starting its

rI{

technologyd

Itisoneof India\ leadingfast moving consumer goods (FMCG) companies. I

on a legacy.of quality and experience for more than 120 years, Dabur is
most trusted name and the world's largest Ayurvedic and Natural Health
Company. Dabur has come a long way in popularizing and making a whole
ofproducts based on the haditional science ofAyurvedi easily availible,
and
high standards in developing products and processes that meet stringent
norms. Dabur currently has 16 ultra-modern manufacturing faciliiies
throughout the globe. Its products are marketed in more than 50 countries.
Itesultg

o
o
o
.
o

Average sawings of l0 per cent across various categories

Overall ROI from the initiative of
times

ll

Btril- ding a

knowledge base of extensive category expertise

High adoption of online sourcing within the organization

Standardized sourcing process across categories

The Challenges

In 2002, Dabur initiated the change management process by introducing a

led procurement organization headed by their CpO, M..Jude iMagima.
ThJ

felt the need to professionalize its sourcing and procurement activities. To

and sustain this new initiative, Dabur engaged Ariba to implement a

that was focused on reducing costs, avoiding subjectivity, and

transparencies and global best practices in its sourcing process. The
pr

was later expanded to include category management capabilities as well.

Soon thereafter, Ariba's consulting services and technological capabilities

help
to improve Dabur's gross margins, despite inflationary trends. This initiative
lei
significant savings and expansions ofthe supplier base_especially for key
38

Mapted from www.ariba.com/customers/successstories.cfm with permission from Ariba

India.

caregory er$d
Dabut's qri

and supplier,l
was the lack 0
Before the teoi
tools and med
Another c[i

the rural and I

mteractive nej
advancementcomputer literr

Dabur by teacl

active part ofD

Another extt
diverse set of su
dealing with sr4

based in differa
spend managetr
of leadership,

ol

any commonly

The Solutions
Initial phase_A
Dabur started Ar
where the Ariba
collection tenpla
strategy based o

business needs al

and publishing a

approved potentir

TNDUsTRY

sNAPsHors 507

With that began the multi-phased spend management joumey of

Dabur with Ariba.
areas of spend.

monitor
shipments from
with order
toll-free number

Initial Challenges

representatives-

Building
Dabur is India's
Health Care
a whole range
and setting
stringent qualitY
facilities spread
countnes.

,t
jl..i

?I

;tl

.tI

rlf

pboducing a centreThe comPanY

;gimalivities. To accelerate

The chief objectives in the preliminary phase of the Ariba engagement were cost
avoidance and transparency, whereas the secondary phase was focused on achieving
excellence in processes and adoption of global best practices. In the six years since
starting its spend management initiative, Dabur has used Ariba's various sourcing
technology solutions, as well as its consulting services for relevant market knowledge,
category expertise, and change management Processes.
Dabur's spend management journey began with streamlining its sourcing process
and supplier management. One of the biggest challenges during the initial stages
was the lack of an established, standardized, and documented sourcirrg process.
Before the team implemented its Ariba initiatives, there were no internal scalable
tools and methodology to facilitate soucing in line with their sourcing strategy.
Another challenge, which was external-facing, was to enable its suppliers both in
the rural and urbar parts of India to participate in a trarsParent, dynamic, and
interactive negotiation process. In some cases, there was a lack of technological
advancement-such as internet connectivity-and in others it was very little
computer literacy. As this was a new way ofconducting negotiations, Ariba assisted
Dabur by teaching suppliers how to use comPuters and continued to remain an
active part of Dabur's newly formed sourcing strategy.
Another external challenge that Dabur exPerienced was the way to manage the
diverse set of suppliers spread across the globe. The challenge was associated with
dealing with suppliers of different cultures, who spoke different languages and were
based in different time zones throughout the world. User adoption of the new Ariba
spend management solution was never an issue at Dabur. Through an effective mix
of leadership, executive sponsorship, and communication, Dabur was able to mitigate
any commonly found risk of intemal resistance.

ment a Programme'
y, and introdu
Fs. The programme
fes as well.

