A Conceptual study on Supply Chain Management at Mosquito Repellent Industry, Puducherry

 

Bala Sendhil Kumar. G1*, Kalairasan Karthik. P2

1Faculty, School of Management Studies, Christ College of Engineering and Technology, Puducherry-605010

2School of Management Studies, Christ College of Engineering and Technology, Puducherry-605010

*Corresponding Author E-mail: guru.bsk@gmail.com; kalairasankarthik@gmail.com

 


ABSTRACT:

This project entitles “A conceptual study on Supply Chain Management at Mosquito Repellent Industry, Puducherry” is based on the production of the Good Knight Active+ Booster Machine in Mosquito Repellent Industry. Supply Chain Management is an important factor which helps to increase the effective co-ordination between supply chain partners and productivity. The researcher visited the production department of the Mosquito Repellent industries. Based on the observation and discussion with the experts in production department, the researcher formulated a case on Supply Chain Management. The case formulated on Supply Chain Management explains the entire operation of Supply Chain Process from the procurement of raw material transform them into intermediate goods and then final products and deliver products to customer through a distribution system. The SWOT analysis was done on this case. Based on the SWOT analysis findings from the study is formulated. The findings suggest various suggestions and recommendations. The conclusion of the study focuses on enhancing the Supply Chain Management is more effectively in Mosquito Repellent Industry, Puducherry.

 

KEYWORDS: Supply Chain Management, Mosquito Repellent Industry, SWOT analysis.

 

 


1. INTRODUCTION:

Its sole reason for existence in the market is the omnipresent mosquito, which makes life excruciatingly difficult for the average Indian during summer and monsoon months. In many ways the primary factor fuelling the explosive growth of this market – characterized by low brand loyalty and low product involvement –has been the availability of cost-effective, mosquito repellents.

 

The night-long noisy drone of mosquitoes that disturbs our sleep is music to the ears of the Rs1,100-crore mosquito repellent industry. The various segments in this industry are coils, mats, vaporizers, aerosols and creams. The two new segments are personal sprays and gels.

 

The category-wise market shares:

Coils command nearly 50 per cent of the market share, vaporizer refills at 20 per cent, with mats at 10 per cent followed by aerosols at 9 per cent and the rest shared by creams, heating devices and other products.

 

Segment Wise Market Share

The market for insecticides and repellents has grown by 20 per cent in 2003-04 and is estimated to grow at about 20%. The rural market for mosquito repellents is reckoned at around Rs 173 million against a mere Rs 79 million in urban centers. The market leader of the industry is Godrej Sara Lee Ltd. With brands like Good Knight, Jet and Hit enjoying a market share of 40%.

 

The Evolution:

Coils were the first mosquito repellants to be introduced in the Indian market. The first brand of coils was Tortoise, launched by Bombay Chemicals Ltd. (BCL) in the 1970s. In the 1980s Good Knight was launched and mats used with electronic mosquito destroyers became extremely effective. In the mid 1990s Karamchand Appliances created a new segment of vaporizers with the launch of All Out. .This segment was almost completely dominated by KAPL.

GSLL (Godrej Sara Lee Limited) could no longer ignore this growing segment and launched its own vaporizer under the Good Knight brand in 1996-97. In the latter half of the 1990s, the market became much more competitive, with the entry of GSLL, Reckitt Benckiser and HLL. GSLL launched an array of brands (all coils) like Jet Fighter (1997), Good Knight Jumbo (1999) and Good Knight Instant one after the other The company's other brands included Banish (mats),  Hit (aerosols), Hit Lines (chalks), Mosfree (lotion) and Hex it (spray).while Reckitt also launched its range of mats and coils. These new entrants resorted to heavy advertising and aggressive sales promotion tactics.

Recently two new categories of personal sprays and gels have emerged.

