94187572 Study of Supply Chain Management at Britannia Industries

ANALYSIS OF SUPPLY CHAIN MANAGEMENT AT BRITANNIA INDUSTRIES

Acknowledgement

It would be of great pleasure for me to take the opportunity of thanking nearly everybody who had been of great help in the completion of my dissertation. My sincere gratitude goes to MR.KAPIL GARG (DEPPT. OF MANAGEMENT) and MR.MANORANJAN (DEAN). My institute guide, without whose help this dissertation would have seemed impossible. I owe immensely for the minute help that was forwarded to me by friends in my organization. Both of the above mentioned persons supported me incredibly and guided me with suggestions and probation’s for the betterment of my accomplished work. It has been of great learning to be on the job and doing the dissertation simultaneously, which enriched my knowledge and developed my outlook. I am looking forward to continued support from my friends and colleagues in future as well. Only with their encouragement and coorporation.

SARITA KUMARI

Content Chapter 1:

Introduction -Need of the study - Background

Chapter 2:

Research methodology -Objectives of the study -Research Methodology (sample size, instrument used, Methods of data collection)

Chapter 3:

Descriptive work of subtopic on study

Chapter 4:

Data analysis & Interpretation

Chapter 5:

Suggestions & Conclusions

Chapter 6:

Bibliography & Annexure

SYNOPSIS TOPIC: - STUDY OF SUPPLY CHAIN MANAGEMENT AT BRITANNIA INDUSTRIES.

Chapter 1: INTRODUCATION:What is supply chain management? Supply chain management is a process of strategically managing the procurement, movement and storage of materials, parts and finished inventory through the organization and its marketing channels in such a way that current and future are maximized through the cost effective fulfillment of orders. Elements of supply chain management: - Two main elements Supply chain management planning: based on optimization theory and the use of highly sophisticated systems are imperative to arrived at the most efficient production schedules, distribution plans and transportation plans. Supply chain management execution: start from date of schedule. Due to various practical reasons and limitations deviations from the plans are generated. An execution level decision includes re-planning of the material flows, loading factors and the margins. Primary focus of SCM is to serve consumers with excellent goods and services against minimum possible costs and response times. It based on sophisticated IT systems and knowledge workers.

Chapter 2: RESEARCH METHODOLOGY:The non-exploratory research methodology will be used for thesis writing. OBJECTIVES:  Analyze the effects of supply chain management on Britannia industries process.  Supplier Chain management in Britannia industries visa priyagold biscuits.  To provide possible strategies for better implementation in SCM in Britannia industries.

RESEARCH INSTRUMENTS:The secondary data will be collected through internet, books and the materials published in journals and magazines. SCOPE OF THE STUDY: In competitive scenario how to increases the business with the implementation of supply chain management. LIMITATIONS: Not private data’s or primary data’s which really give correct information. Chapter 3: Descriptive works on the other biscuits producers companies. Chapter 4: Data analysis & Interpretation Base on the secondary data’s which will be collect through internet, magazines, books etc. Chapter 5: Suggestions & conclusions Chapter 6: Bibliography & Annexure

INTRODUCATION: In today’s 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 company’s "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 thirdparty 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 management is typically viewed to lie between fully vertically integrated firms, where a single firm and those own the entire material flow where each channel member operates independently. Therefore coordination between the various players in the chain is keys in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and wellpracticed relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The relationships are the strongest between players who directly pass the baton, but the entire team needs to make a coordinated effort to win the race.

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) 2) 3) 4)

location production inventory 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.

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-for-Lot), 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 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.

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

Customer service strategy

1. Collaboration strategy: opportunity for collaboration among business partners will vary depending upon the organization’s 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 firm’s profitability and growth should be determined.

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

Customer Demand &lead-time mgt

Manufacturing

analysis Purchasing

Supply chain management

Transportation

Inventory mgt & control

Materials management

Cost benefit and analysis

Integrated SCM approach

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.

Supply Chain Modeling Approaches: Clearly, each of the above two levels of decisions require a different perspective. The strategic decisions are, for the most part, global or "all encompassing" in that they try to integrate various aspects of the supply chain. Consequently, the models that describe these decisions are huge, and require a considerable amount of data. Often due to the enormity of data requirements, and the broad scope of decisions, these models provide approximate solutions to the decisions they describe. The operational decisions, meanwhile, address the day to day operation of the supply chain. Therefore the models that describe them are often very specific in nature. Due to their narrow perspective, these models often consider great detail and provide very good, if not optimal, solutions to the operational decisions. To facilitate a concise review of the literature, and at the same time attempting to accommodate the above polarity in modeling, we divide the modeling approaches into three areas --- Network Design, ``Rough Cut" methods, and simulation based methods. The network design methods, for the most part, provide normative models for the more strategic decisions. These models typically cover the four major decision areas described earlier, and focus more on the design aspect of the supply chain; the establishment of the network and the associated flows on them. "Rough cut" methods, on the other hand, give guiding policies for the operational

decisions. These models typically assume a "single site" (i.e., ignore the network) and add supply chain characteristics to it, such as explicitly considering the site's relation to the others in the network. Simulation methods are a method by which a comprehensive supply chain model can be analyzed, considering both strategic and operational elements. However, as with all simulation models one can only evaluate the effectiveness of a pre-specified policy rather than develop new ones. It is the traditional question of "What If?" versus "What's Best?"

Network Design Methods: As the very name suggests, these methods determine the location of production, stocking, and sourcing facilities, and paths the product(s) take through them. Such methods tend to be large scale, and used generally at the inception of the supply chain. The earliest work in this area, although the term "supply chain" was not in vogue, was by Geoffrion and Graves [1974]. They introduce a multi-commodity logistics network design model for optimizing annualized finished product flows from plants to the DC's to the final customers. Geoffrion and Powers [1993] later give a review of the evolution of distribution strategies over the past twenty years, describing how the descendants of the above model can accommodate more echelons and cross commodity detail. Breitman and Lucas [1987] attempt to provide a framework for a comprehensive model of a production-distribution system, "PLANETS", that is used to decide what products to produce, where and how to produce it, which markets to pursue and what resources to use. Parts of this ambitious project were successfully implemented at General Motors. Cohen and Lee [1985] develop a conceptual framework for manufacturing strategy analysis, where they describe a series of stochastic sub- models, that considers annualized product flows from raw material vendors via intermediate plants and distribution echelons to the final customers. They use heuristic methods to link and optimize these sub- models. They later give an integrated and readable exposition of their models and methods in Cohen and Lee [1988]. Cohen and Lee [1989] present a normative model for resource deployment in a global manufacturing and distribution network. Global after-tax profit (profit-

