marico erp
DESCRIPTION
Exhaustive analysis of ERP implementation in Marico IndustriesTRANSCRIPT
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By:Anshul Agarwal-01 Ashish Bansal-03 Vikram Bothra-06 Rahul Rathi-21 Gaurav Surana-30
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OUTLINE
Introduction to Marico
Supply Chain and Nature of Challenges Faced
Initiative Implemented
Results and Sustenance
Future Ahead
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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
30 Depots, 1000 Distributor
25 lac Retail Outlets (Reach)
Reaching 13 Crore consumers
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MARICO-SUPPLY CHAIN TRANSACTIONS
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Nature of
Challenge faced
in
Supply Chain
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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.
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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.
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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
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INTERNAL OPERATIONS PROBLEMS
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MARKET PLACE PROBLEMS
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DISTRIBUTION PROBLEMS
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ORDER PLACEMENT PROCESS
Distributor Marico
Sales Order
How does Billing Happen?
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
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THE VICIOUS CYCLE
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Solution AdoptedSolution Adopted
for for
Supply Chain Supply Chain ChallengesChallenges
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IMPLEMENTATION METHODOLOGY
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SOLUTION IMPLEMENTED
MIDAS
Minet
APO
BIW
ERP
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
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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.
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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
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MARICO IT SYSTEM - OVERVIEW
R3
APO
BIW
MIDAS
MIDAS
SDMIDAS
USERS
MI-Net
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MARICO IT SYSTEMS
• Distribution Automation Software package- MIDAS (MARICO INDUSTRIES DISTRIBUTION AUTOMATION SOFTWARE)Received distributor stock and sales data in offline mode
through floppy transfersBut 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
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MARICO IT SYSTEMS
• MI-NET directly linked to SAP R/3 Stock in TransitDepot StocksPending OrdersStatement of AccountsPromotion Schemes to distributors
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MARICO IT SYSTEMS
• Potential Primary developed using mySAP Business Intelligence
Average sale of the previous three monthsDevelops and reports brands and regional sales
potential that should be targeted by the sales groupCumulative actual sales to date—mySAP provides
daily updates through Primary PotentialProactive work rather than Postmortem analysis
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MARICO’S EXTENDED SUPPLY CHAIN SYSTEM
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Impact and BenefitsImpact and Benefits
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VENDOR MANAGED INVENTORY (VMI)VENDOR MANAGED INVENTORY (VMI)
Places order
Distributor Marico
Replenishment based on order
EARLIER
NOW WITH VMI
Distributor Marico
Replenishment based on norms
MIDAS Mi-net APO SAPOrders are automatically generated
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SAP
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SAP APO
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OPERATIONAL IMPROVEMENTS
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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
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Thank You