Britannia Industries Problems
Britannia begins with the business enterprise producing energy. Britannia mechanized its operations, and in 1921, it became the first firm in Asia employing imported gas ovens. Britannia’s business was growing. Britannia obtained a popularity for quality and value very fast. During the World War II, the Government rewarded Britannia by contracting it to supply “service biscuits” to MILITARY. And therefore the company was incorporated in 1918 as Britannia Biscuits Co. Ltd. in Calcutta and in 1924, Peek Frean UK acquired a managing stake in the business, which was later offered to Associated Biscuits International UK (ABI). During the 1950s and 1960s, Britannia expanded its operations beyond Calcutta to Mumbai, Delhi and Chennai.
In the entire year 1978 firm went for public issues and Indian shareholding crossed 60%, firmly establishing the Indian ness of the firm and formed Britannia Industries Small (BIL). It crossed the Rs100 crores earnings mark in subsequent four years (in 1983).
In 1987, Nabisco obtained ABI. Then in 1989, JM Pillai, a Singapore-based non-resident Indian (NRI) businessman, and Grouped Danone acquired Asian functions of Nabisco and the managing stake in Britannia. Later on, Danone and Nusli Wadia got over Mr. Pillai’s holdings.
Britannia features been jointly owned by Danone and Wadia Group since 1997. The two along with five others form a holding firm known as Associated Biscuits International Ltd., which owns a 51% share of Britannia. The remaining 49% share is held by the general public and financial institutions.
On the functions front, In 1997, the company unveiled its fresh corporate identification – “Eat Healthy, Think Better” – and made its first foray in to the dairy products marketplace. In 1999, the “Britannia Khao, World Cup Jao” promotion further more fortified the affinity consumers
Britannia emerged as you of India’s biggest makes in 21st century in the country. It is equally recognized when planning on taking innovative approach to its products and unique marketing concepts: the Lagaan Meet was voted India’s virtually all powerful promotional activity of the entire year 2001 while the delightful Britannia 50-50 Maska-Chaska became India’s virtually all successful product launch. In 2002, Britannia’s HOME BASED BUSINESS Division formed a jv with Fonterra, the world’s second most significant Dairy Company, and Britannia New Zealand Food Pvt. Ltd. was born. In recognition of its eyesight find the surface area of a cube and accelerating graph, Forbes Global ranked Britannia ‘One amongst the Top 200 Small Firms of the Globe’, and The Economic Situations pegged Britannia India’s 2nd Most trusted brand.
Having succeeded in garnering the trust of nearly one-third of India’s one billion populations and a solid control at the helm means Britannia will continue to desire big on its way of innovation and quality. And millions of buyers will savor the results, happily ever after.
Britannia puts a whole lot of emphasis on its primary biscuit makes including Tiger, Good Time, Marie, Milk Bikis, 50:50 and Treat. Biscuits make up more than 80% of the company’s production – bakery, cakes and dairy constitute the rest of the 20%. Its brands are believed to be a great value by India’s price-conscious customers.
BIL may be the first organization to introduce the several types of biscuits in India, such as 50:50, glucose biscuits for children, chocolate biscuits, butter biscuits and started to be the household name of the united states. In fact a few of these brands are bigger than several multinationals in the food business in India. The Tiger manufacturer biscuit, one of the most well-known, is incredibly popular among rural customers – with practically 50% of the brand’s value sales coming in from rural areas.
Market of Britannia
According to Euromonitor International, Britannia continues to truly have a strong occurrence in India’s bakery products industry. In 2001, the business had 18.9% market show for all bakery products; that quantity rose to 19.9% by 2004. As for the biscuit part of the business enterprise, Britannia had 41.2% industry talk about in 2001 and 43.6% in 2004 when Britannia was the national head in biscuit sales. Presently Britannia Industries Ltd, makes up about about 38% in worth and 32% in level of the organized biscuits marketplace in India.
Bakery product sales heightened from 13.9 billion Rupees (US$295.6 million) in 2001 to 17.2 billion Rupees (US$368.1 million) in 2004, a 7.6% compound annual growth amount. Biscuits made up 82% of Britannia’s bakery goods value sales in 2001 and rose to 85% in 2004.
Of Britannia’s total biscuit value revenue, 82% are from sweet biscuits and 18% happen to be from savory biscuits and crackers. In the business’s baked foods category, 87% contain bread goods, 13% are cakes.
