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2008 Solutions
Organizational Background
Reckitt Benckiser is a global force in household, health & personal care, delivering ever
better solutions to consumers. Its health and personal care products comprise of
antiseptics (Dettol), depilatories (Veet), denture care (Kukident, Steradent), analgesics
cold/flu (Lemsip, Disprin) & gastro‐intestinal (Gaviscon, Senokot, Fybogel). Its fabric care
catalogue includes fabric treatment, garment care, water softener, fabric softener and
laundry detergents.
The company has sales of over £ 5 million consistently growing ahead of the industry due
to its leading brands, its operations in over 60 countries and sales in 180, & it’s highly
motivated multinational management.
Vision
“Passionately delivering better solutions in household cleaning and health & personal care
for the ultimate purpose of creating shareholder value”
Some facts about Reckitt Benckiser
• World Leader in House Hold Cleaning (except Laundry Detergent)
• Head Quartered at Slough, United Kingdom
• Sales in over 180 countries and operations in 60 countries
• Turn‐over of 5.22 billion GBP (Increase of 7% last year)
• Operating Profit of 1.23 billion GBP (Increase of 35% last year)
• 22,000 employees in over 60 countries
• Over 10 million products sold every day
• Recently acquired BHI – Boots Healthcare International, Adams Respiratory
Therapeutics
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Brief Summary of Reckitt Benckiser (India) Supply Chain Structure
Reckitt Benckiser (India) does in‐house manufacturing of all the categories and there are
Six (6) Manufacturing locations. Apart from this it also has arrangements with about 15 Co‐
packers. The Distribution system followed by Reckitt Benckiser (India) is typical of any
FMCG company. There are two parallel distributions networks:
a) Manufacturing plant CFA Distributor Retailer
b) Manufacturing plant Regional Mother Go‐down (RMG) CFA Distributor
Retailer.
Some other facts:
• Considering the changing retail scenario and increased demand Reckitt Benckiser
(India) set up two (2) new plants, one in Uttaranchal and another in Jammu. The
existing four plants are quite stable and the new plants are gradually stabilizing.
• There is one CFA per state and all the CFAs are handled by local 3PL partners.
• The RMG are situated in 4 metros (Mumbai, Bangalore, Kolkata and Delhi)
• Transfer of ownership of products happens at the CFA level
• Existing mode of transport for all the categories is road
• Currently mixed products are transported but for Coils which are transported
separately
Planning
Reckitt Benckiser does a Demand Planning followed by Production planning. Following are
some facts about the Demand and Production Planning system:
• All the plants and CFAs are enabled with JD Edward ERP system and the data for
planning is obtained from the same.
• Demand forecasting and planning is done separately using newly implemented
Manugistics system.
• Production plans are 1 month (firm) + 2 Months (rolling)
• A new Oracle based Production and Distribution Planning (PDP) tool is being
implemented.
• Distribution planning is not done on the JD Edward system.
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2
Organizational structure
Emergence of India as big retail market: Opportunities and Challenges
The organized segment of the Indian retail industry is expected to grow from the current 5
per cent of the total market to about 14‐18 per cent of the expected Rs 18‐Lakh Crore
market by 2015 (Source : McKinsey and Co)
Opportunities:
• Growing Urbanization and increased consumerism
• Greater use of Credit
• Many big players like RIL, ABG, Bharti etc are entering the Indian Retail market.
Challenges:
• High inflation rate
• Stringent norms of Modern Trade
• High Real Estate rates.
MD
SALES MARKETING FINANCE SUPPLY
LOGISTICS MANUFACTURING PROCUREMENT QUALITY
Impact of Modern Trade on Reckitt Benckiser (India)
Contribution of Modern Trade to Reckitt Benckiser business 9 %
Growth (year on year) 40 %
The Case
Reckitt Benckiser (India) serves 190 SKUs across various categories. Primarily, sourcing is
single sourced however a few Pareto SKUs multi sourced. It has a strong distribution
system in place. Reckitt Benckiser is known for its aggressive marketing innovation which
poses many Technical and Supply Chain Challenges to the company. Reckitt Benckiser
(India) caters to both traditional Retailers and Modern Trades. Both these retail formats
pose different challenges. Modern Trades are more demanding in terms of better service
levels (expected OFR is 95% and lead time required 5‐7 days from CFA).
