The connected fulfilment network should be deployed along with an agile road map to enable quick testing and learning of different node types that include capabilities in various locations rather than the traditional approach that initiates only when all node types and capabilities are fully developed. Building these required capabilities should also be planned in modular sequence. Regardless of how the omnichannel distribution network looks, it is important to stay flexible and adjust to any road map changes, such as an increase in customer requirements or new logistics service offerings—for example, delivery solutions for fast- and last-mile delivery. Testing, learning, and adjusting quickly should be the credo. Shonik Goyal, Head of Distribution and International Supply Chain at Bajaj Consumer Care informs Ritika Arora Bhola, that supply chain needs to be readjusted based on changing market conditions, and players should pursue an agile approach that enables them to adjust quickly to changing trends, options, and customer expectations. These principles, Goyal says, has helped Bajaj Consumer Care determine the approach to building the network and ecosystem of the future.
Market position
Bajaj Consumer Care, part of the Bajaj Group of Companies, is one of India’s well-known beauty brands. Our flagship product Bajaj Almond Drops Hair Oil is a leading name in the hair oil segment. We also own the Nomarks ayurvedic skin safe formulation product.
Bajaj Consumer Care has a strong presence across the domestic market. We have a range of products catering to a variety of consumer needs made with a blend of traditional practice and modern science. Our hair products reach at least 1 in every 5 Indian household. Bajaj Consumer Care’s product range, best-in-class distribution strategies, smarter visibility in retail, and an amazing sales force drive our brand reputation.
COVID-19 and supply chain operations
The COVID-19 pandemic has increased uncertainty to a level never seen before in supply chains. Demand patterns are all over the place, supply lines are disrupted, lead times are uncertain, and nobody is quite sure when and how things will change going forward.
Today, supply chain planning is more like supply chain prognosticating. Online commerce has exploded, and consumer habits won’t change once the pandemic subsides. That is already putting huge pressure on last-mile delivery. Secondly, demand has become more erratic as consumer buying pattern has undergone a lot of changes during the pandemic as they are shifting to larger packs so that they do not have to visit the marketplace repeatedly. Moreover, consumers have become choosy in terms of buying value-based products. Value has become a bigger virtue than cost.
Need for flexibility
Over the last five years, we have worked extensively on designing a flexible supply chain. Our manufacturing footprint has undergone a drastic change and has far better spread out, giving us much more flexibility in terms of service.
Our distribution network has also undergone a remarkable consolidation in line with our growing manufacturing footprint. It is far more flexible and responsible to the dynamic customer behaviour and erratic demand patterns of the current environment.
Strategic initiatives for better supply of products
Five years back, we primarily had a heavy manufacturing set up in the North of India. Over time, we analysed customer demand patterns and accordingly upgraded our manufacturing footprint and developed manufacturing set up in Guwahati to cater to the Northeast and East India. We also developed another factory at Vadodara to cater to West, South and Central zones. This strategy has given us a remarkable cost benefit in primary freight as well as inventory optimisation, since lead times have been reduced by more than 30 per cent for East, South and Central distribution hubs. Also, we have onboarded best-in-class third-party logistics (3PL) service providers to cater to the factor of last-mile delivery—from distribution hubs to customers.
Creating value
Information flow is the backbone of customer service. Today, each and every customer needs information about the delivery of the order placed by them.
First things first, we started leveraging simple Smartphone apps like Whatsapp to provide information flow about stocks, dispatches and deliveries on a common platform. Later, we started using SMS App to keep our customer regularly informed about billing, dispatch, vehicle details, transit locations and delivery dates. This has ensured better customer satisfaction as well as increased order flows for better planning and stock availability.
Establishing coordination
After the lockdown announcement at the time of pandemic onset in March 2020, we communicated effectively with all suppliers, transporters and cross functional departments, especially sales so that no panic sets in the system.
Secondly, we released partial payments to our suppliers and transporters so that there is no shortage of funds to manage the crisis situation. Also, real-time data was critical for in transit stocks and at plants. We ensured that depot and distributor inventories were consistently flashed to all stakeholders. We utilised technology through SAP and communicated on the stock coverage to all stakeholders.
We kept a close watch on the communications from Ministry of Home Affairs (MHA). We constantly checked the status with local administration and kept our teams motivated.
We leveraged and utilised Whatsapp groups to stay connected and ensure proper information flow through the entire logistics chain including the suppliers, and mainly drivers who were often stranded midway without food and shelter. We even maintained constant contact with our distributors and retailers to give them the comfort that ‘we care and we are in this together’.
Outsourcing of logistics
All our transportation needs are outsourced. We sign contracts with logistics service providers (LSPs) based on location and load factors. And we have agreed to specific turnaround time (TAT) for each location.
In general, our LSPs are trustworthy, customer- and cost-centric, service-oriented, innovative and technologically advanced, owns GPS-enabled fleet, and has the experience to operate across diversified sectors and expertise to reach out to pan-India locations.
Warehousing strategies
We have undergone warehouse consolidation and reduced number of distribution centres pan-India. After an analysis of customer demand patterns, freight cost and lead times for customer service and undertaken closure of small distribution centres (DCs) and gone for bigger hubs to cater to larger customer base through modern-day logistics services. We are present in all major warehousing hubs. Since rentals are at a premium, we continue to look for options to utilise vertical warehousing space to be future-ready for high growth years.
Guiding performance
We keep on conducting data analysis for evaluating changing customer behaviour, DC delivery efficacy, overall logistics cost, etc. We maintain regular connection with service providers and customers for constant overview on the matters that matter to the business and partner network.
We keep benchmarking within the network and keep exploring opportunities for milk run, clubbing of loads and product delivery processes (PDPs) so that overall efficiencies with respect to cost and lead time optimisation keep getting implemented on ground
