chain
activities. However, it requires the company to firstly map the activities and then associate costs
to make necessary adjustments. The connection between the value chain and cost leadership
strategy reflects a parallel focus on the low cost operational activities. If Panasonic aims to
obtain cost advantage, it needs to identify each element within the value chain can be optimised
to get the whole effect
A Value Chain Analysis Example for Panasonic is that it can use the analysis as a tool to
negotiate the best prices and maximise the in-bound and out-bound transportation processes.
Another Value Chain Analysis Example is using the value chain information to make modest
advertising budget that can reduce marketing costs and offer the product at an affordable cost.
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If Panasonic aims for the low-cost, the Value Chain Analysis can optimise the profitability. If
product differentiation is the aim of Panasonic, Value Chain Analysis will help the company in
maximising efficiency and enhancing the product quality by improving processes.
Panasonic can control following drivers to add value, set differentiation basis and enhance
efficiency.
● Organisational policies
● Integration
● Timing
● Economies of scale
● Linkages
● Interrelationships
● Capacity utilisation
● Learning and Spillover
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Study of warehouse operations:

For the purpose of project study floor space management and inventory management is selected.
Floor space and mismatch in system vs. actual stock and unavailability of material at a given
location. To resolve these problems improvement programs are suggested after studying their
current space utilization, sales volume and sales value. Also there ERP system is studied and
suggest improvement program and compile benefits to be achieved by organization.
Panasonic India has 26 warehouses and out of these four are designated as regional hub. These
are: Delhi
Mumbai (Bhiwandi)
Chennai (Guindy)
Kolkata
1. T1 Operations is related to upcountry stock transfer or stock movement, this include
transfer of stock from Mumbai warehouse to other warehouses or other regional hub.
2. T2 Operations is related to local sales which includes dispatch of stock to local distributors
and wholesalers it also include dispatch to local service centres.
3. Oracle Business suite is ERP software and 4Se is their front end WMS software
4. Average monthly sale T2 operations is approx. ₹30 Cr
Key Performance Indicators

● On time shipment confirmation
● On time delivery
● On time delivery update
● On time proof of Delivery (POD)
● Logistics RMA
● Damaged Material
Warehousing Process:
All activities being handled at warehouse can be classified in following processes:
● Receipt of material
● Dispatch of material
● Management of inventory in warehouse
● Handling of return/replaced material Documentation of activities
● Receipt of material
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● Port (Imported Material)

● Factory (manufactured within country)
● Stock Transfer
● Dispatch of material
● T1 Operations T2 Operation Service Centre Accounting of inventory in warehouse
● Daily stock verification
● Handling of damaged/return/replaced material
● Damage Return from dealer
● In transit damage
● Replacement of Material under warranty
● Damage Material Received
Warehouse Layout
Current system in the organisation:

