Logistics Management

Lubol India Ltd - B

Presented by
Sakshi Gupta Samay Singh Meena Bellana Shankar Sarvesh Hiremath Satya swarup Shantanu Mishra (85) (86) (87) (88) (89) (90)

Case Study Description

Lubol India Ltd Joint Venture of Lubol Petroleum Inc. and National Oil Company (NOC )
Product Lubricating oils Current Share 1 % in competitive market Objective 9 % player by the year 2002-03 (i.e. next 5 years) on average

Current Distribution

CFA Depot @ Sarkhej

Trombay NOC Plant, mumbai Suburb 1 Suburb 2 LCW

Lubol Own Distribution

Bazar Trade Direct Customers Petrol Pump Direct Customers

NOC Channel
NOC Depot @ Ahmedabad

Q1.Criteria to decide Narrow or Wide Distribution Network for Gujarat ?

Transportation Cost
Primary (From LCW to CFA ,5500-7500 Rs/truck) Secondary (CFA to Wholesalers) Cartage (local wholesalers with in radius of 15 km,rate3 /carton of 20 litres)

Inventory Cost

Cycle stocks due to the shipment sizes at the wholesalers & CFAs , applicable for full truckload receipts

Losses/Handling

Service and Market Support

Product Availability

Closeness to customer

Opportunity to Promotion

Q 2.Criteria to decide on a narrow or wide distribution network?

Narrow network (10 wholesalers)

Pros: Cons:

Leverage on IT systems LCV- High Capacity of FTL Higher range of supply Greater credit to the retailers

Market support is less Local knowledge Octroi payment by retailers

Wide network (30 wholesalers)

Pros: Cons:

Octroi responsibility of wholesalers Local knowledge Market support

Less IT support Small radius of supply Limited credit to retailer Conflicts amongst wholesaler

Costs of each option in Gujarat

Narrow
Network

Wide Network

Optimal number & location of CFAs in Gujarat?

By comparing total transportation cost and service quality to increase the market share Wide Distribution Network - CFAs at Ahmadabad, Rajkot &
Vadodara

Optimal Transportation cost Optimal variation in distribution load Covers max geographic area of the state Equal distribution of no of WHs

Current Distribution: Gujarat

LCW
Vadodara Ahmedabad Wholesalers Rajkot

CFA's

Ahmedabad

Rajkot

Ahmedabad W&S
Ahmedabad E Nadiad Dholka

1
Wholesalers 2

Rajkot Jam nagar Verbal Porbandar

Wholesalers 3

Gandhidham Junagadh

Ahmedabad

Gandhidham

Dholka Nadiad

Porbandar

Junagadh

11

Q4. Can some of the large wholesalers be upgraded as CFAs ?

Yes, Out of Top ten large wholesalers, we can upgrade

verbal

porbandar

Sea ports location Very large demand of direct customers Primary transportation cost can be reduced by supplying through vessels.

Thank You