SUPPLY CHAIN MANAGEMENTIN MARICO

INTRODUCTIONMarico is a leading Indian Group in Consumer Products & Services in the Global

Beauty and Wellness space.

Marico's Products and Services in Hair care, Skin Care and Healthy Foods generated a Turnover of about Rs. 23.9 billion (about USD 478 Million) during 2008-09.

Marico markets well-known brands such as Parachute, Saffola, Sweekar, Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal, Kaya, Aromatic, Fiancée, Hair Code, Caivil, Code 10 and Black Chic.

Marico's brands and their extensions occupy leadership positions with significant market shares in most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible Oils, niche Fabric Care etc.

Marico is present in the Skin Care Solutions segment through Kaya Skin Clinics (101 in India, Middle East and Bangladesh) and its soap franchise.

Marico's branded products are present in Bangladesh, other SAARC countries, the Middle East, Egypt, Malaysia and South Africa.

The Overseas Sales franchise of Marico's Consumer Products (whether as exports from India or as local operations in a foreign country) is one of the largest amongst Indian Companies and is entirely in branded products and services.

HISTORY

• The company was originally a joint venture between a Lever group company and Nissin of Japan, and its products were distributed through HLL's channels.

• In 1988 The Company was incorporated on 13th October, under the name of Marico Foods Ltd. It obtained the Certificate of commencement of business on 22nd November.

• In 1989 The name of the Company was changed to Marico Industries Limited w.e.f. 31st October.

In December, the Company entered into an agreement with M/s. Rasoi Industries Limited for purchase of its unit located at M.I.D.C Industrial Estate, Jalgaon.

Saffola won the Most Outstanding `Brand of the Year' Award instituted by the Advertising Club of Mumbai in 1993.

In March 1996, the Company made a fresh issue of 10,00,000 equity shares of Rs.10/- each, at a premium of Rs.165/- per share, simultaneously with an offer for sale by the promoters of 26,25,000 equity shares of Rs.10/- each, at a premium of Rs.165/- per share

In 2002 Marico Industries Ltd has informed BSE that the Board approved the Issue of bonus redeemable preference shares of aggregate face value of Rs 290 million.

Ratio -- 1:1 on equity enhanced after bonus issue of equity shares made by the Board on April 18, 2002 and approved by shareholders on July 18, 2002. The rate of dividend is 8% p.a. Increase in authorised share capital of the Company from Rs 300 million to Rs 600 million.

Marico acquires HLL`s Nihar for Rs 216 cr in 2006

In 2007 Marico Ltd has appointed Mr. Anand Kripalu as an Additional Non-Executive Director on the Board of Directors of the Company.

 

PRODUCTS

VISION AND MISSION

 'COME WIN' ---- their vision and mission is captured in this

acronym, which when bifurcated means the following: -

Consumers : they are the reason we exist.

The primary focus of our efforts will be to not only understand what adds greatest value to the consumer but also change and reinvent ourselves if need be.

We will translate the consumer's needs and desires into marketable products and an ever-expanding base of loyal consumers, with speed and a quality of response that surpasses the competition.

Membership: For a sense of ownership empowers us.Wholesome membership is when a person brings his/her entire being

into the organization.

It also gives each member a role in articulating and shaping the destiny of the organization, which in turn, builds commitment and ownership.

Excellence: For it unleashes our potential.We will focus on policies and practices where people produce

consistently superior performances and where people are encouraged to discover their untapped potential.

Wealth: For on it hinges our growth.

All our efforts must culminate in the creation of wealth. We will do so by continuously adding value in everything we do through a variety of methods.

We will use sources productively, eliminate waste, reduce cycle times and costs and enhance the consumer base.

 Innovation: For it gives wings to ideas.

The future of our organization rests on our willingness to experiment, push in new and untested directions, think in uncommon ways and take calculated risks. Continuous improvement should be a part of everyday work.

We acknowledge that failure is inherent in any new initiative. We will commit resources for experimentation and invest in processes for reviewing and sharing of learning.

SWOT Analysis of Marico Ltd.

Various Environmental Analysis Strategic Advantage Profile (SAP)

IntroductionA competitive advantage is an advantage over

competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

 Concept of Competitive Advantage "Competitive advantage exists when there is a match

between the distinctive competencies of a firm and the factors critical for success within its industry that permits the firm to outperform competitors."

 

It concludes, then, that competitive advantage is externally focused while organisational competence is internally focused.

Therefore, an organisation's competence does not automatically lead to competitive advantage. This phenomenon can be explained by two situations:

The core competence of the organisation may not be of any

importance to the industry in which the organisation is operating.

There are numerous examples of this phenomenon; organisations diversifying into non-core competence areas, failing therein and divesting such business.

Metal Box, having core competence in packaging materials, diversified into bearing and had to divest it, and so on.

2. Even if core competence has relevance in the industry segment, other competitors may have the same strength and the particular organization may not have any competitive advantage.

3. What becomes, then, important for the organization is to have relatively greater strength in that important factor than its competitor, For example, two competitors may enjoy low manufacturing costs; but one with the lower manufacturing costs has a competitive advantage.

