Study of Supply Chain Management of the Paint Industry

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Introduction/Background of the study

With 33 per cent overall in the organized sector, holding a 38 % market share in decorative paints Asian Paints (AP) is the market leader in the Indian paint industry. The annual sales turnover exceeds INR 1,300 Crore, marginally ahead of all the competitors in the industry. AP’s market leadership in the decorative paints segments can be grasped correctly when we take note of the relative position of the various players in the industry. The nearest competitor, Goodlass Nerolac, holds a share of just 14 per cent, with others having sub 10 per cent. In an industry historically dominated by multinationals, a company that is wholly Indian in capital, management and technology is certainly a commendable feat. Different Brands in Different countries:

Asian Paints operates in 21 countries with 29 paint mfg. facilities with capacity of 440 m.lts/annum, servicing consumers in 65 countries. Asian Paints has presence in the following countries:
Asian PaintsSouth Asia (India, Bangladesh, Nepal and Sri Lanka). SCIB PaintsEgypt
BergerSouth East Asia (Singapore),
Middle East (UAE, Bahrain and Oman),
Caribbean (Jamaica, Barbados, Trinidad & Tobago).
Apco CoatingsSouth Pacific (Fiji, Tonga, Solomon Islands and Vanuatu) TaubmansSouth Pacific (Fiji and Samoa).

Asian Paints headquarters in Mumbai, where 5 Factories,18 Processing Centers, 800 raw material and intermediate goods suppliers, 140 Packing Material Vendors and 6 Regional Distribution Centre- 74 depots are integrated. APIL has 67 sales locations situated all across the country and the count for direct dealers is 15K as opposed to 7K of its nearest competitor The focus of our project is to study the Operational Aspects of Asian Paints India Limited along with the competitive industry analysis and perspective in the aspect of logistics, distribution, inventory management etc.


In an order to accomplish the objective, post the detail study of the entire project topic, we had incorporated a few steps. These have been mentioned below in the Flow Diagram:

Existing System

Capacity Utilization:-
Decorative Paints:
Decorative Paints business is of around 94% in the total paint business. The company ranks 1, in this segment with around 8500 colours to offer to its customers with 5 plants operating all over India. PlantCapacity

Bhandup, Mumbai30,000 KL p.a.
Ankleshwar, Gujarat1,00,000 KL p.a.
Patancheru, Hyderabad80,000 KL p.a.
Kasna, NOIDA 80,000 KL p.a.
Kothak1,50,000 KL p.a.
Total Capacity4,40,000 KL p.a

AP operates in 4 main segments
1.interior wall finish, 3. Exterior wall finish,
2.Enamels and 4. Wood Finishes.
Besides, the company outsources around 25-30% of its total production. Industrial Paint:
Asian Paints caters to:-
1.1. Automotive 3. Powder, 5. Protective coatings, 2.Road markings segment 4. Floor coatings 6. General Industrial Paints.

Major business activities are operated by two companies’ viz. Asian PPG Ltd. and Asian Paints Industrial Coating Ltd. Chemicals:
Chemical consists of manufacturing of Phthalic Anhydride (PAN) and Pentaerythritol (PENTA). Asian Paints Ltd., has its PAN manufacturing plant at Gujarat (capacity – 25,200 MT) and PENTA manufacturing facility at Tamil Nadu (capacity – 3000 MT). The company consumes nearly 50% of its production as captive consumption and sells the remaining in the open market. This business contributes around 3% to company’s consolidated revenues.

When Asian Paints entered the Indian paint business, the foreign companies and their wholesale distributors dominated the business. The foreign companies appointed a few traders as their wholesale distributors and allowed them to perpetuate a situation of monopoly. Each distributor was assigned a large territory and was...
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