Role of 3rd party logistics in Haier warehouse at Hyderabad

Submitted to

GITAM SCHOOL OF INTERNATIONAL BUSINESS

Faculty Guide Company Guide

Dr.Shahazadi Begum Shaik Mr.Venkata Ratna Rao

Assistant Professor – Marketing Branch Logistics Manager

Submitted

By

Mohammed Naseer Khan (1226114117)

MBA (IB) 2014-2016

GSIB

GITAM UNIVERSITY

VISAKHAPATNAM

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DECLARATION

I hereby declare that this Dissertation / project titled “Role of third Party Logistics in Haier

Warehouse at Hyderabad “is an original and bona- fide work, carried out towards partial

fulfillment of my MBA (IB) Degree.

I also declare that no part of this dissertation / project has been published or submitted as a

project representation for any degree or diploma by any individual, institute / university.

(Mohammed Naseer Khan)

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CERTIFICATE

This is to certify that the project report entitled “Role of 3rd party logistics in Haier Warehouse

”, is prepared by Mohammed Naseer Khan, (Reg. No.: 1226114117) as part of the Summer

Internship Program, in partial fulfillment for the award of degree of Masters of Business

Administration by GITAM School of International Business(2014-16), GITAM University,

Visakhapatnam. The report is bonafide work carried out by him under my supervision and

guidance and it has not been submitted by any other person before.

Dr.Shahazadi Begum Shaik

Assistant Professor – Marketing

GITAM School of International Business

GITAM University, Visakhapatnam.

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ACKNOWLEDGEMENT

I express my sincere thanks and deep sense of gratitude for the inspiring guidance and support

rendered by my research guide, Mr. Venkata Ratna Rao, Branch Logistics Manager, Haier

Warehouse at Hyderabad.

I am thankful to Mr. Benzon John, H.O.D (logistics) who gave me permission to do my

internship training for the project, whenever needed, and to all the office staff who have directly

or indirectly contributed to the success in this project.

I thank my Internal Guide, Dr. Shahazadi Begum Shaik, Assistant Professor GSIB. GITAM School of

International Business for imparting me the necessary knowledge wherever needed and for guiding

me as to how to go about with this project.

Finally, I am grateful to many employees, workers and all transporters who shared valuable

information that helped in the successful completion of this project.

(Mohammed Naseer Khan)

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Index

Sr. No. CONTENTS PAGE No.

1 DECLARATION i

2 ACKOWLEDGEMENT ii

3 COMPLETION CERTIFICATE ii

4 COLLEGE CERTIFICATE iv

6 INDEX v

7 EXECUTIVE SUMMARY vi

8 CHAPTER-1 INTRODUCTION 10

9. CHAPTER-2 INDUSTRY/ SECTOR REVIEW 26

10. CHAPTER-3 COMPANY PROFILE 46

11. CHAPTER-4 DATA ANALYSIS & INTERPERTATION 75

12. CHAPTER-5 RECOMMENDATION 84

13. CHAPTER-6 REFERENCES 85

EXECUTIVE SUMMARY

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The study involves analysis of third party Company transportation reports like VDR

(vehicle detention report), MIS report, 3PL transportation reports and sales data analysis

of years 2012, 2013 and 2014.The logistics department depends upon the sales and

marketing department which leads the logistics plan of goods from the plant. The

information was collected from south zone at Haier warehouse Hyderabad.

The project involves active participation in collection of complete and up to date

information. The project discusses about various factors of how the 3PL is controlling the

cost of transportation at local and upcountry markets. This project shows the supply chain

of Haier and logistics network all over the country. As per my observations the Haier

Company should invest more in advertising in future and avoid the dumping of the goods

in the warehouse in order to control the cost. I suggest the plant manufacturing

department should coordinate with the sales department in terms of its orders from the

dealers to avoid the transportation cost and avoiding the halting of trucks at the

warehouse. The Haier warehouse at Hyderabad is synonymous with safety handling the

bulk storage of the goods, documentations, safety and cleanliness, policies and

regulations, inbound and outbound operations of the warehouse. The Haier warehouse is

very accurate in its operations of loading and unloading of the goods and inbound and

outbound operations which boost the Haier Company in its transactions of the goods to

its dealers. The Haier warehouse is a strategic unit located in the industrial area of

Hyderabad which is very convenient to all the local dealers in Hyderabad. Thus Haier

warehouse has nodal points to handle the increasing demand of Haier products.

“Third-party Logistics is simply the use of an outside company to perform all or part of

the firm’s materials management and product distribution function.”

The continuous inflow of disposable income and the advancement of technology, the

need for the varied consumer durable goods are increasing. This in turn is leading to a

strong competition among the different consumer durable brands available in the nation

as well as the price gap between the same consumer goods of different companies are

narrowing down. Day by day these goods are becoming cheaper. The rural and urban

market of consumer durables has been growing at a rate of around 15 % on an average.

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The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong

Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is

one of the world’s leading white goods home appliance manufacturers. Under the

leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in

over 15,100 different specifications under 96 categories. Haier products are now sold in

over 100 countries around the globe.

The last chapter deals with the data analysis and interpretation of the sales reports and

data collected from the year 2012, 2013, 2014 of Haier to estimate the sales for future

years. The other reports like monthly inter stock report, vehicle detention report; aged

stock report and transportation report were also used to analyze the 3PL role in Haier

warehouse at Hyderabad.

The main objectives of this study are:

1. To understand the supply chain operations and distribution network of the Haier

appliances private ltd warehouse in Hyderabad.

2. To determine the cost control in supply chain and in all aspects of logistics of

Haier warehouse.

3. To understand the inbound and outbound operations of the warehouse.

4. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad

by referring all the reports and analyzing it.

Need of the study:

The research study was totally exploratory because the study was fully of findings as it was

collected information from the branch logistics manager and 3PL transporters regarding the 3PL

operations in Haier warehouse operations of transportation, loading and unloading operations,

inbound and outbound operations of the warehouse and the services provided by Haier.

Under this study visited to many places such as

Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad.

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Findings:-

1. The space in the warehouse is less which is not enough to allocate the space for the

products from the plant.

2. There was more inter branch transfers from the warehouse to other hubs which creates

expenses for the company.

3. There was no coordination between sales department and manufacturing department from

the plant which creates higher dumps in the warehouse and aging stock.

4. Haier has no repacking department at warehouse and in other hubs which helps to avoid

carton box damage for imported products.

5. The Haier warehouses have high part loads and low billing of the products which creates

extra costs and time.

6. The Haier warehouses have high halting time for the trucks to unload the goods in the

warehouse which creates expenses, no order quantity and problems with third Party

Transportation Companies.

INTRODUCTION

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Logistics:-“The overall management of the way resources are obtained, stored and moved to the locations

where they are required”. Logistics management entails identifying potential suppliers and

distributors; evaluating how accessible and effective they are and establishing relationships and

signing contracts with the companies who offer the best combination of price and service. A

company might also choose to handle its own logistics if it is cost-effective to do so.

 Logistics function:

a. Warehousing: Under this goods are stored after manufacturing till the time they are required

for consumption.

b. Inventory management: Goods like raw materials which are required for day to day operations

of the business also need to be properly stored and kept track of.

c. Transportation: Goods need to be transported from one place to another. They may have to be

shipped from supplier location to factory and thereafter from factory to customer.

3PL Logistics:-

“Third-party Logistics is simply the use of an outside company to perform all or part of the

firm’s materials management and product distribution function.”

Third Party Logistics is an industry to which a shipper (owner of transported goods) outsources

various elements of the supply chain to perform some / all logistics management functions

including inbound freight, customs, warehousing, order fulfillment, distribution and outbound

freight.

Role of 3PL in the Logistics operations:-

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Characteristics of Third Party Logistics (3PL):-

1. Globalization :-Supply chains are increasingly globally (even within manufacturing processes), it requires greater management of supply chains.

2. Core competencies :-Manufacturers and retailers are focusing on their core business and outsourcing logistics to specialized firms.

3. Innovation and management :- 3PL is increasingly sophisticated in supply management making investments realizing economics of scale.

4. Asset utilization :-3PL model promotes greater asset utilization like balancing flows and asset sharing alliances.

Types of 3PL:-

1. Transportation based 2. Warehouse and distribution based 3. Forwarder based 4. Financial based 5. Information based

Main components of 3PL:-

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A third-party logistics provider is (abbreviated 3PL, or sometimes TPL) is a firm that provides

service to its customers of outsourced (or "third party") logistics services for part, or all of

their supply chain management functions. Third party logistics providers typically specialize in

integrated operation, warehousing and transportation services that can be scaled and customized

to customers' needs based on market conditions and the demands and delivery service

requirements for their products and materials. Often, these services go beyond logistics and

include value-added services related to the production or procurement of goods, i.e., services that

integrate parts of the supply chain. Then the provider is called third-party supply chain

management provider (3PSCM) or supply chain management service provider (SCMSP). Third

Party Logistics System is a process which targets a particular function in the management. It may

be like warehousing, transportation, raw material provider, etc.

Types of 3PL providers:-

Third-party logistics providers include freight forwarders, courier companies, as well as other

companies integrating & offering subcontracted logistics and transportation services.

Hertz and Alfredsson (2003) describe four categories of 3PL providers.

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Standard 3PL Provider: this is the most basic form of a 3PL provider. They would perform

activities such as, pick and pack, warehousing, and distribution (business) – the most basic

functions of logistics. For a majority of these firms, the 3PL function is not their main

activity.

Service Developer: this type of 3PL provider will offer their customers advanced value-

added services such as: tracking and tracing, cross-docking, specific packaging, or providing

a unique security system. A solid IT foundation and a focus on economies of scale and scope

will enable this type of 3PL provider to perform these types of tasks.

