Supply Chain Management Assignment

What is the approach of Titan in channels of distribution? How has itbenefitedthem?

With its trademark signature tune and a brand name Titan has ruled the consumer watch industry for over two decades. It markets under the Titan and Sonata brand names. It enjoys a 25 per cent share of the total domestic market-more than three times the size of its nearest competitor-and close to a 50 per cent share among nationally recognised brands.

Titan faced questions like: But what exactly is ‘right'? How does the company know which market demands for which specific type of watch, which manufacturing unit should cater to which retailer? And exactly how many watches will he need?

And the answer to this lay in an inaccurate demand forecasting system. The system was not dependable as it hinged on the opinions of the field sales force -- opinions that were not backed by numbers for the most part. Coordinating between the supply chain and distribution has been one of the biggest challenges of Titan. Another problem was mismatched inventory.

During 2003-04, Titan took many measures to further improve its effectiveness with respect to the customers and to boost its internal efficiencies.

The supply chain is a network of suppliers, factories, warehouses, distribution centre's and retailers through which raw materials are acquired, transformed and delivered to the customer. Supply Chain management is the strategic, tactical and operational level decision making that optimizes supply chain performance.

In order to optimize performance, supply chain functions must operate in an integrated manner. But the dynamics of the enterprise and the market make this difficult; materials do not arrive on time, production facilities fail, workers are ill, customers change or cancel orders, etc. causing deviations from plan. In some cases, these events may be dealt with locally, i.e., they lie within the scope of a function. In other cases, the problem cannot be ‘locally contained'; modifications across many functions are required. Consequently, the supply chain management system must coordinate the revision of plans/schedules across supply chain functions.

Titan followed this approach of integrated supply chain management and reorganized its supply chain by integrating the functions of forecasting, demand planning, production and materials planning, distribution planning, stores, imports and exports and excise, which they named as Supply chain and logistics organization.

Then they collaborated their forecasting process. This helped them to make more accurate forecasts with respect to the demand. They could integrate the information they got from different sources. The titan watches are available through World of Titan and they also supply them to other retailers through redistribution stockists, time zone and direct dealers. These retailers and stockists provide their requirements in advance which helps titan to forecast its demand and optimize production accordingly. The product management group also submits its plans about new models in advance which helps in better information flow and decision making in the supply chain.

The benefits this integrated approach were:

  1. With a better forecasting process and information flow, Titan was able to optimize their inventory
  2. It helped them to provide match the demand more accurately
  3. There was better communication of information, coordination of decisions, and management of change within multi-agent environments
  4. It helped to promote a sense of ‘ownership' and commitment to the goal among all the groups
  5. It helped to monitor and control the logistics cost.

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