INTRODUCTION

In todays rapidly changing business environment, ever greater demands are

being placed on business
to provide products and services quicker
with greater added value
to the correct location
With no relevant inventory position.
Customers want more quality, design, innovation, choice, convenience and
service, and they want to spend less money, effort, time and risk.
The supply chain of a company consists of different departments, ranging from
procurement of materials to customer service.
Supply Chain Management means transforming a companys "supply chain"
into an optimally efficient, customer-satisfying process, where the effectively of
the whole supply chain is more important than the affectivity of each individual
department.

NEED FOR SCM IN THE MARKET TODAY:

Businesses the world over are struggling to sustain competitiveness in a global
zing economy. They are at present in the midst of a revolutionary
transformation; that of competition shifting from industrial age to information
age. During the industrial age the companies succeeded by how well they could
capture the benefits from economies of scale and scope. However, information
age does not allow all this and has initiated following unique challenges, which
the businesses have to cope up with.

Managing uncertainty: Companies are finding difficult to predict the

changes in this competitive market today. Customers are becoming competitors;
competitors are becoming partners and unconventional competition is emerging.

Understanding customers: It is becoming increasingly important to

understand customers needs and wants deeply and to translate these into unique
value added business mission.

Understanding globalization of business: Globalization is a process,

which cuts across national boundaries, integrating and connecting communities
in new-spaces time combinations. The emergence of Internet as a global
communication vehicle has had a profound impact on the business processes.
Since the industrial revolution, the developments in tooling, processes, materials
etc. accelerated the growth of factory system remarkably.
The concept of supply chain management is based on this view of
competency alliance. In fact, effective SCM is the result of powerful alliance
between customer, manufacturer, and the supplier.

WHAT IS SUPPLY CHAIN?

Supply Chain: A supply chain is a network of facilities and distribution options
that performs the functions of procurement of materials, transformation of these
materials into intermediate and finished products, and the distribution of these
finished products to customers. Supply chains exist in both service and
manufacturing organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm.
Below is an example of a very simple supply chain for a single product, where
raw material is procured from vendors, transformed into finished goods in a
single step, and then transported to distribution centers, and ultimately,
customers. Realistic supply chains have multiple end products with shared
components, facilities and capacities. The flow of materials is not always along
an arbores cent network, various modes of transportation may be considered,
and the bill of materials for the end items may be both deep and large.

What is supply chain management?

Supply chain management (SCM) is the combination of art and science that
goes into improving the way your company finds the raw components it needs
to make a product or service and deliver it to customers.
SCM is also called extending which means integrating the internal and
external partners on the supply and process chain to get raw materials to the
manufacturer and finished products to the consumer. Most companies fail to
integrate their supply chain strategies for a number of reasons; among them a
lack of system integration due to fragmented supply chain responsibilities. But
in neglecting integration and the broader concept of supply chain management,
firms might be missing an opportunity to cut costs and boost customer service.

The following are five basic components of SCM:

1. Plan This is the strategic portion of SCM. You need a strategy for
managing all the resources that go toward meeting customer demand for your
product or service. A big piece of planning is developing a set of metrics to
monitor the supply chain so that it is efficient, costs less and delivers high
quality and value to customers.
2. Source Choose the suppliers that will deliver the goods and services you
need to create your product. Develop a set of pricing, delivery and payment
processes with suppliers and create metrics for monitoring and improving the
relationships. And put together processes for managing the inventory of goods
and services you receive from suppliers, including receiving shipments,
verifying them, transferring them to your manufacturing facilities and
authorizing supplier payments.
3. Make This is the manufacturing step. Schedule the activities necessary for
production, testing, packaging and preparation for delivery. As the most metricintensive portion of the supply chain, measure quality levels, production output
and worker productivity.
4. Deliver This is the part that many insiders refer to as logistics. Coordinate
the receipt of orders from customers, develop a network of warehouses, pick
carriers to get products to customers and set up an invoicing system to receive
payments.
5. Return The problem part of the supply chain. Create a network for receiving defective
and excess products back from customers and supporting customers who have problems with
delivered products.

Supply chain management has the following

characteristics:
An ability to secure raw material or finished good from anywhere in
world.
A centralized, global business and management strategy with flawless
local execution.
On-line, real-time distributed information processing to the desktop,
providing total supply chain information visibility.
The ability to manage information not only within a company but across
industries and enterprises.
The seamless integration of all supply chain managements, including
third-party suppliers, information systems, cost accounting standards, and
measurement systems.
The development and implementation of accounting models such as
activity-based costing that like cost to performance are used as tools for
cost reduction.
A reconfiguration of the supply chain organization into high-performance
team going from the shop floor to senior management.
Traditionally, marketing, distribution, planning, manufacturing, and the
purchasing organizations along the supply chain operated independently. These
organizations have their own objectives and these are often conflicting.
Marketing objectives are high customer service and maximum sales dollars
conflict with manufacturing and distribution goals. Many manufacturing
operations are designed to maximize throughput and lower costs with little
consideration for the impact on inventory levels and distribution capabilities.
Purchasing contracts are often negotiated with very little information beyond
historical buying patterns. The result of these factors is that there is not a single,
integrated plan for the organization---there were as many plans as businesses.
Clearly, there is a need for a mechanism through which these different functions
can be integrated together. Supply chain management is a strategy through
which such integration can be achieved.

Supply Chain Decisions:

Supply chain management is a cross-functional approach to managing the
movement of raw materials into an organization and the movement of finished
goods out of the organization toward the end-consumer. As corporations strive
to focus on core competencies and become more flexible, they have reduced
their ownership of raw materials sources and distribution channels. These
functions are increasingly being outsourced to other corporations that can
perform the activities better or more cost effectively. The effect has been to
increase the number of companies involved in satisfying consumer demand,
while reducing management control of daily logistics operations. Less control
and more supply chain partners led to the creation of supply chain management
concepts. The purpose of supply chain management is to improve trust and
collaboration among supply chain partners, thus improving inventory visibility
and improving inventory velocity.Supply chain activities can be grouped into
strategic, tactical, and operational levels of activities.

Strategic decisions: strategic decisions are made typically over a longer time
horizon. These are closely linked to the corporate strategy (they sometimes the
corporate strategy), and guide supply chain policies from a design perspective.
Strategic network optimization, including the number, location, and size
of warehouses, distribution centers and facilities.
Strategic partnership with suppliers, distributors, and customers, creating
communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party
logistics.
Product design coordination, so that new and existing products can be
optimally integrated into the supply chain, load management
Information Technology infrastructure, to support supply chain
operations.
Where to make and what to make or buy decisions
Align Overall Organizational Strategy with supply strategy

Tactical decisions:
Sourcing contracts and other purchasing decisions.
Production decisions, including contracting, locations, scheduling, and
planning process definition.
Inventory decisions, including quantity, location, and quality of inventory.
Transportation strategy, including frequency, routes, and contracting.
Benchmarking of all operations against competitors and implementation
of best practices throughout the enterprise.
Milestone Payments

Operational decisions: operational decisions are short term, and focus on

activities over a day-to-day basis. The effort in these types of decisions is to
effectively and efficiently manage the product flow in the "strategically"
planned supply chain
Daily production and distribution planning, including all nodes in the
supply chain.
Production scheduling for each manufacturing facility in the supply chain
(minute by minute).
Demand planning and forecasting, coordinating the demand forecast of
all customers and sharing the forecast with all suppliers.
Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
Inbound operations, including transportation from suppliers and receiving
inventory.
Production operations, including the consumption of materials and flow
of finished goods.
Outbound operations, including all fulfillment activities and
transportation to customers.

