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Operations Itc

ITC Ltd has implemented a new direct distribution model to supply products from manufacturing units directly to retail outlets across India, aiming to reduce lead time to just one day. Under the new model, ITC removes stocking points to send products directly from factories to over 2 million retail stores in its distribution network. This reduces working capital needs by 10% and ensures safer, fresher products while lowering distribution costs by 20%. The new direct supply chain model helps ITC better respond to market demand.

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Radhu Abrol
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50 views

Operations Itc

ITC Ltd has implemented a new direct distribution model to supply products from manufacturing units directly to retail outlets across India, aiming to reduce lead time to just one day. Under the new model, ITC removes stocking points to send products directly from factories to over 2 million retail stores in its distribution network. This reduces working capital needs by 10% and ensures safer, fresher products while lowering distribution costs by 20%. The new direct supply chain model helps ITC better respond to market demand.

Uploaded by

Radhu Abrol
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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OPERATIONS AND

MATERIAL MANGEMENT
Prepared by : Radhu Abrol Course mentor:
Rollno: 33MBA21 Dr Aubid Hussain Parrey sir
Topic

Newspaper Article
On ITC’s Direct
Distribution To
Retail Outlets.
PROFILE
 ITC was established in 1910.

ITC :  Was known as imperial tobacco company of India


limited.
INDIAN  India's foremost private sector company with businesses
TOBACCO spanning Fast Moving Consumer Goods, Hotels,
COMPANY Paperboards and Packaging, Agri Business and
LIMITED Information Technology.
 Gross sales value of ₹ 90,104 crores and Net Profit of ₹
15,058 crores (as on 31.03.2022).
 ITC was ranked as India's most admired company,
according to a survey conducted by Fortune India.
 ITC Ltd has worked on the “leanest possible" distribution model to supply products directly from its
manufacturing units to retail outlets across the country, aiming to ultimately reduce lead time to just one day.

 The company, with interests in cigarettes, packaged food, personal care, apparel, hotels and information technology, has
changed its distribution supply chain model for cigarettes and packaged goods such as shampoo and soap to sharpen its
competitive edge and reduce costs.
 ITC has one of the most extensive distribution networks in India. Its products are available at 4.3 million of the estimated
eight million retail stores in India. Of this, about 2 million are under ITC’s direct distribution network. 

 Traditionally, ITC,stocked products at its distribution centres. Products first go to its exclusive wholesale dealers, then
distributors and direct retailers.The entire process takes anything from one week to three weeks.

 ITC has made efforts to reduce that to a day.


The new model has implemented across the 2 million retail stores that are touched by ITC’s direct distribution network.
 ITC’s long-term goal is to reach the retail points directly from the manufacturing facility, so that the
company is able to improve their competitiveness in the market. 

 Less working capital requirement :


ITC has tried to remove as many stocking points as possible as part of its new model.This ensures better
profitability. Optimal deployment of inventory has reduced working capital by about 10%.

 Safety of products :

The ultimate goal was to ensure a supply chain that is as close to the market as possible .This ensured greater
freshness of products, greater responsiveness and lower costs.Companies has reduced costs by about 20% at
the distribution centre level.

The new model has helped the company get more data about consumers and, in the long run, that
could be the biggest benefit for ITC.
Indeed, the new model helps the company respond better to market demand.
 The company said it would continue to make
investments towards establishing a distributed
manufacturing footprint, structural interventions with a
view to reducing operating costs and focus on supply
chain optimization and improve supply chain
responsiveness .

 It added that the focus is on building flexibility and


agility across the supply chain to ensure delivery of
volume and variety in a timely and cost-effective
manner.
 https://en.wikipedia.org/wiki/ITC_Limited

Reference  https://www.itcportal.com/media-centre/press-reports-conte
nt.aspx?id=1597&type=C&news=ITC-looks-at-direct-supp
ly-of-products-to-retail-outlets
Thank you

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