local taxes) is maximized through the design of facility network and control of material flows within the network. The cost structure consists of variable and fixed costs for material procurement, production, distribution and transportation. They validate the model by applying it to analyze the global manufacturing strategies of a personal computer manufacturer. Finally, Arntzen, Brown, Harrison, and Trafton [1995] provide the most comprehensive deterministic model for supply chain management. The objective function minimizes a combination of cost and time elements. Examples of cost elements include purchasing, manufacturing, pipeline inventory, transportation costs between various sites, duties, and taxes. Time elements include manufacturing lead times and transit times. Unique to this model was the explicit consideration of duty and their recovery as the product flowed through different countries. Implementation of this model at the Digital Equipment Corporation has produced spectacular results --- savings in the order of $100 million dollars. Clearly, these network-design based methods add value to the firm in that they lay down the manufacturing and distribution strategies far into the future. It is imperative that firms at one time or another make such integrated decisions, encompassing production, location, inventory, and transportation, and such models are therefore indispensable. Although the above review shows considerable potential for these models as strategic determinants in the future, they are not without their shortcomings. Their very nature forces these problems to be of a very large scale. They are often difficult to solve to optimality. Furthermore, most of the models in this category are largely deterministic and static in nature. Additionally, those that consider stochastic elements are very restrictive in nature. In sum, there does not seem to yet be a comprehensive model that is representative of the true nature of material flows in the supply chain.

Rough Cut Methods: These models form the bulk of the supply chain literature, and typically deal with the more operational or tactical decisions. Most of the integrative research (from a supply chain context) in the literature seems to take on an inventory management perspective. In fact, the term "Supply Chain" first appears in the literature as an

inventory management approach. The thrust of the rough cut models is the development of inventory control policies, considering several levels or echelons together. These models have come to be known as "multi-level" or "multiechelon" inventory control models. Multi-echelon inventory theory has been very successfully used in industry. Cohen et al. [1990] describe "OPTIMIZER", one of the most complex models to date --- to manage IBM's spare parts inventory. They develop efficient algorithms and sophisticated data structures to achieve large scale systems integration. Although current research in multi-echelon based supply chain inventory problems shows considerable promise in reducing inventories with increased customer service, the studies have several notable limitations. First, these studies largely ignore the production side of the supply chain. Their starting point in most cases is a finished goods stockpile, and policies are given to manage these effectively. Since production is a natural part of the supply chain, there seems to be a need with models that include the production component in them. Second, even on the distribution side, almost all published research assumes an arborescence structure. Each site receives re-supply from only one higher level site but can distribute to several lower levels. Third, researchers have largely focused on the inventory system only. In logistics-system theory, transportation and inventory are primary components of the order fulfillment process in terms of cost and service levels. Therefore, companies must consider important interrelationships among transportation, inventory and customer service in determining their policies. Fourth, most of the models under the "inventory theoretic" paradigm are very restrictive in nature. Mostly they restrict themselves to certain well known forms of demand or lead time or both, often quite contrary to what is observed.

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 MNC’s 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.

India Food Processing Ingredients Sector: India’s food-processing sector, although still in a nascent stage, has undergone important changes over the last six to seven years. The types, variety, quality, and presentation of products have all improved, mainly as a result of economic liberalization, which led to foreign direct investment (FDI) in this sector. Several multinational companies, including US companies like Pepsi, Coca Cola, ConAgra, Cargill, Heinz, and Kellogg’s have invested in the Indian food-processing industry. The growth in the food-processing sector has generated increased interest in quality food ingredients in order to produce higher quality foods.

Market summary: India’s food-processing sector, though still developing, contributes 14 percent to the manufacturing GDP (5.5 percent of aggregate GDP), produces goods worth Rs. 2.8 trillion ($64 billion), and employs 13 million people. Much of India’s food-processing industry is small-scale and involves very little value addition, although in recent years several multinational food-processing companies have started operations in India. A plethora of internal restrictions, including (a) prohibition on foreign direct investment in retail, (b) prohibitions on contract farming, (c) barriers to interstate commerce based on revenue and food security concerns, (d) some of the highest taxes on processed foods in the world, and (e) inefficient in infrastructure and marketing networks seriously constrain growth of the sector. The almost year-round availability of fresh products across the country, combined with the consumers’ preference for fresh products and freshly cooked foods has dampened demand for processed food products. The level of processing varies across segments – ranging from less than 2 percent of the production in the case of fruits and vegetables to over 90 percent in nonperishable products such as cereals and pulses. In the latter, however, processing involves very little value addition, and is mostly confined to grading, cleaning, milling, and packing; with negligible use of additives, preservatives, and flavors. Level of processing in perishable products: Product

Fruits vegetables Milk Meat Poultry Marine fisheries Shrimp

Level of Processing (% of total production) Unorganized Total Organized Sector 1/ Sector & 1.2 0.5 1.7 15.0 21.0 6.0 1.7 0.4

22.0 0 0 9.0 1.0

37.0 21.0 6.0 10.7 1.4

“Unorganized” in fruits and vegetables includes unbranded pickles, sauces. And potato chips, but excludes processing by street vendors; “unorganized” in dairy includes processing by sweet food makers; “unorganized” in marine products includes processing by small fishermen. According to the Ministry of Food-processing Industries (MFPI), the foodprocessing industry over the last decade has grown at an average annual rate of 7.1 percent. This higher rate is indicative of the relatively low base, the increasing marketable surpluses of agricultural products, changing consumer life styles and tastes, and the country’s higher disposable income. The growth is projected at around 7.3 percent per annum over the next five years. Of the estimated total food sales of rupees 8.6 trillion ($198 billion) in 2003/04, processed food consumption was valued at Rs. 5.3 trillion ($122 billion), with the share of value-added foods (juice, jams, pickles, cheese, butter, ghee, processed meat, confectionary and chocolate, alcoholic beverages, aerated beverages, malted beverages, food services, etc.) estimated at 37 percent.

Entry strategy It is essential to survey existing and potential markets in India for products before initiating export sales. The Office of Agricultural Affairs in the American Embassy New Delhi (see Section V) and market research firms in India can assist new exporters. If the US companies do have products of promising sales potential in India, they can either set up a base in India or appoint distributors or agents. The Indian government encourages foreign investment in the food-processing sector. Hundred percent equity participation or joint ventures with Indian companies are possible. Tax benefits and incentives are available to companies setting up operations in Special Economic Zones (SEZ). o Determine through surveys that their potential customers are, and where in India these customers are located o Recognize that agents with fewer principals and smaller set-ups often are more adaptable and committed than those with large infrastructure and big reputations. o There may be a conflict of interest where the potential agent handles similar product lines, as many agents do.

