Consumer Products & Retail

As consumer demands evolve, consumer products and retail companies must find the right balance between success today and growth tomorrow.

Disruptive technologies, new business models and agile market entrants are revolutionizing the way people shop, what they buy and how they live. In this complex environment, consumer products and retail (CPR) companies must shift their focus from protecting what they have to creating what they need to become.

Consumer products and retail companies must rethink how and where to serve the smart consumer. They must build the capabilities to put data at the heart of the organization and create the agility to respond to market change. Their supply chain must evolve into a transparent demand-response network.

We help consumer products and retail companies explore, identify and implement the right balance of bold strategic choices that will sustain their business today and transform it for relevance tomorrow.

The better the question. The better the answer. The better the world works.

Case study: How EY enhanced business resilience for a leading FMCG organization

EY helped one of South Asia’s leading FMCG organizations in their business transformation journey across their value chain.

The better the question. The better the answer. The better the world works.

How do you drive your business transformation without the right engine?

The South Asian FMCG major needed to transform their operations to not only be future-ready but also create barriers of entry in the market.

One of South Asia’s leading FMCG organizations was anticipating stiff competition from multinational corporations on the back of a free trade agreement (FTA) for consumer goods in the market. Easy market access for competition in the future and deep pockets of the peer group to buy market share were primary concerns for the client.

Business transformation Journey
The better the question. The better the answer. The better the world works.

We helped build business resiliency and efficiency

Strengthening systems and processes, with end-to-end procurement, supply chain and route-to-market transformation.

EY worked on a 15-month transformation journey, using a three-step approach, i.e., optimizing and addressing procurement gaps, sustaining the change and building a credible differentiator that is future-ready. The business transformation was devised with the aim to unlock greater potential across the value chain, significantly improve EBITDA and most importantly, create barriers of entry in the market.

The key initiatives of the transformation journey included:

Procurement transformation

EY helped the organization transition from a traditional sourcing and price discovery model to a scientific sourcing and procurement model by building capability across key functions such as strategic sourcing, category management, supplier relationship management and total delivered cost optimization. The initiative also helped drive defined cost savings measures such as identifying cost effective suppliers, better supplier negotiations, among others.

Supply chain optimization

EY designed and implemented robust tools for production planning (to optimize finished goods inventory and working capital) and dispatch planning (for optimizing distributor inventory and reducing loss of sales).

Downstream transformation (route-to-market)

This initiative focused on driving topline growth and creating bottom-line savings through:

  • Creating profitable channel partners with improved ROI
  • Enabled sales force with decision making support through advanced analytics
  • Customized route-to-market capability creation, focusing on specialized channels to maximize extraction
  • Optimizing cost of complexity by rationalizing portfolio
Business resilience
The better the question. The better the answer. The better the world works.

Positive impact on EBITDA margins with a stronger and wider distribution network

Addressing the gaps in the value chain, the organization is now ready to sustain the market disruption while increasing entry barriers for competition.

The client started to reap the benefits from the business transformation program within three months of implementation, in terms of positive EBITDA margins.

Benefits:

~600

basis points delivered to the bottom-line revenue

~250

basis points on procurement and supply chain initiatives

~350

basis points through route-to-market transformation

We were also able to consolidate the distributor base for greater efficiency and developed an empowered sales force through specialized trainings.

(Contributors include Nishit Bhatia, Karan Bhatia, Pratik Gandhi, Rahul Mukherjee, Guneet Singh and Niharika Mehta.)

Value chain

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