Keeping up the Supply

Building supply chain resilience and embracing digital at every stage were the biggest learnings for CPG industry post COVID

After a big jolt initially, there has been a month-on-month improvement in sales in consumer products. But for the industry to return to pre-pandemic levels, consumer product companies will need to realign their business priorities to meet changing consumer demands, build a flexible distribution network, improve the supply chain, and focus on sustainable business practices.

So, what are the lessons learnt post COVID? How big a role will technology play driving the growth of consumer product companies? What are the challenges it faces? To find answers to such and more questions, top leaders from CPG companies participated in a discussion around ‘Consumer Products Industry: Navigating a New Paradigm’ as part of the Consumer Products Conclave. The webinar was organised by ET and presented by SAP. Alokesh Bhattacharyya, Senior Editor, ET moderated the discussion.

Bisleri had a five-point agenda to tackle the pandemic. Ensuring their supply networks were active from day one, reaching customers directly through the ‘Bisleri at Doorstep’ initiative, incorporating humour in their digital campaigns to lighten atmosphere, investing in product innovations such as fizzy drinks and hand purifiers, and combining technology tools to enhance customer service. “We also learnt not to try and do everything ourselves. Leverage competent partners, collaborate within the industry and outside the industry to benefit the consumer,” said Angelo George, CEO, Bisleri International.

The need for agility in supply chain has come to the fore in the year gone by. When the lockdown was announced, companies did not know what was going to happen and what were the next steps. They had to digitise supply chain to be able to respond to the changes that were happening. In the case of some categories like healthcare, demand actually went up and it became critical for supply to be available at the right time.

“We had to rebuild the supply chain ecosystem during the lockdown because there were lot of disruptions on that part and we needed our employees to build resilience,” said Country Manager & Executive Director, Olam Agro India. With freight charges going off the roof, it was a challenge and an opportunity for most companies to fix their supply chain by getting into the right alliances and collaborations.

Some like Zydus Wellness turned to technology to look for solutions. “We put the entire value chain on a digital platform and used analytics to take sharper decisions. It helped us respond to changing consumer needs.,” said Tarun Arora, its CEO.

Technology is critical to consumer businesses, not just for customer understanding and product development, but also to drive efficiency in business processes and also identify new revenue streams. While most leading companies had already begun their digital transformation journey, the pandemic greatly accentuated it. “Even prior to Covid-19 we had embarked on our digital transformation journey. We had invested in our supply chain to ensure we get the right product at the right time at the right price,” said Lalit Malik, CFO, Dabur India. The company ensured that speed of execution and quality of processes are not compromised in the bargain. It also supported its distributor partners on their credit requirements to ensure inventory and cash flow issues are addressed.

Despite the numerous difficulties thrown up by the pandemic, it did force us to innovate. “The lockdown proved to be a hotbed for innovation,” said Sudakshina Ghosh, Industry Business Architect Team Lead, Industry & Customer Advisory Practice, SAP India. “For example, in partnership with some of the startups being incubated by SAP Labs in Bangalore, we came out with solutions to drive better safety and adherence to more Covid-19 related norms on the shop floor.”

Customer understanding and connect and honouring the trust consumers placed in brands became more important than ever. “The pandemic taught us to test new product innovations through e-commerce and other platforms,” said Arora. Direct to customer as a trend also emerged where companies wanted to create these store fronts to reach their customers. Dabur, for instance, took several initiatives in direct to reach and e-commerce which increased as a saliency from 2 per cent to 6 per cent in the company. Bilseri observed that ticket size went up because frequency of purchases went down, customers bought in bulk and wanted someone to deliver at home and moved onto online shopping.

For a dairy company such as Creamline, the machines never stopped. Even though demand fell by 30 percent, the farms were getting us the milk and it was being processed. “Farmers can’t do much about it. Our team had to find ways to get back to the customers in their house or wherever they were or use it for other products like butter. We are learning how to manage the in-home business and that’s where digital is also coming into play,” said Bhupendra Suri, CEO, Creamline Dairy. “We went backwards to integrate digitally with the farmer.”

Prudent companies also looked at cost optimisation very closely and examined each and every item to see where cost could be eliminated, where automation can be used, and where it could be differed to provide sustainable and profitable growth. With the pandemic, it started becoming important for companies to demonstrate a low carbon footprint for their products available on retail shelves. The panel concured that in India the awareness around sustainable practices is less than in other countries.

Leave a reply

Your email address will not be published.