India’s food-processing industry can be broadly classified into the following categories: • • • • • • • •

Fruits and vegetable based products Dairy products Cooking oils Meat and poultry Fisheries Non-alcoholic beverages Alcoholic beverages Confectionary • Grain and grain-based products (milling & baking) Milling and baking: 75 percent of India’s wheat production is milled into wheat flour (atta) to make rotis or chapattis (unleavened flat bread), mostly in small chakkis (small wheat grinding mills) in the unorganized sector. Branded atta is a relatively new segment, developed to provide consumers a more hygienic quality, as compared to chakki atta. Annual production of branded atta is about 1 million tons, and is growing at 7 to 9 percent annually. Major players are ITC, Pillsbury, HLL, Agro Tech Foods, and Shakti Bhog Foods. Bakery products constitute the largest segment of grain-based processed foods. Small and medium unorganized local players and a limited number of organized units dominate the industry. Major players are Britannia, HLL, ITC, Parle, Priya Gold, and Cremica. The grain-based snack market, comprising extruded snacks and savories, is estimated at around ($667 million). Of this, the organized segment contributes only 15 percent of sales. Major players are Pepsi, Haldiram, SM Dyechem, Bikanerwala, etc. Breakfast cereal production in the organized sector is very small, and is mainly confined to corn flakes. Major producers are Kellogg’s and Mohan Meakins. Pepsi is reportedly interested in investing in the breakfast segment over the next five years.

Company profiles Indian food processors may be divided into the following main categories: • Large Indian companies that have their production base in India or neighboring countries (for tax-saving purposes) • Multinational and joint-venture companies that have their production base in India • Medium/small domestic food-processing companies with a local presence • Small local players in the unorganized sector

Company Name

INDIAN COMPANIES Products Godrej Foods Vegetable oils, fruit juices, tomato Ltd. paste, soy beverages Dabur India Fruit juices, cooking paste, honey Ltd. Mother Dairy Dairy products, ice cream, canned Dhara vegetables, fruit juices, cooking oils Amul Dairy products, ice cream, chocolate ITC Hindustan Lever (HLL) VH Group Britannia Industries Parle Products

Branded wheat flour, biscuits, readyto-eat food, confectionary Ice cream, branded wheat flour, bread, sauces, jams, jellies Poultry products Biscuits, bread, packaged food Biscuits, candies, toffees

Nutrine Confectionary Company Weikfield Products Company Rasna (Pioma Industries) Haldiram’s

Confectionary, chewing gum

UB Group

Beer, alcoholic beverages

Marico Industries MTR Foods

Vegetable oils, jams

Punjab Markfed Vista Processed Foods Dynamix Dairy Industries

Custard powder, baking powder, jelly crystals, drinking chocolate, sauces, soups Instant drink, health drink, soft drink concentrates, flavors Snack foods

Ready-to-eat foods, soups, spices, ice cream mixes, pickles Canned food, rice, vegetable oils Frozen chicken and vegetables

Cheese, whey, other dairy products

MULTINATIONAL/JOINT VENTURE COMPANIES

Company Name

Cargill

Products Soft drinks, potato chips, snack food, fruit juices Vegetable oils

Heinz

Ketchup, health drinks

Kellogg’s

Breakfast cereals, biscuits

Bunge

Vegetable oil, margarine

Nestle

Cadbury

Coffee, chocolates, confectionary, instant noodles, milk products, beverages, health drinks Chocolates, health drinks

Coca Cola

Soft Drinks, beverages

Pepsi

Agro Tech Branded vegetable oils, branded Foods wheat flour, snack food, popcorn (ConAgra’s) Pillsbury Wheat flour, cake mixes GlaxoSmith Kline Perfetti

Health drinks

Wrigley

Chewing gum

Chewing gum, candy

Lotte India Confectionary Corporation Ltd. (Parry’s) McCain Foods French fries Adani Wilmar Cooking oils, bakery shortenings Ltd. The Solace Soy nuggets Company

Sector trends Production: • The food-processing industry in India has undergone big changes over the last six to seven years, in terms of types, variety, quality, and presentation of products, which is mainly a result of the liberalization that led to foreign direct investment (FDI) in the processed food sectors. • Most food-processing sectors have been brought under the liberal, transparent, and investor-friendly FDI policy, which allows 100 percent FDI. • However, the small-scale farming system in India, marketing problems, lack of grading and standards, poor distribution channels, and onerous government policies continue to pose problems for the processing industry to source the right type of raw materials and to discourage more investment in the sector. • Nevertheless, the proportion of FDI in the food-processing sector to total FDI into India is low, constituting about 4 percent of total FDI inflow from 1991 to 2004. • Several multinational companies, including US-based companies like Pepsi, Coca Cola, ConAgra, Cargill, Heinz, Kellogg’s, IFF, and Mars (pet food only) have entered the Indian food-processing industry with significant investments. • Indian food and beverage companies are expanding their operations to neighboring countries like Bangladesh, Nepal, Sri Lanka, Commonwealth of Independent States countries, and the Middle East. • Takeovers and mergers are beginning to occur in the Indian foodprocessing sector, leading to consolidation.

• The food-processing industry is beginning to focus on, and invest in, advertising and awareness campaigns about products and brands. • Companies have added extras to their existing brands, including stylish packaging. • The growth in the food-processing sector has generated increased interest in high quality food ingredients in order to produce high quality foods. • The ready-to-eat food sector is growing at a high rate due to the changing lifestyles of the middle-class consumers (both partners working, etc.). • Some previously unknown regional brands are gaining national acceptance because of consistent quality and product safety, thereby providing some competition to established companies. • The GOI is in the process of enacting a Food Safety and Standards Bill, which if properly done and implemented, would provide increased transparency, better food safety management systems, and science-based standards.

Consumption: The following factors influence the type and quality of inputs in processed foods: • A large and an exceedingly wealthier middle class are creating growing demand for a wider variety of high quality processed foods. • The changing age profile (sixty-five million people expected to enter 20-34 year age group by 2010) and increasing exposure to western-type products and lifestyles. • The market entry of several multinational food-processing companies and ingredient suppliers. • The increasing number of fast food chains. • The recent trend toward a healthier lifestyle has generated a niche market for diet, healthy, low-calorie, and non-fat food products. • The increasing urbanization and growing number of working women. • A slow but steady transformation of the retail food sector in cities.

