Context and challenges faced
- As a FMCG company operating in different divisions e.g. personal care, food, dairy and beverages, the client had been struggling to get a clear view of profitability across divisions affecting its ability to take informed business decisions. With a lot of manual number crunching, both speed and accuracy of reporting was a challenge.
- There was a need to refine the client’s reporting framework and sales hierarchy before finalising the technology solution design.
- The key objective of the engagement was to provide the management a clear and accurate view of cost and profitability starting at the division level going up to region, brand and SKU levels.
- We also took up this opportunity to introduce a number of improvements and automation in the operations, especially around finance, supply chain and logistics.
- Real-time reporting providing drill-down information of profitability to SKU level.
- Management of inventory and products with better shelf-life usage for ever-increasing demands of the customer.
- Optimisation of the production process by creating demand and capacity-based production planning across multiple plants both owned and exclusive third-party units.
- Reduce transportation and freight cost from 6 per cent to approx. 3 percent of the SKU cost
- Increased order fill rate by optimising the supply-chain and logistics process
- Use of S4/HANA Transport Management module to optimise truck utilisation, routing of trucks and estimating costs for freight.
- KPMG in India charted out a digital-transformation roadmap for the organisation across two years and three phases
- The first phase consists of greenfield implementation of S/4HANA, SAP BPC (planning) and analytics on cloud to set up a digital core, enabling further adoption of intelligent automation
- Phase I started with us establishing business and functional KPIs with the top management and drew business processes aimed at seamless reporting of the agreed KPIs.
- To ensure result-oriented implementation of S/4HANA, we jointly identified six KPIs across the core functions that would be tangibly improved using relevant S/4HANA features – Project KPI approach
- With a Powered Enterprise enabled approach, we ensured incorporation of leading CPG practices in solution design
- KPMG in India proposed consolidation of all the interfaces using process orchestration for seamless exchange of data within existing system and set up a robust platform for future systems.
KPMG in India’s insights
- While most of the technology implementation projects do not have a clear ROI, KPMG in India worked along with the management team to identify six KPIs across diverse functions such as finance, supply chain, logistics and operations with a clearly defined target for improvements
- This ensured that the business case for the project was accepted and owned by business
- Monitoring mechanisms have been deployed for the KPIs since going live on 1 April 2019 and improvements have been observed so far in line with the expectations.