“From a consumer’s perspective, there are only three supply chain metrices that matter in CPG products – Availability, Freshness and Pricing (which is influenced to an extent by cost). Supply chains, which are designed around managing these metrices are the most efficient ones and has the most business impact. Here at Mamaearth, this is exactly what we are attempting to build,” shares Avinash Dhagat, Vice President – Operations, Honasa Consumer Pvt. Ltd., during an interview…
How has CPG space evolved over the years with the entry of new players?
The new entrants in the CPG space have made a dent on all the three areas of what the consumers are buying, why are they buying and how are they buying. If we look at Mamaearth as an example of the new age CPG player, “what” here is the natural ingredient led products, which addresses specific consumer needs. Being a purpose led brand answers “why” the consumers are preferring the brand and the D2C route to market is “how” the consumers are making their purchases.
How has technology helped in shaping up the changing dynamics?
Technology has been the key driver of this evolution and when we look at it from the D2C lens, the technology led ecosystem has acted as a catalyst in accelerating the growth of these brands. This ecosystem comprises of technology led enablers around fulfilment including pick pack process and last mile, around data led demand & supply planning and enabling the entire buying process for the consumer.
During your initial years in the corporate world, how was supply chain scenario? How were the supply chain professionals considered/ treated? How has it transformed over the years?
Supply chain function for a long time was looked at as a logistics enabler. Over the years, it has moved as a business enabler function wherein lot of organizations are now able to leverage supply chain as a competitive advantage. The evolution of how consumers make their purchases has played an important role in bringing supply chain at the forefront of solving business problems and the Covid crisis has further accelerated this. Amongst different business problems where supply chain across industry has been playing a pivotal role, few recent interesting ones are the quick commerce or same day/ next day deliveries, physically enabling D2C & omnichannel platforms.
You have been a part of FMCG for quite a long time? How can supply chains of FMCG products be efficiently managed?
From a consumer’s perspective, there are only three supply chain metrices that matter in CPG products – Availability, Freshness and Pricing (which is influenced to an extent by cost). Supply chains, which are designed around managing these metrices are the most efficient ones and has the most business impact. Here at Mamaearth, this is exactly what we are attempting to build.
Any global supply chain best practices that you would like to share that you emulate?
Global optima vs local optimization as a supply chain practice is something that I really believe in and in my opinion, companies which can incorporate this have always an advantage over the long term. A classic example around this is – let’s say if an organization tries to optimize its inventory without considering its impact on either upstream (i.e., suppliers) or downstream (i.e., B2B customer partners), while it may achieve its results of working capital or revenue in short term but always has an impact over long term. While there is no ideal state, it’s a journey, which is worth taking.
Companies are focusing on sustainability these days more than ever. How is supply chain tuned to that change?
In a product’s life cycle, right from how the goods are produced to how they are stored and transported to how they are scrapped – has a significant impact on the sustainability roadmap for an organization. And supply chains can enable it at each of these stages of a product life cycle. This aside, sustainability has a much larger scope, for example, apart from the environmental impact, it also looks at the social, economic, and human impact and here at Mamaearth, this is what we focus on. One such example is the Plant Goodness initiative.
How do you foresee the supply chain landscape few years from now?
The business landscape will remain volatile & uncertain and supply chains will keep evolving at a fast pace to enable the changing business landscape. The 4 enablers in supply chain will be – more connected supply chains, sustainability will emerge as a key focus, technology and data will keep playing a pivotal role and the talent in supply chain will evolve with more cross-functional skills.
What should be the traits of the new age supply chain managers who want to manage this change?
Supply chain roles have evolved over the years from a back-office logistics management role to now helping solve specific business problems around enabling the right route to market for any brand. And this would need the new managers to build more cross-functional skills around business understanding, data & analytics and at the same time, having a strong bias for execution.