Competition India’s domestic industry is the primary competitor for US food-processing and ingredients suppliers in India. India, with diverse agro-climatic conditions, has a production advantage in many agricultural goods, with the potential to cultivate a large range of agricultural raw materials required by the foodprocessing industry. India is a major producer of spices, spice oils, essential oils, condiments, and fruit pulps. Significant variations in food habits and culinary traditions across the country translate into a competitive advantage for small and medium local players, who are familiar with local food habits and markets. Some Indian food-processing companies have increased market share by decreasing product prices. High import duties on processed food and food ingredients make

imports relatively costly. Existing domestic food laws restrict the use of several ingredients, flavors, colors, and additives, thus posing an additional challenge to US exporters interested in the Indian market. Foreign competition to the United States is mostly from countries in closer geographic proximity to India, such as Australia and New Zealand. Suppliers from other countries often supply inferior goods at cheaper prices in comparison to those available from the United States. European suppliers are major competitors in the food ingredient sector. Several foreign firms, including some from the United States, have started operations in India. After all these, find out that in India there are lots of scope for organized sectors like ITC, BRITTANNIA and PRIYAGOLD to increase the business by applying supply chain management process for right quantity on right time to right customer.

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, 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

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.

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

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.

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'.

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.

Companies values:

The Britannia values are those guidelines that help us add value to the life of the consumer. Energize your Body and Mind - This is Britannia's Promise to the Consumer All our actions should ensure that this promise is delivered to the consumer. Optimized delivery to the AW, the retailer and the end consumer is how we can deliver this value to the consumer. Organizational efficiency for healthy eating - This means that the retail relationship management has to be extremely effective so as to minimize costs and maximize coverage and range in each store. Laddering Innovation - There has to be a stretch in the implementation of newer approaches to access the existing and new consumers. Horizontal Empowerment- which in case of the sales function, translates to confident interaction with all customers and consumers such that the company is represented in the best possible manner.

Britannia to diversify product range: 21st July 2005 Kolkata: Confectionery major Britannia Industries Ltd, a joint venture between the Nusli Wadia group and Groupe Danone of France, is planning to diversify into other areas of foods from current product range of biscuit and cakes in order to become a complete food company, Britannia chairman Nusli Wadia told reporters after the 86th annual general meeting here today. Britannia earlier had a milk business, which was sold to Britannia New Zealand Foods two years back. Wadia said the company was now looking into various new areas of foods like snacks and health drinks but had not yet finalized anything. "The board will take a decision in this regard soon," he said. According to Wadia, BIL will look for both organic and inorganic growth opportunities for venturing into new areas of foods. Commenting on the commodity buying strategy, Wadia said the company would use the commodity exchanges as a mechanism for hedging. "The company

is heavily dependent on commodities like wheat and sugar. The hedging activity will help control costs. It is now implementing a commodity buying strategy for managing input cost," added Wadia. According to him, the focus on cost control and supply chain management yielded savings of Rs20.2 crores in 2004-05. BIL has already appointed KPMG for supply chain management. "KPMG is looking into 48 projects like efficient procurement of raw materials, manufacturing and distribution logistics etc," said Wadia. The chief executive officer of Britannia, Vinita Bali, said the company was looking at new distribution channels like malls. "The company is investing around 15-20 per cent of revenue from a brand into brand promotion," she said. "Our company has six power brands in the portfolio each exceeding Rs 100 crore in annual sales," she added. Meanwhile Field Marshal Sam Manekshaw, one of the hero's of 1971 IndoPak war, is stepping down from the board of Britannia Industries. The eminent soldier served in the board of BIL for more than a decade. "He intimated to the company that he does not seek reappointment. The company will not propose to fill up the vacancy in the forthcoming annual general meeting," an official said.

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?

Robust sales growth At a time when growth rates for most FMCG products have wound down to single digit, Britannia has managed to sustain a fairly healthy growth in its sales revenues. This is on account of several factors. One, the company has rationalized its product portfolio, pruning the number of brands from 35 to 25, so that it can devote greater attention to key businesses. It also reduced contribution from the low-margin breads business to focus on faster-growing segments such as biscuits and cakes. This appears to have resulted in better utilization of the ad spend. Despite sustaining a high-decibel promotional campaign over the past two years, Britannia's ad spend-to-sales ratio hovers at around 7 per cent, lowest in the FMCG universe. Two, in 1998, the company moved into the mass market for biscuits introducing low-priced varieties under the umbrella brand, Tiger. The success of this brand has enabled Britannia expand its market share in the `Glucose' biscuit market from 10 per cent to over 20 per cent. While growth rates in the mid-priced and premium biscuits have flagged, it is Tiger which has kept Britannia's biscuit business roaring. Meanwhile, the company kept up the high-decibel promotional campaign to make known its other major brands -- 50:50, Mariegold, Bourbon, Pure Magic, Nice, Snax and Milk Bikis. Britannia Khao World Cup Jao and Britannia Khao Crorepati Ban Jao have been among the more successful of these campaigns. Three, to pep up overall growth rates, the company has also been leveraging its brand image to establish a foothold outside of the highly competitive biscuit market. Over the past couple of years, it has launched a slew of dairy products (processed cheese, flavored milk, butter, ghee and dairy whitener) and ethnic snack foods such as Aloo Bhujiya and Chana Choor. The foray into dairy products appears to be a success, with revenues improving more than two-fold from Rs 38 crores in 1997-98 to Rs 89 crores in 2000-01. It is more difficult to find evidence of the success of Britannia's snack food business

which faces competition from a host of local brands, apart from national players such as Pepsi Foods and Haldirams. However, in both dairy and snack foods, Britannia outsources manufacturing. Therefore, should these forays fail to contribute on the expected lines; Britannia's losses would be restricted to its investments in product promotion. A proposed foray into bottled water, which was on the cards earlier, appears to have been put on the hold.

