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Sales & Distribution Strategy - ITC Bingo
This document discusses ITC's implementation of a hybrid order booking model for its packaged snack food sales and distribution in Bangalore, India. It describes tracking sales losses, supply variations, and inefficiencies in the existing system. The hybrid model tested clubs two routes together on alternating order and supply days, doubling distributor visibility and reducing costs. Initial results for two distributors, MA Associates and Rushub, showed sales increases of 23.8-25.6% and bill/line cuts of 101.5-156.9%/40-54% respectively. A pure order booking model with four routes covered by four distributors on order days also yielded improved results.
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Sales & Distribution Strategy - ITC Bingo
- 1. Sales & DistributionStrategy : Packaged Snack Food Category 1 ITC BINGO Hybrid Order Booking Model Implementation, Results & Scale up Harshvardhan Singh Chauhan Copyright 2009 , ITD Marketing, ITC , Bangalore.
- 2. 2 Copyright 2009, ITD Marketing, ITC , Bangalore. Presentation Plan •Understanding the Sales And Distribution Chain •Tracking Sales loss Across Bangalore •Tracking the variation in supply •Opportunities to avoid the Sales •Order Booking Model •Hybrid Model Solution •Pure Order Booking Model
- 3. 3 Understanding theSales And Distribution Chain Copyright 2009 , ITD Marketing, ITC , Bangalore.
- 4. 4 Copyright 2009, ITD Marketing, ITC , Bangalore. Processes in the chain
- 5. 5 Copyright 2009, ITD Marketing, ITC , Bangalore. •ECD •Stock at hand •Supplies •Reserve Stock •Cash at hand Inefficiencies in Loading •Stock at WD point •Route Demand •Carrying Capacity
- 6. 6 Dynamics involvedin a Sales negotiation Copyright 2009 , ITD Marketing, ITC , Bangalore. •Prefers high selling SKU’s •Prefers more credit & variety •Induces Sales Cannibalization •DS pushes available stock •Maximize sale value , bill cuts, lines cut •Retailer’s capacity to pay
- 7. 7 •Stock Check •Hanging Ladis •Arranging on rack •New Stock Rotation on rack •Expired stock •Air out Packets •Unsold / Obscured packets in stores •Lost visibility Copyright 2009 , ITD Marketing, ITC , Bangalore. Inefficiencies in Merchandising
- 8. 8 25% 33% 31% 32% Copyright 2009 , ITD Marketing, ITC , Bangalore. • High Average Daily Actual Sales of Rs.5020 •Low Billed Outlets Coverage 30.71% •Excess Stock 60.43% •Expected Daily Sales of Rs.7832 per DS •High Average Daily loss of Rs.2812 per DS •Huge Demand Supply Mismatch •Stock Unavailable 99.99% •Stock out 0.01% Tracking the Sales Loss 20% 26% 27% 37% Across 112 routes , 4200 + outlets , 8 WD points •Sales loss of 35.5%
- 9. 9 Variation indemand and supply for January’09 Copyright 2009 , ITD Marketing, ITC , Bangalore. •Reserve stock of five days was taken •ECD is prepared by the Area Executive •Total Variation of 83% Inefficiencies in Supply •10 variants supplied •Three variants supply was only 50% of demand •Two variants supply of more than 100% •Only Three variants supply was close to demand •91.38% excess supply •Four variants were under supplied •One variant had close to 100% excess supply ECD + Reserve Supply + SOH
- 10. 79 KGs oftransfer 380 KGs of transfer 212 KGs of transfer Cover Day Report Analysis for MA Associates & Rushub as on May 30th ‘09 Copyright 2009 , ITD Marketing, ITC , Bangalore. 10 MA Rushub Was Sales loss avoidable?
- 11. HYBRID MODEL WEEKLYPLAN 11 The Order Booking Model – Rushub Copyright 2009 , ITD Marketing, ITC , Bangalore. HIGHLIGHTS •Two routes clubbed together in one day •Alternate day cycle of Order Day (OD) and Supply Day(SD) •Visibility of DS is just doubled per route •22 day average : Inc Sales 25.64% ,Inc Bill Cuts 70.33% , Inc Lines Cut 44.31% •K4 costs reduced by 40.20% : Saving of Rs.8 in servicing per outlet Sales 48.76% Bill Cuts 78.5% Lines Cut 40% Sales 57.89% Bill Cuts 84.9% Lines Cut 54% Sales 39.49% Bill Cuts 82.6% Lines Cut 58%
- 12. HYBRID MODEL WEEKLYPLAN 12 The Hybrid Sales and Distribution Model – MA Associates Copyright 2009 , ITD Marketing, ITC , Bangalore. HIGHLIGHTS •Two routes clubbed together in one day •Alternate day cycle of Order Day (OD) and Supply Day(SD) •Visibility of DS is just doubled per route •25 day average : Inc Sales 23.81% ,Inc Bill Cuts 112.34% , Inc Lines Cut 45.29% •K4 costs reduced by 40.20% : Saving of Rs.8 in servicing per outlet Sales 16.98% Bill Cuts 101.5% Lines Cut 47% Sales 37.89% Bill Cuts 156.9% Lines Cut 40% Sales 39.49% Bill Cuts 179% Lines Cut 58%
- 13. The Pure OrderBooking Model – Emerald HIGHLIGHTS MODEL WEEKLY PLAN 13 •Four routes covered by 4 DS on OD •15-18% more outlets added in each route •Increased Coverage per route •Two supply vehicles used for 4 routes on SD •22 day average : Inc Sales 15.91% ,Inc Bill Cuts 25.4% , Inc Lines Cut 25.33% •K4 costs remains same at Rs. 2600/- for four days Sales 15.91% Bill Cuts 25.4% Lines Cut 25.33% Copyright 2009 , ITD Marketing, ITC , Bangalore.
- 14. 14 The END Copyright 2009 , ITD Marketing, ITC , Bangalore.
Editor's Notes
- #2 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #3 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #4 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #5 Process Workflow: Sales and Distribution Chain from WD to Channel.
- #6 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #7 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #8 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #9 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #10 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #11 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #12 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #13 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #14 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.
- #15 The Sales and Distribution Hierarchical framework for BINGO!. *Obtain figures for channel types , Salesmen , AE , Supervisor for Pan-Bangalore.