Moving products into the hands of customers as quickly as possible is the mantra, says Hemant Kumar Sood, Director- Value Chain, Raymond Consumer Care. The action strategy, he informs Upamanyu Borah, remains ‘Agility’ as the deciding factor for prosperity and speedy supply chain, which is most important for winning the battle.
Organisation background and corporate mantra
The Raymond Group has a noteworthy presence in the FMCG business through its associate company – Raymond Consumer Care Pvt Ltd, the second oldest FMCG Company in India and in operations since 1964.
With pioneering brands like Park Avenue and KS– home care segment through the premium brand and sexual wellness segment through the KamaSutra brand, Raymond is steadfastly expanding its presence in the category. In this direction, the company is already looking to expand the Park Avenue brand into skincare as well as haircare sub segments.
Last year, Raymond brought global perfume brand Tonino Lamborghini to India.
The success mantra for Raymond is in fulfilling the need gap of the customer and providing high quality products that consumers can cherish and enjoy.
The guiding principle of ‘consumer first’ remains at the core, therefore all innovation, efforts and products are designed, developed and commercialised to win consumer trust and loyalty.
Best practices for seamless and efficient supply chain operations
E-commerce is a fast emerging channel and establishing a supply chain for it is a daunting task, given the requirement could range from 2X to 50X in a short period along with customised requirement of a product.
Speed to market is key for us in today’s digitally connected world. Today is the era of fast failure and quick success. Innovation to commercialisation life cycle has reduced from 18 months to 90 days. Supply chains must therefore generate value and agility for organisations.
As shoppers move to an ‘omni’ mode, expecting the products to be present ‘when’ and ‘where’ they shop, FMCG companies will need to transform their distribution models to enable this. As such, our distribution and manufacturing strategy have been designed and executed to cater to e-commerce, after a detail study of saliency across geography, time and inputs to demand.
Last year, we introduced 99 products, i.e. three products coming out for commercialisation every third day of the year. This has helped us in achieving a leadership position in the FMCG segment.
Warehouse management strategies
Our warehouse provides strategic inventory buffers at pre-determined locations and act as shock absorbers.
We consider location, serviceability, cost and safety as strategic points while designing and setting up new warehouses. Locations are selected looking at cost benefits that may come.
Consistently inspecting storage areas, regular cycle counting, setting up KPIs, periodic monitoring, regular staff training on product and process are key parameters we adopt.
Ensuring smooth coordination across the supply chain
IT and IoT plays an important part in smooth operations and coordination across the supply chain. GPS tracking of trucks is now something that everyone boasts.
With the integration of sources, purchasing and procurement technology and its interface into wider and specialised business applications, has single-handedly transformed the procurement process for us.
If organisations haven’t done it yet, they must start today.
Managing logistics network
Complete logistics function is outsourced to our partners in the logistics services network. Planning is done internally.
The primary expectation from logistics service providers are value-added services such as product customisation and fast and efficient transportion of products to the retailer, so that it reaches the hands of customers as quickly as possible.
Optimising logistics cycle
Discreet and customised solutions across the board are worked out considering given priorities along with long term supply chain management strategies.
Megatrends in supply chain management
The agility of the supply chain will determine the prosperity of an organisation. To enable agility in the supply chain, it must be backed by cutting-edge technology. Blockchain in supply-side, AI in demand-side would help predict how the current distribution is likely to emerge as the most efficient model in the coming years.
Disaggregation will lead to ‘disowning’ a large part of the distribution network, but facilitate partnership with regional and national players to enable the most efficient and lowest ‘cost to serve’ distribution model for FMCG brands across all channels. This will, in turn, allow brands to focus on creating the ‘pull’ and in-store customer/shopper experience.
In China, approximately 25 per cent of FMCG business is distributed by aggregators. In the end, the ability to serve the demand that can’t be forecasted will be a megatrend which will bring about structural changes in warehousing. Apart that, others that would emerge:
Megatrend 1 Increased competition and price pressures
In order to continue to compete with the commoditised products, firms would need significant cost improvements with supply chain redesign and technology.
Megatrend 2 Outsourcing
As many companies step back and examine their core competencies, outsourcing parts or a complete supply chain can be advantageous.
Megatrend 3 Shortened and more complex product life cycles
Today, many companies are under pressure to develop and innovative products, and bring them to market more rapidly while minimising cannibalisation of existing products which are still in high demand.
In order to meet the needs of both customers and consumers, companies need more efficient product lifecycle management processes. One key benefit of product lifecycle management processes is helping companies design products that can share common operations, components, or materials with other products, thereby reducing risks of obsolescence, write-offs, increasing cost leverage on the purchasing of key materials and ensuring that infrastructure investments are optimally utilised.
Megatrend 4 Collaboration between stakeholders in the extended supply chain
As supply chains continue to develop and mature, there has been a move towards more intense collaboration between customers and suppliers. The level of collaboration goes beyond linking information systems to fully integrating business processes.
Megatrend 5 Flexible warehousing
Today, most of the organisations are exploring the trend of moving towards flex warehousing or on-demand warehousing. More is hired when it is required, thus effectively creating value for the customer.