The trouble spots Will the Tiger cease to roar? But if robust sales performance is indeed the key behind the re-rating of the Britannia stock, is the performance likely to be sustained? In this respect, there have been a couple of negative developments for Britannia. One, the removal of the excise exemption on low-priced biscuits (costing less than Rs 5 per pack) in the 2001 Budget is bound to push up costs for the Tiger range of biscuits. Any attempt to pass on higher costs through a hike in selling prices could well trim the high growth rates hitherto enjoyed by this mass market brand. This could well mean that for the time being, Britannia will have to absorb the additional costs arising from the enhanced excise duty. Two, with the removal of quantitative restrictions on dairy products in the latest Exim Policy, Britannia could well feel the sting of competition in its emerging dairy business as well. Apart from expanding the number of brands competing at the premium end, the removal of QRs could also make it easier for MNCs such as Nestle, which already have a presence in the domestic market, to import and sell some of their global offerings in India. The removal of QRs on biscuits has already brought a flood of foreign brands on to Indian shelves. Though these products compete mainly at the premium end, they could pose a threat to Britannia by intensifying competition in a segment which is already sluggish.

With Hindustan Lever and Nestle India also planning to expand their presence in the confectionery segment, the threat to Britannia in this segment could be potent. Of course, Britannia also does have the option to draw from the product portfolio of one of its parents, Groupe DANONE, one of the largest food companies in the world. However, unlike Nestle or Hindustan Lever, Britannia has seldom drawn from the parent's product portfolio for its domestic product launches. And Groupe Danone, which controls 36 per cent of Britannia's equity, does not hold a majority stake in Britannia.

The bright spots Benign input prices are the foremost. After record wheat output over the past two years, prices of this key input have been soft over the past year, allowing Britannia to earn higher operating profit margins. The carry-in stocks from the previous year and the fairly healthy output forecast for the 2000-01 seasons could hold down wheat prices for the time being, allowing Britannia greater leeway in managing its expenses and absorbing additional costs from the excise duty hike.

Competitors start from scratch As for the threat from the phase-out of the QRs, in respect of biscuits, Britannia has faced this threat reasonably well over the past one year, without a visible impact on its financial performance. The proposed foray by Nestle India and Hindustan Lever into confectionery and dairy products, could pose the only remaining threat to Britannia. On this, Britannia's already established brand name in the foods business could erect an entry barrier, however temporary, when it comes to mass market products. Though both HLL and Nestle have the option of drawing products from their parents' portfolio, these brands would scarcely be familiar names in India; therefore, investments in brand-building would be necessarily high, at least in the initial stages. In the bakery business, HLL's acquisition of Modern Foods, the largest bread manufacturer in India, could pose a threat. However, Britannia's dependence on the bread segment is now negligible, and any extension of the Modern brand to biscuits and cakes could take some time, affording some breathing space to Britannia.

A `Kwality' acquisition As to the threat from the slowing sales growth in biscuits, Britannia's recent acquisition of an equity stake in Kwality Biscuits should provide some spark to the performance over the next one year. The purchase, which cost Rs 30 crores, would have made but a small dent in Britannia's overall cash flows. (Britannia generated operating cash flows of Rs 97 crores in 1999-2000) the Britannia Industries stock, which now trades at a price-earnings multiple of around 30 times its earnings for 2000-01 (based on nine-month per share earnings of Rs 17), should offer scope for reasonable capital appreciation over a three-year period. Investors can use any decline in stock price in keeping with market trends to build exposures to this stock.

Britannia Industries: Hold

SHAREHOLDERS can hold the Britannia Industries stock; given its relative low valuation visa other FMCG players. At its current price-earnings multiple of about 15 times its trailing 12-month earnings, the stock valuation is at a discount to other FMCG peers, which are hovering at 20-22 times. However, significant price appreciation on the stock is unlikely in the near term. The company's numbers for the June quarter display a continuing trend of decelerating sales growth, suggesting loss of market share to rivals in the biscuit business. Profit growth has been outpacing sales growth due to cost savings. This is likely to continue as the company ramps up production in the newlycommissioned manufacturing facility in Uttaranchal and reaps tax savings. The company's ongoing buyback programmed may also provide a stable underpinning to the stock price.

Sales growth losing steam: Britannia Industries' sales growth for the just ended June quarter was at 2.7 per cent, indicating that the company grew at a much slower rate than the sector, which posted double-digit growth. Sales growth has also been on a steady downward spiral since the December quarter of 2004, decelerating from 12 per cent in September 2004 to the present 3 per cent. The skidding sales growth could be a sign that competitors such as ITC's Sun feast are eroding Britannia's dominance in the biscuit market. ITC has been steadily adding to its biscuit portfolio, with products such as Marie Light, Sun feast Milky Magic, and rolling out a wide range of cream biscuits under the Sun feast banner. This enhances competition for Britannia at the premium end of the market, which it has so far dominated with its `Treat' range of cream biscuits. In the mid-priced segment, with regional competitors such as Surya Foods (Priyagold) expanding distribution reach, there has been a significant erosion of pricing power, with product prices remaining unchanged for over two to three years now. These appear to have taken a toll on Britannia's market share and, thus, sales growth numbers. The long-term outlook for Britannia's business will hinge on a revival in sales growth. This will depend, for now, on the success of product launches such as

Duet Treat, and buoyancy in rural market growth — a key market for the Tiger brand.

Profit growth robust: While sales growth is winding down, profit growth at Britannia continues to be robust. Net profits for the June quarter rose a healthy 22 per cent, after adjusting for exceptional items that magnified the previous year's numbers and suppressed this years'. This is notable given the inflationary trend in prices of inputs such as sugar and wheat in this particular quarter. The significant expansion in the company's profit margin suggests that the restructuring measures put in place over the past year are paying off. Over the past year, Britannia has closed its manufacturing facilities at Mumbai, reduced its workforce through a VRS and streamlined its procurement and supply chain. As a result of such measures, cash flows from operations have risen about 80 per cent in 2004-05 and debt has been trimmed to negligible levels.

Likely to outpace sales growth: Profit growth could continue to be robust in the coming quarters, as the company shifts a substantial portion of its biscuit manufacture to its new facility at Uttaranchal, a tax-free zone. Though this unit was commissioned in April, the company expects the facility to ramp up to full capacity by the third (December) quarter of this year. Given that Britannia's excise and tax outgo has been almost flat in the June quarter; one can assume that the benefits from the excise and tax savings at the new unit are yet to reflect in a big way on the company's numbers. This offers promise for a further expansion in profitability over the next couple of quarters, if the company manages to keep a tight rein on input costs. The superior cost-efficiencies in the new unit could also help relieve some of the pricing pressures on Britannia and help it offer better value on its brands.

