Business Intelligence in FMCG


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  • POS- transactional data. The data in this table is updated very frequently. Whenever there is a purchase, a record is generated. Now let us see this product key. The various attributes of this product key like Category, weight, description, they do not vary frequently. Hence we have a separate dimension table which acts like a Master data table.
  • Various stores- each has a target Summarized info required by the Management team – action points in the form of alerts. Red Alerts in the above report give a clear indication to the management that the performance of the store is below satisfactory level. What is displayed in the report depends on what parameters the management focuses on. This may change yr after yr. Data for this summarized report is not present in one place. Some data needs to be extracted from the HR team, some from the marketing team, some from the finance team. The task to achieve the required intelligence from the data involves extraction of data, integration, summarizing and the complete modelling.
  • They are leading indicators of performance desired by the organization. • Easy to understand. • It should be balanced not undermine each other. • Users can gauge their progress overtime. • KPI is always connected with the corporate goals. • A KPI is decided by the middle or top management. • It belongs to an individual who is accountable for its outcome. • A KPI leads to action. • Few in number. • KPI’s loses its value overtime so they must be periodically reviewed and refreshed. Specific. • Measurable. • Achievable. • Result-oriented or Relevant. • Time-bound
  • Supplier Perspective : Supply Lead time against inventory norms Reponse Delay Rejection rate Online Rejections OTIF Percentage delay Responsiveness to urgent deliveries   Manufacturing Perspective: Rejection Rate Material utilization Capacity utilization efficiency Stockout loss Write offs Space utilization Volume contribution of top 20% SKUs Products with more than a specified number of days of inventory OEE Equipment failures Production service level Inventory days of supply Cost per operation hour Power consumption per ton produced Wastage/scrap loss   Shipment Perspective: Forecasting error Fill rates Confirmed fill rate OTIF backorders     Financial Perspective: Inventory Turns Sales Asset turns Cash Cycle time Total supply chain cycle time Purchase order cycle time Input Freight Costs Tax and Surcharges Conversion cost Manufacturing Cost Inventory Carrying cost K2 freight cost
  • Business Intelligence in FMCG

    1. 1. Varun Wadhwani (09BM8060) S. Srikanth (09BM8049) VGSoM, IIT Kgp
    2. 2. <ul><li>Computer based techniques used in spotting, digging-out and analyzing business data. </li></ul><ul><li>Quicker, fact-based decision making </li></ul><ul><li>Simplified reporting </li></ul><ul><li>Combination of multiple data sources put together, resulting increase in efficiency. </li></ul><ul><li>Solutions are mapped as per user requirement </li></ul>
    3. 3. What BI helps you do in FMCG <ul><li>Increase the value of customer relationships </li></ul><ul><li>Respond quickly to changing markets and company sensitivities </li></ul><ul><li>Launch new products sooner </li></ul><ul><li>Reduce inventory investment </li></ul><ul><li>Improve planning, scheduling, and the procurement schedule </li></ul><ul><li>Maintain high quality standards </li></ul>
    4. 4. What BI helps you do in Retail <ul><li>Align their corporate and store operations around critical revenue and profitability targets </li></ul><ul><li>Identify report on, and analyze trends </li></ul><ul><li>Gain visibility into key metrics across the chain </li></ul><ul><li>Monitor turnover and employee productivity. </li></ul><ul><li>Increase cost savings by comparing and benchmarking performance </li></ul><ul><li>Optimization </li></ul>
