Xavier Institute of Social Service Ranchi

PROJECT ON LOGISTIC AND SUPPLY CHAIN MANAGEMENT OF SPENCERS BREWERIES & DISTELLRIES PRIVATE LIMITED

SUBMITTED TO:

PROF. SUBHOJIT

SUBMITED BY:-

ABHINAV ANAND(60)
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Contents
Topic Introduction to Distribution Channel Page No 3 4-5 Transportation to C&F Godown 5-7 Transportation to Retailers. Channel Management Strategy Customer Service Channel Management Strategy Customer Service 8 9 8 9

DEFINITION Activities concerned with efficient movement of products from producers to consumers. It is the set of activity concerned with the physical flow of materials, components and finish goods producer to channel and consumer. WHY DISTRIBUTION CHANNELS ARE NEEDED? Cannot reach Provide efficiency Smooth flow Core competence specialization

The company we visited is Spencers breweries and distilleries private limited which is a beer manufacturing plant and is also in bottling of UB spirits. As intensity decides the service level, well the distribution intensity of the company is intensive by nature. Distribution through every reasonable outlet available. The distribution which we are studying is INTENSIVE DISTRIBUTION. Well there is a lot of licenses and paper work which has to be done in order to make the distribution network work in a proper way. Almost all the intermediaries are involved in the process of making the distribution network work out for the company as well as the customers. MANUFACTURER: Well the manufacturer has to first take up the 19B license which is for (storage of finished goods), state excise license and 19C license which is for (warehousing within the factory premises itself). These three things are a must for the manufacturer to start the distribution process for a Beer manufacturing industry. The manufacturer deposits state excise duty @ Rs. 10/ bulk liter i.e. Rs. 78/case of strong beer. SALES TAX REGISTRATION No: JHARKHAND (S) 1879 DATE: 5/3/2004 J.V.A.T. No. 20490100189 TRANSPORTER: SHARDHA ROADLINES ROAD PERMIT No/DATE Labels of brands of liquor to be supplied in Jharkhand have to be registered and approved or renewed by the Excise Commissioner, Jharkhand, Ranchi. Such registration and approval shall be obtained by the distributor and submitted to the Corporation. The manufacturer shall offer for sale only such brands in respect of which the labels are registered and approved or renewed by the Excise Commissioner, Government of Jharkhand as on the date of submission of offer.
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A statement furnishing information about label registration of each brand of FMEL/IMFL/Beer/Wine shall be submitted in the prescribed Performa

So after the licenses are obtained by the manufacturer and is all set legally to start the distribution process. After the licenses are obtained the industry and all the intermediaries have to focus on 6 different functional areas of distribution system i.e. ORDER PROCESSING, INFORMATION FLOW, WAREHOUSING, INVENTORY CONTROL, PACKAGING, TRANSPORTATION. The manufacturer processes the order which is received by them from the CNFs/stockiest/distributors as in delivers the amount of goods which is demanded by the intermediaries and ultimately by the consumers. The information flow is very systematic is nature and is made such that the information does not get distorted in the process. Most of the manufacturers have their own warehousing facilities which help to store their products and basically if we talk about SPENCERS BREWERYS & DISTILLERIES PVT LTD who does hold so much as to say market share and distribution is not periodic in nature therefore warehousing facility is a very good option to protect their products. Inventory is also in control of the manufacturer as sales person from the industry pays regular visits which help to keep the inventory at a check. Protective packaging is done by the manufacturers before dispatching the goods in packages that fits the storage space and transportation vehicle such as Item Package Carton Pallet Container

. Transportation costs can be both Fixed as well as Variable in nature. Fixed cost involves pick up, delivery, terminal handling, billing & collecting and Variable cost involves fuel, maintenance & labor. When the truck is dispatched for delivery the truck driver carries the invoice, road permit and gate pass. Road permit involves

COST STRUCTURE CHARGED TO THE STOCKIST/WHOLESALERS

PARTICULARS assessable price excise duty vat @50% TCS 1% price charged to the stockist/wholesaler AMOUNT 262 78 170 5.1 515.1

PARTICULARS assessable price excise duty vat @50% TCS 1% export fee (if applicable) price charged to the stockiest

AMOUNT 262 78 170 5.1 3.7 518.8

PAYMENT TERMS: Immediate on the presentation of the bill through cheque otherwise interest charged @ 2% p. m.

