HLL stockists go high-tech

Not content with being credited with using IT in a big way to manage its business processes and functions, HLL, India’s largest FMCG company, is now taking IT to the smaller parts of its distribution chain. It recently implemented a SCM solution called Stocky@fmcg aimed at managing stockists inventory, logistics and financial data. Akhtar Pasha reports

Think Hindustan Lever (HLL) and what comes to mind is India’s leading FMCG (fast moving consumer goods) company with hundreds of products and a supply and distribution chain of a magnitude few companies would have. While HLL has been recognised widely for using IT for its business processes and functions for years now, today, the giant is helping take IT to the smaller parts of it’s large distribution chain too. Indeed, at HLL gone are the days when one thought implementing technology at the distributor or stockist level was a distant dream. Today, technology is a powerful tool for small players as well, even those with their turnover running into a few lakh rupees. To increase their efficiency, productivity and profitability in terms of cost and time HLL has implemented a SCM solution called Stocky@fmgc from Botree Software International to manage stockists inventory, logistics and financial data.

The objective of the implementation was to know keep a tab on products moving out of stockist locations, outlet sales and to find out fast moving products across the country. “For a company like HLL, 70 percent of business comes from 30 percent of the stockists. So the need was to increase efficiency and make the stockist’s data available online for faster processing of order for analysis,” says N Jayan, vice president-SCM solutions Group, Botree Software International.

The challenge was to implement Stocky at 136 stockists across Tamil Nadu, Kerala, Calcutta, Andhra Pradesh, Mumbai, Delhi and Karnataka. The entire project took seven months to complete. “On an average, an SCM implementation costs around Rs 20-30 lakh depending upon the client requirement,” says Jayan when asked about project costs.

“The main objective was to make the data with the stockist available in an electronic format and move the data online over the Web for speedy processing and analysis so that all the information could be moved quickly to the company server. The exercise was to reduce logistics and inventory costs and make accounting a simpler process,” explains Kabir Ahmed Shakir, sourcing and logistics manager at HLL.

During the survey Botree found that 95 percent of HLL’s stockists were handling inventory, sales orders and logistics manually. “The main bottleneck was to ask the stockist to invest in a PC and software, which cost Rs 15,000, but which they were not willing to spend on. It was a big task,” says Jayan. HLL and Botree formed a strategy to educate the stockist first and give them first hand experience before asking them to make an investment.

“Implementing SCM solutions at HLL’s stockists was not a easy job as the majority of stockists felt that they were not tech-savvy enough to handle Stocky (the application). It took us five days for providing onsite training and implementing Stocky at each location,” he added. The benefits? For one-month’s inventory, a stockist can reduce inventory by seven days using Stocky. A C&F agent can reduce six days while retailers save seven days. The process involves filling up stocks in an electronic format. Most companies want to reduce inventory cost and make data available online. The company can connect to the stockist and can view the products that are moving in the market.

Adds Jayan, “Instead of spending hours in their godown taking stock and making out over 150 bills manually every day, stockists now spend a few minutes with their PC, getting information at the click of a mouse. It saves time and cost for both the company and its stockists by at least 35 percent.”

The second phase of the implementation was to get stockists to log into the HLL site and enter their requirements. So Botree introduced some incentive schemes to motivate them to put in electronic data online.

To provide technical support for the software, HLL hired three employees from Botree for their Calcutta market and one from Bangalore. The tech support professionals help the stockist to solve problems in using the software like customisation of reports and bills.

And HLL is extremely happy with what Stocky has managed to achieve. Shakir adds, “Botree Stocky has helped us move crucial data of stockists on to the Web and will reduce the inventory cost to a large extent. Since Botree has several installations at Nestle and Marico, it was a natural choice for us to make.”

Stocky is a window based SCM solution and was developed using Delphi and Visual Basic as developmental tool on Windows platform. The company has invested Rs 7.5 crore in developing the product with Rs 4.5 crore in revenues. It expects to generate revenues of Rs 20 crore for the next fiscal year.