 Order promising, accounting for all constraints in the supply chain,

including all suppliers, manufacturing facilities, distribution centers, and
other customers.
Performance tracking of all activities

Four major decision areas in supply chain management:

1) location
2) production
3) inventory
4) transportation (distribution)
And there are elements in each of these decision areas.

Location Decisions
The geographic placement of production facilities, stocking points, and sourcing
points is the natural first step in creating a supply chain. The location of
facilities involves a commitment of resources to a long-term plan. Once the size,
number, and location of these are determined, so are the possible paths by which
the product flows through to the final customer. These decisions are of great
significance to a firm since they represent the basic strategy for accessing
customer markets, and will have a considerable impact on revenue, cost, and
level of service. These decisions should be determined by an optimization
routine that considers production costs, taxes, duties and duty drawback, tariffs,
local content, distribution costs, production limitations, etc. Although location
decisions are primarily strategic, they also have implications on an operational
level.

Production Decisions
The strategic decisions include what products to produce, and which plants to
produce them in, allocation of suppliers to plants, plants to direct customers,
and direct customers to customer markets. As before, these decisions have a big
impact on the revenues, costs and customer service levels of the firm. These
decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities. Another critical issue
is the capacity of the manufacturing facilities--and this largely depends on the
degree of vertical integration within the firm. Operational decisions focus on
detailed production scheduling. These decisions include the construction of the
master production schedules, scheduling production on machines, and
equipment maintenance. Other considerations include workload balancing, and
quality control measures at a production facility.

Inventory Decisions
These refer to means by which inventories are managed. Inventories exist at
every stage of the supply chain as either raw material, semi-finished or finished
goods. They can also be in process between locations. Their primary purpose is
to buffer against any uncertainty that might exist in the supply chain. Since
holding of inventories can cost anywhere between 20 to 40 percent of their
value, their efficient management is critical in supply chain operations. It is
strategic in the sense that top management sets goals. However, most
researchers have approached the management of inventory from an operational
perspective. These include deployment strategies (push versus pull), control
policies --- the determination of the optimal levels of order quantities and
reorder points, and setting safety stock levels, at each stocking location. These
levels are critical, since they are primary determinants of customer service
levels.

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Transportation Decisions
The mode choice aspects of these decisions are the more strategic ones. These
are closely linked to the inventory decisions, since the best choice of mode is
often found by trading-off the cost of using the particular mode of transport with
the indirect cost of inventory associated with that mode. While air shipments
may be fast, reliable, and warrant lesser safety stocks, they are expensive.
Meanwhile shipping by sea or rail may be much cheaper, but they necessitate
holding relatively large amounts of inventory to buffer against the inherent
uncertainty associated with them. Therefore customer service levels and
geographic location play vital roles in such decisions. Since transportation is
more than 30 percent of the logistics costs, operating efficiently makes good
economic sense. Shipment sizes (consolidated bulk shipments versus Lot-forLot), routing and scheduling of equipment are keys in effective management of
the firm's transport strategy.

Functions of Supply chain management:

Supplier management: the goal is to reduce the number of suppliers
and get them to become partners in business in a win/win relationship.
The benefits are seen in reduced purchase order (PO) processing costs;
increased numbers of POs processed by fewer employees, and reduced
order processing cycle times.
Inventory management: the goal is to shorten the order-ship-bill cycle.
When a majority of partners are electronically linked, information faxed
or mailed in the past can now be sent instantly. Documents can be tracked
to ensure they received, thus improving auditing capabilities. The
inventory management solution should enable the reduction of inventory
levels, improve inventory turns, and eliminate out-of-stock occurrences.
Distribution management: the goal is to move documents related to
shipping (bills of lading, purchase orders, advanced ship notices, and
manifest claims). Paperwork that typically took days to cycle in the past
can now be sent in moments and contain more accurate data, thus
allowing improved resources planning.
Channel management: the goal is to quickly disseminate information
about changing operational conditions to trading partners. In other words,
technical, product, and pricing information that once required repeated
telephone calls and countless labor hours to provide can now be posted to

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electronic bulletin boards, thus allowing instant access. Thus

electronically linking production with their international distributor and
seller networks eliminates thousands of labor hours per week in the
process.
Payment management: the goal is to link the company and the suppliers
and distributors so that payments can be sent and received electronically.
This process increases the speed at which companies can compute
invoices, reducing clerical errors and lowering transaction fees and costs
while increasing the number of invoices processed.
Financial management: the goal is enable global companies to manage
their money in various foreign accounts. Companies must work with
financial institutions to boost their ability to deal on a global basis. They
need to assess their risk and exposure in global financial markets and with
global information as opposed to local market information.
Sales force productivity: the goal is to improve the communication and
flow of information among the sales, customer, and production functions.
Linking the sales force with regional and corporate offices establishes
greater access to market intelligence and competitor information that can
be funneled into better customer service and service quality. Companies
need to collect market intelligence quickly and analyze it more
thoroughly. They also need to help their customers introduce their
products to market faster, giving them a competitive edge.
In sum, the SCM process increasingly depends on electronic markets
because of global sourcing of products and services to reduce costs, short
product life cycle, and increasingly flexible manufacturing resulting in a
variety of customizable products.

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SUPPLY CHAIN STRATEGY:

Supply chain strategy will have a major impact on creating value for a company
and its supply chain partners. An effective supply chain strategy may be
formulated to meet the needs of the market and integrate them with technology
to generate the highest level of customer satisfaction while delivering the
highest value to the shareholders.

Demand flow
strategy

Collaboration
strategy

Supply chain
strategy
framework

Technology
integration
strategy

Supply chain strategy framework

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Customer
service
strategy

1. Collaboration strategy: opportunity for collaboration among business

partners will vary depending upon the organizations perspective role in the
supply chain.
Manufacturing/supplier collaboration: by collaborating with suppliers,
manufacturers will derive benefits in activities such as products development,
order fulfillment and capacity planning.
Manufacturer/customer collaboration: the opportunities of collaboration
between manufacturers and customers are focused on demand planning and
inventory replenishment. This approach ensures that the customer requirements
are met efficiently.
Collaboration with third party and fourth party logistics providers: the
collaboration of companies with 3rd party logistics providers focuses on jointly
planning logistics activities. It also gives the company the added advantage of
better packaging. The 4th party logistics organization is one of the intermediate
stages along the logistics spectrum that combine the benefits of the outsourcing
and in sourcing.

