Consumer companies hit bump in digitising the supply chain

Consumer companies are working on ways to not just digitally capture data of reta­ilers, who sell their products, but also help them place orders directly with distributors. However, the issues companies face are that if they digitise retailers’ lists, it becomes difficult to push slow-moving packs and introduce launches through retailers.  These are typically done by a company’s ground sales team. Also, retailers are not keen on placing orders digitally yet.   Despite these challenges, companies are looking to digitise the supply chain.  This is.....
Consumer companies are working on ways to not just digitally capture data of reta­ilers, who sell their products, but also help them place orders directly with distributors.

However, the issues companies face are that if they digitise retailers’ lists, it becomes difficult to push slow-moving packs and introduce launches through retailers.  These are typically done by a company’s ground sales team. Also, retailers are not keen on placing orders digitally yet.  

Despite these challenges, companies are looking to digitise the supply chain.  This is because it helps in not just making it simpler to receive orders directly from the retailer but also aids in capturing data. This, in turn, helps in servicing the retailer more effectively. It also helps companies read the demand scenario from various retailers in the same area.  

Parle Products has a system called sales force automation with its on-ground sales team to help it capture demand from retailers.  Mayank Shah, category head at Parle Products, said retailers are not keen on digitising their stores. “The other issue consumer companies face is if the retailer orders online, then he is more likely to place orders of products that have better offtake and may not order other products. But when the salesperson visits the store, he is able to push for slow-moving units and new products,” Shah said. 

CavinKare has been piloting an app with 40,000 retailers to place orders with them directly. It currently has 10,000 retailers that are active on the app.  Venkatesh Vijaya­raghavan, chief executive officer (CEO) at CavinKare said the retailer is exposed to so many companies and the solution cannot be a common app.

The South-based fast-moving consumer goods major is also looking at a WhatsApp-based interaction with retailers to place orders that will be linked to the company’s distributors.  Taking orders online from retailers is one way for us to make sure that there isn’t a shortage of stock with the retailer, said Vijayaraghavan, pointing out that the implementation of this is not easy. 

“In the direct-to-retailer space, the traditional salesman-based ordering at fixed intervals (weekly or fortnightly) is moving towards the retailer self-ordering through market aggregators (like Udaan) or even through orders taken on the company’s digital asset (Shikhar, Metro app),” said Akshay D’Souza, chief of growth & insights at Bizom, a retail intelligence platform.

He added that retailers typically order through an application “but off late, we’re seeing increased acceptance of WhatsApp-based ordering from the kirana channel.” 

Dabur India is working on increasing its coverage and has tied up with MapmyIndia for visualisation of its existing coverage across urban and rural geographies. “Dabur has also rolled out suggested order module, an artificial intelligence and machine learning-based algorithm that helps the salesman drive the right assortment in store to leverage cross-sell and up-sell opportunities,” said Adarsh Sharma, executive director (sales) at Dabur. 

“Companies have deployed multiple methods to ensure retailer data entry and are using them for demand planning,” said PS Easwaran, partner and leader for supply chain, Deloitte India. 

Easwaran added, “If these are not feasible, due to geographic, infra or other constraints, companies look at other levels in the supply chain to capture demand.” 

Companies incentivise the channel by optimising the working capital cycle and their inventory with the data collected. They also offer higher margins to distributors and retailers as an incentive.  


Key stories on business-standard.com are available to premium subscribers only.

Already a premium subscriber?

Subscribe to get an across device (Website, Mobile Web, Iphone, Ipad, and Android Phone applications) access to Premium content, Breaking News alerts, Industry Newsletters, Stock and Corporate news alerts, access to Archives and a lot more.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel
Read More on

SUPPLY CHAIN

RETAIL SPACE

INDIAN COMPANIES

CONSUMER GOODS

COMPANIES

NEWS


Most Read

Markets

Companies

Opinion

Latest News

Todays Paper

News you can use