Triggers: Investors should also watch for a couple of additional triggers to the Britannia stock price. The company has been steadily shrinking its equity base through buyback of its shares from the open market. The fourth tranche of the latest buyback program was concluded in 2004-05, at a maximum price of Rs 650 per share. Announcements on the next tranche of buyback, if any, are awaited. If Britannia decides to continue with its open market buyback program, it would be a positive for the stock, as buybacks have proved to be good tools to protect against downside in stock prices for other FMCG stocks. Second, Groupe DANONE, one of Britannia's overseas co-promoters, has recently been the object of speculation about a possible takeover. Though nothing concrete has happened, any possible consolidation of DANONE’s food business at the global level with another strong FMCG player could have implications for Britannia Industries. Shareholders need to watch out for developments on both these fronts, so that they can be factored into the investment decision.

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

Through its three core businesses (Fresh Dairy Products, Beverages and Biscuits and Cereal Products), GROUPE DANONE is committed to improving the lives of people around the world by providing them with better food products, a wider variety of flavors and healthier pleasures. Its dominant position worldwide is based on major international brands and on its solid presence in local markets (about 70% of global sales come from brands that are local market leaders).

GROUPE DANONE is recognized for the dynamism and strength of its brands: •

• •

•

DANONE: the leading brand worldwide for Fresh Dairy Products; DANONE represents almost 20% of the international market. DANONE is present in 40 countries worldwide. Evian: the best selling mineral water brand, with 1.5 billion bottles sold every year. Present in the 5 continents, in 125 countries. LU: the second brand worldwide, the first biscuits brand of GROUPE DANONE, which represents almost the half of the sales for the Biscuits and Cereal Products division. LU is mainly present in Western Europe. Wahaha: the leading brand for refreshing still water (water, readymade tea, fruit juices). The brand is one of the most popular in China, with more than 1.5 billion liters of water sold each year. Its name means "the child who laughs".

What’s make a Britannian: If you think Britannians are extraordinary individuals who are passionate about everything they do…create inspiration through everything they do…and succeed in everything they do…you’re probably right. Britannians are hand-picked for a singular purpose…to 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

Company releases: Britannia reports robust top line growth of 24%. Mumbai, October 28th, 2006: Britannia Industries Ltd. (BIL) has delivered its 4th Successive quarter of 20%+ growth. Net Sales Revenue at Rs. 550 crores represents a growth of 24%. Profit after Tax declined by Rs. 23 crores for the quarter, impacted by unprecedented and inordinate inflation of 15% - 20% in commodities like wheat, sugar, milk and edible oils. Biscuit prices to the consumer have remained firm for the last 5-6 years. Cost effectiveness and technical efficiencies have significantly absorbed the extraordinary inflation in all input costs. Net Profit is also impacted by the onetime exceptional income of Rs. 117 Mn available in the previous period (six months ending Sep 05) that did not re-occur in the current period. The accelerated trajectory of 20%+ top line growth continued this quarter as well with all of the company's key brands - Good Day, Tiger, 50:50 etc., and categories, like bread, cakes and exports, posting double digit growth, in excess of 40%. Specifically: •

•

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This quarter's growth of 24% continues the accelerated trend achieved over the last four quarters - with the Company consistently growing more than 20% each quarter for the last 4 quarters. To meet the high rate of growth, the Company is also investing in augmenting its manufacturing capability with plans to invest over Rs. 150 crores in infrastructure. Britannia has led the industry in innovation bringing delightful, 'new to the market' offerings like 50:50 Pepper Chakkar, MarieGold Doubles, Chota Tiger, Good Day cup cakes. The range of Festive Packs under the "Greetings" umbrella has doubled sales this Diwali. Consistent with its strategy of innovation, Daily Bread in which Britannia had acquired a strategic stake, has opened its first Italian frozen dessert parlour 'DeLuca's Gelato Italiano' in Bangalore.

Milestones:

1892

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

1910

Advent

1921

Imported machinery introduced; Britannia becomes the first company East of the Suez to use gas ovens

1939 – 44

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

of

electricity

sees

operations

mechanized

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

1978

Britannia Biscuit Company takes over biscuit distribution from Parry's Public issue - Indian shareholding crosses 60%

1979

Re-christened Britannia Industries Ltd. (BIL)

1989

The Executive Office relocated to Bangalore

1992

BIL celebrates its Platinum Jubilee

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

1975

1997

Re-birth - new corporate identity 'Eat Healthy, Think Better' leads to new mission: 'Make every third Indian a Britannia consumer'

1999

BIL enters the dairy products market "Britannia Khao World Cup Jao" - a major success! Profit up by 37%

2000

Forbes Global Ranking - Britannia among Top 300 small companies

2001

BIL ranked one of India's biggest brands

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

2002

Maska Chaska: India's most successful FMCG launch 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' by Forbes Global Economic Times ranks BIL India's 2nd Most Trusted Brand

2003

Pure Magic -Winner of the Worldstar, Asiastar and Indiastar award for packaging 'Treat Duet'- most successful launch of the year Britannia Khao World Cup Jao rocks the consumer lives yet again

2004

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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.

Financial performance Annual Performance (FY 2006)

Britannia's gross sales turnover increased to Rs 18,179 mn in 2005-06 from Rs 16,154 mn in the previous year, registering a growth of 13%. Operating profit at Rs 1,763 mn increased by 7%, profit before tax and exceptional items at Rs. 1,958 mn declined by 19% against 2004-05 , Impacted by the profit on sale of long term investments that accrued to 'other income' last year. The Company achieved these results despite significant increases in input cost, particularly sugar, fuel and Oils, coupled with aggressive pricing in the industry. Your Company's focused initiatives on commercializing market place opportunities, supply chain efficiencies and overall cost management resulted in its top line growth and profitability. Operating margin at 10.3% in 2005-06 compared with 10.9% in the previous year was impacted by the inflation in input costs.

Bonus and divided history: Britannia has an excellent track record of rewarding its shareholders. The company has an uninterrupted record of distributing dividends for several decades. The dividends declared over the last 10 years are as under:

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Dividend Percentage 40.00 40.00 50.00 55.00 45.00 55.00 75.00 100.00 110.00 140.00 150.00

Bonus History Year 1961 1966 1968 1971 1976 1984 1987 1990 2000

Brand milestones:

Bonus Particulars 1 equity share for every 2 shares held 4 equity shares for every 10 shares held 2 equity shares for every 3 shares held 2 equity shares for every 3 shares held 7 equity shares for every 10 shares held 2 equity shares for every 5 shares held 2 equity shares for every 5 shares held 1 equity share for every 2 shares held 1 equity share for every 2 shares held

Overview: The success of Britannia lies in its strategy of identifying high value opportunities and capitalizing on them through relevant and differentiated brands, supported by an effective and efficient supply chain. The fountainhead of this strategy is Brand Building, i.e. increasing consumer relevance, preference and purchase. The key drivers are availability, presence, and merchandising for brands that offer consumers a satisfying experience across a variety of consumption occasions, and price points that represent good value for money.

