come experience the nivea feeling!...come experience the nivea feeling! one always feels that being...

COME EXPERIENCE THE NIVEA FEELING!

One always feels that being a boss is the easiest job, so we give you the “easy” way out

PLAY THE BOSS, BUT WITH A RIDER ATTACHED – YOU HAVE TO PRESENT TO THE BIG BOSS

HERE ARE THE RULES OF THE GAME

• YOU ARE THE DIRECTOR, SCM OF NIVEA INDIA (NO LESS!)

• THE MD OF THE COMPANY HAS ASKED YOU TO MAKE A PRESENTATION ON THE SUPPLY CHAIN STRATEGY IN THE CHANGING BUSINESS ENVIRONMENT (READ, ORGANIZED TRADE, OMNI CHANNEL, E COM GROWTH IN INDIA)

• REMEMBER, THE MD IS A BUSY MAN SO HE WILL NOT READ A LENGTHY PROPOSAL

• THE SOLUTION SHOULD BE A COST EFFECTIVE, CRISP AND ACTIONABLE / IMPLEMENTABLE ROADMAP FOR THE FUTURE

INSTRUCTIONS

Case presentations will be judged on thoroughness, originality and uniqueness of the idea, feasibility of implementation, Nivea India’s strengths and values, and economic logic used to defend practicability.

Teams need to submit the case solution in the form of a Power Point Presentation with not more than 8 slides and minimum 12-point font size. (including illustrations, title page, cover page).

There must be a cover page of the presentation comprising of an executive summary of the solution, limited to one slide only.

Participants are encouraged to use the format which best illustrates their solution.

Wherever necessary, the participants must refer to the sources of information and data.

ABOUT NIVEA INDIA

NIVEA India Pvt Ltd is an affiliate of Beiersdorf AG. Throughout our history we have built trust by staying close to our consumers and developing innovative skin care brands that are tailored to their needs. We work as one global team, with one focus: making people feel good in their skin. Everywhere. Every day. As we head into the future, we want to become the number one skin care company in the world.

NIVEA is the world’s largest skin care brand which uses ingredients inspired by nature to work in harmony with skin, body and life to make you look and feel more beautiful.

NIVEA India Pvt Ltd was established in 2005. In the last 14 years, NIVEA has established a robust and effective distribution network, and built strong relationships with consumers and partners. In 2015, NIVEA established its first manufacturing location in India in Sanand, Gujarat.

In India, NIVEA is present across various categories like all purpose cream (Nivea crème, Nivea soft etc.), Body wash, deodorants etc.

NIVEA INDIA PRODUCT PORTFOLIO

NIVEA IS PRESENT IN INDIA IN THE FOLLOWING CATEGORIES -

BODY

Hand Care

Lotions

All Purpose Creams

FACE

Face Cleansing

Lip Care/Sun

MEN

Cleansing

Grooming

Personal Care

Male Deodorant

Female Deodarant/ Talc

Shower Gel/ Soap

SC ORGANIZATIONAL STRUCTURE INDIAVP Supply Chain, NE

SC Director

MD-Nivea India

Logistics & CS Head

SC Excellence Mgr.

RLM N&E

RLL North

RLM- West

RLM- S & C

RLE – Central

RLE- East

RLE – South

CS Mgr

CS officer

Procur. Lead

Purchasing Manager

3PM steering

3PM prodn Lead

Sr Quality & RA Mgr

Q& RA Manager

Planning Head

Demand PlngMgr

Demand PlngMgr

DP lead

supply planning mgr

Export/Madcon

Supply P Mgr.

Distribution Mgr

Distribution off

OT service Mgr

OT team (off role and On

role)

SUPPLY CHAIN ROADMAP

BROAD FUNCTIONS WITHIN SUPPLY CHAIN

Planning Logistics & CS

IIM

ProcurementVAS

Indirect / Marketing/ Logistics

3PM Steering

Quality

NIVEA INDIA VALUE CHAIN

BMH / BMB BMTCThailand PC BMM

* Value wise contribution

INDIA PC : 60%

3PM: 20%

IMPORTS : 20%

NIVEA INDIA VALUE CHAIN : DOMESTIC BUSINESS

General Trade

400+ Points

Modern Trade

Cash & Carry

E-Commerce

CSD / CPC / Institution

150+ Points

100 Points

100 Points

100+ Points

INDIA PC : 60%

3PM : 20%

IMPORTS : 20%BDF Factory

Regional WH

Mother WH

Kolkata

Mumbai

Delhi

West

Bangalore

Central

Satellite WH

East

North

South

NIVEA INDIA VALUE CHAIN

WHAT GOES INTO ALL OF THIS ?