The Customer Adapter: this type of 3PL provider comes in at the request of the customer and

essentially takes over complete control of the company's logistics activities. The 3PL

provider improves the logistics dramatically, but does not develop a new service. The

customer base for this type of 3PL provider is typically quite small.

Why Use 3PL?

BECAUSE SOMEONE ELSE CAN DO IT BETTER

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Even if you have resources available, another organization within the supply chain may be able

to do it better, simply because its relative position in the supply chain, supply chain expertise and

economies of scale.

TO SHARE RESPONSIBILITY

3PL companies can share responsibility for managing global supply chains, keeping customers

and stores properly stocked, and delivering the perfect order every time.

TO RE-ENGINEER DISTRIBUTION NETWORKS

Logistics outsourcing can be a quick way to re-engineer distribution networks to meet global

market demands and gain a competitive edge. Did you know that you can drill into the history of

each SKU number tracked by P3PL and view when and to where every piece was shipped, when

new stock arrive and how many?

BENEFITS OF USING A 3PL

Reduced total delivered cost for your customer

Local expertise in new markets

Improved customer service through shorter shipment times

Reduced inventory costs through better management

Cost benefits through volume shipping discounts

Improved focus on core competency

Increased shipment visibility

More scalable logistics operation and cost model

Improved variety of technology and service

Risk reduction

3PL and its functions

Originally, 3PL means outsourcing logistics activities including transportation and Warehousing

to outside firms, which are not a consignor or a consignee. However, it is not common 3PL

practice to outsource a single activity of logistics independently, but to outsource multiple

activities from the firm's strategic point of view.

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3PL (or 3PL provider) has the following features at present:

1. Integrated (or multi-modal) logistics service provider

2. Contract-based service provider

3. Consulting service provider

Evolution of 3PL:-

Early 1900’s to late 1950’s- introductory period-single service

Late 1950’s to mid 1960’s- Awareness period – Separate service

Mid 1960’s to late 1970’s- necessity period – integrated service

Late 1970’s to mid 1980’s- integration period –combined service

Late 1980’s to mid 1990’s- differentiation period – incorporate service

Late 1990’s today – corporate period – corporate service

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First, a 3PL provider is regarded as an integrated logistics service provider. IT-related activities

for controlling goods flow such as order processing, and inventory Management, among others

are also included in the function of the 3PL provider.

However, the 3PL provider need not provide all the services solely. The 3PL provider can

outsource some activities to sub-contractors.

A 3PL provider can be classified into the asset-based and the non-asset-based. The 7 asset-based

3PL provider owns some assets, particularly transport-related assets such as trucks, warehouses,

etc., while the non-asset-based 3PL provider does not own such assets, and usually relies on sub-

contractors’ assets. Examples of non-asset 3PL providers include forwarders, brokers, marketing

companies, and information system management companies.

Second, the service of 3PL is contract-based. Recently, a contract was written about the way to

share responsibilities assuming various situations in detail. Such strict contract would make

reliable relationship between the parties, and strengthen the alliance. Third, offering consulting-

services to the firms is an important feature of the 3PL. The 3PL provider can make various

advises to answer customers’ requirements concerned with marketing strategy, information

system configuration, cooperative transportation, etc.

Role of 3PL in Supply Chain Management:

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3PL GROWTH DRIVERS IN INDIA:-

1. Strong GDP growth

2. Increased FDI inflows

3. Consolidation of raw materials from the vendor’s

4. Better infrastructure

5. Goods and service tax (GST)

6. Logistics parks/ FTWZs

7. Organized structure of the logistics industry

8. Increasing presence of MNCs in India.

9. Entry of MNC 3PL players in India

10. Increasing need to focus on core competency.

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3PL Market Structure in India

The 3PL market in India is comprised of two segments: the first one is asset based in which

assets like trucks, distribution centers and warehouses are utilized in supply chain management,

and the second one is non-asset based. There is a significant difference between the nature of

Indian 3PL and its counterpart elsewhere, especially in the U.S., Table 1.

Table 1: Comparative Analysis of 3PL in India and the U.S.

Parameter USA India

Usage of 3PL 71% 55%

Common activities

outsourced

Warehousing (73.7%) Outbound Transportation (55%)

Outbound Transportation (68.4%) Inbound Transportation (52%)

Freight bill payment (61.4%) Custom clearing and forwarding (51%)

Inbound warehousing (56.1%)

Reasons for not

outsourcing

Control would diminish (63%) Poor infrastructure of provider (81%)

Costs would not be reduced (63%) Inability to respond to changing needs

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(81%)

Service commitment would not be

met (48%)

Unreliable promised from providers

(80%)

Logistics is a core competency

(44%)

Concerns about capability of providers

(77%)

Necessity of e-

commerce

72% 67%

Collaborative

relationship

82% 14%

Gain sharing is

important for

relationship

80% 6.6%

Considerable amount of research on the topic of the implementation of 3PL in different countries

has been published in academic and trade journals. Viewpoints of both users and service

providers have been considered to identify the major issues, industry dynamics, current status

and future prospects of the 3PL industry. However most of the research is descriptive in nature

and does not go into in-depth statistical analysis of survey data. In the present study Indian 3PL

providers’ service dimensions are analyzed in terms of the key success factors and growth

strategies using various statistical tools.

Obstacles for 3PL in India:

Inefficient Logistics operations.

Multiple tax structures.

Inadequate logistic infrastructure.

And unorganized nature of the transport industry.

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Warehouse management:-

Warehousing Management is one of the important aspects of 3rd party logistics companies; where

companies are store their stock in large warehouses in proper manner. A warehouse is

a commercial building for storage of goods. Warehouses are used

by manufacturers, importers, exporters, wholesalers,transport businesses, customs, etc. They are

usually large plain buildings in industrial areas of cities and towns and villages. They usually

have loading docks to load and unload goods from trucks. Sometimes warehouses are designed

for the loading and unloading of goods directly from railways, airports, or seaports. They often

have cranes and forklifts for moving goods, which are usually placed on ISO

standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing

materials, spare parts, components, or finished goods associated with agriculture, manufacturing

and production.

Warehouse Management System

A warehouse management system (WMS) is a software application that supports the day-to-day

operations in a warehouse. WMS programs enable centralized management of tasks such as

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tracking inventory levels and stock locations. WMS systems may be standalone applications or

part of an Enterprise Resource Planning (ERP) system.

A warehouse management system (WMS) is a key part of the supply chain and

primarily aims to control the movement and storage of materials within a warehouse and

process the associated transactions, including shipping, receiving, put away and picking.

The systems also direct and optimize stock put away based on real-time information

about the status of bin utilization. A WMS monitors the progress of products through the

warehouse. It involves the physical warehouse infrastructure, tracking systems, and

communication between product stations.

Need of the study:

The research study was totally exploratory because the study was fully of findings as it was

collected information from the branch logistics manager and 3PL transporters regarding the 3PL

operations in Haier warehouse operations of transportation, loading and unloading operations,

inbound and outbound operations of the warehouse and the services provided by Haier.

Under this study visited to many places such as

Visits to the Haier Appliances India Pvt Ltd at Begumpet Hyderabad.

The main objectives of this study are:

5. To understand the supply chain operations and distribution network of the Haier

appliances private ltd warehouse in Hyderabad.

6. To determine the cost control in supply chain and in all aspects of logistics of

Haier warehouse.

7. To understand the inbound and outbound operations of the warehouse.

8. To determine the operations of 3rd party logistics in Haier warehouse in Hyderabad

by referring all the reports and analyzing it.

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Research methodology:

Research design:

The research consisted of various steps

COLLECTION OF DATA

SECONDARY DATA

DATA SORTING AND ANALYZING

DATA PRESENTATION

DATA INTERPRETATION AND RESULTS

Sources of data:

The study was carried out by collecting data from secondary sources.

Secondary data:-

To collect the secondary data the corresponding database were checked and the necessary

information was collected.

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a. Research reports

b. Articles

c. Newspaper articles

D. internet

e. Monthly Magazines.

f. Haier official website.

g. Haier journals.

h. Customer Database provided by Haier.

i. Excel forecasting method

j. tables, charts and graphs in excel

Limitation of the study:-

1. Less number of employees in the warehouse in order to collect more information.

2. Due to time constraints the study has been restricted to secondary data only.

3. Due to the restrictions of the company some of the data cannot be included in the reports.

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INDUSTRIAL REVIEW

Introduction of consumer durables goods in India:-

The continuous inflow of disposable income and the advancement of technology, the need for

the varied consumer durable goods are increasing. This in turn is leading to a strong competition

among the different consumer durable brands available in the nation as well as the price gap

between the same consumer goods of different companies are narrowing down. Day by day these

goods are becoming cheaper. The rural and urban market of consumer durables has been

growing at a rate of around 15 % on an average.

 

Growth prospects:-

India is likely to emerge as the world’s largest middle class consumer market with an aggregated

consumer spend of nearly US$ 13 trillion by 2030, as per a report by Deloitte titled 'India

matters: Winning in growth markets'. Fuelled by rising incomes and growing affordability, the

consumer durables market is expected to expand at a compound annual growth rate (CAGR) of

14.8 per cent to US$ 12.5 billion in FY 2015 from US$ 7.3 billion in FY 2012. Urban markets

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account for the major share (65 per cent) of total revenues in the Indian consumer durables

sector. In rural markets, durables, such as refrigerators, and consumer electronic goods are likely

to witness growing demand in the coming years. From US$ 2.1 billion in FY 2010, the rural

market is expected to grow at a CAGR of 25 per cent to touch US$ 6.4 billion in FY 2015.

 Some of the top consumer durables brands in India are:

 LG

Nokia

Philips

Samsung

Sony

Whirlpool

Blue Star

Carrier

Godrej India

Hitachi India Limited

Sharp India Limited

Tata

Toshiba India Private Limited

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Videocon

Voltas

About Consumer Durables:-

Consumer durables refer to those consumer goods that do not quickly wear out and yields utility

over a long period of time. Some of the popular and common examples of these kinds of items

are electronic goods, kitchen appliances, home furnishings and leisure equipments etc. Consumer

durables can be broadly categorized into the following 3 heads:

 

White Goods: White goods mainly include air conditioners, refrigerators, washing machines,

audio equipments and speakers.

