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Role of 3rd party logistics in Haier warehouse Hyderabad

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Role of 3rd party logistics in Haier warehouse Hyderabad

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Role of 3rd party logistics in Haier warehouse Hyderabad

  1. 1. 1 | P a g e Role of 3rd party logistics in Haier warehouse at Hyderabad Submitted to GITAM SCHOOL OF INTERNATIONAL BUSINESS Faculty Guide Company Guide Dr.Shahazadi Begum Shaik Mr.Venkata Ratna Rao Assistant Professor – Marketing Branch Logistics Manager Submitted By Mohammed Naseer Khan (1226114117) MBA (IB) 2014-2016 GSIB GITAMUNIVERSITY VISAKHAPATNAM
  2. 2. 2 | P a g e DECLARATION I hereby declare that this Dissertation / project titled “Role of third Party Logistics in Haier Warehouse at Hyderabad “is an original and bona- fide work, carried out towards partial fulfillment of my MBA (IB) Degree. I also declare that no part of this dissertation / project has been published or submitted as a project representation for any degree or diploma by any individual, institute / university. (Mohammed Naseer Khan)
  3. 3. 3 | P a g e CERTIFICATE This is to certify that the project report entitled “Role of 3rd party logistics in Haier Warehouse ”, is prepared by Mohammed Naseer Khan, (Reg. No.: 1226114117) as part of the Summer Internship Program, in partial fulfillment for the award of degree of Masters of Business Administration by GITAM School of International Business(2014-16), GITAM University, Visakhapatnam. The report is bonafide work carried out by him under my supervision and guidance and it has not been submitted by any other person before. Dr.Shahazadi Begum Shaik Assistant Professor – Marketing GITAM School of International Business GITAM University, Visakhapatnam.
  4. 4. 4 | P a g e ACKNOWLEDGEMENT I express my sincere thanks and deep sense of gratitude for the inspiring guidance and support rendered by my research guide, Mr. Venkata Ratna Rao, Branch Logistics Manager, Haier Warehouse at Hyderabad. I am thankful to Mr. Benzon John, H.O.D (logistics) who gave me permission to do my internship training for the project, whenever needed, and to all the office staff who have directly or indirectly contributed to the success in this project. I thank my Internal Guide, Dr. Shahazadi Begum Shaik, Assistant Professor GSIB. GITAM School of International Business for imparting me the necessary knowledge wherever needed and for guiding me as to how to go about with this project. Finally, I am grateful to many employees, workers and all transporters who shared valuable information that helped in the successful completion of this project. (Mohammed Naseer Khan)
  5. 5. 5 | P a g e Index Sr. No. CONTENTS PAGE No. 1 DECLARATION i 2 ACKOWLEDGEMENT ii 3 COMPLETION CERTIFICATE ii 4 COLLEGE CERTIFICATE iv 6 INDEX v 7 EXECUTIVE SUMMARY vi 8 CHAPTER-1 INTRODUCTION 10 9. CHAPTER-2 INDUSTRY/ SECTOR REVIEW 26 10. CHAPTER-3 COMPANY PROFILE 46 11. CHAPTER-4 DATA ANALYSIS & INTERPERTATION 75 12. CHAPTER-5 RECOMMENDATION 84 13. CHAPTER-6 REFERENCES 85
  6. 6. 6 | P a g e EXECUTIVE SUMMARY The study involves analysis of third party Company transportation reports like VDR (vehicle detention report), MIS report, 3PL transportation reports and sales data analysis of years 2012, 2013 and 2014.The logistics department depends upon the sales and marketing department which leads the logistics plan of goods from the plant. The information was collected from south zone at Haier warehouse Hyderabad. The project involves active participation in collection of complete and up to date information. The project discusses about various factors of how the 3PL is controlling the cost of transportation at local and upcountry markets. This project shows the supply chain of Haier and logistics network all over the country. As per my observations the Haier Company should invest more in advertising in future and avoid the dumping of the goods in the warehouse in order to control the cost. I suggest the plant manufacturing department should coordinate with the sales department in terms of its orders from the dealers to avoid the transportation cost and avoiding the halting of trucks at the warehouse. The Haier warehouse at Hyderabad is synonymous with safety handling the bulk storage of the goods, documentations, safety and cleanliness, policies and regulations, inbound and outbound operations of the warehouse. The Haier warehouse is very accurate in its operations of loading and unloading of the goods and inbound and outbound operations which boost the Haier Company in its transactions of the goods to its dealers. The Haier warehouse is a strategic unit located in the industrial area of Hyderabad which is very convenient to all the local dealers in Hyderabad. Thus Haier warehouse has nodal points to handle the increasing demand of Haier products. “Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function.” The continuous inflow of disposable income and the advancement of technology, the need for the varied consumer durable goods are increasing. This in turn is leading to a strong competition among the different consumer durable brands available in the nation as well as the price gap between the same consumer goods of different companies are
  7. 7. 7 | P a g e narrowing down. Day by day these goods are becoming cheaper. The rural and urban market of consumer durables has been growing at a rate of around 15 % on an average. The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leading white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96 categories. Haier products are now sold in over 100 countries around the globe. The last chapter deals with the data analysis and interpretation of the sales reports and data collected from the year 2012, 2013, 2014 of Haier to estimate the sales for future years. The other reports like monthly inter stock report, vehicle detention report; aged stock report and transportation report were also used to analyze the 3PL role in Haier warehouse at Hyderabad. The main objectives of this study are: 1. To understand the supply chain operations and distribution network of the Haier appliances private ltd warehouse in Hyderabad. 2. To determine the cost control in supply chain and in all aspects of logistics of Haier warehouse. 3. To understand the inbound and outbound operations of the warehouse. 4. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad by referring all the reports and analyzing it. Need of the study: The research study was totally exploratory because the study was fully of findings as it was collected information from the branch logistics manager and 3PL transporters regarding the 3PL operations in Haier warehouse operations of transportation, loading and unloading operations, inbound and outbound operations of the warehouse and the services provided by Haier. Under this study visited to many places such as
  8. 8. 8 | P a g e  Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad. Findings:- 1. The space in the warehouse is less which is not enough to allocate the space for the products from the plant. 2. There was more inter branch transfers from the warehouse to other hubs which creates expenses for the company. 3. There was no coordination between sales department and manufacturing department from the plant which creates higher dumps in the warehouse and aging stock. 4. Haier has no repacking department at warehouse and in other hubs which helps to avoid carton box damage for imported products. 5. The Haier warehouses have high part loads and low billing of the products which creates extra costs and time. 6. The Haier warehouses have high halting time for the trucks to unload the goods in the warehouse which creates expenses, no order quantity and problems with third Party Transportation Companies.
  9. 9. 9 | P a g e INTRODUCTION Logistics:- “The overall management of the way resources are obtained, stored and moved to the locations where they are required”. Logistics management entails identifying potential suppliers and distributors; evaluating how accessible and effective they are and establishing relationships and signing contracts with the companies who offer the best combination of price and service. A company might also choose to handle its own logistics if it is cost-effective to do so. Logistics function: a. Warehousing: Under this goods are stored after manufacturing till the time they are required for consumption. b. Inventory management: Goods like raw materials which are required for day to day operations of the business also need to be properly stored and kept track of. c. Transportation: Goods need to be transported from one place to another. They may have to be shipped from supplier location to factory and thereafter from factory to customer. 3PL Logistics:- “Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function.” Third Party Logistics is an industry to which a shipper (owner of transported goods) outsources various elements of the supply chain to perform some / all logistics management functions including inbound freight, customs, warehousing, order fulfillment, distribution and outbound freight.
  10. 10. 10 | P a g e Role of 3PL in the Logistics operations:- Characteristics of Third Party Logistics (3PL):- 1. Globalization :- Supply chains are increasingly globally (even within manufacturing processes), it requires greater management of supply chains. 2. Core competencies :- Manufacturers and retailers are focusing on their core business and outsourcing logistics to specialized firms. 3. Innovation and management :- 3PL is increasingly sophisticated in supply management making investments realizing economics of scale. 4. Asset utilization :- 3PL model promotes greater asset utilization like balancing flows and asset sharing alliances. Types of 3PL:- 1. Transportation based 2. Warehouse and distribution based 3. Forwarder based 4. Financial based 5. Information based
  11. 11. 11 | P a g e Main components of 3PL:- A third-party logistics provider is (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials. Often, these services go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. Then the provider is called third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP). Third Party Logistics System is a process which targets a particular function in the management. It may be like warehousing, transportation, raw material provider, etc. Types of 3PL providers:- Third-party logistics providers include freight forwarders, courier companies, as well as other companies integrating & offering subcontracted logistics and transportation services.