2. Demand flow strategy: traditionally, in supply chain management, the

key focus and scope has been in managing flow of goods from suppliers
through the manufacturing and distribution chain to the customer.

3. Customer service strategy: customer satisfaction level is directly

proportional to the service provided by the company. Formulating a customer
service strategy involves addressing three steps, namely, customer
segmentation, cost to service and revenue management.

Customer segmentation: a company has to decide on the segment it wants

to target for a particular commodity. It can decide not to have a homogenous
market, which is unacceptable.

Cost to serve: it is important to obtain an impartial assessment of whether the

things that the customers want the feasible for the company.
Revenue management: determination of the appropriate response to the
identified needs and expectations of each customer segment must be completed.
The response that maximizes the firms profitability and growth should be
determined.

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4. Technology integration strategy: developments in IT enabled the

integration of business information systems, both horizontally and vertically. A
number of IT-based supply chain information management tools are now
available to provide intelligent decision support and execution management

Demand &leadtime mgt

Customer
analysis
Purchasing

Manufacturing

Supply chain
management

Transportation

Inventory mgt &

control

Materials
management
Cost benefit and
analysis

Integrated SCM approach

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Supply chain management problems:

Supply chain management must address the following problems:
Distribution Network Configuration: Number and location of suppliers,
production facilities, distribution centers, warehouses and customers.
Distribution Strategy: Centralized versus decentralized, direct shipment,
pull or push strategies, third party logistics.
Information: Integrate systems and processes through the supply chain to
share valuable information, including demand signals, forecasts,
inventory and transportation.
Inventory Management: Quantity and location of inventory including raw
materials, work-in-process and finished goods.

NEED OF THE STUDY:

Though bakery business has started developing in India, it still remains
largely unorganized and dominated by the small bakers. In fact in 1977-1978,
the government reserved bread and biscuit manufacturing for small scale sectors
and restricted entry of large producers. During the last two decades, small and
unorganized players have shared the growth in the industry. Currently there are
an estimated 2 million bakeries across the country engaged in the production of
bread, biscuits and other products. The Abid Hussain Committee recommended
de-reservation of the sector. The government in the 1996-97 budgets
implemented the recommendation and the sector was de-reserved. After that
there has been a steady inflow of MNCs and other organized players into this
sector, Britannia Industries Limited (BIL), HLL and ITC. For the existing
players, appropriate marketing and branding strategy will be the keys for growth
and customer retention, for which understanding of consumer behavior.
Some organized sectors apply the proper supply chain to retention of the
customer. So, first know the process of food sectors.

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BACKGROUND:
HISTORY OF BISCUITS:
Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching
on biscuits, but do they know how biscuits began? The history of biscuits can be
traced back to a recipe created by the Roman chef Apicius, in which "a thick
paste of fine wheat flour was boiled and spread out on a plate. When it had dried
and hardened it was cut up and then fried until crisp, then served with honey
and pepper."
The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and
'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term
for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers
which, because of their low water content, were ideal food to store.
As people started to explore the globe, biscuits became the ideal travelling
food since they stayed fresh for long periods. The seafaring age, thus, witnessed
the boom of biscuits when these were sealed in airtight containers to last for
months at a time. Hard track biscuits (earliest version of the biscotti and
present-day crackers) were part of the staple diet of English and American
sailors for many centuries. In fact, the countries which led this seafaring charge,
such as those in Western Europe, are the ones where biscuits are most popular
even today. Biscotti is said to have been a favorites of Christopher Columbus
who discovered America
Making good biscuits is quite an art, and history bears testimony to that. During
the 17th and 18th Centuries in Europe, baking was a carefully controlled
profession, managed through a series of 'guilds' or professional associations. To
become a baker, one had to complete years of apprenticeship - working through
the ranks of apprentice, journeyman, and finally master baker. Not only this, the
amount and quality of biscuits baked were also carefully monitored.
The English, Scotch and Dutch immigrants originally brought the first
cookies to the United States and they were called teacakes. They were often
flavored with nothing more than the finest butter, sometimes with the addition
of a few drops of rose water. Cookies in America were also called by such
names as "jumbles", "plunkets" and "cry babies".
As technology improved during the Industrial Revolution in the 19th century,

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the price of sugar and flour dropped. Chemical leavening agents, such as baking
soda, became available and a profusion of cookie recipes occurred. This led to
the development of manufactured cookies.
Interestingly, as time has passed and despite more varieties becoming
available, the essential ingredients of biscuits haven't changed - like 'soft' wheat
flour (which contains less protein than the flour used to bake bread) sugar, and
fats, such as butter and oil. Today, though they are known by different names
the world over, people agree on one thing - nothing beats the biscuit!

Some interesting facts on the origin of other forms of biscuits:

The recipe for oval shaped cookies (that are also known as boudoir biscuits,
sponge biscuits, sponge fingers, Naples biscuits and Savoy biscuits) has
changed little in 900 years and dates back to the house of Savoy in the 11th
century France. Peter the Great of Russia seems to have enjoyed an oval-shaped
cookie called "lady fingers" when visiting Louis XV of France.
The macaroon - a small round cookie with crisp crust and a soft interior seems to have originated in an Italian monastery in 1792 during the French
Revolution. SPRING-uhr-lee, have been traditional Christmas cookies in
Austria and Bavaria for centuries. They are made from a simple egg, flour and
sugar dough and are usually rectangular in shape. These cookies are made with
a leavening agent called ammonium carbonate and baking ammonia.
The inspiration for fortune cookies dates back to the 12th and 13th Centuries,
when Chinese soldiers slipped rice paper messages into moon cakes to help coordinate their defense against
Mongolian invaders

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Manufacturing Process of Biscuits

1. Flour and sugar is dispensed into large mixers. The ingredients that are used

in smaller quantities are hand weighed and added into the mixing bowl for each
batch of dough to be mixed.

2. The ingredients are then mixed to form dough in the mixing bowl according
to a specific mixing procedure.
3. The dough is then tipped into a hopper and gravity-fed into the dough
sheeting section of the machine. In this process the dough is fed through various
rollers to form a sheet of dough. Depending on what type of biscuit is being
produced, this process varies.
4. Different forming techniques are used to get the required shape and size of
the piece of dough which will form the biscuit.
5. The raw biscuits are transported through a gas-fired oven on a metal
conveyor band where they are baked to form fresh, warm and deliciously
smelling biscuits. While still hot, the savory biscuits are sprayed with oil and
one of a number of types of flavoring is added to produce what is required for
that particular biscuit.
6.Biscuits are baked rather than fried, so the oil merely assists the flavour
particles to cling to the biscuit surface. The flavored biscuits then travel along a
cooling conveyor in order to cool off.

