Supply Chain Challenges in

FMCG and Retail Sector

Presented By
Group 3
PVS Murthy (PG – 126)
Balasubramanian R (PG – 138)
Rajiv Ranjan Singh (PG – 145)
Abhijeet Sinha (PG – 149)
Sushant Tare (PG – 154)
Supply Chain Challenges – FMCG Sector

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 Agenda

• Supply Chain Challenges in FMCG

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 About FMCG Industry

• In 2008 India’s FMCG retail industry was of US $25 billion,

growing at a rate of 12% annually. (FICCI-Technopak report)

• FMCG is the 4th largest sector in the Indian economy

• One of the largest employer

• 13 million people earn livelihood on this industry
• 25 million employed at wholesalers, distributors etc.

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 Industry Overview - India

• Top Players in FMCG

– Hindustan Unilever Ltd.
• Personal Care Products (Soaps, Cosmetics)
– ITC Ltd.
• Filter Cigarettes
– Nestle India
• Food Category
– Amul
• Food Category (Icecream, Curd, Milk, Butter)
– Dabur India
• Herbal Speccialist (Dabur Amla, Chyawanprash, Hajmola)

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 About – Parle Agro

• It is a food and beverage company based in Mumbai, India

• Founded by Mohanlal Dayal Chauhan in 1929.

• The name Parle was derived from the Mumbai suburb

Vile Parle.

• Parle group split and Parle Agro and Parle Products became
separate entities.

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Parle Agro Family Tree

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Distribution Network

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 Supply Chain Challenges

• Forecasting
– Zonal business heads  Top level managers  Sales managers

• Distribution
– Lack of Quality Education
– Distributors buy small quantities initially
– Route planning
– Procured number of SKUs will be less initially
– Handling Inventory Pile Up

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 Supply Chain Challenges

• Understanding the Customer needs and tapping the latent demand

• Decision in stock dispatch

• Handling Pilot sales representatives

• Transportation damages
– Beverage transportation - Leakages
– Disruption in the Supply Chain

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 Supply Chain Challenges

• Logistics
– Contract
– Road Transport and Fuel prices
– Handling peak season demand

• Infrastructure
– Number of check posts
– Road condition and Km per day
– Corruption
– Old vehicles
– Rugged Landscape

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 Supply Chain Opportunities

• Cheap Labor

• Technical Knowhow

• Institutional sales also picking up

• Organized Retail

• Stores Like METRO providing bulk sale opportunities

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 Recommendations

• Developing rural network

• Training of supply chain staff

• Providing incentives to the middlemen, distributor

• Investment in IT

• Silent Product Rollover Strategy

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 Acknowledgement
• We would like to acknowledge the following people for helping us
in making this presentation

– Prof. Nagendra

– Mr. Dinkar Khandelwal, Asst.Manager – Logistics, Parle Agro Pvt.Ltd

– Mr. Ganesh Subramaniam, Senior Manager – Logistics, Parle Agro

Pvt. Ltd.

– Mr. Makarand Joglekar, MMS – Operations, SIMSR

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Supply Chain Challenges – Retail Sector

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 Agenda

• Supply Chain Challenges in Retail Sector

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 About Retail Industry

• The sector is expected to touch Rs. 18,10,000 crore by 2010

• Retail sector is the second largest employer in India

• It accounts for over 10 per cent of the country’s GDP

• Food and grocery dominated the retail segment with 59.5% valued at Rs 7,92,000
crore

• Clothing and accessories with a 9.9 %share at Rs 1,31,300 crore.

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 Industry Overview - India

Top 5 Players in Retail sector

• Shoppers' Stop

• Westside (Trent)

• Pantaloon (Big Bazaar)

• Lifestyle

• RPG Retail (Foodworld, Musicworld)

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 About – Big Bazaar

• Founded by Mr. Kishore Biyani

• Headquartered in Mumbai
(Bombay)
• 2 million customers every week
• Over 1 million loyalty card
members
• First set of Big Bazaar stores
opened in 2001 in Kolkata,
Hyderabad and Bangalore

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Distribution Network

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 Supply Chain Challenges

Problems Solutions

Truck Unloading Delivery at Night

Bar Code Missing Applying New Barcode

Price Fluctuation Updated Regularly

Inventory Shrinkage Improve Handling

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 Supply Chain Opportunities

• Behavioral pattern, preferences

and expenditure capacity of
Indian consumers
• Growing consumer power in tier
2 and tier 3 cities in India
• IT trends in Indian retail industry
and technological expansion

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 Recommendations

• Development of supply chain to enable market expansion

• Training of supply chain staff

• Providing incentives to the middlemen, distributor

• Investment in IT

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 Acknowledgement

• We would like to acknowledge the following people for

helping us in making this presentation

– Prof. Nagendra

– Mr. Yogesh , Warehouse Manager, Big Bazaar, Bombay

Central

– Mr. Sai Kamble, RM- 2008-10, SIMSR

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Some snaps

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Some snaps….

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Some snaps….

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 Thank You

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