Hair & Care Case Study

Case Study

Hair & Care Products is one of Asia’s leading FMCG (Fast Moving Consumer Goods) companies with market share of over 30 % in shampoos & hair oils.

There are two main manufacturing plants making the base oil which are in North India and Bangladesh. The main markets are West/East regions in India and MENA region countries. The co-packers & RM (Raw Material)/PM (Packing Material) suppliers are spread over South of India & SE Asia. The company has agencies in the MENA (Middle East North Africa) countries and directly imports products from India to these countries.

The company has 2 major brands, GLOW in shampoos, SHINE in hair oils. Both have 5 SKUs (Stock Keeping Units) each (50 ml, 100ml sachet, 50-100-200ml bottle). 50 & 100 ml sachet & bottles are the fast movers with 80 % volumes on value/volume basis. All SKUs are treated similarly for forecasting & replenishment. There is a demand team which does forecasting & replenishment based on top management target driven approach. Only historical databases are used.

In the current year the company has faced innumerable stock outs on all SKUs There are numerous issues which can be summarized as follows:

1. The subcontractors /co-packers are fed up of numerous changes in the Packing materials /FG (Finished Goods) mfg plan and SKU mix changes. They are unable to fulfill PM/FG requirements on time.

1. The agencies in the MENA have numerous back orders to be fulfilled for their requirements. Safety stocks seem to be insufficient for the fast moving SKU’s. Slow moving stocks are facing obsolescence & expiry.

1. Numerous production line shortages in the factories in India/Bangladesh due to PM & RM shortages

1. Uncontrollable escalations in freight costs.
2. The Purchasing dept is faced with numerous changes in requirements. They focus on quantity discounts only. They are facing major stock outs in Plastic RM as they were buying this from one supplier who has major shortfalls in capacity. All sourcing is done locally in India.

1. There is high spending on last minute priority dispatches through express cargo /air cargo dispatch.

a) Categorize & discuss in details the broader issues faced by this company in logistics, supply network & Supply planning.

b) Prepare a roadmap for implementation for efficient supply chain management strategy