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MARICO - OVER THE WALL

Executive summary
Context:
According to the case, Ms.Ranjana is facing an uphill task of integrating
the whole supply chain in line with consumer demand. The instance of
Mumbai Depot presents a bleak picture of the reality against perceived
expertise. Although, it had growing primary sales figure to boast of, the
consumer sales had been taking a hit, drawing the distributors ire.
The company has been practicing push strategy for primary sales, which
has been impacting the ROI of the distributors and also resulting in
blocking of working capital. This is essentially making the distributors
more apprehensive about purchasing stock from the depot. Due to the
misalignment in the primary and the secondary forecast, the market share
took a hit. The cause was analyzed and the most imperative reasons that
were spotted include:

The presence of excess inventory with a particular distributor and


stock outs experienced in the other
The inefficient negotiations to place orders from the Depot, resulting
in the loss of potential market share.
The vast difference in the primary and secondary sales forecasts in
certain months due to the bottlenecks in the supply chain.

The Issue Analysis:


The primary analysis of the situation clearly indicates that the distributors
have been operating in remotely different areas. The Ram distributor is
primarily operating in the area which is predominantly populated with
people from the low income group. This can be read from the less volume
sales in the high end product segment and high volume sales in the low
end market segment. Also the purchase of Saffola 5L is too frequent as
compared to pouches. On the other hand, the Laxman distributor has
been operating in a much enricher part of the city as it has recorded
higher volume sales of high end products as compared to low. Another
observation has been that in certain months it has been observed that a
huge difference exists between the sales forecast and actual sales. This
can be attributed to the existing bottlenecks in the supply chain.
Key remedies:
Enhancement in the ERP module to facilitate smoother
communication between the depot and the factory.

The initiations of the Good-to-go meeting to facilitate more


accurate forecasting by taking into account both - the perceptions of
the distributor and the Marico forecasting team.
The reductions in the replenishment lead time by enhancing
transportation units and also integrating with certain local transport
agencies.
Provide logistical support to the distributors to ensure good
accessibility of their products in the target areas.
In house warehousing for particular products, thereby increasing
margins.
Inter-distributor integration so as to minimize maximum stock and
also minimize stock out levels
With all the primary solutions it is also important to note that retaining the
trust of the distributors is essential to avoid hindrance in taking orders.
Maintaining balanced stock levels will be the key to process improvements
and mitigate supply chain disruptions.