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ASSIGNMENT ON

DISTRIBUTION LOGISTICS
MANAGEMENT

Submitted to:Mis Kriti Sinha

Submitted by:Abhijeet Pandey PG/FW/11-13

DISTRIBUTION AND LOGISTICS MANAGEMENT

Definition of distribution logistics


From the producer to the customer:The focal point of distribution logistics is the shipment of goods from the manufacturer to the consumer. Here is an example: In the early morning, a major supermarkets own truck delivers fresh supplies to replenish those that were sold on the previous day right to the loading ramp - all pre-picked for the retail outlets. At the same time, the specialty-food retailer next door is buying goods for that particular day from the wholesaler. Distribution logistics addresses these types of deliveries and others as well. In the process, distribution logistics covers much more than the simple shipment of a product from Point A to Point B.

Allocation of distribution logistics within the logistics system of an industrial Company

CONCEPT AND SCOPE OF DISTRIBUTION LOGISTICS MANAGEMENT


Distribution logistics comprises all activities related to the provision of finished products and merchandise to a customer. The products can be delivered directly from the production process or from the traders stock located close to the production site or, possibly, via additional regional distribution warehouses. Like procurement logistics, distribution logistics is a market-linked logistics system. It links a companys production logistics with the customers procurement logistics. In distribution logistics, customer orientation plays a special role because of the close link to the customer. Workers in a distribution center frequently have more contact with the customer than sales representatives do. The tremendous significance of service thinking in distribution logistics arises from this customer orientation. The aim is to constantly search for innovative ways that offer the customer improved logistics solutions. In the process, special requirements are being made as the traditional marketing principle of produce in a market-focused manner is being replaced by the futureoriented marketing principle of sell first, produce later. Furthermore, service is increasingly being provided to the customer in a multi-faceted way based on the principle of just for you. Both trends require a great amount of service speed and flexibility.

Marketing with a delivery service


If the delivery service is considered to be an instrument of marketing strategy, interdependencies with other instruments must be considered. This is because the instruments used in marketing strategy have an effect on the customer only when combined with the marketing mix . Information about the current interdependencies will be provided in later articles about distribution logistics. In the process, marketing instruments are combined into tools of product strategy, contract policies or terms & conditions, communications strategy and distribution strategy

Typical work activities


Responsibilities vary according to the specific job role and whether the employing company is a manufacturer, retailer or specialist service provider (e.g. in third party logistics (3PL)). A range of business tasks is undertaken to support the smooth and efficient operation of supply chain processes, and tasks usually include: monitoring the quality, quantity, cost and efficiency of the movement and storage of goods; coordinating and controlling the order cycle and associated information systems; analysing data to monitor performance and plan improvements and demand; allocating and managing staff resources according to changing needs; liaising and negotiating with customers and suppliers; When managing warehouse or transport staff, the role may also include:

implementing health and safety procedures; managing staff training issues; motivating other members of the team; project management; setting objectives.

More senior roles in logistics may involve:


planning projects; working on new supply strategies; planning vehicle routes; using specialist knowledge, such as mechanical-handling systems, to provide consultancy services.

EXAMPLE OF DISTRIBUTION AND LOGISTICS MANAGEMENT

Dabur India Limited

Company Profile
Dabur derived from Daktar Burman is India's largest Ayurvedic medicine manufacturer. Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis. The story of Dabur goes back to 1884, to a young doctor armed with a degree in medicine and a burning desire to serve mankind. This young man, Dr. S.K. Burman, laid the foundations of what is today known as Dabur India Limited. The brand name Dabur is derived from the words 'Da' for Daktar or Doctor and 'bur' from Burman. From those humble beginnings, the company has grown into India's leading manufacturer of consumer healthcare, personal care and food products. Over its 125 years of existence, the Dabur brand has stood for goodness through a natural lifestyle. An umbrella name for a variety of products, ranging from hair care to honey, Dabur has consistently ranked among Indias top brands. Its brands are built on the foundation of trust that a Dabur offering will never cause anyone slightest of harm. The trust levels that this brand enjoys are phenomenally high.

