Marico Supply Chain

A CASE STUD STUDY Y ON SUPPLY CHAIN OF

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Submitted By, Richesh Krishnan

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Contents 

Company Profle



Marico’s nbound Copra Supply Chain



Remedial !ction



Marico Strate"y and Supply Chain mpact



Marico #utbound Supply chain



mpro$ed #utbound supply Chain



Conclusions



Re%erences

2

Contents 

Company Profle



Marico’s nbound Copra Supply Chain



Remedial !ction



Marico Strate"y and Supply Chain mpact



Marico #utbound Supply chain



mpro$ed #utbound supply Chain



Conclusions



Re%erences

Company Profle

7 

Foune on 1!"1



#ar$%o $s one o& In$a's lea$n( Consumer Prou%ts ) Ser*$%e Inustry



+ran port&ol$o, Para%-ute. Sa/ola. Ha$r ) Care. N$-ar. #e$0er. e*$*e #ar$%o also o3ns popular 4rans l$0e Set 5et. L$*on. 6ata0 . an ot-er personal %are 4rans

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

#ar$%o $s a F#C8 %ompany pro*$$n( %onsumer prou%ts an ser*$%es $n t-e areas o& Healt- an +eauty 4ase $n #um4a$



Leaers-$p pos$t$ons $n most %ate(or$es9 Co%onut O$l. Ha$r O$ls. Post 3as- -a$r %are. Ant$9l$%e Treatment. Prem$um efne E$4le O$ls. n$%-e Fa4r$% Care et%



#ar$%o's o3n manu&a%tur$n( &a%$l$t$es are lo%ate at 8oa. :an;$0oe. ?!@ Cr



Net Proft, IN 7!@ Cr



Part o& #ar$%os 4us$ness strate(y $s to eBpan

?

#ar$%os In4oun Copra Supply C-a$n, Pr$or to 1!!1. Copra pur%-ase un$t 3as $n #um4a$ #ar$%o %ontra%te 4ro0ers $n #um4a$ 3-o $n turn %ontra%te 4ro0ers $n :erala +ro0ers $n :erala -a t-e$r o3n tra$l o& $nterme$ar$es lo%al 4ro0ers. Copra Con*erters. &armers Copra 4uy$n( $s approB$mately ?= o& #ar$%os pur%-ase port&ol$o  Term$nal

Suppl$er

@

Pro4lems 3$t- t-e In4oun Copra Supply C-a$n In%rease %ost o& pro%urement ue to presen%e o& many $nterme$ar$es

ual$ty o& t-e %opra 4ou(-t &rom mar0et s$(n$f%antly $/erent &rom one t-at rea%-e #ar$%o &a%tor$es

Pr$%e an Payment terms 3ere $%tate 4y 4ro0ers

uant$ty $s%repan%$es

FreGuent supply $srupt$ons

Copra Supply C-a$n "

eme$al A%t$on, D$s$nterme$at$on )

Inter$ror

 Traers J



&isintermediation' reu%$n( $nterme$ar$es $n supply %-annel +uy$n( O%e set up $n :o-$0oe $n 1!!1. 4ypass$n( 2 layers o& pr$mary 4ro0ers at #um4a$ ) :erala



Fa%tory set up $n :an;$0oe. Puu%-ery an 8oa #um4a$ &a%tory s-ut o3n



Ne3 &a%tor$es %loser to sour%$n( lo%at$ons an mar0ets

nitial Problems (ith the initiati$e)

 Term$nal mar0ets -a stron( la4our un$ons

H$(- la4our %-ar(es

Separate un$ons &or -anl$n(. loa$n(. unloa$n(. ry$n(. sta%0$n( et%

!



 To reu%e epenen%y on term$nal mar0ets. #ar$%o starte sour%$n( &rom Inter$or Traers9 small a((re(ators 3-o sour%e Copra &rom $nter$or *$lla(es

Kenor De*elopment In$t$at$*e 1=

Kenor De*elopment  Ten Kenors Start$n( 1!!>. In$t$at$*es,

$ent$fe $n N :erala an ($*en Copra ryers alon( 3$t- some tra$n$n(

attempts to e*elop *enor 4ase $n Tam$l Nau. ot-er states

Sour%$n( &rom term$nal mar0ets $s%ont$nue %ompletely 4y 1!!J

11 *he * push) • •

•

+$( 4an( EP $mplementat$on $n 2==19=2 #ar$%os Copra suppl$ers %onne%te t-rou(- 3e4 portal9 #ar$%o Conne%t Inst$tut$onal$e e94uy$n( $n Copra pur%-ase ealt later

