SUPPL SUPPLY Y CHAI CHAIN N MANAGEMENT OF HORLICKS
Submitted to: Submitted By 1! FMS!MBA!"#1 1!FMS!MBA!1"1
$EPARTMENT OF MANAGEMENT STU$IES FACULTY OF MANAGEMENT STU$IES MANA% MANA% RACHNA RACHN A INTERNA INTE RNATIONAL TIONAL UNI%ERSITY& FARI$ABA$
CONTENTS: 1' I(t)odu*tio( +' Ob,e*ti-e o. t/e 0tudy #' Su2y C/3i( o. t/e Ho)2i*40 5' Ide(ti6*3tio( o. Su2y C/3i( M3(37eme(t .3*to)0 8' $i0*u00io( ' Co(*2u0io( 9' Re.e)e(*e0
1.INTRODUCTION Horlicks is from the company GlaxoSmithline. !"o#t the GlaxoSmithline $rst% &e ha'e a challen(in( an) inspirin( mission% to impro'e the *#ality of h#man life "y ena"lin( people to )o more+ feel "etter an) li'e lon(er. This mission (i'es #s the p#rpose to )e'elop inno'ati'e me)icines an) pro)#cts that help millions of people aro#n) the ,orl). Hea)*#artere) in the U an) ,ith operations "ase) in the US+ ,e are one of the in)#stry lea)ers+ ,ith an estimate) se'en per cent of the ,orl)-s pharmace#tical market. !s a company ,ith a $rm fo#n)ation in science+ ,e ha'e a air for research an) a track recor) of t#rnin( that research into po,erf#l+ marketa"le )r#(s. /'ery ho#r ,e spen) more than US023+444 to $n) ne, me)icines. &e pro)#ce me)icines that treat six ma5or )isease areas 6 asthma+ 'ir#s control+ infections+ mental health+ )ia"etes an) )i(esti'e con)itions. In a))ition+ ,e are a lea)er in the important area of 'accines an) are )e'elopin( ne, treatments for cancer.
1.1 !7OUT HOR8ICS Ho)2i*40 is the name of a company an) of a malte) milk hot
)rink+ ,hich is claime) to promote sleep ,hen cons#me) at "e)time. It is man#fact#re) "y GlaxoSmithline in the Unite) in()om+ In)ia an) 9amaica
7y far+ the "i((est market for Horlicks is In)ia+ ,here it has tra)itionally "een markete) as -The Great :amily No#rishe).- Ne, pro)#cts ha'e "een )e'elope) speci$cally for In)ia+ s#ch as alternati'e a'o#rs an) special form#lations for yo#n( chil)ren an) "reast;fee)in( mothers. Claims "y GlaxoSmithline In)ia in 344 that Horlicks enco#ra(es (ro,th an) alertness in chil)ren has+ ho,e'er+ ca#se) some contro'ersy. 9#nior Horlicks 1;3;< is a lar(e extension that is specially )esi(ne) for pre;school chil)ren. Horlicks is also a'aila"le in "isc#it forms. In 344+ Horlicks 8ite ,as also intro)#ce) tar(etin( ol)er cons#mers an) )oes not contain any cholesterol or a))e) s#crose. In a))ition+ the company has intro)#ce) Cereal 7ars #n)er the name Horlicks N#tri7ar excl#si'ely for In)ia.
Horlicks is in mat#rity sta(e of pro)#ct life cycle. Reason for Horlicks in mat#rity sta(e are liste) "elo, 1. Their sales are at peak le'el an) increasin( e'ery year "y year 3. =ro$t is 'ery hi(h <. Their c#stomers are of mi))le ma5ority an) ha'in( a chil) in home prefer to a health )rink an) many prefer Horlicks >. Their cost per c#stomer is 'ery less as $xe) costs are )ecrease) as n#m"er of c#stomers are more . N#m"er of competitors are sta"le+ their competitors are "oost+ "orn'ita+ complan an) pe)ia s#re etc an) no ne, competitors ha'e entere) into this market 2. Their main o"5ecti'e is to maximi?e the pro$t an) protectin( their o,n market from competitors.
