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Marico.pdf
1. Sardar Patel College of Engineering
Mechanical Engineering Department
Case Study: Supply Chain Improvement at Marico
Dhaval Prabhudesai
M1910055
B. Tech
Mechanical Engineering
Semester VIII
A.Y
. 2022-23
1
2. Marico Ltd.
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About Marico:
• One of India’s leading consumer goods companies
operating in the global beauty and wellness
categories.
• FY 2021-22: Turnover of about INR 95.12
billion (USD 1.15 billion) through its products
sold.
• Present in over 25 countries in Asia and Africa.
• Marico products are claimed to be used by every
third Indian household.
• Believe in the values of : Innovation,
Transparency & Openness, Bias for Action,
Global Outlook, Excellence, Opportunity seeking,
Consumer seeking and Boundarylessness
5. Alumni
Name:- Prakash Rao
Branch:- Mechanical Engineering
Year of passing:- 1991
Contact Info:- linkedin.com/in/prakash-rao-3971822
Designation:- Materials Manager
Name:- Vaibhav Wankhade
Branch:- Mechanical Engineering
Year of passing:- 2005
Contact Info:- linkedin.com/in/vaibhav-wankhade-
49895313
Designation:- Plant Manager
Name:- Siddhant Pawar
Branch:- Mechanical Engineering
Year of passing:- 2007
Contact Info:- linkedin.com/in/siddhant-pawar-244a7416
Designation:- HR Executive
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6. Alumni
Name:- Darshan Patil
Branch:- Mechanical Engineering
Year of passing:- 2013
Contact Info:- linkedin.com/in/darshan-patil-1650a099
Designation:- Brand Executive- Male Grooming
Name:- Tuhin Chakraborty
Branch:- Mechanical Engineering
Year of passing:- 2010
Contact Info:- linkedin.com/in/tuhin-chakraborty-
bb097344
Designation:- Supply Chain Executive
Name:- Rajnish Tiwari
Branch:- Mechanical Engineering
Year of passing:- 2005
Contact Info:- linkedin.com/in/rajnish-tiwari-15573b15
Designation:- BusinessApplication
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7. Product Introduction
• Product Name: Parachute Coconut Oil
• According to Marico, Parachute Coconut Oil is a market leader in its
category.
• The brand has seen a lot of innovations in packaging, sizing and tamper-
proofing. Parachute enjoys enormous loyalty in urban, semi-urban and rural
market.
• This product has close to 55% of the total revenue at Marico
• Variants:Aloe Vera Hair Oil, Jasmine Oil, Advanced Hot Oil
• Application: Hair nourishment, Skin dryness
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8. Manufacturing Cycle of Product
1. Coconuts which are dehusked are sun dried
for a day before nuts are manually separated
on the next day.
2. Copra sun-dried to get required moisture
content.
3. Reheating of copra and chopping into pieces.
4. Roasting the pieces in cooker with steam.
5. The Copra is then crushed in two stages.
6. Cake particles are separated from extracted
oil using mechanical vibrators.
7. Filtration of oil to get finer versions.
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8. Oil closed in tanks for packing.
10. Basic Supply Chain Model
Procur
coc
ement of
onuts
Manufacturing
Coconut oil from
the coconuts
Storage in tanks Packing
Distribution
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• Farmers are at the heart of the supply chain
ensuring constant supply of good quality
coconuts.
• The process at Marico is well oiled, ensuring
efficient use of Copra to produce pure
coconut oil which complies with quality
standards.
• The oil is stored in tanks and packed as per
the requirements of demand.
• Distribution through first-level and second-
level wholesalers and retailers.
13. 17
Push Pull view of the supply chain
Multiple
Farmers
supplying
Coconut
Multiple
Farmers
supplying
Coconut
Multiple
Farmers
supplying
Coconut
Multiple
Farmers
supplying
Coconut
C oconut
Traders/
Vendors
C oconut
Traders/
Vendors
Marico Ltd.
Stockist/
Distributor
Stockist/
Distributor
Multiple
Retailers
C
O
N
S
U
M
E
R
14. Problems with Marico’s supply chain
Inbound supply chain
• Increased cost of procurement due to intermediaries: The supply chain is based on
the brokers placed in others part of India.
• Quality discrepancies: Quality maintenance of incoming coconut is hard to track.
• Frequent supply disruptions: Having a dependency on the unstructured network,
supply disruptions are frequent.
• Price & Payment dictated by brokers: Brokers tend to control the prices.
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15. Problems with Marico’s supply chain
Outbound supply chain
• Forecast errors: Due to the volatility of the F M C G market, forecast errors are common.
• Unintegrated application systems: The application systems implemented throughout
the supply chain are not integrated so that they can be helpful.
• Problems with distribution: Distribution channels are not accurately marked out.
• Planning issues: Planning takes a hit due to the dependence on many factors.
• Supply Chain not scalable without expansion plan
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16. Strength
1. Widespread distribution network
2. Understanding Indian consumer
behaviour
3. Strategic plant location
4. Rural Market reach
Weakness
1. Low on promotion offers
2. High dependence on one product
3. Higher cost as compared to local
competitors due to branding
Opportunity
1. Hugh FMCG Market
2. Growth in international markets
3. Innovation in product and
manufacturing.
Threat
1. Tax and Regulatory structure
2. Competition from diverse players in
market
SWOT Analysis
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20. Supply Chain Risks at Marico
Strategic Risk
• Changing consumer
preference:
Demand could adversely
affected by shift in
consumer preferences.
