The better the question
Optimize for today? Build for tomorrow?
Getting ready to manage the scale and future growth of the business.
We worked with one of India’s leading food and snacks brands to help gear up their business for future growth and expansion through transformation of their key business functions on the back of a robust technology infrastructure.
The organization operates in an industry which has been traditionally dominated by few large Indian and multinational organizations but has seen a massive rise of regional homegrown players. The organization has grown rapidly year-on-year to become the market leader in its segment. As they grew, the client wanted to further strengthen their business functions to become future-ready. They were cognizant of the need to build up the organizational capability, modernize yet simplify, key aspects of the business in order to ensure sustained growth.
The better the answer
An integrated business and technology transformation approach
Strengthening key functions and processes, with supply chain, ERP and route-to-market being the major building blocks.
EY conducted a detailed diagnostic to crystallize the capability, build imperatives and simplify the processes. Key focus areas for the organization were:
- Establishing an integrated and centralized end-to-end digital supply chain planning capability to ensure product availability and customer service levels with optimal inventory
- Having a scalable route-to-market model to deliver best-in-class sales and distribution
- Improving control of last mile execution to ensure availability and visibility at the point of sale
- Building a robust technology backbone with a market leading ERP and best-in-class business processes at its core
Based on the identified themes, EY worked on a 20-month-long transformation journey which significantly changed the way the client was functioning across its entire value chain.
- Supply chain planning: EY helped set up a centralized and integrated supply chain planning function. This included designing the supply chain organization structure, moving to a completely pull-based replenishment system to minimize stock-outs and deploying EY’s proprietary suite of Asterisk Supply Chain Planning Solutions. The institutionalization and sustainability of the entire solution was backed by change management to embed the capability and new ways of working in the organization.
- Route-to-market transformation: Focused on improving availability and visibility at the consumer point of sales across towns and cities, the initiative prioritized direct coverage expansion and range selling across urban and rural markets. This was further facilitated by significant distributor consolidation for scale and efficiency.
- Technology: EY subject matter experts with consulting and technology capabilities came together to design, implement, train and migrate the client’s existing ERP system to SAP S/4 HANA in a short span of 7 months. This entire initiative also entailed redesign of the key transactional business processes to leading industry practices, enabling a fully functional state-of-the-art integrated technology backbone.
The better the world works
Positive impact on EBITDA margins with simplified business operations
The transformation was backed by right design and implementation coupled with strong change management.
Over a period of just 24 months, the client built significant capabilities in supply chain and route-to-market with a robust technology backbone. The benefits came in the form of:
- Establishment of cutting-edge supply chain planning capability in terms of people and technology, resulting in improved availability (3-4 % reduction in loss of sales, 2.7% reduction in A-class stock out index) through better demand predictability (10% improvement in forecast accuracy) while maintaining inventory levels
- Single organization wide view of metrics through a control tower
- Scalable route-to-market model with enhanced market coverage (58% increase in direct coverage in pilot markets) and a robust model for rural penetration
- Efficient, scalable and robust business processes which were enabled and automated by an integrated technology backbone with a state-of-the-art ERP system
(Contributors include Rajan Sachdeva, Nikhil Arora, Sanjay Katyal, Aniruddha Devera Konda, Apurva Agarwal and Sumanth Viraktamath.)