Brown Goods: This kind of consumer durables mostly include kitchen appliances like chimneys,

electric fans, grinders, iron, microwave ovens, mixers and varied other cooking ranges.

Consumer Electronics: Some of the mostly used consumer electronic goods are DVD players,

MP3 players, mobile telephones, telephones, VCD players etc.

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Consumer electronics in India:-

According to a McKinsey 2005 report, while Food and Grocery took the highest share of wallet,

and electronics took only a mere 5%, the proportion of spending on electronics was definite

bound to increase by 2015 and also the growth rate for the share of organized retail in the

electronics segment was set to increase from 15% to a astounding 45% in 2015. A graph

representing the share of wallet to the share of organized retail is shown below.

List of consumer durables' brands in IndiaMany of the national as well as multi-national brands are involved in the business of consumer

durables in India. Apart from the famous brands, some portion of this market in the nation has

even been captured by some unbranded consumer products. However, to name a few of the top

consumer durables brands in India are:

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LG:

Starting their business from 1st October, 1958, LG Electronics is known for consumer goods like

air conditioners, CDMA handsets, DVD players, home theatres, optical storages, radios etc. 

Nokia:

This brand name is famous for their innumerable products related to mobile telephones and is

one of the leading mobile telephone brands in India. This brand has got a flair for introducing

new models updated with the latest technologies, which meets the requirements of the modern

tech savvy people of the country. 

Philips:

Philips Electronics India Limited is one of the leading consumer durable companies that have got

different kinds of consumer durables in the national market. Some of the popular Philips'

consumer durables are television sets, music systems, personal care items, household products,

lightings, telephone handsets, computer products and accessories etc. 

Samsung:

Commencing its operation in India during the month of December in 1995, Samsung is presently

enjoying a turnover of more than U. S. $ 1 billion. Famous for their products like washing

machines, refrigerators, color monitors and televisions, this company is headquartered in the

capital city of New Delhi. Their design center is located at different parts of the world though.

The “made in India” Samsung products are even exported the Middle East as well as SAARC

countries. 

Sony:

The Japanese company Sony Corporation started their business operations in India from

November, 1994. Comprising of more than 7000 channel partners and 215 Sony Worlds, this

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brand is one of the leading consumer durables' brands in India, who offers goods like color

televisions, music systems, mobile telephones, laptops and many more. 

Whirlpool:

Headquartered in U. S. A., Whirlpool is one of the most recognized home appliances' brands in

India. Apart from holding a share of above 25 % in the national market, this is said to be the

biggest refrigerator and the 2nd biggest washing machine brand in the nation. 

Some of the other popular consumer durable brands in India are as follows:

Blue Star

Carrier

Godrej India

Hitachi India Limited

Sharp India Limited

Tata

Toshiba India Private Limited

Videocon

Voltas

Growth prospect of consumer durables' market

With the continuous inflow of disposable income and the advancement of technology, the

need for the varied consumer durable goods are increasing even in the country of India. This

in turn is leading to a strong competition among the different consumer durable brands

available in the nation as well as the price gap between the same consumer goods of different

companies are narrowing down. Day by day these goods are becoming cheaper. The rural and

urban market of consumer durables has been growing at a rate of around 15 % on an average.

Segment Definition:-

In general consumer electronics refers to a variety of electronic equipment used by private

customers. This industry can be divided into many segments:

1. ‘Traditional’ Consumer Electronics: audio and video equipment

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2. Computing Devices: Computers, Calculators, Laptops

3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum

cleaners, grinders, etc

4. Personal Care: Hair Dryers, shavers, electric toothbrushes.

In addition to this, the emergence of telecommunication has lead to the convergence of mobile

technology into the consumer electronics industry and hence this paper will only deal with

traditional consumer electronics, mobile phones and computing devices which can be termed as

Brown Goods as per industry definitions. Henceforth in this paper consumer electronics will

refer to Brown Goods.

Current and future issues of consumer durables segment:-

Indian Retail Sector and Consumer Durables Segment

Within retail industry, customer appliances are worth of Rs. 297,285 million with a YOY

growth rate of 13.3%. Traditionally the unorganized retailers dominated consumer durables

segment but huge growth potential is attracting large corporate organizations to expand their

retail operations into this territory. Until recently majority of sales in consumer durables were

originating from urban centers but with change in demographics and increasing exposure, the

growth in sales volume from rural areas are projected to be higher than urban areas. With the

revival of western economy after the recession being slower than anticipated, large global

retailers are also looking forward to expand their business in India. Also with increase in

awareness, Indian customers are increasingly demanding more value for money both in terms of

quality of durables and convenience of buying.

Using the PEST framework and scenario based approach we aim to create an understanding of

the state of the retail sector and consumer durables segment in India at present and to develop

a clearer picture of how the consumer durables retail market would shape out towards the end

of this decade.

Union Budget

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The Rs 50,000-crore consumer durables and electronics industry was unequivocal in its praise

for this year's Union Budget. The government rationalized duty structures in the Budget,

responding to long-standing demands of companies operating in the space. In the exercise,

domestic manufacturing is expected to get a boost. "The reduction of customs duty on 22 items

(which go into the manufacture of various products including TVs, refrigerators, washing

machines, air conditioners and microwaves) as well as a reduction in tax on royalty will

encourage indigenous manufacturing and technology proliferation," said Manish Sharma, MD,

Panasonic, India & South Asia, and current president, Consumer Electronics and Appliances

Manufacturers' Association (CEAMA). According to CEAMA, almost 40 per cent of goods sold

in the consumer durables and electronics market are imported. Those that are made here are

basically assembled using imported parts. While this is not expected to change overnight,

companies say, the government's efforts are laudable, since it seems committed to promote its

'Make in India' drive.

Anirudh Dhoot, director, Videocon Industries, and past president of CEAMA, says, "For long,

the industry felt neglected because measures were simply not adequate. What this Budget has

done is changed that perception. There have been definite measures taken in this Budget, which

will create the environment or climate for manufacturing. That is the key."

The government has specifically targeted LED TVs, one of the largest consumer electronic

categories in the country, reducing customs duty on organic or OLEDs from 10 per cent to zero.

This, says Dhoot, was something that TV manufacturers were demanding, since OLEDs are

expected to gain traction in the coming months. Dhoot says customs duty on backlights used in

LEDs has also been abolished - from 10 per cent to zero. "Bulk of the components in LEDs is

imported. By reducing customs duty, assembling costs will reduce. While manufacturers stand to

gain from this, consumers benefit because we could pass these savings to them," Dhoot says.

The appliances segment too got a favorable push. Kamal Nandi, business head and executive

vice-president, Godrej Appliances, says, "Of the 22 items that see customs duty reduction, there

are two that appliance manufacturers were demanding. This includes magnetrons, a key input

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used in microwave ovens, and components used in the manufacture of refrigerator compressors.

While we are yet to assess the impact of this on our business, at the outset these steps are

welcome."

Even LED light and lamp makers have a reason to cheer because excise on components such as

LED drivers and metal core printed circuit boards or MCPCBs have been reduced from 12 per

cent to six per cent. The move comes in the wake of the government's effort to push energy

conservation in the country. In January, Prime Minister Narendra Modi had launched a scheme

for LED bulb distribution under the domestic efficient lighting programmed in Delhi as well as a

national programmed for LED-based home and street lighting.

AC makers like Videocon and Voltas focus on institutional sales due to slowing

retail growth

NEW DELHI: Air-conditioner makers such as Videocon, Voltas and Panasonic, hit by untimely

rains this summer, are betting big on the business-to-business segment, or institutional sales, to

push their products in this financial year.

"Taking into account both commercial refrigeration products as well as room ACs, 25 to 30 per

cent of our volumes is expected from the B2B segment this year," said Pradeep Bakshi, president

and chief operating officer, (UPBG & MCED), at Voltas Ltd.

The company has dedicated sub-verticals to look after institutional sales of various product

categories. Voltas is also looking at cash & carry formats of modern trade partners, who are

aggregators for the B2B segment.

Panasonic is working closely with developers, architects, interior decorators, project

management consultants, services consultants, companies, retail chains and the hospitality

industry.

Demand for air-conditioners from the commercial segment is catching up fast with an increasing

number of offices, stores and business apartments being set up. The growth of the retail,

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hospitality and commercial sectors has boosted demand as they involve large-scale application of

ACs, said Vipin Agrawal, general manager and head - CAC at Panasonic India Pvt Ltd.

"We are looking at selling around 15,000 units through B2B vertical this year, and generate

revenue of about Rs 750 million," Agrawal said.

Videocon, which is looking to double its market share to 12 per cent in the overall air-

conditioning market, says its targets can be achieved through the B2B segment. The company

plans to sell overall 4.5 lakh units this year, valued at about Rs 1,100 crore.

The realty sector is one of the biggest growth opportunities, said Videocon Industries COO (air-

conditioners) Sanjeev Bakshi.

According to Videocon's research, there are 1.6 million houses that will be delivered this year,

which will be ready for possession. On an average, one AC will be fitted in each house, said

Bakshi.

To drive the effort, the Indian home appliances maker has formed a separate vertical that will

only look at B2B sales.

"We expect 20-25 per cent revenue should come through this segment this fiscal," said Bakshi.

Industry players assume the growth of air-conditioning in the B2B segment would be 25-30 per

cent compared with single-digit growth in the retail sector. According to analysts, the market in

India for room ACs is 3.5 million to 4 million units, with a penetration of about 3 per cent.

