A couple of years ago, Mumbai-based consumer goods company MaricoNSE -1.85 %, which sells the Parachute brand of hair oil and the Saffola brand of edible oils, introduced a new route optimisation system which geo-tagged the routes taken by its salesmen. Since then, the company has increased its direct distribution reach by 20%, but with the same number of salespeople.
Fast moving consumer goods (FMCG) companies are making use of technology to beat longstanding challenges and build on emerging opportunities in an evolving marketplace.
While some technology development is taking place internally, many firms are working with startups too.
Zero stock-outs at retailers and making new products quickly available are critical for FMCG companies.
An efficient network to push a pipeline of often perishable goods is also important.
“Advancements in technology and Internet of Things have made a transformative impact across the supply chain process – from assessing market demand using digital analytical forecasting to an integrated operations planning strategy,” said Ankur Bhagat, Head - Supply Chain, Procter & Gamble - Indian Subcontinent.
P&G, best known for its Ariel detergent and Gillette range of shaving products for men, has set up a strong delivery tool to make the best use of its market delivery system.
This has shortened delivery time by up to 20%, cutting down on both costs and carbon footprint.
Emami has implemented a distributor management system that has made transactions both speedy as well as more accurate. The system is helping it track secondary sales daily, manage inventory better through automated demand fulfillment, process claims online and manage master data from a centralised location.
“Almost half of the world’s stores are in India. We have all the major global and Indian e-commerce players competing in the India market. Indian retail space is unique and has evolved rapidly unlike the developed markets,” said Bhagat of P&G.
In addition, they also have to ensure that products are fresh, there is enough market reach and that working capital ratios are constantly improving.
These are the most important factors driving technology adoption in this sector.