FMCG cos in supply-chain problem, seeks help of startups

Dec 31, 2018

Startups are now seeing a massive potential in fixing the supply-chain problems of certain FMCG groups.

Facing problems in supply chain, Kolkata-based ice cream maker Rollick wanted to fix this issue so it turned to Locus for help. Lucas is a three-year-old startup that focuses on logistics management. Locus has put into operation a set of solutions, including route optimization resulting in 8% savings on costs and three hours of daily planning time.

Same happened with Chennai’s Manna Foods. It wanted to expand its presence across the country so it turned its attention to Obopay for data on distribution and seeking aid where intervention was needed.

Traditional style of retailing still rules the market, which has its own set of shortcomings and challenges. Increasing demand for consumer goods in smaller towns, with lesser number of stock-keeping units (SKUs) that FMCG companies keep in wake of feasibility planning, operational allocation and forecasting becomes a great challenge, and a lack of accurate implementation can have a direct impact on logistics costs.

 

Harsha Razdan, partner, KPMG India, said, “To ensure customer stickiness, large ecommerce and FMCG players tend to spend more on logistics to ensure quick and seamless last-mile delivery, leading to reduction in margins. Lack of integrated technology platforms across planning, forecasting, manufacturing, delivering and inventory management is also a challenge which various FMCG companies are facing.”

“In India, the supply chain responsibility is with the consumer goods company and they are all concerned about how to increase their organic reach. Route optimization solutions help keep the time spent on the road to the minimum and maximize the time spent in stores. It drives efficiency and helps fulfill demand at a lower cost,” said Nishith Rastogi, CEO, Locus.

“In consumer goods, stocks are constantly moving so IoT-based solutions can give real-time visibility on inventory. Large companies are dealing with thousands of distributors and retailers and a tech solution that can help with real time inventory management is useful for both the company and the distributor,” said Anshul Gupta, senior director analyst at Gartner. Fintech firm Obopay also provides a solution which allows companies to monitor and track the movement of goods to the distributor and retailer.

“While the large companies have their own software, 90% of the retailers still depend on pen and paper. Here the information is transmitted real-time and everyone has timely access to information. This also captures how the product is being sold, whether on credit or cash, and who it is being sold to,” said Shailendra Naidu, the CEO of Obopay.

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