As retailers increase the private label footprint, Consumer Goods (CG) companies are working hard to get closer to their end-consumers and increase brand recall. This has triggered the trend of consumers and shoppers buying directly from Consumer Goods (CG) companies –largely through online and mobile channels – with the result that control over deliveries has become exceedingly important.

For CG and retailers alike, directly serving the consumer and shopper is an increasingly attractive route to manage demand. It allows them to offer multiple delivery options aligned with the customer’s needs, keep costs down and make direct contact with customers thus helping to improve communication, feedback and loyalty.

Consumers and shoppers prefer buying from CG companies directly for a variety of reasons as shown below.

To take advantage of this trend, CG companies need to be on top of their logistics chain and ensure that products are packed and delivered to customers using the `lowest-cost + fastest-delivery’ option. This means facilitating deliveries direct to consumer to be made from a number of stock points including factory, supplier, warehouse, back of store and directly off retail shelves.

This shift in consumers’ buying trends has direct implications on the CG organizations to build up their own e-commerce operation, either by developing their own fulfillment capabilities or by distributing the product via a third-party platform. Let us look at some components of this rewiring:

• Products/ SKUs must be picked and packed accurately as per customer order; else the surge in returns can impact margins apart from fueling customer dissatisfaction.
• A capability to pick and pack products from multiple stock points may be needed to complete a single order.
• Tight delivery windows based on customer convenience focuses on outbound transportation optimization.
• Delivery destinations can be completely unpredictable, forcing better routing decisions to optimize delivery costs.
• Ability to proactively inform the customer in the event of order changes (substitutions, partial/split fulfillment, delivery window changes etc.)
• Reverse logistics should look at returns policies as well as processing.

Technology comes into play once the above processes are outlined. Giving visibility to the logistics partner into the CG Company’s production units, suppliers, order management system, warehouses and other stock points is a start. In addition, the IT system (whether it’s the logistics provider’s or the manufacturer’s) must accurately estimate shipping time and costs, communicating it clearly to the customer upfront and staying through the order life cycle all the way to fulfillment and order closure.

What are the biggest hurdles a CG company is going to face when setting up the IT systems to integrate channels, orders and logistics? I would love to hear your thoughts on this.

Srini is the President for Wipro’s Consumer Business Unit which serves clients in a range of consumer-focused industries including Retail, CPG, Media & Entertainment, Travel & Hospitality and Public Sector. Srini is responsible for setting the vision as well as shaping and implementing growth strategies for each of the industry verticals.

Srini has been with Wipro for 24 years in various leadership roles - establishing, scaling and spearheading growth across Business Units, Service Lines and Markets. Previously, Srini was Sr. Vice President & Global Head of Business Application Services, with a team of over 29,000 people across dedicated practices. This service line contributed to 30% of Wipro’s global revenues. He has also been Vice President - Business Development & Sales for Americas geography, driving a business of USD 700 million across multiple industry verticals.

He was rated among the top 25 Young Business Executives in India by Business Today in 2008. He has received several accolades including Award of Excellence for Exemplary Performance and Chairman’s Club - Most Valuable Player for his contributions to Wipro’s growth. Srini holds a Master’s degree in Management from Indian Institute of Science, Bangalore and a Bachelor’s degree in Engineering. He has undergone an Advanced Leadership Program from McGill Executive Institute, Canada. Besides his interests in history and wildlife, he is an avid trekker and a runner.