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Information technology as an enabler of sales and distribution

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  1. Introduction
  2. FMCG sector in India
  3. Distribution sectors
    1. Marico, Asian paints and HLL
  4. IT in sales and distribution automation
    1. Supply chain management
    2. Review of popular SCM solutions
    3. Sales and distribution in India
    4. The modern trends: Use of PDA's
  5. S&D automation: Case studies
    1. Hindustan Lever Limited
    2. Marico
    3. Asian paints
  6. Comparitive analysis
    1. CFA's depots and distributors
    2. Primary and secondary sales automated
  7. Advantages and critical factors
  8. Framework for IT implementation
  9. Conclusion
  10. Bibliography

A competitive edge in sales and distribution network provides much needed muscle to the companies to compete in market place as has been epitomized by companies like HLL, Marico & ITC etc. Use of IT in sales and distribution promises to provide a consistent source of competitive advantage that can go a long way in enhancing the overall power of company in market place.

Sales and Distribution in India means a set of levels- wholesalers, stockists, transporters, retailers etc. Automation of S & D promises the reduction in storage costs, administrative costs, communication costs, lesser wastage and lesser transportation cost because of better route planning. It enhances the revenue because of better marketing planning, demand volatility management, responsive product development. The productivity is also enhanced because of effective use of sales data, improved communication flows and computer assisted ordering. Considering all these advantages, IT looks like to be a natural candidate to be used in sales and distribution.

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage.

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing industry. India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million.

[...] And as it was anyway toying with the idea of refurbishing its IT system it decided to check out the potential of an Enterprise Resource Planning (ERP) system. The ?business advantages' of ERP systems prompted the company to analyze its potential. Marico sought to keep pace with the dynamically changing business environment and saw ERP as the means to achieve it. Though the benefits of ERP were fairly apparent, Marico decided to play it safe by chalking out a detailed plan on paper. [...]

[...] We are currently in one of those phases and believe it to be the fourth major asset of the company (other three being strong brand image, new product development strengths and an extensive distribution network).? HARNESSING INFORMATION TECHNOLOGY In an effort to establish itself as a strong player in the FMCG sector, The company has already started implementing IT systems and processes all across the company. The distribution network is the lifeline for an FMCG company and is great value add in terms of IT returns than manufacturing. [...]

[...] The i2 Order Fulfillment solution can help an organization provide a single face to the customer as well as an optimum customer experience through proactive visibility, accurate real-time responses to requests, and improved delivery performance within an increasingly complex and fragmented set of participants 2.3 SALES AND DISTRIBUTION IN INDIA In today's competitive markets, success depends on an enterprise's ability to effectively plan, influence, manage, and communicate customer demand. Continuous demand management can potentially reduce both manufacturing and inventory costs, improve customer satisfaction, and provide the understanding of consumer demand required to win market leadership. [...]

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