Godrej Consumer Products Limited_SDM 2_B5_2013

8/12/2019 Godrej Consumer Products Limited_SDM 2_B5_2013

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Analyzing the distribution channel of

GCPL

Part-2

Submitted to: Submitted by:

Prof. Vinod alia Grou! "-#

$ Gireesh "abu %&2P'()*

$anish Gu!ta %&2P'(#*

$ohit "atra %&2P'(+*

,ihil Gu!ta %&2P'(*

,itish Gu!ta %&2P'((*

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Recommendations

ROI of distributor

o /01 Structure

,et income of a Godre distributor is a!!ro3imately #4 of his turno5er

1n5estment of a distributor is in follo6ing four as!ects:

Stoc Le5el- 7he in5entory le5el 6hich is e!t by the distributor

ee!ing a safe le5el in order to a5oid stoc-out

$aret Credit- 1t is the number of days after 6hich the money is

collected after deli5ering the goods to the 6holesaler8retailer

Claims- Any s!ecial schemes9 6hich are !re5alent in that month

from the com!anys side9 are !aid on behalf of the distributor. 7his

money has to be collected from the com!any

;amaged Stoc- Any goods 6hich are damaged 6hile trans!orting

or 6hile in in5entory ha5e to be incurred by the distributor

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of t6o ty!es- mechanized %motor 5ehicle* and non-mechanized

%ricsha6*. 7he cost of a non-mechanized deli5ery unit is about

)'4 lesser than that of a mechanized unit.

Cost of the office and >arehouse9 along 6ith its o!!ortunity cost

An e3tra cash discount gi5en by the distributor to the 6holesaler of

about &4 in com!arison to the retailer

$iscellaneous e3!enses in the form of tele!hone9 stationary9

1nternet etc.

Subtracting the e3!enses from the net income and di5iding the net !rofit

calculated by the in5estment gi5es the final /01 of the distributor

o 7o increase the /01 follo6ing ste!s can be taen by the distributor

Su!!ly chain 5elocity- A fast re!lenishment system 6ould hel! in bringing

more sales. ith increased 5isibility9 sales 6ould ha5e an increase

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$aret confidence- Schemes offered by the com!any should be !assed on

to the retailer. 7his hel!s in creating a maret confidence on the com!any

Pilferage- Stealing of goods at the 6arehouse by any !erson should be

checed u!on in order to maintain !ro!er @hygiene. 7his can lead to loss

for the distributor.

o Repercussion of the Changes- 1f the abo5e mentioned recommendations are

a!!lied9 in order to maintain a fast su!!ly chain !rocess9 e3tra man force may be

reBuired at the distributor !oint. So there might be a need for more deli5ery units

to mae sure that the deli5ery is done on the consecuti5e day of taing the order.

$oreo5er9 the =ield 0fficer 6ould also ha5e to ee! a chec on this fact as e5en

one day of stoc-out 6ould amount to lost sales for the com!any.

Also9 currently not all ;S/s maintain a chec on the 5isibility of Godre !roducts

6hen they go to a sho!. 1f the 5isibility needs to be checed9 the ;S/s 6ould

ha5e to s!end more time on each sho! that might reduce their !roducti5ity.

Abo5e-mentioned !roblems can be taen care of by efficient 6oring of the

com!any and distributor officials. =or 5isibility9 there is a merchandiser se!arately

hired by the distributor9 6ho can ee! a !ro!er chec on the 5isibility of Godre

!roducts at a sho!.

Credit Allocation->holesalers are al6ays the bottlenecs in e3traction-credited money.

1t is easier to tae money from retailers than 6holesalers because they al6ays deal in

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large 5olumes hence the amount to be !aid by them is al6ays larger. Certain ste!s 6hich

can be follo6ed to a5oid this !roblem is:

o ;ouble billing shouldnt be allo6ed i.e. the order for the goods should be taen

by the ;S/ only if the 6holesaler8retailer has !aid for the !re5ious consignment

taen

o A record should be maintained as to the stoc9 6hich is generally maintained by

the 6holesaler8retailer so that only that amount of stoc is deli5ered e5ery 6ee.

1f enough stoc is gi5en that lasts for one 6ee only and not for t6o 6ees9 then

the sho!ee!er 6ill ha5e to order e5ery 6ee9 6hich can only be done if he has

!aid for the !re5ious order

o 1f this system 6ere follo6ed then the deli5ery !rocess 6ould ha5e to be checed.