1.3@!R/TING STR!T/GI/S O: HOR8ICS 1. =ro)#ct% Here they can pro'i)e many )i'ersi$e) pro)#cts from o competitors. :or example they can oAer pro)#ct ,ith ne, inno'ati'e a'ors like man(o+ mix fr#it )iAerent from
common chocolate an) stra,"erry a'ors. Or they can oAer pro)#ct ,hich can pro'i)e more 'itamin or n#trition to "a"ies. Or ,hich can help in )ietin( as ,ei(ht )ecreasin( helpin( pro)#ct. So (o for )iAerent an) inno'ati'e pro)#ct o 3. =rice% Here Horlicks can (o for settin( prices accor)in( to the price o of competitors mainly 7orn'ita+ complan an) pe)ia s#re an) "oost as they pro'i)e to#(h competition to Horlicks. :or example if "oost sets its price 344 rs then Horlicks sho#l) o
keep its price "et,een 1B4 to 314 r#pees. If 7orn'ita is pro'i)in( in the packet of 34rs than they also keep price of their small packet aro#n) it.
<. Distri"#tion channel % Here Horlicks sho#l) (o for intensi'e )istri"#tion channel. o Here they sho#l) (o for maxim#m )istri"#tion channel for ex. Three le'el )istri"#tion channel of man#fact#re;,holesaler; )ealer;retailer;c#stomer. Company sho#l) ha'e a )istri"#tion channel "y ,hich a cons#mer can (et the pro)#ct at nearest o
store so that c#stomer ,ill not prefer another pro)#ct. :or example if Horlicks is not a'aila"le in nearest area an) c#stomer ha'e to (o 3 kilometers to p#rchase it an) if "orn'ita an) complan an) pe)ia s#re is a'aila"le near to
o
them then they may p#rchase the other pro)#ct So (o for maxim#m )istri"#tion channels ,hich a'aila"le near
to yo#r c#stomer. >. !)'ertisin(% Here company sho#l) "e a"le to express an) stress a"o#t o ho, their pro)#ct )iAers from competitors an) ho, it is "ene$cial for them. :or example they sho#l) "e a"le to express that o#r Horlicks is a"le to )e'elop "rain of chil) an) is helpf#l for "a"y to "e a T!88/R+ STRONG/R !ND S@!T/R "oy or (irl an) also helpf#l to pre(nant ,omen an) help to o'ercome from )aily fati(#e .This part refers to a)'ertise in
mass me)ia like tele'ision a)'ertisin( or ne,spaper a)'ertisin( etc. . Sales promotion% Her company sho#l) "e a"le to (enerate "ran) s,itchin( o ,hich means moti'atin( to chan(e "ran). Here company can (o for s,itchin( "y sho,in( ho, their "ran) is "etter than competitors "y #sin( 'ario#s metho)s of free samplin( or pro'i)in( yo#r pro)#ct free ,ith other pro)#cts.
3. O"5ecti'e of the st#)y I choose the Horlicks for the s#pply chain. Horlicks is the lea)in( health foo) )rink in In)ia. It occ#pies 4 share of Health :oo) Drink market. !.C.Neilson report on marketE. It is pop#lar "ran) since1B<4Fs. To)ay+ the mo)ern Horlicks stan)s for tr#st an) its promise of pleas#ra"le No#rishmentF ,ith a )elicio#s ran(e an) a'o#rs. 7#t the core o"5ecti'es are 1. The S#pply Chain of the Horlicks 3. :rom man#fact#re to the $nal c#stomer
<. SU==8 CH!IN O: HOR8ICS
Takes or)er from )irect to the company an) )istri"#tes it to the )istri"#ters accor)in( to their re*#irement. They take the or)er "y tr#ck an) "y other 'ehicle roa) transportationE. !ccor)in( to G8 =arnami the total sale of Horlicks in :ari)a"a) is aro#n) 4 lakhs app.E.
#'1Fu(*tio(0 o. i(te)medi3)ie0: 1. Sellin( an) promotin(% Here they try to promote sales "y #sin( 'ario#s promotional •
tools an) try to (enerate more )eman) an) sale more ,hich "ene$ts company. 3. 7#yin( an) assortment "#il)in( Here ,holesalers p#rchase 'ario#s pro)#cts of Horlicks an) •
assort them cate(ory ,ise so at the time of sales it is easily a'aila"le. :or example they "#y all Horlicks pro)#ct an) arran(e them in cate(ory like ,omen Horlicks + 5#nior Horlicks ,hen sales are )one no pro"lem of assortment are fo#n).
