Guest Blogger, Viktoria Sadlovska, is the co-founder and managing director of Prameya Research Pvt. Ltd. Prameya Research is at the forefront of supply chain management research focused on emerging markets. Prameya Research conducts its own innovative research and additionally offers research outsourcing and emerging market value chain support services to clients worldwide.
November 7, 2013
Supply chains in the BRIC markets have been undergoing rapid changes, with various optimization and restructuring efforts under way over the past decade. In this process, many firms have realized the need for automating certain supply chain management processes as they were trying to scale up their operations, reduce costs or increase efficiency.
One of the areas of heightened interest today is the optimization of warehouse and fulfillment operations in Fast-Moving Consumer Goods (FMCG) industries. In developed markets, the current debate centers around the best ways to achieve efficient omni-channel fulfillment and e-fulfillment. This topic is becoming increasingly relevant in emerging markets as both organized retail and electronic sales are poised for continued rapid growth in the near future.
To achieve increased efficiency in warehouse management and fulfillment processes, as well as prepare for future expansion of business operations, companies need to implement a number of warehouse automation software solutions, with WMS (warehouse management system) being an indispensable component of their enterprise IT eco-system. Many of the successful FMCG companies in the BRIC markets have been early adopters of these warehouse automation technologies. Some of the examples of their supply chain execution improvement efforts are discussed below.
Improving Throughput and Turn-Around Time with WMS in India
In an interview with the Head of FMCG Supply Chain at one of the top business conglomerates in India, we discussed the path the company had taken in improving its warehouse management. The company operates over 50 warehouses throughout the country, most of them outsourced. However, due to the warehouse operators’ lack of maturity, the company needs to continue working with them to ensure that warehouse management processes are efficient and up to the company’s standards. It has been working closely with its outsourced warehouse operators, training their staff and helping them implement the needed software technology.
Five years ago, the company was using an SAP ERP solution, but did not have a warehouse management solution. It then decided to implement the SAP WMS module which would integrate seamlessly with its ERP. The SAP WMS is now up and running in at least six of company’s warehouses. The Head of FMCG Supply Chain notes that initially there was resistance to the use of new WMS but with time the company was able to improve visibility into its warehousing processes and increase throughput. As a result of implementing the WMS, “throughput has improved significantly” and the turn-around time has been reduced from 1-2 hours to about 40 minutes.
Automating Supply Chain Execution in Russia
Holding company “Holiday” operates a large retail chain in the Western Siberian region of Russia with over 340 retail stores under various local brands. The company has embarked on a multi-year journey of automating its supply chain execution processes. In 2007, the company implemented a WMS solution from a US-based software vendor Manhattan Associates. The WMS helped the company optimize the management of its three distribution centers.
In early 2013, Holiday announced new business expansion plans and its intention to replicate the implementation of WMS Manhattan SCALE (formerly Manhattan ILS) at its new distribution center near Novosibirsk. The company cites increased efficiencies due to using the system and its flexibility as positive points, leading to its decision to expand the usage of the WMS.
Implementing Best-of-Breed Supply Chain Software in Brazil
Last month, CASA&VIDEO, a major Brazilian home improvement, electronics and appliances retailer, purchased a number of supply chain planning and execution solutions from a US-based software vendor JDA (read the full press release about this here). On the execution side, the retailer decided to implement solutions in support of its fulfillment, warehouse and workforce management. According to its CEO Fabio Carvalho, CASA&VIDEO is implementing these solutions to “help us maintain our competitiveness, improve our efficiencies and service to our customers”.
These and other similar stories highlight the growing emphasis on building supply chain execution excellence in FMCG companies in the BRIC markets. Similar to their counterparts in developed markets, companies in BRIC and other emerging markets are realizing that maintaining a long-term lead in the FMCG industry requires a seamlessly working supply chain. Many of the large and mid-size firms in these markets are in the process of adapting their supply chains accordingly, with a primary focus on improving their supply chain execution.
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