  12. 12. 12 | P a g e Hertz and Alfredsson (2003) describe four categories of 3PL providers.  Standard 3PL Provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) – the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.  Service Developer: this type of 3PL provider will offer their customers advanced value- added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.  The Customer Adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company's logistics activities. The 3PL provider improves the logistics dramatically, but does not develop a new service. The customer base for this type of 3PL provider is typically quite small. Why Use 3PL? BECAUSE SOMEONE ELSE CAN DO IT BETTER
  13. 13. 13 | P a g e Even if you have resources available, another organization within the supply chain may be able to do it better, simply because its relative position in the supply chain, supply chain expertise and economies of scale. TO SHARE RESPONSIBILITY 3PL companies can share responsibility for managing global supply chains, keeping customers and stores properly stocked, and delivering the perfect order every time. TO RE-ENGINEER DISTRIBUTION NETWORKS Logistics outsourcing can be a quick way to re-engineer distribution networks to meet global market demands and gain a competitive edge. Did you know that you can drill into the history of each SKU number tracked by P3PL and view when and to where every piece was shipped, when new stock arrive and how many? BENEFITS OF USING A 3PL  Reduced total delivered cost for your customer  Local expertise in new markets  Improved customer service through shorter shipment times  Reduced inventory costs through better management  Cost benefits through volume shipping discounts  Improved focus on core competency  Increased shipment visibility  More scalable logistics operation and cost model  Improved variety of technology and service  Risk reduction 3PL and its functions Originally, 3PL means outsourcing logistics activities including transportation and Warehousing to outside firms, which are not a consignor or a consignee. However, it is not common 3PL practice to outsource a single activity of logistics independently, but to outsource multiple activities from the firm's strategic point of view.
  14. 14. 14 | P a g e 3PL (or 3PL provider) has the following features at present: 1. Integrated (or multi-modal) logistics service provider 2. Contract-based service provider 3. Consulting service provider Evolution of 3PL:- Early 1900’s to late 1950’s- introductory period-single service Late 1950’s to mid 1960’s- Awareness period – Separate service Mid 1960’s to late 1970’s- necessity period – integrated service Late 1970’s to mid 1980’s- integration period –combined service Late 1980’s to mid 1990’s- differentiation period – incorporate service Late 1990’s today – corporate period – corporate service
  15. 15. 15 | P a g e First, a 3PL provider is regarded as an integrated logistics service provider. IT-related activities for controlling goods flow such as order processing, and inventory Management, among others are also included in the function of the 3PL provider. However, the 3PL provider need not provide all the services solely. The 3PL provider can outsource some activities to sub-contractors. A 3PL provider can be classified into the asset-based and the non-asset-based. The 7 asset-based 3PL provider owns some assets, particularly transport-related assets such as trucks, warehouses, etc., while the non-asset-based 3PL provider does not own such assets, and usually relies on sub- contractors’ assets. Examples of non-asset 3PL providers include forwarders, brokers, marketing companies, and information system management companies. Second, the service of 3PL is contract-based. Recently, a contract was written about the way to share responsibilities assuming various situations in detail. Such strict contract would make reliable relationship between the parties, and strengthen the alliance. Third, offering consulting- services to the firms is an important feature of the 3PL. The 3PL provider can make various advises to answer customers’ requirements concerned with marketing strategy, information system configuration, cooperative transportation, etc. Role of 3PL in Supply Chain Management:
  16. 16. 16 | P a g e 3PL GROWTH DRIVERS IN INDIA:- 1. Strong GDP growth 2. Increased FDI inflows 3. Consolidation of raw materials from the vendor’s 4. Better infrastructure 5. Goods and service tax (GST) 6. Logistics parks/ FTWZs 7. Organized structure of the logistics industry 8. Increasing presence of MNCs in India. 9. Entry of MNC 3PL players in India 10. Increasing need to focus on core competency.
  17. 17. 17 | P a g e 3PL Market Structure in India The 3PL market in India is comprised of two segments: the first one is asset based in which assets like trucks, distribution centers and warehouses are utilized in supply chain management, and the second one is non-asset based. There is a significant difference between the nature of Indian 3PL and its counterpart elsewhere, especially in the U.S., Table 1. Table 1: Comparative Analysis of 3PL in India and the U.S. Parameter USA India Usage of 3PL 71% 55% Common activities outsourced Warehousing (73.7%) Outbound Transportation (55%) Outbound Transportation (68.4%) Inbound Transportation (52%) Freight bill payment (61.4%) Custom clearing and forwarding (51%) Inbound warehousing (56.1%) Reasons for not outsourcing Control would diminish (63%) Poor infrastructure of provider (81%) Costs would not be reduced (63%) Inability to respond to changing needs
  18. 18. 18 | P a g e (81%) Service commitment would not be met (48%) Unreliable promised from providers (80%) Logistics is a core competency (44%) Concerns about capability of providers (77%) Necessity of e- commerce 72% 67% Collaborative relationship 82% 14% Gain sharing is important for relationship 80% 6.6% Considerable amount of research on the topic of the implementation of 3PL in different countries has been published in academic and trade journals. Viewpoints of both users and service providers have been considered to identify the major issues, industry dynamics, current status and future prospects of the 3PL industry. However most of the research is descriptive in nature and does not go into in-depth statistical analysis of survey data. In the present study Indian 3PL providers’ service dimensions are analyzed in terms of the key success factors and growth strategies using various statistical tools. Obstacles for 3PL in India:  Inefficient Logistics operations.  Multiple tax structures.  Inadequate logistic infrastructure.  And unorganized nature of the transport industry.
  19. 19. 19 | P a g e Warehouse management:- Warehousing Management is one of the important aspects of 3rd party logistics companies; where companies are store their stock in large warehouses in proper manner. A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers,transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing and production. Warehouse Management System A warehouse management system (WMS) is a software application that supports the day-to-day operations in a warehouse. WMS programs enable centralized management of tasks such as
  20. 20. 20 | P a g e tracking inventory levels and stock locations. WMS systems may be standalone applications or part of an Enterprise Resource Planning (ERP) system. A warehouse management system (WMS) is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization. A WMS monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations. Need of the study: The research study was totally exploratory because the study was fully of findings as it was collected information from the branch logistics manager and 3PL transporters regarding the 3PL operations in Haier warehouse operations of transportation, loading and unloading operations, inbound and outbound operations of the warehouse and the services provided by Haier. Under this study visited to many places such as  Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad. The main objectives of this study are: 5. To understand the supply chain operations and distribution network of the Haier appliances private ltd warehouse in Hyderabad. 6. To determine the cost control in supply chain and in all aspects of logistics of Haier warehouse. 7. To understand the inbound and outbound operations of the warehouse. 8. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad by referring all the reports and analyzing it.
  21. 21. 21 | P a g e Research methodology: Research design: The research consisted of various steps COLLECTION OF DATA SECONDARY DATA DATA SORTING AND ANALYZING DATA PRESENTATION DATA INTERPRETATION AND RESULTS Sources of data: The study was carried out by collecting data from secondary sources. Secondary data:- To collect the secondary data the corresponding database were checked and the necessary information was collected.
  22. 22. 22 | P a g e a. Research reports b. Articles c. Newspaper articles D. internet e. Monthly Magazines. f. Haier official website. g. Haier journals. h. Customer Database provided by Haier. i. Excel forecasting method j. tables, charts and graphs in excel Limitation of the study:- 1. Less number of employees in the warehouse in order to collect more information. 2. Due to time constraints the study has been restricted to secondary data only. 3. Due to the restrictions of the company some of the data cannot be included in the reports.
  23. 23. 23 | P a g e INDUSTRIAL REVIEW Introduction of consumer durables goods in India:- The continuous inflow of disposable income and the advancement of technology, the need for the varied consumer durable goods are increasing. This in turn is leading to a strong competition among the different consumer durable brands available in the nation as well as the price gap between the same consumer goods of different companies are narrowing down. Day by day these goods are becoming cheaper. The rural and urban market of consumer durables has been growing at a rate of around 15 % on an average. Growthprospects:- India is likely to emerge as the world’s largest middle class consumer market with an aggregated consumer spend of nearly US$ 13 trillion by 2030, as per a report by Deloitte titled 'India matters: Winning in growth markets'. Fuelled by rising incomes and growing affordability, the consumer durables market is expected to expand at a compound annual growth rate (CAGR) of 14.8 per cent to US$ 12.5 billion in FY 2015 from US$ 7.3 billion in FY 2012. Urban markets
  24. 24. 24 | P a g e account for the major share (65 per cent) of total revenues in the Indian consumer durables sector. In rural markets, durables, such as refrigerators, and consumer electronic goods are likely to witness growing demand in the coming years. From US$ 2.1 billion in FY 2010, the rural market is expected to grow at a CAGR of 25 per cent to touch US$ 6.4 billion in FY 2015. Some of the top consumer durables brands in India are:  LG  Nokia  Philips  Samsung  Sony  Whirlpool  Blue Star  Carrier  Godrej India  Hitachi India Limited  Sharp India Limited  Tata  Toshiba India Private Limited
  25. 25. 25 | P a g e  Videocon  Voltas About Consumer Durables:- Consumer durables refer to those consumer goods that do not quickly wear out and yields utility over a long period of time. Some of the popular and common examples of these kinds of items are electronic goods, kitchen appliances, home furnishings and leisure equipments etc. Consumer durables can be broadly categorized into the following 3 heads: White Goods: White goods mainly include air conditioners, refrigerators, washing machines, audio equipments and speakers. Brown Goods: This kind of consumer durables mostly include kitchen appliances like chimneys, electric fans, grinders, iron, microwave ovens, mixers and varied other cooking ranges. Consumer Electronics: Some of the mostly used consumer electronic goods are DVD players, MP3 players, mobile telephones, telephones, VCD players etc.
