Paper on Scm in Fmcg Sector

SUPPLY CHAIN MANAGEMENT IN THE FMCG SECTOR

~ Sneha Susan John

206

MA- tech (chemical)

Literature Review

INTRODUCTION

The FMCG sector, also referred to as the Consumer packed goods, deals with the production, distribution and marketing of consumer packaged goods. They are consumables which are consumed by the consumers at a regular interval.

The fast moving consumer goods sector is growing at an exponential speed, with the overall demand expected to rise manifolds in the years to come. The high growth is estimated to be cause of the constantly changing customer preferences, emergence of modern establishments, and growing rural demand. The competition among this sector is increasing, thus the investment in this industry is high too.

In India the FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2012.

The Demand side growth factors that affect the Indian FMCG sector include:

* The burgeoning sector: includes the younger generation population,which are more actively employed, thus more available increased incomes to spend on expendables. Further more aware and exposed to the media and its influences

* Untapped rural market:  Rural India has a large consuming class with 41 percent of India’s middle-class and 58 percent of the total disposable income

* Evolving customer profile:

The Supply side growth factors :

* Modern trade: The modern trade share in the FMCG sector in 2010 was only about 5 percent. An increase of approximately 25 percent annual growth. 

* Technology: it achieves front-end processes by creating consumer awareness, enabling efficient sales and distribution and backend processes like market research, generating shopper insights; gathering business intelligence, supply chain management

* Macroeconomic factors: growth in the GDP, increase in incomes, more employement of women, rural penetration

The FMCG industry is regarded as the...