7he distributor 6ill ha5e to mae sure that the good are being deli5ered the 5ery

ne3t day9 because other6ise there is a chance of stoc out for the sho!ee!er

along 6ith the 6eely cycle of taing orders 6ould also be disturbed

o =inally9 the com!any 6ill ha5e to !lay by its o6n rules i.e. if they ha5e set the

rules of not taing the ne3t order in case the !re5ious bill has not been cleared9

then this system should be strictly follo6ed. 7he maret has trust on the

distribution system of Godre Consumer Products Ltd. and 6ould also start

adhering to its rules as there is a demand for its !roducts in the maret

o Repercussions of the Changes- =or the abo5e ste!s9 being strict 6ith the retailers

on credit basis but end u! losing some sho!s for Godre9 but in the long run it

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6ould gi5e a correct signal to the rest of its customers and a5oid the !roblem for

credit collection.

Availability of Products- A 6holesaler doesnt ee! all S?s that the com!any offers.

1nstead it ee!s only certain S?s but it deals in large 5olumes. 7he total S?s carried

by a 6holesaler are al6ays greater than the total S?s stoced by a retailer. 7here can be

three reasons for the una5ailability or stoc out of !roducts at a 6holesaler:

o 7here is a stoc shortage at the com!any le5el

o 7he brand being taled about is a slo6 mo5ing brand because it is not generating

the necessary !ull and hence not bringing high sales. Dence9 the retailers are not

ordering in !ro!er cycles and its getting stoc out at certain times

o 1ssue in the distributors distribution style

,o69 in the abo5e mentioned !oints the first t6o !oints are outside the !ur5ie6 of sales

and ha5e to be considered by officials belonging to the mareting de!artment of the

com!any. Checing the record of the billing freBuency of 6holesalers8retailers can chec

the third issue. 7he =ield 0fficer %=0* of the com!any can chec these records. Another

alternati5e is that more number of S?s should be !ushed for6ard at the outlets that are

facing an una5ailability situation. 7his can al6ays hel! in increasing the sales for the

com!any.

Repercussions of the changes- 7here 6ould be a resistance from the =ield 0fficers in

acce!ting this ind of 6or9 because this 6ould add to their already high amount of

6orload.

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People Issues- 7he biggest issue faced here is by the =ield 0fficers %=0* in managing the

;S/s. Since the ;S/s are not under the com!anys !ayroll9 their immediate senior in

authority !erson is the distributor himself. 1t is difficult for the =ield 0fficers to manage

the ;S/s9 to as them to 6or in a manner that is suited to the sales of the com!any. As a

solution to this !roblem9 the com!any currently offers an incenti5e on the sales target

achie5ement9 6hich is a!!ro3imately #'4 of their monthly salary. 7his acts as a

moti5ator for the ;S/s. 0n the other hand9 it also acts as a demoti5ation for some ;S/s

6ho are unable to achie5e their sales targets. 7his has to be constantly checed by the

=ield 0fficer. 0n an a5erage a field officer has about &' ;S/s allotted to him.

Something e3tra that can be done by Godre is that they can start a /e6ards and

/ecognition !rogram for the ;S/s9 6hich 6ould in5ol5e in ind gifts to them instead of

ust monetary incenti5es. 7his model is being follo6ed by all other maor =$CGs in

1ndia

Repercussions of the changes- 7he /e6ards and recognition !rogram by the com!any

6ould add !ressure on the bottom line of the com!any9 but the returns on this 6ould be

long term and cannot be measured Buantitati5ely through a !ilot !rogram. 7his !rogram

6ill surely hel! in reducing the high attrition rate of the ;S/s for the com!any that 1s

around )#4 currently %yearly*

IT System-A generic solution that can hel! in sol5ing most of the !roblems for the

com!any is to maintain a robust $1S system. 7hough9 currently a highly ad5anced

system is being utilized by Godre to maintain and chec data9 but there is still a sco!e of

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im!ro5ement. 7his im!ro5ement can be achie5ed by benchmaring 6ith the $1S systems

being used by the best =$CGs of 1ndia

Contacts

Area Sales $anager %;elhi /egion*

$r Aman Sang6an

Contact: EF&-F#(2##2&''

Area Sales $anager %"ihar /egion*

$r /ishabh "ansal

Contact: EF&-('#&&''(2&

Area Sales $anager %Andhra Pradesh /egion*

$r Varun $ahaan

Contact: EF&-F')#)2&

Area Sales $anager %South "engal /egion*

$r arn "a6ara

Contact: EF&-F('')F#(

=ield 0fficer %;elhi /egion*

$r A5nish

Contact: EF&-F#'+&(('

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=ield 0fficer %olata /egion*

$r Soumitro

Contact: EF&-F('&')2&

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Godrej Consumer Products Limited_SDM 2_B5_2013

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