Benchmarking of FMCG industries in India
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Presentation On
“BENCHMARKINGOF
FMCG INDUSTRIES IN INDIA”
Presented ByArvind Rathod
@SIMS (Operations)
Email: [email protected] 9823141993
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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.'
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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
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Bench marking organization: Xerox
Benchmark : Canon, Ricoh etc
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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.
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Planning
Analysis
Integration
Action
Maturity
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'Leadership through Quality' program
introduced
Supplier Management System
Inventory management
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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).
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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%...
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FMCG market has been divided for a long time between the organized sector and the unorganized sector
India’s Rs. 460 billion FMCG market remains highly fragmented with roughly half the market going to unbranded, unpackaged home made products
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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.
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Merger
Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969.
Demerger
March 2007, it was revealed that CadburySchweppes was planning to split its businessinto two separate entities& The demerger took effect on 2 May 2008o one focusing on its main chocolate and
confectionery marketo other on its US drinks business
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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
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Nestlé S.A. (French pronunciation: [nɛsle]) is a multinational packaged food company founded and headquartered in Vevey, Switzerland
It originated in a 1905 merger of the Anglo-Swiss Milk Company for milk products
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CADBURY JOHNSON NESTLE
COST OF RAW
MATERIAL
350.29 141.98 1647.46
COST ADDITION IN
THE RAW MATERIAL
STAGE
5.84 3.89 15.50
COST AT THE END OF
RAW MATERIAL
STAGE
356.13 284.60 1454.66
COST AT THE END OF
WIP STAGE
1064.24 1416.92 2893.47
COST ADDITION AT
THE FINISHED GOODS
STAGE
8.66 14.00 24.71
COST AT THE END OF
FINISHED GOOD
STAGE
1072.90 1430.92 2918.18
Cr. Rs.
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COST OF HOLDING INVENTORY FOR TIME PERIOD I (CR)
INTERNAL SUPPLY CHAIN MANAGEMENT COST FOR TIME PERIOD I (Lac’s)
CADBURY 16.31 276.34
JOHNSON 18.46 249.58
NESTLE 49.08 389.29
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COMPANY ACCOUNTS
RECEIVABLE
ACCOUNTS PAYABLE
CADBURY 71.63(LOW) 385.09(LOW)
JHONSON 244.36 495.33
NESTLE 168.6 957.78
Cr. Rs.
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HOLDING
PERIOD
(NO.OF
DAYS)
CADB-
URY
JHON-
SON
NEST-
LE
2005 2006 2007 2005 2006 2007 2005 2006 2007
RAW
MATERIA
L
29 48 54 40 25 31
WIP 5 6 4 1 1 1 4 1 5
FG 22 17 19 22 22 24 20 22 22
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CADBUR
Y
JHONSO
N
NESTL
E
2005 2006 2007 2005 2006 2007 2005 2006 2007
INVT149.29 160.99 149.29 117.78 245 147.72 220.03 245.21 392.66
A/C R
20.06 39.4 71.63 164.38 219.6 244.36 112.08 158.99 168.6
A/C P 205.57 293.41 385.09 537.39 553.01 495.33 685.32 768.87 957.78
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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.
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