Purchase of ACs by individuals is elastic, depending on weather pattern changes and they may

be replaced with air coolers due to pricing or electricity bill concerns, according to Devangshu

Dutta, chief executive at retail consultancy firm, Third Eyesight. Institutional purchases are more

planned and can provide a significant and long-term buffer to consumer demand, he said.

Lloyd Electric, which aims to corner an 11 per cent share in the domestic AC market, estimates it

can sell 500,000 units through the B2B vertical and generate revenue of Rs 750 crore this year,

according to Nipun Singhal, director, Lloyd Electric & Engineering Ltd. The company plans to

set up new factories and invest in new machinery and technology, said Singhal.

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Haier India to invest Rs370 crore to expand manufacturing facility

Mumbai: Haier India, a wholly owned subsidiary of Haier Group, on Friday announced an

investment of Rs.370 crore to expand its manufacturing facility at Ranjangaon, Pune. Haier

Group, China signed a memorandum of understanding with the Maharashtra government in this

connection.

The proposed investment will scale up manufacturing operations of the company in India by

introducing new product lines like washing machines, air condition, LED panels, water heaters

and deep freezers, apart from refrigerators. By 2017, Haier plans to increase manpower by 120%

to 2,600 employees.

“At Haier Group, localization has been at the core of the business since its inception, which has

helped the company gain market leadership in several countries. We are positive that this

expansion opens multiple opportunity areas not just for Haier but also for our consumers,

employees, dealers and other key stakeholders,” said Eric Braganza, president, Haier India.

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COMPANY PROFILE

The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC.

In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leading

white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang

Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96

categories. Haier products are now sold in over 100 countries around the globe.

Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies

and over 50,000 employees throughout the world. Haier’s focused industries include technology

research, manufacturing, trade and financial services.

The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd.,

a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong.

Qingdao Haier Co., Ltd., also a Haier subsidiary, is listed on the Shanghai Stock Exchange.

On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the

Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing

Olympic Games for white goods home appliances.

Unmatched Home Appliance Product Offerings

Haier’s product categories range from refrigerators, refrigerating cabinets, air conditioners,

washing machines, LED’s, mobile phones, water heaters, freezers and integrated furniture,

among which 9 are ranked market leaders in China, and 3 are ranked among the top 3 worldwide

in their respective industries. Haier is also a world leader in the technology domains of intelligent

integrated home furniture, networked home appliances, digitalization and large scale integrated

circuits.

By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589

software intellectual property rights. Haier’s proposal for safe care water heater technology

initiative was accepted at the 66th IEC Conference in 2002 and Haier dual drive washing

machine technology was included in the 2006 IEC standard proposal. This clearly demonstrates

Haier’s world-class innovation capabilities in product R&D.

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Refrigerators

Haier is one of the world’s largest and most advanced refrigerator manufacturers, producing

over 12 million units of refrigerators and freezers annually at its 20 production facilities

worldwide. Haier consistently applies leading global technologies in the manufacturing of its

products. Haier is the first company to make breakthroughs in integrating fluorine-free, energy-

saving technologies with large freezing capacity, and solve technological problems related to

sterilization. Haier has also rolled out the world’s first variable frequency refrigerator, which is

made of heat insulating material designed for aerospace.

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Household Air Conditioners

At its eight large production bases in China, Haier uses the world’s most advanced automatic

flexible production lines to ensure the delivery of large quantities of highly reliable air

conditioners, which are exquisite in quality and free of defects.

Washing Machines

Haier produces washing machines of 5,000 different specifications under 18 categories, and is

the only company in the world with the capability of large scale production of top load washing

machines (popular in Asia), front load washing machines (popular in Europe), agitator washing

machines (popular in America) and dual-drive washing machines. Haier, with a mission of

“customer-oriented design”, pays great attention to safety, health, and the environmental

concerns of consumers in designing its products. Haier has introduced a series of new hi-tech

environmentally-friendly washing machines, staying ahead of the market trend and

demonstrating the technological innovation capability of the company.

Freezers

Haier produces 1.8 million units of freezers each year. Haier is licensed to supply products for

military provisions, and is the only company to win the bid for three consecutive years. Haier

freezers have received ISO9001 quality, ISO14001 environmental compliance, and ISO12001

metering and testing certification. Haier is also China’s first freezer maker to receive TUV

International Safety Certification, and was the first to receive a no-fluorine certificate from the

United Nations Development Programmed.

Vacuum Cleaner

Developed with the Haier spirit of continuous innovation, Haier dust collectors consistently lead

the trend in the dust collection market. Haier’s dust bag series are innovatively designed to

collect dust from all directions. The user-friendly design includes such features as a speed-

adjustment button on the handle, dust bag design, and lightweight aluminum.

Home appliances for kitchen and bathroom

Integrated Kitchen

Haier integrated kitchen products come with an advanced green safety system, and are equipped

with environmentally friendly material, dust-free digital technology, high-quality sync

installation and one-stop green service channel, thus bringing customers the ultimate green and

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safety experience. Haier Kitchen Company is the only company in its product segment to receive

ISO9001 quality certification in China.

Water Heaters

Haier manufactures water heaters of 300 specifications under 12 categories, including electric

water heaters, gas water heaters, solar energy heaters, and gas boilers, in the categories of

mechanical, electric, and network-based, and with the capacity range of 5-litres to 500-litres.

With the application of high technology, Haier produces water heaters in a wide range and

specifications both for home and commercial use. Haier follows its “Safety-based Products”

philosophy in manufacturing water heaters and leads the industry in safety technologies.

Kitchenware

Haier’s kitchen appliances cover 4 categories: dishwashers （ see above introduction, exhaust

fans, gas cookers and sterilizing cupboards, in more than 300 specifications. Haier Kitchenware

products are based on environmentally-friendly technology, with zero leakage and low radiation.

The products have won environmentally friendly and green product certifications in both China

and the US.

Microwave Ovens

Haier offers microwave ovens in 50 varieties under 8 categories, including mechanical

electronic and digital, and with the capacity range of 17-litres to 40–litres. Haier ovens feature

both stainless steel and painted stoves, and come with top doors and side doors. In

2003, Haier developed the steam microwave oven, taking the lead in the application of new

technology. Haier is committed to manufacturing high-quality, high-tech and environmentally

friendly products, using components made by the world’s top 500 companies. Haier microwave

oven products have received FCC and FDA certificates from the U.S Federation Drug

Administration.

Audio and video products

Color TVs

Growing at an annual rate of 141% over the last 9 years, Haier color TVs are manufactured with

the application of high technology. Haier aims to provide the right products for different

consumer groups, gaining high customer recognition. Haier is committed to strengthening its

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global competitiveness, with the creation of a global supply chain under the concept of

“competitive cooperation”. Haier’s extensive range of products, including traditional

TVs, flat-panel TVs, digital TVs, wireless TVs, touch TVs and 5.1 sound system TVs, aim to

bring more freedom, comfort and greater entertainment to homes and customers.

DVD Players

Haier offers a diverse line of DVD players of exceptional quality. Haier DVD players are

favored by consumers for their performance and after sales service. The products have won a

number of awards for environmental protection and energy efficiency.

Commercial Air Conditioners

Haier has become a well-known global brand for commercial air-conditioners for its strong

R&D, excellent product performance, and marketing capability. Haier delivers commercial air

conditioners, large multi-system air conditioners and large cold-water air conditioning units in 8

categories and 260 specifications, featuring an integration of fluorine-cooling, wind-cooling and

water-cooling functions. Haier’s variable-frequency, variable capacity multi-system central

conditioners, flexible variable-capacity screw compressors, and household variable-frequency

central air conditioners lead the industry trend with their energy efficiency.

Communication and IT products

Mobile Phones

Based on the philosophy that the technology and fashion can co-exist, Haier integrates state of

the- art wireless communication technologies into a complete range of in-fashion mobile phones.

Haier mobile phones include such latest features as GSM/GPRS technology, integrated digital

cameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includes

bar-type phones, clamshell phones, smart phones and the new and unique slim phones.

IT products

Computers (desktop and laptop)

With a special attention to users’ health, and eye-protection, Haier makes desktop and laptop

computers for personal and commercial use in different ranges, including the world’s first laptop

with 2.0 mega-pixel camera. Haier is committed to delivering a full-service package, and offers

free software commissioning. By establishing strategic alliances with suppliers, such as Intel,

Microsoft, China Unicom and China Netcom, and taking advantage of the technology and

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resources of its partners, Haier consistently improves the quality of its computers. In product

R&D, Haier employs a team of top class engineers from the U.S., Japan,

Republic of Korea, and China’s Taiwan region, and has established a strict-quality control

system.

Digital Information Products

Haier offers a number of patented digital information products, including MP3 and MP4. Haier is

committed to delivering personalized products, services and application solutions to meet the

individual needs of users.

Haier Pharmacy

Founded in 1996, Haier Pharmacy is the newest growth area within the group. The product

offerings cover 80 specifications under 60 categories including medical raw materials, tablets,

capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection,

eye drops, etc. The products of Haier Pharmacy fall into four categories of marine drugs, Chinese

medicine, Western medicine and healthcare products, with focused areas of the heart and

cerebral system, digestive system, osteoporosis, diabetes and healthcare, all of which have

received GMP certification in China.

Haier Expansion Strategy Phases at a glance

The phase of Global brand strategy（2005-2012）: Consolidating global resources and creating

a global brand

The Internet era brings segmentation of the market, and the mode of traditional enterprises

featuring “production-storing-selling” can no longer satisfy the tailored needs of users. The

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enterprises must shift from the enterprise-centric sale of products to the user-centric sale of

services. That is, they should shift to the “demand manufacturing and delivery” mode. The

Internet also brings integration of the global economy, and the relationship between

internationalization and globalization is one of logical improvement. Internationalization means

creating international brands with the own resources of the enterprises, while globalization

means making use of global resources to create localized mainstream brands. They are quite

different. Therefore, Haier consolidates the global resources in R&D, manufacturing, and

marketing to create a global brand.