STOCKIST/WHOLESALER/DISTRIBUTOR: An agreement which is made between the distributor and manufacturer should be on a stamp paper of denomination of Rs. 100/Distributors desirous of supplying liquor to the Corporation for subsequent Sale/distribution of liquor to retailers shall give their offers to the Corporation. If the distributor is not the owner of the brands proposed to be supplied, then a copy of the agreement between the distributor and the owner of the brand. Movement license and government license PAN No. AACFAA5101C

After the following documentation is done by the stockiest then the order processing is done by the stockiest. A regular check is maintained by the stockiest so that the stockiest can process the orders given by the retailers at large in Ranchi. In order to process the order properly and without any disturbances the stockiest checks whether stock is there in the warehouse.

There is a direct contact between the manufacturer and the stockiest/wholesalers and because of that the information flow is smooth in nature and does not get distorted. The order which is received by the retailers and the order which is given to the manufacturers is coordinated in an orderly way. Information flow then has a great effect on the delivery schedule and price of the product, transportation time & cost also. Well the stockiest/wholesalers also have provisions for warehousing of products which they receive from the concerned manufacturers so that no loss is incurred without any reason. Warehousing also protects the goods which are in stock with the stockiest and also helps on time supply of goods to the retailers. Warehouse layout, size and ownership is all as per the schedule of the stockiest. Management of inventory is the most important work of the stockiest/wholesalers as because they have to decide when they have to make the order and how much they have to order from the manufacturer and for this the stockiest requires a Dependable IMS, Independable IMS, purchase control, stores control, issues management, JIT system, perpetual inventory system. Packaging is not an issue so much for the stockiest/wholesalers as the goods which are dispatched by the manufacturers are already packed properly as per the requirements of the product so they dont have to use their head packaging so much. Transportation is the most important part of the work of the stockiest/wholesalers as they are the medium between the manufacturers, retailers and the consumers. The cost and the time factor involved in transportation has to be met by the stockiest, whether they should use their own fleet of trucks or outsource them is also an important decision which the stockiest make, the routing planning of the vehicles also has to be made in accordance to their advantage and also scheduling of the vehicle are the few decisions involved in transportation.

COST STRUCTURE OF THE STOCKIEST /WHOLESALERS TO THE RETAILERS

PARTICULARS Stockiest/wholesalers price movement fee/case license fee/case margin @5% on MRP price charged to the retailers

AMOUNT 515.1 7.1 7.8 40 570

PAYMENT TERMS: 30 days from the date of delivery through account payee cheque or draft drawn in favour on a schedule bank of Ranchi otherwise 18% interest charged per month. The payment of this bill shall be deemed to have been received by us only on the issue of the firms official stamped receipt.
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RETAILERS: Retailers license from the government

Retailers are independent of the manufactures-not attached to any of them. Survey shows that 35% of the purchases are pre planned. Retailers help to create time, place and possession utility. Retailers provide consumers a wide variety of products and add form utility. There are number of salesperson working for the concerned company who give a regular visit to all the 347 retail shops in Ranchi. The work of the salesperson is basically keep a upto date check on the shortage of the stock which is stocked by the retailers and simultaneously with the stockiest who supplies the stock to the retailers. The stock which is send to the retailers are unloaded by the retailers and an invoice made by the stockiest is given to the retailers where one copy is kept by the retailers and one copy is signed and stamped and given back to the stockiest for his reference. COST STRUCTURE:
PARTICULARS Stockiest/wholesalers price license fee/case Margin price charged to the retailers AMOUNT 570 110 112 792

Customer has to pay 792/12= Rs. 66/ bottle

Channel Management Strategy

Lakshya
It helps to meet Premium Dealer revenue targets. It provides strong value proposition for appointing new PDs & ARs. It helps to create a healthy working relationship with dealers due to reward-focused conversations. The points are accumulated on the basis of following criteria: Target achievement consistency. Volume growth. Net Sales Value. F2R proportion. Cash discount availed. % Volume from PDRs.

Project Storm
This type of activity is done in High Contribution & Low Market Share area. It helps to achieve the targets in short term. It is a platform to learn & brainstorm with the best minds in the company. Increased no. of counter visits, site visits, mystery & ghost shopping, customer & mason meet, visible branding at PD/AR counters increases the brand pull. It creates a feeling of pride in being a part of ACC family.

Customer Service

Objective: To retain and serve existing customer. To bring in new customers.

Offers: Assurance to customers about the product. Guidance on use of the product. Demonstration of the product for right application. Education to customers & influencers.

Complaint Handling: Do not ignore/store complaint. Do not act aggressively with customer. Do not take complaints in Business personally. Be patient. Be a good listener. Carry out requisite action to customers satisfaction. Definition of Cement, OPC, PPC & PSC. Advantages of PPC/PSC over OPC cement. Fine & Coarse aggregates.

References:
o Mr. Ajay Sinha, Director- Spencers breweries 131,tupudana,industrial Area, Tubudana, Ranchi o Ajanta Traders, Kokar, Ranchi and distilleries. Plot no-

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