+urther &isintermediation, •  To

&urt-er el$m$nate traers. #ar$%o starte 3$t- o3n %olle%t$on %enters •  T-$s 4rou(-t more sta4$l$ty to t-e suppl$es, Small &armers %oul sell $re%tly to #ar$%os

Share o% sourcin" throu"h Copra Collection Centers

 Process

mpro$ement) Inst$tut$onal$e e94uy$n(

12 

eb Based !uctions) #ost suppl$ers 3ere %omputer $ll$terateM t-$s %-allen(e 3as met 4y,   

Open$n( e$/ ema$l $s &or ea%- *enors  Tra$n$n( on e9ma$l usa(e ) t$e9up 4et3een *eno rs an %y4er %a&es

Fast Tra%0 Payment FTP, allo3e *enors to rotate t-e$r money &aster



7 P-ase, Copra e9 Portal e9mar$%o%om laun%-e $n 2==?



Ena4le pla%$n( o& 4$s t-rou(S#S

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Pro%ess Impro*ement, •

Da$ly ne(ot$at$ons 3$t- Copra traers 3as one a3ay 3$t• Re$erse !uction, +uy$n( team 3oul a%%ept Guotes &rom %opra traers only ur$n( t-ree one9-our au%t$on slots $n a ay an t-e lo3est 4$er 3oul 4e sele%te •  T-e $n$t$al res$stan%e to e*erse Au%t$on $e o3n $n a &e3 mont-s an traers a%%epte t-e pro%ess

1>

1?

#ar$%o Strate(y an Supply C-a$n Impa%t 1--. / +ocus on Brand &e$elopment

5tensi$e ad$ertisin" ,nno$ati$e promotion schemes / !d$ertisin" e5penditure increased steadily

*his (as in response to the "ro(in" nternational competition %rom ri$als /0nile$er and Con!"ra

ntroduction o% more products and more brands / incur cost

+or sur$i$al

Reduced reliance on  mar3et leader

5pansion strate"y / introduced more brands and tried to increase reach / created Supply Chain problems

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#ar$%o Out4oun Supply %-a$n

Marico’s Supply Chain

Plants

Depots

D$str$4utor

Super D$str$4utor

eta$ler

Sto%0l$st

Ur4an

eta$ler

nitial #utbound Supply Chain 1" Fa%tory Sto%0  Trans&er Depots Ieal In&ormat$on Flo3

Suppl$erSuper Suppl$er

Pr$mary Sales Se%onary Sales

eta$ler

Consumer

O/ta0es

1J

Features o& t-e Out4oun Supply C-a$n 

6ature o% the Mar3et



Fra(mente nature o& In$an supply %-a$n



Supply %-a$n %an pro*$e %ompet$t$*e a*anta(e



Bull(hip ect



Only 2 9 represents or(an$e reta$l storest$ny (ro%ery stores



!? , :$rana stores

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Po$nt o& sale $n&ormat$on Q Not rea$ly. $re%tly a*a$la4le &rom reta$lers



Sales ata Q %olle%te &rom fel test. %ustomer &o%us (roup. 3ell fnan%e a*ert$s$n( pro(ram

1! 

Key Stren"th



elat$*ely lo3 %ommo$ty a3 mater$al su%- as Ke(eta4le o$l. saRo3er sees



Stron( %ontrol on sour%$n( o& #



Less *ar$at$on $n sales seasonal$ty

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No ma;or manu&a%tur$n( %onstra$nts



Mana"in" Supply Chain



Slo3 mo*$n( S:Us Q s-$ppe $re%tly &rom &a%tor$es to epots



Fast mo*$n( S:Us Q s-$ppe to re$str$4ut$on %entre an su4seGuently to epots

2=

C-allen(es Fa%e $n t-e out4oun Supply %-a$n 

Supply chain not scalable (ith 5pansion Plan



Strate(y, 

EBpan %ont$nuously to rea%- most In$an -ouse-ols



8ro3t- t-rou(- ne3 4rans an prou%t l$nes



Penetrate more $nto rural areas 9 represents "= o& In$an populat$on



Enta$ls more sales an mar0et to tra%0 Qmore &ore%ast to ma0e .more prou%t to plan. more S:Us to tra%09more tru%0loas to %onf(ure