30No. Of direct

chain servicing

200 SPGRs 200 SPGRs 200 SPGRs

400 Vendors

650 + Artworks &

Registrations

200 SPGRs

▪PLANNING ▪LOGISTICS ▪VAS, PROCUREMENT

& REGULATORY

17000

Pallets/ Mth

200 SPGRs

1 Mln +

cartons / Mth

200 SPGRs

5500 +

Orders / Mth

200 SPGRs

4500

Deliveries / Mth

200 SPGRs

50K +

S&OP Fcst data

points

200 SPGRs

10K +

Distribution data

points

200 SPGRs

30 +

VAS promo /

Mth

200 SKUs

200 SPGRs 200 SPGRs

12 Mln VAS Pcs/ Annum

SUPPLY CHAIN OVERVIEW: LOGISTICS AND WAREHOUSINGNivea India has one production unit in Sanand, Gujarat and a mother hub in Mumbai. There are 3 regional hubs in North, South and East respectively and 16 distribution centers spread across the country. For Nivea India,

FTL share in primary transportation is almost 60% of the total volume.

The cost drivers include service levels back haul opportunities, supply demand dynamics, and seasonality. Primary contributors to transportation cost include line haul charges, cost of consumables, tolls & taxes, and costs related to EMI and maintenance of the vehicle.

GST

Service Tax

Customs Duty

Excise exemption

Central Sales Tax

Entry Tax

Octroi

LBT

GS

T

SCALE WAREHOUSING

Fragmented W/h

Low Quality

Small time 3PL partners

Challenge in systems / IT

W/h Consolidation

High Quality W/h infrastructure

SCALE Players

Pre GST Post GST

COUNTRY LOGISTICS SCORE IMPROVING

*LPI – Logistics Performance Index

Source: World Bank Ranking - 2018

2014 LPI 51st

2018 LPI 44th

ROAD & SEA INFRASTRUCTURE

ROAD

SEA

Golden Quadrilateral

Connecting PORTs –SAGARMALA

Project

TECHNOLOGY IN SUPPLY CHAIN

PLAN MFG DEPOT DB / RETAIL PROCURE

Demand Planning Software

Supplier Relationship Management

(SRM)

+

Procurement & E-Auction Solutions

Production Planning & Detailed

Scheduling

+

Capacity Requirements

Planning (CRP) Solutions

Warehouse Automation

+

Warehouse Management System

(WMS) Solutions

Building Digital Connect with Customers

RISE OF ORGANIZED TRADE AND CHANGING BUSINESS LANDSCAPE (OMNI CHANNELS & DIGITAL KIRANA)

Organized trade encompasses:

▪ Modern Trade (Dmart, Big Bazaar, Reliance Retail etc.)

▪ Cash & Carry (Metro Cash & Carry, Walmart India, Reliance Mart etc.)

▪ Ecommerce (Amazon, Bigbasket, Nykaa, Grofers etc.)

Organized trade has been steadily gaining pace in India and by leveraging technology and scale the distribution models are evolving

NIVEA has also seen the organized trade business grow rapidly in the last 3 years.

Given the trend, the target is to sustain 35%+ growth rate YOY in this channel.

Organized trade represents unique challenges in demand planning accuracy, distribution strategy, increased levels of inventory to sustain needs of the customers, ownership of bad goods and reverse logistics, product mix etc.

2017 2018 2019Contribution in Domestic Sales 40% 45% 50%

Growth 35% 40% 35%

THE CHALLENGE & DELIVERABLESRecommend a comprehensive supply chain management strategy for Nivea, which will address the following:

- How to leverage the current presence in modern trade and ecommerce. It is recommended to draw information from external sources on the growth of Organized Trade, new trends and channel conflicts etc. in India

- Parallel drive efficiency and growth in current traditional trade stores while extending distribution into new stores (Use of technology and efficient ways to handle)

- Propose ways to continue driving our efficiencies in productivity while ensuring we retain an agile/highly customer centric organization and supply chain.

