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Presentation

On
“BENCHMARKING
OF
FMCG INDUSTRIES IN INDIA”

Presented By
Arvind 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 Cadbury


Schweppes was planning to split its business
into two separate entities
& The demerger took effect on 2 May 2008
o one focusing on its main chocolate and
confectionery market
o 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
Cr. Rs.

CADBURY JOHNSON NESTLE

COST OF RAW 350.29 141.98 1647.46


MATERIAL
COST ADDITION IN 5.84 3.89 15.50
THE RAW MATERIAL
STAGE
COST AT THE END OF 356.13 284.60 1454.66
RAW MATERIAL
STAGE
COST AT THE END OF 1064.24 1416.92 2893.47
WIP STAGE
COST ADDITION AT 8.66 14.00 24.71
THE FINISHED GOODS
STAGE
COST AT THE END OF 1072.90 1430.92 2918.18
FINISHED GOOD
STAGE
COST OF HOLDING INTERNAL SUPPLY
INVENTORY FOR TIME CHAIN MANAGEMENT
PERIOD I (CR) COST FOR TIME
PERIOD I (Lac’s)

CADBURY 16.31 276.34

JOHNSON 18.46 249.58

NESTLE 49.08 389.29


Cr. Rs.

COMPANY ACCOUNTS ACCOUNTS PAYABLE


RECEIVABLE

CADBURY 71.63(LOW) 385.09(LOW)

JHONSON 244.36 495.33

NESTLE 168.6 957.78


HOLDING CADB- JHON- NEST-
PERIOD URY SON LE
(NO.OF
DAYS)
2005 2006 2007 2005 2006 2007 2005 2006 2007
RAW
MATERIA 29 48 54 40 25 31
L
WIP 5 6 4 1 1 1 4 1 5

FG 22 17 19 22 22 24 20 22 22
CADBUR JHONSO NESTL
Y N E
2005 2006 2007 2005 2006 2007 2005 2006 2007

INVT
149.29 160.99 149.29 117.78 245 147.72 220.03 245.21 392.66

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.

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