Driving Accelerated Growth

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TITAN WATCH DIVISION

GOLDRATT CONSULTING
 Main Undesirable Effects list
Shortfall in desired product mix for sales

Primary customers do not get what they want

We experience lost sales

Excess inventory / Obsolescence leads to discounting for clearing the stock

Forecast based system, not driven by actual retail

Capacity being blocked

We are unable to respond to sudden unforeseen needs

High stock levels with WOTs (4 months), RS (1-2 months)

Month end skew in primary billing (huge billing in last week)

Suppliers delivery performance is poor

 The Root Causes for UDEs
1. Forecast is done on the CFA level for 90 days / 60 days time horizon

2. Production is loaded with orders for the next 90 days/ 60 days forecast

3. There is no sufficient safety stock to protect against unreliability of

supply

4. Production facilities are measured based on local efficiency / utilization

5. FG are immediately distributed to CFAs according to the forecast

6. Sales cycle is monthly (targets and billing)

7. Sales schemes creates artificial peaks in demand

Pull Distribution with Buffer
Management
 What is a pull distribution
system?
Consumption
Replenishmen
Replenishmen report
Consumption Consumption t
t
report report
Sales
CFA

Components Central
Assembly CFA
WH WH

CFA
 Key elements of Pull
Distribution
1. Replenish to actual sales Vs. Push from stock
2. Capitalizing on Aggregation of Demand
Reduces the variability and hence the needed inventories are smaller

3. Shortening Replenishment Times

Results in less inventory
Shortens the response time to market changes

4. Increasing the Frequency of Replenishment

Results in less inventory
Increases availability
 How can we satisfy the demand
without a forecast?
The logic is built on two key concepts:
Dynamic Buffer Management
Aligning inventory targets with actual demand

Frequent Replenishment
Replenishing to demand to fill the inventory target
 Buffer target
is increased Inventory is
Too Much in Buffer target
to provide
the Green is decreased
more
zone - to reduce
protection
unnecessary
inventory cost

Replenishmen
t requirement

Replenishmen
t execution

Inventory residesConsumption
Too Much in rate is back
Consumption rate is
the Red zone Availability is at
to normal rate again
temporarily
risk
increased
Pilot Design
 Pilots Plan
Pilot 5 1
CFA
~30 days 5 ~15 days RS
Plating
Case and
2
Manufacturing WOT
CA
Central
FPS Assembly CFA
WH 3
LFS

4
30-120 days FTS
CFA
Sourcing
6 Pilots
1,2,3
Pilot 6
Pilot 4
 Pilot 4- Fastrack
Objectives
To streamline the current replenishment system & make it
automatic & free of any manual intervention
Check the effect of DBM on availability and on target
inventories
Reduction of stock-outs
Sales improvement due to better availability
Inventory turns, while maintaining not more than 2 months
stock at the store
How are we going to do it?
List of stores which would be part of the pilot process:
BLR (7), Upc Kar (2), HYD (6), Vizag (2), CHEN (4), PUN (4), Upc Mah(3), Mumbai
(1), DEL (1), COIM (1), BUB (1), GUW (1), MP (2), AMD (1)
Plan Buffers for each store (keep in mind sunglasses activation starting
14th Jan)
Plan buffer stocks for the corresponding CFAs and central stock to be
held at CWH
Work out the anticipated monthly sales
Confirm the availability in pipe line
Decide the pilot start date after allocation, re-alignment of stocks
Link up ETP software for automatic upload initial stock daily sales for
all stores
Test daily uploads & accuracy of data
Roll out
Continue the Bi-weekly Billing Tue & Fri and if volumes support, more
frequent billing
What is different from
today?
The stock norm what we have defined is static
and we keep only adding new introductions /
remove the dropped ones.
We had intended to review stock norm once in six
months and we have not done the same
DBM dynamically changes the stock level required
at stores depending on the actual retail sales, thus
higher opportunity for sales and better stock turn
Currently, we have left the decision of billing to
franchisees and we would like to enforce the same
based on DBM proposal.
Current issues with south
stores
State Store Issues

Karnataka Koramangala, BEL road, We get approval only for

Mantri Mall, Forum kiosks watches
Garuda mall kiosk We do not get stock stmt
Jayanagar, Manipal No issues
Mangalore Cheques availability

Tamilnadu Anna nagar, City centre Just started. We were not

getting stock stmt
Velachary, Ashok nagar Most of the time, asks for
more stocks than proposed
Pondy bazaar store No issues
Coimbatore Need to start separate bin

AP Neelima-2, Vizag Stock statement irregular

Other 7 stores No issues
Expectations from
Franchisees
Agreement on the initial stock norm
Empowerment to Titan for auto replenishment
Cheques availability at the CFA / immediate
payment mechanisms
Raise any concerns on availability to the sales /
supply chain team (Single point of contact:
Supply chain officer Saravana kumar,
Escalation: Sandeep Badoni / J. Murali)
Participate in reviews with Titan team to track
the progress / learning of pilot
What we will measure during
pilot?
No. of variants stock out per category
% age Buffers in green, yellow, black per

category at each store

Inventory turns per category p store
No. of Months stock per category p store
Retail sales increase per category p store
% age Buffers in green, yellow, black per

category at CFA and CWH

Thank
You