 

MAJOR PLAYERS

v  Karamchand Appliances Private Ltd. – All Out

v  Godrej Sara Lee Ltd- Good Night, Jet, Banish, Hit

v  Reckitt Benckiser- Mortein

v  Jyothy Laboratories- Maxo

v  Tainwala Personal Care Products- Casper

v  Bombay Chemicals- Tortoise

 

1.1 Godrej Sara Lee Ltd - GOOD KNIGHT

Godrej Sara Lee Ltd. is a 450 crore turnover company with brands like Good Knight, Jet and Hit. It is the market leader in the mats segment with a share of 68% in May 2000. Good Knight has become the most preferred mosquito repellent solution in the country. The Good Knight brand was launched by Transelektra Domestic Products Ltd (TDPL) in 1984. The product was innovative and perfectly priced. Good Knight worked on a long term strategy that would capitalize on its long-established equity. In the mid 1990s, Good Knight faced growing competition from new coil and vaporizer products. To counter this thrust, Good Knight re-launched its mat first as super mat and finally as Good Knight Silver mat in 2003, with contemporary packing, superior technology and using a high decibel campaign. Today Good Knight Silver mat is a market leader with 62% market share.

 

By 1999, Good Knight also joined the battle for the coils by launching its red coil variant. Since Good Knight was seen to be a hi-tech brand and coils were regarded as an entry-level product, the company made sure that it did not suffer a downgrade in consumer perception. It branded its version as a value-added product, which lasted ten hours (compared to eight hours in the case of most others). The color red was meant to convey power. . The red coil category created by Good Knight is growing and has cornered 50% of the coil market.

 

Good Knight entered the vaporizer segment in 1995 by launching Good Knight liquidator and Liquid Mosquito Destroyer (LMD) machine, together as a combo-pack. In a short span of three years, Good Knight liquidator managed a share of 24% of the vaporizer market and 32% of LMD market based on the strength of the Good Knight equity. The Good Knight Vaporizer lasted 30-45 days and just had to be plugged in. Good Knight Turbo refill, a technologically superior product, was launched in 2004. It was the right time for Good Knight to take the plunge and gun for market leadership.

 

The most important USP for Good Knight is its brand equity, built over a decade by its products and brand communication.

 

1.2 Karamchand Appliances Private Ltd - ALLOUT

The name All Out is almost a generic name for Liquid Vaporizers (vaporizers), a segment of Rs.22O crores in the mosquito repellant industry in India. All out is the market leader in this segment with a 70 percent market share in 2001. KAPL was almost solely responsible for creating this segment. Within a decade of its launch, All Out had converted a large number of customers into vaporizer users.

All out’s sales reached Rs 253 million in 1996-97. GSLL could no longer ignore this growing segment and launched its own vaporizer under the Good Knight brand in 1996-97. Although the initial success of All Out was largely due to technological innovation and first-mover advantages, it was widely believed that what had kept the brand going was strong marketing. KAPL decided to handle the advertising for All Out on its own, surprising many industry watchers and drawing criticism from some ad agencies. However, the company surprised everybody with the launch of a campaign featuring an animated, jumping frog (actually an All Out vaporizer) eating mosquitoes, which proved to be immensely successful.

 

In 1998, KAPL came out with a Rs 99 pack consisting of the Pluggy and a refill. The deal, called the 'deadly offer' was backed by heavy advertising. After KAPL's 'deadly exchange scheme,' Good Knight’s share decreased by 9.3% in volume terms between September 1999 and February 2000.

 

KAPL's distribution network consisted of around 120 distributors across the country. Of the 900,000 outlets across the country, that sold repellants, KAPL was available in only 18%. As this was significantly lower than the 55% figure for RandC and 54% for GSSL, KAPL is working towards increasing its presence.

