Post GST distribution and CFA rationalization (Titan)

Abstract

The Titan Company Limited (Titan) is a joint venture of Tata Group and Tamil Nadu Industrial Development Corporation and markets a wide range of products such as watches, jewelry, eyewear & perfumes. Titan markets its watches under multiple brand names – Titan, Edge, Raga, Fastrack, etc. It markets its products Pan-India through various channels which are fed by the strategically located 23 CFAs. This logistics system was based on the earlier tax structure & operational costs. Roll out of GST in 2017, has helped in making the overall logistics system more efficient & cost-effective. Thus Titan can also benefit through reanalysing & planning the logistics system in the current scenario. The objective of the project was to undertake a detailed logistics cost study and conduct a cost-benefit analysis for CFA rationalisation & savings inline with the Titan business model. The scope of the project included logistics cost analysis and optimisation of the same through developing a model for deciding number & locations of CFAs and optimal distribution. Considering the business model of immediate replenishment for each sale, the overall sales were divided into four regions and models were developed for the same. Since the transportation cost structure is based on the location as well as quantity in each order, the overall sales was divided into four categories for each state of that region. The CFA to State mapping was done for all the four categories.