Environmental scanning usually refers just to the macro environment, but it can also include industry,,(consumer analysis), (product innovations) or the company's internal environment.

Macro environmental scanning involves analysing:

PoliticalEconomicalSocialTechnologicalEnvironmentallegal

 

PESTEL ANALYSIS

EconomyGDP per capitaEconomic GrowthUnemployment RateInflation RateConsumer And Investor ConfidenceInventory LevelsCurrency Exchange RatesMerchandise Trade BalanceFinancial And Political Health Of Trading PartnersBalance Of PaymentsFuture Trends

Government

Political Climate - Amount Of Government ActivityPolitical Stability And RiskGovernment DebtBudget Deficit Or SurplusCorporate And Personal Tax RatesPayroll TaxesImport Tariffs And QuotasExport RestrictionsRestrictions On International Financial Flows

Legal• Minimum Wage Laws

• Environmental Protection Laws

• Worker Safety Laws

• Union Laws

• Sunday Closing Laws

• Municipal Licenses

• Laws That Favour Business Investment

TechnologyEfficiency Of Infrastructure, Including: Roads, Ports, Airports,

Rolling Stock, Hospitals, Education, Healthcare, Communication, Etc.

Industrial ProductivityNew Manufacturing ProcessesNew Products And Services Of CompetitorsNew Products And Services Of Supply Chain PartnersAny New Technology That Could Impact The CompanyCost And Accessibility Of Electrical Power

Potential Suppliers

• Labour Supply – Quantity Of Labour Available

– Quality Of Labour Available

– Stability Of Labour Supply

– Wage Expectations

– Employee Turn-over Rate

– Strikes And Labour Relations

– Educational Facilities

Material Suppliers Quality, Quantity, Price, And Stability Of Material

InputsDelivery DelaysProximity Of Bulky Or Heavy Material InputsLevel Of Competition Among Suppliers

Service Providers Quantity, Quality, Price, And Stability Of Service

FacilitatorsSpecial Requirements

 

• Socio-cultural

Demographic factors such as: – population size and distribution– age distribution– education levels– income levels– ethnic origins– religious affiliations

 Attitudes Towards: Materialism, Capitalism, Free EnterpriseIndividualism, Role Of Family, Role Of Government,

CollectivismRole Of ReligionConsumerismEnvironmentalismImportance Of Work, Pride Of Accomplishment

Cultural Structures Including: Diet And NutritionHousing Conditions

 

STRATEGIC BUSINESS UNIT  

VALUE CHAIN ANALYSIS OF MARICO ConceptA value chain is a chain of activities for a firm operating in a

specific industry. The business unit is the appropriate level for construction of

a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order,

and at each activity the product gains some value. The chain of activities gives the products more added value

than the sum of added values of all activities. It is important not to mix the concept of the value chain with

the costs occurring throughout the activities.

Activities• The value chain categorizes the activities of an

organization. • The "primary activities" include: inbound logistics

operations (production), , marketing and sales (demand), and services (maintenance).

• The "support activities" include: administrative infrastructure management, human resource management, technology (R&D), and The costs and are identified for each value activity.

Primary Activities of MARICO Inbound logisticsThese are the activities concerned with receiving the materials from

suppliers, storing these externally sourced materials, and handling them within the firm.

Here goods are received from a company's suppliers.

They are stored until they are needed on the production/assembly line. Goods are moved around the organization.

MARICO purchase their raw material from all around the world.

In order to maximize their availability of raw material MARICO maintain good relationship with their suppliers.

MARICO use JIT (Just in Time) approach for handling of raw material

 OperationsThese are the activities related to the production of

products and services. This area can be split into more departments in certain

companies. For example, the operations in case of a hotel would

include reception, room service etc.This is where goods are manufactured. Operations could include organizing the parts to make

final FMCG Product. MARICO are known for their reliability which comes from

efficient operations.

Outbound LogisticsThese are all the activities concerned with distributing

the final product and/or service to the customers.

For example, in case of a hotel this activity would entail the ways of bringing customers to the hotel.

 The goods are now finished, and they need to be sent

along the supply chain to wholesalers, retailers or the final consumer.

MARICO manage their Distributor and Super Distributor in different rural and urban area.

MARICO make their product easily assessable

Marketing and SalesThis functional area essentially analyses the needs and

wants of customers and is responsible for creating awareness among the target audience of the company about the firm’s products and services.

Companies make use of marketing communications tools like advertising, sales promotions etc. to attract customers to their products.

  MARICO given TV ads and magazine for a marketing.

This area focuses strongly upon marketing communications and the promotions mix.

 

ServiceThere is often a need to provide services like pre-installation

or after sales service before or after the sale of the product or service.

This includes all areas of service such as final checking, after-

sales service Like quality, quantity, packaging, weight etc..

MARICO values their customers.

Support Activities of MARICO

ProcurementThis function is responsible for purchasing the materials that are

necessary for the company’s operations.

An efficient procurement department should be able to obtain the highest quality goods at the lowest prices.

 This function is responsible for all purchasing of goods, services and

materials.

The aims to secure the lowest possible price for purchases of the highest possible quality.

MARICO will be responsible for outsourcing and e-Purchasing (using

IT and web-based technologies to achieve procurement aims).

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