  26. 26. 26 | P a g e
  27. 27. 27 | P a g e Consumer electronics inIndia:- According to a McKinsey 2005 report, while Food and Grocery took the highest share of wallet, and electronics took only a mere 5%, the proportion of spending on electronics was definite bound to increase by 2015 and also the growth rate for the share of organized retail in the electronics segment was set to increase from 15% to a astounding 45% in 2015. A graph representing the share of wallet to the share of organized retail is shown below. List of consumer durables' brands in India Many of the national as well as multi-national brands are involved in the business of consumer durables in India. Apart from the famous brands, some portion of this market in the nation has even been captured by some unbranded consumer products. However, to name a few of the top consumer durables brands in India are:
  28. 28. 28 | P a g e LG: Starting their business from 1st October, 1958, LG Electronics is known for consumer goods like air conditioners, CDMA handsets, DVD players, home theatres, optical storages, radios etc. Nokia: This brand name is famous for their innumerable products related to mobile telephones and is one of the leading mobile telephone brands in India. This brand has got a flair for introducing new models updated with the latest technologies, which meets the requirements of the modern tech savvy people of the country. Philips: Philips Electronics India Limited is one of the leading consumer durable companies that have got different kinds of consumer durables in the national market. Some of the popular Philips' consumer durables are television sets, music systems, personal care items, household products, lightings, telephone handsets, computer products and accessories etc. Samsung: Commencing its operation in India during the month of December in 1995, Samsung is presently enjoying a turnover of more than U. S. $ 1 billion. Famous for their products like washing machines, refrigerators, color monitors and televisions, this company is headquartered in the capital city of New Delhi. Their design center is located at different parts of the world though. The “made in India” Samsung products are even exported the Middle East as well as SAARC countries. Sony: The Japanese company Sony Corporation started their business operations in India from November, 1994. Comprising of more than 7000 channel partners and 215 Sony Worlds, this
  29. 29. 29 | P a g e brand is one of the leading consumer durables' brands in India, who offers goods like color televisions, music systems, mobile telephones, laptops and many more. Whirlpool: Headquartered in U. S. A., Whirlpool is one of the most recognized home appliances' brands in India. Apart from holding a share of above 25 % in the national market, this is said to be the biggest refrigerator and the 2nd biggest washing machine brand in the nation. Some of the other popular consumer durable brands in India are as follows:  Blue Star  Carrier  Godrej India  Hitachi India Limited  Sharp India Limited  Tata  Toshiba India Private Limited  Videocon  Voltas Growthprospect of consumer durables' market With the continuous inflow of disposable income and the advancement of technology, the need for the varied consumer durable goods are increasing even in the country of India. This in turn is leading to a strong competition among the different consumer durable brands available in the nation as well as the price gap between the same consumer goods of different companies are narrowing down. Day by day these goods are becoming cheaper. The rural and urban market of consumer durables has been growing at a rate of around 15 % on an average. Segment Definition:- In general consumer electronics refers to a variety of electronic equipment used by private customers. This industry can be divided into many segments:
  30. 30. 30 | P a g e 1. ‘Traditional’ Consumer Electronics: audio and video equipment 2. Computing Devices: Computers, Calculators, Laptops 3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum cleaners, grinders, etc 4. Personal Care: Hair Dryers, shavers, electric toothbrushes. In addition to this, the emergence of telecommunication has lead to the convergence of mobile technology into the consumer electronics industry and hence this paper will only deal with traditional consumer electronics, mobile phones and computing devices which can be termed as Brown Goods as per industry definitions. Henceforth in this paper consumer electronics will refer to Brown Goods. Current and future issues of consumer durables segment:- Indian Retail Sector and Consumer Durables Segment Within retail industry, customer appliances are worth of Rs. 297,285 million with a YOY growth rate of 13.3%. Traditionally the unorganized retailers dominated consumer durables segment but huge growth potential is attracting large corporate organizations to expand their retail operations into this territory. Until recently majority of sales in consumer durables were originating from urban centers but with change in demographics and increasing exposure, the growth in sales volume from rural areas are projected to be higher than urban areas. With the revival of western economy after the recession being slower than anticipated, large global retailers are also looking forward to expand their business in India. Also with increase in awareness, Indian customers are increasingly demanding more value for money both in terms of quality of durables and convenience of buying. Using the PEST framework and scenario based approach we aim to create an understanding of the state of the retail sector and consumer durables segment in India at present and to develop a clearer picture of how the consumer durables retail market would shape out towards the end of this decade.
  31. 31. 31 | P a g e Union Budget The Rs 50,000-crore consumer durables and electronics industry was unequivocal in its praise for this year's Union Budget. The government rationalized duty structures in the Budget, responding to long-standing demands of companies operating in the space. In the exercise, domestic manufacturing is expected to get a boost. "The reduction of customs duty on 22 items (which go into the manufacture of various products including TVs, refrigerators, washing machines, air conditioners and microwaves) as well as a reduction in tax on royalty will encourage indigenous manufacturing and technology proliferation," said Manish Sharma, MD, Panasonic, India & South Asia, and current president, Consumer Electronics and Appliances Manufacturers' Association (CEAMA). According to CEAMA, almost 40 per cent of goods sold in the consumer durables and electronics market are imported. Those that are made here are basically assembled using imported parts. While this is not expected to change overnight, companies say, the government's efforts are laudable, since it seems committed to promote its 'Make in India' drive. Anirudh Dhoot, director, Videocon Industries, and past president of CEAMA, says, "For long, the industry felt neglected because measures were simply not adequate. What this Budget has done is changed that perception. There have been definite measures taken in this Budget, which will create the environment or climate for manufacturing. That is the key." The government has specifically targeted LED TVs, one of the largest consumer electronic categories in the country, reducing customs duty on organic or OLEDs from 10 per cent to zero. This, says Dhoot, was something that TV manufacturers were demanding, since OLEDs are expected to gain traction in the coming months. Dhoot says customs duty on backlights used in LEDs has also been abolished - from 10 per cent to zero. "Bulk of the components in LEDs is imported. By reducing customs duty, assembling costs will reduce. While manufacturers stand to gain from this, consumers benefit because we could pass these savings to them," Dhoot says. The appliances segment too got a favorable push. Kamal Nandi, business head and executive vice-president, Godrej Appliances, says, "Of the 22 items that see customs duty reduction, there
  32. 32. 32 | P a g e are two that appliance manufacturers were demanding. This includes magnetrons, a key input used in microwave ovens, and components used in the manufacture of refrigerator compressors. While we are yet to assess the impact of this on our business, at the outset these steps are welcome." Even LED light and lamp makers have a reason to cheer because excise on components such as LED drivers and metal core printed circuit boards or MCPCBs have been reduced from 12 per cent to six per cent. The move comes in the wake of the government's effort to push energy conservation in the country. In January, Prime Minister Narendra Modi had launched a scheme for LED bulb distribution under the domestic efficient lighting programmed in Delhi as well as a national programmed for LED-based home and street lighting. AC makers like Videocon and Voltas focus on institutional sales due to slowing retail growth NEW DELHI: Air-conditioner makers such as Videocon, Voltas and Panasonic, hit by untimely rains this summer, are betting big on the business-to-business segment, or institutional sales, to push their products in this financial year. "Taking into account both commercial refrigeration products as well as room ACs, 25 to 30 per cent of our volumes is expected from the B2B segment this year," said Pradeep Bakshi, president and chief operating officer, (UPBG & MCED), at Voltas Ltd. The company has dedicated sub-verticals to look after institutional sales of various product categories. Voltas is also looking at cash & carry formats of modern trade partners, who are aggregators for the B2B segment. Panasonic is working closely with developers, architects, interior decorators, project management consultants, services consultants, companies, retail chains and the hospitality industry. Demand for air-conditioners from the commercial segment is catching up fast with an increasing number of offices, stores and business apartments being set up. The growth of the retail,
  33. 33. 33 | P a g e hospitality and commercial sectors has boosted demand as they involve large-scale application of ACs, said Vipin Agrawal, general manager and head - CAC at Panasonic India Pvt Ltd. "We are looking at selling around 15,000 units through B2B vertical this year, and generate revenue of about Rs 750 million," Agrawal said. Videocon, which is looking to double its market share to 12 per cent in the overall air- conditioning market, says its targets can be achieved through the B2B segment. The company plans to sell overall 4.5 lakh units this year, valued at about Rs 1,100 crore. The realty sector is one of the biggest growth opportunities, said Videocon Industries COO (air- conditioners) Sanjeev Bakshi. According to Videocon's research, there are 1.6 million houses that will be delivered this year, which will be ready for possession. On an average, one AC will be fitted in each house, said Bakshi. To drive the effort, the Indian home appliances maker has formed a separate vertical that will only look at B2B sales. "We expect 20-25 per cent revenue should come through this segment this fiscal," said Bakshi. Industry players assume the growth of air-conditioning in the B2B segment would be 25-30 per cent compared with single-digit growth in the retail sector. According to analysts, the market in India for room ACs is 3.5 million to 4 million units, with a penetration of about 3 per cent. Purchase of ACs by individuals is elastic, depending on weather pattern changes and they may be replaced with air coolers due to pricing or electricity bill concerns, according to Devangshu Dutta, chief executive at retail consultancy firm, Third Eyesight. Institutional purchases are more planned and can provide a significant and long-term buffer to consumer demand, he said. Lloyd Electric, which aims to corner an 11 per cent share in the domestic AC market, estimates it can sell 500,000 units through the B2B vertical and generate revenue of Rs 750 crore this year, according to Nipun Singhal, director, Lloyd Electric & Engineering Ltd. The company plans to set up new factories and invest in new machinery and technology, said Singhal.
