Challenges Faced by Fmcg in India
Current Trends:
Challenges faced by FMCG supply chain in India * Several layers of intermediaries does not allow the supply chain to be cost effective and efficient. * Use of IT and other systems like ERP,RFID is not very prevalent. * Complex tax structure: High Indirect tax, lack of uniformity, high octroi and changing tax policies result in escalating prices at every level of supply chain. * Poorly developed agricultural infrastructure. * High power cost * Lack of proper transportation in roadway infrastructure. * Delays caused due to product not reaching its intended customer on time. * Uneven terrain causing delays. * High fuel costs resulting in increased transportation bills * Produce usually take one to three days from farm to fork. * Lack of cold chain resulting in loss of farm output. Nearly 8-10% of dairy products is lost due pilferage. * Regulatory constraints: State borders cause a lot of delays and usually 2-3 days out of every 20-30 days of finished goods inventory is stuck on various state borders.
Lack of uniformity in regulations
Bureaucracy and corruption also reduce the efficiency of the supply chain. * Due to volatility in commodity prices and petroleum prices, cost of supply of materials continuously changes, because of which supply chain dynamics need to planned afresh * India being a diverse country with 35 states in union territories it is difficult to manage inventory as each area have different factors which has to be taken into considerations * There is a huge challenge for the whole supply chain to move towards green technology to reduce its carbon footprint and keep it sustainable.
Road Ahead, Recommendations:
Features of Ideal supply chain: * Future will belong to that supply chain which can convert all the activities across the whole supply chain towards being GREEN. * A supply chain should be integrative in nature * ITC , HUL and Amul are great
Challenges faced by FMCG supply chain in India * Several layers of intermediaries does not allow the supply chain to be cost effective and efficient. * Use of IT and other systems like ERP,RFID is not very prevalent. * Complex tax structure: High Indirect tax, lack of uniformity, high octroi and changing tax policies result in escalating prices at every level of supply chain. * Poorly developed agricultural infrastructure. * High power cost * Lack of proper transportation in roadway infrastructure. * Delays caused due to product not reaching its intended customer on time. * Uneven terrain causing delays. * High fuel costs resulting in increased transportation bills * Produce usually take one to three days from farm to fork. * Lack of cold chain resulting in loss of farm output. Nearly 8-10% of dairy products is lost due pilferage. * Regulatory constraints: State borders cause a lot of delays and usually 2-3 days out of every 20-30 days of finished goods inventory is stuck on various state borders.
Lack of uniformity in regulations
Bureaucracy and corruption also reduce the efficiency of the supply chain. * Due to volatility in commodity prices and petroleum prices, cost of supply of materials continuously changes, because of which supply chain dynamics need to planned afresh * India being a diverse country with 35 states in union territories it is difficult to manage inventory as each area have different factors which has to be taken into considerations * There is a huge challenge for the whole supply chain to move towards green technology to reduce its carbon footprint and keep it sustainable.
Road Ahead, Recommendations:
Features of Ideal supply chain: * Future will belong to that supply chain which can convert all the activities across the whole supply chain towards being GREEN. * A supply chain should be integrative in nature * ITC , HUL and Amul are great