1. Use of Racking system: this has increased space utilisation from current 20% to 50% and
storage volume has increased by 5670 cu.ft
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2. Storing items in warehouse as per priority basis (Pareto analysis- quantity sold): Has
resulted in easy location of item and has also reduced loading and unloading time
3. Well-defined Stock count policy based on ABC analysis (value of item sold): This has
reduced time consumed in daily stock count
4. Use of bin card system: This has helped in improving the analysis of stock movement in
terms of Fast Slow Non-Moving Items
Collection Flowchart - Panasonic India IPR Framework
Panasonic India recycles all of its electronic waste generated out of its manufacturing and trading
activities in India and channelize it to the authorized recyclers and dismantlers.
They have set up an individual and collective take-back systems so that everyone understands
and knows this process. They have also complied with all applicable laws related to e-waste
management.
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● Service organisation
With the goal of making it more convenient for customers requesting repairs, Panasonic
has made arrangements for receiving requests via websites and for courier services to
pick up customers’ products before repair and to deliver the repaired products when they
are ready.
Customers can get a diagnosis from the website before applying for repairs, allowing them
to confidently use their online repair service. To receive a diagnosis, customers enter their
product numbers and select the appropriate symptoms, and the system provides useful
troubleshooting approaches to solving their problems. If the system deems repairs to be
necessary or is unable to resolve their problems, customers can review the estimated
costs for repairs and apply for them.
These efforts demonstrate that Panasonic is working to provide service offerings that
mesh with customer lifestyles and life stages, including one-stop service.
● Use of technology in the distribution structure
Panasonic has a full line of solutions which maximize operational efficiency at each step
of the supply chain from labelling and dispatch error detection at factories, to sorting and
loading at distribution centres, on to transportation and proof of delivery. The flow of
logistics information and material tracking processes from the point of receiving an order
all the way to delivery, highlighting the various products and solutions that Panasonic
offers to contribute to supply chain operations. Furthermore, Panasonic's group company,
Zetes Industries S.A., is exhibiting its unique software solutions for supply chain
management and operation.
Providing solutions for each step of the logistics process:
In the factory & warehouse, Panasonic is showcasing its range of Cloud-based solutions which
enable real-time product and asset traceability; quick and easy identification, serialization and
aggregation on packaging lines; an easy and faster (no error) warehouse operations for more
reliable delivery. Furthermore, an RFID/Image ID Gate system demo shows how parcels passing
through the gate can be immediately scanned simultaneously, in units of individual products or
pallets, by RFID and/or 2D barcode to reconfirm if the deliverables contain the correct items and
quantity.
In the distribution centre solutions area, Panasonic's Visual Sort Assist system demonstrates how
boxes on a conveyor are traced by sensors, measuring the size, then projecting onto the box the
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assigned sorting information in numbers and colours. An Automated Transport System which
employs a compact-size fork-lift robot to pick up and deliver pallets autonomously to their
assigned destination is demonstrated, as well as a wearable Power Assist Suit solution to support
the loading/unloading of heavy parcels — thus decreasing fatigue to the user.
In the delivery solutions area, Zetes' proof of delivery software which ensures perfect delivery
through real-time control over collection/delivery and management processes is displayed; along
with field mobility solutions that maximize and empower service teams to support complex direct
store delivery and van sales operations; and user friendly in-store solutions for mobile devices to
improve in-store processes by providing real-time on-shelf availability information. Moreover, the
company's Smart Locker which enables unmanned pick-up and delivery services of parcels with
security access managed by the Cloud.
Support provided to distributors / dealers by the company

● Company provides convenience to the dealers to conduct business with them, place their
orders for their products and resolve their queries.
● Helps with consultation and support services
● Offers various training services and education to their dealers like business management
and skills training, new technology education and industry insights
● Providing better credit facilities
● Incentivizing dealers in the form of gifts or prices, once dealers’ targets are met in order
to motivate their dealers
● Providing advertisement support to the dealers like Above the line or Below the line
advertisements support which leads to sales growth in dealers’ market
● Providing various discounts or promotional schemes to the dealers, helps dealer in
earning better margin even after passing on some discount to consumers
● Company will use data analytics to better understand the needs of consumers, which
helps dealers better deal with consumers.
● Providing a software which would act as a one stop solution for dealers
● Less stringent damage policy of company i.e. how the company settles claims related to
unsold , expired or unsaleable products of company lying in market and at godown of
distributor/dealers
● Regular dealers meet in order to create a culture of knowledge sharing
Promotional Support given and expected
● Company will provide banner and other promotional material to the dealers for free
● During the festive season (Especially in summers), the company will provide some special
offer to dealers to increase the sales
● The company will also provide a list of authentic dealers/ distributors on its website so that
customers can locate them easily
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● Company will also run promotional activities in various malls and launch a campaign to
increase awareness about its products. This will help dealers to get a greater number of
orders
● In addition, the company offers regular schemes to the dealers which indirectly are
provided to customers that acts as a promotional activity
● Also, at certain premium dealers’ outlets, company changes the infrastructure of the store
in such a way that promotes its brand
Any distribution is incomplete without serving its end consumers. Panasonic India makes sure it
maintains a good repo with its loyal consumer and provides valuable support when needed. In
several ways it does this:
1. One of the ways includes Panasonic offering offline help in the form of brochures,
self-help brochures and solution of their online customer queries. It has a separate
consumer feedback online team - online reputation management team
2. Separate D-I-Y tricks and tips videos on various social media platforms and also
on their YouTube channel
Other Promotional support
1. Catalogue/Price Book: A catalogue is a detailed list of the inventory of is genre. This catalogue
contains all the data related to the products which include product images, specifications,
descriptions, price etc. The customers view this catalogue before making a purchasing decision.
The catalogue also requires retailers for ordering products. Generally, Catalogues are usually
updated every four to five months and are a good advertising medium for introducing the products
to the retailer community. Same has been shared below:
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2. Monthly Specials Bulletin:This is a listing of monthly specials and new products. Addition of
product selling information during the same month that a product is on sale is a great way for the
product to get retailer exposure and gives an incentive to buy the product.
3. Provide schemes and discounts: Promotional schemes and benefits such as Gift vouchers
and Seasonal discounts sponsor trips to the dealers or Giving them a chance to earn a profit by
selling the products on the earlier rates instead of the revised rates.
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Margins at each level
ROI for Primary Channel partners - Distributor
Calculation of ROI:
Average monthly turnover of the distributor = 34,00,000 (INR)
Margin= 7% (Average)
Gross Margin = 238,000 (INR)
Expenses
Delivery Expenses= 11,000
Electricity Bill = 5000
Admin Telephone Expense = 500
Rent & Misc. Expense (Packaging & Storage) = 45,000
Salary of Helper = 7000
Salary of Computer Operators = 15,000
Stationary = 3000
Total Expenses = 76,500
Net Profit monthly = 238,000 – 86,500 = 151,500
Investment:
Average Market Credit = 14,00,000
Average Stock = 40,00,000
Average Claim outstanding= 600,000
Total = 60,00,000
Return on investment:
ROI= Return on Investment
=1,51,500/60,00,000
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= .0252
=30% (Annual ROI approx)
Credit terms given to distributors by company