  34. 34. 34 | P a g e Haier India to invest Rs370 crore to expand manufacturing facility Mumbai: Haier India, a wholly owned subsidiary of Haier Group, on Friday announced an investment of Rs.370 crore to expand its manufacturing facility at Ranjangaon, Pune. Haier Group, China signed a memorandum of understanding with the Maharashtra government in this connection. The proposed investment will scale up manufacturing operations of the company in India by introducing new product lines like washing machines, air condition, LED panels, water heaters and deep freezers, apart from refrigerators. By 2017, Haier plans to increase manpower by 120% to 2,600 employees. “At Haier Group, localization has been at the core of the business since its inception, which has helped the company gain market leadership in several countries. We are positive that this expansion opens multiple opportunity areas not just for Haier but also for our consumers, employees, dealers and other key stakeholders,” said Eric Braganza, president, Haier India.
  35. 35. 35 | P a g e COMPANYPROFILE The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leading white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96 categories. Haier products are now sold in over 100 countries around the globe. Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies and over 50,000 employees throughout the world. Haier’s focused industries include technology research, manufacturing, trade and financial services. The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd., a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong. Qingdao Haier Co., Ltd., also a Haier subsidiary, is listed on the Shanghai Stock Exchange. On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing Olympic Games for white goods home appliances. Unmatched Home Appliance Product Offerings Haier’s product categories range from refrigerators, refrigerating cabinets, air conditioners, washing machines, LED’s, mobile phones, water heaters, freezers and integrated furniture, among which 9 are ranked market leaders in China, and 3 are ranked among the top 3 worldwide in their respective industries. Haier is also a world leader in the technology domains of intelligent integrated home furniture, networked home appliances, digitalization and large scale integrated circuits. By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589 software intellectual property rights. Haier’s proposal for safe care water heater technology initiative was accepted at the 66th IEC Conference in 2002 and Haier dual drive washing machine technology was included in the 2006 IEC standard proposal. This clearly demonstrates Haier’s world-class innovation capabilities in product R&D.
  36. 36. 36 | P a g e Refrigerators Haier is one of the world’s largest and most advanced refrigerator manufacturers, producing over 12 million units of refrigerators and freezers annually at its 20 production facilities worldwide. Haier consistently applies leading global technologies in the manufacturing of its products. Haier is the first company to make breakthroughs in integrating fluorine-free, energy- saving technologies with large freezing capacity, and solve technological problems related to sterilization. Haier has also rolled out the world’s first variable frequency refrigerator, which is made of heat insulating material designed for aerospace.
  37. 37. 37 | P a g e Household Air Conditioners At its eight large production bases in China, Haier uses the world’s most advanced automatic flexible production lines to ensure the delivery of large quantities of highly reliable air conditioners, which are exquisite in quality and free of defects. Washing Machines Haier produces washing machines of 5,000 different specifications under 18 categories, and is the only company in the world with the capability of large scale production of top load washing machines (popular in Asia), front load washing machines (popular in Europe), agitator washing machines (popular in America) and dual-drive washing machines. Haier, with a mission of “customer-oriented design”, pays great attention to safety, health, and the environmental concerns of consumers in designing its products. Haier has introduced a series of new hi-tech environmentally-friendly washing machines, staying ahead of the market trend and demonstrating the technological innovation capability of the company. Freezers Haier produces 1.8 million units of freezers each year. Haier is licensed to supply products for military provisions, and is the only company to win the bid for three consecutive years. Haier freezers have received ISO9001 quality, ISO14001 environmental compliance, and ISO12001 metering and testing certification. Haier is also China’s first freezer maker to receive TUV International Safety Certification, and was the first to receive a no-fluorine certificate from the United Nations Development Programmed. Vacuum Cleaner Developed with the Haier spirit of continuous innovation, Haier dust collectors consistently lead the trend in the dust collection market. Haier’s dust bag series are innovatively designed to collect dust from all directions. The user-friendly design includes such features as a speed- adjustment button on the handle, dust bag design, and lightweight aluminum. Home appliances for kitchen and bathroom Integrated Kitchen Haier integrated kitchen products come with an advanced green safety system, and are equipped with environmentally friendly material, dust-free digital technology, high-quality sync installation and one-stop green service channel, thus bringing customers the ultimate green and
  38. 38. 38 | P a g e safety experience. Haier Kitchen Company is the only company in its product segment to receive ISO9001 quality certification in China. Water Heaters Haier manufactures water heaters of 300 specifications under 12 categories, including electric water heaters, gas water heaters, solar energy heaters, and gas boilers, in the categories of mechanical, electric, and network-based, and with the capacity range of 5-litres to 500-litres. With the application of high technology, Haier produces water heaters in a wide range and specifications both for home and commercial use. Haier follows its “Safety-based Products” philosophy in manufacturing water heaters and leads the industry in safety technologies. Kitchenware Haier’s kitchen appliances cover 4 categories: dishwashers ( see above introduction, exhaust fans, gas cookers and sterilizing cupboards, in more than 300 specifications. Haier Kitchenware products are based on environmentally-friendly technology, with zero leakage and low radiation. The products have won environmentally friendly and green product certifications in both China and the US. Microwave Ovens Haier offers microwave ovens in 50 varieties under 8 categories, including mechanical electronic and digital, and with the capacity range of 17-litres to 40–litres. Haier ovens feature both stainless steel and painted stoves, and come with top doors and side doors. In 2003, Haier developed the steam microwave oven, taking the lead in the application of new technology. Haier is committed to manufacturing high-quality, high-tech and environmentally friendly products, using components made by the world’s top 500 companies. Haier microwave oven products have received FCC and FDA certificates from the U.S Federation Drug Administration. Audio and video products Color TVs Growing at an annual rate of 141% over the last 9 years, Haier color TVs are manufactured with the application of high technology. Haier aims to provide the right products for different consumer groups, gaining high customer recognition. Haier is committed to strengthening its
  39. 39. 39 | P a g e global competitiveness, with the creation of a global supply chain under the concept of “competitive cooperation”. Haier’s extensive range of products, including traditional TVs, flat-panel TVs, digital TVs, wireless TVs, touch TVs and 5.1 sound system TVs, aim to bring more freedom, comfort and greater entertainment to homes and customers. DVD Players Haier offers a diverse line of DVD players of exceptional quality. Haier DVD players are favored by consumers for their performance and after sales service. The products have won a number of awards for environmental protection and energy efficiency. Commercial Air Conditioners Haier has become a well-known global brand for commercial air-conditioners for its strong R&D, excellent product performance, and marketing capability. Haier delivers commercial air conditioners, large multi-system air conditioners and large cold-water air conditioning units in 8 categories and 260 specifications, featuring an integration of fluorine-cooling, wind-cooling and water-cooling functions. Haier’s variable-frequency, variable capacity multi-system central conditioners, flexible variable-capacity screw compressors, and household variable-frequency central air conditioners lead the industry trend with their energy efficiency. Communication and IT products Mobile Phones Based on the philosophy that the technology and fashion can co-exist, Haier integrates state of the- art wireless communication technologies into a complete range of in-fashion mobile phones. Haier mobile phones include such latest features as GSM/GPRS technology, integrated digital cameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includes bar-type phones, clamshell phones, smart phones and the new and unique slim phones. IT products Computers (desktop and laptop) With a special attention to users’ health, and eye-protection, Haier makes desktop and laptop computers for personal and commercial use in different ranges, including the world’s first laptop with 2.0 mega-pixel camera. Haier is committed to delivering a full-service package, and offers free software commissioning. By establishing strategic alliances with suppliers, such as Intel, Microsoft, China Unicom and China Netcom, and taking advantage of the technology and
  40. 40. 40 | P a g e resources of its partners, Haier consistently improves the quality of its computers. In product R&D, Haier employs a team of top class engineers from the U.S., Japan, Republic of Korea, and China’s Taiwan region, and has established a strict-quality control system. Digital Information Products Haier offers a number of patented digital information products, including MP3 and MP4. Haier is committed to delivering personalized products, services and application solutions to meet the individual needs of users. Haier Pharmacy Founded in 1996, Haier Pharmacy is the newest growth area within the group. The product offerings cover 80 specifications under 60 categories including medical raw materials, tablets, capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection, eye drops, etc. The products of Haier Pharmacy fall into four categories of marine drugs, Chinese medicine, Western medicine and healthcare products, with focused areas of the heart and cerebral system, digestive system, osteoporosis, diabetes and healthcare, all of which have received GMP certification in China. Haier Expansion Strategy Phases at a glance The phase of Global brand strategy(2005-2012): Consolidating global resources and creating a global brand The Internet era brings segmentation of the market, and the mode of traditional enterprises featuring “production-storing-selling” can no longer satisfy the tailored needs of users. The
  41. 41. 41 | P a g e enterprises must shift from the enterprise-centric sale of products to the user-centric sale of services. That is, they should shift to the “demand manufacturing and delivery” mode. The Internet also brings integration of the global economy, and the relationship between internationalization and globalization is one of logical improvement. Internationalization means creating international brands with the own resources of the enterprises, while globalization means making use of global resources to create localized mainstream brands. They are quite different. Therefore, Haier consolidates the global resources in R&D, manufacturing, and marketing to create a global brand. In this phase, the business mode created by Haier to develop consumers in the Internet era is a “Win-win Mode of Individual-Goal Combination”. Global Branding Strategy Haier’s global branding strategy aims at positioning the company as a local brand in different world markets in conjunction with enhanced product competitiveness and strong corporate operations. Haier’s international business framework encompasses a global network of design, procurement, production, distribution and after-sale services. Today, Haier has established 15 industrial complexes, 30 overseas production factories and bases, 8 design centres and over 58,000 sales agents worldwide. ABOUT HAIER INDIA Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier India was launched in India in December 2003 and by August 2004 had an all-India promotion launched with over 55 products across six product categories -- refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also launched its brand of mobile phones in India. The India launch was started with innovative products which were designed keeping the day to day customer needs in mind -- products that will transform the customer's everyday living into inspired living.“Products that will make your today better than yesterday”. Haier India launched BMR technology for the first time in India. Even the Double drive is a newly patented technology.
