Freudenberg Gala | India Network Design & Supply Chain & Logistics Optimization
About the Organization | Freudenberg Gala Household Product Pvt Ltd
Gala Brush is one of the leading manufacturers and distributors of cleaning tools in India since 1986. Along the way, Gala has received many awards and recognition for its successful export business and has been a pioneer in the cleaning tools industry in India.
Freudenberg Gala Household Products (FGHP) was formed in 2009 as the result of a joint venture between Gala Brush (based in Mumbai) and Freudenberg Home and Cleaning Solutions (based in Weinheim, Germany).
Freudenberg Home and Cleaning Solutions is a Freudenberg company and a world leader in cleaning tools with Vileda being the most popular brand. FHCS is present is all over the world with successful brands for over 60 years now. In India, the company is present in all leading modern trade outlets and also distributed in the general trade/grocery stores via a network of over 250 distribution partners.
Network Design & Supply Chain Optimization | Business Case
This project’s objective is to evaluate the supply chain (network) with a specific focus on –
(1) Customer Service fill
(2) Transportation Cost
(3) Inventory
Based on this, arrive at the list of Gaps / Bottlenecks / Opportunities, and come up with a Solution Design to De-bottleneck them to design the To-Be state options, such the organization can ensure highest Service fills and Customer Experience with Optimum Inventory and Cost.
OPPORTUNITY
Scope of Work
1. Dip Stick Study
a. Understand present situation via Dip Stick study
b. GAP analysis and Benchmarking -Recommendations for Short term improvement.
c. KPI review and recommendations – to improve our KPI measurements
d. Recommended to visit Mumbai, Adas sites to understand the supply chain setup in more detail.
2. Study about Future
a. Understand product /Location/Volume for future/Customers need
b. Anticipate future distribution set up (taking into considering future developments in Indian logistics industry)
c. Anticipate customer needs for future (limited to consultant support to analyze data received and take help from sales, marketing to finalize future forecast)
3. Project outcomes
a. Define the criteria for such an optimum Logistic setup (Overall logistic cost < 7 %)
b. Inventory Stocking points (Distributor and SS only) and their optimum Days in stock to fulfil the required Customer Service levels.
c. Distributor setup V/s Super Stockist setup V/s Our warehouse setup – Study for 2 -3 distributor/2-3 SS (FGHP will share details)
d. Service level achievement of 95% for Primary Distribution (Fill rate 95 % + On time in fill rate – 85 %)
e. Define the distribution network along with roadmap planning for the next 5 years including a comparison study with respect to the current set up and multiple network simulation models need to be prepared (considering all possible constraints)
f. Evaluate this setup versus benchmark in the industry (cost, service, inventories) & propose solutions
g. Roadmap planning for the next 5 years and help building a Forecast after input from Marketing, Sales, Production & Supply chain teams. Refining the forecast, analysis, and to present mutually agreed solutions.
SOLUTION
India Network Design & Optimization (Roadmap for 5 Years)
We approached the business case as follows.
- Supply Chain As-Is State Mapping which would document the Current state of the Business in a Crystal-Clear manner. The Focus is to even question the documented performance and validate the same through Business data points.
- Tool that would be used is Value Stream Mapping
- Supply Chain Data Analysis – at this stage, a complete analysis would be done keeping a focus on Service fill, Inventory, Volumes and Cost. All the points part of the Business case shared by FREUDENBERG GALA would be covered and focused upon.
- Potential Tools – Unit Economics Map, SCOR Model, Stress Simulation and Benchmarking
- Gap Analysis – Voice of Business & Voice of Customer in-terms of Volumes, Key Constraints, Customer Expectations, Service fills and so on are used to arrive at the Bottlenecks, Gaps and Opportunities. The analysis will also include Industry best practices, Benchmarks, Distribution standards, workflow, safety and so on.
- Potential Tools – Value Stream Map used as a Simulator and Benchmarking
- Logistics Standards
- Network Modelling + Optimization (Solution Design) – at this stage design a short-term solution as fixes and model framework for FREUDENBERG GALA. The reason why we need to split this up is, the short-term solutions design will ensure you reap the benefits of the increasing demand and ensure FREUDENBERG GALA does not lose any customers and the long-term framework (supply chain) would ensure that the Supply chain is agile and scalable.
- Hesol’s Supply Chain proven Transformation Framework would be used to lead this transformational design
- Design for Future Techniques would be used
RESULTS
- As-Is Network is mapped and thorough analysis is completed. Some of the key analysis done are listed below:
- As-Is Network coverage
- Sales Map
- Distribution Map
- State-wise Distribution
- Product Portfolio Map
- Order to Delivery Lead Time Map
- OTIF Estimation and Plot at Country Level
- On Time Delivery Map by State / Zone
- LTL Freight Analysis
- Sales Loss Analysis
- Inventory Health Analysis and Report by Product / Category
- Lost sales due to stock outs
- Inventory cover analysis
- Non performing stock analysis
- Dead stock analysis
- Supply Chain Benchmarking (Market Research on Key Performance Indicators Vs the Current Performance Data)
- Secondary market research (primary source)
- 30+ Distribution projects aligned with our operations selection
- Primary market research (1-1 Interviews with Supply chain heads and our partners)
- India Household Cleaning market is the primary selection
- When data is scarce, India Household and Personal Products market is considered
- Size: 300-1000 Cr & 5000+ Cr Companies are considered in the selection to get range of performance
- Warehouse Operations – Box in & Box out with No Automation
- Logistics Operations – Fully outsourced Model
- Key KPIs established with Benchmarks (OTIF, OTD, OTS, Order processing, Fulfilment, DOS, Inventory Turns, Warehousing Cost %, Logistics Cost %, Returns %, Operational Skewness, LPMH, Pallets per Square Metre, Warehouse Throughput, Stock Accuracy)
Key Results:
The To-Be Network’s Overall Supply Chain Cost is well within the Industry Benchmarks. This Includes Inventory, Warehousing and Logistics Costs.
- Key As-Is Network Recommendations and Quick Wins that can be implemented within 3 months (info are masked considering confidentiality)
- Pan India Benchmarking completed and the Gaps from current performance is established
- Total of 25 Supply Chain Network Scenarios are Simulated during the Network, Supply chain and Process Optimization
- Warehouse Space Forecasting for 5 Years is completed
- Warehouse Space Optimization Game plan is completed
- Warehousing Pan India Footprint is arrived at
- For each scenario of network, Inventory, Space, Service Fill and Logistics Cost are arrived at
- To-Be Network is simulated and the Optimized Network is finalized
- Specific Recommendations for Modern Trade and Ecommerce are submitted
- Detailed 6-Year Supply chain strategy and game plan are submitted
- Phase-wise 6 Year Implementation Plan is developed
