Supply Chain Challenges in FMCG and Retail Sector

Presented By

Group 3

PVS Murthy (PG – 126)

Balasubramanian R (PG – 138)

Rajiv Ranjan Singh (PG – 145)

Abhijeet Sinha (PG – 149)

Sushant Tare (PG – 154)

Supply Chain Challenges – FMCG Sector

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Agenda

• Supply Chain Challenges in FMCG

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About FMCG Industry

• In 2008 India’s FMCG retail industry was of US $25 billion, growing at a rate of 12% annually. (FICCI-Technopak report)

• FMCG is the 4th largest sector in the Indian economy

• One of the largest employer• 13 million people earn livelihood on this industry

• 25 million employed at wholesalers, distributors etc.

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Industry Overview - India

• Top Players in FMCG– Hindustan Unilever Ltd.

• Personal Care Products (Soaps, Cosmetics)

– ITC Ltd.• Filter Cigarettes

– Nestle India• Food Category

– Amul• Food Category (Icecream, Curd, Milk, Butter)

– Dabur India • Herbal Speccialist (Dabur Amla, Chyawanprash, Hajmola)

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About – Parle Agro

• It is a food and beverage company based in Mumbai, India

• Founded by Mohanlal Dayal Chauhan in 1929.

• The name Parle was derived from the Mumbai suburb Vile Parle.

• Parle group split and Parle Agro and Parle Products became separate entities.

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Parle Agro Family Tree

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Distribution Network

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Supply Chain Challenges

• Forecasting– Zonal business heads Top level managers Sales managers

• Distribution– Lack of Quality Education

– Distributors buy small quantities initially

– Route planning

– Procured number of SKUs will be less initially

– Handling Inventory Pile Up

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Supply Chain Challenges

• Understanding the Customer needs and tapping the latent demand

• Decision in stock dispatch

• Handling Pilot sales representatives

• Transportation damages– Beverage transportation - Leakages

– Disruption in the Supply Chain

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Supply Chain Challenges

• Logistics– Contract

– Road Transport and Fuel prices

– Handling peak season demand

• Infrastructure– Number of check posts

– Road condition and Km per day

– Corruption

– Old vehicles

– Rugged Landscape

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Supply Chain Opportunities

• Cheap Labor

• Technical Knowhow

• Institutional sales also picking up

• Organized Retail

• Stores Like METRO providing bulk sale opportunities

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Recommendations

• Developing rural network

• Training of supply chain staff

• Providing incentives to the middlemen, distributor

• Investment in IT

• Silent Product Rollover Strategy

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Acknowledgement

• We would like to acknowledge the following people for helping us in making this presentation

– Prof. Nagendra

– Mr. Dinkar Khandelwal, Asst.Manager – Logistics, Parle Agro Pvt.Ltd

– Mr. Ganesh Subramaniam, Senior Manager – Logistics, Parle Agro Pvt. Ltd.

– Mr. Makarand Joglekar, MMS – Operations, SIMSR

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Supply Chain Challenges – Retail Sector

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Agenda

• Supply Chain Challenges in Retail Sector

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About Retail Industry

• The sector is expected to touch Rs. 18,10,000 crore by 2010

• Retail sector is the second largest employer in India

• It accounts for over 10 per cent of the country’s GDP

• Food and grocery dominated the retail segment with 59.5% valued at Rs 7,92,000 crore

• Clothing and accessories with a 9.9 %share at Rs 1,31,300 crore.

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Industry Overview - India

Top 5 Players in Retail sector

• Shoppers' Stop

• Westside (Trent)

• Pantaloon (Big Bazaar)

• Lifestyle

• RPG Retail (Foodworld, Musicworld)

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About – Big Bazaar

• Founded by Mr. Kishore Biyani• Headquartered in Mumbai

(Bombay)• 2 million customers every week• Over 1 million loyalty card

members• First set of Big Bazaar stores

opened in 2001 in Kolkata, Hyderabad and Bangalore

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Distribution Network

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Supply Chain Challenges

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Problems Solutions

Truck Unloading Delivery at Night

Bar Code Missing Applying New Barcode

Price Fluctuation Updated Regularly

Inventory Shrinkage Improve Handling

Supply Chain Opportunities

• Behavioral pattern, preferences and expenditure capacity of Indian consumers

• Growing consumer power in tier 2 and tier 3 cities in India

• IT trends in Indian retail industry and technological expansion

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Recommendations

• Development of supply chain to enable market expansion

• Training of supply chain staff

• Providing incentives to the middlemen, distributor

• Investment in IT

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Acknowledgement

• We would like to acknowledge the following people for helping us in making this presentation

– Prof. Nagendra

– Mr. Yogesh , Warehouse Manager, Big Bazaar, Bombay Central

– Mr. Sai Kamble, RM- 2008-10, SIMSR

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Some snaps

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Some snaps….

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Some snaps….

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Thank You