CONSUMER DURABLES

:Durable Supply Chain

Group No:3
Himanshu Tiwari (29NMP32)
Itishree Verma (29NMP34)
Raman Sharma (29NMP65)
Anil Kardam (29NMP78)
Ashutosh erma (29NMP92)
Saswat S. Ota (29NMP93)
Indian Consumer Durables Industry (2015-
16)
India is expected to be Fifth largest Consumer durable market
in the world by 2025.
In 2015, revenue from consumer durables sector in India
stood at US$ 9.7 billion, which further increased to US$ 12.5
billion in FY16.
Expected to grow at CAGR of 13 per cent from FY05 to FY20.
Urban market share is 65 Percent of total revenue.
Govt policies of liberalization has favored FDI & policies such
as National Electronics Mission & Share
digitization of TV and
in the consumer durables market in India (FY16)
Electronics Park have boosted the growth
Rural, 35% .
Urban, 65%
Consumer Durables Advantage
India

FY FY
Demand growth is likely to Rural and semi-urban markets
2015 accelerate with rising currently contribute 35 per cent to 2016
Market total sales; their combined size is Market
size: disposable
set to post a CAGR of 25 per cent size:
incomes and easy access to
over 2010-15
USD9.5 credit USD12.5
billion Increasing electrification of Huge untapped rural market; billion
rural areas and wide usability of currently there is only 2 per cent
online
sales would also aid growth in penetration for refrigerators
and 5 per cent for washing
demand Advantag machines
e India
100 per cent FDI allowed
Increasing investments in the
Sector has attracted electronics hardware-
significant manufacturing
investments over the years sector under the automatic
(even route;
during the global downturn of Approval of 51 per cent in
2009-10) multi-
USD1 billion worth of brand would further fuel the
 CONSUMER DURABLES

Categories of Consumer Durables

CONSUMER
DURABLES
Consumer Consumer
Electronics Appliances
(Brown (White
Goods) Goods)
Television Audio Air conditioner Refrigerator
System
Personal Washing Sewing
CD, DVD
Comput Machine Machine
er
Cleaning
Laptop Digital Electric Fans
Equipment
Camera
Other
Electronic Camcorder Microwav
Domestic
Accessorie e Ovens
Alliances
s

Source: India Brand Equity Foundation (IBEF)

 Salient Characteristic of Industry Specific
Supply Chain
Retailing
Benefits:
Better POS data collection
Increased level of sales
Lesser freight costs
Collaborative planning
Downside:
Retailers gain power Higher margins, lesser inventory norms and better credit
norms
Traditional players will lose out as organized retailers will offer lower prices

Ecommerce(Virtual Delivery), Order Tracking

Key benefits of the Virtual Delivery process are:
Faster flow of information
Integration of virtual and physical supply chains
Optimization of cost
Greater contact with the customers, better POS data collections and CRM efforts
Reduction in finished goods inventory
Better production planning
 Contd.
Build-to-order (BTO) or Postponement: products are built
only after the customer has entered his order
Advantages of BTO:
Reduction in finished goods inventory
Reduction in risk of obsolescence
Customer gets the product with his exact specifications
No sales discounts
Disadvantages of BTO:
Susceptible to demand fluctuations
Reduced capacity utilization in times of slow demand

Forecasting demand based on historical data

Flexible Manufacturing-Multiple Products without major
changes
Third party logistics (3PLs):Provide services right from the
back end till the final sale is made
 Unique
Practices

Sony Corporation: Electronics business unit and the parent company

of the Sony Group, which is engaged in business through its eight
operating segments Consumer Products & Devices (CPD), Networked
Products & Services (NPS), B2B & Disc Manufacturing (B2B & Disc),
Pictures, Music, Financial Services, Sony Ericsson and All Other
Unique Feature: CSR Supply Chain
Materials procurement procedures involves creating and maintaining
synergetic business partnerships with suppliers, regarded as Sony's
stakeholder.
Providing support to realize CSR from such standpoints as the
environment, human rights and labor conditions.
CSR management programs through supply chain that include legal
compliance, employment, occupational health and safety, and
environmental protection.
 Unique
Practices

Videocon: Industrial conglomerate with interests all over the world

and based in India. The group has 17 manufacturing sites in India and
plants in China, Poland, Italy and Mexico.
Unique Feature: The mySAP system-successfully implemented
mySAP (ERP version 2004) across the organization.
This installation combines all the futuristic modules like Enterprise
Portal (EP), Business Warehousing (BW), Customer Relationship
Management (CRM), and Human Capital Management (HCM) amongst
others and is thus it is first of its kind in India.
Provided its 1500+ Sales staff with laptops and sierra cards to enable
them to carry office with them always and to respond effectively to the
business requirements.
 Unique
Practices

LG: South Korea's second largest conglomerate that produces

electronics, chemicals and telecommunications products and operates
subsidiaries like LG Electronics, LG Display, LG Telecom and LG Chem
in over 80 countries
Unique Feature: Carry & Forward Agent (CFA)-
The number of C/F agents are 28.
They are spread across 20 states in India.
The company dispatches the goods to C/F on consignment basis.
At the same time, these C/F agents all work on contract basis.
They get paid as per the amount they stock.
. Distributors conduct sales and marketing on behalf of the company
in markets serving to all the required company stores. The distributor
is given a margin of 10-20%.
LG Distribution Network
 Potential Challenges

Downstrea
Upstream Internal
m
Limited Demand Warehouse
Visibility Driven Managemen
Product supply t
Variety Inventory Transportati
Global Managemen on
Sourcing t Managemen
Investment Reducing t
in Operating Customer
Technology Expenses Satisfaction
Production Small
Planning Retailer
Balance Scorecard
 Recommendations
Customer Perspective
Maintain as high an order fill rate as possible.
Minimize the transit time.
Avoid any Back order.
Time, quality and flexibility relative to the cost to Customer.
Finance Perspective
Maintain faster cash to cash cycles.
Minimize COGS.
New value adding features along the supply chain.
Minimize Inbound logistics costs .
Business Process Perspective
Offer variety to its customers without lengthening the time .
Process improvements in time, quality and flexibility
Innovation and Learning Perspective
Information Flow Goal
Push final production as close to the customer as possible to prevent inventory
pile up and risk of obsolescence.
Trained service engineers to install and/or service products
Thanks