This is report on supply chain management of ITC- Diversification. this is beneficial for the BBA/b.om /mba students. this includes following topics - Supply chain Supply chain management Key benefits of supply chain management Goals of supply chain management Process of supply chain management Types of process floe of supply chain Introduction of company Supply chain of Cigarettes Supply chain of Agarbattis Supply chain of e-Choupal Supply chain of hotel Supply chain of paper Conclusion Bibliography

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A
Project Report on
“SUPPLY CHAIN PROCESS WITH REFERNCE TO ITC-
DIVERSIFICATION”
SUPPLY CHAIN MANAGEMENT
(SML-505)
Submitted By:-
Yamini Kahaliya (K13341)
Akshat Kishore (K13816)
Rakshit Jain (K13327)
Nishtha Shaktawat (K13566)
BBA Honors
5th semester (3rd year)
Submitted to:
Priyanka Kukreja ma’am
Assistant Professor
School of Commerce &
Management

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ACKNOWLEDGEMENT
We wouldlike toexpress ourspecialthanksof gratitude to ourteacher(PriyankaKukrejaMa’am)
whogave us the goldenopportunitytodothiswonderful projectonthe topic(SupplyChain
Management), whichalsohelped usindoingalot of Researchand we came to know about somany
newthings we are reallythankful tothem.
Secondly we wouldalsoliketothank our friends whohelped usalotin finalizingthisprojectwithin
the limitedtime frame.

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CONTENT
CONTENT NAME PAGE NO.
Supply chain
4 - 5
Supply chain management
6
Key benefits of supply chain management
7
Goals of supply chain management
8
Process of supply chain management
9 – 11
Types of process floe of supply chain
12 – 13
Introduction of company
14 – 16
Supply chain of Cigarettes
17 – 20
Supply chain of Agarbattis
21 – 24
Supply chain of e-Choupal
25 – 27
Supply chain of hotel
28 – 29
Supply chain of paper
30 - 33
Conclusion
34
Bibliography
35

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SUPPLY CHAIN
A supply chain is a network of retailers, distributors, transporters, storage facilities, and
suppliers who take part in the production, delivery, and sale of a product that convert and
move the goods from raw materials to end users, it describes the processes and organisations
involved in converting and conveying the goods from manufactures to consumers.
The activities close to the raw material stage are known as upstream activities and activities
between the manufacturer and end consumer are downstream activities. Marketing
distribution concerns these downstream activities. A typical supply chain consists of multiple
companies which coordinate activities to set themselves apart from the competition.

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In the above figure, we can see the flow of goods, services and information from the
producer to the consumer. The picture depicts the movement of a product from the producer
to the manufacturer, who forwards it to the distributor for shipment. The distributor in turn
ships it to the wholesaler or retailer, who further distributes the products to various shops
from where the customers can easily get the product.
Supply chain management basically merges the supply and demand management. It uses
different strategies and approaches to view the entire chain and work efficiently at each and
every step involved in the chain. Every unit that participates in the process must aim to
minimize the costs and help the companies to improve their long term performance, while
also creating value for its stakeholders and customers. This process can also minimize the
rates by eradicating the unnecessary expenses, movements and handling.
Here we need to note that supply chain management and supply chain event management are
two different topics to consider. The Supply Chain Event Management considers the factors
that may interrupt the flow of an effective supply chain; possible scenarios are considered
and accordingly, solutions are devised for them.

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Supply ChainManagement
Supply Chain management can be defined as the management of flow of products and
services, which begins from the origin of products and ends with the product’s consumption
at the end-user.
Supply Chain Management can be defined as the management of flow of products and
services, which begins from the origin of products and ends at the product’s consumption. It
also comprises movement and storage of raw materials that are involved in work in progress,
inventory and fully furnished goods.
The main objective of supply chain management is to monitor and relate production,
distribution, and shipment of products and services. This can be done by companies with a
very good and tight hold over internal inventories, production, distribution, internal
productions and sales.

