ISSN 2394-3777 (Print)

ISSN 2394-3785 (Online)

Available online at www.ijartet.com

International Journal of Advanced Research Trends in Engineering and Technology (IJARTET)

Vol. 4, Issue 10, October 2017

Knowledge Management: An Application

Supply Cain in Consumer Goods
Poonam Bansal1, Dr. Shakti Prakash
Research Scholar, Management, Mewar University, India 1
Director, Management, ITS, Greater Noida, Chittorgarh, India 2

Abstract: Supply chain and knowledge management in consumer goods industry plays a very important role now a day.
Supply chain in consumer goods companies are complex while knowledge management plays an effective and efficient role
in companies to manage supply chain. The objective of this paper is to understand the effect of knowledge management to
supply chain in FMCG industry. The paper also explains the use of knowledge management in challenges and benefits
lessons learnt in a real-life case.

Keywords: supply chain, knowledge management, fast moving consumer goods

I. INTRODUCTION To backing business development and administration

conclusions and make is existing whenever and wherever it
Todays supply chain is the backbone of organizations. is desired, assembly of all applicable knowledge and
Active and well-organized management is crucial for experience in the firm from all levels gained by education,
competing supply chains. According to Kumar (2002), Fast experience, ideas, rules and conclusions (Sallis and Jones,
Moving Consumer Goods (FMCG) industries is a fast and 2002). Knowledge management can be used to attain long
responsive industry which cover wide variety of products. term aids or rewards to the new levels of effectiveness,
And confirmed by Unilever (2015:5), which stated that 150 efficiency and scope of action in an organization.
million times a day, in 150 countries, people use our
products at key moments of their day. Organisations determine and absorb innovative
technologies and new openings because of the growth in
A very complex underlying supply chain setup added technology, data and information. But the main issue
this industry due to low shelf lifecycle of some products. increases in assembly of information in usable format and in
Some advanced thoughts are produced but there are many spreading of knowledge in organisation to achieve
encounters that are tackled by FMCG industries (Kumar, organisations mission and vision.
2002) like bullwhip effect (small inconsistency in end-
customer demand effects high variability up the supply This paper explores this above complication of
chain, also known as Forrester or ripple effect). knowledge management to address the complications in the
supply chains.
New optimization methods are accepted by the supply
chain managers to address these encounters and risks that II. RELATION BETWEEN SCM & KM
also move to new supply chain risks (Ostby, 2009). Using of Knowledge management, together with SCM, will
unsuitable actions to handle supply chain matters also results confirm that knowledge, not information alone, is shared
of the performance pointers the supply chain managers use with the transaction partners. Knowledge management
to achieve and monitor the supply chain (Mishra, 2008). assistance to regulate how best to deliver the product is
Just-in-time and low-cost nation sourcing are some of the while, information can merely specify what is obligatory in a
usually used best practices are not recent day encounters business. A simple supply chain model is as shown in Figure
(Kumar, 2009). 1 to consent for the flow of knowledge, along with
information, from one end of the supply chain to the other.

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 ISSN 2394-3777 (Print)
ISSN 2394-3785 (Online)
Available online at www.ijartet.com

International Journal of Advanced Research Trends in Engineering and Technology (IJARTET)

Vol. 4, Issue 10, October 2017

Raw material Transformation Consumption

Deloitte (2009) and Kumar (2009). Making, moving and
Supply storing are less essential functions that are normally contract
out while buying and selling are the key functions that
Suppliers Manufactures Distributors Consumers typically done by the FMCG organisation, state Kumar
(2002, 2004).
Information & Knowledge

Fig 1: Knowledge exchange in supply chain

According to Bessant et al. (2003) gives reasons of inter-

firm knowledge transfer in supply chain:
1. Common interest between supply chain partners,
focused on delivering value to a particular
customer;
2. Increased in global competition, there is huge
motivation for supply chain partners to share Fig 3: Supply chain activities in a consumer goods organisation (Kumar,
knowledge and learn from each other; and 2009)
3. Potential benefits of sharing knowledge and the
learning experience, including risk reduction, IV. CHARACTERISTICS OF FMCG SUPPLY CHAIN
transfer of ideas, shared experiment, etc. To understand the difficulties of FMCG supply chains,
. one wants to know the characteristics of these supply chains.
The characteristics are categorized in two sections:
functional and structural.
TABLE I
CHARACTERISTICS OF FMCG SUPPLY CHAIN (KUMAR, 2009)
Current Knowledge Knowledge
- Current Business Capabilities
opportunities Future - Internal &
(Information & Business external
Know how) opportunities knowledge

Fig 2: Relationship between knowledge and the firm

III. SUPPLY CHAIN IN FMCG INDUSTRIES

The FMCG industry as one of the major trades in the
world with exceptional features as they are non-durable,
packaged, branded and used each month straight by the end
consumer, as specified by the Confederation of Indian Table 1 shows that FMCG supply chains use complex
Industry (CII) (2015). distribution networks and recognized the kinds of products
Co-ordinated supply networks as its asset, while low involved (including their life cycle and shelf life) and the
technology initiatives as a weakness and asymmetrical tax sharing of information among the several supply chain
structures and imports as a hazard to the industry, is the entities.
SWOT analysis for the FMCG industry as published in