The Solutions

rl capabilities

collection templates and supplier research. Data analysis that translated into a lotting
strategy based on suppliers' capabilities, manufacturing locations, and Dabur's
business needs and other strategic sourcing decision-making criteria' and building
and publishing a category-specific total-cost Request For Quotation (RFQ) to the
approved potential suppliers. Ariba also assisted Dabur in the initial managed markets

initiative led to
,This
ially for keY strategic
:bn ftom Ariba India-

Initial Phase-Ariba Managed Markeb and Ariba On-demand Sourcing Basic

Dabur started Ariba's engagement by conducting several Ariba-managed markets,
where the Ariba team assisted Dabur with data collection in category-specific data

508

sr

llLr

rA

\1.r\ \(,rrir \

by condrrcting supl)iicr nlanaecltl(.nt port lL|() pLrblicatjon [inal

I)ric(, lteg()tiations,
au:rrrling lltc busirress to thc strrcr.ssfirlsuplrlicrs.
Bitsi'cl on thc rnrtitiplc ath artlrtecs oI tIit'irri(iuI rn:ulrgetl nr;rrkers. I)alrrrl liLnrpcd
up rts sll('rd Iniura.qcnrL'nt j0nrncr $ith the inr Plcrncrrtatiorr ril r\riba ()n I)errrarrd

'I'he cate
rvt:rc'devek

an(1 th1'n

Srrrrrirrg Ilasi. techrrol.q' ai.ns *itlr lirll tirnr'--\rilra Llrrrsrrlting se'vict's. Ihis
liutht'r hclPerd l)iLbur's btrr crs t() a(l(lr( ss both thcir sh alesic arrtl intlir ect t'rPt,nscs,
*hiclr inciudt'rl rrraize clt'r'i'uti'r's, srrgar.lo.qistics, arrcl chcrricais to niull('ir i('\\..
'['his lirst
lrhlsc ol sltentl r]rilrrascrnt'trt lesultccl irr corit reductii)r, lrilnspilrcncy,
ancl strt'arnlirring ol tht soulcing proccs\. r\n exampli: lils thi: sorucing rif salliorr.
'fr arlilirtnallr',
I)llrur sortr-t r:cl salfr orr liorn scvcl strlipliels bascd in Lrclia's rrorthernrnos{ statc ol Janrnlr arrcl Kashrnir. 'l hc ntirrk(.t \\ as it r u.tual oJigolxrr., alio cver\ \,car
su1;ir)iers $oulcJ clrrotc ecpral lrli.es $'itlr I)abrrr ailotati]rg e(lual quiiotitics lo each ol
lh(fltl. r\r ii)a S( )Lrr( iru liasit hclpt'cl lo blirg r isilrilin rlor rs l ith t osl r'erh rctiou, rr, hcrcbv
lh. sulrpli.r: irncl f)rLl,r.iould st'c tltr: br.st r;tr.t.tl 1rr-itt's Ibr lh. r'Lrntnroclilt..'l he
resUit\\.astrlrnsl)arL,l:c\.r|critrtrritC),lurdelthirrrC{,cl clli:icncr ] lh(.\\\li.nt
Sin cc lhe r ollou t in l)r'r cnrl'er ol2{)02. I )LLbur hrrs r:onduclt rl .t20 sor u cirrg pr.o jcct.s
r.ia ;\riba Sotrlcirre llilsic u.itlt in cl.{c sar irrgs ol I0 per ccnt across virriorrs r:alcqoLies.
Dailrr *lrs rltlr'1. iclr:rrtilv a b.tt.r suPplit't. ltrrst' jn Clti.a. S.uth Easi ,\sia a'd
Irast.rn lrrircpean t orrntr ir-s ior r lir i,us ( ate{orirs srrch as lrlrrr.v. rril li cshcrrer.s,
juices, arrcl packinu tnirttrials to ritnl('just a fcr,v throLtlh \-iba's t.rper.tisc in lolvcost ( oun tr\' so ur cing. ,\r'iba has also he )pt'd L)alrr rr to iLr oiri rirrsht rr c inilation n hile
expancling its sultplv ltases irnrl leclrrcinq r.osts.
The Secondary Phase

Ariba On-demantl Sourcing Professionttl (Categorv Management)

