Supply Chain Management

GROUP 9
Shobhit Pathak
Dhruv Bansal
Shubham Sharma

Flow Of Presentation
About the Company
About Supply Chain Management
SCM Component in ITC
The Composition
Analysis
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ABOUT ITC
ITC is one of India's foremost private sector companies with a
market capitalisation of $ 45 billion and a turnover of $ 7 billion.
Today ITC is the country's leading FMCG marketer, the clear market
leader in the Indian Paperboard and Packaging industry
It is the second largest Hotel Chain in India and a trailblazer in
'green hoteliering'.
ITC has established vital brands like
Aashirvaad, Sunfeast, Dark Fantasy, Bingo!, mint-o, Kitchens of
India in the Branded Foods space;
Fiama Di Wills, Vivel and Superia in the Personal Care products
segment;
Classmate and Paperkraft in Education & Stationery products;
Wills Lifestyle and John Players in the Lifestyle Apparel
business;
Mangaldeep in Agarbattis
Cont
One of the 8 Indian Companies to feature in Forbes A-List for 2004
Featuring 400 of the Worlds best big companies with M-cap. > USD 7
billion . & are rated as the most attractive companies for investor

Only Indian FMCG Company to feature in Forbes 2000 List
A comprehensive ranking worlds biggest companies measured by a
composite of sales, profits, assets & market value

Among top in :
Sustained value creation (BT-Stern Stewart survey)
Operating profits
Cash Profits Ranks

No. 8 among Indian listed
Companies by Market cap

..Supply Chain Management is Getting the right things
to the right places at the right times, for profit..


New information and communications technologies have
revolutionized todays supply chains, making them
extraordinarily better and faster
SCM Components practiced at ITC
Demand creation and forecast understand needs/ perceptions,
gauge market potentials, study competitor environment


Product development and commercialization product packaging,
process structure


Distribution network configuration number and location of
supplier, production facilities, distribution system, warehouse and
customer

Cont
Distribution strategies centralized and decentralized, direct
shipment, push / pull strategies


Information integrated system and processes through
supply chain to share valuable information, demand
forecasting, demand signals, inventory and transportation.


Inventory management quantity and location of inventory
including raw materials, work-in-process and finished goods.
reduce bull whip effect
ITCs Supply Chain (Before IT implementation)

ITC receives various grades of Tobacco Leaf and Stem from Indian
Leaf Tobacco Division (ILTD) based mainly in Guntur, Andhra
Pradesh

Processed to form tobacco blends at one of the three Tobacco Processing
Units at Bangalore, Saharanpur an Munger.

Tobacco Processing Unit is called PMD or Primary. Manufacturing
Division. The cut tobacco is then sent to the Secondary Manufacturing
Division (SMD) for making and packing cigarettes

ITC Supply Chain Model
ITC Ltd. uses Hub And Spoke Model for the distribution of
its product.
The hub and spoke model is a system which makes
transportation much more efficient by greatly simplifying a
network of routes.
The spoke-hub distribution paradigm is a system of
connections arranged like a chariot wheel, in which all traffic
moves along spokes connected to the hub at the centre.
The model is commonly used in industry, in particular
in transport, telecommunications and freight
ITC FMCG Supply Chain
Consists of diverse categories with different priorities.
More than 1000+ SKUs.
Buying Value $68 MM.
Warehousing space of more than 3.5m ft
2
around 55+
Locations.
Products manufactured at 45+ plants.
More than 650 trucks moved every day.
Direct distribution from factories to Distributors.
Indirect movement through RDCs.
Combination of Rail/Road/Sea movement within the country
depending on the product type.
THE COMPOSITION
MANUFACTURING UNITS
Separate for each product
Contract manufacturing
Backward integration
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STORAGE HUBS
Stores all the products

CONT

DISTRIBUTORS
Exclusive based on population
Needs to stock all FMCG products(except stationary)

WHOLESALERS
RETAILERS
PANWALAS
Deepest penetration possible
ANALYSIS
ITC has the most popular brand of cigarettes in India.
The sale of ITC product takes place from the largest of
retailers like big bazaars, spencers to roadside panwalas.
So, ITC has successfully and deeply penetrates the Indian
market

With an already established channel for cigarettes, ITC is also
selling its FMCG products using the same channel itself