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2015 TOCICO International Conference

Executive Track Keynote Presentation

Rakesh Sinha
COO-Global Supply Chain,
Manufacturing and IT
Godrej Consumer Products

Godrej Consumer Products-Story of the First Viable Vision Implementation in the World
September 6, 2015

About the Company Products and environment: Godrej Consumer Products is part of more than 100 years old Godrej Group. The company is into production and distribution of products like soaps, hair colors, mosquito repellents etc. When implementation started in 2004 in soaps and hair color business, it had around 400 live SKUs, produced in 4 factories and distributed through a network of 30 warehouses, and 1600 distributors, 2.5 million retailers.

Now, after 11 years, the range of products in India is about 800 live SKUs, number of factories in India has grown from 4 to 21 supplying through 41 warehouses to 4.5 million retailers. The company has presence in more than 12 countries and has acquired several similar brands in countries like Argentina, Chile, Indonesia and multiple Countries in Africa.

11 years after starting the implementation, the company (India business) has grown from around 80 Million USD size to 800 Million USD.. Today company is aggressively expanding through acquisitions across the globe and spreading TOC into DNA of newly acquired businesses as well as continuing to improve in its existing operations.

The Challenges Faced in 2004: The team faced several challenges in implementation. Few of them are as follows:

  • The first implementation in the world, in India, hence no proven, tested solutions available. No experience to the consultants of holistic implementation in India.
  • Lack of software to manage replenishment and DBM
  • Lack of strong internet connectivity with distributors (in 2004)
  • Poor logistical and infrastructural facilities in India (in 2004)

Despite all these challenges, the management was completely committed to a paradigm shift and found ways to overcome these challenges.

The key results achieved:

  • Paradigm shift for the company at the era when inventories were not seen as a liability, forecasting was deeply rooted practice and logistic cost reduction was the prime objective of logistic.
  • Significant improvement in availability till distributors
  • Fill rates to distributors increased from about 80% to 99%
  • Improvement in inventory turns of the company almost by 50%
  • Around 40% Impact on top line, bottom line within two years of implementation
  • 20% to 30% exposed capacity in the factories in the first two years of implementation
  • Significantly helped expand distribution from 2.5 million to 4.5 million retailers

Life after 11 years: After learning the TOC solutions to manage significantly higher availability of products with much less inventory, a set of TOC experts started expanding TOC knowledge, implemented at newly acquired companies. Till date apart from India business, several businesses across the globe are following TOC practices at different level of maturity.

Growth for employees: Organic and Inorganic business growth is creating significant opportunities for growth of employees. The company adapted profit sharing model with employees, creating multifold jump for financial gains to employees building growth and stability along with the company.

DR RAKESH K. SINHA heads the Global Supply Chain, Manufacturing and Information Technology at Godrej Consumer Products Limited, the flagship company of the Godrej Group.

Dr. R.K.Sinha is a B.Tech. in Mechanical Engineering and a post graduate from NITIE. He joined Godrej Soaps as a Management Trainee in 1980 and completed ICWA, CFA and Ph.D. from IIT-Bombay while working with Godrej. He holds the distinction of being the first doctorate in Supply Chain Management in India.

Dr. Sinha has headed several functions in Godrej Consumer Products including Supply Chain, Marketing, Strategic Planning and Information Systems. He has served on the Board of Governors of ICFAI. He is currently on the Academic Council of NITIE and the Academic Board of Welingkar Institute. He is actively involved in several key initiatives of the company, like TOC and Efficient Consumer Response (ECR). He is a guest faculty at several leading Management Institutes in India.

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