Description
the competitive advantage of Metro Cash and Carry by strategically organizing the suppliers.
Metro Cash and Carry India – Competitive Advantages through Strategic Sourcing
1
1
Status Of Supply Chain in India
• •
The Indian wholesale / retail system is fragmented and lengthy. The distribution system, which worked well at lower growth rates in a “Shortage Economy”, now needs to be mordernised in terms of ? Structure ? Infrastructure The supply chain is „uni-dimensional? with one-size-fits-all backend. Modern supply chain structures and systems imperative for rapid economic growth. Current supply chain creates wastages and adds costs. Small and medium enterprises have difficulty in getting – Sensibly priced inputs – Distribution and marketing muscle
• • • •
2
2
Introduction to Metro Cash & Carry
•
Targeted at and open only to business customers.
•
Three supply chain success stories :
? ? ?
Shoes Fruit juice Pork
3
3 Success Story #1
Success Story #1 – Shoes
• Market study revealed a definite need amongst small businesses
for decent looking shoes at affordable prices - uniforms.
• Studied the characteristics that would need to be fulfilled.
•
METRO worked with an unbranded
shoe manufacturer in Agra. – Helped design appropriate basic footwear – Sells at a never before price of Rs. 199/-
•
Helped to make his supply chain more efficient.
4
3 Success Story #1
Success Story #1 – Shoes …
• • • The shoe manufacturer was a small scale industrialist. Turnover of previous year (pre-METRO) Rs 4.5 Crores (USD 1 million). Turnover after dealing with METRO Rs 6 Cr (USD 1.3 m), an increase of 33% with
Rs 1.1 Cr (USD 0.25 m) coming from just
METRO – and the relationship is barely 10 months old. • • Costs of production reduced by 5%. Profitability increased from 8% to over 12%.
5
3 Success Story #1
Success Story #1 Shoes… IMPACT
• • A direct marketing link between SME and specific needs of a section of business customers. An ability for SME to organise their production and supply chain better as most of the uncertainty and many costs
taken out of their system.
• • Improved distribution amongst shoe retailers. Getting better educated in a management sense enabling:
?
?
? ?
Management systems to become better. Setting up sample production centre. Improving the Packaging tremendously. Develop the ability to deal with some customers who were not approachable in the past.
6
4 Success Story #2
Success Story #2 – Fruit Juice
• • This Bangalore based SSI manufacturer produced bottled fruit juices, with some bulk sales. His price was at a 28% discount over established players ….. and yet – He did not have the distribution channel or the marketing muscle to make an impact in the market place. • Given the profile of METRO?s customers like B&C class Retailers, we saw an opportunity to promote a “budget”priced juice brand. METRO worked with him to upgrade his Quality and Packaging (Tetrapak). ? Result – Good quality juices being sold at affordable prices
7
•
4 Success Story #2
Success Story #2 – Fruit Juice IMPACT
• Turn over before Metro Rs 6 Lacs per month, went up to Rs 11 Lacs per month – a whopping 83% increase. • Kept prices at same low levels even after making sizeable investments in Tetrapak. • Diversified into non-traditional juices.
8
4 Success Story #2
Success Story #2 – Fruit Juice IMPACT
•
• • •
METRO provided a crucial distribution outlet.
SME Manufacturer able to survive and prosper. Affordable prices, encourage consumption of healthy beverage. B & C category retailers have increased sales.
9
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel
Background • Were importing pork from Australia
? ? ?
Expensive High stock because of lead time for import Uncertainty of supplies
10
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
METRO’s intervention
• • Studied current practices of the pork industry. Identified areas for improvement and worked with selected piggeries. • • • • • • • • Breed Feed Hygiene / Veterinary care Slaughter Preservation Transport Storage
Worked with the hotel to get local product acceptance.
11
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
Current status • The hotel approved METRO?s pork products for its Bangalore outfit. • After satisfying itself, discontinued Australian imports and switched to METRO?s pork for all India requirements.
•
Based on ongoing dialogue and study,
customer has made changes to the logistics.
12
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
IMPACT • International standards of hygiene and food safety introduced and disseminated. • Lower costs for Customers. • Larger market for small farmers. • Import substitution – possible export opportunity.
13
6
Organised Supply Chain Player
Organised Supply Chain Player Initial Impact
• Direct linkages between customer and producer – both food and non food.
• Enhanced distribution reach, especially for SMEs and Farmers.
• SMEs benefit from reduction in supply chain costs (both inputs and distribution). • SMEs benefit from access to technology and systems. • Improvement in general level of quality (food and non-food), hygiene
and food safety.
14
6
Organised Supply Chain Player
Organised Supply Chain Player Possible Further Impacts
• Major improvements in agricultural supply chain possible – Metro?s
international experience
?
Reduction in wastage : Better realisation for farmers : Lower consumer Prices De-layering of chain will reduce costs – Margins – Transaction Costs – Transportation
?
15
doc_541631476.pptx
the competitive advantage of Metro Cash and Carry by strategically organizing the suppliers.