<. 7#lk "reakin( &holesalers p#rchase in lar(e *#antity an) sa'e a lot "y •
p#rchasin( in lar(e *#antity as company pro'i)es *#antity )isco#nt an) it #ltimately "ene$ts retailers an) c#stomers only. >. &areho#sin( They store the 'ario#s Horlicks pro)#ct in their ,areho#se •
an) re)#ce in'entory cost of s#ppliers. . Transportation They can pro'i)e *#icker )eli'ery to "#yer as they are •
closer to "#yer an) retailers 2. :inancin( They pro'i)e Horlicks c#stomers an) retailers on cre)it •
"ases an) facilitate $nancin( for them. . Risk "earin( They re)#ce some risk "y takin( the o,nership of the (oo)s •
an) "ear the cost of )ama(e+ spoila(e an) o"solescence. J. @arket information &holesaler s#pply information re(ar)in( complaints an) •
fee)"ack to the company taken "y them from c#stomers.
a. the str#ct#re of the #nitary pro)#ct cost+ ,hich imply the analysis of the cost pools that compose the pro)#ct cost informationK ". the metho)olo(y a)opte) to acc#m#late costs into the cost poolsK c. the allocation metho)s follo,e) to trace costs to the #nitary pro)#ct cost+ or to other reportin( s#"5ectsK ). the cost control metho)olo(ies+ that s#pport "enchmarkin( analysis an) lea) to correcti'e actions.
>. I)enti$cation of S#pply Chain @ana(ement factors To #n)erstan) ho, a Horlicks s#pply chain ,orks+ it is more important to i)entify the factors of aAectin( s#pply chain mana(ement. This factors ,ill make the chain either more pro)#cti'e or less.
5'1 E(-i)o(me(t32 u(*e)t3i(ty .o) Ho)2i*40
/n'ironmental #ncertainty refers to the en'ironmental iss#es in the pro)#ct chain ,ith the man#fact#rers. ItFs )escri"e) this as the #nexpecte) chan(es of c#stomer+ s#pplier+ competitor+ an) technolo(y. The increase of o#tso#rcin( acti'ities in the in)#stry no, a )ays ha) a#(mente) the a,areness of the importance of strate(ic s#pply mana(ement+ ,hich lea)s to "etter relationship amon( or(ani?ations.
5'+ Com3(y e(-i)o(me(t i(te)(32 3(d ete)(32 .o) Ho)2i*40
This s#";factor is relate) to the companyFs relationship ,ith s#ppliers an) their le'el of tr#st an) commitment. Company en'ironment is also relate) to the companyFs expectations of *#ality+ on time )eli'ery+ competition in the sector+ an) the le'el of ri'alry amon( $rms. In or)er to respon) eAecti'ely to )eman)+ companies reali?e that imports are a (oo) option for o"tainin( exi"ility in response+ e'en tho#(h ,orkin( ,ith co#ntries from o'erseas implies ,orkin( ,ith #ncertainty. Uncertainty ne(ati'ely aAects company performance. 7#t this can "e re)#ce) if a strate(ic relationship ,ith critical s#ppliers is esta"lishe). Th#s+ companies nee) to implement ne, strate(ies that allo, them to )eal ,ith en'ironmental #ncertainties in the s#pply chain in or)er to perform in a pro$cient manner.
5'# Go-e)(me(t Suo)t .o) Ho)2i*40
They (i'es a "i( s#pport to the man#fact#rer to contin#e the s#pply chain in the normal path to make s#re the contin#ity to )eli'er the pro)#ct #p to the c#stomer. The le'el of s#pport that the company recei'es from the (o'ernment ,hen importin( ra, materials or pro)#cts from o'erseas or #sin( )omestic materials. It incl#)es the #se of norms+ re(#lations+ policies+ an) a)'ice for the sector. The thin( is ho, (o'ernment can make a series of reforms to enco#ra(e exporters "y increasin( man#fact#rin( sectorFs competiti'eness in the international market thro#(h lo(istics competency. The increase of international tra)e for ac*#irin( reso#rces from other co#ntries intro)#ces complicate) matters s#ch as lan(#a(e "arriers+ transportation+ transportation costs+ exchan(e rates+ tariAs+ an) a)ministrati'e practices. 5'5 I(.o)m3tio( te*/(o2o7y .o) Ho)2i*40
This is the era of (lo"ali?ation ,here telecomm#nications an) comp#ter technolo(y allo, all the factors in the s#pply chain to comm#nicate amon( each other. The #se of Horlicks information technolo(y allo,s s#ppliers+ man#fact#rers+ )istri"#tors+ retailers+ an) c#stomers to re)#ce lea) time+ paper,ork+ an) other #nnecessary acti'ities insi)e the factory. It is also mentione) that mana(ers ,ill experience consi)era"le a)'anta(es ,ith its #se s#ch as the o, of information in a coor)inate) manner+ access to information an) )ata interchan(e+ impro'e) c#stomer an) s#pplier relationships+ an) in'entory mana(ement not only at the national le'el "#t also internationally.
