Meeting supply Chain Challenges of Tomorrow DORA CERAMIC TILES
KAMAL KR. AGRAWAL SAURAV DEY YOGESH BERI RAKESH KR. CHOUDHARY MEENAKSHI LAKRA ASHUTOSH PANDA RACHIT KESHRI KUMAR RAJAN SURAJ ANIMESH KUJUR PRESENTED BY
INTRODUCTION This a close ended case dealing with the tile industry. Ceramic tiles is one of the few Indian indusries having very high growth potential. Tiles has been used as life style products for interior decoration of homes. This is due to the changes in the lifestyle and taste of the people during the last 10years. The use of tiles that was used traditionally for the decoration of walls and floors of Bathrooms and Kitchens has now a days been extended to its use in decorating bedrooms ,Drawing rooms (walls and floors as well). But still the consumption of tiles in India is much less than used in other countries like China,Spain, Italy,UnitedKingdom,United States of America. India accounts for 2 percent of world’s ceramic tiles production as compred to China which accounts for 37 per cent ,16 percent by Italy and Spain.
Asia accounts for 41 percent of world’s total tiles production as compared to Europe which accounts for 52 % .India exports 10 percent of the total ceramic tiles production which accounts for 0.05 per cent of the world’s tiles Export. The Ceramic tiles Industry in India is highly Competetive having many players both from the Organised and Unorganisedsectors.The share of the unorganised sector is near about 35 to 45 percent . Major Players in the organised sector with national brands are Johnson,Kajaria , Somany,Bell,Peddar,Orient etc.
The Capacity utilisation in the industry is 80 to 85 percent.The industry is pegged with excess capacity and intense competition. Particlarly from The unorganised sector which offers products at 30 to 40 percent cheaper prices. Dora Tiles started its operations in the year 1990 and established its first plant in the rural areas of Gujrat as an organised sector with a manufacturing capacity of 50000 sq,m per nnum and was exempted from paying sales tax for 5 years
Dora purchased the technology from a leading Italian tiles manufacturer. The company marketed its products through dealer network. Institutional sales were done directly by the Company’s Sales Force. Dora had a sales growth of 20 to 25 percent in the first five years of its operations and achieved a market share of 6 percent in 1995. The company invested Rs. 500 million in a new plant in Karnataka. With the latest technology involving the dry process of tiles manufacturing. The technology had advantages of Faster production cycle, lower rejections and lower input cost.
The new plant was fully operational In 1995 with the production capacity 50,000 sq.m was dedicated to floor tiles .t he plant was exempted from sales tax for five years. The company mainly focussed on the institutionl sales to Contractors,the Corporate sector and large projects.it never seriously focussed on the reail sector. After the tax exemption was over Dora lost its price advantage over its competitors I 2001 and started feling the loss of the market share ,which was 11 per cent in 2001
SWOT ANALYSIS STRENGHTS: The only industry dealing with ceramic tiles having greater market share. Latest technology in Karnataka plant than the Gujarat plant. With comparison to marbles, granite and other expensive stone ceramic tiles, comes in a cheaper rate and looks attractive to eyes. therefore sales for ceramic tile was shooting upwards.
WEAKNESS: Was not concern with retail marketing. Did not have an effective cost control mechanism until 2000. High bargaining power with supplier and low bargaining power with buyers. The ceramic tiles industry was not utilizing full capacity of the plant.
ACCEPTED AS LIFESTYLE PRODUCT RURAL AREA More market opportunities in India OPPORTUNITIES:
1. STEPS TAKEN BY DORA TO MEET FUTURE CHALLENGES:
More tiling options:
Tiles for bathrooms, kitchens, walls etc.
Quality a sine qua non
Unmatched quality and style
Merging of Product and Services
Quality products with after sales services
Imported materials from overseas market
Mergers and Acquisitions
Takeovers of other companies such as Johnson, Kajaria, Somany
Margins under pressure
Value for money by offering VALS products
Customization for segments
Different segments have different tastes and preferences
Dora’s strategy:- 1- Dealers:- Retailers are basically one of big player in supply chain management . so to ensure the proper distribution of the ceramic tiles Dora's company should go for this practice because the management were not emphasizing on this, the main reason for their sales reduction.. As retailers have all the varieties of the product range so it is considered as one stop to get all the desired product As for this company while facing a lot of competitive threats from another company and also retailing sector was growing for these commodities so it is better for this company to switch towards retail chain with his all power.
2 - Customers:- The company should adopt the new policy i.e. to create a awareness about their product among customers as well as also tell about the post services which company offers. And also adopt the tendency of customizing the product making it as a one stop solution for all the customer. as customers are having more bargaining power as well as also having a number of substitute.
2. How far Dora’s SCM initiative keeping pace with market changes? Due to change in market scenario, the co. recognized the need for changing the traditional role of the distribution channel to the one required for achieving total customer satisfaction. This new role is necessary , not only for growth but for survival as well because the co. has been lost its price advantages over its competitors and that is why it has taken some initiatives regarding distribution channel, they are-
The co. has been hired facilitator and planner for max. inventory turn over.
4.ROLE TO BE PLAYED BY LOGISTICS IN THE COMING YEARS IN TILE INDUSTRY: “The entire process of materials and products moving into , through and out of a firm.” The process of planning implementing and controlling the efficient effective flow storage of goods , services and related information from a point of origin or origin to point of consumption for the purpose of conforming to the customer requirements. In the coming years the role of logistics is very much important. Basically the total future market of tiles is now based on the logistics.
Dora ceramic tiles pvt. Ltd has to develop a proper logistics to regain its market share. Because as much time it got the tax relief it worked as the cost leader but for that it didn’t look to the future. So that it did not think to go the retailers. So now it has to loss its market share. There was lack foresightness in dora’s company. So now he has to go the retailers. For that the logistics he has to develop.
2. For getting tax relaxation Dora establish his factory in rural areas. So that he had to pay a lot for the transportation. So he has to take decision for that. 3. For getting his market share back he has to make the logistics so easy that in every market anyone can get his products. And this can be done only by the smooth logistics. 4. As logistics means consumption it can only be done by delivering the products to the end customers.
5. It can provide the competitive advantage over other companies. 6. It can help in reducing the wastage and emission must grow to a point where the strategy and vision of the company incorporates environmental issues. 7. This acts as CSR for the company. So these are the role logistics will have to play in future market of tiles market.
“In life there is fall and rise. After the fall there is rise and after rise there is fall.” But if one can want he can stop the fall. this statement is fully applied to this case. This is a close ended case as it has some questions at the end. Basically there is one organization named DORA CERAMIC TILES.As it has the cost advantage it ruled the market not thinking about the future. So now the FALL situation arises. And there are some suggestion to RISE once again. CONCLUSION
These suggestion are very much in need but with them there are also some more suggestion as given by my friends like establishing MIS system, improving the logistics and supply chain etc. so if we follow both of the suggestion then we can take back to the company to his place and even more than that. And that is the RISE once again and this time it never goes to FALL.