Metro Cash and Carry India – Competitive Advantages through Strategic Sourcing
1
1
Status Of Supply Chain in India
• •
The Indian wholesale / retail system is fragmented and lengthy. The distribution system, which worked well at lower growth rates in a “Shortage Economy”, now needs to be mordernised in terms of ? Structure ? Infrastructure The supply chain is „uni-dimensional? with one-size-fits-all backend. Modern supply chain structures and systems imperative for rapid economic growth. Current supply chain creates wastages and adds costs. Small and medium enterprises have difficulty in getting – Sensibly priced inputs – Distribution and marketing muscle
• • • •
2
2
Introduction to Metro Cash & Carry
•
Targeted at and open only to business customers.
•
Three supply chain success stories :
? ? ?
Shoes Fruit juice Pork
3
3 Success Story #1
Success Story #1 – Shoes
• Market study revealed a definite need amongst small businesses
for decent looking shoes at affordable prices - uniforms.
• Studied the characteristics that would need to be fulfilled.
•
METRO worked with an unbranded
shoe manufacturer in Agra. – Helped design appropriate basic footwear – Sells at a never before price of Rs. 199/-
•
Helped to make his supply chain more efficient.
4
3 Success Story #1
Success Story #1 – Shoes …
• • • The shoe manufacturer was a small scale industrialist. Turnover of previous year (pre-METRO) Rs 4.5 Crores (USD 1 million). Turnover after dealing with METRO Rs 6 Cr (USD 1.3 m), an increase of 33% with
Rs 1.1 Cr (USD 0.25 m) coming from just
METRO – and the relationship is barely 10 months old. • • Costs of production reduced by 5%. Profitability increased from 8% to over 12%.
5
3 Success Story #1
Success Story #1 Shoes… IMPACT
• • A direct marketing link between SME and specific needs of a section of business customers. An ability for SME to organise their production and supply chain better as most of the uncertainty and many costs
taken out of their system.
• • Improved distribution amongst shoe retailers. Getting better educated in a management sense enabling:
?
?
? ?
Management systems to become better. Setting up sample production centre. Improving the Packaging tremendously. Develop the ability to deal with some customers who were not approachable in the past.
6
4 Success Story #2
Success Story #2 – Fruit Juice
• • This Bangalore based SSI manufacturer produced bottled fruit juices, with some bulk sales. His price was at a 28% discount over established players ….. and yet – He did not have the distribution channel or the marketing muscle to make an impact in the market place. • Given the profile of METRO?s customers like B&C class Retailers, we saw an opportunity to promote a “budget”priced juice brand. METRO worked with him to upgrade his Quality and Packaging (Tetrapak). ? Result – Good quality juices being sold at affordable prices
7
•
4 Success Story #2
Success Story #2 – Fruit Juice IMPACT
• Turn over before Metro Rs 6 Lacs per month, went up to Rs 11 Lacs per month – a whopping 83% increase. • Kept prices at same low levels even after making sizeable investments in Tetrapak. • Diversified into non-traditional juices.
8
4 Success Story #2
Success Story #2 – Fruit Juice IMPACT
•
• • •
METRO provided a crucial distribution outlet.
SME Manufacturer able to survive and prosper. Affordable prices, encourage consumption of healthy beverage. B & C category retailers have increased sales.
9
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel
Background • Were importing pork from Australia
? ? ?
Expensive High stock because of lead time for import Uncertainty of supplies
10
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
METRO’s intervention
• • Studied current practices of the pork industry. Identified areas for improvement and worked with selected piggeries. • • • • • • • • Breed Feed Hygiene / Veterinary care Slaughter Preservation Transport Storage
Worked with the hotel to get local product acceptance.
11
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
Current status • The hotel approved METRO?s pork products for its Bangalore outfit. • After satisfying itself, discontinued Australian imports and switched to METRO?s pork for all India requirements.
•
Based on ongoing dialogue and study,
customer has made changes to the logistics.
12
5 Success Story #3
Success Story # 3 – A Renowned 5 Star Hotel …
IMPACT • International standards of hygiene and food safety introduced and disseminated. • Lower costs for Customers. • Larger market for small farmers. • Import substitution – possible export opportunity.
13
6
Organised Supply Chain Player
Organised Supply Chain Player Initial Impact
• Direct linkages between customer and producer – both food and non food.
• Enhanced distribution reach, especially for SMEs and Farmers.
• SMEs benefit from reduction in supply chain costs (both inputs and distribution). • SMEs benefit from access to technology and systems. • Improvement in general level of quality (food and non-food), hygiene
and food safety.
14
6
Organised Supply Chain Player
Organised Supply Chain Player Possible Further Impacts
• Major improvements in agricultural supply chain possible – Metro?s
international experience
?
Reduction in wastage : Better realisation for farmers : Lower consumer Prices De-layering of chain will reduce costs – Margins – Transaction Costs – Transportation
?
15
doc_541631476.pptx