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KEY BENEFITS OF SUPPLY CHAIN MANAGEMENT
 Develops better customer relationship and service.
 Creates better delivery mechanisms for products and services in demand with
minimum delay.
 Improvises productivity and business functions.
 Minimizes warehouse and transportation costs.
 Minimizes direct and indirect costs.
 Assists in achieving shipping of right products to the right place at the right time.
 Enhances inventory management, supporting the successful execution of just-in-time
stock models.
 Assists companies in adapting to the challenges of globalization, economic upheaval,
expanding consumer expectations, and related differences.
 Assists companies in minimizing waste, driving out costs, and achieving efficiencies
throughout the supply chain process.

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SUPPLYCHAIN MANAGEMENT – GOALS
Every firm strives to match supply with demand in a timely fashion with the most efficient
use of resources. Here are some of the important goals of supply chain management −
 Supply chain partners work collaboratively at different levels to maximize resource
productivity, construct standardized processes, remove duplicate efforts and
minimize inventory levels.
 Minimization of supply chain expenses is very essential, especially when there are
economic uncertainties in companies regarding their wish to conserve capital.
 Cost efficient and cheap products are necessary, but supply chain managers need to
concentrate on value creation for their customers.
 Exceeding the customers’ expectations on a regular basis is the best way to satisfy
them.
 Increased expectations of clients for higher product variety, customized goods, off-
season availability of inventory and rapid fulfillment at a cost comparable to in-store
offerings should be matched.
 To meet consumer expectations, merchants need to leverage inventory as a shared
resource and utilize the distributed order management technology to complete orders
from the optimal node in the supply chain.
Lastly, supply chain management aims at contributing to the financial success of an
enterprise. In addition to all the points highlighted above, it aims at leading enterprises using
the supply chain to improve differentiation, increase sales, and penetrate new markets. The
objective is to drive competitive benefit and shareholder value.

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SUPPLY CHAIN MANAGEMENT – PROCESS
Supply chain management is a process used by companies to ensure that their supply chain is
efficient and cost-effective. A supply chain is the collection of steps that a company takes to
transform raw materials into a final product. The five basic components of supply chain
management are discussed below −
1. Plan
The initial stage of the supply chain process is the planning stage. We need to develop a
plan or strategy in order to address how the products and services will satisfy the
demands and necessities of the customers. In this stage, the planning should mainly focus
on designing a strategy that yields maximum profit.
For managing all the resources required for designing products and providing services, a
strategy has to be designed by the companies. Supply chain management mainly focuses
on planning and developing a set of metrics.
2. Develop(Source)
After planning, the next step involves developing or sourcing. In this stage, we mainly
concentrate on building a strong relationship with suppliers of the raw materials required
for production. This involves not only identifying dependable suppliers but also
determining different planning methods for shipping, delivery, and payment of the
product.
Companies need to select suppliers to deliver the items and services they require to
develop their product. So in this stage, the supply chain managers need to construct a set
of pricing, delivery and payment processes with suppliers and also create the metrics for
controlling and improving the relationships.
Finally, the supply chain managers can combine all these processes for handling their
goods and services inventory. This handling comprises receiving and examining

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shipments, transferring them to the manufacturing facilities and authorizing supplier
payments.
3. Make
The third step in the supply chain management process is the manufacturing or making of
products that were demanded by the customer. In this stage, the products are designed,
produced, tested, packaged, and synchronized for delivery.
Here, the task of the supply chain manager is to schedule all the activities required for
manufacturing, testing, packaging and preparation for delivery. This stage is considered
as the most metric-intensive unit of the supply chain, where firms can gauge the quality
levels, production output and worker productivity.
4. Deliver
The fourth stage is the delivery stage. Here the products are delivered to the customer at
the destined location by the supplier. This stage is basically the logistics phase, where
customer orders are accepted and delivery of the goods is planned. The delivery stage is
often referred as logistics, where firms collaborate for the receipt of orders from

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customers, establish a network of warehouses, pick carriers to deliver products to
customers and set up an invoicing system to receive payments.
5. Return
The last and final stage of supply chain management is referred as the return. In the stage,
defective or damaged goods are returned to the supplier by the customer. Here, the
companies need to deal with customer queries and respond to their complaints etc.
This stage often tends to be a problematic section of the supply chain for many
companies. The planners of supply chain need to discover a responsive and flexible
network for accepting damaged, defective and extra products back from their customers
and facilitating the return process for customers who have issues with delivered products.

