Presentation On BENCHMARKING OF FMCG INDUSTRIES IN INDIA

Email: arvindelite@gmail.com 9823141993

Arvind Rathod @SIMS (Operations)

Presented By

Benchmarking is the process of finding, adapting and implementing outstanding practices. Process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results. The main emphasis of benchmarking is on improving a given business operation or a process by exploiting 'best practices,' not on 'best performance.'

Identification of bottlenecks and poorly performing activities Corrective action taken leading to improvement in operative parameters and reduction in cost and time to market Creates a culture that values continuous improvement to achieve excellence

Increasing sensitivity to changes in external environment

Focus through performance targets Prioritizing areas that need improvement Sharing best practices between benchmarking partners

Bench marking organization: Xerox Benchmark : Canon, Ricoh etc

Xerox Corporation is one of the world's top technology innovators, with research and technology centers in the United States, Canada, and France. The Xerox Innovation Group (XIG) invents next-generation technology, focusing on marking systems, materials, digital imaging, as well as solutions and services.

Planning Analysis Integration Action Maturity

'Leadership through Quality' program introduced Supplier Management System

Inventory management

Xerox zeroed in on various other best practice companies to benchmark its other processes. American Express (for billing and collection), Cummins Engines and Ford (for factory floor layout), Florida Power and Light (for quality improvement), Honda (for supplier development), Toyota (for quality management), Hewlett-Packard (for research and product development), Saturn (a division of General Motors) and Fuji Xerox (for manufacturing operations) and DuPont (for manufacturing safety).

Highly satisfied customers for its copier/duplicator and printing systems increased by 38% and 39% respectively Customer complaints to the president's office declined by more than 60%. Customer satisfaction with Xerox's sales processes improved by 40%, service processes by 18% and administrative processes by 21%...

FMCG market has been divided for a long time between the organized sector and the unorganized sector Indias Rs. 460 billion FMCG market remains highly fragmented with roughly half the market going to unbranded, unpackaged home made products

 COMPANY

PROFILE

In 1824, John Cadbury began vending tea, coffee, and (later) chocolate at Bull Street in Birmingham in the UK and sometimes in India. The company was later known as "Cadbury Brothers Limited

After World War I, Cadbury Brothers Limited undertook a financial merger with J.S. Fry & Sons Limited, another chocolate manufacturer.

 Merger

Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969.

Demerger
March 2007, it was revealed that Cadbury Schweppes was planning to split its business into two separate entities & The demerger took effect on 2 May 2008 o one focusing on its main chocolate and confectionery market o other on its US drinks business

 COMPANY

PROFILE

the most comprehensive manufacturer of healthcare products, selling more than 100 different products in the consumer, pharmaceutical and professional markets Since 50 years of establishment in India

Nestl S.A. (French pronunciation: [nsle]) is a multinational packaged food company founded and headquartered in Vevey, Switzerland

It originated in a 1905 merger of the AngloSwiss Milk Company for milk products

Cr. Rs. CADBURY

COST OF RAW MATERIAL

JOHNSON 141.98

NESTLE 1647.46

350.29

COST ADDITION IN
THE RAW MATERIAL STAGE COST AT THE END OF RAW MATERIAL STAGE COST AT THE END OF WIP STAGE COST ADDITION AT THE FINISHED GOODS STAGE COST AT THE END OF FINISHED GOOD STAGE

5.84

3.89

15.50

356.13

284.60

1454.66

1064.24 8.66

1416.92 14.00

2893.47 24.71

1072.90

1430.92

2918.18

COST OF HOLDING INTERNAL SUPPLY INVENTORY FOR TIME CHAIN MANAGEMENT PERIOD I (CR) COST FOR TIME PERIOD I (Lacs)

CADBURY JOHNSON NESTLE

16.31 18.46 49.08

276.34 249.58 389.29

Cr. Rs. COMPANY ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE

CADBURY

71.63(LOW)

385.09(LOW)

JHONSON

244.36

495.33

NESTLE

168.6

957.78

HOLDING

CADB-

JHON-

NEST-

PERIOD
(NO.OF DAYS) 2005

URY

SON

LE

2006

2007

2005

2006

2007

2005

2006

2007

RAW
MATERIA L WIP FG 5 22 6 17 4 19 1 22 1 22 1 24 4 20 1 22 5 22 29 48 54 40 25 31

CADBUR Y 2005 INVT 149.29 A/C R 160.99 149.29 117.78 2006 2007 2005

JHONSO N 2006 2007 2005

NESTL E 2006 2007

245

147.72

220.03

245.21

392.66

20.06
A/C P

39.4

71.63

164.38

219.6

244.36

112.08

158.99

168.6

205.57

293.41

385.09 537.39

553.01

495.33

685.32

768.87

957.78

 Recommendation

If a firm is very large in comparison to its suppliers, then it should be more concerned about keeping its accounts payable at lower levels since the cost of capital faced by a small player is much higher. On the sell side, a firm may be prone to offer extensions of credit and sell more on credit to generate sales.