Processed Food Industry

India is the world's largest producer of milk.

It has the largest number of livestock in the world.

It is the world's second largest producer of fruit and vegetables.

It has the third largest output of fish.

Poor Processing Levels in

India

Poor Infrastru

cture

Poor Supply of raw

materials

Unfriendly Govt Policies

Processed Food Industry

Current liberalization and Globalization have facilitated the availability of food products from all over the world

The ethnic food processing industry manufacturing products has traditionally comprised small scale companies but sensing a great business opportunity, MNCs have started foraying into the ethnic food business of late

Big Players of the Industry

This has necessitated a change in thinking and approach to the way business is conducted

Industry Weaknesses and its Impacts

Weaknesses

Poor Infrastructure

Poor supply of raw materials

Unfriendly Govt Policies

No R & D

No Automation & Computerization

Improper Forecasting

Poor inventory management

Crop prices vary from season to season

Sonic Foods Ltd

• Started Sonic Foods Ltd• Largest manufacturer of branded pickles in India

1987

Processes Involved

• ORDER PROCESSING

• PROCUREMENT OF MATERIALS

• MANUFACTURING

• SUPPLY CHAIN

• COMMUNICATION AND INFORMATION PROCESSING

Order Processing

DISTRIBUTOR

( FEEDBACK)

DEPOT MANAGER

HEAD OFFICE

MARKETING

MANAGER

WORK ORDER

Order Processing Problems

TOS & wrong order processing Cycle Time too long

Dead Inventory

Order Processing Solutions

Decentralize

Depot Manager must be kept in the loop

Procurement of materials : Problems

Sourcing of perishablesUncertainty of crop season

Dependence on farmer

Storage of non perishables

Procurement of materials: Solutions

Import

Short –Term Forecasting

Contract Farmers

Manufacturing

Problems semi finished to finished products (as per instructions of the H.O but no

inputs from marketing department) Sales return of finished products

Manufacturing

Solutions Manual or machine check of leaky / damaged bottles.

Packaging in plastic pouches.

More Information on Market Demand (reduce non moving products)

Supply Chain

Haryana

Raw Materials

Packaging Materials

From AP, TN, Gujarat, MP, UP, Haryana, Punjab, Rajasthan

From Haryana, Mumbai, Chennai, Kerala

Finished Goods

Depots - Kochi, Chennai, Bangalore, Hyderabad, Tirupati, Vijayawada, Visakhapatnam, Panipat, Jaipur, Lucknow, Bhubaneshwar and New Delhi,

C & F agents in Kolkata, Guwahati, Indore

one consignment stock agent.

Supply Chain Problems

CFB Boxes

Inconsistent in terms of size and requirement

Glass Jars

• Supplier inconsistency

• High rejection rates

Labels

Mismatch between minimum order level and requirement

Transportation

• Unavailability of Truck on time

• Goods lying in transporter's warehouse

Solutions – CBF Boxes

Gather historic data – Vendor

Sales Projections Report

Set new order levels

• Maximum Level• EOQ• Minimum Level• Danger Level

Solutions - Glass Jars

Stricter Contract and Alert Systems

Alternate Suppliers

Larger Number of Suppliers

Solutions - Labels

Printing order based on Sales

Projection

Scrap old labels spoilt due to long storage

Solutions - Transportation

Zone – wise contractors

Commissions for on-time delivery

Assured minimum revenue

Alternate Transporters

Penalties for late delivery

Communication and Information Processing

Materials received in

factory

Suppliers invoice

sent to HO

Suppliers follow with

purchase dept.

F&A dept at HO processes

the bills

Problems faced• Delay of payments to suppliers• Inspite of a central server, data was

independently handled and stored• Untrained Depot staff

Communication and Information Processing

Solutions An accounting information system that

processes bills as per the date An accounting system that allows access

to every piece of information to a relevant user

Training the depot staff for handling the computerised processes

Competition

Problem faced: Innumerable small players in

almost every town Their flexibility in deciding prices

Solution:• On ground sales promotional activities• Cheaper variant

Thank You !!

Chaitali ChandeSidharth DhoteRaashi MehraReshma TrivediChandni PanjwaniAditya Nagavekar