Dabur Financial Analysis

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WORKING CAPITAL MANAGEMENT: FINANCIAL ANALYSIS OF A SUPPLY CHAIN INTRODUCTION FMCG Industry deals with the manufacturing and sale of consumer durable goods such as soft drinks, toiletries, processed foods etc. The essential features of such products are that they have short shelf life and are available at relatively low price. Therefore, inventory management and extensive distribution network are few of the prerequisites to build a healthy supply chain resulting in an improved financial performance of the company. Measuring the efficiency of a supply chain is a rigorous and thorough process. Various metrics and methods have been designed to analyze the effectiveness of supply chain. In this article, we emphasize on how different financial metrics…show more content…
customers primarily constitute of stockists, institutions (malls, hotels etc.) and international customers. Its aim is to enable payments from its customers as quickly as possible. The maximum credit period given to stockists is 10 days. Due to the factoring method employed by various international companies, the payment dues are also cleared quickly. As far as the suppliers are concerned, the discussions with them are held in the most transparent way possible. Dabur India Ltd. can extend its payables duration from 7-120 days. The recent implementation of ERP enabled Dabur to integrate its supply chain…show more content…
ITC Ltd. The value is determined to be 230 days for the FY ’15. The inventory management of ITC is not as efficient as Dabur, as greater number of days are required to replenish their inventory i.e. 277 days as compared to Dabur’s 118 days. This huge increase in inventory days may be attributed to the relatively higher sales (approx. 492%). ITC could achieve this due to implementation of ERP throughout its supply chain. It follows the policy of First Manufactured First Out (FMFO) i.e. the goods that it manufactured first are cleared out from the warehouses earlier than those manufactured at later point of time. By observing the C2C cycles, we can conclude that Dabur India Ltd, one of the oldest companies in India has managed its supply chain well enough and thus has been maintaining fourth position in the FMCG sector consistently. It has also integrated IT into its supply chain and renewed its supply chain. However, the market leaders of this sector i.e. ITC Ltd and HUL are way ahead in making use of advancements in technologies and thus possess a proficient supply

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