- Also propose digitization opportunities across value chain to drive customer centricity and capturing real demand

- The strategy should be well rounded, drawing upon various aspects of supply chain including but not limited to service level, demand planning, distribution strategy, technology for organized trade, impact on overall inventory levels, measures to ensure freshness of stock, logistics cost and terms etc.

-

THE CHALLENGE & DELIVERABLESTHE STRATEGY PRESENTED SHOULD COVER BUT NOT TO BE RESTRICTED TO THE FOLLOWING –

DEMAND PLANNING / SENSING

The service levels asked for byOrganized Trade Customersare substantially higher thanthe service levels agreed uponfor Traditional Trade.

Suggest a strategy in thiscontext to increase ServiceLevel (if required) taking intoconsideration the following orany other ideas that you mayfeel important and actionable

• Differential Norms for MTSKUs

• Stock Reservation for MT

• Reconciliation withCustomer – Who (referorganogram)/Howoften/How/When

DISTRIBUTION STRATEGY FOR ORGANIZED TRADE

IMPACT ON INVENTORY LEVELS OF THE COMPANY

SERVICE LEVEL

Suggest ways and means ofimproving Demand PlanAccuracy for Organized Tradeby focusing on the following

Need and methodology forSeparate demand plan forOrganized Trade and itsintegration into the overallDemand Plan of the company

Event Planning for OrganizedTrade considering specialoffers are given to OrganizedTrade Customers

Need and way forward forCollaborative Planning withOrganized Trade Customers

What should be the distributionstrategy for Organized Trade -

Distribution Structure in viewof emerging Organized Trade

Should Organized Tradecustomers be given priority fordispatches

Is reserved stock for OrganizedTrade desired

Direct deliveries from factories

VAS (Value added services)where and when.

Strategy to counter increasedlevels of inventory to beprovided in line with the needsof Organized Trade asspecified above viz, CustomerService levels and DistributionPlanning

THE CHALLENGE & DELIVERABLES

Rationale for policy(definition of FreshnessKPI to be used) on ageingof stock on shelf to bedecided. Basis the ageingstock policy there needsto be an action plan onBad Goods andownership of Bad Goodsand reverse logistics ofthe same if ownership iswith Nivea

Logistics strategy needsa relook considering theincreased variabledistribution cost withincreased number ofdelivery points.

Responsibility needs tobe assigned fordistribution from NiveaDC to Organized TradeCustomer warehouse andfrom warehouse to store

Given the Organizationstructure suggest anychanges (if required) tohandle organized TradeBusiness or suggestadditional responsibilitywherever required.

Give a brief outline ofNivea Wish list from allthe Organized TradeCustomers regardingproduct placement onshelf, total shelf space,warehousing practices,quality of transportation,Inputs for DemandPlanning, and any otherparameters that Niveashould be sure of giventhe product mix of Nivea.

LOGISTICS COSTS & TERMS

CHANGES IN ORGANIZATION STRUCTURE

NIVEA EXPECTATIONS FROM CUSTOMER

FRESHNESS

THE STRATEGY PRESENTED SHOULD COVER BUT NOT TO BE RESTRICTED TO THE FOLLOWING –

THE CHALLENGE & DELIVERABLES

As an efficient Director SCM you need to ensure that supply chain provides a competitive edge tobusiness and any opportunity which presents itself should be leveraged towards the same. Give abrief write-up on Nivea business strategy viz., the growth of Organized Trade in India which shouldseek to answer the following

• How does Nivea leverage on the Organized Trade emergence with long term business strategy toensure sustainable growth in the future.

• How would Nivea make a strategy for Market Share gain, increased weighted distribution,improved merchandising opportunity etc that Organized Trade has to offer in long term?

• Integration of Nivea International Brands (presently not in India) with omni trade emergence

• Leveraging Nivea Strength in other markets which have high Organized Trade contribution

• Leveraging Digitization technologies to capture the real demand.

YOU ARE FREE TO ADD ANY MORE POINTS WHICH YOU FEEL ARE RELEVANT

BUSINESS STRATEGY

ALL THE BEST !

come experience the nivea feeling!...come experience the nivea feeling! one always feels that being...

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