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7. Once the biscuits have been cooled, they are packed into wrappers, cartons
and cases, ready for distribution to one of the warehouses

8. Quality checks are conducted at key points in the process to ensure process
control and product quality is constantly maintained at a high standard.
9. The finished product is then transported in cases to state-of-the-art
distribution warehouses. Stock is loaded as per delivery orders and sent to the
various customers

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Britannia Industries:
Britannia Industries Limited is an Indian company based in Kolkata that is
famous for its Britannia brand of biscuit, which is highly recognized throughout
the country. The Company's principal activity is the manufacture and sale of
biscuits, bread, Rusk, cakes and dairy products like cheese, butter and milk. The
brand names of biscuits include Vita Marie Gold, Tiger Variants, Nutri choice
Junior, Good Day, 50 50 variants and Good Morning. Its Non-Executive
Chairman is Mr. Nusli Wadia, and Chief Executive is Ms. Vinita Bali. The
Britannia's fame is largely acknowledged through the colorful Britannia logos,
Indian cricketers such as Virender Sehwag, and Rahul Dravid wear on their
bats.
Britannia's controlling stake is jointly with Groupe Danone and Nusli
Wadia. Groupe Danone is one of the leading players in the world in bakery
products business. The Company is based in the Indian city of Kolkata.
Britannia Industries Ltd (BIL) -- one of India's leading food companies & a
leading manufacturer of biscuits in the country has always been the pioneer in
product innovation. Biscuits contribute to nearly 90 % of Britannia's total
turnover, the rest coming from a rapidly growing portfolio that includes Cakes,
Bread and Rusks. Britannia is synonymous with 'biscuits' and its brands like
MarieGold, Good Day, 50-50, Treat and Tiger have become household names in
the country.

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Company overview:
The story of one of India's favorite brands reads almost like a fairy tale.
Once upon a time, in 1892 to be precise, a biscuit company was started in a
nondescript house in Calcutta (now Kolkata) with an initial investment of Rs.
295. The company we all know as Britannia today.
The beginnings might have been humble-the dreams were anything but. By
1910, with the advent of electricity, Britannia mechanized its operations, and in
1921, it became the first company east of the Suez Canal to use imported gas
ovens. Britannia's business was flourishing. But, more importantly, Britannia
was acquiring a reputation for quality and value. As a result, during the tragic
World War II, the Government reposed its trust in Britannia by contracting it to
supply large quantities of "service biscuits" to the armed forces.
As time moved on, the biscuit market continued to grow and Britannia
grew along with it. In 1975, the Britannia Biscuit Company took over the
distribution of biscuits from Parry's who till now distributed Britannia biscuits
in India. In the subsequent public issue of 1978, Indian shareholding crossed
60%, firmly establishing the Indianness of the firm. The following year,
Britannia Biscuit Company was re-christened Britannia Industries Limited
(BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In
1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new
corporate identity - "Eat Healthy, Think Better" - and made its first foray into
the dairy products market. In 1999, the "Britannia Khao, World Cup Jao"
promotion further fortified the affinity consumers had with 'Brand Britannia'.

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Britannia strode into the 21st Century as one of India's biggest brands and
the pre-eminent food brand of the country. It was equally recognized for its
innovative approach to products and marketing: the Lagaan Match was voted
India's most successful promotional activity of the year 2001 while the delicious
Britannia 50-50 Maska-Chaska became India's most successful product launch.
In 2002, Britannia's New Business Division formed a joint venture with
Fonterra, the world's second largest Dairy Company, and Britannia New
Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating
graph, Forbes Global rated Britannia 'One amongst the Top 200 Small
Companies of the World', and The Economic Times pegged Britannia India's
2nd Most Trusted Brand.
Today, more than a century after those tentative first steps, Britannia's
fairy tale is not only going strong but blazing new standards, and that miniscule
initial investment has grown by leaps and bounds to crores of rupees in wealth
for Britannia's shareholders. The company's offerings are spread across the
spectrum with products ranging from the healthy and economical Tiger biscuits
to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering
the trust of almost one-third of India's one billion populations and a strong
management at the helm means Britannia will continue to dream big on its path
of innovation and quality. And millions of consumers will savoir the results,
happily ever after.

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Britannia Industries: Buy

BRITANNIA Industries has sure come a long way from being a company
with a stodgy but well-recognized brand name and an inconsistent financial
performance in the mid-1990s.
After a thorough overhaul of the operational structure, a revamp of its
product portfolio and an ambitious foray into new areas, such as dairy products
and snack foods, the company has managed to turn in robust financial
performance over the past four years.
The stock market has also taken notice; re-rating the stock, pushing up its
price earnings multiple from 14-15 times in 1997 to around 30 times now. The
stock now ranks among the preferred investment options within the universe of
FMCG companies. So, what has driven Britannia's valuations and what are its
prospects?

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The origin of eat healthy think better:

Britannia -the 'biscuit' leader with a history-has withstood the tests of time.
Part of the reason for its success has been its ability to resonate with the changes
in consumer needs-needs that have varied significantly across its 100+ year
epoch. With consumer democracy reaching new levels, the one common thread
to emerge in recent times has been the shift in lifestyles and a corresponding
awareness of health. People are increasingly becoming conscious of dietary care
and its correlation to wellness and matching the new pace to their lives with
improved nutritional and dietary habits.
This new awareness has seen consumers seeking foods that complement their
lifestyles while offering convenience, variety and economy, over and above
health and nutrition.
Britannia saw the writing on the wall. Its "Swasth Khao Tan Man Jagao" (Eat
Healthy, Think Better) re-position directly addressed this new trend by
promising the new generation a healthy and nutritious alternative - that was also
delightful and tasty.
Thus, the new logo was born, encapsulating the core essence of Britannia healthy, nutritious, and optimistic - and combining it with a delightful product
range to offer variety and choice to consumers.

Global partners:
The Wadia Group of India along with Group Danone of France is equal
shareholders in ABIL, UK which is a major shareholder in Britannia Industries
Limited. GROUPE DANONE is an International FMCG Major specializing in
Fresh Dairy Products, Bottled Water and Biscuits/Cereals. One of the World
leaders in the food industry, these are some of the laurels it possesses:

worldwide in Fresh Dairy Products

worldwide equally placed in Bottled Water (by volume)

worldwide in Biscuits and Cereal Products

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Whats make a Britannian:

If you think Britannians are extraordinary individuals who are
passionate about everything they docreate inspiration through
everything they doand succeed in everything they doyoure probably
right. Britannians are hand-picked for a singular purposeto perpetually
ensure Market Leadership and generate exemplary performance in every
function. Britannians exhibit the following leadership behaviors (we
fondly call BULBs Britannia Universal Leadership Behaviors)
Integrity
Team Orientation
People Development
Learning Orientation
Customer Orientation
Quality Orientation
Drive for Results
Entrepreneurial Spirit
System and Process Orientation
Communication

26

Milestones:

1892

1910

1921

1939 44

The Genesis - Britannia established with an investment of Rs. 295

in Kolkata

Advent

of

electricity

sees

operations

mechanized

Imported machinery introduced; Britannia becomes the first

company East of the Suez to use gas ovens

Sales rise exponentially to Rs.16,27,202 in 1939

During 1944 sales ramp up by more than eight times to reach
Rs.1.36
crores

1975

1978

1979
1989

1992

Britannia Biscuit Company takes over biscuit distribution from

Parry's
Public issue - Indian shareholding crosses 60%
Re-christened Britannia Industries Ltd. (BIL)
The Executive Office relocated to Bangalore

