ITM B SCHOOL students on SCM of Marico

1. A
CASE STUDY
ON
SUPPLY CHAIN OF
PRESENTED BY
SWAPNIL JAISWAL
SUKUMAR PRADHAN
ABHINANDAN MOHANTY
:

2. About Marico
 Founded on 1987.
 Marico is one of India's leading Consumer Products
& Service Industry.
 Holds a number of brands including Parachute
, Saffola , Hair&Care, Nihar, Mediker, Revive,
Manjal, Kaya SkinClinic , Livon, Set Wet, Zatak,
Fiancee, HairCode, Eclipse, Xmen, Hercules, Caivil,
Code 78 and Black Chic.
 900cr company.

3. Initial Outbound Supply Chain

4. Challenges faced
Supply chain not scalable
with Expansion Plan
Forecasting Errors
Strategy:
• Expand continuously to reach
most Indian households.
• Growth through new brands and
product lines.
• Penetrate more into rural areas –
represents
70%
of
Indian
population.
• Entails more sales and market to
track –more forecast to make
,more product to plan, more
SKUs to track-more truckloads to
configure.
To cater to the new areas with existing
supply chain – logistic challenge
• Low cost products – leading to
impulsive buying decisions.
• Product availability.
• Forecast accuracy was 70%.
• Distribution – suffered stock outs
leading to loss of sales 30%.
• On one hand – low level of service
level due to product availability.
• Other hand, excess inventory lying at
Marico and in the channel.
• Cost of errors in shipments to remote
depots increased.

5. Contd.
Planning issues
Business impact
• Planning cycle: 30 days
• Manufacturing: 2 weeks
• Distribution: 1 week
• Only one qualified planner
• Spread sheet based planning
• Result:
• Inventory problems
• Eroded distributor confidence
• Expired products
• Unresponsive to market changes
• Supply chain not in tune with the
marketing strategy
• Losing competitive advantage
• Losing image among supply chain
components
• Poor performance affected cash
flows
• Supply chain hindered expansion
strategy of growth through more
brands
• Affected consumer’s image of
company

6. Outbound Supply chain redesign
 Solution: SAP business Intelligence
 Big bang approach for SAP implementation
(At Company factories, warehouses, business offices, contract
manufacturers)
• MIDAS (Marico industries distribution automation
software) (Offline Solution)
• MINET(Real Time Solution)
MIDAS
implemented
for
MINET
implemented
for
SAP APO
implemented
for:
capture and
standardize
transactions
Dynamic and real
time information
Demand
forecasting
Received stock
and sales in
Feed data online
Supply chain
network planning

7. Comparison

8. Impact on the organization
 The implementation of VMl with key distributors resulted
in declining sales skew within a month and reduction in
excess stocks and stock-outs at the distributor point.
 MI-NET and SAP R/3 gave the field sales personnel access
to current information on order status, distributor
performance, and depot stock levels.
 Sales force productivity improved significantly as a result
of the combination of SAP R/3, mySAP SCM, and the MINET initiative.

9. Benefits

10. CONCLUSION
 Marico has improved service by decreasing stock-
outs at the depot from 21 % to 9% and at the
distributor level from 30% to 15%. It also reduced
supply chain exception cost by 64% and average total
inventory by a fourth from 29 days to 22 days.
 The company's turnover has moved up from 3% in
FY2000 to 18% in FY2004.

11. THANK YOU