 "George Angelo")
Smartphone and tablet manufacturers have an interesting source for bulk orders these days: fast moving consumer goods (FMCG) majors and healthcare/pharmaceutical companies with widespread retail channel networks. Reason: In a hyper competitive environment where consumer loyalty is increasingly becoming a myth and availability - and not the brand per se - is the key determining factor for a sale, these devices are serving the need for speed on the part of the manufacturers.
FMCG, healthcare and pharma companies are equipping their in-field sales teams with handheld devices such as smartphones and tablets for faster relaying of sales data and information from the field to the distribution centres. The practice has been adopted with much rigour by companies such as Hindustan Unilever (HUL), Johnson & Johnson (J&J), Marico, Dabur and Cadbury Mondelez India to make their last mile delivery more effective. Some like HUL started experimenting with new technology for the last mile back in 2008 whereas others like J&J India are more recent adopters (2012-13).
The availability of devices at prices as low as Rs 5,000 and deepening wireless networks has contributed to the widespread usage of technology. So for Dabur India, with sales force of 2,000, at a price point of Rs 5,000, the investment in devices would be a crore, even if you don't factor in a bulk discount. The IT solution sought entails a bigger investment, but the overall return-in terms of the cost and time saved-more than makes up for the upfront investment.
The sophistication of the device and the range of functions the device can be used for depends on the employee role mostly. For instance, at HUL multiple grades of devices are deployed depending on the role. Distributor salesmen and merchandisers have smartphones, while supervisors have tablets. Shakti Ammas (rural sales representatives recruited through local self-help groups) have entry-level phones. Devices and applications have been designed to suit the needs of individual users. For example, the device serves as a selling aid to allow a salesperson to make an intelligent sales call. The sales supervisor on his part uses it to track performance of salespersons and the key sales metrics. In the case of people focused on task execution, the mobility solution is used as an execution tracking and recording aid. The Shakti Amma uses it as a mini enterprise resource planning (ERP) solution for all her transactions.
How it is used
The barebone functions remain the same across the board: the sales agent goes on the field, notes down the order using his handheld device. The information is relayed instantaneously to the company's central warehouse or area distribution centres, kick-starting the process of dispatch of goods to the retailer, possibly even before the sales agent has left the said store. This is quite unlike the pre-handheld device days, when the agent went back to his workstation, filled in the orders manually (mostly at the end of the day, after all his sales calls were done), which, in turn, delayed the dispatch process significantly.
Madan Mohan Pandey, head sales, Marico India says, "Earlier, the (stock) replenishment cycle would be close to a week - seven or eight days. In the current scenario, the replenishment takes a couple of days only. The super-distributor will factor in the closing stock as the data is readily available and dispatch the order. With data availability across the system, the depot can replenish the stock to the retailer circumventing the distributor in extreme cases. This can further cut down the replenishment cycle time. The fill rate goes up for Marico and the closing stock at the distributor goes down."
Pandey further adds that the automated nature of the current system vis-a-vis the earlier manual system ensures that accurate information is uploaded real time thus eliminating the chances of spillage or wastage during the process. Take Marico, which has completely overhauled the system in Bangalore, Chennai, Mumbai and Delhi. Under its new JIT (just in time) delivery model, the timeline is broken down in the following manner: the depot will dispatch the stock to the distributor (as soon as the sales agent uploads the order entry onto his device) and the distributor then supplies the stock to the retailer. Both the links will take a day each.
Besides cutting down the stock replenishment cycle, the usage of handheld devices is helping the companies make their sales calls more effective by literally putting all the available information on a particular retailer at the sales agent's fingertips. J&J India, which distributed Android devices to the company field force in 2012 and tablet-based solutions for distributor team salesman in February this year, concurs. "The usage of handheld devices helps in keeping the distribution teams updated about information on distributor selling and inventory, salesmen performance measurement, training tools etc," says Mudit Mathur, GM - customer development, Johnson & Johnson (consumer). "With the help of the 'handy' (handheld device), the company representative has the most updated information at his finger tips, helping him stay connected with the organisation, analyse his business and take timely actions to capitalise on opportunities."
Here's how Cadbury does it: The smartphone device has a list of retailers, the salesperson is scheduled to visit to book order for the day. The smartphone device also records the past purchase data for each retailer. The device has colour coding wherein, the outlet that has not purchased stock during the month appears as red and those that have bought appear in green, says Sunil Taldar, director, sales and international business, Cadbury Mondelez India.
Another way of making the sales call effective is to have information at hand about what sells at the particular store. While the sales agents may know this, data analytics can provide a scientific basis to his pitches.
George Angelo, executive director, sales, Dabur India, explains, "Dabur has a portfolio around 1,200 fast-selling SKUs. Managing all these SKUs is a highly complex task. Today, our dashboard presents us real-time information on all dimensions in terms of population, SEC, geography, even localities and SKUs bought and sold. So, when an order is booked, we know what is the demand pattern, which product and SKU sells more in which geography, etc. Even buying patterns of retailers are available and tracked real-time."
Beyond stock keeping
As companies and their workforces get more comfortable with using handheld devices for basic functions like order booking and stock keeping, companies are mulling new ways to monetise the technology and the data available at hand. Dabur, for instance, is using it to keep track of the 'freshness of their stock'. "Under this system, a merchandiser enters the expiry date and the condition of the packages and ensures the process of return is initiated immediately, if required. This also helps the supervisor rearrange the items in such a way that older products move faster," says Angelo.
Equipping the sales force with handheld devices also means putting mobile electronic promotional material at their disposal. This augurs well for rural markets where the reach of television and digital campaigns is limited. Companies like J&J India are making product-related material and marketing campaign information to be stored in the handheld devices of their sales teams. The availability of information, combined with technology can open up new opportunities on the distribution front for companies. For instance, Marico says that access to the fill rate data across the different retail touch points and distributors, helps them take better decisions relating to mapping the dispatch, cutting down on the time significantly. "It is possible to map the retail touch points across geographies using Google Maps. Marico designs the ideal route map for distribution factoring in the exact location of the outlets and the traffic congestion. It is dynamic and can undergo change on a daily basis. We call it a dynamic route plan, or the most efficient route planned for distribution," says Pandey.
Evidently, technology has emerged at the key pivot on which FMCG companies are deploying their supply chains, especially to make the most of the huge rural opportunity. The kirana stores and the paan-wallas in urban as well as rural markets may not drive value, selling mostly smaller packs, but they are key to driving trials and building a future customer base. And yet, by their intrinsic fragmented nature, rural markets pose a big challenge.
"Reaching out to new stores is a challenge for most FMCG companies. These new stores have witnessed the highest growth in rural India and the intervention of technology will be key to track sales in rural market. It will also be helpful in driving efficiency in the rural retail space and to ensure the customer service in small towns is on par with the urban markets," says Taldar of Cadbury, indicating the key role 'handys' have come to play in their supply chain.
