Synopsis

on

Warehousing Operations in FMCG Industry

Synopsis submitted in partial fulfillment of requirements for

Bachelors of Business Administration
Logistics management

Mentors Name-
Dr. Neeraj Anand

UPES- Dehradun

Submitted by-
FAIZ ALI
500040446
R380214038
BBA LogisticsManagement
2014-2017
College of Management & Economics Studies, UPES

Table of contents
Chapter Topic
1 Introduction of the Industry
What is WMS and FMCG
Reason for implementing WMS in FMCG sector
Effects of WMS in FMCG sector
Scope of WMS in FMCG sector
Pros and corns of implementing WMS in FMCG sector
FMCG in India
2 Literature review
3 Research Methodology
Data sources
Business problems in WMS
Research problems
Methods of data collection
Tools
Limitation of data collection
4 References
 Chapter-1

Introduction

What is WMS and FMCG?

WMS= A warehouse management system (WMS) is a software application,

designed to support warehouse or distribution center management and staff. They
facilitate management in their daily planning, organizing, staffing, directing, and
controlling the utilization of available resources, to move and store materials into,
within, and out of a warehouse, while supporting staff in the performance of
material movement and storage in and around a warehouse. Warehouse
management solution are primarily tactical tools, purchased and used by
businesses to satisfy the unique customer demand requirements of their supply
chains and distribution channels, when the inventory and workload are larger than
can be handled manually, with spreadsheets. Motivation to purchase generally
comes from need to support sales growth or improve performance, and
occasionally both.

Daily management functions include

Planning

Organizing

Staffing

Directing

Controlling
 FMCG = Fast-moving consumer goods (FMCG) or consumer packaged
goods (CPG) are products that are sold quickly and at relatively low cost. Examples include
non-durable goods such as soft drinks, toiletries, over-the-counter drugs, processed foods and
many other consumables. In contrast, durable goodsor major appliances such as kitchen
appliances are generally replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the product
deteriorates rapidly. Some FMCGs, such as meat, fruits and vegetables, dairy products, and
baked goods, are highly perishable. Other goods, such as alcohol, toiletries, pre-packaged foods,
soft drinks, chocolate, candies, and cleaning products, have high turnover rates. The sales are
sometimes influenced by some holidays and season.

Though the profit margin made on FMCG products is relatively small (more so for retailers than
the producers/suppliers), they are generally sold in large quantities; thus, the cumulative profit on
such products can be substantial. FMCG is a classic case of low margin and high volume
business.

The main characteristics of FMCG

From the consumers' perspective

Low involvement (little or no effort to choose the item)Low price

Short shelf life

Must use for daily consumption

Frequent purchase

From the marketers' angle

High volumes
 Low contribution margins

Extensive distribution networks

High stock turnover

Reason for implementing WMS in FMCG sector

Anyone in the warehousing or distribution industries today can cite specific benefits for
deploying a warehouse management system (WMS), including increased order accuracy,
faster picking and receiving times, and better inventory control, to name a few. There are
other less obvious, but equally compelling reasons why a company might decide to invest
in a WMS. Here are five of those reasons.

Reducing Employee Theft

Tracking Employee Metrics

Keeping Up with Competitors

Improving Supplier Confidence and Warehouse Appearance

Staying Compliant with Customer requirements.

 Effects of WMS in FMCG sector

Some of the effects which took place by implementing the WMS software in FMCG
industry are as follows

Correlation of picking and shipping processes for timely order delivery, etc

Efficient management of inbound processes (dock management, receiving and

put away)

Correct selection of the picking method

The accuracy of the physical inventory without stopping the warehouse activity,
etc.
 Scope of WMS in FMCG sector

Warehouse management significantly increases the overall efficiency of the production and
organization. A robust warehouse management would ensure that:

A smooth flow of production

Appropriate layout management to reduce material handling and equipment

handling

Reduce to wastage as well as spoilage

Eliminate the possibility of theft and damage

Ensure preservation of environment and reduce pollution

Encourage cost reduction and driving efficiency

Pros and corns of implementing WMS in FMCG sector

Modern warehouse management systems (WMSs) can produce fewer fill errors, greater
productivity and better customer service. A WMS can reduce operating costs by increasing
warehouse productivity. With a WMS, warehouse personnel don't have to spend time reading or
handling paper, keying in data or thinking about where they need to go. A true WMS can help
avoid warehouse expansion by determining a slotting arrangement that needs less space.
Furthermore, because the WMS software does the processing, fewer mistakes are made, and
errors that do creep in are immediately identified. All this increases the level of customer service,
which also can reduce costs.

