By:Anshul Agarwal-01 Ashish Bansal-03 Vikram Bothra-06 Rahul Rathi-21 Gaurav Surana-30

OUTLINE

Introduction to Marico

Supply Chain and Nature of Challenges Faced

Initiative Implemented

Results and Sustenance

Future Ahead

ABOUT MARICO

• Found in 1991, Public Limited Company

• A leading Indian Group in Consumer Products and Services

• Renowned Brands like Parachute, Saffola,Kaya Skin Clinics

• CAGR of 21% in turnover, 30% in profits - over last 5 years

• Turnover of 1910 Crores (2007-08)

12 Brands, Turnover Rs 1550 Crores

100 SKUs, 1500 Suppliers

7 Factories, 15 Contract Manufacturers

30 Depots, 1000 Distributor

25 lac Retail Outlets (Reach)

Reaching 13 Crore consumers

MARICO-SUPPLY CHAIN TRANSACTIONS

Nature of

Challenge faced

in

Supply Chain

MARICO’S PROBLEMS

• Nature of FMCG market : Aggressive strategy• More brands and more products incur costs: This entails more

sales and markets to track,• More forecasts to make, • More production to plan, • More SKUs to track, • More pallets and truckloads to configure and route. The

SKU/distribution point combinations run in millions.• The distribution network became more costly and complex,

exposing many process inefficiencies. • The resulting growth strained Marico’s highly regarded

distribution network and exposed shortcomings in its forecasting, planning, and supply chain processes.

MARICO’S PROBLEMS(CONT)

• Forecast accuracy was at 70%.

• Distributors were suffering stock-outs and loss of sales on 30% of Marico SKUs.

• Excess inventory

• The costs of errors in shipments to remote depots were mounting.

CHALLENGES- SUPPLY CHAIN

• Penetrate areas with less than 20, 000 population.

• No secondary sales data.

• Peak / Min Sales Ratio - across months

• Skew of Sales with in a month

• Order placement process

• Distribution network complexity

INTERNAL OPERATIONS PROBLEMS

MARKET PLACE PROBLEMS

DISTRIBUTION PROBLEMS

ORDER PLACEMENT PROCESS

Distributor Marico

Sales Order

How does Billing Happen?

Non Clarity/Non Uniform Norms

Very High Order Closure Time at Depot

No Scientific way of Defining Norms

Too much of manual interventions

Strong need to make it system generated and not person dependent

THE VICIOUS CYCLE

Solution AdoptedSolution Adopted

for for

Supply Chain Supply Chain ChallengesChallenges

IMPLEMENTATION METHODOLOGY

SOLUTION IMPLEMENTED

MIDAS

Minet

APO

BIW

ERP

ERP, APO, BW - April 2001

MIDAS for Distributors - Nov 2001

Minet :- The face of all the above to users in the field (April 2002)

Outcome - Stock visibility of depot and distributor real time

HOW MiNET WORKS?• MiNet is a portal that links 800 distributors and 110 super

distributors of Marico spread across the country to the company• MiNet also enables the company to get daily updates at the

stockist level• At the backend, Marico has installed the SAP R3 transaction

handling modules for sales, finance and materials management• The company has also installed the Advance Planner &

Optimizer (APO), a supply chain module, which works right from demand forecasting to materials management and production planning. Marico claims to be the first APO installation for SAP in India

• The company has in place a Business Information Warehouse (BIW) which is the repository of every bit of information relevant to the company. This backend is linked to the outside world comprising scores of business associates for Marico, through MiNet.

THE “MIDAS” TOUCH

• The company has also put in place a software called the Marico Industries Distributor Application Software (MIDAS) which is akin to an ERP (enterprise resource planning) software to capture “secondary sales” data

• MIDAS has been created by Marico in conjunction with Chennai-based firm Botree

• Every morning the distributor logs on to MiNet and uploads information from MIDAS and we pass on the information regarding invoices, running schemes etc to the distributor

• This means that the distributor can keep feeding his data on MIDAS and then dial in periodically and feed the information on MiNet. He doesn’t have to be online all the time

MARICO IT SYSTEM - OVERVIEW

R3

APO

BIW

MIDAS

MIDAS

SDMIDAS

USERS

MI-Net

MARICO IT SYSTEMS

• Distribution Automation Software package- MIDAS (MARICO INDUSTRIES DISTRIBUTION AUTOMATION SOFTWARE)Received distributor stock and sales data in offline mode

through floppy transfersBut for VMI- real time data needed • Internet based system MI-NET in which distributors could

log in and supply data online• Application which could automatically transfer data from

distributor’s PC to MARICO’s central servers

MARICO IT SYSTEMS

• MI-NET directly linked to SAP R/3 Stock in TransitDepot StocksPending OrdersStatement of AccountsPromotion Schemes to distributors

MARICO IT SYSTEMS

• Potential Primary developed using mySAP Business Intelligence

Average sale of the previous three monthsDevelops and reports brands and regional sales

potential that should be targeted by the sales groupCumulative actual sales to date—mySAP provides

daily updates through Primary PotentialProactive work rather than Postmortem analysis

MARICO’S EXTENDED SUPPLY CHAIN SYSTEM

Impact and BenefitsImpact and Benefits

VENDOR MANAGED INVENTORY (VMI)VENDOR MANAGED INVENTORY (VMI)

Places order

Distributor Marico

Replenishment based on order

EARLIER

NOW WITH VMI

Distributor Marico

Replenishment based on norms

MIDAS Mi-net APO SAPOrders are automatically generated

SAP

SAP APO

OPERATIONAL IMPROVEMENTS

THE LAST MILE…WHAT IT IS NEXT?

• Marico is now working on the last mile—capturing data at the tertiary or retailer end

• The company plans to arm its distributor sales representatives with handheld devices with a customised application that will allow them to record the stock position at the retailers’ end on a weekly basis and then feed it into MiNet at the distributor office

• Consumer complaints can also be fed in and acted upon in record time

• But the most important aspect of capturing this data for the company lies in the market data generated and the potential to link the entire supply chain to consumer off-take

Thank You