1. By:Neha Sikarwar, Boby Sebestian, Rahul Bedi, Vipul Bajaj and Souvik Roy

2. OUTLINE Introduction to Marico Supply Chain and Nature of Challenges Faced Initiative Implemented Results and SustenanceFuture Ahead 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 2660 Crores (2009-10) 12 Brands, Turnover Rs 1550 Crores 100 SKUs, 1500 Suppliers 7 Factories, 15 Contract ManufacturersReaching 13 Crore 30 Depots, 1000 Distributor consumers 25 lac Retail Outlets (Reach) 4. External Analysis of Marico Porters Five forces: Threat of substitute products: In FMCG sector the products are highly substitutable. Threat of new entrants: The established companies have huge base of loyal customers which acts as an entry barrier for new entrants. Determinants of Suppliers power: The industry is mostly dependent on the local players for supplies of raw materials. Determinants of buyers power: Highly substitutable products and highly price sensitive market. Industry rivalry: Intense competition 5. Networking environment Citrix Presentation Server running on one HPProLiant DL 360G4P server and one HCL Global Line server Citrix GoToAssist Microsoft Windows Server 2003 Connectivity through VSATs, VPNs, leased circuitsand Internet VPNs HCL/Zenith desktops and Toshiba laptops. 6. MARICOs SUPPLY CHAIN Slow Moving 6 RDCsRDC SKUs/ low volPrimary SecondaryRaw SalesSales DirectMaterial PlantsDepotsRetailerDistributorsVendors 33 depots, 37 ASM AreasSuper Stockists Distributors Total, > 1100 7. MARICO-SUPPLY CHAIN TRANSACTIONS 8. MARICOS PROBLEMS More brands and more products incur costs: This entails moresales and markets to track, more forecasts to make, moreproduction to plan, more SKUs to track, more pallets andtruckloads to configure and route. The SKU/distribution point combinations run in millions. The distribution network became more costly andcomplex, exposing many process inefficiencies. The resulting growth strained Maricos highly regardeddistribution network and exposed shortcomings in itsforecasting, planning, and supply chain processes. 9. MARICOS PROBLEMS(Contd..) Forecast accuracy was at 70%. Distributors were suffering stock-outs and loss of sales on30% of Marico SKUs. Excess inventory The costs of errors in shipments to remote depots weremounting. 10. 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 Data Visibility Order placement process Distribution network complexity 11. KEY ISSUE - PEAK / MIN SALES RATIO KEY BRAND - ANILLUSTRATION3.02.82.62.42.22.01.81.61.41.21.01 2 3 4 5 6 7 8 9 1011 12MonthPeak / Minimum Sales ratio Variation across the yearas high as 3:1 (Key Brand) 12. KEY ISSUE - DATA VISIBILITYEXCELTRACSPINS AOGCAFASMPSFAS-IngressLack of Visibility of stocks on a frequent basis even at depotDepartmental System for Transactions, No Integration 13. INTERNAL OPERATIONS VISIBILITYLack of visibility among transaction systemsStand alone applications systemsNon-Integration: Departments working with conflicting numbersAnd coordination problems in supply chain planning and executionRationalization and Consolidation of data for monthly financial statementsExcel spreadsheet based applicationOnly one planner qualifiedData Gathering-Indicative Plan-Production Department-Final Production Plantook 30 days 14. MARKET PLACE VISIBILITYReliability on PRIMARY DATA- suboptimal visibilityNest best option- Distributors sales to RetailersMARICO operated with a PUSH METHODSevere skewing of salesSynchronization between MARICO and distributors- differentbucketed time horizons 15. DISTRIBUTION VISIBILITYPC-supported legacy systems use of relational database librariesStruggling to meet increased logistics needsPoor visibility into depot stocks-no prioritization rules in place in configuring foroptimal truck loadsExcess stock- hire temporary spaces and demurrage chargesStock-outsMaldistribution of goods- higher delivery costs 16. THE VICIOUS CYCLE 17. The Approach Fully integrated system consisting of Enterprise Resource Planning (ERP) business application SAP R/3, a Supply Chain Management (SCM) suite. The Advanced Planning and Optimization (SAP APO) component of my SAP Supply Chain Management (my SAP SCM) My SAP Business Intelligence Solution for Supply Chain Performance Management. 18. SOLUTION IMPLEMENTED - TO TACKLE VISIBILITYAPOERPMinetBIWERP, APO, BW MIDAS for Distributors Minet :- The face of all the above to users in the field Outcome - Stock visibility of depot and distributor real time 19. MARICOS EXTENDED SUPPLY CHAIN SYSTEM 20. SAPSAP R/3Integrated Systems-mySAP SCM &SAP APO mySAPBusinessIntelligenceDemandSupply ChainperformanceFinance, Forecastingmanagementand Planning, activities, SupplyDataCostNetworkWarehousing Accounting,Planningfunctionality, (SNP),Deployment Business Materials Intelligenceand Cockpit tools andManagement,modulesAnalytics, Production Best- PracticePlanning, Models,QualityAdministrativeManagement,resources. Sales & Distribution 21. SAP(Contd..) SAP R/3 integrated business systems, includingfinance, cost