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SUPPLY CHAIN MANAGEMENT - PROCESS FLOW
Supply chain management can be defined as a systematic flow of materials, goods, and
related information among suppliers, companies, retailers, and consumers.
Types
There are three different types of flow in supply chain management −
1. Material flow
2. Information/Data flow
3. Money flow
Types of Process Flow
Let us consider each of these flows in detail and also see how effectively they are applicable
to Indian companies.
 Material Flow
Material flow includes a smooth flow of an item from the producer to the consumer. This is
possible through various warehouses among distributors, dealers and retailers.
The main challenge we face is in ensuring that the material flows as inventory quickly
without any stoppage through different points in the chain. The quicker it moves, the better it
is for the enterprise, as it minimizes the cash cycle.

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The item can also flow from the consumer to the producer for any kind of repairs, or
exchange for an end of life material. Finally, completed goods flow from customers to their
consumers through different agencies. A process known as 3PL is in place in this scenario.
There is also an internal flow within the customer company.
 Information Flow
Information/data flow comprises the request for quotation, purchase order, monthly
schedules, engineering change requests, quality complaints and reports on supplier
performance from customer side to the supplier.
From the producer’s side to the consumer’s side, the information flow consists of the
presentation of the company, offer, confirmation of purchase order, reports on action taken on
deviation, dispatch details, report on inventory, invoices, etc.
For a successful supply chain, regular interaction is necessary between the producer and the
consumer. In many instances, we can see that other partners like distributors, dealers,
retailers, logistic service providers participate in the information network.
In addition to this, several departments at the producer and consumer side are also a part of
the information loop. Here we need to note that the internal information flow with the
customer for in-house manufacture is different.
 Money Flow
On the basis of the invoice raised by the producer, the clients examine the order for
correctness. If the claims are correct, money flows from the clients to the respective producer.
Flow of money is also observed from the producer side to the clients in the form of debit
notes.
In short, to achieve an efficient and effective supply chain, it is essential to manage all three
flows properly with minimal efforts. It is a difficult task for a supply chain manager to
identify which information is critical for decision-making. Therefore, he or she would prefer
to have the visibility of all flows on the click of a button.

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INTRODUCTION OF COMPANY
ITC Limited is an Indian company headquartered in Kolkata, West Bengal. Its diversified
business includes five segments: Fast-Moving Consumer Goods (comprising Foods, Personal
Care, Cigarettes and Cigars, Apparel, Education and Stationery Products, Incense Sticks and
Safety Matches), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and
Information Technology. Though, cigarette business contributes more than 80% of the profits
of the company, 80% of the capital is invested in the non-tobacco businesses.
Established in 1910 as the 'Imperial Tobacco Company of India Limited', the company
was renamed as the 'India Tobacco Company Limited' in 1970 and later to 'I.T.C.
Limited' in 1974. The dots in the name were removed in September 2001 for the company to
be renamed as 'ITC Limited' where 'ITC' would no longer be an acronym. The company
completed 100 years in 2010 and as of 2012-13, had an annual turnover of US$8.31 billion
and a market capitalization of US$50 billion. It employs over 30,000 people at more than 60
locations across India and is part of Forbes 2000 list.
Name of company ITC Ltd.
Industry Conglomerate
Type Public
Predecessor W.D. & H.O. Wills
Founded August 24; 1910
Headquarters Kolkata, West Bengal; India

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Products
Consumer goods, hotels and resorts,
paperboards and specialty paper packaging,
Agri-products, IT
Managing Director Sanjiv Puri
Website www.itcportal.com