The entire biscuit marketplace is estimated to be around 1.1 million tones per annum, totaling to around Rs 50 billion. The biscuit segments enjoy the most developed markets for any item having mass usage, It covers over 90% of the entire potential market. This means over 900 million Indians consumes biscuits, with varying frequency in a time. From the supply aspect the market is highly competitive, with many little scale manufactures and the arranged large scale sectors.
After the 1997 Britannia changed its tactics from merchandise oriented to chance oriented. Earlier Britannia provides narrow lined products mainly for kids however when the trends. Preferences and taste of common man changed Britannia also added number of types in its products and they in real feeling used the opportunity in making the merchandise, Britannia widen its product line which follows the STP.
They served the merchandise for all the types of people, now biscuit isn’t only meant for guest also for the individuals by presenting tiger biscuits in small packs. Britannia holds about 46% of market talk about (Note1) by benefit in the fiercely competitive market. Targeting the key consumers and and changing the products with opportunity has worked for the Britannia and that’s why they are the leader in the biscuit selection.
Note 1 – Source http://www.superbrandsindia.com/images/superbrands_book_2004/britannia/index.htm
Product Portfolio of Britannia
Britannia’s entire product offering derive their premium attributes from the concepts of health and taste. This primary premise has led to the evolution of an eternity menu where Britannia product exists for every stage in a person’s life. The highest intake group for biscuit will be children; here Britannia gives milk bikis with all the current ‘goodness of milk’ required by younger kids. While the tiger manufacturer is aimed for 7-14 year olds and them with the exuberant health expected by winners of tomorrow. Treat a range of scrumptious cream biscuit- is meant as a delicacy for children during fun times.
A particularly notable achievement has been little hearts, designed for teenagers and kids, which includes completely dispelled an erstwhile sector axiom that target group did not snack on lovely biscuit.
Moving on other age groups, Britannia created 50-50 as a biscuit snack for young adults. The savory time move brand is targeted at the same age group aswell, Britannia mariegold, is usually regared as a tea-time selling, packed with wheat energy with well being conscious urban adults. Good day, a cookie filled up with rich ingredients is a healthy everyday treat for whole family.
Britannia has a selection of cakes and breads entrenched in the bakery segment. These products allow the consumers a much better interactions with the manufacturer and maintains continuity of the style with health promise.
In 2004, the company was extremely productive in rolling out new products. It introduced its Bit of Hearts manufacturer, which are referred to as “melt in the oral cavity” biscuits. Little Hearts Orange (orange-flavored biscuits) and Vintage retail for 10 Rupees. Britannia also added Blackcurrant Treat, Jam Treat, Good Day time Gingernut and Good Evening Choco-Nut to its growing biscuit series in 2004. For the bread and dairy marketplaces, Britannia released NutriChoice vitamin-enriched bakery and Milk Guy low-fat cheese slices.
There were no innovative product launches in 2005, instead the business worked on strengthening existing brands. It released Superior Assorted Exotic Creme Biscuits, which feature varieties of one of the most popular biscuits – Pure Magic Chocolate, Pure Magic Vanilla, Pure Magic Strawberry & Vanilla and Jam Deal with. The pack retails for 100 Rupees. The business also reformulated its 50:50 Maska Chaska biscuits.
Sourcing Strategy: Outsourcing Vs Manufacturing
With only four plants located in the country, it’s hard to assume how Britannia Industries Ltd. became one of many largest food corporations in India. But because of the company’s system of outsourcing a substantial level of products, Britannia has the ability to offer more than 13 brands and a lot more than 200 SKUs because of its customers in India and around the world.
The company’s vegetation are situated in India’s four important metropolitan towns – Kolkata in eastern India, Chennai in southern India and Delhi and Uttaranchal in northern India. Mixed, these facilities employ a lot more than 4,300 people and yet just make 30% of the company’s products. Sixty-one different contracted factories produce the remaining 70% of Britannia’s products.
It’s a distributed manufacturing strategy in Britannia Sectors Limited made to optimize the delivered expense to the consumer. Outsourcing manufacturing is a model used by many other companies in India, both in the consumer packaged and durable products segment in such corporations Britannia Industries Small and Hindustan Unilever limited will be effectively using this strategy.
The 61 factories contracted to create Britannia products usually do not produce any other items at their locations. Selected brands and product types are made at particular facilities. Even though the contracted facilities are not possessed by Britannia, they are monitored by organization representatives to make sure quality control.
