BPL Case study(Logistics) - Vth semester

divesh_ramawat

New member
Hi!! Guys.
I need your help to solve a case study.This case study was asked in 2004 Sem-V(Logistics Mgt) paper.

Case Study:
M/s. Britecolor Paints Ltd. (BPL) is a manufacturer of decorative paints for households, commercial premises and industrial application.

(a) M/s.BPL had embarked on a policy of satisfying every possible customer in respect of shades, delivery and durability.Thus it went ahead and created 25 depots, one almost in every major city.The manufacturing base however was maintained at Pune.The factory recieved information in connection with stocks from depots once in a week and there was no inter-communication between depots.Since they were in a competitive market, price was predetermined, i.e. the manufacturer had no liberty to price the product as per one's own choice.

(b) In their effort to satisfy the customer, M/s BPL manufactured every possible shade by combining various primary shades and would await the prospective customer to carry out the purchase.It ensured that these shades were available at each and every depot even at the cost transportation incurred in sending goods in less than full truckload lots.This certainly provided a very high service level and customers who could get the shade as per their desire, were fully satisfied.

(c) While on one hand M/s BPL had a population of very satisfied customers, they had almost 50%of their total domestic saleslying as finish goods inventory at various depots, on the other hand.

(d) Industrial paints ,though not very customised, the respective industrial customer was quite satisfied.Consequently, the inventory of finished goods was very low in this segment.But at the same time, realisation was also lower due to stiff competition from other industrial paint manufacturers than the domestic segment.

(e) Nevertheless, the economic runs of industrial paints were always assured due to high off-take by the industrial customers.

(f) The objective of the manufacturer was to increase the realization taking into account, economic runs, inventory, seasonality and individual choices of domestic/industrial customer.

If you are appointed as the Logistics consultant, then advice M/s BPL in respect of
How to achieve economy in transportation, by maintaining almost same service level?
(B) Demand forecasting technique to take care of seasonality, reduction in inventory.
(C) Information technology to substitute maintenance of high inventory without affecting customer service level.
(D) Connectivity between factory and depots (Networking Diagram)




Friends Please help me asap.

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Nitin1987

New member
Hi Divesh,

The main prob i think and which has been clearly been outlined is the fact that they have overstretched their distribution way beyond their supplying means. Wat i mean is 1 manufacturing facility providing 25 distribution centres!!!! - too much. This has also pumped up their transportation costs.
The best solution i think is to set up 2-3 more manufacturing facilities in areas i.e Pune facility for the western stores, 1 for northern stores, 1 for southern and the last for eastern.
These facilities will reduce the transportation costs, set in the economies of scale thus reducing production costs and also help reduce unnecessary inventories kept by the stores which are also pushing up costs and reducing profit.
Also, the depots are maintaining inventories for industrial clients - they can start an order placement system i.e. after the customer has created his desired colour mix he can place an order which will then be manufactured just for him. This will really kill the costs due to inventory.
Basically the demand trends will lie mostly in the months after rains bcoz the repairing and fixing and all will be done after rains, thats when the demand is gonna go up so checking earlier records will help determine the trend.

I hope this will give u a start.

- Nitin
 
I think the main problem lies is in their distribution and manufacturing locations. They have 25 depots and only one manufacturing unit and that to in pune. They should have chosen bhiwandi becasue it connects all national highways and because of that communication and availability of the product becomes more easy.
 
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