Godrej builds 'Sampark' with distributors

Godrej Consumer Products' distributor management system keeps inventory levels and costs down, while helping the company to accurately forecast and plan production, says Chitra Padmanabhan

The objective of implementing Sampark was to reduce the working capital of distributors. This in turn would give a better return on investment, says Mani Mulki

Where there is a successful integration strategy, there is enterprise value. At its very core, a well-executed supply chain project offers a single window into business and distribution, consolidates systems and processes, and provides quick and accurate information on secondary sales at the point of distribution. This is precisely what Godrej Consumer Products (GCPL) achieved through project "Sampark," a distributor management system used for stock management, billing to retailers, accounting and report generation.

Commenting on the meticulous implementation of the system, Mani Mulki, general manager, information systems, Godrej Industries says, "The objective of implementing Sampark was to reduce the working capital of distributors. This in turn would give a better return on investment leading to more coverage and hence more sales." Sampark is currently being used by 300 distributors who account for 67 percent of the company's sales. GCPL has made an investment of approximately Rs 1 crore and by the end of the year, the company plans to extend its reach to around 400 distributors spread across the country.

How did 'Sampark' come about?

GCPL chose MFG/PRO as its ERP package in 1995. By 2000, the company was reaping benefits in terms of RoI (Return on Investment). However, the company wanted to extend its ERP to external business partners, and was keen on deploying a system which had pre-defined business logic. To achieve this, the company asked Accenture to study its systems and draw up an IT roadmap. One of the outcomes of the study was CPFaR (Collaborative Planning, Fore-casting and Replenishment) to achieve better integration between distributor and C&F (Clearing and Forwarding) agents.

For GCPL, achieving a single view of the various distribution points became the ultimate goal in integrating the distributor management system (DMS) with the ERP system. The management believed that this could significantly reduce the time and cost of cross-referencing or maintaining multiple databases.

With Sampark, the company wanted to store data centrally on a day-to-day basis. The C&F agents enter all their daily transactions into a centralised MFG/PRO database. Stock-related data which has been despatched to the distributor is also available. The system gives the closing stock figure available at the distributor's warehouse. The distributor in turn collates all the data, generates an order and passes it on to the C&F agent. The next day, the distributor gets a bird's eye view of the C&F despatches that are in transit.

The central ERP database brings together data from the distributor and the C&F agents. All necessary details of invoices, receipts, goods received note and despatches made are available through the centralised engine.

Regular replenishment

Since the data is stored in a centralised database, the DMS not only captures secondary data of sales and stock with the distributors but also goes a step further in replenishing stocks. "Since the closing stock details of distributors are collected by the centralised database on a daily basis, it helps in regular replenishment at the distributor and C&F agents' level. This helps in maintaining a base level of inventory," says Mulki. GCPL's initiative to connect distributors with core business processes has generated results because it was influenced by both business objectives and technological realities.

The company today has achieved the initial objective of reduction in the working capital of the distributors. This in turn gives a realistic view of the inventory levels to be maintained. The system builds a bridge between GCPL and its distributors, which is a win-win situation for both, as the company has instant access to information about the distributors inventory levels. In this way, distributors are not required to keep excess stock.

chitra@expresscomputeronline.com