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ESTIMATING THE LENGTH OF A

SUPPLY CHAIN FOR AN FMCG


COMPANY
Akhil Gupta
Doni Riba
Saurabh Kispotta
Ravi Shankar Batta
Nitesh Duhan
OVERVIEW

09/26/10
 Sector: FMCG
 Product: Soap Bar

MBA - Management of Services, FMS


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Demand

09/26/10
Recognitio Ordering Raw
Processin
n, Raw Materials Inventory
production g
Materials Recieved

MBA - Management of Services, FMS


decision

Packaged
and
stored

Large
Cons Retailers Distributor Warehouse
umer s s
s Wholesaler
Retailers
s 3
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DEMAND RECOGNITION,
PRODUCTION DECISION
RAW MATERIALS

09/26/10
 The raw materials in bar soaps are fats, fatty
acids and inorganic water-soluble bases

MBA - Management of Services, FMS


 Fats are extracted from mutton tallow, beef,
coconut, palm and palm kernel oils
 After extracting the raw material it goes to a
treatment plant to make it pure.

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PROCUREMENT OF RAW MATERIALS

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 Oil as a raw material procured from suppliers
 For purification of oil

MBA - Management of Services, FMS


 Strategy A: Supplier provides purified oil
 Strategy B: Company purifies itself

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09/26/10
 Strategy A
 Costincreased
 Time duration lesser

MBA - Management of Services, FMS


 Strategy B
 Costreduced
 Time for processing increased

 We chose strategy A
 Lead time between ordering of raw materials and
supply : 1-3 weeks
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PROCESSING OF SOAP

09/26/10
 It takes two days for processing of a soap

MBA - Management of Services, FMS


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PACKAGING AND STORE

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 Individual soaps are packed in plastic foils

MBA - Management of Services, FMS


 Individual boxes are then put in a box of 72
each
 For building up of inventory packaged soaps
are kept in the store
 The packets are then transported to the
different warehouses in the country

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FACTORY TO WAREHOUSES
Company

09/26/10
Warehouse

Factory 1-3

MBA - Management of Services, FMS


weeks

10
WAREHOUSE WEEKS Distributors

09/26/10
1-3
Company
weeks

MBA - Management of Services, FMS


warehouse

11
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12
Retailers

weeks
1-3
DISTRIBUTORS
Demand

09/26/10
Recognitio Ordering Raw
Processin
n, Raw Materials Inventory
production g
Materials Recieved

MBA - Management of Services, FMS


decision

Every 1-3weeks 2-5 days


month
Packaged
2-5 and
days stored
1-3 1-3 1-3
weeks weeks week
Large
Cons Retailers Distributor Warehouse
umer s s
s Wholesaler
Retailers
s 13
SCM LENGTH

09/26/10
 It takes about 5 to 13 weeks after the
demand forecasting has been made/orders
placed

MBA - Management of Services, FMS


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HUL

09/26/10
 HUL’s distribution network is recognized as one of its key
strengths -- that which helps reach out its products
across the length and breadth of this vast country.

MBA - Management of Services, FMS


 Distribution network is one of the key strengths that help
them reach their products across the length and breadth
of this vast country
 It has 2000+ suppliers and associates 7,000 stockists
and direct coverage in over 1 million retail outlets across
India.
 To meet the ever-changing needs of the consumer, HUL
has set up a distribution network that ensures
availability of all their products, in all outlets, at all
times.
 HUL boasts of placing a product across the country in
less than 72 hrs.
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09/26/10
Wholesaler Ordering Raw
s and large Processin
Raw Materials Inventory
retailers g
place order Materials Recieved

MBA - Management of Services, FMS


Packaged
and
stored
Kiosks

wholesaler
Consumer s Distributor Warehouse
s s s

Retailers 16
Large
Retailers
HUL – CHANGING TRADITIONS

09/26/10
MBA - Management of Services, FMS
Kiosks

Warehouse Distributor The CONSUMER

Retailers

17

Large
Retailers
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