 

1.3 Reckitt Benckiser - MORTEIN

Rs 585-crore Reckitt Benckiser in India is high profile particularly because it has a range of popular products. Reckitt launched mosquito repellent coils and mats under the brand name Mortein in 1994. Mortein is also available in liquid and aerosol spray forms. Mortein is the number two pest control brand in the country Mortein sales grew by 9.2% in F12/01, as against market growth of 9%. Mortein Coil sales grew by 14.5% despite stiff competition in the category. For Mortein the strategy is to increase penetration of coils, enhance brand salience of other variants and tap niche segments through a stream of innovations. Another target for 2001 is to gather a legitimate share among vaporizers -- from 1.5 per cent to a double digit figure. Mortein's share in mats is estimated at roughly 15 per cent.

1.4 Supply Chain Management

The concept of SCM was first introduced by Forrester (1961), who suggested that success of industrial business is dependent on the “interactions between flows of information, materials, manpower and capital equipment”. But the term “supply chain” did not become popular until early 1980s (Oliver and Webber, 1982).

 

Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Some experts distinguish Supply Chain Management and logistics, while others consider the terms to be interchangeable. Supply Chain Management is also a category of software products.

 

2. REVIEW OF LITERATURE:

SCM has been interpreted by various researchers. Supply chain management (SCM) has been regarded as a major inter-organizational practice for gaining competitive advantage particularly for alliances and networks with suppliers and customers (Rungtusanatham et al., 2003; Janvier-James, 2012). Waters (2007) defines SCM as: “the function responsible for the transport and storage of materials on their journey from original suppliers, through intermediate operations, and on to final customers”. Chopra and Meindl (2001) have defined that, “A supply chain consists of all stages   involved,    directly or indirectly, in fulfilling a customer request”. According to Mentzer et al. (2001), “The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.” Handfield and Nichols (1999) has defined that “A supply chain encompasses all activities associated with the flow and transformation of goods from the raw material stage, through to the end user, as well as the associated information flows”. According to Christopher (1998), “The supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer.” Lee and Corey (1995) has defined that, “The integration activities taking place among a network of facilities that procure Raw material, transform them into intermediate goods and then final products, and deliver Products to customers through a distribution system.” Ganeshan and Harrison (1995) has defined that, “A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials intermediate and finished products, and the distribution of these finished products customers.” Cooper and Ellram (1993) has defined that, “SCM is an integrative philosophy to manage the total flow of distribution channel from the supplier to ultimate user.” According to Cavinato (1992), "The supply chain concept consists of actively managed channels of procurement and distribution. It is the group of firms that add value along product flow from original raw materials to final customer.” Towil, Naim, and Wikner (1992) has defined that, "The supply chain is a system, the constituent parts of which include material suppliers, production facilities, distribution services, customers linked together via the feed forward flow of materials and the feedback flow information.” Scott and Westbrook (1991) has defined that, “supply chain is used to refer to the chain linking each element of the process from, raw materials through to the end customer.”

 

Keely L. Croxton et al. (2001) has stated that increasingly, supply chain management is being recognized as the management of key business processes across the network of organizations that comprise the supply chain. Among the strategic and operational descriptions of the eight supply chain processes identified by members of the global supply chain forum, as well as illustrations of the interfaces among the processes and an example of how a process approach can be implemented within an organization. Our managers are framed to be used in implementing supply chain management, instructors with material useful in structuring a supply chain management course, and researchers with a set of opportunities for further development of the field.

According to the Jari Collin et al. (2009), the leading supply chain companies have used to identify and design alternative supply chain solutions according to their customers demand chains. The supplier of telecommunications equipment found that by deploying three different supply chains that corresponded to three types of customers demand chains it could simultaneously improve customer satisfaction and effectiveness. The supplier of fasteners found it could serve its different industrial customers with essentially two supply chain designs. Our experience with innovative high tech, high design, and machinery products in both B2B and B2C relationships has demonstrated the benefits of customer aligned supply chains.