According to our secondary research, currently Panasonic is providing 21 days credit to
distributors and will continue this. Distributor will have to pay by RTGS. If distributor will not pay
the remaining amount to company in 21 day they the 1.5 times the remaining bill will be deducted
from their deposit.
Coverage Plan of distribution channels
Distribution channels are covered by Jaina Marketing for Panasonic. Its headquarter is in Delhi.
Jaina Marketing & Associates is a partnership concern established in 2000 and involved in the
business of distribution of cellular phones and other electronic items, with a strong distribution
network and expertise in supply chain management across India.
To increase the reach to final consumers, Jaina follows Pareto’s principle by providing more
efficient catering and coverage to 20% store that cause 80% sales in Delhi NCR. High frequency
beats of sale officers to the distributors catering to these stores is ensured so that replenishing to
these high sales generating stores is optimal and no shelf space is wasted and maximum revenue
generation happens through these best performing retail outlets.
The suggested coverage plan involves integrating distributor channels such distributors that are
catering to stores which are on peripheral areas of NCR such as bordering Faridabad, Gurgaon
don’t go unattended and cause at least minimum sales and no shelf space is wasted in these
stores as it is imperative to brand awareness and loyalty building to retail outlets selling products
to end users.
Delhi NCR region is disintegrated in the suggested distribution system into four areas/zones so
as to ensure full coverage and excess control in a structured way. Each zones distributor is to
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implement permanent journey plan as their routing schedule to supply Panasonic to the stores in
that particular zones. The stores which are located far away or do not register bulk sales are
covered through hopscotch method so that the cost allocation is reduced and maximum revenue
could be generated. Salesmen are employed to collect the order from different outlets and the
order delivery is done the next day with the help of delivering vehicles by the distributor in that
particular zone.
Outlets reached by the coverage plans followed by distributors in each zone are:
A. Electronic shops
B. Supermarkets
C. Malls
D. Showrooms
Factors under considerations while developing the coverage plan are:

A. Retail outlets in each zone
B. Reachability of warehouse to each retail
C. Reachability of stores by salesperson to log the requirement in each beat/hop scotch and
communicating the same to the distributor.
Infrastructure required by distributors / dealers
Warehousing
Distributors can leverage on third party for warehousing and storage units but it increases the
cost for the distributors if it is an established distribution channel and established markets such
as Delhi NCR, distributors can go ahead with their own storage units which have surplus capacity
for stocking goods and the warehouse should be such that its reachability could address board
area in that particular region. The conventional hired or contracted based warehouse can also be
used, whichever reduces the cost for the distributor.
IT infrastructure
With the advent of technology, certain IT infrastructure for logging real time data collection,
automation of logistics has become imperative to improve the delivery and vendor relations by
reducing response time of delivery and pacing up the distribution to end users, hence improving
the sales which is the primary objective of using the channel. Hence a robust IT infrastructure if
not most essential but still good to be incorporated.
Distribution Vehicles
A good number of vehicles to meet the orders received from the retail outlets is an unavoidable
necessity for distributors. The capacity of the vehicle and the handling measures for the product
installed in the vehicle of the distributors should be considered while selecting. In current scenario
distribution vans and trucks are best suited.
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Major points of conflicts envisaged
VERTICAL CONFLICT
● Manufacturers circumvent intermediaries and sell to customers directly and thus compete
with intermediaries.
● In a designated region, manufacturers allow too many intermediaries to limit, decrease
sales possibilities for individual dealers and eventually decrease their earnings.
● Manufacturers give the various channel members distinct services and margins even at
the same rate or favor some participants.
● Manufacturers are developing and using innovative channels that threaten the
establishment of channel members.
● Irregular communication with channel employees, non-cooperation and rude behaviour.
HORIZONTAL CONFLICT
Horizontal disputes are conflicts at the same level between channel participants
● One dealer / retailer's price-off draws more clients from other distributors.
● One dealer's aggressive publicity and pricing impacts other dealers ' businesses.
● One dealer / retailer's additional service draws clients from others.
● Crossing the land allocated and selling in the region of other dealers / retailers/ franchises.
● Unethical practices or malpractices of one dealer or retailer to increase customer base
affects other and spoil the brand image
INTER TYPE CONFLICT
● The intermediaries dealing in a specific item start trading outside their normal range of
products. Small vegetable stores sell cookies now, for instance, and thus compete with
tiny distributors selling these products. Large retailers often offer a large variety and thus
they compete with small but specialized retailers.
MULTI CHANNEL CONFLICT
Multi-channel conflict arises when the manufacturer utilizes a dual distribution strategy, i.e. two
or more channel arrangements are used by the manufacturer to achieve the same market.
● Manufacturers can sell via b their exclusive showroom or outlets directly. This act impacts
other channels ' company selling the products of the manufacturer.
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● Wholesalers bypass manufacturers and sell to big distributors directly. In this situation,
conflict becomes more intense as the big distributors enjoy more clients and thus the profit
owing to providing more range and still economical prices, which is feasible owing to a
buying quantity.
Plan for conflict management
Conflict management is a four stage process through which strategies for conflict resolution is
determined. These four steps are shown below.
UNDERSTANDING THE NATURE AND IMPACT OF CONFLICT
TRACING THE SOURCE OF CONFLICT
UNDERSTAND THE IMPACT OF THE CONFLICT
STRATEGY AND PLAN OF ACTION FOR RESOLUTION
4 STAGE PROCESS
● Power should be properly defined: one channel member's ability to get another channel
member to do something he wouldn't have accomplished otherwise is power. This should
be correctly indicated and used to resolve conflicts.
● Role Defined: Set prescriptions to define the member's behaviour.
● Communication Defined: Information flow allowing channel participants to send and
receive messages should be correctly defined in order to prevent conflict due to
miscommunication / lack of adequate communication.
Conflict resolution styles
● Avoidance: Used by weak members of the channel. Discussion is delayed or prevented.

