Вы находитесь на странице: 1из 14

The Story So Far

TANISHQ -Supply Chain Excellence

Acad Group No. 1

The Story So Far


Market leader in 1990s with 60% share Diversified into branded jewellery Manufacturing since 1994, distribution in Europe Move to 22kt products in 1999 FY2000: On the verge of bankruptcy SBUs
Products Jewellery

52 Citie s

Rs. 40k Cr of market


1 million customers

Asset Heavy Business FG = 85% of Working Capital FY 2001: Break-through FY 2002: Rebuilding S&M, setup of SCM function

Company Boutiques (6) Oldest, Located in Metros Fully ownes by Tanishq

Management Agents (30) Stocks on Tanishqs books 2-5 years old

Franchisees (31) Stocks owned by franshisees Smaller showrooms

SCM Initiative
Supply Chain Project ASPIRE
Extremely asset heavy model
Improve ROCE to 25% or above Bulk of working capital locked in stocks (Raw Material + WIP) / Finished Good = 20:80 Improved sourcing of primary raw material

Three Pronged Improvement plan


Clean Inside out plan
Introductio n of new channels of supply
Remodeling order generation and Fulfillment Process

Clean InsideOut Plan


There were 4 parts to plan
Stock turn based margins introduced New terms of trade for franchisees
FSN categorization of Inventory

Disposal of non-moving stocks through

Impure to pure marketing campaign to dispose rest of stock Mechanism to address the issue in future Displaying best seller and modifying display config. Identifying non-moving annually Modifying product launches Disposing sludge through discount Permissible level of sludge depending on size and scale of boutique

19 slow moving categories contributed to less than 5% of total sales. Lesser stock turn for these products vis--vis over all turns Identification of zero potential product categories
Performance analysis of each boutique based on age, potential of growth and cash flow Five boutiques brought under close observation Two boutiques finally closed down due to financial unviability

New Channels
Prototype Enabled Sale
Prototype of high value products Range of design Reduced inventory Responsive business Hub & spoke with delivery in one week

Made to Order (MTO)


Considerable impact on Working Capital Customer order with a lead time of one month 8000 designs ( 2 week)

Consignment sale
Display of Vendors stocks Range of Design without any investment

Impact of New Channels on Sales


Proto Impact-stock & Sales Trend
50 Values in Rs. Crore

40
40 30 20 10 0 2001-02 2002-03 2003-04

29 13 15

25

28
Sales Stock

The Growth of Prototype MTO & Consignment Chains


Sales (Proto) 18 16 Value in Million $ 14 12 10 8 6 4 2 Sales (MTO) Sales (Consign)

15.6 11 7 3.02 0.7


2001-02 2002-03 2003-04 2004-05

8.3 6.74

9.3

9.76

3.5

Source: Supply Chain Management : An International Journal (340-348)-2005

Remodeled OG&F

The Before Supply Chain

The Redesigned Supply Chain

MTR & MTBI

To prevent stock outs

Made to Replenishment (MTR) supply chain

Cycle stock at the boutique & safety/replenishment stock at the factory From Reactive to Proactive supply chain Totally automated using IT tools.

Better discipline with the introduction of boutique wise, cluster wise stock norms

Made to Boutique Indent (MTBI)

Transparent system of tracking mechanism & reduction in indent processing time to two days. Help desk was set up to enable single point contact with SCM

Responsive Supply Chain


The Before Supply Chain
Production plan Indent Order Processing
Company Boutiques Management Agents Franchisee Boutiques

Suppliers

Manufacturin g

Inventor y

C&FA

The Redesigned Supply Chain


Production plan Stock Control Supply Chain Management Indent GIT Control

Suppliers

Manufacturin g

Inventor y

C&FA

Company Boutiques Management Agents Franchisee Boutiques

Strategic Outsourcing
Utilization of market potential and reduce cost rather than investing and increasing production capacity. Initially started with 50 vendors .

Karigar Parks
Company developed ancillary units. Helped in controlling cost of operation & help in introducing new designs into the market thus increased sales and profitability.

MEADOWS
Management of Enterprise & Development Of Women. Initiative started with SHGs assembling the discrete links of bracelets resulted into outsourcing.

SCM Initiatives 2004 onwards


Advanced Planner & Optimizer Tool
Is a planning tool used to plan & optimize supply chain processes. Using since April 2005, the demand for each watch variant is matched with the capacity within companys mfg. shops as well as those of its vendors. And forecast is modified till a concrete production plan emerges.

Supplier Network Planning


Through a portal orders can be placed on the vendors; they will upload information daily on the portal helping the company to keep a track on production in real time. This ensures the effective utilization of resources.

Use of Web Application


Titan has a network of spares distributors across the country, and stays connected using a web application . In fact, they are able to place approximate orders before the production begins, thus helping Titan produce closer to market requirements.

Streamline Financial Management


In January 2012, the organization upgraded to Oracle E-Business Suite Release 12 to streamline financial management, reduce supply chain lead times, and cut manufacturing costs. Tanishq reduced supply chain lead times by 30%, cut month-end accounting times from 10 days to 4 days.

Integrated Supply Chain Management


IScM provides better work environment and upgrades the environment outside the manufacturing unit. A dedicated Technology Cell has also been established to ensure that cutting-edge technology is constantly tracked and infused into the business. Integrated Supply Chain Management (IScM) is backed by high-end machinery. The product development cycle is based on state-of-the-art CAD/CAM technology that enables seamless integration of various stages: styling, three-dimensional solid modelling, engineering design, tool design, tool making and prototype making.

Tangible Benefits
Sales (in crores)
484 389 299 141 32 38 73 188 -10.6 -10.4 12.3% -5.56 8.3% 8.5% 2.07 1.87

669

Net Profit (in crores)


16.35 7.82 19.75

ROCE (%)
25% 20.7%

-21.96

Tanishq's contribution to Titan Sales (%)


43

Improvement in delivery alignment increased from 70% to 90%

Working Capital reduced by 10%


24
14 8

FG Inventory is within 10% of stock norms in comparison with 22% last year

1996-97 1997-98 1999-00 2002-03

Challenges/Solutions/Impact
Challenges
Poor Stock Management

Solutions
Gather insights from franchisee model two boutiques

Lack of Ownership of FG Inventory


High lead-time for order fulfillment Irregular Indenting Poor delivery alignment Lost sales due to stock-out High non-moving stock Poor visibility of stock and sale No single point contact

Tanishq SCM is the owner of total FG Inventory


Tanishq SCM encompassing the whole value chain Weekly indenting system was introduced Improvement of delivery alignment from 70% to 90% MTR Supply Chain was to prevent stock-outs Tracking non-moving stock using IT systems IT initiative Gold Mine for visibility of stock and sale Help Desk became the single point contact for SCM queries

Impact

Key performance measures are total FG inventory including GIT against norm, delivery alignment. Managing logistics and reducing cost, tracking non-moving stock and stock turn at every retail point.

THANK YOU