In this phase, the business mode created by Haier to develop consumers in the Internet era is a

“Win-win Mode of Individual-Goal Combination”.

Global Branding Strategy

Haier’s global branding strategy aims at positioning the company as a local brand in different

world markets in conjunction with enhanced product competitiveness and strong corporate

operations. Haier’s international business framework encompasses a global network of design,

procurement, production, distribution and after-sale services. Today, Haier has established 15

industrial complexes, 30 overseas production factories and bases, 8 design centres and over

58,000 sales agents worldwide.

ABOUT HAIER INDIA

Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier

India was launched in India in December 2003 and by August 2004 had an all-India promotion

launched with over 55 products across six product categories -- refrigerators, color

television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also

launched its brand of mobile phones in India.

The India launch was started with innovative products which were designed keeping the day to

day customer needs in mind -- products that will transform the customer's everyday living into

inspired living.“Products that will make your today better than yesterday”. Haier India launched

BMR technology for the first time in India. Even the Double drive is a newly patented

technology.

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The India operations already has an established dealer network of approximately 1600 dealers all

over the country, which is backed by a strong service and after sales service network.

HAIER INDIA VISION

To be the Most admired brand in India providing innovative, state of the art, user friendly

products of lasting value to our customers, to make their today better than yesterday.

Over 4000 Retail outlets selling Haier products

21 Planet HAIER (plus some exclusive stores)

Presence in all major cities

Brand recall – better than other new brands.

18 Branch Offices & 25 warehouses.

6 Direct Service Centers & 135 Haier customer care centers (covering all India)

24x7 Call Centre

Present status of Haier considering the time span, is appreciated by the Industry.

Haier plans to invest Rs 370 crore in Pune plant:KOLKATA: Chinese appliances maker Haier plans to invest Rs 370 crore in its Pune

plant to scale up operations.  The company said on Thursday it has signed a

memorandum of understanding with the Maharashtra government in this regard.  The

investment will be used to expand manufacturing capacity of refrigerators besides adding

new products, such as washing machines, air-conditioners, LED television panels, water

heaters and deep freezers, to the production line.

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The investment will enable Haier to strengthen local research and development to

manufacture products more suited for Indian consumers.  The company said it also plans

to increase its manpower 120% to 2,600 employees across the country by 2017.  Eric

Braganza, president at Haier India, said the expansion in India is a testimony of the

company's commitment to contribute to the government's 'Make in India' initiative.  Haier

Electronics on lookout for more logistics acquisitions

Haier Electronics plans new acquisitions to bolster its fast-growing logistics service

business, after the company posted a 19 per cent year-on-year increase in first-half net

profit.

The company, a subsidiary of home appliances giant Qingdao Haier, said the strategy

would help meet demand on the mainland, where more enterprises are expected to

outsource the storage, transport and distribution of their goods to professional third-party

logistics companies.

"The group will reinforce investments and enhance its merger integration capability,

aiming to absorb more third-party logistics teams into the group's platform," Haier

Electronics chairman Zhou Yun Jie said in a results statement to the Hong Kong stock

exchange yesterday.

Total capital expenditure of 367.53 million Yuan (HK$462.05 million) in the first six

months of the year was mainly used for developing its "integrated channel services"

business, including the construction of logistics warehouse projects. The business helps

fulfill the logistics requirements for a wide variety of household electrical appliances and

consumer electronics goods.

In January, Haier Electronics made two acquisitions for an undisclosed sum to build up

its logistics operations. It bought a 60 per cent stake in Shanghai Boyol New Brothers

Supply Chain Management and wholly acquired Boyol Logistics Offshore.

The company entered into a strategic alliance with e-commerce powerhouse Alibaba in

December with the goal of creating industry-leading service standards for the logistics,

installation and servicing of household appliances across the mainland.

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Hangzhou-based Alibaba invested HK$2.82 billion in Haier Electronics in that deal, with

HK$1.86 billion of that amount put into subsidiary Qingdao Goodaymart Logistics and

HK$965 million used to buy a minor equity stake in the company.

Alibaba also invested in HK$1.31 billion worth of convertible bonds issued by Haier

Electronics in March. They could be converted into ordinary shares at HK$19.334 each

in three years.

Zhou said the net proceeds from the convertible bonds would be used to expand and

upgrade warehousing capacity, develop the company's online-to-offline integration

business, and for potential new acquisitions in the logistics industry.

Ricky Lai, an analyst at Guotai Junan International, said: "Haier Electronics will likely

pursue cooperation with other e-commerce service providers, based on the steady

expansion of online shopping in more cities and villages across the mainland."

The company reported interim net profit of 978 million yuan, up from 822 million yuan a

year earlier, on the back of its integrated channel services business. Total revenue grew

14 per cent to 32.9 billion yuan from 28.9 billion yuan in the first half of last year.

Haier expands China logistics business as 3PL demand grows

HONG KONG — Haier Electronics spent $60 million in the first half developing its

logistics business as the well-known Chinese brand embarks on a bold new strategy to

tackle the increasingly outsourced logistics requirements of household electrical

appliances and consumer electronics.

The company, a subsidiary of mainland home appliances giant Qingdao Haier, told

investors in a Hong Kong Exchange announcement that there is rising demand in China

for third-party logistics as more firms outsource the storage, transport and distribution of

their products.

Haier Electronics chairman Zhou Yun Jie said following investments in two logistics

companies in the first half, the company plans new acquisitions to boost its fast-growing

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logistics services division. In January, Haier bought a 60 percent stake in Shanghai Boyol

New Brothers Supply Chain Management and wholly acquired Boyol Logistics Offshore.

The group posted a 19 percent increase in first-half profit, banking $160 million, with

revenue growing 14 percent to $5.35 billion.

Haier Electronics’ new strategy gained momentum in the first half after leveraging a

strategic alliance with China’s e-commerce powerhouse Alibaba that was signed in

December. The goal was to create industry-leading standards for the logistics, installation

and servicing of household appliances across the country.

Alibaba invested $361 million, with $239 million injected into subsidiary Qingdao

Gooday Mart Logistics. The e-commerce giant also put $167 million into convertible

bonds issued by Haier Electronics, the net proceeds of which Zhou said would be used to

expand and upgrade warehousing capacity, develop the company’s online-to-offline

business and acquire logistics companies.

“The group has nearly 30 warehouses across the country to provide merchants on

Tmall.com (a unit of Alibaba) with logistics and delivery services that features

warehousing and distribution. Goods will be delivered directly from the group’s logistics

centers to consumers to avoid multiple transfers, which has significantly improved

delivery efficiency and lowered the chances of product damages and customers’ costs,”

Zhou said in a statement.

In China, the “last mile” delivery to online shoppers is an area crucial for the success of

any e-commerce operation, and Haier Electronics is integrating its installation service

business with Gooday Mart Logistics, which it believes will greatly improve service. 

Gooday Mart Logistics operates a 24-hour delivery in over 1,500 districts, and in addition

to delivery-at-request and installation-after-delivery services, Gooday Mart also offers

reverse logistics, unpacking and product checks, and scheduled delivery.

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The acquisition of Shanghai Boyol also expanded the company’s last-mile capability in

the furniture business while allowing it to build a nationwide network and move service

coverage into third- and fourth-tier markets. The upgrade of service capacity is helping

Boyol to build the largest third-party professional furniture installation platform across

the country. 

It has allowed Boyol to expand business cooperation with existing customers, such as

IKEA, and bring in new clients such as Yihua Timber and Red Star Macalline.

Zhou said the logistics industry in China would continue its rapid growth in the second

half. “The industry is experiencing large scale consolidation, and more enterprises will

outsource their logistics function to professional third party logistic companies. The

group will reinforce investments and enhance its merger integration capability, aiming to

absorb more third party logistic teams into the group’s platform,” he said.

Alibaba and Haier Create Logistics Joint Venture

Alibaba to Invest $360 Million in Haier Electronics as Part of Deal

BEIJING—Alibaba Group Holding Ltd. will invest 2.82 billion Hong Kong dollars

(US$364 million) in Chinese appliances maker Haier Electronics Group Co., as part of a

deal between the companies to form a logistics joint venture.

The companies said the agreement is aimed at creating a logistics and service network

across China that will deliver and assemble household appliances and other large items.

ENLARGE

An employee walks past a logo of Alibaba Group at its new base on the outskirts of

Hangzhou, Zhejiang province, China, Nov. 4, 2013. EUROPEAN PRESSPHOTO

AGENCY

Alibaba Group, the operator of China's largest e-commerce sites, has been working in

recent years to improve China's logistics industry to provide quicker and more-reliable

delivery of orders from its popular Taobao and Tmall shopping sites.

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Alibaba founder Jack Ma has said "terrible" logistics are slowing the growth of Internet

retailing in China. The new cooperation is the most recent in a number of steps taken by

Alibaba to bolster China's underdeveloped delivery system. Earlier this year, the

company said it would join with banks, delivery companies and industry competitors to

invest 100 billion yuan, or about US$16 billion, to strengthen China's logistics network

over the next decade.

Though delivery times in China's largest cities can be speedy, the country's vast and

often-mountainous landmass has made it a challenge to get large products such as

electronics and refrigerators to more-distant locations.

To establish the joint venture, Alibaba said it would invest HK$1.86 billion in Haier

Electronics' Goodaymart unit, by taking a 9.9% stake for HK$541 million and

subscribing to convertible bonds. Alibaba also will acquire a 2% stake in Haier

Electronics for HK$965 million. News of the deal helped boost shares in Haier

Electronics as much as 19% to a 14-year high in Hong Kong Monday morning. The stock

closed 13% higher. Haier Electronics is a unit of Qingdao Haier Co. Qingdao Haier's

parent, Haier Group, ranks first in China and globally, according to Euro monitor, in

terms of market share for major appliances, such as refrigerators, washing machines and

large cooking appliances. Haier Group had 27.2% of the domestic market in China last

year, while GD Midea Holdings Co. was No. 2 with 13.5%. Globally, Haier Group

and Whirlpool Corp. each have 9.6% of the appliances market.