 

R. Glenn Richey Jr et al. (2009) has stated that firms with a desire to improve, operating in a challenging competitive environment typically experience high levels of performance. Further, barriers to supply chain integration can actually increase the firm’s ability to achieve firm performance as the firm is required to make greater efforts to overcome those barriers and develop effective supply chain linkages.

Faisal Talib et al. (2010) are to identify the relationships among them by comparing the identified TQM and SCM practices. It results in compares these practices and found that management support and commitment, customer focus, and supplier partnership are the most common practices found by the researcher, and have the strongest impact in the integration of TQM and SCM.

 

3. OBJECTIVES OF THE STUDY:

The Objectives of the study are as follows

 

1.      To study about supply chain management at Mosquito Repellent Industry.

2.      To find out the hurdles in supply chain management.

3.      To identify the communication needs of supply chain.

4.      To give suggestions for improvements in supply chain management.

 

4. RESEARCH METHODOLOGY:

Research methodology is a plan of action for a research project and explains in detail how data are collected, analyzed and presented so that they will provide meaningful information (C.R Kothari, 2004). The type of research used in this study is Exploratory Research. The source of data is Secondary Data. Data collected from a source that has already been published in any form is called a secondary data. The profile of the industries and production details is the secondary data used for the study.It may use a variety of methods such as trial studies, interviews, group discussions, experi­ments, or other tactics for the purpose of gaining information. This type of study is mainly case study oriented. Case study involves a careful and complete observation of a social unit, an institution, even the entire community. The type of analysis used to analyze this case is SWOT analysis.

 

5. CASE FORMULATION AND ANALYSIS:

The case formulated on Supply Chain Management explains the entire operation of Supply Chain Process from the procurement of raw material transform them into intermediate goods and then final products and deliver products to customer through a distribution system. Supply Chain Management is the process of planning, implementing and controlling the operations of the supply chain with the purpose to satisfy the customer requirements as efficiently as possible.

 

Supply Chain Management is the control of supply chain as a process from supplier to manufacturer to consumer.

 

Fig.1 Supply Chain Management Process

The main aim of the Supply chain management is to improve the effective Co-ordination between the supply chain partners which results in better productivity and deliver the goods and services to the customer at the right time.

 

5. SWOT ANALYSIS:

STEP1: SUPPLIER

Strength

v  The raw material which is ordered by Mosquito Repellent Industry will be delivered in right time by the various suppliers.

v  The main raw material required to manufacture a Good Knight Active+ Booster Machine is thermistor which is imported from foreign country at right time.

 

Weakness

v  When delay in importing the thermistor due to some transportation problem.

v  Low quality thermistor leads to low quality products.

 

Opportunities

v  Alternative suppliers give the raw material on behalf of the supplier if there is no stock.

v  Demand for thermistor in India is becoming high for Good Knight Active+ Booster Machine.

v  So the supplier can get the product in low cost without any delay in transport if the production of thermistor is produced in our country.

 

Threats

v  Misunderstanding among the Mosquito Repellent Industry suppliers will lead some problem.

 

STEP2: QUALITY CHECK IN RAW MATERIAL

Strength

v  The Quality control officers are most efficient and well trained person.

v  The Quality officer can reject the damaged raw material as well as the product which is not fulfilling their components according to their specification.

v  The defects in production can be minimized.

 

Weakness

v  If the raw materials are not checked at specified time it leads to poor productivity.

v  This will lead to the loss.

 

Opportunities

v  During the Quality checking, the Quality officer can check each and every components of raw material.

v  The Quality officer will use latest measuring instruments for testing the components.

v  Quality products will be increasing.

 

Threats

v  If the measuring instrument shows the false reading, then it will affect the entire production process.

v  Loss might not be controlled.

 

STEP3: MANUFACTURER

Strength

v  Based on the customer expectations, the products of Good Knight Active+ Booster Machine are produced.

v  The Quality of the product is tested by the well trained person. So defectives are reduced in the process.

 

Weakness

v  Lacking in checking the process, will lead to defective products.

