Presentation On

“BENCHMARKINGOF

FMCG INDUSTRIES IN INDIA”

Presented ByArvind Rathod

@SIMS (Operations)

Email: arvindelite@gmail.com 9823141993

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

India’s 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 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

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

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

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.

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

COMPANY ACCOUNTS

RECEIVABLE

ACCOUNTS PAYABLE

CADBURY 71.63(LOW) 385.09(LOW)

JHONSON 244.36 495.33

NESTLE 168.6 957.78

Cr. Rs.

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

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

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.