21 

+orecastin" rrors



Lo3 %ost prou%ts Q lea$n( to $mpuls$*e 4uy$n( e%$s$ons



Prou%t a*a$la4$l$ty Q :ey to $mpulse 4uy$n(



Fore%ast a%%ura%y 3as "=



D$str$4ut$on Q su/ere sto%0 outs lea$n( to loss o& sales 7=



On one -an Q lo3 le*el o& ser*$%e le*el ue to prou%t a*a$la4$l$ty



Ot-er -an. eB%ess $n*entory ly$n( at #ar$%o an $n t-e %-annel



Cost o& errors $n s-$pments to remote epots $n%rease

22



0n'inte"rated !pplication systems



La%0 o& $nte(rat$on amon( transa%t$on systems 



esult 

Poor *$s$4$l$ty $nto $nternal operat$ons



D$ not s%ale 3$t- $n%rease lo($st$%s reGu$rements

Ina%%urate &ore%asts. lon( plann$n( %y%les. no transparen%y o& 3are-ouse sto%0. elaye response to %ustomer nees



Problems (ith distribution



S-$ppe only &ull tru%0s



O4sta%les to (oo $str$4ut$on, 

anom e%$s$ons ue to

27





Monthly distribution le$els 

F$rst 2= ays, 1@972



Last 1= ays, ?7

Result 

Neee to -$re eBtra spa%e 3-en s-$pment eB%eee epot &a%$l$ty



EB%ess $n*entory &or some S:Us. sto%09out $n ot-ers



H$(-er el$*er %osts



Eros$on o& sales. $str$4utor %onfen%e an %ustomer sat$s&a%t$on

2>

Out4oun Supply C-a$n rees$(n 

Solut$on, mySAP 4us$ness Intell$(en%e



+$( 4an( approa%- &or SAP $mplementat$on 

At Company &a%tor$es. 3are-ouses. 4us$ness o%es. %ontra%t manu&a%turers

 S!P !P# implemented %or)

6ot implemented %or)

Deman &ore%ast$n(

Sour%$n(

Supply %-a$n net3or0 plann$n(

Sales

2?

Sta(e 1,

Supply Chain mplementation Lo3er $n*entory an supply %-a$n %osts

e*amp pro%esses EP

Sta(e 2,

esol*e &ore%ast$n( pro4lems. el$m$nate $n*entory an

Partner relat$ons-$p 3$t$str$4utors K#I

 Te%-nolo($%al support t-rou(- -$(-ly $nte(rate appl$%at$ons systems  +$( 4an( rollout $n 2==1

 T$mely sales an $n*entory $n&ormat$on #ana(e $str$4utor $n*entory 4y replen$s-$n(

mpro$ed #utbound supply Chain 2@

Complete K$s$4$l$ty

Impro*e Fore%ast A%%ura%y

S-ort Plann$n( Cy%le



eu%e In*entory an

Un$&orm s%ales

Lo3 In*entory an sto%0outs

el$a4le an espons$*e prou%t$on an $str$4ut$on ata

eu%t$on $n Del$*ery Cost Fast response to

Benefts o% redesi"n 2"

Operat$onal $mpro*ements •

eu%e plann$n( %y%le • +rom 7 days to 17 days Impro*e &ore%ast$n( a%%ura%y Impro*e el$*ery rel$a4$l$ty

• •

Impro*e &ore%ast$n( •

+ot- pr$mary an se%onary sales 3ere a*a$la4le

Impro*e $str$4ut$on • •

K#I Kenor mana(e In*entory $mplemente SAP -eur$st$%s ensure s-$pments are sent $n &ull tru%0loas an t-at epot $n*entor$es s$multaneously rema$n 3$t-$n pres%r$4e $n*entory norms

Impro*e $str$4utor relat$ons-$p, reduced bull(hip eect •

Partners-$p relat$on 3$t- $str$4utors

#utbound Supply chain per%ormance impro$ements 2J

Con%lus$ons

2!



Marico’s Outbound Supply Chain



Forecasting and distribution errors impacted company’s cash flows and hindered expansion



By effective implementation of SAP, forecasting and distributor r elationship improved, costs and inventory levels went down



Marico’s Inbound Supply Chain



Marico faced increased costs of procurement and freuent supply disruptions due to many levels in supply channel



!isintermediation and "# assisted process improvement led to reduced costs, procurement lead time and efficient operations

7=

e&eren%es



#ar$%o Inustr$es, mySAP Supply C-a$n #ana(ement II#. +an(alore +y. >>J@!>11sau(ata 9(upta9&m%(9ma;or9mar$%o9supply9%-a$n



#ar$%o 9 An In&ormat$on Upate Apr$l 2@. 2=="