As a corporate, Britannia has worked for the benefit of all stakeholders shareholders, consumers, dealers, suppliers, bankers, and employees. It has established an excellent track record in terms of its financial performance and dividends distributed to its shareholders. This has been adequately demonstrated with the Company's top line growing from Rs. 7,523 mn in 1997 to Rs. 18,179 mn in 2006 -a growth of 142% over the last 10 years. The net profit grew even more significantly at 718% from Rs. 179 mn in 1997 to Rs. 1,464 mn in 2005-06, giving a CAGR of 26.30%. As of 31st March 2006, the issued and paid up capital of Britannia amounts to 23,890,163 equity shares having a nominal value of Rs. 10/- each. The shareholder base is about 23,000 in number. Britannia's shares are listed at the Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange.

Britannia Marie Gold Doubles: Everybody's favorite Marie biscuit now comes in a completely new avatar! Recently launched in Tamil Nadu, Britannia Marie Gold Doubles is all about doubling expectations and experience. Naturally, everything about it is new and exciting. This special variant of Marie, through a patented production process, offers three delicious layers in a new flavor concept - with the same old crispiness and a subtle new taste. The shape of the new Marie Gold Doubles biscuit is completely altered and nowhere resembles the classic round Marie biscuit. The premium packaging is also a breakthrough design with an outer sleeve and unique shape. So whether people savor the biscuit themselves or gift it, Britannia Marie Gold Doubles is definitely double the enjoyment!

Britannia 50-50 Pepper Chakkar : The launch of the latest 50-50 variant left everybody guessing "What it eez?" From TV ads, radio, outdoor and in-store display materials to events, a website and SMS and email blasts, traditional and new media were blended synergistically to create excitement and curiosity about the unique taste of the biscuit. The tangy and distinctive pepper flavored biscuit, that's thin and crispy and more like a snack, caught the imagination of a younger audience craving something to nibble on. The 50-50 Pepper Chakkar launch is truly a case of leveraging the marketing mix to best advantage.

More Power to Britannia Treat! In a one-of-its-kind tie-up with the immensely popular kids' show "Power Rangers" on Toon Disney, Britannia Treat created a huge buzz amongst kids. The brand activity targeted children in three cities - Delhi, Mumbai and Bangalore - at various touch points such as schools, malls, residential colonies and amusement parks. The idea behind it was to bring fun and adventure into the Britannia Treat brand of cream biscuits with the help of a unique new collectible toy - the Power Rangers Shooter. These exciting new toys were available with packs of Britannia Treat, and kids had to collect them to solve the "Power Rangers" contest. An eyecatching float, specially designed to promote this contest, was moved around these cities and became the pulse point of "Shooter Mania". At the end of 10 days, the activity touched 225 schools across the three cities and reached more than 50,000 kids - and got every kid talking about Britannia Treat.

Britannia Tiger's 'Alti Palti' Offer for Children: Alti Palti was an exciting offer to go with the most popular biscuit in the country - Britannia Tiger. Children love ventricular or 3D picture collections and Tiger biscuits gave them just that. With the purchase of Britannia Tiger, kids collected ventricular gifts such as rulers, book labels, bag tags and stickers. Each gift had the animated Tiger mascot on it doing crazy things like skateboarding, cycling, dancing and more.

As part of the promotion, a life-size Tiger mascot visited select schools and distributed the 3D collection to the lucky children. They even got to photograph themselves with their favorite Tiger! This exciting offer ran at retail stores across the country. Buzz was created with in-store display materials like attractive dispensers and branded posters all based on the Alti Palti theme. The Alti Palti craze caught on like wildfire amongst the kids - just like Britannia Tiger biscuits!

Britannia –super brand 2003-2005 Moving on to other age groups, Britannia created 50-50 as a biscuit snack for young adults with its sweet-salty duality. The savory Time Pass brand is targeted at the same age group as well. Britannia Marie Gold is a venerated tea-time offering that is 'packed with wheat energy' and has found much favor with health conscious urban adults. Good Day, a cookie filled with rich ingredients is a healthy everyday treat for the entire family. Britannia has a range of bread and cakes entrenched in the fresh bakery segment. These products allow the consumers to interact with the brand more often and maintain continuity of the taste-with-health promise.

Recent Developments A new initiative taken by Britannia, to cater to all the taste fads of the consumer, seeks to widen the range of its snack foods. This will be Britannia's biggest challenge in the next few years. Meanwhile in existing categories of biscuits and baked products, innovation will be the key principle. A host of new flavors and food-formats, as never seen before in the Indian market, are due to enter the market in 2004. Thus, Britannia will continue to define the Indian market in biscuits and other food products.

Promotion: The role of promotions for Britannia is especially important in this highly fragmented and competitive market. Today, the company prides itself on communication that is innovative, yet constantly able to strike a chord in the consumers' hearts and minds. Britannia's promotions have virtually redefined consumer expectations from this category. To reach out to the Indian consumer, Britannia has successfully leveraged India's two prime passions - cricket and movies. Britannia addressed these platforms in a manner true to its unique innovative style. It capitalized on every Indian's dream to watch a cricket World Cup match and created the 'Britannia Khao, World Cup Jao' contest in 1999. It based itself on instant gratification. The entire consumer needed to do was buy packs of Britannia biscuits, scratch a lucky card and win an all-expenses paid trip to England to watch a World Cup match. This promotion was so successful that it set a trend that has got every company scrambling for tickets to take their consumers for the World Cup. This promotion was repeated successfully in 2002/03 with the destination of choice being South Africa. Taking the success further was the promotion of 'Britannia Khao, Cricketer Ban Jao' that was fuelled by the need of every Indian to be a part of the passion called cricket. Britannia followed it up with another unique promotion; a vehicle that dealt with India's other passion movies. A promotion called 'Britannia Lagaan Match' that revolved around a movie called Lagaan was based on a cricket match. This promotion gave the consumer a chance to interact with the film stars and also get to play cricket with them. The match had over 40,000 spectators and made the headlines of leading newspapers and news channels. Britannia promotions have proved to the marketing world that promotions per se need not be only tactical but could also be strategic - used as a tool to further brand equity. Britannia advertising has distinguished itself from competition in terms of imagery and recall value. The innovation of such communication was exemplified through the launch of Britannia's salt-sweet biscuit. The brand name was 50-50 and the consumer was never to upfront that the product was saltsweet. But by just allowing the consumer to decipher the message himself, the company was able to draw the consumer closer and distinguish the offering from competition.