Relationships don't matter much. Conflict is prevented because there is no severe attempt
to get anything done.
● Aggression: also recognized as a greedy or competitive style. It implies worrying about
one's own objectives without thinking about the others. The (may be the principal)
dominating channel partner dictates conditions to the others. The scheme might be
harmful to the long term.
● Accommodation: a full surrender situation. One party enables the other reach their
objectives without worrying about their own objectives. Emphasis is placed on complete
collaboration and approach flexibility. May produce the recipient's emotions that match. If
not correctly treated, exploitation may lead.
29 | P a g e
● Compromise: it goes without saying that both parties must give up something to meet
midway through. Can only operate with disputes that are low and not so severe. Often
used in the two previous phases.
● Collaboration: also recognized as an approach to problem solving. Try to maximize both
parties ' advantage while resolving the conflict. The most perfect way to resolve conflict–
a win - win strategy. It takes a lot of time and exercise
3PL in Panasonic
Similar to many multinational companies in China, Panasonic established over 30 branches and
nearly one hundred factories, yet the company does not have a subsidiary that specifically takes
charge of logistics services, nor does it have any warehouses or transport vehicles. Therefore,
Panasonic outsources its entire logistics operations to third-party logistics providers. The logistics
services provided by third party providers must not only support Panasonic’s internal business
operation, including procurement of raw materials and delivery of finished products, but also
needs to adapt to different kinds of deliveries through different channels. For example: There is a
great difference between the delivery of electronic products and home appliances. Likewise, B2B
distributors and B2C e-commerce operators possess different delivery features.
To integrate shipping volume resources among different factories and manage third-party logistics
providers in different regions, Panasonic was the first company to use a data-driven system to
manage its supply chain. The company began applying information management systems like
ERP, TMS, and WMS several years ago. However, an information system centered around ERP
generally comes from a financial standpoint that emphasizes production processes and internal
cost calculation. Thus, such systems have certain limitations when it comes to logistics
management, which mainly relies on outsourcing. In addition, the original TMS system could only
receive in-transit messages periodically sent by carriers, thereby lacking promptness and
traceability. In addition, the inability to upgrade the conventional software hindered the company’s
ability to satisfy the increasing demands arising from rapid business growth. Therefore,
management had no way to determine transport status in real time and could not gauge the quality
of on-site implementation from third-party logistics providers.
In contrast to production and warehousing — which only requires managing internal employees
— transport, as the only means for delivering products, is the first point of contact for end
customers to experience Panasonic’s service and has a direct impact on the customer’s overall
impression towards Panasonic. As the increasing prevalence of e-commerce continues to change
the shopping habits of Chinese consumers, it is also causing customers to have exceptionally
high expectations towards logistics service.
Through the oTMS transport management platform, Panasonic realizes real-time data sharing
with 16 partnering third-party logistics companies. Compared to the previous method, wherein
carriers periodically sent notifications back through integrated systems, oTMS provides a fully
traceable and clear real-time tracking and location display with 100% precision. Real-time tracking
adds another advantage for Panasonic’s internal personnel. With oTMS’ “Where Is It” app,
employees can see the status of goods in transit anytime, anywhere without having to wait for the
30 | P a g e
carrier to communicate with the driver and send notifications back, thereby enabling better control
over the timeliness of orders.
In terms of the cost, oTMS provides software as a service (SaaS) which does not require
additional hardware or IT personnel. This approach has also cut costs and workloads for
connecting with 16 carrier systems. Panasonic has applied the solution from oTMS for less than
half a year, so an accurate ROI cannot yet be calculated. After just one year of application,
companies can reduce costs associated with tracking personnel and warehouse transfer orders
by 80% and 60%, respectively. In addition, the time spent reviewing and confirming shipping
invoices can be reduced by as much as 95%, and the tendering process can be sped up by as
much as 90%.
Outsourcing in Panasonic
Outsourcing leads to the better-quality customer service, product quality and reduction in costs.
This also allows the company to bond the gap in staffing. Also, with outsourcing, company avail
the services of specialized vendor systems. Due to the efficiency of their systems, it is possible
for the company to have a quicker improvement time and advanced ranks of quality. Working with
a third-party organization, the company gets the flexibility in functions, and at any time it is in a
condition to get the switch to other company, who can perform best. Thus, there are plentiful
benefits of outsourcing recognized that include more flexibility, fewer labor costs, lesser
investment risk along with enhanced cash flow. Panasonic is also functioning globally, and it also
outsources its activities both with local and international parties. It is riskier for the company to
manage the outsourcing while dealing with international suppliers and vendors. But with good
experience and brand reputation, management, the company can do well in this area.
Repositioning the brand for future growth

