Blending Technology and Distribution

Introduction
The Asian paints s story that how this company improved their supply chain, distribution channel and how efficiently they catered to the requirements of 14,500 dealers across the country. They implemented Enterprise resource planning, SCM solutions along with SAP which helped the company to forecast demand accurately , thereby reducing stock and working capital costs.

Case Facts
It is among the top ten decorative coating companies in the world,generated turnover of Rs 25.6 billion in the first half of 2005. The company built up its network and had around four manufacturing facilities in India with 2,800 stock keeping units 2001. To support these, there were six regional distributions centres that handled around 55 depots. In 1983, asian paints introduced computers on the shop floor of their Bhanup Plant in Mumbai. From 1982 to 1984, asian paints developed software for manufacturing and material planning. In 1994, APIL installed VSATs(Very Small Aperture Terminals), which connected the factories to the depots.

It also implemented the i2 technologies SCM solution along with SAP ERP solution at an investments of Rs.290 million to simplify the processes across its operations. In 1999-2000, its SCM and ERP solutions helped APIL save around Rs.100 million. To extend its distribution onto a new platform, APIL set up Color World in 1999. The company also extended its distribution network to rural areas by focusing on villages with a population of upto 10,000. It gave yearly targets to its dealers with an extra incentive of 0.25% to 0.5%, which bound them to the company. APIL was awarded the Cheminor Award 2002 in recoginition of its excellent management of the supply chain for better productivity and increased customer satisfaction.

Q1. APIL was well known for its continuous investment in technology to improve its operations. In the 1990s, it implemented supply chain management systems along with ERP. Highlight the benefits of these initiatives in the operations at APIL.

 Helped in Integrate all its plants, regional distribution centres, outside processing centres and branches in India. The supply chain runs through a wide spectrum of functions right from materialsplanning to procurement to primary distribution. It has played a pivotal role in improving operational efficiencies Creating agile procurement, production and delivery systems. It has also enhanced the flexibility of operations Lowered output time Reduced delivery costs This improved customer-servicing levels The Supply Chain Management is backed by IT efforts that help the company in demand forecasting

Q2- Apart from pruning its supply chain systems, APIL also laid emphasis on dealer relations. This was very critical as the paint business required an extensive dealer network. What are the various measures that the paint major has taken to improve relations with the dealers? What other measures would you suggest to the company to further strengthen the dealer network?

 Encouraging the existing dealers to start up new more outlets. Product warranty policies,Indemnification Extra incentives . Providing financial support (Infrastructure,logistics,etc). It would come up with the schemes like Star Dealer of the month,Star Dealer of the year. Trainings. Personal touch with top management.

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