  42. 42. 42 | P a g e The India operations already has an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network. HAIER INDIA VISION To be the Most admired brand in India providing innovative, state of the art, user friendly products of lasting value to our customers, to make their today better than yesterday.  Over 4000 Retail outlets selling Haier products  21 Planet HAIER (plus some exclusive stores)  Presence in all major cities  Brand recall – better than other new brands.  18 Branch Offices & 25 warehouses.  6 Direct Service Centers & 135 Haier customer care centers (covering all India)  24x7 Call Centre  Present status of Haier considering the time span, is appreciated by the Industry. Haier plans to invest Rs 370 crore in Pune plant: KOLKATA: Chinese appliances maker Haier plans to invest Rs 370 crore in its Pune plant to scale up operations. The company said on Thursday it has signed a memorandum of understanding with the Maharashtra government in this regard. The investment will be used to expand manufacturing capacity of refrigerators besides adding new products, such as washing machines, air-conditioners, LED television panels, water heaters and deep freezers, to the production line.
  43. 43. 43 | P a g e The investment will enable Haier to strengthen local research and development to manufacture products more suited for Indian consumers. The company said it also plans to increase its manpower 120% to 2,600 employees across the country by 2017. Eric Braganza, president at Haier India, said the expansion in India is a testimony of the company's commitment to contribute to the government's 'Make in India' initiative. Haier Electronics on lookout for more logistics acquisitions Haier Electronics plans new acquisitions to bolster its fast-growing logistics service business, after the company posted a 19 per cent year-on-year increase in first-half net profit. The company, a subsidiary of home appliances giant Qingdao Haier, said the strategy would help meet demand on the mainland, where more enterprises are expected to outsource the storage, transport and distribution of their goods to professional third-party logistics companies. "The group will reinforce investments and enhance its merger integration capability, aiming to absorb more third-party logistics teams into the group's platform," Haier Electronics chairman Zhou Yun Jie said in a results statement to the Hong Kong stock exchange yesterday. Total capital expenditure of 367.53 million Yuan (HK$462.05 million) in the first six months of the year was mainly used for developing its "integrated channel services" business, including the construction of logistics warehouse projects. The business helps fulfill the logistics requirements for a wide variety of household electrical appliances and consumer electronics goods. In January, Haier Electronics made two acquisitions for an undisclosed sum to build up its logistics operations. It bought a 60 per cent stake in Shanghai Boyol New Brothers Supply Chain Management and wholly acquired Boyol Logistics Offshore. The company entered into a strategic alliance with e-commerce powerhouse Alibaba in December with the goal of creating industry-leading service standards for the logistics, installation and servicing of household appliances across the mainland.
  44. 44. 44 | P a g e Hangzhou-based Alibaba invested HK$2.82 billion in Haier Electronics in that deal, with HK$1.86 billion of that amount put into subsidiary Qingdao Goodaymart Logistics and HK$965 million used to buy a minor equity stake in the company. Alibaba also invested in HK$1.31 billion worth of convertible bonds issued by Haier Electronics in March. They could be converted into ordinary shares at HK$19.334 each in three years. Zhou said the net proceeds from the convertible bonds would be used to expand and upgrade warehousing capacity, develop the company's online-to-offline integration business, and for potential new acquisitions in the logistics industry. Ricky Lai, an analyst at Guotai Junan International, said: "Haier Electronics will likely pursue cooperation with other e-commerce service providers, based on the steady expansion of online shopping in more cities and villages across the mainland." The company reported interim net profit of 978 million yuan, up from 822 million yuan a year earlier, on the back of its integrated channel services business. Total revenue grew 14 per cent to 32.9 billion yuan from 28.9 billion yuan in the first half of last year. Haier expands China logistics business as 3PL demand grows HONG KONG — Haier Electronics spent $60 million in the first half developing its logistics business as the well-known Chinese brand embarks on a bold new strategy to tackle the increasingly outsourced logistics requirements of household electrical appliances and consumer electronics. The company, a subsidiary of mainland home appliances giant Qingdao Haier, told investors in a Hong Kong Exchange announcement that there is rising demand in China for third-party logistics as more firms outsource the storage, transport and distribution of their products. Haier Electronics chairman Zhou Yun Jie said following investments in two logistics companies in the first half, the company plans new acquisitions to boost its fast-growing
  45. 45. 45 | P a g e logistics services division. In January, Haier bought a 60 percent stake in Shanghai Boyol New Brothers Supply Chain Management and wholly acquired Boyol Logistics Offshore. The group posted a 19 percent increase in first-half profit, banking $160 million, with revenue growing 14 percent to $5.35 billion. Haier Electronics’ new strategy gained momentum in the first half after leveraging a strategic alliance with China’s e-commerce powerhouse Alibaba that was signed in December. The goal was to create industry-leading standards for the logistics, installation and servicing of household appliances across the country. Alibaba invested $361 million, with $239 million injected into subsidiary Qingdao Gooday Mart Logistics. The e-commerce giant also put $167 million into convertible bonds issued by Haier Electronics, the net proceeds of which Zhou said would be used to expand and upgrade warehousing capacity, develop the company’s online-to-offline business and acquire logistics companies. “The group has nearly 30 warehouses across the country to provide merchants on Tmall.com (a unit of Alibaba) with logistics and delivery services that features warehousing and distribution. Goods will be delivered directly from the group’s logistics centers to consumers to avoid multiple transfers, which has significantly improved delivery efficiency and lowered the chances of product damages and customers’ costs,” Zhou said in a statement. In China, the “last mile” delivery to online shoppers is an area crucial for the success of any e-commerce operation, and Haier Electronics is integrating its installation service business with Gooday Mart Logistics, which it believes will greatly improve service. Gooday Mart Logistics operates a 24-hour delivery in over 1,500 districts, and in addition to delivery-at-request and installation-after-delivery services, Gooday Mart also offers reverse logistics, unpacking and product checks, and scheduled delivery.
  46. 46. 46 | P a g e The acquisition of Shanghai Boyol also expanded the company’s last-mile capability in the furniture business while allowing it to build a nationwide network and move service coverage into third- and fourth-tier markets. The upgrade of service capacity is helping Boyol to build the largest third-party professional furniture installation platform across the country. It has allowed Boyol to expand business cooperation with existing customers, such as IKEA, and bring in new clients such as Yihua Timber and Red Star Macalline. Zhou said the logistics industry in China would continue its rapid growth in the second half. “The industry is experiencing large scale consolidation, and more enterprises will outsource their logistics function to professional third party logistic companies. The group will reinforce investments and enhance its merger integration capability, aiming to absorb more third party logistic teams into the group’s platform,” he said. Alibaba and Haier Create Logistics Joint Venture Alibaba to Invest $360 Million in Haier Electronics as Part of Deal BEIJING—Alibaba Group Holding Ltd. will invest 2.82 billion Hong Kong dollars (US$364 million) in Chinese appliances maker Haier Electronics Group Co., as part of a deal between the companies to form a logistics joint venture. The companies said the agreement is aimed at creating a logistics and service network across China that will deliver and assemble household appliances and other large items. ENLARGE An employee walks past a logo of Alibaba Group at its new base on the outskirts of Hangzhou, Zhejiang province, China, Nov. 4, 2013. EUROPEAN PRESSPHOTO AGENCY Alibaba Group, the operator of China's largest e-commerce sites, has been working in recent years to improve China's logistics industry to provide quicker and more-reliable delivery of orders from its popular Taobao and Tmall shopping sites.
  47. 47. 47 | P a g e Alibaba founder Jack Ma has said "terrible" logistics are slowing the growth of Internet retailing in China. The new cooperation is the most recent in a number of steps taken by Alibaba to bolster China's underdeveloped delivery system. Earlier this year, the company said it would join with banks, delivery companies and industry competitors to invest 100 billion yuan, or about US$16 billion, to strengthen China's logistics network over the next decade. Though delivery times in China's largest cities can be speedy, the country's vast and often-mountainous landmass has made it a challenge to get large products such as electronics and refrigerators to more-distant locations. To establish the joint venture, Alibaba said it would invest HK$1.86 billion in Haier Electronics' Goodaymart unit, by taking a 9.9% stake for HK$541 million and subscribing to convertible bonds. Alibaba also will acquire a 2% stake in Haier Electronics for HK$965 million. News of the deal helped boost shares in Haier Electronics as much as 19% to a 14-year high in Hong Kong Monday morning. The stock closed 13% higher. Haier Electronics is a unit of Qingdao Haier Co. Qingdao Haier's parent, Haier Group, ranks first in China and globally, according to Euro monitor, in terms of market share for major appliances, such as refrigerators, washing machines and large cooking appliances. Haier Group had 27.2% of the domestic market in China last year, while GD Midea Holdings Co. was No. 2 with 13.5%. Globally, Haier Group and Whirlpool Corp. each have 9.6% of the appliances market. U.S. private-equity firm KKR & Co. in September said it would take a 10% stake in Qingdao Haier for about US$556 million. Stratigies:- 1. Three phases of haier innovation strategy a. Brand building (1984-1991)-quality is prominent for haier. b. Product diversification (1992-1998)-acquisitions of companies with bad management infusing life into them.
