Marico ERP

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Exhaustive analysis of ERP implementation in Marico Industries

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Marico ERP

  1. 1. By: Anshul Agarwal-01 Ashish Bansal-03 Vikram Bothra-06 Rahul Rathi-21 Gaurav Surana-30
  2. 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. 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)
  4. 4. MARICO-SUPPLY CHAIN TRANSACTIONS
  5. 5. Nature of Challenge faced in Supply Chain
  6. 6. 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.
  7. 7. 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.
  8. 8. 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
  9. 9. INTERNAL OPERATIONS PROBLEMS
  10. 10. MARKET PLACE PROBLEMS
  11. 11. DISTRIBUTION PROBLEMS
  12. 12. 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
  13. 13. THE VICIOUS CYCLE
  14. 14. Solution Adopted for Supply Chain Challenges
  15. 15. IMPLEMENTATION METHODOLOGY
  16. 16. 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
  17. 17. 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.
  18. 18. 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
  19. 19. MARICO IT SYSTEM - OVERVIEW R3 MIDAS MI-Net MIDAS BIW SD APO MIDAS USERS
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. MARICO’S EXTENDED SUPPLY CHAIN SYSTEM
  24. 24. Impact and Benefits
  25. 25. 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
  26. 26. SAP
  27. 27. SAP APO
  28. 28. OPERATIONAL IMPROVEMENTS
  29. 29. 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
  30. 30. Thank You

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