Godfrey Phillips India is one of the leading players in the domestic cigarette industry having several iconic brands like Four Square, Red & White, and Cavanders under its name. Over the years, the company has expanded its product portfolio beyond cigarettes and tobacco products and entered highly competitive segments like chewing products, mouth freshener, confectionery segment, and of course into retail with its sought-after brand 24Seven. To take a peek behind the curtains and understand the supply chain mechanisms of the company, we reached out to Pankaj Kumar Patodi, Head Supply Chain – Godfrey Phillips India Ltd. who shared some exclusive insights about his organisation’s supply chain function.
Q] Please throw some light on the impact of the pandemic on your company’s retail reach and how innovation and technology played a crucial role in meeting the brand’s commitment.
The impact of the pandemic on the entire industry was unprecedented and many small-time retailers have shut their shops and moved back to their home town, the market which got opened in unlock phase, we have managed our distribution with help of various digital initiatives like e-portal wherein the retailer can place their order thru digital mode and our sales force can fulfill the order.
We have also set up a telephonic call centre wherein the call centre representative is making the phone call well in advance to the retailers for the orders and on confirmation from him, the stock is being delivered. This not only reduced the exposure of the frontline salesmen but also enhanced efficiencies. We also explored alternative channels like grocery stores for our distribution.
Q] Amidst the outbreak of the pandemic when cities and states were experiencing continuous lockdowns, how did you ensure that your products reached every nook and corner of India?
Some of the points I have already covered in the above question, and we have very agile salesforce who is fully equipped with the digital tools, the entire route of the salesman is visible on the handheld device which they carry and they get live information about the retailers and this helps our sales force reach every nook and corner of the geography.
When the lockdown was announced we had many of our shipments on the road. We have a robust truck tracking mechanism in place and we were continuously in touch with the vehicle driver and transporter. We also supported the safe standing of the vehicles and the well-being of the drivers for their food and essentials during this period.
We developed a regular review of the lockdown and unlock progress at local levels and noted in particular the restriction on timing and vehicle movements and thereby adjusting our supplies in compliance with the local restrictions. We also got in arrangement with leading logistic providers with dedicated vehicles available to ensure that we can move our stocks as the situation occurs.
Once we got permission to operate our plants as per govt. guidelines, we had a team to put everything in place for the safety of our people and partners and ensured that COVID-appropriate behaviour is maintained and all guidelines are followed at all levels. We have provided masks and sanitizers to drivers and cleaners who came to our plant.
Q] How do you plan to optimise your supply chain activities? Are your optimisation strategies based on speed or cost?
Our strategies on the supply chain are based on a mixed model taking into account speed (timely delivery) in a cost-effective manner. We have multiple vendor bases and expertise in multiple models based on Speed, Cost, Quality, and Freshness of the stock, hence we are effectively utilising the strength of our partners to gain the maximum benefit.
At Godfrey Phillips, we have the freedom to choose speed or cost basis the market dynamics. As an example, while the supplies to the northern part of India got disturbed for various reasons, we attempted a full charter cargo flight at a cost that was 10 times our normal cost and got this successful and demonstrated that we are capable of handling supplies in difficult times.
We have arrangements with a leading freight forwarder for all of India which is used when the speed of delivery is critical. We cannot overlook the cost factor as well and therefore combines or break our consignments to optimise the cost – like urgent shipments by air in limited quantity and rest quantity was moved by road. We are also actively exploring train movement for our goods where speed is not critical for delivery.
We have many crucial input materials both domestic and imports and therefore a longterm view is essential for us to plan our Inventory considering lead time and Minimum order Quantity (MOQ). The vendor also had their share of challenges in terms of partial operation, shortage of skilled/ unskilled manpower, and time restriction on movement of vehicles and people, and therefore a collaborative model is always beneficial for both parties.
Our supply chain is the best example of collaborative working as we work closely with Sales/ Marketing/ Product Development/ Manufacturing and regular S&OP meetings to review the demand and inventory position to adjust our production plan.
Many developments continued during the pandemic period and one of them worth mentioning is the development of common packing material so that we can use the same material at various plants, in case we were not able to operate a location.
We used the pandemic time to evaluate various advanced tools for supply chain optimisation and digital supply chain and were able to select the best fit for our business. Very happy to share that in this crucial time we were approved by management to go ahead with Digital Control Tower for the Supply Chain project. I appreciate this support by the management at this point.
This is an abridged version of the interview. To read the complete interview, click here.