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ISSN 2394-3785 (Online)
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International Journal of Advanced Research Trends in Engineering and Technology (IJARTET)

Vol. 4, Issue 10, October 2017

V. CHALLENGES IN FMCG SUPPLY CHAIN Push approach: individuals encode their knowledge
Kumar and Bala (2009) and Bala et al. (2010) highlight into a shared knowledge source, such as a database, as well
the issues faced by the FMCG supply chains: as recovering knowledge they need that other individuals
In supply chain complexity rises because in supply have provided to the repository.
chain own several production plants, including of Pull approach: individuals making knowledge
co-manufactures and co-packers. requests of experts associated with a particular subject on an
Transport problems, logistics firms and warehouse ad hoc basis.
service providers rise burden on relationships, if VIII. APPLICATION OF KNOWLEDGE MANAGEMENT IN
distribution is handled by the firm. SUPPLY CHAIN
The retail sector is the dealer-owned brands,
which makes them not only the FMCG
An Indian FMCG organisation, with its manufacturing
organisations customers, but also their opponents.
Retail sector is the industry to manufacture andsetup in North India and supply chain distribution in the
supply at the lowermost possible price and to whole country has incredible supply chain complexities. The
decline the response time. traditional issues with fast moving, short life cycles and high
volume low margin products shaped additional
VI. KNOWLEDGE MANAGEMENT BENEFITS complexities in its supply chain. The organization also has a
Middle Eastern setup, concentrating on its international
Moya K. Mason gave reasons for instituting a knowledge
customer segment, ensuing in planning and execution
management, like:
complexities.
Superior personal development and empowerment,
outcomes in rise in employee satisfaction.
Knowledge management was enabled by basic enterprise
Support to keep employees longer and thereby, resource planning (ERP) system with a few add-ons for
decreases the loss of intellectual capital from operations management reporting.
people leaving the company.
Saves time and money of an organisation by not The challenges experienced by supply chain professionals
reinventing the wheel each time a new project in this case are:
comes along. Access to information is partial
Decreases costs by decreasing and achieving Redundant and imprecise information available
economies of scale in gaining information from
Delay in processing information
external providers.
Real time decision making is not existing
Rises productivity by making knowledge available
No impactful decision making built on the
more fast and easily.
information
Provides workers with a more democratic place to
Duplicate and overlapping information
work by allowing everyone access to knowledge.
requirements and decision-making events
Learn quicker with knowledge management and
No clear roles and responsibilities
learning sooner means staying competitive.
Data gaps and missing data points
Knowledge management software and
technological infrastructures permit for global No feedback on use of information no closed loop
access to an organisation's knowledge, at a No continuous enhancement in the knowledge
keystroke. management procedure.

VII. APPROACHES TO KNOWLEDGE MANAGEMENT Despite of the above acknowledged challenges,

There are three stages of approaching knowledge i.e. knowledge management impacted the working of this supply
before, during and after knowledge management related chain in the following way:
activities. Awareness to the existing information and decision
There are two approaches of knowledge management: support process
End-to-end assessment of the supply chain

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 ISSN 2394-3777 (Print)
ISSN 2394-3785 (Online)
Available online at www.ijartet.com

International Journal of Advanced Research Trends in Engineering and Technology (IJARTET)

Vol. 4, Issue 10, October 2017

Acknowledged dependencies on supply chain International Journal of Advanced Research in Computer Science and
Software Engineering, 2(10),pp. 8-16
elements
Internal benchmarking on needs for knowledge [6]. Kumar, D. and Bala. M. (2009). Supply chain risks in todays
economy,Journal of Management, 1(2), pp. 53-62.
management
Identified areas of enhancement to address the gaps [7]. Kumar, D. (2002). CPG Industry: Supply chain drivers using
in comprehensive knowledge management process SCOR,Vision: The Journal of Business Perspective; Special Issue on
Supply Chain Management, 7(1). Pp. 99-107.
The identified benefits succeed the challenges, as per the
supply chain professionals of this case. The researcher also [8]. Kumar, D. (2004). Beyond the low-hanging fruit: using lean concepts
to peel away the supply chain inefficiencies. Industrial Engineer,
agrees with the output, representing that the knowledge 36(5), pp. 44-48.
management allows competitive supply chain setups.
[9]. Kumar, D. (2009). Balance among forecasting, network and
IX. CONCLUSION inventory,Proceedings of 3rd Annual Best Practice for Demand
Forecasting & Inventory Optimisation [CD-ROM], May 26-27,
Knowledge management is an unending process to Johannesburg.
understand the organisation aims, requirements and storage [10]. Mishra, D.P. (2008). FMCG distribution channels in India: challenges
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