For case in point in the northern area of India there happen to be eight manufacturing systems including Britannia Industries limited New Delhi, where Britannia features outsourced its making. And for the quality control there exists a Quality Assurance Workforce guided by Quality Assurance Manager Mr. Dev Raj Dabas. A short introduction of these eight is listed below:
French Foods Faridabad
RKM Foods Kandrori
BIL New Delhi
Delta Foods Biscuits Gaziabad
Delta Foods Cake Gaziabad
JB Managaram Gawalior
Super Snacks Gaziabad
Britannia generally launches items that offer the company good returns, helping these through brand construction and leveraging on its nationwide supply chain.
Sales and Distribution of Britannia
Britannia two different varieties of distribution networks one is for dairy products and other an individual is Bakery products. Below distribution network of bakery items has been talked about. In Bakery items Britannia applies two kind of distribution system. These are given below:
1. Mass Distribution
Britannia use to create general FMCG items which are in form of packaged foodstuff and which need not to have very special sort of distribution strategy. Like additional FMCG companies Britannia as well use mass distribution program. Since all virtually all the products of Britannia happen to be of good deal, repeat purchase things, and will not require a lot of effort from customer aspect. So ultimately these products are sold on mass distribution basis.
Mass Distribution Composition of Britannia for Bakery Goods:
There are four C&F of Britannia in NCR area:
Mudka – Bahadurgarh
49 distributors are working under these four C&F. The distribution network of Britannia’s products throughout is listed below:
First of all stock is sent to these C&F, and this stock is sent to the various distribution canters of Britannia. These distribution centers usually do not contain items of any other manufacturer. Now this way to obtain stock is based on full e-network. This system has been provided a specific terminology my spouse and i.e. “UDAAN PACKAGE”. In this system the accountant who is in distribution centre submits an online order to the C&F. Afterward in C&F the purchase for a particular distribution center is immediately generated and additional fulfills by C&F.
Britannia has established these C&F at very appropriate locations. When there exists a demand generated in virtually any distribution centre These C&F are able to match the demand within 4-6 hours. So that it is clear that C&F provides instant delivery to the distribution centre. But in order to meet up this demand the C&F also offers to hold some inventory with it.
Now if we discuss in line with the distribution perspective we will see that Distribution Centre must likewise make some inventory to be able to meet any type of scarcity or fast demand. According to Mr. Randhir Kumar, (Territory Sales Incharge, Britannia Industries Limited), the distribution center has to maintain inventory of three days.
Now the distribution of inventory from the distributor to merchant could be further explained by firmly taking a distributor Keshav Enterprises. Keshav Enterprises may be the distributor near Kishan Garh Vasant Kunj; handles 850-1000 outlets. The region which a distributor addresses is also very large. E.g. Keshav Enterprises handles Munirka, R.K. Puram, South Moti Bagh, Vasant Kunj, Sataya Niketan, Mahipal Pur, Kapashera Border, Bijwasan, Nangal Dairy and Vasant Vihar. There are 49 such distributors of Britannia in Delhi.
Under this distributor five product sales men work and they cover the entire area which is mentioned previously.
Here the distribution is again divided into two parts i.e. distribution for
Key Profile Outlets (KAT)
1). General Shops
Distribution to general retailers is performed by two sales guys. They covers 30 to 40 outlets each day. Now the number of these outlets isn’t content, it varies time by time as they are not very loyal to the company and also does not contribute to very prominent sale.
2). Key Consideration Outlets (KAT)
These outlets are covered by two thesis topics sales men plus they take order from these outlets biweekly. These sales men visit twenty to 25 outlets every day. These outlets are very much loyal to the company and offer prominent business to the business. So from the product sales viewpoint these outlets are very important.
Now the inventory is moved from distributor to the vendors. For selling the share on the shops there are two procedures:
1). Order Booking
There are separate product sales teams who perform this task. For example one sales force has to go for order booking. In this technique the salesman first go to shop to shop and reserve the orders from generally there. On last week or some times on the same evening the delivery van moves all over the place in order to fulfill the orders. Now due to this method distributor not merely gains the sales along with looses the sale. Purchase booking process is performed in Britannia on Biweekly or Weekly basis. Some circumstances Order Booking and Prepared Stock both the job will be performed by the same sales man.