 

Opportunities

v  We can use the latest technologies for production such as robotics and advanced technology, etc.

v  Production capacity would be increased.

v  Production time and defects could be reduced.

 

Threats                                                                                                                               

v  Breakdown of machinery in production process by using robotics and latest technologies, it will lead to delay in delivery of goods and some major problems.

 

STEP4: QUALITY CHECK IN FINISHED GOODS

Strength

v  The Quality control officer should set the room temperature to check the Good Knight Active+ Booster Machine is working in various temperature degrees.

v  Multi-meters are used to check the Good Knight Active+ Booster Machine.

 

Weakness

v  Temperature reading exceeds the standard reading; corrective measures are not taken.

v  Delay in problem identification.

 

Opportunities

v  They can use latest technologies to set the room temperature automatically.

v  This will be helpful for the Quality officer to check the product.

 

Threats

v  The data sheets of temperature reading are not maintained properly means then it will be very difficult to identify the problems in Good Knight Active+ Booster Machine.

v  Random samples of 3 pieces in every carton boxes will lead to defect in the product.

 

STEP5: CONSUMER

Strength

v  Delivering innovative product based on the customer feedback.

v  No side effects in Good Knight Advanced Active+ vaporizer.

v  Two modes of working: Normal mode and Active mode.

 

Weakness

v  Liquid smell gives some problem while we breathe.

v  Unable to use Good Knight Advanced Active+ vaporizer in all the places.

 

Opportunities

v  We can produce the liquid refill without any infection, while we breathe.

v  We can adopt battery mode for the Good Knight Advanced Active+ vaporizer.

 

Threats

v  Handling with careful.

v  Children’s should be kept away from the Good Knight Advanced Active+ vaporizer.

 

6. FINDINGS FROM THE STUDY:

The main raw material required to manufacture a Good Knight Active+ Booster Machine is thermistor which is imported from foreign country at right time. The Quality control officer is most efficient and well trained person. The Quality officer can reject the damage raw material as well as the product which is not fulfilling their components according to their specification. The Quality of the product is tested by the well trained person so there is no defective in the product. The Quality control officer should set the room temperature to check the Good Knight Active+ Booster Machine is working in various temperature degrees.

 

The raw material which is ordered by Mosquito Repellent Industry will be delivered in right time by the various suppliers. Alternative suppliers will give the raw material on the behalf of the supplier if there is no stock.

 

During the Quality check in raw material, the Quality officer can check each and every components of raw material. The Quality officer will use latest measuring instruments for testing the components. So we can increase the quality of the products.

 

Unchecked raw materials will leads to loss of production and even low quality thermistor leads to low quality products. In every stage of production process will be checked in regular interval period.

 

From the study it is found that the Supply Chain Management which is taking place in the Mosquito Repellent Industry is carried out in an effective manner.

The communication needs in the supply chain management are the supplier can have the flow of communication without any deviations with the manufacturer and the manufacturer should communicate the customer in a proper way.

 

7. SUGGESTIONS AND RECOMMENDATIONS:

The following are the suggestions and recommendations based on the findings:

v  The manufacturer of thermistor will start their company in our country means they can reduce the cost of it and delivery of raw material to the customer in right time.

v  The quality officer may use latest measuring instruments for testing the components of raw material in order to identify the minute mistake in components.

v  The new employees can be given adequate training in order to acquire finest knowledge regarding the product manufacturing.

v  The existing employees can be supervised at regular intervals for better improvement in productivity.

v  The company may take proper evaluation regarding the product complaints from the customer.

v  The information flow between the supply chain partners should be communicated properly without any distraction.

 

8. CONCLUSION:

The researcher made the research in Mosquito Repellent Industry, located in Puducherry. The Good Knight Active+ Booster Machine of raw material if not checked properly will affect the production and will add to the loss. Quality check is being made at regular intervals to produce zero defect prod­ucts. If the quality officer is more efficient and a well trained person in the field of quality checking, the quality of Good Knight Active+ Booster Machine can be produced easily. The finished goods of Good Knight Active+ Booster Machine will give to the Customer in the right time without any delay; the goodwill of the industries is also increased at high level.

