IT in FMCG Sector

SECTOR OVERVIEW

Evolution of FMCG in India

During 1950s to 1980s the due to low purchasing power and

lack of support from the government his the investments in

the FMCG industry were very limited.
Hindustan Lever Limited (HLL) was the only MNC company
had its manufacturing base in India.
Nirmas entry changed the whole Indian FMCG scene. As the
company focused on the value for money plank,It set an
example for others to Follow.
Post 1991, the lowering of the trade barriers encouraged
MNCs to come and invest in India to cater to 1bn Indians
needs.
Today companies like HUL,ITC,P&G, Godrej Consumer,
Marico, Henkel, Reckitt Benckiser are focussing hugely on the
untapped rural markets .

Current Scenario
The fourth largest sector in the Indian economy , FMCG

INDUSTRY has grown at an annual average of about 11% over

the last decade
The market size of the Indian FMCG sector is expected to reach
US$ 135 billion by 2020 from US$ 44.9 billion in 2013
Two-thirds of the sector's revenue is comes from Food product
(43 % market revenue ) and personal care (22% market
revenue)
The overall fast moving consumer goods (FMCG) market is
expected to increase at a compound annual growth rate (CAGR)
of 14.7 per cent to touch US$ 110.4 billion in the period 20122020
Out of this the rural FMCG market anticipated to increase at a
CAGR of 17.7 per cent to US$ 100 billion during 2012-2025.

Some of the leading FMCG Players

KEY PERFORMANCE AREAS

Key Performance Areas

KPAs are key areas of performance of a business. KPAs analysis enables learning and
improvement on critical operations, capabilities and processes across business domains. The
scope of KPAs cover all the actionable activities performed within an organization. These
activities center on three broad categories referred to as Business Domains. The three business
domains are:

Demand Management

All the actionable activities involved with generating demand for the products and services
offered by the
organization.

Supply Management

All the actionable activities directly involved with satisfying demand for the products and
services offered by the
organization.

Support Services

All other actionable activities involved with supporting the organization. These services
operate within
organizations by providing services to internal clients. They operate on
business principles and provide internal services at a cost and quality that is acceptable to its
clients, when assessed against alternatives.

KPAs Continued.
Business Domain

KPAs

Demand Management

Market Responsiveness
Sales Effectiveness
Product Development Effectiveness

Supply Management

Customer Responsiveness
Supplier Effectiveness
Operational Efficiency

Support Services

Human Resource Responsiveness

Information Technology Responsiveness
Finance & Regulatory Responsiveness

BEST IN CLASS

P&G IT implementation
P&G is considered to have a trailbaizing IT implementations in

the field of FMCG Companies.

P&G recently announced that it is increasing its analytics
workforce fourfold.
The company clearly believes that analytics as a core source
of competitive advantage in the coming years.

Information Systems used for

improving productivity
Web 2.0 for online activities and websites.
Blogs for sharing information with others.
Custom search engine- Allows employees to share bookmarks and tag

content with descriptive words that appear in future searches. It also

facilitates social networks of coworkers to find and share information more
effectively
A Complete Collaboration system led by suite of Microsoft products
such as Live Meeting, SharePoint
InnovationNet, a browser-based portal, contains over 5 million research
related documents in digital format.
Tele Presence Conference Room by CISCO. An excellent way to foster
collaboration between employees across not just countries, but continents.

Presentation of data by P&G to

decision makers

Decision Cockpit
An Enterprise Information Management System
Developed by Accenture
Its primary function is to provide quick information
to multi-functional teams around the globe
Its a portal based system and the only relevant data
are accessible to the managers.(privilege)
More than 90% Business Units are using it and the
portal has spanned across 80% core processes
Decision Cockpit consists of a portion named
Efactbook which is basically a scorecard about
performance of a division/SKU/BU. (Reports on Selfappraisal)
Another component of DC is PeopleConnect
which helps the manager to connect with his
subordinates.
Decision Cockpit is operational 24X7 worldwide and
has helped the Co become more agile.

Business Spheres
Hi-tech conference rooms
allows company leaders to harness massive

amounts of data to make real-time business

decisions.
operational in 50 offices across the globe
Large screens are fitted on the walls and
people from many Centres discuss amongst
themselves with embedded analysts from
P&Gs Information and Decision Solutions
group aiding their deliberations with Spotfireenabled visuals.
Spotfire is an application that builds analytics
software to help in Business Intelligence.

Heatmap
Usually used in the meeting of top manager who rely less on

exact data and more on processed data

All the products/brands are clubbed together in this graphical
representation
Red Color: Low Market Share Green: High Market Share
The heat map simultaneously shows all the markets in which P&G
products compete and their relative share (red indicating low
market share and green indicating high market share),
. P&G tries to make its graphics and colors Apple simple to
ensure that managers can focus on the important business issues
wherever they are in the world

Business Sufficiency Models

Primary aim is to focus on exceptions and provide forward looking projections

and scenarios
Of 2 Types: i) Why Model and ii) What Model
What Model: focus on data such as shipments, sales, and market share
What Model: displays sales data down to the nation, territory, product line, and
store levels, as well as factors such as advertising and consumer consumption
(considering region and country-specific economic data)
The two models are common in the following manner:
They focus on exceptions, whats doing better and worse than
expected(managers can adopt best practices and amend unsuccessful practices)
The models are predictive, and delineated via dashboards, charts, and
supplemental analytics generated through data visualization and analysis
software

SAP in-memory computing at P&G

SAP HANA has been deployed at P&G
Completely rethink the transactional systems and analytical

systems around them, Depth i.e. much lower levels of granularity

Speed enhanced from several days to seconds to process the data
Mobility for managers
Short term focus is on financial management
Scalability of SAP was a major reason for going for it
User should not have to think about the IT system and rather use
it intuitively also provides Single point of access

Channel Partnership between

Wal-Mart and Procter & Gamble

Supply-Chain Integration through

Information Sharing
Development of inter-organizational

information systems (IOIS)Transactional, operational and

Strategic
Technology played a key role in Joint
scorecards and measurements,
Driving out costs through
automation, Sharing data to better
understand the consumer and drive
sales

 Development of Continuous Replenishment Process (CRP)Reduction of Bull Whip effect and reduction in inventory
levels

References
http://proctorngamble.blogspot.in/p/information-systems-used.html
http://

www.cisco.com/en/US/services/ps6887/ps10672/External_CaseStudy_Procter_Nov2009.pdf
http://www.digital-ecosystems.org/doc/nov17/pg/Procter_and_Gamble.pdf
http://citebm.business.illinois.edu/IT_cases/Graen-Shaw-PG.pdf
http://www.cio.com/article/2854239/cio-role/pandgs-filippo-passerini-stands-out-as-a-stellarexample-of-the-strategic-cio.html
http://www.slideshare.net/nightfurryfaysal/mis-case-study-procter-gamble
http://community.aiim.org/blogs/bryant-duhon/2014/06/04/digitizing-rd-pgs-businesstransformation-success-story
http://spotfire.tibco.com/blog/?p=18602
http://www.networkmagazineindia.com/200301/cover14.shtml
http://enterpriseinnovation.net/article/pg-use-technology-move-goods-production-shopperscarts
http://www.mckinsey.com/insights/consumer_and_retail/inside_p_and_ampgs_digital_revolution
http://www.mckinsey.com/insights/business_technology/winning_with_it_in_consumer_package
d_goods_seven_trends_transforming_the_role_of_the_cio