Professional Documents
Culture Documents
Presented by:
Sakshi Gupta Samay Meena Bellana Shankar Sarvesh Satya Swarup Shantanu Mishra (85) (86) (87) (88) (89) (90)
1
Lubol India Ltd A Joint Venture of Lubol Petroleum Inc. and National Oil Company (NOC) Product Lubricating oil Current Market Share 1 % (1998) Target 9 % share (2002-03) LIL uses the spare capacity that NOC has at three lube bending plants at Mumbai, Chennai and Haldia LCWs at Mumbai, Chennai, Calcutta and Gurgaon
Blending plants
Filling lines
LCWs
DISTRIBUTION NETWORK
40 NOC depots
Wholeseller
LILs retail
Consumers
Sales Tax Structure CST, LST, D- form concession Demand/Fuel consumption Sales volume Urban population
Location of three blending plants and four LCWs, existing NOC depots
5
A single LIL depot in West Bengal catering to the needs of the north-eastern states Arunachal Pradesh Assam Manipur Meghalaya Tripura
Demands in the following states can be met by the adjoining states Goa Himachal Pradesh Jammu and Kashmir
At least 1 LIL depot in Maharashtra, Tamil Nadu and West Bengal to cater to large consumption and urban population in addition to existing depots, blending plants and LCWs
WHAT ARE THE CRITERIA FOR SELECTION FOR DECIDING ON THE METHOD OF DEPOT MANAGEMENT(WITH RESPECT TO THE OPTIONS OF CONTINUING WITH NOC, OPERATING OWN WAREHOUSES AND APPOINTING CFAS)
Cost
Services and responsiveness
CFAs
Moderate demand, Operational Efficiency, Expected ROI less poor connectivity and high logistics cost North Eastern region, A&N, Lakshadweep etc.
NOC
CONTD.
Cost structure for calculation of expenses for LIL/CFAs: - Inventory Carrying cost - Rental for Space - Fixed Operating costs salaries etc.
It has been assumed that NOC takes Rs 50000 monthly; correspondingly, the annual cost comes out to be Rs 6,00,000
Direct
LIL Channel NOC Channel 10% to 29% 35% to 6%
Retail
35% to 50% 20 to 15%
States with High Retail Trade - NOC depots States with High Direct Trade - LIL Depots Low Demand or High Cost States - CFAs
9
Procurement cost is higher & Replenishment cycle is less frequent in smaller depots
Economic order quantity will vary depending upon the annual sales and also the frequency of replenishment cycle
10
Why should we go for CFAs? Hired labour cost & Fixed costs It will affect customer service level & growth The CFAs recommended fee structure can be based on sales Fee structure should be based on volume handled but should be less than total cost incurred by LIL if it were to open its own depot
11
OUT OF 3 SOURCES , WHICH SOURCE SHOULD BE ALLOCATED TO WHICH DEPOT ? COULD THE EXISTENCE OF 3 SOURCES INFLUENCE THE NEED OF MULTIPLE DEPOTS IN CERTAIN STATES?
Market priorities and demand Well established connection with the bounding states Planned capacity of the allocated sources to meet the requirement Thus,states like Maharashtra, Uttar Pradesh, Tamil Nadu need to have multiple depots so as to meet the demands of depots in neighbouring sites
12
THANK YOU
13