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SCM case study of Marico

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ITM B SCHOOL students on SCM of Marico

ITM B SCHOOL students on SCM of Marico

Published in: Business, Technology
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  • 1. A CASE STUDY ON SUPPLY CHAIN OF PRESENTED BY SWAPNIL JAISWAL SUKUMAR PRADHAN ABHINANDAN MOHANTY :
  • 2. About Marico  Founded on 1987.  Marico is one of India's leading Consumer Products & Service Industry.  Holds a number of brands including Parachute , Saffola , Hair&Care, Nihar, Mediker, Revive, Manjal, Kaya SkinClinic , Livon, Set Wet, Zatak, Fiancee, HairCode, Eclipse, Xmen, Hercules, Caivil, Code 78 and Black Chic.  900cr company.
  • 3. Initial Outbound Supply Chain
  • 4. Challenges faced Supply chain not scalable with Expansion Plan Forecasting Errors Strategy: • Expand continuously to reach most Indian households. • Growth through new brands and product lines. • Penetrate more into rural areas – represents 70% of Indian population. • Entails more sales and market to track –more forecast to make ,more product to plan, more SKUs to track-more truckloads to configure. To cater to the new areas with existing supply chain – logistic challenge • Low cost products – leading to impulsive buying decisions. • Product availability. • Forecast accuracy was 70%. • Distribution – suffered stock outs leading to loss of sales 30%. • On one hand – low level of service level due to product availability. • Other hand, excess inventory lying at Marico and in the channel. • Cost of errors in shipments to remote depots increased.
  • 5. Contd. Planning issues Business impact • Planning cycle: 30 days • Manufacturing: 2 weeks • Distribution: 1 week • Only one qualified planner • Spread sheet based planning • Result: • Inventory problems • Eroded distributor confidence • Expired products • Unresponsive to market changes • Supply chain not in tune with the marketing strategy • Losing competitive advantage • Losing image among supply chain components • Poor performance affected cash flows • Supply chain hindered expansion strategy of growth through more brands • Affected consumer’s image of company
  • 6. Outbound Supply chain redesign  Solution: SAP business Intelligence  Big bang approach for SAP implementation (At Company factories, warehouses, business offices, contract manufacturers) • MIDAS (Marico industries distribution automation software) (Offline Solution) • MINET(Real Time Solution) MIDAS implemented for MINET implemented for SAP APO implemented for: capture and standardize transactions Dynamic and real time information Demand forecasting Received stock and sales in Feed data online Supply chain network planning
  • 7. Comparison
  • 8. Impact on the organization  The implementation of VMl with key distributors resulted in declining sales skew within a month and reduction in excess stocks and stock-outs at the distributor point.  MI-NET and SAP R/3 gave the field sales personnel access to current information on order status, distributor performance, and depot stock levels.  Sales force productivity improved significantly as a result of the combination of SAP R/3, mySAP SCM, and the MINET initiative.
  • 9. Benefits
  • 10. CONCLUSION  Marico has improved service by decreasing stock- outs at the depot from 21 % to 9% and at the distributor level from 30% to 15%. It also reduced supply chain exception cost by 64% and average total inventory by a fourth from 29 days to 22 days.  The company's turnover has moved up from 3% in FY2000 to 18% in FY2004.
  • 11. THANK YOU

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