Fast moving consumer goods (FMCG) companies are looking at 10-20 percent improvement in production and efficiency levels this year because of the adoption of newer technologies to track expansion of product portfolio and manufacturing locations, besides aggregation of godowns and shipment warehouses.
FMCG companies will spend around 10-15 percent of their net profit on technology. Companies like ITC Limited, Emami and Marico have forayed into diverse businesses in FMCG alone. This has not only led to the rapid expansion of the supply chain but has also increased complexities.
ITC’s manufacturing locations have increased rapidly to about 200 from about a dozen-owned manufacturing facilities for its different businesses. In addition to these manufacturing locations, ITC’s aggregating of godowns and shipment warehouses have grown exponentially in a couple of years.
Emami’s recent investment in IT has ensured finalisation of its balance sheet in a record 35 days against the 60-day norm.
Mohan Goenka, director, Emami, says: “We foresee an improvement of 10 percent in production and efficiency levels at Emami for financial year 2008-09. This will be achieved by implementing sales and operation planning, demand management and distribution resource planning which will enable system control to forecast sales, check inventories at locations, plan manufacturing resources and logistics to meet the customer schedules.”
Marico, on its part, is investing in better connectivity through enterprise portals; wi-fi enabled offices and in unified communications.
Marico is investing in automation of many workflows like Writeoffs, insurance claims, and media spend management portal.
According to Udayraj Prabhu, head, business applications, Marico: “We have commenced Project Edge, an initiative to improve the budgeting, planning and review systems using the TM1 tool of IBM-Cognos. This will enable us to strengthen our budgeting, planning and review processes by making them quicker, error-free and less tedious. This should lead to a significant saving in time for those involved in these activities.”
The company has also launched HR portal platforms as active channels of communication within the organisation.
ITC Ltd is building an IT infrastructure to bar code its produce at the warehouse itself, even before it reaches the retailers.
This is expected to help ITC keep track of product manufacturing time, thereby enabling implementation of first-manufactured-first-out (FMFO) strategy, which means items manufactured first are shipped out of the factory and the warehouse earlier than products manufactured later.
Among other projects, ITC will also implement this year usage of ‘push technology’ for its sales force.
VVR Babu, chief information officer, ITC Ltd, says: “Each salesman is allotted specific locations and he has to track sales and requirements of all shops and stores of a particular area. We are working on an integrated IT system which will gather and push information onto our salesmen’s laptops so that they don’t have to waste time looking up details on the company portal. For instance, if a salesman is covering 10 outlets of a region, every evening ITC’s systems will push onto his laptop the sales, distribution and requirements of that region and also the target to be met.”