Benefits of Order Booking
In this process the distributor definitely remains in better location to forecast the demand. As the sales person has recently an order list. This helps not merely to the distributors but likewise to the C&F as well as finally to the factory in order to make more realistic demand.
Since the sales guy does not have to accomplish more but to book the purchase, it permits the sales man to locate the new opportunities on the market. It helps not merely to the business but also to the revenue man as sales guy gets special rewards from the business side.
Since in this process the sales person gets extra time where he/she gets enough time to interact with the store which is again very important.
Actually the retailer does not want only profit but also an improved respect and courtesy from the salesman. Hence in such scenarios if the retailer is getting good period with the salesman, certainly he will become more loyal to the company. Also during this period the sales guy could boost the visibility of its products in the shelves of the shop keeper.
Drawbacks of Order Booking
Along with all these benefits there are some drawbacks also involved in this advance booking process. Some times sales gentleman takes orders from the shopkeeper and assures him that the buy will come to be fulfilled on next day. But during this time period the sales person of other firm comes and provides the same product at some discounts or with some schemes in this problem the shopkeeper requires the stock from that sales man.
2). Ready Stock
In this technique the sales guy carry the group along with him which contain a delivery van, a driver, and one or two helpers. The sales gentleman takes buy from the shops and in addition places the order at the location. There are following positives and negatives of this method. Nearly thirty to forty outlets are visited by in this manner.
Benefits of Ready Stock
The retailer gets inventory on the spot without any delay.
The sales man does not provide a chance to the retailer to switch any other brand.
The defected inventory is replaced at that moment.
Drawbacks of Ready Stock
The sales man will not get plenty of time; he merely dumps the inventory and moves in one store to another store.
Even then he will not cover many suppliers, as the delivery method takes a large amount of time.
What amount of share should be carried by the sales man is also can not be predicted.
The sales guy moves to pre determined path and may not find new retailers, so the industry penetration by the revenue man can be very rare in this instance.
2. Selective Distribution
Selective distribution is performed for premium items of Britannia. There happen to be eight SKUs, for which Britannia uses selective distribution. These brands are:
These products are incredibly costly and lie between your prices ranges of Rs. 150 to Rs. 200. Today the products are not given by the distribution centre but immediately from C&F. These distributions will be completed through the Merchandiser Crew. Merchandiser Team is elaborated in even more pages.
Merchandiser takes order from these exclusive retailers and transfers this order to the C&F. Nowadays C&F sends the stock and the billing is performed by the respective distribution centre.
Selective Distribution Composition of Britannia for Bakery Products
Exclusive Retail Outlet
Exclusive Retail Outlet
Exclusive Retail Outlet
Exclusive Retail Outlet
To compete properly, Britannia found that it was essential to get sales persons out before customers – but this isolated them from their ordering systems. Managers wanted to enable remote working to allow additional time to be put in with buyers, while providing easier usage of ordering and production administration tools.
Use of ERP centered remedy in Supply Chain
It is preferred that Britannia implement “mySAP” ERP applications for the high performance and remarkably scalable IBM technology. The mySAP ERP software program enables full usage of company’s inventory, production preparation, sales order systems accessed through a simple Browser and SAP client.
The Benefits: Britannia can get to accomplish around 30 % smaller database administration costs, with better specialized performance leading to increased productivity . Sales force can finish orders quickly without waiting around to return to any office; Britannia can provide information on pricing of the existing product and stock-availability in real time; lower software license service fees for remote devices and decreased administrative and repair workload means a substantial decrease in TCO.
The ERP functions from the point of view of source chain optimization are shown in following flowchart.
Overall process optimization
Revenue and Profit optimization
ERP optimization at various stages of supply chain
The business value of the ERP system includes:
Streamlined supply chain and accurate information.
Reduced supply chain costs.
Increased sales through exact product availability.
The following body highlights IT components in ERP, IT infrastructure and means in SCM. The SCM arranging is the input for ERP.
Data, account, analysis
SCM Manufacturing planning
ERP, IT Infrastructure and resources in SCM
Key Solution Components
Applications: mySAPâ„¢ ERP ECC 6.0
Hardware: IBM System p5â„¢ 570, p5-520, IBM System Safe-keepingÂ® DS4300â„¢, IBM TotalStorageÂ® 3580 tape drives
Software: IBM AIXÂ® 5.3, IBM DB2Â®