  48. 48. 48 | P a g e c. Globalization (1998-2005)-attacking the difficult markets first followed by relatively weaker ones. Principles followed for expansion:- 1. Best efforts are made to fully develop the current industry before entering segment of relative products. 2. Best efforts are made to gain the leading position in the new segment of the industry after a certain period. Global Presence of Haier:- · Trading Companies: 64 · Design Centers: 8 · Industrial Complexes: 15 · Sales Network: Over 58,000 Partners of Haier:- Haier has established an extensive sales network around the globe. Key partners in perspective Markets include: • China: Strategic alliance with Sunning and Gomes chain stores • America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's, HOME DEPOT, Best Buy, PC-Richard, Wal-Mart, Sam's, Costco, Brand smart and Target • Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO • Europe: Cooperation with KESA, Media Market and Carrefour Challeneges:- 1. The first and most important thing which Haier needs to do is to, it was found in Customer survey that still 64% of people surveyed were not aware of Haier, even Dealers who are in consumer durable business from more than past 20 years are not Aware of Haier. 2. Haier needs to increase the number of BTL (below the line) activities to generate Common awareness and visibility at grassroots level.
  49. 49. 49 | P a g e 3. In Ahmadabad market dealers don’t want to put direct push effort on brands that’s why unlike other cities market where if a dealer deals in LG they prefer not to deals with its direct competitor Samsung, but in Gujarat every dealer is having collection of brands, they want to be ready for everything like whatever customer demands they can easily find out in their store. Currently Haier is available with most of the major dealers in Ahmadabad, Haier needs to focus on those dealers also where it will not face direct competition with LG and Samsung , a small and dedicated brand dealer will work not only for margins but they also can see the future opportunities in form of Haier. 4. Good thing about Haier is that they got somehow success in positioning themselves as a quality brand the customer survey and the dealer’s survey tells the story about it. 5. Haier should adopt aggressive marketing strategies to cut down competition and visibility at market place. 6. Appropriate product knowledge should be given by the company to dealers and to dealers to create awareness towards quality. 7. Overall there is much scope for Haier in Gujarat market. But Brand visibility should be increased so it can convince dealers and customers like LG and Samsung are more customers driven, where company demand is initiated by the customers, these company products pulls demand from the market. 8. Company must have to focus on print ads, because where in the TV ads, a person can see only if he/she open the TV and if the ads is getting broadcast that time, whereas print ads any person can see going through the news paper throughout the day. 9. Products should be more attractive refrigerators looks very simple and ordinary especially direct cool refrigerators Entry level Refrigerators can do better because of price and 190 capacities.
  50. 50. 50 | P a g e 10. Haier presence in Gujarat market is less compared to their competitors like LG, whirlpool, Samsung, Godrej it is greater than only Electrolux, one thing is also evident that Haier is present in major counters with LG and Samsung, Haier also need to focus on those dealers were it will not face direct competition with LG and Samsung. Competitive strategy should be like this where first Haier should wipe out smaller brands compare to LG and Samsung because this brand also have market share larger than Haier, and Haier is not in competition of LG and Samsung it should target on brands like Electrolux Godrej , TCL first, so it can compete the bigger brand later on. Haier BCG matrix:- STAR The star has a large market share in rapidly growth industry. The air conditioners are the stars of haier as they have large market share and business growth rate in the market. They are stars as
  51. 51. 51 | P a g e they earn maximum profit for the company and even it has potential to grow and progress further. Cash Cows Cash cows exit in mature, slow growth industry but are a dominant business in the industry, whit a large market share. Refrigerators were the first product which hair produced and launch initially. This product runs successfully by getting more market shares in the market and achieving high growth rate. They financed their business by gathering revenue from the sales of refrigerators. As it’s a mature product of haier so it’s a cash cow of the company. Question Marks Question mark exit in new rapidly growth industry but has low market share. Cell Phones of haier lay in question mark because they had low market share in this industry. Also they did not create value among customers like their other products have created. They are at risk, either these cell phones would be star or dog in future. Dog Dog is a poor performer with low market share in slow growth market. I would say Haier has no product in this segment. Porter what’s Strategy Framework:- Haier Activities System:  Understanding of Markets  Outstanding Product quality  Sourcing & Distribution network in place  Development of Global brand  JIT delivery (reducing inventory cycle)
  52. 52. 52 | P a g e Haier Competitive Advantages:  High product quality  Differentiation in products and services (Thanks to high investment in R&D)  Single brand management  Quickly response to shifts in market Product Life Cycle:- Haier has passed the introductory stage. It has demonstrated that it is a workable business entity. It is producing many products and services and has loyal customers. They are solidly based and profitable. At this time Haier is at the growth stage, where they have achieved success and now they are trying to take off. They have occupied half of the world and they are planning to invest in Middle East. SWOT Matrix: Haier has quite strong opportunities that can use to expand the market and have the possibilities to enter new product segments and also to maintain the position. In terms to develop and avoid
  53. 53. 53 | P a g e threats situations, the company should use its strengths and turn threats into opportunities at the same time. It can help the company to increase and expand its position on the market.
  54. 54. 54 | P a g e For the first entry product – washing machine as necessary weekly cleaning equipment, it must have a great opportunity selling on Finnish market. Moreover, Finland has a great life style and high standard of life and high salary level, the local consumption power is relatively strong. The demand for washing machine with durable, high quality, energy saving and super silent module is still the increasing customer need in the long term period. Furthermore, Haier has the advantages of plenty experiences in European markets, customized product supply and
  55. 55. 55 | P a g e innovation spirit, which can help much for 41 Haier enters into a new market. In a whole, the investment of Finland can be considered in the future business decision making plan. The Marketing Mix: Ingredients for Success The marketing mix, earlier known as the 4 P’s, (but now has a few more), is a vital part of any marketing strategy. This is a tool whereby the marketer takes decisions on what and how a product should be, where it can be sold, how it should be priced, how it will be promoted, how to equip the people who are responsible for selling the product… and so on. Getting the marketing mix right is equally important for the large corporation and the small business owner. One of the most critical marketing management decisions is that decision of setting the marketing mix values, and selecting and employing strategy that periodically changes that marketing mixes in response to changing business environment. The marketing mix problem involves setting the values of the marketing decision variables; the four P’s; namely, Product (its quality), Price, Place (distribution and sales-force expenditures) and Promotion (advertising, selling). Developing an effective marketing mix is important for product planners seeking to gain competitive advantage in industrial markets. The decision regarding specifying the marketing mix depends on a set of variables, such as competitor's price, competitor's product quality, competition level, forecasted sales and others. These types of variables necessitate adoption of appropriate approaches that can deal with such variables' nature marketing mix mapping is a step done to achieve this. Product: A lot of thought and effort goes into designing a product offering. The most important question, as a marketer, a person need to ask is whether there is a need for that type of product and how this product satisfies that need better than those of their competitors. This will force to think of why that product is unique, and thereby help to evolve that product’s Unique Selling Proposition. Price: This element of the marketing mix can be many a strategy’s undoing. A complete understanding of the financials that drive a business is essential before deciding a pricing strategy. Base your decision after considering the following – what is the perceived value of your product in the eyes
  56. 56. 56 | P a g e of the customer? How price elastic is the market? Do you wish to load overheads on to the new product, if an existing product line is capable of absorbing them? What is your objective – do you plan to gain market share on the strength of a rock bottom price or do you wish to create a premium image targeted at niche customers and price your product accordingly? Place: This is probably that element of the marketing mix that has undergone a complete change in definition. Traditional trading and distribution models have given way to remote or virtual channels. While reaching the customer may have become simpler, your job as a decision maker has become that much more complex. You now have a plethora of options to choose from – do you go for brick and mortar or direct mailing, use the phone or sell door to door? This decision should, first and foremost, be driven by customer preference and then by other considerations like logistics and economics. Indeed most businesses rely on a multi distribution channel strategy. Promotion: In a commoditized industry, this is what makes the essential difference. Possibly no other marketing mix element draws as much attention from strategy makers. Again, let consumer needs drive your efforts. Does your marketing communication address a specific need of the target audience? Is the message memorable? Does it spur action? Here again, the entire landscape has changed from what it was a few years ago. Promotion has gone way beyond mere advertising and public relations – it is now a highly evolved process, ranging from live events to internet marketing. In these times of information overload, promotion strategies must pack sufficient punch to cut through the clutter. The marketing mix is a dynamic entity and needs to be reviewed and refined periodically. It always helps to stay in touch with the latest developments. Marketing mix mapping for the brand is done to know the standing of the brand mapped with their competitors with respect to essential element of marketing mix i.e., product, price, place, and promotion. It ensures Studying marketing mix strategies of the brand mapped and reviewed and refined periodically according to market condition and competition comparative mapping with other major players in the market, finding loopholes and building effective marketing mix strategy for Haier in Refrigerator and Washing machine segment
  57. 57. 57 | P a g e Haier distribution network in India:- In the above haier distribution network shows the details of each plant and warehouses hubs distribution networks in India. The Pune plant is the main and largest plant operations of haier in India which manufacture electronic manufacturing products and refrigerators to hub warehouses in Mumbai, Kolkata, Delhi, and Chennai which is located at north, south, east, and west of India. The haier at china imports medical freezers, LCD’s and other consumer electronics to all the hubs of warehouses in the country. Thus the network distribution shows the clear information of logistics and distribution networks in Haier India.
