52 Citie s
Asset Heavy Business FG = 85% of Working Capital FY 2001: Break-through FY 2002: Rebuilding S&M, setup of SCM function
SCM Initiative
Supply Chain Project ASPIRE
Extremely asset heavy model
Improve ROCE to 25% or above Bulk of working capital locked in stocks (Raw Material + WIP) / Finished Good = 20:80 Improved sourcing of primary raw material
Impure to pure marketing campaign to dispose rest of stock Mechanism to address the issue in future Displaying best seller and modifying display config. Identifying non-moving annually Modifying product launches Disposing sludge through discount Permissible level of sludge depending on size and scale of boutique
19 slow moving categories contributed to less than 5% of total sales. Lesser stock turn for these products vis--vis over all turns Identification of zero potential product categories
Performance analysis of each boutique based on age, potential of growth and cash flow Five boutiques brought under close observation Two boutiques finally closed down due to financial unviability
New Channels
Prototype Enabled Sale
Prototype of high value products Range of design Reduced inventory Responsive business Hub & spoke with delivery in one week
Consignment sale
Display of Vendors stocks Range of Design without any investment
40
40 30 20 10 0 2001-02 2002-03 2003-04
29 13 15
25
28
Sales Stock
8.3 6.74
9.3
9.76
3.5
Remodeled OG&F
Cycle stock at the boutique & safety/replenishment stock at the factory From Reactive to Proactive supply chain Totally automated using IT tools.
Better discipline with the introduction of boutique wise, cluster wise stock norms
Transparent system of tracking mechanism & reduction in indent processing time to two days. Help desk was set up to enable single point contact with SCM
Suppliers
Manufacturin g
Inventor y
C&FA
Suppliers
Manufacturin g
Inventor y
C&FA
Strategic Outsourcing
Utilization of market potential and reduce cost rather than investing and increasing production capacity. Initially started with 50 vendors .
Karigar Parks
Company developed ancillary units. Helped in controlling cost of operation & help in introducing new designs into the market thus increased sales and profitability.
MEADOWS
Management of Enterprise & Development Of Women. Initiative started with SHGs assembling the discrete links of bracelets resulted into outsourcing.
Tangible Benefits
Sales (in crores)
484 389 299 141 32 38 73 188 -10.6 -10.4 12.3% -5.56 8.3% 8.5% 2.07 1.87
669
ROCE (%)
25% 20.7%
-21.96
FG Inventory is within 10% of stock norms in comparison with 22% last year
Challenges/Solutions/Impact
Challenges
Poor Stock Management
Solutions
Gather insights from franchisee model two boutiques
Impact
Key performance measures are total FG inventory including GIT against norm, delivery alignment. Managing logistics and reducing cost, tracking non-moving stock and stock turn at every retail point.
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