5'8 P23((i(7 too20 .o) Ho)2i*40
S#pply chain mana(ement plannin( tools are "asically inten)e) to inte(rate the main reso#rces plannin( acti'ities in a $rm or or(ani?ation. There are some of the most common plannin( tools are% material
re*#irement
plannin(
@R=E+
man#fact#rin(
reso#rces
plannin( @R=IIE+ an) /nterprise Reso#rce =lannin( /R=E. ! @R= is a tool that allo,s an or(ani?ation to sche)#le pro)#ction acti'ities to meet speci$c )ea)lines "ase) on the "ill of materials+ in'entory le'els+ an) master pro)#ction sche)#le. !n impro'ement of @R= tools is @R=II ,hich inte(rates man#fact#rin( capa"ilities an) capacities ,ith the "ene$ts of @R=. !n /R= tool allo,s the or(ani?ation to inte(rate all processin( information tasks relate) to all processes in the 'al#e chain.
5' Su2y */3i( )e23tio(0/i0 .o) Ho)2i*40
S#pply chain relationships is an important role to achie'in( the $rmFs (oals. The coor)ination an) inte(ration of acti'ities ,ith the proper s#ppliers an) #n)erstan)in( the nee)s of c#stomers+ an) nee)s res#lts in (reater "ene$ts for companies. S#pply chain mana(ement is completely relate) ,ith relationship mana(ement+ ,hich incl#)es the "ase of s#ppliers an) c#stomers. Strate(ic s#pplier partnerships an) c#stomer relationships are main components in the s#pply chain mana(ement practices+ ,hich lea)in( to information sharin(+ ,hich is one of the $'e pillars in achie'in( a soli) s#pply chain relationship
5'9 Re23tio(0/i0 ;it/ 0u2ie)0 .o) Ho)2i*40
Companies are associate) to ,ork ,ith )iAerent s#ppliers in )iAerent manners. It is important that the relationship ,ith s#ppliers sho#l) "e satisfactory for their company nee)s. In terms of commo)ity pro)#cts+ it is common to $n) an a)'ersarial relationship mainly "ase) on price ne(otiation "et,een "#yer an) s#pplier. This type of relationship ,ith
s#ppliers )oes not eAect for the price or cost re)#ction in the s#pply chain. It may "e "ene$cial to net,ork ,ith the s#pplier+ to )e'elop the partnerships an) alliances that ,ill "ene$t "oth partners.
5'< Re23tio(0/i0 ;it/ *u0tome)0 .o) Ho)2i*40
The (lo"al markets oAer a 'ariety of pro)#cts of )iAerent *#ality an) cost from )iAerent co#ntries. !s a res#lt+ companies are al,ays competin( an) tryin( to re)#ce costs an) impro'e *#ality ,ith the man#fact#rin( cost. C#stomers look for more choices+ "etter ser'ice+ hi(her *#ality+ an) faster )eli'ery of the pro)#ct thro#(h all o'er the ,orl). The relationship ,ith c#stomers has "ecome a strate(ic iss#e for to)ayFs companies to keep them loyal on their pro)#ct an) ser'ices.
S#pply Chain Distri"#tion of Horlicks
>.3 S#pply Chain Net,ork Str#ct#re !ll $rms participate in a s#pply chain+ from the ra, materials to the #ltimate cons#mer of Horlicks. Ho, m#ch of this s#pply chain nee)s to "e mana(e) )epen)s on se'eral factors incl#)in( the complexity of the pro)#ct+ the n#m"er of a'aila"le s#ppliers+ an) the a'aila"ility of ra, materials. Dimensions to consi)er incl#)e the len(th of the s#pply chain an) the n#m"er of s#ppliers an) c#stomers at en) point at each le'el. It ,o#l) "e rare for Horlicks to participate in only one s#pply chain. Horlicks man#fact#rer+ the s#pply chain looks less like a pipeline or chain than an #proote) tree+ ,here the "ranches an) roots are the extensi'e net,ork of c#stomers an) s#ppliers. The *#estion is ho, many of these "ranches an) roots nee) to "e mana(e). The closeness of the relationship at )iAerent points in the s#pply chain ,ill )iAer. @ana(ement ,ill nee) to choose the le'el of partnership appropriate for partic#lar s#pply chain links. Not all links thro#(ho#t the s#pply chain sho#l) "e closely coor)inate) an) inte(rate). The most appropriate relationship is the one that "est $ts the speci$c set of circ#mstances. Determinin( ,hich parts of the Horlicks s#pply chain )eser'e mana(ement attention m#st "e ,ei(he) a(ainst $rm capa"ilities an) the importance to the $rm. It is important to ha'e an explicit kno,le)(e an) #n)erstan)in( of ho, the s#pply chain net,ork str#ct#re is con$(#re). Horlicks s#((est that the three primary aspects of a companyFs net,ork str#ct#re are% 1E the mem"ers of the s#pply chain for ra, materials+ 3E the str#ct#ral )imensions of the net,ork+ an)
S#pply Chain Net,orkin( system of Horlicks
>.3.1 In'entory mana(ement •
•
•
•
The location of inventory and number of sites from inventory is supplied by Horlicks is affected by the total sales and mode of transportation. Storage o Here Horlicks decides where they have to store their finished products. Warehousing In this part it involves assembling, dividing and preparing for o transportation, for example caps of bottles are fitted on bottles. istribution centers Here an integrated system is developed for the flow of products and o acceptance and execution of orders and their deliveries.
