Godrej Consumer Products : The Meeting Point

Godrej Consumer Products or GCPL is a part of the Godrej group, one of the
largest engineering and consumer products companies in India, with interest in
engineering to personal care products business and much more.

GCPL was an early IT adopter that implemented ERP across the enterprise as
long as a decade back. In 2004, the company decided to look beyond ERP and
leverage the Internet for connecting business partners outside the organization.
This was fulfilled with Samparka software for connecting distributors.

Need for Sampark

Due to the non-visibility of stocks at the distributor end, GCPL was forced
to depend on estimates, intuition and knowledge of the field force. Therefore
the company had a task to bring in its distributors in the IT infrastructure
fold. However, distributors were not open to sharing data with the company and
technical challenges arose as most distributors were already using other oftware.
They felt GCPL will have insights into their data which might be shared with
other distributors.

The underlying concept of the initiative is based on replenishment as it
monitors the inventory levels at the distributor end and based on that suggests
a replenishment plan. Sampark was a disruptive innovation as it called for
change in work practice, ie, from push-based ordering to pull-based demand
fulfillment. This means that orders get auto-generated triggered solely by
demands by the distributors, says Mani Mulki, executive VP, IT, Godrej
Industries.

Elaborating on the architecture of Sampark, Mulki says that particular
customized software (developed by Botree) was uploaded at the distributors
location (on a desktop) through which the distributor issued invoices to
retailers and uploaded information about goods received from CFA, etc. And once
the software was connected to the SAP database server, inflow and outflow of
information was easily done.

GCPL benefited by getting daily updates on retailing while distributors
benefited from lower inventory carrying costs. This implementation has
reorganized the push-sales tactic followed before while the distributor invests
smaller chunks of capital for shorter time-period. While the distributors
initially were wary of sharing their data with the company, the final outcome of
the initiative saw finished goods stock going down by as much as 30-40%. Word of
mouth ensured that all our A class distributors came around, adds Mulki. After
the success of Sampark, the company has extended Sampark to the suppliers and
this initiative is called Sahayog.

Returns from Sampark

There has been an overall improvement in the quality of service after
deploying Sampark as it has helped to considerably strengthen the
company-distributor relations by improving the quality of service to
distributors.

With Sampark GCPL has managed to reduce the lead-time taken to replenish a
distributor as the stock is replenished on a daily basis. The lead-time taken to
respond to market demands has also reduced as the CFAs are intimated in advance
about a stagnation or scarcity. Due to lower distribution inventory, the company
could also respond faster to competition via promotions and new product launches
without the concern about stock buy-back.

Post Sampark, the distributor shares his billing and inventory documentation
daily and can streamline his investment strategies, bank his money in smaller
units for shorter periods of time, on assured sales leading to high RoI.

The company is now looking forward to deploying a robust Business
Intelligence solution which would procure data from SAP, distributors, etc for
enabling the management to take informed decisions pertaining to business.

Stuti Das

stutid@cybermedia.co.in