  58. 58. 58 | P a g e Haier supply chain operation:- In the above Haier supply chain diagram shows the role of 3rd party in supply chain, transportation, warehouse, distributors, dealers and customers. This haier supply chain gives us the logistics information, cost control and finding out the bottlenecks in the haier supply chain. The supply chain starts with the Pune plant manufacturing unit which supplies the finished goods through the mode of road transport which is operated by the 3rd party company to all the warehouses hubs in the country. And even after transporting the goods in all the warehouses the 3rd party provides service to haier for transport the goods to the distributors, dealers, outlets and to customers. Thus this supply chain gives the necessary information and clear idea for maintaining the supply chain of Haier Company India.
  59. 59. 59 | P a g e 3PL company of Haier company:- 1. Clearing and forwarding agency will provide man power to warehouse operations as per government of labor policies. 2. They will maintain warehouse operations as per the Haier guidelines. 3. They will handle the loading and unloading and stacking the stocks which related to warehouse operations. 4. They will stack the stocks as per the ageing norms of the company. 5. They will take care of fire extinguisher to the warehouse. 6. They will provide transportation facilities to Haier warehouse in Hyderabad in order to move the goods. 7. They will give fright bill as per transport agreement with HIL. 8. They will also provide service for product labeling, packaging, assembly and kitting. 9. It also provides the supply chain consulting services to the company. 10. They also provide the product order entry, processing and fulfillment. 11. The 3rd party provides fleet management in the warehouse. 12. They will provide customer service through the Haier Company. 13. Haier uses 3rd party courier companies DTDC, Blue dart, Trick on for transferring the physical documents depend upon urgency of the reports.
  60. 60. 60 | P a g e Swamy and sons 3rd party logistics provider to Haier company:- .What they do:- Swamy Sons has earned tremendous goodwill from name brands since 1973 as a committed C&F Agent. The group has been providing comprehensive logistics solutions by catering to  Providing warehouse space  Managing C&F Operations  Liaison with Government offices and agencies  Transport and  Value Added Services  With strong IT setup that compliments the current C&F scenarios, Swamy Sons always ensures delight during the engagement. Best in class CFA Agent with decades of experience:-  They have major name brands as our customers to date  They have made liberal investments in robust IT systems that bring precision in Invoicing & Banking  There Transport backbone is unmatched. With own and allied fleet, transport goes seamless at Swamy Sons. Providing 3PL service to these organizations:- Colgate Cadbury Goorej Amul Haier Tata sky Bajaj Camlin ETA Godrey Phillips Indian oil jubilant foodworks LG Saffola Loreal Marico Marlboro MTR Nissin Kellogg’s CFA warehouse operations:-  We supply own space or source it based on specific requirements pertaining to security, environment specifications and proximity to markets
  61. 61. 61 | P a g e  We evaluate the shortlisted spaces for adequate ventilation parking space, area of entry and exit passages for ease of material handling and vehicle movement. Handling cases, products, SKU’s:-  Stocking, handling receipts, dispatch and monitor inventory at the unit desired by the customer. Manpower:-  We decide staff profile for various needs of our clients  We provide training on customer specific needs  We ensure legal compliances Handle spikes in staffing pattern/requirements Infrastructure:-  We deploy furniture, equipment, connectivity lines and transport based on the size of operations. Information technology:- Swamy Sons is on ERP using SAP, Oracle, MFG PRO, for and on behalf of the principal companies. Data entry and generation of MIS for the principals is done on their software as per their corporate and IT policy. Value added services:-  Delivery to distributors on the same day in Hyderabad as that of all orders received up to 1PM  Settlement of transport claims to up-country distributors within one month
  62. 62. 62 | P a g e  Ability to file monthly A2 returns, and complete the sales tax assessment if suitable authorization is given  Procuring Licenses for the principals  Handling Banking requirements at the warehouse level (Collecting DDs, and other instruments).  Generating MIS on the principal’s own software, as per their reporting conventions  Any other customer specific requirements  Delivering and consulting for turnkey logistics solutions, to enable new entrants to set up retail chain.  Disposal of expired stocks as per the legal norms and policies of the principal company Transport:-  We own a fleet of vehicles consisting of Autos, Tata A/C, Tata 407s, Tata 607 and DCMs for local deliveries.  We affect Local Deliveries on same day if order is received before 1PM.  Separate vehicles for Modern Trade deliveries  We have contracts with leading transporters for up country deliveries to any town/village in Andhra Pradesh, Karnataka and Tamil Nadu. Manufacturing:- As a part of our backward integration strategy, we have manufacturing facilities to make custom build shippers/cases. The manufacturing facility is handled by our group company Shrikant Containers, located in Uppal, Hyderabad. This is over and above, the normal repacking solutions that we offer as part of our CFA operations. Logistics solutions providers Swamy Sons provides Logistic and fulfillment services for small and medium online businesses, which may have the know-how for creating the product and procuring orders but not for delivery and distribution. For example, a cottage industry for pickles or eco friendly store may have good reputation for quality products. They may procure orders by phone or through website. They may not have the expertise to handle logistics and delivery. That’s where Swamy Sons steps in.
  63. 63. 63 | P a g e Operations of inbound logistics of the warehouse:- 1. When the goods are unloaded from the truck. 2. The Inspection of inbound documents will be done by security officer of the warehouse and he will enter all stock into inbound register 3. After inspection is done the security officer will submit the inbound report of unloaded of the goods to warehouse manager (C.F.A.) 4. After checking the document report by the warehouse manager. He/she plans for managing the space in warehouse. 5. After unloading of goods in the warehouse. The CFA manger will check the MRP stickers with bar codes stickers on each product and condition of the carton box. 6. Then the warehouse manager submits the document report to branch logistics manager. 7. Branch logistics manager will prepare space management report according to the sales plan. 8. The vehicle Detention report and space management report will be sent to Regional Logistics Manger /Head Office of logistics. 9. After unloading of the all stocks in the warehouse. The Branch Logistics Manager will send stock unloading report to all branch sales team. 10. Branch Logistics Manager will manage vehicle detention report daily.
  64. 64. 64 | P a g e Inbound operation procedure:- Entering security inbound register Stackingof consignment in receiving area Physical verificationby warehouse executive Is consignment correct? Update DEPS Labeling bar code level in each box (sku), which provide by supplier Preparing GRN Giving acknowledgementto supplier SKU checking process i.e. size, quality, color, unit Put inbound no. in back side of bill/invoice/challan GRN posting by data entry operator Start Closing inbound process Conform GRN SKU wise storing material into BIN
  65. 65. 65 | P a g e Operations of outbound logistics of the warehouse:- 1. To dispatch the stock in outbound. The logistics department in warehouse need tax invoice document from the commercial manager. 2. As per the invoice the warehouse manager arranges the trucks as per route plan. 3. After taking the invoice the supervisor of the warehouse moves the stacked stocks from its place to delivery place as per the invoice as allotted and he/she enters the each outbound products details in the bin card as per invoice details. 4. After entering into bin card. The Warehouse supervisor officer will start the loading part along with security officer and they will write down the each unit serial number on tax invoice. 5. The warehouse manager will check the truck condition (torpholan). After loading the warehouse manager will arrange the road permit (waybill) for the trucks. 6. After loading the goods in the vehicle the transporter will raise the Lorry copy. 7. Security officer of the warehouse will checks all documents and enter in outbound register and handover papers to diver.