F,ttcortla..:crl ltr tlte tosl sarirrgs. the ntrt Ioqical rnorr lirr. l)itlrur.uits to locus oll
catcgor\ sirecilic Process slarrdar dizittiol. visibilit' irrto its trpr:nclirtrr.s, iisk
mtitrilOt ing altci ttliligatio]1. kttott lerlge nrana.g'rr('n1, ancl irrforntt cl dccisjorr rnakint
on lroth buclgets lind ltricinu.
1b hclp achievt'thrsr: soals. I):rbLrl lrcclrrirr:<l ,\rilra ()n l)r,nrancl SoLrr.cing
llolession;ri in .\Lrgrrst
2()0{r..5inrc irnPJr.nrerrrirg the tcclrnol..qr, l)abLu rvas
'1
able ttt rnhancc roil:rboraliorr ar:ross',lrlioLrs ({cl)artnr('nts irtcrr:rllr'. as rvcll as
irnronssr sul)pli('r's. l'he <1rr;rlitv ol clr.cision rraliing. or{.:arrizalional brrr in, sourcino
visibilitv. cfliciertt,,, proccss sllutclardizatior, knorvlt:rle('cai)truinq. iurti rornJrliance
l t't't' also i'nhiurcecl considclablr.
The Benefits

Cullentlr', l)altur's sorrrcint olearrizatiou is cerrtralizccl an(l i1\ \,rLl{ ilt

ltrutt.sses
aro at a stirs('rvhere thev hir*l'ltt.err stt.r:arllinccl. ntapl;r,cl, ancl .r.rlanizt,cl rrr.ourtd
business

orr1c

ortres.

inrport ship
.\r'iba Sourr
irabling thr
Dabur h
\ovember r
thc tool. Th
r alv materie

lrcmica]s tr
paper boarc
c

Ariba So
inlo the enti
o1 cach cate

[rrr kcv catel

-l'he

Arit

L)ir

cctot

anr

cosl rcductir

contribution
u pplv man:

Irdian

acad

Nlatr:i ials M
in the fut

rnlrnagelllen
cn

ablerlenl,

-lirt:r

Motors
billion.
$11.8
rlrc top lhre
nralk"t segnr
the first rrllc
the bcst in t
bcst jrr oLrr r

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lrol

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il

\DUsrRY sNAPsHors

gotiations,

ramPed
r-Demand
dces. This
uf

;exPenses'
re a few.

lsParency,
of safton.

northemevery year

to each

of

whereby
rodity. The
n,

em.
urg

projecd

categories.

and
freshenerg
tise in low'
lation while
st Asia

to focus

Ld

I
.i:

509

'Ihe category-specific sourcing best practices are instilled within templates that
were developed for sourcing raw materials, packaging materials, logistics services,
import shipments, and indirect spend. Twenty templates have been developed on
Ariba Sourcing Professional to cover more than 3000 categories in its portfolio,
enabling the Dabur team to follow a standardized sourcing process.
Dabur has completed more than 340 comprehensive sourcing projects since
November of2006 and has built a team of20 category managers who regularly use
the tool. The category managers use Ariba Sourcing Professional to source major
raw materials such as vegetable oils, maize derivatives, herbs, spices, sugar, and
chemicals to name a few, and also for major packaging materials, such as paper,
paper boards, flexibles, and more.
Ariba Sourcing Professional has ensured improved visibility and transparency
into the entire sourcing cycle for Dabur from data collection to the business award
of each category. It has also helped in identifying and classifying the best suppliers
for key categories.
The Ariba initiative is spearheaded at Dabur by Mr.Jude Magrma, Executive
Director and Management Committee Member. His team has realized significant
cost reductions during this journey and continues to deliver. In recognition for his
contribution towards making a fundamental difference in the way sourcing and
supply maragement is practiced, he was awarded the 'CPO of the year'by a leading
Indian academic body on supply chain management, namely Indian Institute of
Materials Management.
In the future, Dabur plans to use Ariba's solution for other areas, such as budget
manement process, tracking savings across the entire sourcing programme, supplier
enablement, and nerv employee introduction.

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