BIL celebrates its Platinum Jubilee

27

1993

Wadia Group acquires stake in ABIL, UK and becomes an equal

partner with Groupe DANONE in BIL

1994

Volumes cross 1,00,000 tons of biscuits

1997

Re-birth - new corporate identity 'Eat Healthy, Think Better' leads to

new mission: 'Make every third Indian a Britannia consumer'

1999

2000

2001

BIL enters the dairy products market

"Britannia Khao World Cup Jao" - a major success! Profit up by
37%

Forbes Global Ranking - Britannia among Top 300 small

companies

BIL ranked one of India's biggest brands

No.1 food brand of the country
Britannia Lagaan Match: India's most successful promotional
activity of the year
Maska Chaska: India's most successful FMCG launch

2002

BIL launches joint venture with Fonterra, the world's second

largest dairy company
Britannia New Zealand Foods Pvt. Ltd. is born
Rated as 'One amongst the Top 200 Small Companies of the World'

28

by Forbes Global
Economic Times ranks BIL India's 2nd Most Trusted Brand
Pure Magic -Winner of the Worldstar, Asiastar and Indiastar award
for packaging
2003

'Treat Duet'- most successful launch of the year

Britannia Khao World Cup Jao rocks the consumer lives yet again

2004

Britannia accorded the status of being a 'Superbrand'

Volumes cross 3,00,000 tons of biscuits
Good Day adds a new variant - Choconut - in its range
2005

Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the

popular chant!
Britannia launched 'Greetings' range of premium assorted gift
packs
The new plant in Uttaranchal, commissioned ahead of schedule.
The launch of yet another exciting snacking option - Britannia 5050 Pepper Chakkar.

29

Brand milestones:

30

Introduction of priyagold biscuits:

The wondrous magical journey of our company Surya Food & Agro Ltd.
began in Oct.1993 & since then we have been one of the leading manufacturers
of biscuits in northern India. Our brand PRIYAGOLD has been a perennial
household favorite since then. On a profound level spread in to western as well
as southern India, the inevitable cycle of distribution network has helped us to
spread into western India as well. Our obsession is to make the finest quality
biscuits available to the consumers & our constant endeavor is to provide our
consumers, a palate to look forward to a taste & flavor that is uniquely
priyagold.
We are operating in the new age, ruled by the dizzying pace of technology,
poised to pace up with emerging trends thus improving quality standards every
time. Our fully automated ovens bake the biscuits round the clock and then they
find their way to the automatic packing units at the companys plant in Surajpur,
Greater Noida (U.P.), catering the ever growing demand of PRIYAGOLD
biscuits. This is reflected through our brands positioning which says Haq Se
Maango, a positioning that was formulated keeping in mind that everyone has
the right to good taste and the right to ask for it. We feel that the means to
finding the future lies in believing in ourselves. Our over the period created trust
and confidence, can never be destroyed, just like the eternal force of nature. We
adhere to ensure that PRIYAGOLD continue moving forward towards
achieve best quality for total consumers satisfaction.
BP Agarwal, chairman, Surya Food & Agro Limited, the maker of
Priyagold brand of biscuits, is a small regional player who presents an insight
into chaste Indian entrepreneurship and the minds of its practitioners.
And global giants would do well to take heed, for these are the local
fighters who have not allowed global brands to make a clean sweep of the
markets in different industries. They continue to nag global brands in their own
inimitable local ways. "They have all the resources while we are small players
in this business," justifies Agarwal, with a note of sarcasm.
While Agarwal maintains that Priyagold is a small local brand, he's quick to
flaunt his achievements in select markets. "We sell more biscuits than Britannia
in UP and have a share of 25-30 per cent," he boasts. In other towns and cities
of northern India, Priyagold has become a determining factor for whatever large
players like Britannia and Parle plan to do. From modest sales of less than Rs 28
crores in 1998, Priyagold has become an Rs 100 crores brand. And the target
this year is Rs 200 crores. "We hope to cross the Rs 400 crores mark by 2004end, when we'll be selling in the South and the East and expanding in the West,"
says Agarwal. That may not impress the DANONEs of the world, but

31

considering that the growth for Priyagold comes primarily from a limited
geographical coverage, it speaks volumes for the potential of the Indian market.
Priyagold hasn't succumbed to pressures from mega-brands Britannia and
Parle, which enjoy greater clout due to large product portfolios. Not all
distributors and retailers are happy with big brands, claims Agarwal: "We've
tried to give a healing touch to egos bruised by the arrogant attitude of the
MNCs and large companies." Hand-in-hand with better returns, it can work
wonders. And Agarwal gives margins that are far more attractive than those
offered by the large players. Distributors get seven per cent against 4-4.5 per
cent from Britannia, and retailers get 20-25 per cent rather than an industry
average of 10-15 per cent in the organized sector.
Unlike bigger companies, Agarwal ensures distributors operate in clearly
demarcated territories so they are able to cover all retail outlets in their areas
more efficiently. "This allowed a faster inventory turnover," says Agarwal. At
the same time, Agarwal identified newer segments and flavors where there was
virtually no competition, and launched variants like Kesar Bite, Cheese
Crackers and Cashew Chat Masala.
In the cream segment, which accounts for almost 40 per cent of the total
biscuit market by volume, Priyagold had the regular chocolate, orange and
elaichi. But Agarwal decided to target kids and launched new flavors like butter,
chocolate and strawberry. "We wanted to give consumers a new base of flavors
and train them to experience new tastes," he explains. Today he offers around 20
varieties, and retailers have begun to see Priyagold as an alternative to big
brands. Agarwal has gone more by gut feel and understanding of the consumer,
than relying on marketing textbooks.
In order to emphasize the value-for-money proposition, Agarwal focused on
economy packs and Priyagold was the first to enter the 250 gm segment when
its Butter Bite was launched in 1993. Seeing the success of Butter Bite,
Britannia's Good Day, which sold in 100 gm packs (priced at Rs 10), also
entered the 250 gm segment at Rs 18, the same as the former. Agarwal takes
pride in the fact Priyagold has strength to make big players react. Today
Priyagold biscuits come in 100 gm, 250 gm and ATC packs. When Britannia
introduced its Marie sachet of two, Priyagold responded with a pack of four at
the same price of one rupee. Agarwal is targeting hospitals like Apollo for these
sachet packs.
According to Radhika Roy, national qualitative head, NFO India, biscuits, as
a category, bring certain category boundaries. Overall, (barring the cream
variety) most formats are driven by 'rational' consumption triggers and aspects
like taste, indulgence and gratification are less dominant. "Often it's as a filler,
cheap hospitality item or sustenance that one buys biscuits," she says. And this
is the need gap that Agarwal wants to fill.

