Sudesh Prasad

Integrating the complex supply chain continues to remain the most important challenge before the FMCG industry in India. It is here that most action on IT implementation is taking place. IT adoption in FMCG is on a fast track with PCs being used for field sales force and IT becoming an integrated part of the strategy of all the leading FMCG company. This is being talked about by veterans of FMCG industry as a second dimension of the second phase.

Challenge Aplenty

For these companies, goods flow at multiple levels before they reach the end consumers and each level introduces new problems, which requires detailed planning. There are various incentive schemes and demand shaping exercises that ensure sales targets are met. Tracking also becomes complicated if the necessary IT infrastructure is not in place. All this keeps companies wondering if the growth is due to actual consumer demand or because of incentive programs that happen along the supply chains

IT at all levels

FMCG companies are not hesitating to outsource their IT infrastructure function to leading system integrators. They are also revisitng their relationship with the telecom service providers and factor in every possible details before entering into SLAs with them. On the technology front, companies are moving on to the next level. Some of them are moving to MPLS-based VPN instead of leased line due to its scalability and other features.

A big push for mobility applications is being witnessed in the FMCG sector with companies' increasingly going in for mobility applications ranging from SMS to enabling their employees and suppliers to access ERP applications. For example, an application developed by Colgate Palmolive for its stockiest are being accessed by about 600 persons. This system works when salesmen go to rural areas, take order using the PDA and then upload all the data at their distributors' end.

One of the early adopters of IT, Hindustan Lever realized the importance of IT long back and overhauled its entire IT system implementing the supply chain, data warehousing, and customer management solutions.

Companies are also using Internet as a medium to reach out to their customers through their customer portals wherein they are inviting customers to register their complaints and grievances related to their products. A lot of backend integration is to make the system work. Many companies have implemented CRM but it's understanding has not lived to its expectations.

Some companies are even investing software development to help their suppliers and distributors.

Companies are increasingly using supply chain optimization tools apart from business intelligence tools to stay ahead of competition.

As FMCG companies expand their scattered operations, and with the ensuing retail boom and cut throat competition, IT is all set to play a pivotal role in the endeavor to efficiently reach out to the customers across the country.