accounting, materialsmanagement, production planning, qualitymanagement, and sales and distribution A key component of mySAP SCM, SAP APO, including itsdemand forecasting and planning, supply networkplanning (SNP), deployment, and supply chain cockpitmodules mySAP Business Intelligence for supply chain performancemanagement activities, a system that provides datawarehousing functionality, business intelligence tools andanalytics, best-practice models, and administrativeresources 22. SAP APO few commodity raw materials no manufacturing capacity constraints Not used for no sales seasonality- no promotions and minimizeSourcing andManufacturingartificially induced demand surges Improve internal Collaborative forecasting between manufacturing sites and warehouses.Demand forecasting Assigned and accountable ownership- distribution and Supply Chainfrom warehouses to distributors met service levels Planning 23. DEMAND PLANNING- SAP APOActual pack-mix sales of previous three monthsPack-mix allocation factorsDetailed demand plan at the SKU levelProduction Capacity Vs Raw Material Availability and provide feedback (1st week)Minor modifications using Primary and Secondary data for every region now available Check Pack-Mix allocation to reflect the current market trends Release final demand plan to the supply chain group at the Head Office 24. SUPPLY NETWORK PLANNINGSNP module in SAP APO Reliable, Responsive Productionand Distribution Planning Process Depot and Plant Heuristics Production and Dispatch related decisions for the planning periodof a month 25. PLANT SNP in SAP APO Run unconstrained Plant Heuristics using Indicative Demand Planning DataFirm Demand in Place Run Constrained Plant Heuristic in SNPFirm Production Plan prepared for Factories and Contract Manufacturing PlantsProvide broad feasibility related feedback to the sales force 26. DEPOT SNP in SAP APOUsing a Truck Builder Module-coordinate multiple SKUs and depotsShipments are sent in full truck-loadsDepot inventories simultaneously remain within the inventory normsPlans in blocks of 10 days- tradeoff between Transportation Costs and Inventory Carrying costs Provide broad feasibility related feedback to the sales force 27. DEPOT SNP in SAP APOBuilt prioritization rulesAssign relative priority of depots and SKUs in the TRUCKBUILDER MODULEDepot heuristics run thrice a month (primary sales datavary from forecast) 28. MARICO IT SYSTEM - OVERVIEW R3 MIDAS MI-Net MIDAS BIW SD APOMIDAS USERS 29. MARICO IT SYSTEMS Distribution Automation Software package- MIDAS(MARICO INDUSTRIES DISTRIBUTION AUTOMATIONSOFTWARE) Internet based system MI-NET in which distributors could login and supply data online Application which could automatically transfer data fromdistributors PC to MARICOs central servers 30. MARICO IT SYSTEMS MI-NET directly linked to SAP R/3 Stockin Transit Depot Stocks Pending Orders Statement of Accounts Promotion Schemes to distributors 31. MARICO IT SYSTEMS Potential Primary developed using mySAP Business Intelligence Average sale of the previous three months Develops and reports brands and regional sales potentialthat should be targeted by the sales group Cumulative actual sales to datemySAP provides dailyupdates through Primary Potential Proactive work rather than Postmortem analysis 32. HOW MiNET WORKS? MiNet is a portal that links 800 distributors and 110 superdistributors of Marico spread across the country to the company MiNet also enables the company to get daily updates at the stockistlevel At the backend, Marico has installed the SAP R3 transactionhandling 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 demandforecasting 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 tothe company. This backend is linked to the outside worldcomprising scores of business associates for Marico, through MiNet. 33. THE MIDAS TOUCH The company has also put in place a software called theMarico 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 withChennai-based firm Botree Every morning the distributor logs on to MiNet and uploadsinformation from MIDAS and we pass on the informationregarding invoices, running schemes etc to the distributor This means that the distributor can keep feeding his data onMIDAS and then dial in periodically and feed the informationon MiNet. He doesnt have to be online all the time 34. VENDOR MANAGED INVENTORY (VMI) Places order Marico EARLIERDistributorReplenishmentbased on orderReplenishment based onnorms DistributorMarico NOW WITH VMI MIDAS Mi-net APOSAP Orders are automatically generated 35. SALES BENEFITS OF VMI MI-NET AND SAP R/3, Field Sales Personnel Immediate access to MARICOS depot stock level Order status and distributor performance Time saved for collecting data for sales reports Focus on sales, brand development and distributorrelationships Bolster trust among sales personnel and win distributortrust Dumping has stopped 36. Using mySAP SCMVisibility and tools and SAP R/3 ERP provide by SCM & modules will:ERP will: 37. Thank You