An efficient transportation system demands cost effective and clean logistics. But this is often a challenge for Fast Moving Consumer Goods (FMCG) companies where many stakeholders and various communication touchpoints are involved. Here is how Reckitt & Benckiser India (RB India) tackled this.
RB India is a FMCG giant operating out of sixty locations across six continents world-wide. It has been producing and delivering products in the home, personal and hygiene care categories since 1819. Its India operations too has a vital role to play in the company's global output. Sreeji Gopinathan, Regional IS Director, RB India, says that the company’s Indian operation ranks third after its U.K and U.S operations in terms of revenue.
Some of the critical aspects of FMCG logistics involve reliable transportation and deliveries. This brings with it the responsibility of ensuring complete transparency throughout the process. Consequently, the team at RB India felt that the strategy behind logistics, supply-chain management and payment systems was due for a thorough revision. “There were significant leakages in the system where spends were managed as black-box,” says Sreeji Gopinathan, Regional IS Director, RB India.
The company therefore decided to deploy a transport management system designed to bring in transparency across functions and stabilize conflicts amongst stakeholders. This tool enables a process driven transportation management cycle. “In the existing set-up, continuous improvements are being driven to utilize other savings-levers like detention costs. And the insights coming from the system like the truck-placement-efficiency and Carrier Scorecard (CS) help improvize service levels by working with transporters as partners,” says Gopinathan.
The key features of this system include spend analytics which includes both planned and unplanned spends, CS, detention analysis, sourcing optimizer and the load optimizer.
This implementation has enhanced operations over three key areas including the finance, transporter system and Carrier and Forward Agents (CFA). “There is better compliance with contracts, complete transparency on transporter payments based on the approver/checker model and the three way match has significantly reduced finance-logistics friction,” says Gopinathan.
A more efficient payment system helped cut down on delays. “The improved payment cycle has eliminated the need for manual interventions during payments. A vital tool like the CS helps transporters measure individual performance and keeps them competitive,” says Gopinathan.
With the CFA structure, supply-chain issues like shortage, damage and detention with online proof of delivery were managed smoothly.
Gopinathan says that since the deployment of the new system the logistics and freight costs have come down by 2 per cent, and the annual carbon emissions have reduced by 1000 metric tons.