 

9. DIRECTION FOR FURTHER RESEARCH:

Supply Chain Management is fully based on the secondary data to find out the result. This research is made within the organization. But in future we can extend it by getting the information from the supplier and client by the ways of Questionnaire in the form of descriptive type of analysis.

 

10. REFERENCES:

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2.       Chopra S. and Meindl's (2001) book, Supply Chain Management:  Strategy, Planning, and Operation, Prentice Hall of India.

3.       Christopher M. (1998), Logistics and Supply Chain Management: Strategies for Reducing Costs and Improving Services, Pitman Publishing, and London.

4.       Cooper M. C. and L. M.  Ellram. , “Characteristics of Supply Chain Management and the Implications for Purchasing and Logistics Strategy, " International Journal of Logistics Management, (4: 2), 1993, pp.  13-24. 

5.       D.K.Agrawal, “Logistics and Supply Chain Management, Macmillan Publishers India Limited, Reprinted 2009.

6.       Faisal Talib, Zillur Rahman, M.N.Qureshi (2011),A Study of TQM and Supply Chain Management Practices”, Vol. 60, No.3, pp 268-288.

7.       Forrester, J. (1961), Industrial Dynamics, Wiley, New York, NY.

8.       Ganeshan, R, and Harrison Terry P., “An.  Introduction to Supply Chain Management,” Department of.  Management Sciences and Information Systems, 1995.

9.       Handfield R. B. and Nichols E. L., “Introduction to Supply Chain Management”, Prentice-Hall, New Jersey, 1999, pp.  1-183. 

10.     Jari Collin, Eero Eloranta and Jan Holmstrom (2009),How to Design the Right Supply Chains For Your Customers”, Vol.14, No.6, pp 411-417.

11.     Janvier-James, A.M. (2012), “A new introduction to supply chains and supply chain management: definitions and theories perspective”, International Business Research, Vol. 5 No. 1, pp. 194-207.

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15.     Lee Hau L., and Corey Billington, “The Evolution of Supply- Chain-Management Models and Practice at Hewlett- Packard.  Interfaces”, 25 pp. 42-63:  5 September- October, 1995. 

16.     Mentzer J. T. , DeWitt V,  Keebler K. S., Min S.,  Nix N. W. and Smith. C. D “Defining Supply Chain Management, “Journal of Business Logistics, (22: 2), 2001.

17.     Oliver, R.K. and Webber, M.D. (1982), “Supply chain management: logistics catches up with strategy”, in Christopher, M. (Ed.), Logistics: The Strategic Issues, Chapman and Hall, London.

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19.     R. Glenn Richey Jr, Haozhe Chen, Rahul Upreti, Stanley E. Fawcett and Frank G. Adams (2009),”The Moderating Role Of Barriers On The Relationship Between Drivers To Supply Chain Integration And Firm Performance”, Vol. 39, No.10, pp 826-840.

20.     Scott C. and Westbrook R., "New Strategic Tools for Supply Chain Management, "International Journal of Physical Distribution and Logistics Management, (21: 1), 1991, pp 23-33.  

21.     Towill D. R., N. M.  Naim and J.  Wikner.  "Industrial Dynamics Simulation Models in the Design of Supply Chains”,   International Journal of  Physical Distribution and Logistics Management, (22: 5), 1992, pp.  3-13. 

22.     Waters, D. (2007), Supply Chain Risk Management: Vulnerability and Resilience in  Logistics, Kogan Page, London.

 

 

 

 

Received on 09.05.2014               Modified on 20.05.2014

Accepted on 22.06.2014                © A&V Publication all right reserved

Asian J. Management 5(3): July-September, 2014 page 341-346