32

The larger players have been trying to change this by imbuing the category
with higher order rational vales (health, vitamins etc). For Priyagold, it makes
sense to push sales through salience and retail measures. "The strategy in the
short term to build critical mass is good from their point of view. But when they
become significant players, they will have to look at more enduring and longterm initiatives", says Roy. That will be the challenge for people like Agarwal.
After all, the task of brand differentiation is a huge one, expensive and fraught
with many pitfalls.
Analysts agree that while not necessary for market leaders, for challengers,
the strategy adapted by Priyagold seems more prudent and effective. "Instead of
reinventing some of the issues, they've focused on value-adding, such as putting
more sugar or making biscuits softer and crunchier," adds Roy.
For six years since its launch in 1994, Priyagold clung to its obvious target
consumer, the middle and lower middle class in SEC B and C. Direct
competition came from local cousins in north India, like Apsara, Anmol,
Cremica and Crown. Agarwal had enough money (from his oil mills) to pump
into his new venture. Clearly savvier than local rivals, he communicated with
consumers by spending on the mass media.
This was enough for him to leave local rivals far behind and quickly become
acceptable to the middle class. Starting with UP and New Delhi, Priyagold
expanded into Punjab, Haryana, J&K and Rajasthan. While the brand got a
stronghold on the SEC B and C consumer segment, over the years, it distanced
itself from the high-end consumers, who turned to Britannia and Parle. "We're
still not acceptable to top-end consumers in the large cities," confides a senior
staffer in the company. Last year, Agarwal decided to take the brand to up
market retail shelves in Delhi to attract consumers in the upper income strata.
But resistance came from large retailers in localities like Greater Kailash and
Panchsheel Park. In a bid to convince them Agarwal undertook a complete
packaging overhaul across the entire range. Agarwal convinced big-time
retailers to let Priyagold set up a counter and was even willing to pay them says
a big Priyagold distributor. The results were good, if not amazing the brands
found a place in swanky outlets, like Morning Stores in Delhi. Although he
hiked Priyagold advertising budget from Rs 5 crores last year to Rs 7 crores,
Agarwal believes smaller players will not be able to match resources of national
marketers and MNCs when it comes to frills and imagery. "It's more essential to
improve processes in your back-end operations to convince people about quality
and hygiene," he says. That's surely one thing consumers evaluate while
considering local brands.
Therefore, Agarwal is pumping money into extensively modernizing his
factory. Surya is setting up a new integrated plant at Surajpur on the outskirts of
Delhi at a whopping Rs 50 crores, which will have flour, oil mill and biscuit

33

making and packaging units.

Another new plant is being set up in Lucknow at a cost of Rs 20 crores so that
Priyagold can cater to the eastern UP market better. Agarwal is now importing a
state-of-the-art cream sandwiching machine for Rs 5 crores which, he
claims, nobody has in the whole of south Asia. These may be small things for
global giants, but give tremendous joy to Agarwal.

Priyagold to take on Britannia on its turf:

EVEN as the `Big Two' - Britannia and Parle - fight a pitched battle in the
Rs 3,000-crore biscuits market, one regional player that has been quietly
grabbing market share and forcing competition to have a rethink of their
strategies, is the Delhi-based, Rs 150-crore Surya Food & Agro Ltd, marketer of
Priyagold biscuits.
The decade-old Surya Food, which has stronghold markets in Uttar Pradesh,
Punjab and Haryana, plans to take on Britannia on its own turf later this year. In
other words, the company plans to foray in the Southern market by the end2003, beginning with Karnataka. "Subsequently, we intend to set up a
manufacturing unit in the State," Mr Shekhar Agarwal, Director, Surya Food &
Agro, told Business Line. He added that the company's immediate priority was
to double turnover - to Rs 300 crore - in the current fiscal.
Meanwhile, Surya Food plans to set up a fresh manufacturing facility in
Greater Noida (UP) next financial year, on an investment of Rs 20 crore. The
company's third manufacturing base in Lucknow, set up on an investment of Rs
5 crore, kicked off production in February this year, and is expected to begin
production in full swing later this month, he said. Surya Food's existing
manufacturing bases are in Surajpur (where it has seven biscuit lines) and
Faridabad (a franchisee unit).
The Priyagold brand already claims market leadership in the non-glucose
biscuit segment, which, according to industry estimates, accounts for 30 per
cent of the overall biscuits market. Meanwhile, Britannia's market share
dropped to 45.2 per cent in October from 46.5 per cent in September last year,
according to AC Nielsen data.
He ruled out the privately-held Surya Food entering into joint ventures or
tie-ups at this stage, even as he admitted that several multinationals have
expressed interest in either buying out or forging strategic alliances with his

34

company. Priyagold which currently has 23 varieties of biscuits, plans foray into
salty biscuits next year.
The company plans to hike its consolidated ad spend from Rs 5 crore last
year to Rs 8 crore this fiscal. Exports of Priyagold biscuits to markets such as
Dubai, Muscat and Oman are on the cards, and the first consignment is expected
to be shipped later this year.

Priya Food launches scheme for Priyagold biscuits:

Priyagold brand biscuits manufacturer, Surya Food & Agro, is
aggressively promoting its brand with the launch of a scheme titled Khaao Aur
Khelo. According to the scheme, on every purchase of Rs50 and above worth of
PriyaGold biscuits, customers will receive a free gift coupon, enabling him to
become eligible for a prize. The first prize will be a Mercedes Benz car,
followed by Maruti Alto (five second prizes), Tanishq Jewellery (10 third
prizes) and a Compaq Laptop (10 fourth prizes).

Priyagold forays into juices; sets up unit in Noida:

DELHI NCR-based Surya Foods and Agro Ltd, manufacturers of
Priyagold biscuits, has forayed into the juices segment. It has set up a state-ofthe-art manufacturing facility in Greater Noida with an investment of Rs 25
crore. The plant has a capacity of producing 1.5 lakh liters of juice per day.
Branded `Freshgold', the one-liter juice in cartons is available in
supermarkets and malls in and around Delhi for Rs 60. Speaking to Business
Line, Mr B.P. Agarwal, Chairman, Surya Foods and Agro Ltd, said, "Though the
juices are currently available only in the northern markets, we plan to launch it
in the south by the next month. We are also working on a specific distribution
network for the same."
The Rs 300-crore turnover company is also setting up a biscuit
manufacturing plant in Uttaranchal to avail of the tax incentives. "We are
investing around Rs 20 crore on the plant with a capacity of 100 tons per day,
which would be operational by December 2006," Mr Agarwal said.
The company has been keeping a low profile with regard to advertising and
promotions after its not-so-good experience with the `Priyagold khaao or khelo'
contest. According to Mr Agarwal, "The retailers did not give out the coupons to
the end-consumers. Consequently, we had to withdraw the scheme from the
market." However, he said that the company has earmarked around Rs 3 crore

35

for promoting the juices. While tele-commercials have already begun on India
TV, the company is hopeful of running them on all other channels by the next
fortnight.
It is also in the process of sprucing up its exports operations. Currently it
exports its biscuits to countries such as Dubai and Nepal. According to Mr
Agarwal, "The high level of taxation in the domestic market, which is a major
concern, is one of the reasons why we are looking to increase export volumes."
Explaining further, he pointed out that high input costs and taxes are
affecting margins and profits. As fierce competition from other players is
preventing the company from increasing prices, he said, "High taxes are even
forcing manufacturing units to close down. In fact, we have already had to shut
down two out of six company's plants."
While speaking on the company's performance, he said, "We face immense
competition not just from competitors in organized retail but also from the
unorganized market which holds almost 40 per cent of the market share and has
the benefit of not being subject to any taxes." The government needs to look
into the matter before the situation worsens, he added.

