V-Guard Industries Limited, a Kerala-based company, started in 1977. It is a major electrical appliances manufacturer from South India and has been swiftly expanding pan India. The company, which aims to become a trusted household name, is a tech-centric company that has been expanding its product range and makes its operations seamless and efficient. Shaik Asad Parwez, General Manager – Supply Chain, V-Guard Industries, in his candid conversation with Logistics Insider, speaks about the challenges of the FMEG supply chain, the steps taken by V-GUARD to ensure safety and security of the products, the role of technology in their supply chain and much more.
What are some of the key challenges faced in the supply chain and logistics of FMEG products? And did those challenges amplify during the nationwide lockdown last year?
Transit time due to lack of proper road infrastructure is a crucial challenge in warehousing and logistics in FMEG. In India, road conditions pose a significant challenge. We thought of bypassing Toll plazas and checkposts, which would lead to shorter transit times. But due to road conditions and other reasons, the transit time still continues and is still a major challenge in logistics.
Another challenge is consumer-trade, the way the trade channel behaves. In India, consumertrade is not very uniform. In most organisations, 40-50% of sales occur in the last few days of the month, which puts a lot of stress on the warehouses. This is typical to Indian warehouses since in other regions of the globe, say Europe or China, the order pattern is very uniform and one can do better planning. Once you have the visibility for the market you are servicing and your dealer-distributor orders, you can do better backward planning, helping the organization be cost-effective and manage inventory.
Particularly for the FMEG industry, in the end, our dealer distributor model is also not very mature. They think that if they delay their purchase, they will get better discounts. This also leads to skews, which are a total waste.
Apart from this, wastage control in the supply chain and uniformity in trucks/containers also pose challenges. In India, we see no uniformity in trucks: the truck’s length may be the same, but the volume differs, and we have no laws that to deal with this. This is a major challenge.
During the lock down the entire country came to a stand still and the trucks in transits were affected very badly, as they could not move ahead, in cases where they did reach the warehouses, the warehouses were closed and the materials could not be unloaded hence these vehicles were stranded on the roads for months together till there were relaxation in the lock down.
What step do you undertake to ensure the safety and security of your products during transit? What role does packaging play?
We have made sure we use closed trucks/ containers for transportation of our products. Earlier, people were using open trucks. Since electronics are fragile, they are prone to damage in an open body truck due to bad weather and other external factors. There is also an added risk of goods being stolen on the highways. To ensure security and safe travel we seal the containers with a company seal and the seal number is mentioned in the invoice. When the recipient receives the products, they check the seal number if it matches, and then the seal gets opened.
We also leverage technology to ensure the safety of our products. We have installed a tracking device called ‘Roambee’ in our fleet/trucks. It is a motion-detecting device that alerts us whenever someone is trying to break in.
Packaging also plays a significant role in the safety of our products. In most organisations valueengineering often reduces costs on packaging. I believe we should never compromise on packaging as it defines the condition in which the product reaches the end consumer. Bad packaging not only increases the risk of product damage but can also ruin the brand image. If the product is damaged due to weak packaging, the cost that one was trying to save gets compromised.
On what parameters does V-GUARD judge the performance of its LSPs? Would you like to name a few of the LSPs you have partnered with?
In V-GUARD, the whole process from manufacturing to warehousing and logistics is managed directly by us. However, we have commenced outsourcing for the past two years. As of now, we have outsourced six warehouses.
When it comes to outsourcing processes, we do not only consider the cost but the image and performance of the organisations. So when we choose service providers, we always consider their image, market feedback and ensure they have internal SOPs, checks and balances.
Some of the renowned 3PLs with whom we have partnered are TVS Logistics, DHL, Yusen Logistics, Hitachi Transport Solutions (Flyjac), etc. We have also moved from brokers to vehicle owners for primary transportation. They have their own fleet and are always available on demand.
This interview was originally published in the March issue of the Logistics Insider Magazine. If you wish to read the complete & unabridged version, click here.