    5. 5. Source: ITC Infotech BI at a US Food Distribution Major Strategic Goals Demand Initiatives <ul><li>General Analysis </li></ul><ul><li>Sales Force Effectiveness </li></ul><ul><li>Trade Promotion </li></ul><ul><li>Effectiveness </li></ul><ul><li>Marketing Effectiveness </li></ul><ul><li>Market Analysis </li></ul><ul><li>Spend Analysis </li></ul><ul><li>Supplier Performance </li></ul><ul><li>Analysis </li></ul><ul><li>Item & Brand Analysis </li></ul><ul><li>Bid Analysis </li></ul><ul><li>Competitive Analysis </li></ul>Business Functions - Functional Metrics, Reports, Alerts, Scorecards , IT Functions - Dashboards, BI Tools, Databases, Sourcing Initiatives Supply Chain Initiatives Customer Initiatives Some Analysis Areas <ul><li>General Analysis </li></ul><ul><li>Segmentation Analysis </li></ul><ul><li>Contract Compliance </li></ul><ul><li>Business Review Analysis </li></ul><ul><li>Customer Profitability </li></ul><ul><li>Analysis </li></ul><ul><li>Delivery Effectiveness </li></ul><ul><li>SKU rationalization </li></ul><ul><li>Effectiveness </li></ul><ul><li>Backhaul Effectiveness </li></ul><ul><li>Carrier Performance </li></ul><ul><li>Analysis </li></ul>Some Analysis Areas Some Analysis Areas Some Analysis Areas
    6. 6. Source: Business Standard
    7. 7. Data Transformation Source: IBM POS Logistics Suppliers Manufacturing
    8. 8. POS Retail Date Key (FK) Product Key (FK) Store Key (FK) Promotion Key (FK) Customer Key (FK) POS Transaction Number (DD) Sales Quantity Sales Amount Cost Amount Date Dim Date Key (PK) Date Day of Week Calendar Week Calendar Month Quarter Calendar Year Promotion Dimension Promotion Key (PK) Promotion Name Promotion Type Promotion Begin Date Promotion End Date Store Dimension Store Key (PK) Store Name Store Number Store District Store Region First Open Date Last Remodel Date Product Dimension Product Key (PK) Product Description SKU Number Brand Description Subcategory Category Description Department Package Type Fat Content Customer Dim Customer Key (PK) Customer Name Customer Address Customer Class Advantage Card id Retail Sales Schema
    9. 9. Balance Scorecard-Retail Store-1291 KPI Plan Actual Variance Loyalty 50% 40% -20.00% Cost of Services per Customer 50$ 60$ 20.00% Rate of service charges / profits 20% 15% -25.00% Cost per agent per month 100$ 95$ -5.00%
    10. 10. Characteristics of KPI <ul><li>Satisfy the SMART criteria </li></ul><ul><li>Leads to action. </li></ul><ul><li>Easy to understand. </li></ul><ul><li>Periodically reviewed and refreshed </li></ul><ul><li>Balanced not undermine each other. </li></ul><ul><li>To gauge their progress overtime. </li></ul><ul><li>Connected with the corporate goals. </li></ul><ul><li>Accountability of an individual </li></ul><ul><li>Few in number. </li></ul>
    11. 11. Supply Chain Dashboard Report-FMCG <ul><li>Raw Material Vendor Performance </li></ul>RM Category Vendor Name Shpmnts Cost/Unit Del.Shpmnt % Avg. Del.Days OTIF % Lot Rej% Qty Rej% Colors & Pigments Clariant Chem. 22 10 5% 0 86% 12% 2% B 2 20 50% 7 50% 1% 1% C 2 15 0% 0 100% 0% 0% Fatty Substance Cognis GmbH 1 14 100% 43 0% 0% 0% D 1 12 0% 0 0% 0% 0% GODREJ IND. 10 13 70% 10 10% 0% 0%
    12. 12. FMCG- Supply Chain KPIs <ul><li>Supplier Perspective : </li></ul><ul><li>Supply Lead time </li></ul><ul><li>Reponse Delay </li></ul><ul><li>Rejection rate </li></ul><ul><li>Online Rejections </li></ul><ul><li>OTIF </li></ul><ul><li>Percentage delay </li></ul><ul><li>Responsiveness to urgent deliveries </li></ul>
    13. 13. FMCG- Supply Chain KPIs <ul><li>Manufacturing Perspective: </li></ul><ul><li>Rejection Rate </li></ul><ul><li>Material utilization </li></ul><ul><li>Capacity utilization </li></ul><ul><li>Stockout loss </li></ul><ul><li>Write offs </li></ul><ul><li>Space utilization </li></ul><ul><li>Volume contribution of top 20% SKUs </li></ul><ul><li>Overall Equipment Efficiency </li></ul><ul><li>Equipment failures </li></ul><ul><li>Production service level </li></ul><ul><li>Inventory days of supply </li></ul><ul><li>Cost per operation hour </li></ul><ul><li>Power consumption per ton produced </li></ul><ul><li>Wastage/scrap loss </li></ul>
    14. 14. FMCG- Supply Chain KPIs <ul><li>Shipment Perspective: </li></ul><ul><li>Forecasting error </li></ul><ul><li>Fill rates </li></ul><ul><li>OTIF </li></ul><ul><li>backorders </li></ul>
    15. 15. FMCG- Supply Chain KPIs <ul><li>Financial Perspective: </li></ul><ul><li>Inventory Turns </li></ul><ul><li>Sales </li></ul><ul><li>Asset turns </li></ul><ul><li>Total supply chain cycle time </li></ul><ul><li>Input Freight Costs </li></ul><ul><li>Tax and Surcharges </li></ul><ul><li>Manufacturing Cost </li></ul><ul><li>Inventory Carrying cost </li></ul>
    16. 16. Thank You!