>.< :rom @!NU:!CTUR/R to C#stomer !S" #!laxoSmith"line$ %nited "ingdom Agent: C&F and Distributer Address: !& 'arnami (arketing )ompany !urgon It takes order from direct to the company and distributes it to the distributers according to their re*uirement. They take the order by truck and by other vehicle #road transportation$. +ccording to !& 'arnami the total sale of Horlicks in aridabad is around - lakhs #app.$. How C&F works:
The )/ contact direct to the company and company tie up with particular )/ to distribute their products. Distributer: istributer goes to the direct to )/ or )/ comes to the distributer and they tell the amount of product according to the re*uirement sometimes distributer pick the product them self or sometime )/ drop the product to the distributer. The distributer forwards it to the wholesalers. Addresses of distributer: 0. !S"/ +ssociates --1Sec203, + aridabad. 4. 5a6eev sales agency 7ld aridabad. There is no agent between )/ and istributer.
>. < The &holesalers These people again send their product to the retailers. In this retailer contacts to the wholesaler by phone or direct and deal with them. They bring products by auto or vein or own vehicle and from retailers consumer consumes the products. Wholesaler sold their producy around 4, lot every month. Transportation: by auto and personal vehicle Sale: The new order place after 0 or 0- days. Addresses: 0. 'rinc general store !opi colony, old aridabad. 'h. 8o. 2 1029::;30 4. 5ani general store 44 feet road. San6ay colony Sec29, aridabad. ;.
Sonia general store 4- feet road, sec 9< San6ay colony, aridabad.
9. inesh general store 44 feet road, Sec2 9<, aridabad.
-. Sharma general store 0-0:, road ;; Sec. 2 9<, aridabad.
. Disc#ssion In this report ,e so#(ht to assess the 'ario#s )e$nitions of Horlicks S#pply Chain @ana(ement accor)in( to 'ario#s scholars. !n) ho, SC@ of Horlicks ,orks its 'ario#s operations an) s#" operations accor)in( to nee) of the "#siness. Ho, Department of =roc#rement+ =ro)#ction an) Distri"#tion "ecomes inte(ral part to maintain healthy S#pply Chain @ana(ement at Horlicks an) :irms. This report helps in explorin( an) contri"#tes to a)'ancin( o#r #n)erstan)in( of S#pply Chain @ana(ement ,ithin Horlicks or(ani?ation an) at (lo"al scale. The era of cheap la"or is (one an) man#fact#rin(+ lo(istics an) )istri"#tions+ =eople ha'e "een lookin( for ne, ,ays to re)#ce costs an) S#pply Chain @ana(ement oAers a (reat opport#nity. The ans,er is the key point that+ yo# are thinkin( not 5#st ,ithin yo#r or(ani?ation "#t act#ally thinkin( a"o#t the )iAerent partners alon( the s#pply chain.
2. Concl#sion The o"5ecti'e ,as to f#lly #n)erstan) the "asic f#nctionality of SC@ in Horlicks or(ani?ation+ its role an) its importance. 7#t from a research point of 'ie, it ,as imperati'e to st#)y its history an) the 'ario#s research articles that ha'e "een p#"lishe) thro#(ho#t life time. O"'io#sly+ ,e cannot rea) all of them "#t thro#(h a n#m"er of
research articlesL5o#rnalsLcase st#)ies ,e fo#n) some that ,ere mainly foc#se) on the research articles themsel'es ,hich (a'e #s the material ,e nee)e). This helpe) #s )etermine ho, m#ch has "een in the $el) of SC@ of Horlicks an) (a'e #s clear #n)erstan)in( of ,hat they are (oin( after. The (ap "et,een the research metho)olo(ies an) the area that are mostly foc#se) in an or(ani?ation+ the strate(ies an) this helpe) clear o#r perception of SC@. Hopef#lly ,e ,ill exten) these $n)in(s f#rther.
. References www.gsk-ch.in/MediaReports.aspx www.google.co.in
