By:

Anshul Agarwal-01 Ashish Bansal-03 Vikram Bothra-06 Rahul Rathi-21 Gaurav Surana-30
 OUTLINE

Introduction to Marico

Supply Chain and Nature of Challenges Faced

Initiative Implemented

Results and Sustenance

Future Ahead
 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)

MARICO-SUPPLY CHAIN TRANSACTIONS
 Nature of

Challenge faced

in

Supply Chain
 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.
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.
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

INTERNAL OPERATIONS PROBLEMS
MARKET PLACE PROBLEMS
DISTRIBUTION PROBLEMS
 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

THE VICIOUS CYCLE
Solution Adopted

for

Supply Chain
Challenges
IMPLEMENTATION METHODOLOGY
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

 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.
 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
MARICO IT SYSTEM - OVERVIEW

R3 MIDAS

MI-Net MIDAS
BIW

SD
APO MIDAS

USERS
 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
 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
 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
MARICO’S EXTENDED SUPPLY CHAIN SYSTEM
Impact and Benefits
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
SAP
SAP APO
OPERATIONAL IMPROVEMENTS
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
Thank You