1. Unfortunately, recognition of the Panasonic brand is significantly higher with people
above forty years of age than for people in their twenties. As younger people become
the decision makers of tomorrow, there is a risk that the Panasonic brand will not be
considered regularly in B-to-B purchases
1. The marketing challenge for Panasonic is to extend its brand recognition outside
traditional consumer markets to make it better-known as a strong B-to-B player in
selected markets:
To gain customer attention and break through the noise associated with Internet
advertisements, a strategy of “shock and amazement” was used.
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Panasonic Diaries
32 | P a g e
References
● (https://www.panasonic.com/ph/events-and-promotions.promotions.html?sort=Featured)
● (https://www.panasonic.com/content/dam/Panasonic/ph/en/Events-
Promotions/Promotions/CORP%20BROCHURE_BEAUTY.pdf)
● https://www.ibef.org/news/personal-care-market-to-touch-us-20-billion-in-india-by-2025
● https://www.statista.com/statistics/744164/india-personal-care-market-size/
● https://www.export.gov.il/files/cosmetics/ReportonIndianCosmeticsIndustry.pdf
● https://amritt.com/industries/india-consumer-packaged-goods-market/personal-care/
● Euromonitor
● https://telecomdrive.com/panasonic-india-distribution-focused-brand-plan-expand-channel/
● https://www.indianretailer.com/news/Panasonic-aims-35-revenue-growth-in-FY17-18.n7483/
● http://www.otms.com/en/otms-cases/panasonic/
●
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FORE School of Management SCM Group 10 28/11/2019

Supply Chain Management

Submitted by: Group - 10

Rahil Mehta - 271152

About Panasonic India 7

Products and services 7

Panasonic Supply Chain 9

Major points of conflicts envisaged 28

● The growth in India’s consumer market would be primarily driven by a favorable

population composition and increasing disposable incomes

durables, and transport and communication sectors

20 to reach US$ 400 billion

and Rs 20,000 crore (US$ 3.1 billion), respectively

Information Technology in February 2019.

production of battery chargers will result in setting up of 365 factories, thereby

generating 800,000 jobs by 2025.

investors by amending the M-SIPS scheme, in order to further incentivise investments in

electronics sector, create employment opportunities and reduce dependence on imports

planning to hike FDI limit in multi-brand retail to 51 per cent.

About Panasonic India

care of SAARC nations, Middle East Asia and Africa.

Products and services

smartphones, cameras, camcorders, car audio systems, air conditioners, washing

machines, refrigerators, microwave ovens, automatic cookers, vacuum cleaners

cameras, projectors and displays

● Business Solutions including printers, whiteboards and security solutions

Panasonic Supply Chain

Perceptual map of the modern more-informed online consumers

Multichannel distribution of Panasonic:

● Delhi (Headquartered in Gurgaon)

Manufacturer → Warehouses → Wholesaler/ Distributor →

Location of Panasonic Dealers in Delhi NCR

4) Value Chain Analysis

It includes both- manufacturing and service operations. Analysis of operational activities is

Marketing and Sales

Human resource management

Study of warehouse operations:

Key Performance Indicators

All activities being handled at warehouse can be classified in following processes:

● Port (Imported Material)

Current system in the organisation:

Collection Flowchart - Panasonic India IPR Framework

● Use of technology in the distribution structure

Providing solutions for each step of the logistics process:

Support provided to distributors / dealers by the company

Promotional Support given and expected

Other Promotional support

Margins at each level

ROI for Primary Channel partners - Distributor

Net Profit monthly = 238,000 – 86,500 = 151,500

Credit terms given to distributors by company

Coverage Plan of distribution channels

Factors under considerations while developing the coverage plan are:

Infrastructure required by distributors / dealers

Major points of conflicts envisaged

INTER TYPE CONFLICT

MULTI CHANNEL CONFLICT

Plan for conflict management

UNDERSTANDING THE NATURE AND IMPACT OF CONFLICT

TRACING THE SOURCE OF CONFLICT

UNDERSTAND THE IMPACT OF THE CONFLICT

STRATEGY AND PLAN OF ACTION FOR RESOLUTION

Conflict resolution styles

● Avoidance: Used by weak members of the channel. Discussion is delayed or prevented.