Before data analysis we should know the strategic area of a

company. So that a company can analyze the business processes.
Strategic areas:
Leadership: Investing in leaders who are personally involved in the
development and achievement of the organizations vision and Corporate
Objectives, who develop values required for long-term success, and implement
these via appropriate actions and behaviors and manage the workforce in a fair
and supportive manner.
People: Developing a learning organization which cultivates the full potential
of its people at an individual, team and organization level and provides them
with the competencies and skills needed to meet service requirements in a
constantly changing environment.
Policy: Developing an organization, which manages fairly, consistently and
effectively within a sound framework of stakeholder focused strategies,
supported by relevant policies, plans, objectives, targets and processes.

36

Partnership: Building an outward looking organization, which values the

diversity of the community it serves, seeks to reflect this within its workforce,
and nurtures partnerships for the benefit of the community.
Resources: Continuously improving the use of resources (both internal and
external) to maximize the effectiveness and efficiency of the Organization.

37

Why an organization should decide the strategies?

The strategies provide some basics:

1. Ensure the provision advisory and support services across all services.
2. Identify the requirements and priorities for all functions in accordance with
the corporate objectives, the corporate plan and the Departmental Service Plans
of all other Departments.
3. Seek to provide Best Value in the provision of all services
4. Establish qualitative and quantitative performance targets and indicators to
continually improve standards.
5. Promote the role and continuously develop the employees engaged in service
delivery, supporting and enabling them to deliver quality and cost effective
services.
6. For Departmental representatives to meet on a regular basis to ensure that
there is clear communication and to develop best practice internally.
7. To work with the trade unions and to seek to maintain effective employee
relations and in doing so produce a clear statement of shared values between the
Council and representatives of the workforce.
The food marketing and supply chain management group combines expertise in
marketing and supply chain management in the context of the food industry.
Current research is focused on a number of inter-related issues.

Key areas include:

food safety and risk management
demand management and promotional planning
brand equity and segmentation
food labeling and communication
sustainable sourcing
Corporate social responsibility.

38

Vertical co-ordination and Supply Chain Relationships

Supply Chain management (SCM) is concerned with the sharing of
information, in order to reduce uncertainty and risk, save time, reduce costs,
increase effectiveness and add value. In competitive markets continual
improvement is essential but difficult to achieve when businesses work in a
vacuum. The food industry has been slow to emulate other industries that have
embraced the principles of SCM in order to meet consumer needs more quickly,
more effectively and more efficiently

Demand management and promotional planning

Management of demand is increasingly recognized as a key area for
improving the efficiency of supply chain operations. There has been
considerable work in both the academic and practitioner fields as to how to
improve the management of demand, ranging from the early work on demand
amplification to more recent initiatives in Efficient Consumer Response (ECR)
and Collaborative Planning Forecasting and Replenishment (CPFR).

Food Safety and Risk Management

The need for greater scrutiny of farming and food manufacturing practices
and effective traceability back to the farm (and beyond) has imposed additional
costs on the agri-food industry but provided much-needed momentum for
improved communication within the food chain. However, compliance remains
a challenge, for the rule makers as well as the rule breakers. Research in this
area includes the exploration of public-private partnerships in the regulation of
food safety , vertical co-ordination as a risk management strategy and the role of
assurance schemes in developing transparent integrity in the food chain and the
impact of food labeling and public sector communication campaigns on food
purchasing behavior.

39

Brand loyalty and market segmentation

As competition for market share and 'share of stomach' intensifies in a food
retailing industry that is highly concentrated and reaching maturity, so the
development, growth and defence of brand loyalty becomes increasingly
important for food manufacturers and retailers at risk of falling into the
commodity trap. Our research in this area focuses on the use of alternative
methods of market segmentation and particularly psychographics to develop
brand loyalty amongst distinct consumer groups and the way in which different
promotional tools can be used to encourage brand switching behavior.

Food Labeling and Communication

Consumers are becoming increasingly aware of (and concerned about) the
composition (health and safety), provenance and environmental/animal welfare
implications associated with the foods they purchase. The Government is also
growing increasingly concerned about the health of the nation and is
becoming more involved in promotional and educational campaigns in an effort
to raise awareness of the dietary issues and encourage the consumption of more
healthy foods.

Sustainable Sourcing and Corporate Social Responsibility

Consumers are becoming increasingly aware of and concerned about the
environmental, social and ethical issues associated with food production,
distribution, manufacturing and retailing. These impacts most strongly on food
retailers and manufacturers, who are global sourcing strategies, have fuelled the
'food miles' debate and whose relationships with suppliers have raised concerns
about ethical trading practices and the sustainability of food production.

40

Supply Chain Business Process Integration:

Successful SCM requires a change from managing individual functions to
integrating activities into key supply chain processes. Supply chain business
process integration involves collaborative work between buyers and suppliers,
joint product development, common systems and shared information.
According to Lambert and Cooper (2000) operating an integrated supply
chain requires continuous information flows, which in turn assist to achieve the
best product flows. However, in many companies, management has reached the
conclusion that optimizing the product flows cannot be accomplished without
implementing a process approach to the business. The key supply chain
processes stated by Lambert (2004) are:
Customer relationship management
Customer service management
Demand management
Order fulfillment
Manufacturing flow management
Supplier relationship management
Product development and commercialization
Returns management
One could suggest other key critical supply business processes combining these
processes stated by Lambert such as:
a. Customer service Management
b. Procurement
c. Product development and Commercialization
d. Manufacturing flow management/support
e. Physical Distribution

41

f. Outsourcing/ Partnerships
g. Performance Measurement

42

a) Customer service management process

Customer service provides the source of customer information. It also
provides the customer with real-time information on promising dates and
product availability through interfaces with the company's production and
distribution operations.
b) Procurement process
Strategic plans are developed with suppliers to support the manufacturing
flow management process and development of new products. In firms where
operations extend globally, sourcing should be managed on a global basis. The
desired outcome is a win-win relationship, where both parties benefit, and
reduction times in the design cycle and product development is achieved. Also,
the purchasing function develops rapid communication systems, such as
electronic data interchange (EDI) and Internet linkages to transfer possible
requirements more rapidly. Activities related to obtaining products and materials
from outside suppliers. This requires performing resource planning, supply
sourcing, negotiation, order placement, inbound transportation, storage and
handling and quality assurance. Also, includes the responsibility to coordinate
with suppliers in scheduling, supply continuity, hedging, and research to new
sources or programmes.
c) Product development and commercialization
Here, customers and suppliers must be united into the product development
process, thus to reduce time to market. As product life cycles shorten, the
appropriate products must be developed and successfully launched in ever
shorter time-schedules to remain competitive. According to Lambert and
Cooper (2000), managers of the product development and commercialization
process must:
1. coordinate with customer relationship management to identify customerarticulated needs;
2. select materials and suppliers in conjunction with procurement, and
3. Develop production technology in manufacturing flow to manufacture
and integrate into the best supply chain flow for the product/market
combination.