U.S. private-equity firm KKR & Co. in September said it would take a 10% stake in

Qingdao Haier for about US$556 million.

Stratigies:-

1. Three phases of haier innovation strategy

a. Brand building (1984-1991)-quality is prominent for haier.

b. Product diversification (1992-1998)-acquisitions of companies with bad management infusing

life into them.

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c. Globalization (1998-2005)-attacking the difficult markets first followed by relatively weaker

ones.

Principles followed for expansion:-

1. Best efforts are made to fully develop the current industry before entering segment of relative

products.

2. Best efforts are made to gain the leading position in the new segment of the industry after a

certain period.

Global Presence of Haier:-

· Trading Companies: 64

· Design Centers: 8

· Industrial Complexes: 15

· Sales Network: Over 58,000

Partners of Haier:-

Haier has established an extensive sales network around the globe. Key partners in perspective

Markets include:

• China: Strategic alliance with Sunning and Gomes chain stores

• America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's, HOME DEPOT, Best Buy,

PC-Richard, Wal-Mart, Sam's, Costco, Brand smart and Target

• Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO

• Europe: Cooperation with KESA, Media Market and Carrefour

Challeneges:-

1. The first and most important thing which Haier needs to do is to, it was found in Customer

survey that still 64% of people surveyed were not aware of Haier, even Dealers who are in

consumer durable business from more than past 20 years are not Aware of Haier.

2. Haier needs to increase the number of BTL (below the line) activities to generate Common

awareness and visibility at grassroots level.

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3. In Ahmadabad market dealers don’t want to put direct push effort on brands that’s why unlike

other cities market where if a dealer deals in LG they prefer not to deals with its direct

competitor Samsung, but in Gujarat every dealer is having collection of brands, they want to be

ready for everything like whatever customer demands they can easily find out in their store.

Currently Haier is available with most of the major dealers in Ahmadabad, Haier needs to focus

on those dealers also where it will not face direct competition with LG and Samsung , a small

and dedicated brand dealer will work not only for margins but they also can see the future

opportunities in form of Haier.

4. Good thing about Haier is that they got somehow success in positioning themselves as a

quality brand the customer survey and the dealer’s survey tells the story about it.

5. Haier should adopt aggressive marketing strategies to cut down competition and visibility at

market place.

6. Appropriate product knowledge should be given by the company to dealers and to dealers to

create awareness towards quality.

7. Overall there is much scope for Haier in Gujarat market. But Brand visibility should be

increased so it can convince dealers and customers like LG and Samsung are more customers

driven, where company demand is initiated by the customers, these company products pulls

demand from the market.

8. Company must have to focus on print ads, because where in the TV ads, a person can see only

if he/she open the TV and if the ads is getting broadcast that time, whereas print ads any person

can see going through the news paper throughout the day.

9. Products should be more attractive refrigerators looks very simple and ordinary especially

direct cool refrigerators Entry level Refrigerators can do better because of price and 190

capacities.

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10. Haier presence in Gujarat market is less compared to their competitors like LG, whirlpool,

Samsung, Godrej it is greater than only Electrolux, one thing is also evident that Haier is present

in major counters with LG and Samsung, Haier also need to focus on those dealers were it will

not face direct competition with LG and Samsung. Competitive strategy should be like this

where first Haier should wipe out

smaller brands compare to LG and Samsung because this brand also have market share larger

than Haier, and Haier is not in competition of LG and Samsung it should target on brands like

Electrolux Godrej , TCL first, so it can compete the bigger brand later on.

Haier BCG matrix:-

STAR

The star has a large market share in rapidly growth industry. The air conditioners are the stars of

haier as they have large market share and business growth rate in the market. They are stars as

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they earn maximum profit for the company and even it has potential to grow and progress

further.

Cash Cows

Cash cows exit in mature, slow growth industry but are a dominant business in the industry, whit

a large market share. Refrigerators were the first product which hair produced and launch

initially. This product runs successfully by getting more market shares in the market and

achieving high growth rate. They financed their business by gathering revenue from the sales of

refrigerators. As it’s a mature product of haier so it’s a cash cow of the company.

Question Marks

Question mark exit in new rapidly growth industry but has low market share. Cell Phones of

haier lay in question mark because they had low market share in this industry. Also they did not

create value among customers like their other products have created. They are at risk, either

these cell phones would be star or dog in future.

Dog

Dog is a poor performer with low market share in slow growth market. I would say Haier has no

product in this segment.

Porter what’s Strategy Framework:-

Haier Activities System:

Understanding of Markets

Outstanding Product quality

Sourcing & Distribution network in place

Development of Global brand

JIT delivery (reducing inventory cycle)

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Haier Competitive Advantages:

High product quality

Differentiation in products and services (Thanks to high investment in R&D)

Single brand management

Quickly response to shifts in market

Product Life Cycle:-

Haier has passed the introductory stage. It has demonstrated that it is a workable business entity.

It is producing many products and services and has loyal customers. They are solidly based and

profitable. At this time Haier is at the growth stage, where they have achieved success and now

they are trying to take off. They have occupied half of the world and they are planning to invest

in Middle East.

SWOT Matrix:

Haier has quite strong opportunities that can use to expand the market and have the possibilities

to enter new product segments and also to maintain the position. In terms to develop and avoid

52 | P a g e

threats situations, the company should use its strengths and turn threats into opportunities at the

same time. It can help the company to increase and expand its position on the market.

53 | P a g e

For the first entry product – washing machine as necessary weekly cleaning equipment, it must

have a great opportunity selling on Finnish market. Moreover, Finland has a great life style and

high standard of life and high salary level, the local consumption power is relatively strong. The

demand for washing machine with durable, high quality, energy saving and super silent module

is still the increasing customer need in the long term period. Furthermore, Haier has the

advantages of plenty experiences in European markets, customized product supply and

54 | P a g e

innovation spirit, which can help much for 41 Haier enters into a new market. In a whole, the

investment of Finland can be considered in the future business decision making plan.

The Marketing Mix: Ingredients for Success

The marketing mix, earlier known as the 4 P’s, (but now has a few more), is a vital part of any

marketing strategy. This is a tool whereby the marketer takes decisions on what and how a

product should be, where it can be sold, how it should be priced, how it will be promoted, how to

equip the people who are responsible for selling the product… and so on. Getting the marketing

mix right is equally important for the large corporation and the small business owner.

One of the most critical marketing management decisions is that decision of setting the

marketing mix values, and selecting and employing strategy that periodically changes that

marketing mixes in response to changing business environment. The marketing mix problem

involves setting the values of the marketing decision variables; the four P’s; namely, Product (its

quality), Price, Place (distribution and sales-force expenditures) and Promotion (advertising,

selling). Developing an effective marketing mix is important for product planners seeking to gain

competitive advantage in industrial markets. The decision regarding specifying the marketing

mix depends on a set of variables, such as competitor's price, competitor's product quality,

competition level, forecasted sales and others. These types of variables necessitate adoption of

appropriate approaches that can deal with such variables' nature marketing mix mapping is a step

done to achieve this.

Product:

A lot of thought and effort goes into designing a product offering. The most important question,

as a marketer, a person need to ask is whether there is a need for that type of product and how

this product satisfies that need better than those of their competitors. This will force to think of

why that product is unique, and thereby help to evolve that product’s Unique Selling Proposition.

Price:

This element of the marketing mix can be many a strategy’s undoing. A complete understanding

of the financials that drive a business is essential before deciding a pricing strategy. Base your

decision after considering the following – what is the perceived value of your product in the eyes

55 | P a g e

of the customer? How price elastic is the market? Do you wish to load overheads on to the new

product, if an existing product line is capable of absorbing them? What is your objective – do

you plan to gain market share on the strength of a rock bottom price or do you wish to create a

premium image targeted at niche customers and price your product accordingly?

Place:

This is probably that element of the marketing mix that has undergone a complete change in

definition. Traditional trading and distribution models have given way to remote or virtual

channels. While reaching the customer may have become simpler, your job as a decision maker

has become that much more complex. You now have a plethora of options to choose from – do

you go for brick and mortar or direct mailing, use the phone or sell door to door? This decision

should, first and foremost, be driven by customer preference and then by other considerations

like logistics and economics. Indeed most businesses rely on a multi distribution channel

strategy.

Promotion:

In a commoditized industry, this is what makes the essential difference. Possibly no other

marketing mix element draws as much attention from strategy makers. Again, let consumer

needs drive your efforts. Does your marketing communication address a specific need of the

target audience? Is the message memorable? Does it spur action? Here again, the entire

landscape has changed from what it was a few years ago. Promotion has gone way beyond mere

advertising and public relations – it is now a highly evolved process, ranging from live events to

internet marketing. In these times of information overload, promotion strategies must pack

sufficient punch to cut through the clutter. The marketing mix is a dynamic entity and needs to

be reviewed and refined periodically. It always helps to stay in touch with the latest

developments. Marketing mix mapping for the brand is done to know the standing of the brand

mapped with their competitors with respect to essential element of marketing mix i.e., product,

price, place, and promotion. It ensures Studying marketing mix strategies of the brand mapped

and reviewed and refined periodically according to market condition and competition

comparative mapping with other major players in the market, finding loopholes and building

effective marketing mix strategy for Haier in Refrigerator and Washing machine segment

56 | P a g e

Haier distribution network in India:-

In the above haier distribution network shows the details of each plant and warehouses hubs

distribution networks in India. The Pune plant is the main and largest plant operations of haier in

India which manufacture electronic manufacturing products and refrigerators to hub warehouses

in Mumbai, Kolkata, Delhi, and Chennai which is located at north, south, east, and west of India.