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AREAS OF DIVESIFICATION
 ITC has transformed itself from a leading cigarette manufacturer to an umbrella group
that offers a diversified product mix to enhance its brand image and reduce
dependency on tobacco related products.
 It has forayed into hospitality service industry and has become a major player in the
hotels segment.
 Its position in the FMCG business is also on a growth curve; especially its
confectionary and biscuits which are slated to achieve the top ranks among its peers.
 It has made heavy investments to strengthen its IT segment and to compete with the
big players like Infosys and Wipro.
 Although the ITC group is marketing its image an as ideal corporate citizen and a
company that takes its social responsibility seriously, it still earns 80% of revenues
from selling cigarettes and other tobacco related products.
The major areas in which ITC has diversified are –
1. FMCG
 Cigarettes
 Food
 Lifestyle Retailing
 Greeting & stationery
 Safety matches
 Incense sticks
2. Hotels
3. Paperboards and packaging
 Paperboards & specialty papers
 Packaging
4. Agri-Business
 Agri-exports
 E-Choupal
5. IT

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ITC IN FMCG SECTOR
Cigarettes –
ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has
a leadership position in every segment of the market. It’s highly popular portfolio of brands
includes Insignia, India Kings, Classic, Gold Flake, Silk cut, Navy cut, scissors, and capstan,
Berkeley, Bristol and Flake.
ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger,
Saharanpur and Kolkata. These factories are known for their high levels of quality,
contemporary technology and work environment.

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SUPPLY CHAIN PROCESS OF CIGARETTES
FROM SEED TO SMOKE
A. RAW MATERIAL –
 Here raw material is tobacco leaf for manufacturing of
cigarettes.
 Supplier supplyies tobacco leaves to the manufacturer.
 Itc helps the farmeres by providing technology to grow &
harvest tobacco leaves.
 Regular visits of managers and support staff to outmost of tobacco growing regions.
 ITC has refrigerated storage facility, where temperature and humidity are digitally
monitored to substantially enhance the shelf life of processed leaf tobaccos, is a
unique service proposition to niche customers.
B. MANUFACTURING –
 It includes two division –
1. Primary manufacturing Division: - Cigarette manufacturing process involves
processing of tobacco leaf and stem to different
tobacco blends, which is called, cut tobacco.
2. Secondary manufacturing Division: - Then cut
tobacco is sent to SMD for making & packing. Cut
tobacco is then converted into cigarettes using other
raw materials for making cigarettes & packing them
in different forms as per trading requirements.
 At SMD, there are two processes: Making and Packing.
 Making process is the rolling of cigarette sticks.
 Packing process is the packing of these cigarettes sticks in the cigarettes
packets of various packing styles.

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C. GODOWNS –
 Then after making & packing of cigarettes stored in
Godowns.
 These are named as finished goods and which are
ready to sale.
D. DISTRIBUTORS -
 Then delivered to different distributors.
 It includes different distributors – Agents,
Wholesalers & Retailers.
 Agents – They receive goods from factory &
delivers to wholesalers & retailers.
 Wholesalers – They store the cigarettes carton in
bulk & delivered to retailers in small amount.
 Retailers – They are last intermediates who sales the small cigarettes packs to the
ultimate consumer.
 Retail outlets includes – pubs/bars, kirana stores, pan shops, kiosks and multi
branding outlets.
E. CONSUMERS –
 At last the consumers purchases cigarettes packets
from retailers.

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SUPPLY CHAIN DIAGRAM OF CIGRATTES
RAW
MATERIAL
MONEY
FINISHED
GOODS
MONEY
FINSIHED
GOODS
MONEY
MONEY
FINSIHED
GOODS

