Case Study

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.

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Consulting

The team

Ashish Nanda, EY India Market Segment Leader for Consumer and Health Services (CHS)
Ashish Nanda
EY India Market Segment Leader for Consumer and Health Services (CHS)
Business transformation Journey
1

The better the question

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 resilience
2

The better the answer

We helped build business resiliency and efficiency

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

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Case study: How EY optimized the supply chain of a leading Indian MNC

EY helped a leading FMCG company optimize vendor costs, eliminate redundancies, and create sales & operations platform. Learn more about supply chain case study.

    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
    Value chain
    3

    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:

    basis points delivered to the bottom-line revenue
    basis points on procurement and supply chain initiatives
    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.)

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