Business Research Method Report On Vendor Sales Analysis on Coffee

Submitted By Prabhakar K D Vardhan Vulluri Pawan Kumar K Chaitanya Guttula 1226112238 1226112259 1226112223

Submitted To Dr. R. Venkateswarlu (Professor & Assistant Director) Dr. B. Padma Narayan (Assistant Professor)

Visakhapatnam

Acknowledgement

This research project would not have been possible without the support of many people. We wish to express our gratitude to our Professor Dr. R. Venkateswarlu who was abundantly helpful and offered valuable assistance, support and guidance. Our deepest gratitude are also with our Assistant Professor Dr. B. Padma Narayan without whose knowledge and assistance this study would not have been successful. We are very delightful to her for her support in each and every step of our research paper. We would also like to convey thanks to the Nilgiri Coffee Works for providing all the financial data and all the necessary data without which we wont be able to complete our research. Finally, we would like to thank all the people who directly or indirectly helped us in making this research paper.

Contents Executive Summary Introduction Business Environment Objectives of the Research Supply Chain Process Inventory Management Lead Time and Procurement of goods Methodology Results Conclusions and Future Suggestions References Appendix

Executive Summary Coffee today is the 2nd largest traded commodity in the world. It is been consumed by many persons day in and day out. Coffee production is mainly dominated in South India with leading Karnataka with 53% followed by Kerala and Tamil Nadu. The major competitors of our business are Coffee Day, Nescafe, and BRU etc. This paper covers the overall supply chain of our coffee business. It shows the network of how the raw coffee beans from farmers reach the Retailers. Also it tells about how the inventory is managed efficiently. The entire lead time and procurement of goods are also calculated. The major part in this paper is the sales and purchase of our business as per the seasonal variations. Through this data we have seen significance in between two months and also one month with the overall months. Finally we have analyzed the sales growth and also forecast for the upcoming months. Introduction: Coffee is the 2nd traded commodity in the world after crude oil and it is cultivated across 80 nations in the world (central & south America, Africa, & Asia).Coffee production in India is dominated in the hill tracts of South Indian states, with the state of Karnataka accounting 53% followed by Kerala 28% and Tamil Nadu 11% of production of 8,200 tonnes. Indian coffee is said to be the finest coffee grown in the shade rather than direct sunlight anywhere in the world. There are approximately 250,000 coffee growers in India. Coffee is grown in three regions of India with Karnataka, Kerala and Tamil Nadu forming the traditional coffee growing region of South India. Ideal climatic conditions to grow coffee are related to temperature and rainfall; temperatures in the range of 73 F (23 C) and 82 F (28 C) with rainfall incidence in the range of 6080 inches (1.52.0 m) followed by a dry spell of 23 months suit the Arabica variety. Cold temperatures closer to freezing conditions are not suitable to grow coffee. Thought, the Indian coffee industry is expected to post sound growth on account of growing domestic demand. Key pressing issues of labor shortage and migration, and tremendous increase in cost of labor are major concern areas for the industry. Business environment According to business in this coffee production sector there are many competitors like Nescafe, coffee day & Bru. These are the major competitors in this sector at present. These companies are

trying to be no.1 in supplying required quantity to the required customers but they are decreasing the quality of the product. Due to this the small scale industries could not be developed. So, this is the main issues facing by the small scale industries.

Objectives The main objectives of our project are as follows: Supply chain management Inventory management Lead time & Procurement of goods depending on seasonal variations Sales volatility depending on seasonal variations. Monthly variations taking daily sales

Supply Chain Process

Farmers Tamil Nadu

Central Warehouse

Wholesale Distributors

Retail Manufacturer

Nadars Coffee Works

Karnataka

Bangalore (Coffee Board of India)

Puja Coffee Works

Neelagiri Coffee Works

Kerala Ambica Coffee Works Andhra Pradesh

Figure.1 Supply Chain management of Raw Materials (farmers to Retail Mfrs)

Figure 1 depicts the supply chain process involved in flow of Raw Materials from Farmers to Retail Manufacturers. As shown in the figure, coffee beans are grown mainly in the three regions i.e.., Tamil Nadu, Karnataka, Kerala and Andhra Pradesh. The major production of coffee is from the state of Karnataka of about 53% followed by Kerala about 28%, Tamil Nadu about 11% and Andhra Pradesh about 2%. The overall coffee production is sold at the Coffee Board of India for about Rs. 100 Rs. 300 per Kg according to coffee seeds grading. Coffee Board of India is said to be the Central Warehouse. Every month Coffee Board of India sets an auction for the coffee and the one who bids the highest buys the coffee. In the auction there will be several Wholesale Distributors namely Nadars Coffee Works, Puja Coffee Works, Ambica Coffee Works etc.