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Agarbattis:-
As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector,
the Company commenced marketing Agarbattis (Incense Sticks) sourced from small-scale
and cottage units in 2003. This Business leverages the core strengths of ITC in nation-wide
distribution and marketing, brand building, supply chain management, manufacture of high
quality paperboards and the creation of innovative packaging solutions to offer Indian
consumers high quality Agarbattis & Dhoop. These core strengths aided ITC in becoming the
No. 1 Dhoop player in the country. With its participation in the business, ITC aims to
enhance the competitiveness of the small-scale and cottage units through its complementary
R&D based product development and strengths in trade marketing and distribution.
The Business continues to work on various exciting new offerings to the consumers and is
planning to launch them in the near future.
In line with ITC's Triple Bottom Line philosophy of every business contributing to the
nation's economic, environmental and social capital, Mangaldeep Agarbattis are
manufactured by small scale and cottage units, providing livelihood opportunities for more
than 7,000 people. Mangaldeep Agarbatti is manufactured at various centres across the
country and standardized processes are followed to ensure the same quality across locations.
ITC has signed a MoU with ORMAS (Orissa Rural Development & Marketing Society), an
autonomous body under the Pachayat Raj in Odisha. This initiative provides technical
training to rural women & provides employment opportunities to over 4,000 rural women.

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SUPPLY CHAIN PROCESS OF INCENSE STICKS
FROM CHARCOL POWDER TO INCENSE STICKS
A. RAW MATERIAL –
 The basic ingredients of an incense stick are bamboo sticks, paste
(generally made of charcoal dust or sawdust and joss/jiggit/gum/tabu
powder).
 This raw material supplies to factory of Agarbattis.
B. MANUFACTURING –
 Now in factory the Agarbattis made by charcoal
powder with the help of machinery.
 Here, the Agarbattis or incense sticks make or
pack to deliver to Godowns.
C. GODOWNS –
 Then after making & packing of agarbattis stored in
Godowns.
 These are named as finished goods and which are
ready to sale.
D. DISTRIBUTORS -
 Then delivered to different distributors.
 It includes different distributors – Agents,
Wholesalers & Retailers.
 Agents – They receive goods from factory &
delivers to wholesalers & retailers.
 Wholesalers – They store the agarbattis carton in
bulk & delivered to retailers in small amount.

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 Retailers – They are last intermediates who sales the small agarbattis packs to the
ultimate consumer.
 Retail outlets includes – Kirana stores
E. CONSUMERS –
 At last the consumers purchases agarbattis packets from retailers.

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Supply chain diagram of agarbattis
RAW
MATERIAL
MONEY
FINSHED
GOODS
FINISHED
GOODS
MONEY
MONEY
MONEY
AGARBATTIS

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ITC IN AGRI-BUSINESS
ITC's Agri Business Division, one of India's largest exporters of agricultural commodities,
has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its
customers around the world on a sustainable basis.
The e-Choupal model has been specifically designed to tackle the challenges posed by the
unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure
and the involvement of numerous intermediaries, among others.

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E-Choupal: -
E-Choupal is a virtual market place where farmers can transact directly with the processor
and can realize the better price for the produce.
 Provides for transparent transactions by free flow of information.
 Elimination of some levels of intermediaries
 Connects large / small crop produces e-Choupal also unshackles the potential of
Indian farmer who has been trapped in a vicious cycle of low risk taking ability > low
investment > low productivity > weak market orientation > low value addition > low
margin > low risk taking ability. This made him and Indian agribusiness sector
globally uncompetitive, despite rich & abundant natural resources.
Such a market-led business model can enhance the competitiveness of Indian agriculture and
trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer
risk management, larger investments and higher quality and productivity.
Further, a growth in rural incomes will also unleash the latent demand for industrial goods so
necessary for the continued growth of the Indian economy. This will create another virtuous
cycle propelling the economy into a higher growth trajectory.

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 Centered on a network of e-Choupal.
 Information centers equipped with a computer connected to the Internet, located in
rural villages.
 A local farmer acting as a sanchalak’s (coordinator) runs the village Choupal with the
help of computer usually located in the sanchalak's home.
 ITC also incorporate a local commission agent, known as the samyojak (collaborator),
into the system as the provider of logistical support.
 ITC has plans to saturate the sector in which it works with e-Choupal, as a farmer has
to travel no more than five kilometers to reach at one.
 The company expects each e-Choupal has to serve about 10 villages within a five
kilometer radius. Today its network reaches more than a million farmers in nearly
11,000 villages through 2,000 e-Choupal in four states like Madhya Pradesh,
Karnataka, Andhra Pradesh, and Uttar Pradesh and the network is expanding rapidly.
 The e-Choupals in Madhya Pradesh serves about 500-700 farmers in 10 villages.

