Strategic Supply Chain Network Structure Analysis for an FMCG major
Title: Evaluate robustness of its supply chain to support aggressive future growth plans of the company
Business Scenario:
- Company was primarily into 2 FMCG segments: Personal Care and Foods
- For personal care segment the company operated through a network of owned/contracted manufacturing units, depots, distributors and retailers
- For foods segment, the company operated through a network of contracted manufacturing units, depots, distributors and retailers
- Company aimed to double its top-line in next 2 years
- Objective was to evaluate changes required in the supply chain to support the growth plans and ensure servicing of markets at least landed cost.
Our Solution:
- Initial activity involved understanding of company business strategy and supply chain objectives, baselining the current network and future state business scenario identification
- Baselining the current network lead to identification of improvement opportunities in current operations
- Future state scenarios to be evaluated included
- Evaluation of feasibility of setting up new plants
- Assessing capacity expansion scenarios in existing plants
- Identify optimal plant-depot-market linkages
- Assess impact of fiscal incentives and CST phase out
- Evaluation of hub-spoke model based on future demands
- Sizing and characteristics of Hubs
- Future state demands upto 2013 were considered for the evaluation
- Target was to arrive at 2 alternate possible network structures which would aim to service markets to meet future demand and optimize on landed cost.
- Sensitivity analysis was included to account for variations in assumed values of key inputs
Benefits:
- Recommendation of new improved supply chain network to meet growth plans , with objective of minimizing cost to serve
- Identification of improvement opportunities in current network and operations. For eg: the need to reduce unplanned inter depot movements which were increasing the logistics costs.