Distribution Model
Daburs distribution network is recognised as one of its key strengths. Its focus is not only to enable easy access to our brands, but also to touch consumers with a three-way convergence - of product availability, brand communication, and higher levels of brand experience. A Diagram explaining the channels of Distribution is given below. The above diagram it shows channel of distribution of dabur foods, here first the products are manufactured and from Manufacturing plants the packed goods are supplied to Clearing And Forwarding Agents(C&FA) and from here the goods are then further supplied to number of Stockiest or Distributors, from here goods reaches to large number of Retailers and it is the duty of Stockiest to take orders from retailers and then supply the goods to them, this work is generally done by stockiest salesman through ready stock or by taking orders first and then placing the order. From here the goods finally reaches to Customers. Customer purchases the product from retailers. Manufacturing Plant

Clearing and forwarding agent (different regions)

Stockist A Stockist C

Stockist B

Retailers

Retailers

Retailers

Retailers

Retailers

Retailers

C O N S U M E R S

SWOT ANALYSIS OF DABUR INDIA LTD


STRENGTHS
Strong presence in well defined niches( like value added Hair Oil and Ayurveda specialties) Core knowledge of Ayurveda as competitive advantage Strong Brand Image Product Development Strength Strong Distribution Network Extensive Supply Chain IT Initiatives R & D a key strength

WEAKNESS
Seasonal Demand( like chyawanprash in winter and Vatika not in winter) Low Penetration(Chyawanprash) High price(Vatika) Limited differentiation (Vatika) Unbranded players account for the 2/3rd of the total market(Vatika)

OPPORTUNITIES
Untapped Market(Chyawanprash) Market Development Export opportunities. Innovation Increasing income level of the middle class Creating additional consumption pattern

THREATS
Existing Competition( like Himani, baidyanath and Zandu for Dabur Chyawanprash and Marico,Keo Karpin, HLL and Bajaj for Vatika Hair Oil) New Entrants Threat from substitutes (like Bryllcream for Vatika hair oil)

Cipla : Caring for life


CiplaA Global Leader in Generics
Leading pharmaceutical company in India in terms of retail sales and one of the largest exporters of pharmaceutical products from India. Legacy of innovation and an entrepreneurial spirit ingrained by the founder, Dr. K.A Hamied, and propounded by the present Chairman and Managing Director, Dr. Y.K. Hamied. Wide range of products across all major therapeutic categories and in most dosage forms. Business model based on international strategic alliances and focus on pursuing organic growth while reducing capital commitment and regulatory/litigation risks. Result driven R&D ensuring efficient utilization of resources and generating subst antial technical knowhow fee income. Company turnover is $1billion

Distribution Model
Cipla has a business model based on STRATEGIC PARTNERSHIP. API and formulations exported to approximately 175 countries through strategic alliances, including partnerships and agency arrangements. Export sales contributed 51.5% and 49.5% to FY09 and Q1 FY10 revenues, respectively. Total of approximately 7,000 product registrations in place across various export markets. International partnerships with governments and social service organizations to supply products and/or technology, which helps strengthen relationships abroad. Partnership model helps in: Leveraging in-depth local expertise of partners. Limiting the need to set up own facilities or sales and distribution networks. Lowering fixed costs and capital commitment. Reducing potential risks from litigation, regulatory or employee related matters.

Strategic partnership model structured as per:

-Developed markets which are highly regulated and exposed to litigation risks. -Emerging markets which offer higher growth opportunities, due to lower entry barriers, limited competition and higher profitability.

SWOT ANALYSIS OF CIPLA


STRENGTHS
Ranks #2 in the retail prescription market in India; 18 brands that feature among the top-300 brands; Large basket of 1,500 formulations; and

Partnered 8 leading generics companies in the US for nearly 125 projects.

