2. O U T L IN E
In t r o d u c t io n t o M a r ic o
S u p p ly C h a in a n d N a t u r e o f C h a lle n g e s F a c e d
In it ia t iv e Im p le m e n t e d
R e s u lt s a n d S u s t e n a n c e
Fu tu re Ah e a d
3. 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 Reaching 13 Crore
30 Depots, 1000 Distributor consumers
25 lac Retail Outlets (Reach)
7. 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.
8. 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.
9. 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
13. ORDER PLACEMENT PROCESS
How does Billing Happen?
Sales Order
Distributor Marico
• 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
17. SOLUTION IMPLEMENTED
APO
ERP
Minet
BIW MIDAS
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
18. 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.
19. 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
20. MARICO IT SYSTEM - OVERVIEW
R3 MIDAS
MI-Net MIDAS
BIW
SD
APO MIDAS
USERS
21. MARICO IT SYSTEMS
• Distribution Automation Software package- MIDAS
(MARICO INDUSTRIES DISTRIBUTION AUTOMATION
SOFTWARE)
Received distributor stock and sales data in offline mode
through floppy transfers
But 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
22. MARICO IT SYSTEMS
• MI-NET directly linked to SAP R/3
Stock in Transit
Depot Stocks
Pending Orders
Statement of Accounts
Promotion Schemes to distributors
23. MARICO IT SYSTEMS
• Potential Primary developed using mySAP
Business Intelligence
Average sale of the previous three months
Develops and reports brands and regional sales
potential that should be targeted by the sales group
Cumulative actual sales to date—mySAP provides
daily updates through Primary Potential
Proactive work rather than Postmortem analysis
31. VENDOR MANAGED INVENTORY (VMI)
Places order
Marico
EARLIER Distributor
Replenishment
based on order
Replenishment based on
norms
Distributor Marico
NOW
WITH
VMI
MIDAS Mi-net APO SAP
Orders are automatically generated
35. 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