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ITC in Hotels
Launched in 1975, ITC Hotels, India's premier chain of luxury hotels, has become
synonymous with Indian hospitality. ITC Hotels pioneered the concept of 'Responsible
Luxury' in the hospitality industry, drawing on the strengths of ITC groups' exemplary
sustainability practices. Responsible Luxury personifies an ethos that integrates world-class
green practices with contemporary design elements to deliver the best of luxury in the
greenest possible manner.
The Responsible Luxury commitment of ITC Hotels blends elements of nature to deliver a
unique value proposition to guests, conscious of their responsibility to be planet positive.
Today, these unique interventions have made ITC Hotels a trailblazer in green hoteliering
with all its premium luxury hotels LEED (Leadership in Energy and Environmental Design)
Platinum certified.
With more than 100 hotels in over 70 destinations, ITC Hotels has set new standards of
excellence in the hotel industry in Accommodation, Cuisine, Environment and Guest Safety.

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SERVICE SUPPLY CHAIN OF HOTELS
1. SERVICE PROVIDER –
 Here the service providers are hotels who provide different services
(accommodation, safety etc.)
 ITC have many hotels - ITC Grand Goa Resort and Spa, Goa, ITC Grand
Bharat, Gurgaon, ITC Grand Chola, Chennai, ITC Maurya, New Delhi,
ITC Gardenia, Bengaluru,
ITC Windsor, Bengaluru.,
ITC Grand Central,
Mumbai, ITC Sonar,
Kolkata.
2. CONSUMER –
 Here consumer receives services from hotels in the form of rooms in
hotels, lunch & dinner, etc.

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ITC IN PAPER
ITC's Paperboards and Specialty Papers Business is India's largest, technologically advanced
and most eco-friendly, paper and paperboards business. Having pioneered many specialty
applications, The Business enjoys market leadership in the value-added paperboards segment,
and also has a significant share of the Indian fine papers market. It is the largest exporter of
coated boards from India.
ITC takes great pride in servicing a large cross-section of industry requirements - from
cigarette tissues to FMCG cartons, from electrical insulation papers to Bio-based Barrier
Coated Board, from decorative laminate base to writing and printing papers and much more.
ITC straddles the entire spectrum of paperboards - from 100% virgin, food-grade boards
which are from renewable and sustainable sources to 100% recycled boards.

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SUPPLY CHAIN PROCESS OF PAPER
FROM WOOD TO PAPER
1. RAW MATERIAL –
 Here raw material is wood.
 The process of papermaking uses raw materials
including water, energy, chemicals and wood chips that
contain cellulose. Cellulose is the fiber component of wood,
and exists naturally in most plant life. The paper mill boilers
produce steam for turbines that make electricity for motors
and pumps.
 Delivers to manufacturers
2. MANUFACTURING –
 Now in factory the paper made by wood with the help of
machinery.
 Here, the paper make or pack to deliver to Godowns.
F. GODOWNS –
 Then after making & packing of paper stored in
Godowns.
 These are named as finished goods and which
are ready to sale.
G. DISTRIBUTORS -
 Then delivered to different distributors.
 It includes different distributors – Agents, Wholesalers
& Retailers.
 Agents – They receive goods from factory & delivers to
wholesalers & retailers.
 Wholesalers – They store the paper carton in bulk &

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delivered to retailers in small amount.
 Retailers – They are last intermediates who sales the small cigarettes packs to the
ultimate consumer.
 Retail outlets includes – stationery shops
H. CONSUMERS –
 At last the consumer’s purchases paper packets from retailers.

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Supply chain diagram of paper
FINISHED
GOODS
MONEY
RAW
MATERIAL
FINISHED
GOODS
MONEY
FINISHED
GOODS
MONEY
MONEY

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CONCLUSION
 We came to know about supply chain
 We came to know about supply chain management
 We came to know about various diversification of ITC

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BIBLOGRAPHY
 www.slideshare.com
 www.itcportal.com
 www.wikipedia.com