43

44

d) Manufacturing flow management process

The manufacturing process is produced and supplies products to the
distribution channels based on past forecasts. Manufacturing processes must be
flexible to respond to market changes, and must accommodate mass
customization. Orders are processes operating on a just-in-time (JIT) basis in
minimum lot sizes. Also, changes in the manufacturing flow process lead to
shorter cycle times, meaning improved responsiveness and efficiency of
demand to customers. Activities related to planning, scheduling and supporting
manufacturing operations, such as work-in-process storage, handling,
transportation, and time phasing of components, inventory at manufacturing
sites and maximum flexibility in the coordination of geographic and final
assemblies postponement of physical distribution operations.
e) Physical Distribution
This concerns movement of a finished product/service to customers. In
physical distribution, the customer is the final destination of a marketing
channel, and the availability of the product/service is a vital part of each channel
participant's marketing effort. It is also through the physical distribution process
that the time and space of customer service become an integral part of
marketing, thus it links a marketing channel with its customers (e.g. links
manufacturers, wholesalers, retailers).
f) Outsourcing/Partnerships
This is not just outsourcing the procurement of materials and components, but
also outsourcing of services that traditionally have been provided in-house. The
logic of this trend is that the company will increasingly focus on those activities
in the value chain where it has a distinctive advantage and everything else it will
outsource. This movement has been particularly evident in logistics where the
provision of transport, warehousing and inventory control is increasingly
subcontracted to specialists or logistics partners. Also, to manage and control
this network of partners and suppliers requires a blend of both central and local
involvement. Hence, strategic decisions need to be taken centrally with the
monitoring and control of supplier performance and day-to-day liaison with
logistics partners being best managed at a local level.

45

g) Performance Measurement
Experts found a strong relationship from the largest arcs of supplier and
customer integration to market share and profitability. By taking advantage of
supplier capabilities and emphasizing a long-term supply chain perspective in
customer relationships can be both correlated with firm performance. As
logistics competency becomes a more critical factor in creating and maintaining
competitive advantage, logistics measurement becomes increasingly important
because the difference between profitable and unprofitable operations becomes
narrower.
According to experts internal measures are generally collected and analyzed by
the firm including
1. Cost
2. Customer Service
3. Productivity measures
4. Asset measurement, and
5. Quality.
External performance measurement is examined through customer perception
measures and "best practice" benchmarking, and includes:
1) Customer perception measurement
2) Best practice benchmarking

Components of Supply Chain Management are

1. Standardization
2. Postponement
3. Customization

46

ADVANTAGES AND CHALLENGES

Advantages
Challenges
Increasing disposable income;
High tariffs and increasing
changing life style of consumers nontariff barriers
Growing health and hygiene
Antiquated food laws and
awareness among the middle
internal policies which restrict
class
marketing
Governments high priority on
Inadequate
infrastructure
food-processing industry
facilities, like cold storage and
roads
Plentiful availability of raw
Increasing competition from
materials
local players
Increasing
presence
of
Long and fragmented supply
multinational companies
chain
Modernizing retail sector in big
Problems in tapping the vast
cities
rural market and unorganized
retail sector
Move towards a new Food
Consumer preference for fresh
Safety and Standards legislation
foods
by the government

47

SUGGESTIONS:
Among the factors, which have contributed the most towards growth are
market related factors and IT factors like rise in e-commerce and usage of
Internet.
The food and beverage industry has very small margins and is very
dynamic .for these accurate supply chain information is absolutely key, not just
for planning, but also for operational efficiency. Britannia biscuits industries has
a great opportunity to take advantage of the modern technologies available that
can help it to increase the level of customer service, create new operational
efficiencies, reduce risk, and increase profitability. Its still a vastly untapped
area of supply chain management.
The common factors which have contributed towards manufacturing and
service both are rise in e commerce and sourcing out. Globalisation and
Liberalisation policies have benefited the service sector more than the
manufacturing sector.
Improving supply chain processes requires better collaboration between
retailers and suppliers. So keep good relation with them.
The customers today are not very forgiving, referring to the consequences of
missed delivery schedules. If a company was able to manufacture a product
with the right quality and the right price but missed on delivery, the other two
got nullified. So company should deliver on right time. Services should be
standardized.
Managing the supply chain was not just about transportation of goods. It was
about managing the mismatch of stocks, looking at high inventory and
eliminating premium freight, and managing many suppliers.
There is the need for improving infrastructure to take advantage of the wave
of outsourcing.

48

CONCLUSIONS:
During this thesis I have read lots of material about the organization and
their process of manufacturing the products. I find one similarity between these
is that the organizations want value for their money. They want quality and
quick services. This is because time saved is the money gained. So that
organizations fulfill the requirement of the customers with the satisfaction and
make good relations. Britannia industries also try to give maximum satisfaction
to their customers. The company main motive is to provide the right quality to
right customer at right time with satisfaction. Company is using supply chains
to control the cost.
The Britannia brand is all about eating healthy, to lead a better life. It
advocates values that stand for health, hygiene, family, trust and taste. It reflects
the strong link between physical and mental well-being that is so important to a
person, and is typically a result of what one eats. Today, Britannia, driven by a
passion for excellence, manifested by its innovative thinking, has been able to
weave itself into the fabric of the consumer's everyday life. While Britannia
strives to give consumers a healthier life, the consumer on the other hand, has
come to expect innovation from Britannia's offerings - a huge challenge for the
company.

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Showcase and brand stories:

50

BIBLIOGRAPHY:Newspapers and manuals:

Financial Daily from THE HINDU group of publications Sunday, Feb 03,
2002
Financial Daily from THE HINDU group of publications Friday, Apr 04,
2003
Times news network [ Wednesday, October 16, 2002]
Financial Daily from THE HINDU group of publications Saturday, Nov
20, 2004

Websites:
http://www.thehindubusinessline.com.
www.whatiteez.com
http://www.mofpi.nic.in/fpipolicy.htm
http://www.britanniaindustries.htm
www.britannia .co. in/brandstories-tiger.htm
http://www.supply-chain.org/.
http://en.wikipedia.org/wiki/Supply_chain_management
http://www.lawson.com/.

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Books:
Frontiers of electronic commerce, KOLKOTA. Page-52, 53, 442.
Supply chain management: concepts and cases. page-33- 36
Lee, H. L. and C. billing ton. Material Management in Decentralized
Supply Chains. 835-847.
Lee, H. L., and C. Billington. Supply Chain Management: Pitfalls and
Opportunities. 65-73
Cooper, M. C. and L. M. Ellram. Characteristics of Supply Chain
Management and the Implications for Purchasing and Logistics Strategy.
13-24.
Houlihan J. B. 1985. International Supply Chain Management.22-38.
Lambert, D & Cooper, Industrial Marketing Management. Pages 65-83

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