Distribution and Logistic Management for Local Bakery. Distribution Channel for Local Bakery, Problems faced, solution

1. Project Done By :
•Ruppratim Das
•Himadri Guha
•Sayantan Bhattacharya

2. ‘Existing Bakery business in India’
 The bakery sector in India is estimated to be worth over 3.2 billion Euros (Rs 210 billion),
and is still the cheapest form of ready-to-eat food .The rate of growth is approximately
13-15 per cent.
 According to Research and Markets reports, the bakery industry is the third-highest
revenue-generator in the processed food sector.
 The market size for the industry is pegged at $4.7 billion in 2010, and is expected to
reach $7.6 billion by 2015. It also mentions that the shining star of the sector remains
the biscuit industry.
 Biscuits and bread, which are considered to be the major bakery products, account for
82 per cent of all bakery products.
 The unorganized sector accounts for about half the total biscuit produced in India (which
is estimated at about 1.8 million tonne).
 It also accounts for about 85 per cent of the total bread, and about 90 per cent of other
bakery products (including buns and rusks ) produced in the country, which is estimated
at 0.8 million tonne.

3.  Most of the machinery is manufactured in India. However, if needed, it is generally
imported from Germany, Italy, Switzerland, France and the United States.
 The bakery industry is a largely unorganized sector. Throw some light on this.
 The market share of the branded and organized bread and biscuit sector to that of the
unbranded and unorganized market share has been 60:40.
 So we can see that there is a high potential in the biscuit and cakes industry and the
Unorganized sector (local bakery) has a pretty good market share in it. We should look
forward to developing the sector rather than lagging behind to ultimately be wiped off by
the big players who would potentially be aiming at capturing the whole market and get the
local Bakery out of competition.

4. ‘Distribution System in the Bakery Business’
Manufacturer Big Bakery
Van
Cross Docking
Local Bakery
Van
Tea-Stalls, House-
Sales

5. ‘Existing Distribution system of a local bakery’
According to our survey we found out the following distribution system in a bakery system
 Manufacturer – He is the one who makes the product and supplies it to the wholesaler
(big bakery van).
 Big Bakery Van – They are the wholesalers who generally take goods/product from a
bakery and supplies it to the small bakery van.
 Small Bakery Van – The small bakery van comes to a point where they meet the big bakery
van and takes product from them , here we can clearly see a Cross-Docking taking place.
They don’t take a single brands product rather they take multi-brand product and goes on
to supply to the tea stalls / house sales.
 Tea stall – Generally they keep the biscuits or bread to be sold to the end consumers.
The biscuits are generally sold in small quantity and the bread is sold after some value
addition by the tea stalls like egg-bread, sugar-bread, butter-bread etc.

6. ‘CONFLICT’
 What is Conflict ?
Situation when a producer or supplier bypasses the normal channel of
distribution and sells directly to the end user.
 Types of Conflict that occur is an distribution system
There are mainly three types of Conflict
 Horizontal Conflict
 Vertical Conflict
 Multi-Channel Conflicts

7. ‘Horizontal and Vertical Conflicts in the Distribution system’
While doing the project we have observed the Horizontal Conflict is
carefully managed as the Big Bakery Vans have assigned areas and
they don’t go into another’s area. Rather they maintain a co-operative
relation among one-another, because if one of the Big Bakery Van is
absent another one comes for his cover. Same goes for the Local
Bakery Van too.
In the Vertical Conflict we see that the Big Bakery Van and Small/Local
Bakery Van the conflict doesn’t take place as the Big Bakery Van
doesn't go around distributing to the customers of the Local Bakery
Van. They simply distribute the items to the Local Bakery Van and let
them sell it to the retail outlets, tea stalls & home sales.
In this way Bakery Business avoids Conflict but in few cases we see
Conflicts taking place where the Big Bakery Van sells his product to
the Customer or the Local Bakery Van sell it to the end user by
avoiding the tea stalls or the retail outlets.

8. Distribution Development Index and Category Development Index
 DDI - Distribution Development Index is defined as the availability of a brand/ category in the market
relative to that of a bench mark brand/ category.
 CDI - Category Development Index is defined as per capita consumption of the category in that market
relative to the national per capita consumption of the category.
According to our view it’s better to follow the CDI because it tells us to concentrate more on the following
 The Quality of Distribution
 Providing better Service
 Extending Distribution system immediately.

9. ‘The Major Challenges faced by Local Bakery Business these days’
 Longevity of the product due to bad packaging.
 No brand identity created
 Labour cost on the higher side;
 Lack of knowledge of raw materials and quality control check;
 Lack of awareness about latest development;
 Poor hygiene and process control
 Competition with Big Players like Britannia, Bisk-Farm, Priya, Anmol,
ITC etc.
If the Bakery can overcome this factor it would be helpful for the
Bakery to grow and flourish.

10. Cross-Docking occurring between a Big Bakery Van and a Small Bakery Van

11. Cross-Docking occurring between a Big Bakery Van and a Small Bakery Van

12. Prince Bakery Factory

13. Reverse Logistics
Reverse logistics is the collection of all processes that come into play for goods that move in the
reverse direction, i.e., from the customer to the business. Here are the most important
processes that are covered under reverse logistics.
 Physical Movement of Goods.
 Warehousing.
 Triage.
 Repair.
 After Sale Support.