• Underperformance of
new launches:
New products may not
be accepted in the
market easily (especially
FMCG)
• Competitive market
conditions:
Aggressive prices, more
companies in the
market.
Financial Risk
• Foreign currency
exposure:
Could affect company
due to foreign
investments.
• Volatility in interest
rates:
Changes in the interest
regime and in the terms
of borrowing could
impact the financial
performance.
• Cyber and data
security: Disruption in
business operation due
to cyber-attack and loss
of sensitive
information .
Operational
Risk
• Commodity Risk:
Unexpected changes in
commodity prices and
supply could impact
business margins
• Political Instability:
Unrest and instability in
countries of operation
could significantly
impact business results.
• Underperformance of
acquisition
deliverables:
Integration of
operations and cultural
harmonization may take
time, thereby deferring
benefits of synergies.
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21. 25
Supply Chain Risks at Marico
C ompliance
Risk
• Non-compliance with
regulatory
requirements:
Inadequate compliance
systems and processes
can pose reputation risk
for the Company.
• Violation of ethics
and business
integrity:
Failure to act with
integrity can damage
corporate reputation
and business results.
E nvironmental
Risk
• Disruption due to
climate change
events:
Climate change related
events that have the
potential to disrupt
include changes in
weather patterns such
as increased
temperatures and
altered rainfall patterns.
• Handling of plastic
packaging and waste:
The regulatory,
consumers and
community response to
the environmental
impact of plastic wastes
Social Risk
• Community distress
in operating
locations:
The absence of
understanding and
inability to maintain a
harmonious relationship
with communities could
result in damage to the
brand.
• Failure to meet
product quality and
safety requirements:
Any failure to meet the
product quality and
safety requirements
could lead to significant
reputational risk, loss of
consumer trust.
22. 26
Stakeholder Management
F requency
S takeholder
group
Customer
Key
P roposition
Delight
M aterial
needs
1. Affordability,
accessibility,
quality, reliability
and safety.
2. Enhancing
health and
nutritional
quotient of
products without
compromising on
quality/ taste
E ngagement
Objectives
1. Develop
relationships
based on trust,
loyalty and social
commitments
2. Understand the
shift in
preferences to
catalyse product
innovation
Mode of
engagement
1.One-on-one
interaction
2 . C onsumer
satisfaction
survey
3. Call
centre/
C onsumer
Cell to track
insights and
feedback
4. Digital
platforms, social
media handles
C ontinuous
Investors Deliver 1. Business
resilience and
agility
2. Responsible
growth and
profitability
1. Become a
better investee
company.
2. Create high
shareholder value
1. Annual General
Meeting
2. Investor calls
Quarterly, Half-
yearly, Annually
23. 27
F requency
S takeholder
group
Value Chain
Partners
Key
P roposition
Include
M aterial
needs
1. Cost-benefit
terms, payment
modalities
2. Quality
expectations
3. Safety and
operational risk
management
E ngagement
Objectives
1. Sharing of
mutual
expectations and
needs, especially
with regards to
quality, cost and
timely delivery
2. Capability
building and
growth plans
3. Sharing of best
practices
Mode of
engagement
1. Periodic
interactions
(physical,
telephone, mailer)
2. Annual
meets/
events
3. Training
programmes and
workshops.
C ontinuous
Members Empower 1. Career growth
opportunities,
compensation
packages
2. Redefining value
in the future of
work
1. Technical,
functional and
needbased training
and development
2. Support career
growth plan.
3. Workplace needs
and expectations
1. Personal
development
programme
2. Learning and
development
3. Engagement
survey
4. Organisation
communication
Continuous, Half-
yearly, Annually
24. F requency
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S takeholder
group
Communities
Key
P roposition
Nurture
M aterial
needs
1. Health and
Community
Welfare.
2. Enhancing
socio-economic
development and
livelihood
restoration.
E ngagement
Objectives
1. Maintain
cordial
relationship.
2. Improve
livelihood and
create positive
impact.
3. Shared
ecosystem
Mode of
engagement
1. One-on-one
interactions.
2. Field visits and
trainings
3. Digital
platforms
C ontinuous
Regulators Adhere 1. Compliance,
governance and
risk mitigation.
2. Product safety
assurance.
3.Propelling social
leadership and
empowerment.
1. Understand
compliance and
applicable
regulations.
2. Collaborations
on national
agendas.
1. Business
meetings
2. Stakeholder
consultations
Need-based
25. Supply Chain Implemented Solution
Inbound supply chain
• Direct interaction with farmers, rather than relying on terminals and
other intermediaries.
• Stopping the sourcing from terminal markets which only acts as just
another stage of the supply chain.
• Making the supply chain simplistic by making specified copra collection
centres at various areas.
• Reducing even the manufacturing dependencies from the third party by
setting up an in-house Copra making plant.
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26. Supply Chain Implemented Solution
Outbound supply chain
• Exploring rural markets and understanding tendencies in customer buying
behaviour.
• Optimizing the amount of distributors, retailers in order to ensure
maximum product is sold at minimum cost incurred.
• Strategic positioning of warehouses and distribution centres to cater to
variable demand as and when required.
• Accomplished logistics services to ensure that there are no delays due to
transportation failure.
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27. Industry 4.0 Implementation
• Delighting consumers with new age technology. e.g.: Kaya Youth Analyser
(AI &ML)
• Tracking channel partner’s health using predictive analytics. (Big Data
Analytics)
• Increasing rural expansion through new age technology. (Geo-clustering
of villages to reach service markets)
• Manufacturing information and intelligence. (IoT sensors)
• Integrated HR platform and chatbot. (AR based training modules)
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