Inventory Management The incoming coffee bean stocks are placed in the godown which is in the shop. The area of the shop is (8*9) *2 mt. So, approximately we can place around 1000Kg of coffee bean bags according to different varieties in different lots so that based on the lots there will be an ease in the process of taking the bags out and deliver it to the customer. There will be proper ventilation also the gunny bags will be thick so that there will be no moisture content. Also all the gunny bags will be placed over a plastic cover so that vapor content from the ground wont allow moisture content into the gunny bags. As per customers demands and needs coffee beans are sold in different formats like raw, roasted or powder. Lead time & Procurement of goods depending on seasonal variations: Generally, the coffee bean seeds are mainly procured at our distributors place. We usually buy coffee bean seeds in a lot but we bring only 1 ton coffee bags with us and rest will be procured at our distributors warehouse. Whenever there is a shortage in our godown we will be calling to our distributors and inform them about demand. Then they will send the bags within 2 working days and all the costs of transportation, labor and unloading charges are paid by us. There will be huge amount of procurement of coffee during rainy season and winter season. So to satisfy the demands in both these seasons, we will procure a large amount of stock in summer season itself. The reason behind this is that in rainy season and winter season, the moisture

content in seeds will be more due to which the operation charges and processing time will be more. Since, the quality of the seeds in summer season is also nice as compared to other season so we buy a large quantity in summer and procure them at our distributors warehouse and as well as in our godown so that we can match our customers demand.

Methodology The methodology which we processed our research is by doing an trend projection of sales for every months and analyzing the significance on comparing each month with every other months through one way anova through spss and observing the growth of sales from one month to succeeding months and measuring inventory stocks.

Conclusion Hence from the above obtained output from SPSS and excel, we can observe that while comparing one month with the remaining months, we find that it will be less significant since the demand vary every month so, the sales may vary. Hence it will be less significant. We also observe that in the month April and July, it is very significant since sales in those seasons are large. This is mainly due to winter season and also it is the beginning of financial year. Finally comparing the sales growth monthly we can observe that it is also more significant due to seasonal variations.

GRAPHS over all sales growth

600000 500000 400000 300000 200000 100000 0 1 -100000 2 3 4 5 6 7 8 9 10 sales growth

APRIL SALES

Amount
35000 30000 25000 20000 15000 10000 5000 0 Amount

4/9/2012

4/1/2012

4/3/2012

4/5/2012

4/7/2012

4/11/2012

4/13/2012

4/15/2012

4/17/2012

4/19/2012

4/21/2012

4/23/2012

4/25/2012

4/27/2012

MAY SALES

4/29/2012

40000 35000 30000 25000 20000 15000 10000 5000 0 6/1/2012 6/3/2012 6/5/2012 6/7/2012 5/7/2012 5/9/2012 5/11/2012 5/13/2012 5/15/2012 5/17/2012 5/19/2012 5/21/2012 5/23/2012 5/25/2012 5/27/2012 5/29/2012 5/31/2012 Amount Amount 5/5/2012 5/1/2012

40000 35000 30000 25000 20000 15000 10000 5000 0

JUNE SALES
5/3/2012

JULY SALES
6/9/2012
6/11/2012 6/13/2012 6/15/2012 6/17/2012 6/19/2012 6/21/2012 6/23/2012 6/25/2012 6/27/2012 6/29/2012

Amount

Amount

10000

15000

20000

25000

30000

40000 35000 30000 25000 20000 15000 10000 5000 0 5000 8/1/2012 8/3/2012 8/5/2012 8/7/2012 8/9/2012 8/11/2012 7/11/2012 7/9/2012 7/7/2012 7/5/2012 7/3/2012 7/1/2012

AUGUEST SALES

SEPTEMBER SALES
8/13/2012
8/15/2012 7/15/2012

7/13/2012 7/17/2012
7/19/2012

8/17/2012
8/19/2012

Amount

Amount

8/21/2012
8/23/2012

7/21/2012
7/23/2012

8/25/2012
8/27/2012 8/29/2012 8/31/2012 Amount

7/25/2012
7/27/2012 7/29/2012 7/31/2012 Amount

Amount
60000 50000 40000 30000 20000 10000 0 Amount

9/9/2012

9/1/2012

9/3/2012

9/5/2012

9/7/2012

9/11/2012

9/13/2012

9/15/2012

9/17/2012

9/19/2012

9/21/2012

9/23/2012

9/25/2012

9/27/2012

TREND PROJECTED SALES

300000 250000 200000 150000 100000 50000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Series1 Series2 Series3 Series4 Series5 Series6

9/29/2012