The haier at china imports medical freezers, LCD’s and other consumer electronics to all the

hubs of warehouses in the country. Thus the network distribution shows the clear information of

logistics and distribution networks in Haier India.

57 | P a g e

Haier supply chain operation:-

In the above Haier supply chain diagram shows the role of 3 rd party in supply chain, transportation, warehouse, distributors, dealers and customers. This haier supply chain gives us the logistics information, cost control and finding out the bottlenecks in the haier supply chain. The supply chain starts with the Pune plant manufacturing unit which supplies the finished goods through the mode of road transport which is operated by the 3rd party company to all the warehouses hubs in the country. And even after transporting the goods in all the warehouses the 3rd party provides service to haier for transport the goods to the distributors, dealers, outlets and to customers. Thus this supply chain gives the necessary information and clear idea for maintaining the supply chain of Haier Company India.

58 | P a g e

3PL company of Haier company:-

1. Clearing and forwarding agency will provide man power to warehouse operations as per

government of labor policies.

2. They will maintain warehouse operations as per the Haier guidelines.

3. They will handle the loading and unloading and stacking the stocks which related to

warehouse operations.

4. They will stack the stocks as per the ageing norms of the company.

5. They will take care of fire extinguisher to the warehouse.

6. They will provide transportation facilities to Haier warehouse in Hyderabad in order to move

the goods.

7. They will give fright bill as per transport agreement with HIL.

8. They will also provide service for product labeling, packaging, assembly and kitting.

9. It also provides the supply chain consulting services to the company.

10. They also provide the product order entry, processing and fulfillment.

11. The 3rd party provides fleet management in the warehouse.

12. They will provide customer service through the Haier Company.

13. Haier uses 3rd party courier companies DTDC, Blue dart, Trick on for transferring the

physical documents depend upon urgency of the reports.

59 | P a g e

Swamy and sons 3rd party logistics provider to Haier company:-

.What they do:-

Swamy Sons has earned tremendous goodwill from name brands since 1973 as a committed

C&F Agent. The group has been providing comprehensive logistics solutions by catering to

Providing warehouse space

Managing C&F Operations

Liaison with Government offices and agencies

Transport and

Value Added Services

With strong IT setup that compliments the current C&F scenarios, Swamy Sons always

ensures delight during the engagement.

Best in class CFA Agent with decades of experience:-

They have major name brands as our customers to date

They have made liberal investments in robust IT systems that bring precision in Invoicing &

Banking

There Transport backbone is unmatched. With own and allied fleet, transport goes seamless

at Swamy Sons.

Providing 3PL service to these organizations:-

Colgate Cadbury Goorej Amul Haier Tata sky Bajaj Camlin ETA Godrey Phillips Indian oil

jubilant foodworks LG Saffola Loreal Marico Marlboro MTR Nissin Kellogg’s

CFA warehouse operations:-

We supply own space or source it based on specific requirements pertaining to security,

environment specifications and proximity to markets

60 | P a g e

We evaluate the shortlisted spaces for adequate ventilation parking space, area of entry and

exit passages for ease of material handling and vehicle movement. 

Handling cases, products, SKU’s:-

Stocking, handling receipts, dispatch and monitor inventory at the unit desired by the

customer.

Manpower:-

We decide staff profile for various needs of our clients

We provide training on customer specific needs

We ensure legal compliances

Handle spikes in staffing pattern/requirements

Infrastructure:-

We deploy furniture, equipment, connectivity lines and transport based on the size of

operations.

Information technology:-

Swamy Sons is on ERP using SAP, Oracle, MFG PRO, for and on behalf of the principal

companies. Data entry and generation of MIS for the principals is done on their software

as per their corporate and IT policy.

Value added services:-

Delivery to distributors on the same day in Hyderabad as that of all orders received up to

1PM

Settlement of transport claims to up-country distributors within one month

61 | P a g e

Ability to file monthly A2 returns, and complete the sales tax assessment if suitable

authorization is given

Procuring Licenses for the principals

Handling Banking requirements at the warehouse level (Collecting DDs, and other

instruments).

Generating MIS on the principal’s own software, as per their reporting conventions

Any other customer specific requirements

Delivering and consulting for turnkey logistics solutions, to enable new entrants to set up

retail chain.

Disposal of expired stocks as per the legal norms and policies of the principal company

Transport:-

We own a fleet of vehicles consisting of Autos, Tata A/C, Tata 407s, Tata 607 and DCMs for

local deliveries. 

We affect Local Deliveries on same day if order is received before 1PM. 

Separate vehicles for Modern Trade deliveries

We have contracts with leading transporters for up country deliveries to any town/village in

Andhra Pradesh, Karnataka and Tamil Nadu.

Manufacturing:-

As a part of our backward integration strategy, we have manufacturing facilities to make custom

build shippers/cases. The manufacturing facility is handled by our group company Shrikant

Containers, located in Uppal, Hyderabad. This is over and above, the normal repacking solutions

that we offer as part of our CFA operations. Logistics solutions providers Swamy Sons provides

Logistic and fulfillment services for small and medium online businesses, which may have the

know-how for creating the product and procuring orders but not for delivery and distribution. For

example, a cottage industry for pickles or eco friendly store may have good reputation for quality

products. They may procure orders by phone or through website. They may not have the

expertise to handle logistics and delivery. That’s where Swamy Sons steps in.

62 | P a g e

Operations of inbound logistics of the warehouse:-

1. When the goods are unloaded from the truck.

2. The Inspection of inbound documents will be done by security officer of the warehouse and he will enter all stock into inbound register

3. After inspection is done the security officer will submit the inbound report of unloaded of the goods to warehouse manager (C.F.A.)

4. After checking the document report by the warehouse manager. He/she plans for managing the space in warehouse.

5. After unloading of goods in the warehouse. The CFA manger will check the MRP stickers with bar codes stickers on each product and condition of the carton box.

6. Then the warehouse manager submits the document report to branch logistics manager.

7. Branch logistics manager will prepare space management report according to the sales plan.

8. The vehicle Detention report and space management report will be sent to Regional Logistics Manger /Head Office of logistics.

9. After unloading of the all stocks in the warehouse. The Branch Logistics Manager will send stock unloading report to all branch sales team.

10. Branch Logistics Manager will manage vehicle detention report daily.

63 | P a g e

Inbound operation procedure:-

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Entering security inbound register

Stacking of consignment in receiving area

Physical verification by warehouse executive

Is consignment correct?

Update DEPS

Labeling bar code level in each box (sku), which provide by supplier

Preparing GRN

Giving acknowledgement to

supplier

SKU checking process i.e. size, quality, color, unit

Put inbound no. in back side of

bill/invoice/challan

GRN posting by data entry operator

Start

Closing inbound process

Conform GRNSKU wise storing material into BIN

Operations of outbound logistics of the warehouse:-

1. To dispatch the stock in outbound. The logistics department in warehouse need tax

invoice document from the commercial manager.

2. As per the invoice the warehouse manager arranges the trucks as per route plan.

3. After taking the invoice the supervisor of the warehouse moves the stacked stocks from

its place to delivery place as per the invoice as allotted and he/she enters the each

outbound products details in the bin card as per invoice details.

4. After entering into bin card. The Warehouse supervisor officer will start the loading part

along with security officer and they will write down the each unit serial number on tax

invoice.

5. The warehouse manager will check the truck condition (torpholan). After loading the

warehouse manager will arrange the road permit (waybill) for the trucks.

6. After loading the goods in the vehicle the transporter will raise the Lorry copy.

7. Security officer of the warehouse will checks all documents and enter in outbound

register and handover papers to diver.

65 | P a g e

Outbound process:-

Warehouse delivering process

In Haier warehouse delivering process is 3 types

1) FIFO (Fast in Fast Out).

Here the 1st items which will come to warehouse, it will be going to delivery 1st.

2) LIFO (Last in Fast Out).

Here the last goods are going to first delivery.

3) FEFO (Fast Expire Fast Out).

66 | P a g e

Prepare Indent Pick-up

Picked Material Cross Checking

Scanning the Picked SKU

Route Planning

Generation of Invoice

Update System

Here the first expire goods will be first delivery.

E.g. if some food goods are there for delivery, then it will be delivery first.

DATA ANALYSIS AND INTERPRETATION

This chapter deals with the data analysis and interpretation of the sales reports and data collected from the year 2012, 2013, 2014 of Haier to estimate the sales for future years. The other reports like monthly inter stock report, vehicle detention report; aged stock report and transportation report were also used to analyze the 3PL role in Haier warehouse at Hyderabad.

Sales data 2012:-

commercial

ac

cross

division

digital

it pro

ducts

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

micro Owen

refrig

erators TV

Washing m

achine

water h

eater

0

4000

8000

12000

16000

105

6667

372 161 561

4332

12474

605

13366

211

43831353

quantity invoice

quantity invoice

67 | P a g e

commercial

ac

cross

division

digital

it pro

ducts

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

micro Owen

refrig

erators TV

Washing m

achine

water h

eater

0

20000000

40000000

60000000

80000000

100000000

120000000

1623044157800114713616637198072003

30369795

99088881

1749697

106161050

3356906

26836690

6045748

Sales Net Value

Sales Net Value

In the above analysis of the graphs of sales net value and quantity invoice of the year 2012 data

shows that the refrigerators had great sales turnover around RS.106161050/- with the quantity

sold 13366 units in 2012 was sold in the market. And the second sales LCD had a great sales

turnover around RS.99088881/- with the quantity of 12474 units was sold in the market. The

lowest sale unit was in the year 2012 was digital IT products. Thus it was the interpretation of

the haier sales turnover of year 2012.

