Assignment 1 - Fastgo SCM_23rd Jan 11

8/7/2019 Assignment 1 - Fastgo SCM_23rd Jan 11

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FastGo Inc. Food Products Division

Supply Chain Management

Group:1. Harish Dunakhe 33310

2. Prasad Junnarkar 33317

3. Sushil Kaswa 333244. Sunil Kolvekar 33328

5. Sagar Sathaye 33345

6. Aditya Satpute 33346


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FastGo Background:

Fastgo Inc is a leading company in FMCG.

Famous for high quality at reasonable price

Extremely low time to market

Unlisted Public Limited Company

Six years ago diversified into Food products

Projected to be a success but ended up being a failure.


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What has FastGo got itself into:

Product Issues

Expiry of 12 months

Customers reluctant to buy products older than 2 months

Demand primarily in Urban market

Products are region specific


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Supply Chain Issues

Products manufactured in Pune factory

Sent to factory warehouse

From factory warehouse sent to regional warehouses

Regional Warehouses gets material only in Full truck loads

No formal method of inventory planning

No set up at regional warehouses to analyze how old the stocks are

No cross-shipment between warehouses

No local manufacturing set up


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Issue at the Supermarkets (Final Customer interface)

Stocks nearly six months old

Competition maintains stocks only one month old.

Variance in demand for the product depending on region

Some products are slow moving while some are fast moving.


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What on earth should FastGo do now?


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Solutions: Formal Inventory Management

Use First In First Out Method at the factory and the warehouses

Implement ERP system RFID & Barcode scanning system to make stock visibility

online

As soon as a product gets sold out on the register, the stocks should get

automatically updated


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Solutions: Faster to Market

Setting up local manufacturing (at least in the 4 major Metros)

This is possible by moving some of the existing manufacturing set up to

appropriate 3 other manufacturing locations

Acquiring (taking over) local manufacturers

Brand local manufacturers and sell their products under FastGo name

Set up ZonalWarehouses (same as regional). No factory warehouse.

Allowing transshipment betweenWarehouses as required

ZonalWarehouses should not hold stocks older than 15 days

Local manufacturers to produce the fast moving items .


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Solutions: Slow Moving Item Management

Slow moving product inventory to be built up in spare / low demand time

Slow moving product can be procured from Zonal Warehouses across India on

need basis, or when the stock becomes 1.5 months old. (scheme similar to review

period and compulsory replenishment)

Slow moving items at one location should be shipped / transferred to other

locations where the product might be fast moving (not later than 1 month from

the date of manufacturing)


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Solutions: Variance in Sales at various locations

To address the variation in sales at various Metros here are some of the options:

Delhi - First 2 weeks should be used by the local manufacturing unit to

produce the fast moving products and have them ready at the

supermarket shelf latest by 3rd Week. The 3rd week can be used to

produce the slow moving goods. In the last week the production can be

kept to a minimum to meet the first two weeks requirement. Here

compensatory offs, leaves etc. can be adjusted.

Mumbai Have a leveled production schedule per sales forecast.

Maintain an shelf inventory of about 20% (half of 39%) more than

average sales to address the maximum requirements (similar to review

period optional replenishment technique)

Chennai Maintain about 31% inventory more than average daily sales.


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Solutions: Rural Markets and existing stock

Rural markets should be catered through RWH.

Stocks on supermarket shelves should be replenished every month

To address the current stock of material that is more than 3 months old;

Offer discounts or offer 1 piece extra on purchase of 2. Although this

may not earn any profits, at least recover some of the costs.

Stock older than 6 months should be taken off the shelves.

All the stock in the market should be replaced with stock that is less than 1

month old preferably brand new.


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Solutions: Local Competition

Acquire a local company wherever needed, if possible

Outsource manufacturing

Branding (selling ) local products under FastGos name is another option

With time to market improved using above steps, local competition should be

easier to tackle considering that FastGo is an established brand

Documents

Assignment 1 - Fastgo SCM_23rd Jan 11