Issues to be addressed
1. Customer Service levels
The issues in customer service levels, with current inventory norms of 4.33 weeks, are due
to:
• Low Forecast Accuracy
• High Lead Times
• High Seasonality in Demand
• Mixed Product Categories
In addition to the above mentioned issues the service levels demanded by Modern Trade
Customers are substantially higher than the service levels agreed upon for Traditional
Trade. Since the systems at Modern Trade partners are still evolving there is a greater
nurturing required for this stream of business.
Suggest a strategy to increase Service Levels of Modern Trade taking into consideration the
following:
• Priority given to modern trade over traditional
• Differential Norms for Modern Trade SKUs
The Supply Chain strategy should be able to achieve the desired service levels for both the
organized and un‐organized trades.
2. Logistics cost
Some of the contributors to the increased costs are:
• Transportation cost (increased fuel prices)
• Safety stocks
• Mixed product categories (e.g. stable soap & fragile coil)
• High Real Estate Costs
Suggest a strategy for Overall Logistics Cost Control and Reduction. Also evaluate
Feasibility of Multi Modal Transportation.
NOTE: Please refer to the following data provided in the excel sheet annexed with the case
(Participants are expected to use this data in their solution)
• Table A: Transportation Cost
• Table B: Sales Data
• Table C: Sourcing Matrix
3. System to ensure seamless integration and data availability
Due to various tools being used by RBIL (JD Edwards ERP system, Manugistics demand
planning system, Oracle based PDP system, MRP system) for different activities, there is a
need for streamlining its distribution network, seamlessly integrating the supply chain and
promoting collaboration among various systems. Development and implementation of a
solution to extend visibility across the company’s network of distributors can be suggested.
4. Benchmarking
Compare the planning processes at Reckitt Benckiser with the best practices in the FMCG
space or other companies of comparative or bigger size. Also suggest areas of
improvement.
Rules and Guidelines
Rules for the Round I:
All the interested participants will have to participate in two activities, Case study and
Online SCM quiz, in Round ‐ I.
Case study: The case is open for all the B‐school participants across India
(Weight: 80 %)
Online SCM Quiz: The SCM Quiz would be opened online (www.prerana.nitie.net website)
for all the participants for a period of 1 hour on Wednesday, 15th October at 10:00 PM
sharp (keep checking the website for further details). Solutions to the quiz should be
mailed to [email protected].
(Weight: 20 %)
Based on the quiz score and the case solution score the top five teams (plus 2 wait list)
would be shortlisted and invited for the Round ‐II.
1. A team can consist of maximum two members (Management Students only) from
the same college. A student cannot be a member of more than one team.
2. The team members need to register on the Prerana 2008 website
www.prerana.nitie.net (if you are unable to register on the website for any reasons
please mail your entries directly to [email protected])
3. The solution should not exceed 2000 words inclusive of all exhibits and appendices.
4. Solution format: Font Size – 12, Font Type – Times New Roman, 1.5 line spacing and
the file should be a Microsoft Word Document/PDF.
5. The front page should carry only a) Institute Name, b) Team Name, c) Details of the
team members (Name, Email IDs, Phone Nos.) and d) Prerana Registration IDs.
6. The details of the participants SHOULD NOT appear anywhere else in the case
solution.
7. Send entries to ‘[email protected]’ with the document name as
“Stratagem_TeamName_CollegeName” and subject line as
“ReckittBenckiser_Stratagem”.
8. The entries must reach us by Tuesday, October 14th, 2008 (23:59:59). Short listed
students will be intimated by email.
9. The decision of the organizers of the contest and the panel of judges will be final and
binding on all contestants.
Rules for the Round II:
Five finalist teams would have to participate in two activities, online SCM game and Case
presentation, in Round – II.
Online SCM Game: The link for playing the online SCM game would be floated for the
finalists after confirmation of their participation in Round –II. They would be given 3 days
to play the game and based on their performance the ranking / score would be given.
Timeline for game will be announced at the time of shortlist.
Weight: 20 %
Case Presentation: The finalists would be asked to present the case to the RBIL jury in
NITIE campus
Weight: 80 %
The winner would be selected based on the score in the Game and Presentation.
All participants in second round will be provided two way train travel fare for the shortest
route from their institute to Mumbai.