The initial investment is the biggest negative for any form of WMS. RF devices have gotten less
expensive, but they still aren't cheap. The cost of special WMS software and required training
can easily exceed the cost of the devices. Another negative is the need to rearrange many
warehouses for a WMS to work well. And don't forget to add the need to implement tight
procedures and controls. This can all cost many thousands of dollars.

FMCG in India

FMCG in the fourth largest sector in the Indian economy. As of 2012, it has a market size of 13.1
billion USD.

Market growth rate-

Urban - 40%

Rural 25%
 FMCG in India
35

30

25

20 FMCG in India

15

10

0
2003 2006 2007 2015

Source:
The Confideration of Indian Industry (CII)

Chapter 2

Literature Review

Logistics Management System, more fondly known as Warehouse Management System (WMS)
is a MIS investment in a warehouse. Organizations must be capable of fast, radical changes and
those that aspire to be best must lead in changes.Globalization and competitive pressures have
heightened the impetus for strategic use of MIS. More specifically, Warehouse Management
System (WMS) designed to introduce improvement into every aspect of a companys warehouse
operations offers an organized approach to manage efficiency

When checking in items, WMS notifies warehouse staff if a received good is needed to fulfill a
customer backorder. In this event, instead of moving the item to storage location, it is prepared
for shipping directly to the awaiting customer.

WMS enables real-time tracking of receiving, storage and immediate access to information on
combined statistics of weight and lines for a specified customer.

WMS reducing human errors inherent in manual and paper based systems. Inventory Accuracy
improved from 98.34% to 99.52%. This occurs by allow access all departments within company
to the same set of accurate inventory data. The WMS offered physical scanning of items,
locations and boxes so that the contents of any order or storage location can be viewed in real-
time.WMS allows capturing important information on the items such as weight, expiration date
and more.

In order to encourage the staff to further embrace to new warehouse management system, long-
term on-going training is essential, the system must be designed with regular program
enhancement to create awareness of the gains of using technologies.

Chapter 3

Research Methodology

The research is exploratory research as primary and secondary data have been used.

Data Sources
 Articles

Websites

Business problems in WMS

There are several business links that make up the strength of the supply chain. If a chain is only
as strong as its weakest link, then smart business managers realize the necessity to keep them all
as strong as possible.What follows is a list of five common warehouse management problems
that can arise:

Redundancy
Nothing is less efficient than having to do the same thing twice or three or four times.
Many times, one warehouse worker will pass a ticket on to another, and another, and
another, and so on.

Picking efficiencies
Another argument to be made for automated systems is that it streamlines picking
efficiency. If there is no automation in place, pickers dont always take the most efficient
route to the inventory, which causes a serious process inefficiency.

Poor facility layout

Optimizing the layout of your warehouse will make much more effective use of your
space. In other words, if your storage systems, racking, and pallet patterns are most
efficiently laid out, you may find that you can actually use a much smaller space.

Inventory awareness
If pickers arent aware of the location of key inventory, the whole warehouse operation
will be slowed dramatically. Make sure there is a system in place that allows pickers to be
constantly aware of inventory, especially the high-selling items.
 Accuracy
Of course, accuracy is really the key to almost any efficient operation. If you dont have
an automated system in place that keeps an extremely accurate check on inventory, an
entire list of things can go wrong. If nobody is sure whats actually in stock, unnecessary
build-ups of the wrong items can occur and consequently, shortages of heavily demanded
items can drive customer dissatisfaction. Nothing can hurt a business like a large amount
of orders that cant be filled due to poor inventory accuracy.

METHOD OF DATA COLLECTION

1. Primary data collection

2. Secondary data collection

Research problem

Customer management

Forward distribution

Reverse logistics solution

Order management

Logistics operations

Tools

1. Questionnaire for organization and customer

2. One to one contact via telephone , face to face.

Limitations of data collection

Observations susceptible to observer bias

Survey and questionnaire

size and diversity of sample

Biased information by the respondents

Lack of contact with respondent

Unable to probe for additional details

 Chapter 4

References

https://en.wikipedia.org/wiki/Fast-moving_consumer_goods

https://en.wikipedia.org/wiki/Warehouse_management_system

http://www.sdcexec.com/article/12198895/five-reasons-why-your-company-
needs-a-warehouse-management-system

http://ewweb.com/archive/wms-pros-and-cons

http://www.seniorerp.ro/en/7-problems-occurring-in-the-warehouse-management-
that-a-wms-can-solve/

http://ewweb.com/archive/wms-pros-and-cons

http://www.managementstudyguide.com/warehouse-and-materials-
management.htm#

http://ewweb.com/archive/wms-pros-and-cons