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Operations Case

Study
Team Deepan Sarkar

Bullseye
Shailesh J. Mehta School of
Management
Noopur Parikh
Charandeep Rana
Innovation &
Current Scenario Category Savings Supply & Service Supplier Relationship
Productivity
Copra Production and Cultivation Copra Collection from Collection Center (in MT)
Area PROBLEMS TO
SOLVE
Category Savings
Long term supply
assurance
Service Delivery
Supplier
Area under cultivation increased till The seasonal variation in copra collection is the same
Relationship
2013-14 with rapid decline for the 3 years Management
afterwards The trend shows that the overall collection is falling Delivery on
Production reached a peak in 1022- every year Innovation
12 with a gradual decline Marico needs to be prepared for reduction in Copra Transaction
Copra Productivity
afterwards and Prices collections
Customers
Productivity
Coconut Collection
Farmers Centers
Retailers
Microsoft Word
Document
Marico
Distributor Executive Summary
Factory
Raw Materials
Production per hectare peaked other than Copra Problem Areas
during 2010-11 followed by
considerable decline Marico Supply Chain 2
Prices show an overall steady rise
Innovation &
Current Scenario Category Savings Supply & Service Supplier Relationship
Productivity
Catego
Type Problem Solution Savings
ry
Inconsistency of Indian
Facilitate the loan application
monsoon Copra prices will
process for the farmers to get loans
60% coconut production in reduce resulting in
for irrigation from banks
Apr-July saving in
Procurem Partner with Government and
Yield per hectare is purchasing costs
ent research institutions for improved
decreasing Hedging will
farming techniques
Sellers can easily take protect from future
Engage in futures contracts for
positions expecting rise in price shocks
Copra procurement
prices
Faster stock
Set up small trade centers in other
movement will
Trade center is a 50 sq. km places to remove the control of
reduce logistics
area at Kaveri, Tamil Nadu central procurement
Logistics cost
Only 40% procured directly Increase the direct procurement
Significant
from farmers from farmers by paying slightly
reduction of middle
above the market rate
men costs
Promote innovative value
Cost savings mostly through
Value
enhancements through better deals
one to one negotiations and enhancement will
and incentives
Packag reverse auctions and not cost more but
RFQ process should be made more
ing Procurem through innovation enable greater
transparent with more emphasis on
Materi ent Key supplier Yash with future savings
value innovation
Improvedmaximum
al volumes are not Transparent RFQ
Research will lead
switching to transparent
to up to Distribute
50% increase in per
procurement hectare
among coconut
process will reduce
production due to pentagonal plantation multiple suppliers
techniques i.e. to reduce
more supplier
trees per hectare andcosts 3
models hidden
Innovation &
Current Scenario Category Savings Supply & Service Supplier Relationship
Productivity
Streamline and Engage in futures Marico should go for open tenders
standardise the contract with with no special benefits for existing
purchase of goods suppliers to hedge suppliers
and services against fluctuating Transpar Price should be on a long term effect
Gain greater prices ent RFQ basis and not just the current
Suppliers

Suppliers
Factory
Copra

visibility into Automate Process delivery price


supplier operational
relationships and processes to
performance increase Suppliers should reduce logistics
Accelerate efficiencies costs
procurement Establish Copra delivery on scheduled times
Better only
processing and connectivity
cycle times across all stages Value Reduce dependence on suppliers
Increase of transportation Innovatio with large volumes and go for
transparency in Optimize n pioneering suppliers
cost models of transportation of
suppliers materialsCollection
using Delivery times should be fixed and
GPS basedPrediction early or late delivery should be
trackingwith
of 90%
trucks
CI
heavily fined
Negotiat Establish a Business Continuity Plan
e better with the supplier in case of non-
Terms delivery

Copra collection will fall in future if the current trend continues.


Marico needs to increase efficiency in the supply chain to 4
Innovation &
Current Scenario Category Savings Supply & Service Supplier Relationship
Productivity

From Towards
traditional Knowledg
Black- e Based
Box relationship
model
COMMODITIZE COLLABORATIV
D E
Equal citizenship, no
Each party maximizing HIG PRICE SENSITIVITY LOW fighting for antiquated
its profit H status quo
Unwillingness of suppliers Results in innovation and
to switch to transparent LO WILLINGNESS TO DISCLOSE HIGH productive efforts for
cost models problem solution
W
No personalized Can become locus of
interaction between
NARRO RELATIONSHIP SCOPE BROA value creation, value
supplier and company W D jointly being created

LOW Can help in convergence


e.g. Vendor Intex OPENNESS TO OPPORTUNITY HIGH of technologies and
missing RFQ
industries
Company and Suppliers Liberated suppliers
not transparent about the LOW DEGREE OF TRUST HIGH creative zeal can lead to
products and processes resources being re-
imagined and re-worked
CLIENT RELATIONSHIP CHARACTERISTICS
5
Innovation &
Current Scenario Category Savings Supply & Service Supplier Relationship
Productivity
Integrated Farming
E-purchasing: Alternative way to get more material
Combine individual coconut holdings to reduce overall costs from suppliers
Appoint POCs for village clusters to effectively manage More competitive pricing as no longer limited to local
coconut plantations and their productivity improvement Technolog merchants
Cost of transaction processing can be reduced
Insurance Scheme y
Farmers should be assisted in getting proper insurance
against crop failure due to poor monsoon or other factors
Marico can sponsor the insurance premium of the best
performing farmers as an incentive of the other farmers Inventory control system to reduce inventory,
improve profitability
Information Online order management system, integration with
organization's purchasing
Marico can partner with Government and Universities to
publish the best practices of the industry
Smart Easy identification of peak and low periods allowing
to adjust supply purchases and better management
Conduct seminars and workshops for farmers and traders to inventory of working capital
educate them about scientific farming and post harvest
processing
Financial Assistance
Marico can partner with banks to facilitate the loan approval
process for the farmers and traders Formal suggestion system in place for employees and
The adoption of best practices can be rewarded with first suppliers
right to sell and better price support Continuo Specific teams for specific problems or processes
us Establish a Business Continuity Plan with the supplier
Statistical Analysis in case of non-delivery
improvem
Use logistics data to identify and remove bottlenecks in
transportation networks
ent
Supplier data can be used to find and remove the poor
performers from the supply chain and promote the best 6