Brand Values: 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.

Research methodology The non-exploratory research methodology will be used for thesis writing.

Objectives:  Analyze the effects of supply chain management on Britannia industries process.  Supplier Chain management in Britannia industries visa priyagold biscuits.  To provide possible strategies for better implementation in SCM in Britannia industries

Research instruments:The secondary data will be collected through internet, books and the materials published in journals and magazines.

Scope of the study: In competitive scenario how to increases the business with the implementation of supply chain management.

Limitations: Not private data’s or primary data’s which really give correct information

Descriptive works on the other biscuits producer company (priyagold biscuits)

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 company’s plant in Surajpur, Greater Noida (U.P.), catering the ever growing demand of “PRIYAGOLD” biscuits. This is reflected through our brand’s 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 consumer’s 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 2004-end, when we'll be selling in the South and the East and expanding in the West," says Agarwal. That may not impress the DANONE’s of the world, but 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. 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 long-term 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 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 end-2003, 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 tieups at this stage, even as he admitted that several multinationals have expressed interest in either buying out or forging strategic alliances with his 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-of-the-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 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. 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.

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.

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.

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.

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. b. c. d. e. f. g.

Customer service Management Procurement Product development and Commercialization Manufacturing flow management/support Physical Distribution Outsourcing/ Partnerships Performance Measurement

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.

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.

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. 2. 3. 4. 5.

Cost Customer Service Productivity measures Asset measurement, and 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

The data analysis Base on the secondary data’s which I have collected through internet, magazines, books etc.

DATA ANALYSIS: As per my analysis I find out these factors in both companies:

About Britannia industries:  The Company's principal activity is the manufacture and sale of biscuits, bread, Rusk, cakes and dairy products like cheese, butter and milk.  Britannia products are sold in over two million outlets, reaching millions of consumers who buy approximately 2.4 billion packs each year.  A small army keeps Britannia going-over 100 stock-keeping units, 3000 employees over 1500 authorized whole sellers. 53 depots and 46 factories. All Britannia biscuits sold in a year would stand 10000 times taller than Mount Everest.  Launched in 1997, tiger became the largest selling Britannia biscuit brand in just four months of launch. It crossed the rs. One billion sales mark in its very first year and growing stronger.  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  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.  Britannia will continue to dream big on its path of innovation and quality  The focus on cost control and supply chain management yielded savings of Rs20.2 crores in 2004-05.

 Profit growth has been outpacing sales growth due to cost savings  Net Sales Revenue at Rs. 550 crores represents a growth of 24%.

Britannia's gross sales turnover increased to Rs 18,179 mn in 2005-06 from Rs 16,154 mn in the previous year, registering a growth of 13%. Operating profit at Rs 1,763 mn increased by 7%, profit before tax and exceptional items at Rs. 1,958 mn declined by 19% against 2004-05.  Despite stiff competition, your Company stabilized and held its overall

market share at 31.7% in volume and 38.8% in value for the last year.  As of 31st March 2006, the issued and paid up capital of Britannia amounts to 23,890,163 equity shares having a nominal value of Rs. 10/- each. The shareholder base is about 23,000 in number.  Britannia's shares are listed at the Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange.  Commenting on the performance, Ms. Vinita Bali, Managing Director, BIL

said, "Overall, in a year characterized by extraordinary and unprecedented inflation in key inputs, we have created a step change in our growth rate, and in fact doubled it. This is driven by focused investment in fundamental growth pillars like renovating existing bands, launching new innovative products, creating efficient capacity, strengthening infrastructure and building organizational capabilities. Britannia brands now have greater reach in rural markets and pervasive presence in modern trade"  Brand Values: The success of Britannia lies in its strategy of identifying high value opportunities and capitalizing on them through relevant and differentiated brands, supported by an effective and efficient supply chain. The fountainhead of this strategy is Brand Building, i.e. increasing consumer relevance, preference and purchase. The key drivers are availability, presence, and merchandising for brands that offer consumers a

satisfying experience across a variety of consumption occasions, and price points that represent good value for money.

About priyagold biscuits:  Priyagold big strength is that about 70 per cent of the brand's sales come from rural markets. Apart from Britannia and Parle, other significant players in the market include Bakemans, Priya Biscuits (also a Surya group company) in the Eastern region, and Duke that is strong in the South. While Britannia leads by value, Parle is the biggest volumes player in the organized market, according to industry estimates.  Biscuits are one FMCG category that has been on steady growth path even as most others have been sliding. Priyagold biscuits grew 10.3 per cent by value and 11.6 per cent by volume.  It has set up a state-of-the-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.  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.  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.

 Priyagold hasn't succumbed to pressures from mega-brands Britannia and Parle, which enjoy greater clout due to large product portfolios.

INTERPRETATION:  Britannia industries covering more market share.  Britannia is a global brand and it has global partners like Groupe Danone

and Nusli Wadia.  Brand value of Britannia is more as compare to any other bakery industries.  As per the products categories Britannia is in biscuits, breads, and packed food.  A Britannia biscuit is an industry but priyagold is the product of company Surya Food & Agro Ltd which produces juice also.  Britannia has covering both rural and urban areas but priyagold only urban  Giving divided and bonus to shareholders and registered in BSE, NSE stock exchange.  Britannia has wide network with big infrastructure, new technology and good customer relations.  Britannia is working on supply chain.  Britannia biscuits have wide variety and flavor in biscuits. But priyagold is not as much.

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 class internal policies which restrict marketing  Government’s 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 Safety  Consumer preference for fresh and Standards” legislation by the foods government

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. It’s 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.

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.

ANNEXURE: Financial results: • •

Net sales in 2004: 13,024 million Euros (+6.1% at comparable scope) Operational Income: 1,706 million Euros

Showcase and brand stories:

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

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http://www.mofpi.nic.in/fpipolicy.htm

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http://www.britanniaindustries.htm

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www.britannia .co. in/brandstories-tiger.htm

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http://www.supply-chain.org/.

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http://en.wikipedia.org/wiki/Supply_chain_management



http://www.lawson.com/.

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