  66. 66. 66 | P a g e Outbound process:- Warehouse delivering process In Haier warehouse delivering process is 3 types 1) FIFO (Fast in Fast Out). Here the 1st items which will come to warehouse, it will be going to delivery 1st. 2) LIFO (Last in Fast Out). Here the last goods are going to first delivery. 3) FEFO (Fast Expire Fast Out). Here the first expire goods will be first delivery. E.g. if some food goods are there for delivery, then it will be delivery first. Prepare Indent Pick-up Picked Material Cross Checking Scanning the Picked SKU Route Planning Generation of Invoice Update System
  67. 67. 67 | P a g e DATA ANALYSIS AND INTERPRETATION This chapter deals with the data analysis and interpretation of the sales reports and data collectedfrom the year 2012, 2013, 2014 of Haier to estimate the sales for future years. The other reports like monthly inter stock report, vehicle detention report; aged stock report and transportation report were also used to analyze the 3PL role in Haier warehouse at Hyderabad. Sales data 2012:- 105 6667 372 161 561 4332 12474 605 13366 211 4383 1353 0 2000 4000 6000 8000 10000 12000 14000 16000 quantity invoice quantity invoice 162304415780011471361663719 8072003 30369795 99088881 1749697 106161050 3356906 26836690 6045748 0 20000000 40000000 60000000 80000000 100000000 120000000 Sales Net Value Sales Net Value
  68. 68. 68 | P a g e In the above analysis of the graphs of sales net value and quantity invoice of the year 2012 data shows that the refrigerators had great sales turnover around RS.106161050/- with the quantity sold 13366 units in 2012 was sold in the market. And the second sales LCD had a great sales turnover around RS.99088881/- with the quantity of 12474 units was sold in the market. The lowest sale unit was in the year 2012 was digital IT products. Thus it was the interpretation of the haier sales turnover of year 2012. Sales data 2013:- 24395552980457 10553412 54224180 119979937 3055873 132826344 20232 38360491 14366821 0 20000000 40000000 60000000 80000000 100000000 120000000 140000000 sales net value sales net value 140 7 682 7474 10669 1009 13678 46 5782 3844 0 2000 4000 6000 8000 10000 12000 14000 16000 quantity invoice quantity invoice
  69. 69. 69 | P a g e As per the above analysis observations of sales data and quantity invoice graphs of year 2013 shows that again the refrigerators had great sales turnover around Rs.132826344/- with the quantity of 13678 units sold in the market. And the second highest sales were the LCD’s with the sales turnover of 119979937/- with the quantity of 10669 units sold in the market. The lowest sales were TV’s. Sales data 2014:- 24 108 2212 1161 414 2184 1306 57 0 500 1000 1500 2000 2500 quantity invoice quantity invoice 375421 2303752 24691107 17512371 1257030 20409138 10220122 146912 0 5000000 10000000 15000000 20000000 25000000 30000000 sales net value sales net value
  70. 70. 70 | P a g e As per the above analysis observations of sales data and quantity invoice graphs of year 2014 shows that the home air conditioner had great sales turnover around Rs.24691107 /- with the quantity of 2212 units was sold in the market. And the second highest sales were the refrigerators with the sales turnover of 20409138/- with the quantity of 2184 units was sold in the market. The lowest sales were water heaters. Thus it was the sales analysis interpretation data 2014. Sales data of 3 years estimation for future forecasting the sales turnover:- As per the analysis and interpretation of 3 years of Haier sales data and comparing it with each years of sales the graphs shows that in the year 2013 the sales data was recorded as the highest sales turnover of the Haier company around Rs.378806716/-. And by forecasting the sales data of 3 years of 2012, 2013, 2014 as been estimated that the sales turnover can go down in the year 2015 which is not a good sign for Haier Company. So by doing the sales analysis it shows that all the departments in the Haier Company and even logistics department also depends upon the sales turnover and marketing department of the company. 283663852 378806716 76915841 39714125 0 50000000 100000000 150000000 200000000 250000000 300000000 350000000 400000000 2012 2013 2014 2015 sales estimation data sales
  71. 71. 71 | P a g e Aging stock report analysis:- As per the above aging stock report analysis shows that 59% units of water heaters are still stacked in the warehouse which comes under aged stock in the report and shows very less sales for the water heater and shows high dumping of the water heaters from the plant in the warehouses. The less aged stock in the warehouse is small appliances and commercial AC’s were the flow of the goods is more in the market. The aging stock analysis shows the products which are more sales and less sales in the market. The aging stock also occupies the space in the warehouse and cost of transporting in the market or other warehouses. 0% 0% 1%1% 59% 0% 26% 0% 3% 10% 0% Aging stock analysis Commercial AC Cross Division Freezer Home Air Conditioner LCD Micro-wave Oven Refrigerator Small Appliances Solar Product Washing Machine Water Heater
  72. 72. 72 | P a g e MIS report of April 2015:- As per the above MIS report April 2015 shows how 3rd party provider’s gives number trucks to transport the goods, quantity carried and transit time of days at the warehouses. The above graph shows that Om Sai transporter which is from the company of Samy and Sons the 3rd party company which provides service to haier as been recorded the highest service in the means of transport of trucks to haier warehouse for transporting the goods in local and upcountry of around 46 trucks as been provided by the 3rd party logistics company to haier in the month April 2015 MIS report. And the Om Sai transport truck carries the highest units of haier products with lowest fright charges and to control the cost of transportation. The second 3rd party transport company is S.M. carrying corporation company which provides 45 trucks to Haier Company with units carrying is 858 units. Thus the MIS report shows the role of 3rd party logistics company in the haier company. 46 4 45 3 12 5 94 8 99 18 66 5 1562 128 858 144 1270 125 0 200 400 600 800 1000 1200 1400 1600 1800 number of trucks total transit time number of days total quantity carried
  73. 73. 73 | P a g e MIS report May 2015: As per the above MIS report May 2015 shows how 3rd party provider’s gives number trucks to transport the goods, quantity carried and transit time of days at the warehouses. The above graph shows that S.M. carrying corporation which is a 3rd party transport company which provides service to haier as been recorded the highest service in the means of transport of trucks to haier warehouse for transporting the goods in local and upcountry of around 11 trucks as been provided by the 3rd party logistics company to haier in the month April 2015 MIS report. And the S.M. carrying corporation truck carries the highest units around 220 of haier products with lowest fright charges and to control the cost of transportation. The second 3rd party transport company is TTC logistics which provides 5 trucks to Haier Company with units carrying is 125 units. Thus the MIS report shows the role of 3rd party logistics company in the haier company. 2 3 5 3 1112 18 5 9 38 120 144 125 13 220 0 50 100 150 200 250 number of trucks transit time number of days total quantity
  74. 74. 74 | P a g e Vehicle Detention report:- As per the above VDR analysis report which shows the dumping of the goods from plant without the coordination with sales and logistics departments of the company or due less space in the warehouse which effect the time of halting of the trucks in the warehouse. The trucks from the plant which is SM carrying corporation and Nalagarh truck Perators Company is recorded as more days of halting around 3 days due the low space in the warehouse or low billing from the sales department. Thus the VDR report shows the vehicle detention time and reporting time of halting trucks in the warehouse. 1 1 1 1 3 3 1 2 0 0.5 1 1.5 2 2.5 3 3.5 VDR report No. of Days Halting
  75. 75. 75 | P a g e 3PL transport analysis in Haier warehouse Hyderabad:- As per the above transportation report shows the role 3rd party logistics company which is sovereign enterprises of Swami and Sons Company provide the trucks around 901 trucks to Haier company to local and up country were they had transported the goods more to koti area in Hyderabad where there is more sales and more dealers are located in koti. The 3rd party Logistics Company had provided the trucks to koti around 301 trucks with units carried is 3389 which shows the demand for the Haier products for transporting. Thus the transportation report shows the details of 3rd party logistics in transporting the goods in Hyderabad in local and up country. 8 12 10 20 89 69 10 12 5 11 301 15 10 38 7 11 42 6 50 86 81 5 3160235160 870 165 3040 215 535 100171 5465 360215 761 195205 1880 140 12501260 1620 65 35 0 1000 2000 3000 4000 5000 6000 habids Ameerpet ASRAONAGAR ATTAPUR BEGUMPET BHEL DILSUKHNAGAR GUDLAPOCHAMPALLY HASTINAPURAM KARKANA KOTI KUKATAPALLY LBNAGAR MALAKPET MOOSAPET NAMPALLY MUSHEERABAD PANJAGUTTA SANTOSHNAGAR SEC-BAD TADBUND UPPAL VIDYANAGAR transporter number of trucks KM
  76. 76. 76 | P a g e SUGGESTIONS: 1. The sales department and plant manufacturing department should coordinate to decrease high dumps from the plant. 2. To maximize the warehouse space in order to allocate the space for the higher dumps of the products from the plant. 3. To reduce the lorry detention time during the process and implementing effective scheduling process in the loading and unloading of the products from the plant. 4. To minimize and control the inter branch stock transfers as per sales plan. 5. To reduce the late delivery of products to the dealers and customers. 6. To recruit manpower in order to reduce the time of loading and unloading of the products and to avoid the traffic of trucks. 7. Need to improve in the logistics facilities in the company and maintain the flexibility within the departments. 8. Need to improve to liquidate the ageing stock daily report in the warehouse. 9. To avoid low quantity billing in order to reduce the expenses in local and upcountry. 10. To appoint repacking department and 3rd party at every hub only for import stocks and all warehouses to avoid the carton box damage in order to save time ,reducing the loss and to control the cost. 11. In global market: Continue Brand Building Initiatives, An individualized brand, the product quality, adaptability and flexibility and Customer focused firm. 12. In Domestic Market: Continuous Innovation, a home company to customers which Increases the quality. 13. To avoid the part loads of the goods by the distributor for all the Haier warehouses in the country. 14. To avoid low billing by the distributors in order to control the fright cost.
  77. 77. 77 | P a g e REFFERENCES:- 1. MANAGING SUPPLY CHAINS A LOGISTICS APPROACH BY JOHN .J. COYLE, 2013, 9TH EDITION. 2. Aghazadeh S.M. (2003), “How to choose an effective third party logistics provider?” Management Research News, Vol. 26, No. 7, pp. 50-58. 3. Enterprise Information Management, Vol. 18 No. 3, pp. 316-329. 4. Alves, A.R. and Vieira A. (2006), ‘‘SERVQUAL as a marketing instrument to measure service quality in higher education institutions’’, Second International Conference: Product Management-Challenges of The Future, Poznan. 5. Bask, A.H. (2001), "Relationships between 3PL providers and members of supply chains – a strategic perspective", Journal of Business and Industrial Marketing, Vol. 16 No.6, pp.470-86. 6. Bagchi, P.K., Virum, H. (1996), "European logistics alliances: a management model", International Journal of Logistics Management, Vol. 7 No.1, pp.93-108.

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