Marico is an Indian consumer goods company providing consumer

products and services in the areas of Health and Beauty based in Mumbai .
The organisation hol ds a number of brands including Parachute, Saffola,
Hair&Care, Nihar, Mediker, Revive, Manjal, Kaya Skin Clinic, Livon, Set Wet,
Zatak, Fiancee, HairCode, Eclipse, Xmen, Hercules, Caivil, Code 78 and Black
Chic.

Maricos strategy of Supply chain


We could see that in in response to the growing International competition
from rivals Unilever and ConAgra Marico started increasing efforts on building new
brands. It conducted Extensive advertising, innovative promotion schemes
Advertising expenditure increased steadily. The introduction of more products and
more brands lead to more costs and incurred more costs to the company in
production. Marico decided to go on an expansion strategy and it started to
introduce more brands and tried to increase reach created Supply Chain problems
1995 Focus on Brand
Development
This was in response to
the growing International
competition from rivals
Unilever and ConAgra
For survival -Increased
efforts to develop new
brands
Reduced reliance on 3
market leader brands -
Parachute coconut Oil
,Saffola and Sweekar
Introduction of more
products and more brands
incur cost
Extensive advertising
,Innovative promotion
schemes Advertising
expenditure increased
steadily
Expansion strategy
introduced more brands
and tried to increase reach
created Supply Chain
problems

Outbound Supply chain for rural markets











Outbound Supply Chain Transactions


But the outbound supply chain transactions lack of integration among
transaction systems. I resulted in
Poor visibility into internal operations
Did not scale with increased logistics requirements
Inaccurate forecasts, long planning cycles, no transparency of warehouse stock,
delayed response to customer needs
They also faced problems in distribution of trucks
The problem was that they shipped only full trucks
Obstacles to good distribution:
Random decisions due to
Poor visibility into the depot stocks of growing number of SKUs
No prioritisation rules for configuring optimal truckloads
Monthly distribution levels
First 20 days: 16-32%
Last 10 days: 53%
Result
Needed to hire extra space when shipment exceeded depot facility
Excess inventory for some SKUs, stock-out in others
Higher deliver costs
Erosion of sales, distributor confidence and customer satisfaction
The solution to the problem was using my SAP business Intelligence and big bang
approach for SAP implementation. At Company factories, warehouses, business offices,
contract manufacturers


The following ways can be used to implement change
Lower inventory and supply chain cost
Technological support through highly integrated applications system
Resolve forecasting problems, eliminate inventory and stock-out problems
Partner relationship with distributors
BENEFITS OF REDISGN
Operational improvements reduced planning cycle from 30 days to 10 days and
also improved forecasting accuracy. I also improved delivery reliability and
improved forecasting. Both primary and secondary sales figures were available
Improved distribution lead to the
VMI implemented for C&FA
SAP heuristics ensured shipments are sent in full truckloads and that depot
inventories simultaneously remain within prescribed inventory norms
Improved distributor relationship: reduced bullwhip effect
Partnership relation with distributors
Monitor and manage distributor inventory by replenishing stock on the
basis of secondary sales
C&FA supposed to replenish distributors within specified period or face
penalty.

Marico From Copra to Coconut: Marico i s the largest buyer of copra
in India with about 100,000 tonnes a yearand is striving to meet steadily
growing demand for its popular range of Parachute coconut oi ls, reliable,
resilient and sustainable in-bound raw material chains are a lynchpin for a
crisis-free future. The difficult years spent to broad-base supply has
evidently borne fruits for the company feted for its supply chain innovations.
The recent unveiling of a pilot collection centre near Madurai in Tamil
Naduwhere farmers can troop in with their raw coconutsis a milestone.
Earlier, Marico would buy onl y copracoconuts sun-dried by its vendors. This
migration from copra to coconut is signifi cant. After an effort spanning two
decades to dis-intermediate its copra supply chainridding i t of exploitative
structures and agentsand infuse it with technology platforms for quick,
transparent transactions, FMCG major Marico is nearing its holy grail: the
enviable situation of dealing with the smallest possible vendora marginal
farmer with a few coconut palms in his backyard.

One-Stop Shop: This collection centre, one of the thousands it has, has
machines to de-husk, de-shell and dry coconuts. Farmers disinclined or
unable to convert their coconuts to copra can sell their produce here. The
Madurai centre is a turning point in streamlining the supply chain and
establishing a relationship with the smallest farmer possible, without
engaging in contract farming. Marico has suffered during two bull runs in
coprain 2003-05 and in 2008-09as middlemen salted away copra in
warehouses. From Rs 18,000 a tonne in 2001-02, the price peaked at Rs
52,000 a tonne in 2005. To break this stranglehol d, Marico set a goal of
reaching out to the l argest possible mass of peopl e willing to sell. The idea
was farmers dont usually hoard. Their aim, always, is to sell their produce as
quickly as possible and invest in the next crop.
In the early years, Marico sourced its copra from terminal markets of Kerala
a beehive of agents and unions. There was the transporter, who doubled up
as trading facilitator; traders undertook fumigation, drying and sorting; a
workers union also sorted; another union filled copra into sacks, and stitched
and loaded them; and yet another union stacked the sacks in trucks. All these
activities cost around Rs 500 a tonne and gunny bags cost another Rs 300
per tonne.
Knowing that sourcing from terminal markets couldnt go on, Marico
diversified into buying directly from indivi dual traders, who moved truc kloads
of copra directly to i ts factory. Simultaneously, the company started
developing a sourcing base in Tamil Nadu to de-risk itself from Kerala. In
2002, with of reverse auctions, price discovery and a feel of the quantity
available became much easier. This prompted a month-long blockage by
Kerala traders. Another tactic adopted by angry traders, to break and
discredit the auction system, was to offer copra at lower prices than those
accepted by Marico, after auction hours. Marico buyers, however, refused to
renege on the high prices contracted. Traders even complained to top
management that the company was incurring losses by buyi ng copra at
higher prices. However Marico had decided it would not go for offline buying
.They set up a transparent system and ensured the process never violated.
A web-based system was also crafted. Marico set up its first copra collection
centre i n Perambra, Kerala. It was another significant step i n broad basing
supplies and also enabled Marico to rehabilitate smaller agent s as centre
heads, paying them Rs150 a tonne as commission. Today, over 50% of copra
procurement by Mari co is through its centres; the rest comes from normal
trade.