Sales data 2013:-

68 | P a g e

commercial

AC

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

micro Owen

refrig

erator TV

washing m

achine

water h

eater

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

2439555298045710553412

54224180

119979937

3055873

132826344

20232

38360491

14366821

sales net value

sales net value

commercial

AC

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

micro Owen

refrig

erator TV

washing m

achine

water h

eater

0

4000

8000

12000

16000

140 7 682

747410669

1009

13678

46

57823844

quantity invoice

quantity invoice

As per the above analysis observations of sales data and quantity invoice graphs of year 2013

shows that again the refrigerators had great sales turnover around Rs.132826344/- with the

quantity of 13678 units sold in the market. And the second highest sales were the LCD’s with

the sales turnover of 119979937/- with the quantity of 10669 units sold in the market. The lowest

sales were TV’s.

Sales data 2014:-

69 | P a g e

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

Micro O

wen

refrig

erators

washing m

achine

water h

eater

0

500

1000

1500

2000

2500

24 108

2212

1161

414

2184

1306

57

quantity invoice

quantity invoice

As per the above analysis observations of sales data and quantity invoice graphs of year 2014

shows that the home air conditioner had great sales turnover around Rs.24691107 /- with the

quantity of 2212 units was sold in the market. And the second highest sales were the refrigerators

with the sales turnover of 20409138/- with the quantity of 2184 units was sold in the market. The

lowest sales were water heaters. Thus it was the sales analysis interpretation data 2014.

Sales data of 3 years estimation for future forecasting the sales turnover:-

70 | P a g e

drum wash

ing mach

ine

freeze

rs

home air c

onditioner LCD

Micro O

wen

refrig

erators

washing m

achine

water h

eater

0

5000000

10000000

15000000

20000000

25000000

30000000

3754212303752

24691107

17512371

1257030

20409138

10220122

146912

sales net value

sales net value

2012 2013 2014 20150

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

283663852

378806716

76915841

39714125

sales estimation data

sales

As per the analysis and interpretation of 3 years of Haier sales data and comparing it with each

years of sales the graphs shows that in the year 2013 the sales data was recorded as the highest

sales turnover of the Haier company around Rs.378806716/-. And by forecasting the sales data

of 3 years of 2012, 2013, 2014 as been estimated that the sales turnover can go down in the year

2015 which is not a good sign for Haier Company. So by doing the sales analysis it shows that

all the departments in the Haier Company and even logistics department also depends upon the

sales turnover and marketing department of the company.

Aging stock report analysis:-

71 | P a g e

2%1%

59%

26%

3% 10%

Aging stock analysis Commercial ACCross DivisionFreezerHome Air ConditionerLCDMicro-wave OvenRefrigeratorSmall AppliancesSolar ProductWashing MachineWater Heaterblank

As per the above aging stock report analysis shows that 59% units of water heaters are still

stacked in the warehouse which comes under aged stock in the report and shows very less sales

for the water heater and shows high dumping of the water heaters from the plant in the

warehouses. The less aged stock in the warehouse is small appliances and commercial AC’s

were the flow of the goods is more in the market. The aging stock analysis shows the products

which are more sales and less sales in the market. The aging stock also occupies the space in the

warehouse and cost of transporting in the market or other warehouses.

MIS report of April 2015:-

72 | P a g e

OM SAI TR

ANSPORT

PUSHPAK FR

IEGHT C

ARRIER

S.M.CARRYIN

G CORPORATION(H

O)

SFC TR

ANSPORT

THE N

ALAGARH TR

UCK UNION

TTC LO

GISTICS

0200400600800

10001200140016001800

46 4 45 3 12 594 8 99 18 66 5

1562

128

858

144

1270

125number of trucks total transit time number of days total quantity carried

As per the above MIS report April 2015 shows how 3rd party provider’s gives number trucks to

transport the goods, quantity carried and transit time of days at the warehouses. The above graph

shows that Om Sai transporter which is from the company of Samy and Sons the 3 rd party

company which provides service to haier as been recorded the highest service in the means of

transport of trucks to haier warehouse for transporting the goods in local and upcountry of

around 46 trucks as been provided by the 3rd party logistics company to haier in the month April

2015 MIS report. And the Om Sai transport truck carries the highest units of haier products with

lowest fright charges and to control the cost of transportation. The second 3rd party transport

company is S.M. carrying corporation company which provides 45 trucks to Haier Company

with units carrying is 858 units. Thus the MIS report shows the role of 3 rd party logistics

company in the haier company.

MIS report May 2015:

73 | P a g e

THE N

ALAGARH TR

UCK UNION

SFC TR

ANSPORT

TTC LO

GISTICS

OM SAI TR

ANSPORT

S.M.CARRYIN

G CORPORATION(H

O)0

50

100

150

200

250

2 3 5 3 1112 185 9

38

120144

125

13

220

number of trucks transit time number of days total quantity

As per the above MIS report May 2015 shows how 3rd party provider’s gives number trucks to

transport the goods, quantity carried and transit time of days at the warehouses. The above graph

shows that S.M. carrying corporation which is a 3rd party transport company which provides

service to haier as been recorded the highest service in the means of transport of trucks to haier

warehouse for transporting the goods in local and upcountry of around 11 trucks as been

provided by the 3rd party logistics company to haier in the month April 2015 MIS report. And the

S.M. carrying corporation truck carries the highest units around 220 of haier products with

lowest fright charges and to control the cost of transportation. The second 3rd party transport

company is TTC logistics which provides 5 trucks to Haier Company with units carrying is 125

units. Thus the MIS report shows the role of 3rd party logistics company in the haier company.

74 | P a g e

Vehicle Detention report:-

The N

alagar

h Truck

Perators

Om Sai Tr

ansport

SM Carr

ying C

orp

Om Sai Tr

ansport

SM Carr

ying C

orp

The N

alagar

h Truck

Perators

Om Sai Tr

ansport

The N

alagar

h Truck

Perators

00.5

11.5

22.5

33.5

1 1 1 1

3 3

1

2

VDR report

No. of Days Halting

As per the above VDR analysis report which shows the dumping of the goods from plant without

the coordination with sales and logistics departments of the company or due less space in the

warehouse which effect the time of halting of the trucks in the warehouse. The trucks from the

plant which is SM carrying corporation and Nalagarh truck Perators Company is recorded as

more days of halting around 3 days due the low space in the warehouse or low billing from the

sales department. Thus the VDR report shows the vehicle detention time and reporting time of

halting trucks in the warehouse.

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3PL transport analysis in Haier warehouse Hyderabad:-

habids

Ameerpet

AS RAO NAGAR

ATTAPUR

BEGUMPET

BHEL

DILSUKHNAGAR

GUDLAPOCHAMPALLY

HASTINAPURAM

KARKANAKOTI

KUKATAPALLY

LB NAGAR

MALAKPET

MOOSAPET

NAMPALLY

MUSHEER

ABAD

PANJAGUTTA

SANTO

SH NAGAR

SEC-BAD

TADBUND

UPPAL

VIDYA NAGAR

0

1000

2000

3000

4000

5000

6000

8 12 10 20 89 69 10 12 5 11301

15 10 38 7 11 42 6 50 86 81 5 3160235160

870

165

3040

215535

100171

5465

360215

761

195205

1880

140

125012601620

65 35

transporter number of trucks KM

As per the above transportation report shows the role 3rd party logistics company which is

sovereign enterprises of Swami and Sons Company provide the trucks around 901 trucks to

Haier company to local and up country were they had transported the goods more to koti area in

Hyderabad where there is more sales and more dealers are located in koti. The 3rd party Logistics

Company had provided the trucks to koti around 301 trucks with units carried is 3389 which

shows the demand for the Haier products for transporting. Thus the transportation report shows

the details of 3rd party logistics in transporting the goods in Hyderabad in local and up country.

76 | P a g e

SUGGESTIONS:

1. The sales department and plant manufacturing department should coordinate to

decrease high dumps from the plant.

2. To maximize the warehouse space in order to allocate the space for the higher dumps

of the products from the plant.

3. To reduce the lorry detention time during the process and implementing effective

scheduling process in the loading and unloading of the products from the plant.

4. To minimize and control the inter branch stock transfers as per sales plan.

5. To reduce the late delivery of products to the dealers and customers.

6. To recruit manpower in order to reduce the time of loading and unloading of the

products and to avoid the traffic of trucks.

7. Need to improve in the logistics facilities in the company and maintain the flexibility

within the departments.

8. Need to improve to liquidate the ageing stock daily report in the warehouse.

9. To avoid low quantity billing in order to reduce the expenses in local and upcountry.

10. To appoint repacking department and 3rd party at every hub only for import stocks

and all warehouses to avoid the carton box damage in order to save time ,reducing

the loss and to control the cost.

11. In global market: Continue Brand Building Initiatives, An individualized brand, the

product quality, adaptability and flexibility and Customer focused firm.

12. In Domestic Market: Continuous Innovation, a home company to customers which

Increases the quality.

13. To avoid the part loads of the goods by the distributor for all the Haier warehouses in

the country.

14. To avoid low billing by the distributors in order to control the fright cost.

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REFFERENCES:-

1. MANAGING SUPPLY CHAINS A LOGISTICS APPROACH BY JOHN .J.

COYLE, 2013, 9TH EDITION.

2. Aghazadeh S.M. (2003), “How to choose an effective third party logistics

provider?” Management Research News, Vol. 26, No. 7, pp. 50-58.

3. Enterprise Information Management, Vol. 18 No. 3, pp. 316-329.

4. Alves, A.R. and Vieira A. (2006), ‘‘SERVQUAL as a marketing instrument to

measure service quality in higher education institutions’’, Second International

Conference: Product Management-Challenges of The Future, Poznan.

5. Bask, A.H. (2001), "Relationships between 3PL providers and members of supply

chains – a strategic perspective", Journal of Business and Industrial Marketing,

Vol. 16 No.6, pp.470-86.

6. Bagchi, P.K., Virum, H. (1996), "European logistics alliances: a management

model", International Journal of Logistics Management, Vol. 7 No.1, pp.93-108.

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