WEAKNESSES
Impact of IPR regime

OPPORTUNITIES
Biotherapeutics A new and promising area; Agreement with Avesthagen; and Venturing towards areas of cardiology and anti-cancer.

THREATS
Partnership related; and Potential de-rating

ACC Limited
Company Profile
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 14 modern cement factories, more than 30 Ready mix concrete plants, 20 sales offices, and several zonal offices. It has a workforce of about 9,600 persons and a countrywide distribution network of over 9,000 dealers. Since inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in many areas of cement and concrete technology. ACC has a unique track record of innovative research, product development and specialized consultancy services. The company's various manufacturing units are backed by a central technology support services centre - the only one of its kind in the Indian cement industry.

Distribution Model
The cost of transportation and distribution constitutes a large chunk of the price the customer pays for cement - it can be as much as 30% at many locations in the country. For a low value basic product like cement, minimizing of transportation and distribution is in national interest to make the economy more cost competitive. Today nearly 60% of cement of production units to supply points is transported by road and rest by rail. For long distance movement of cement, rail is still the preferred option due to its lower cost. Nearly all the cement from supply points to customer is transported by road. The cost competitiveness of both rail and road transport has important bearing on the price of cement. restrictions Railways have been steadily losing cement on the customer. The recent traffic due to the inflexibility of freight and the operational; imposed improvements of operational efficiencies of railways is indeed laudable but if this is achieved by passing on the entire burden to its customers, We fear that the cost competitiveness of railways will worsened in a long run - at least for a large volume low price product like cement. Railways must examine all secondary incurred by cement producer in transportation of cement from rail heads if the cost competitiveness of rail movement is to be improved. Railway should also consider allowing cement producer to operate point-to-point rakes, with multiple unloading points. Road transportation during the last years was adversely effected due to sharp and repeated increase in the price of diesel. Taking advantages of the effective caring capacity of trucks, road transporter were offering competitive freight rate by carrying mare than stipulated loads. However the enforcement of carrying load restriction in the recent past in many states has seriously disrupted road transport system in the country. Freight has

shot up with the demand for a higher number of vehicles for the same impact on the cement industry will ever more severe. Also pollution and traffic will increase if the same volume is transported by large number of vehicle. It is apparent that motor Vehicles produced in the country have the capacity to carry large loans per axle than is currently stipulated, with out compromising safety. It will in the national interest to consider upward revision of the present stipulated permissible loads per axle is that the existing stock of vehicles is more productively used. This will also meet the needs of the cement industry which one of the largest used of road transport. Indian railway has revised upward the effective capacity of their wagons; a similar move is called for in respect of road transport to tie over the looming crisis. ACC is the biggest consumer of Indian Railways, and a considerable user of the countrys road transport network services for inward and outward movement of materials and products.

SWOT ANALYSIS OF ACC CEMENT


STRENGTHS
It is having a good image and brand loyalty among consumers. Service is good Dhalai karne ke liye people ask for ACC Perceived to be of very superior quality cement when compared to others Selling form the very first day the shop came in to being & sells easily They have same price prevailing for wholesale at dealers/stockiest retailers end.

WEAKNESS
The competitors are doing much promotional activity rather than ACC Limited thats why it facing more problems in selling of product in the market. Lack of awareness program for consumers.

OPPORTUNITY
Rapid growth is taking place in Bihar and Madhya Pradesh. People are opting for more stable structures and intensive use of cement is taking place, even government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets. As Indian core industry is also growing at rate of nearly 10% per annum,it is having a good future. Foreign direct investment in infrastructure sector going to increase in coming years, which will increase the demand of cement. Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads.

THREATS
Large number of players in cement industry makes it more competitive for ACC to carefully price its product and at the same time satisfy its dealers and customers. Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share. Due to Indias exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war. The emergence of small players in this market may increase the competition and start the malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other Benefits.