At Vector Consulting, we believe that the customary practice of setting sales targets holds back companies from realizing the full sales potential of their markets. Find out why.

Does setting targets have a negative impact on sales of a company?

In our consulting practice, we have repeatedly seen that volume-based schemes (in the distribution channel) can limit a consumer goods company’s reach and range availability in the market while simultaneously throttling cash flow. Find out how this happens.

Do "Trade Schemes" jeopardize the sales of your company?

There is a deeply entrenched belief in the consumer goods industry that direct distribution to the large population of small retailers is unviable. Therefore, companies try to service these retailers through indirect distributors such as wholesalers. In our consulting assignments, we have repeatedly challenged this belief. Find out why!

Does indirect distribution actually lead to desired reach?

Often, materials supplied by the operations teams of consumer goods companies do not match those that the production teams need to fulfil orders. Teams spend copious amounts of time and energy on sourcing (expediting) the ‘missing material’. Vector Consulting has identified the cause of this chronic industry problem. Watch this short video to learn more.

Is your sales and operations planning ineffective?

ba View these videos to challenge some of the entrenched best practices in the consumer goods industry, to understand the chronic problems these practices have created, and to find a radically new perspective.

BA Antithesis

View these videos to challenge some of the entrenched best practices in the consumer goods industry, to understand the chronic problems these practices have created, and to find a radically new perspective.

Antithesis

Consumer Goods & Retail Consulting Services

Much as they may wish otherwise, most Indian consumer good companies find that they have no consistent “Reach” into almost 65% of the country’s population (especially in rural, rur-ban areas) since they believe that this spread out population would be ‘cost inefficient’ to service.

Industries

Consumer Goods & Retail

We have partnered some of the major names in the consumer goods and retail industry to create and implement radical solutions which have redefined industry benchmarks. These include:

Clients

Client Speaks

A. The earlier paradigm dictated that we manufacture products in big batches. To move stock, we had to procure big orders, open sprawling stores or pursue large franchisees. The fallout of this focus on primary sales through large orders was undesirable. Franchisees were burdened with at least six months’ inventory. Consequently, the ROI for franchisees dropped. It became difficult to attract good franchisees; this hampered our growth.
Working with Vector Consulting Group, we understood that small and frequent supplies ensured low inventories (of about two months) at the franchisee. This also brought in significantly higher ROI.

Q. Liberty’s growth story is amazing. You have transformed the franchisee model. How did you accomplish this?

A.Yes! We realised quickly that it was not possible to replenish the shops weekly directly from the production line. Then we learned that it was possible to do so from a Central Warehouse. So, we built one. With Vector Consulting's help, we overhauled operations to align with the goal of improving availability at the warehouse. Availability went up to 95 percent for more than 5,000 SKUs stocked at the warehouse. Production lead-times dropped from 60 to 16 days, consequently total inventory reduced by 50 percent! The next challenge was to accept the increase in logistics costs (which went up along with the frequency of deliveries to the warehouse). We reconciled with this cost as it was marginal compared to the substantial increase in sales.

Q. Liberty moved from manufacturing stocks as per forecasts (for an entire season) to manufacturing small quantities (and replenishing stocks every week). How did you make this shift?

A. We have added 150 new stores in the last 18 months. Our capability to make small and frequent supplies is key to enlarging our network of small franchisees and to operating company-owned stores in two and three tier cities.
95% availability at the central warehouse for more than 5,000 SKUs

Q. Have you thought of leveraging your success further?

Many consumer-packaged goods companies (CPG companies) face seemingly contradictory supply chain issues. Despite high inventory levels, companies still encounter significant stockouts. Furthermore, there is price pressure from supply chain intermediaries, although the end consumer price remains unaffected. Introducing new products or maintaining product freshness at retail points can also be a challenge while older products clog the pipeline. These problems stem from poor timing in inventory creation and movement. Despite efforts to improve forecasting methods and tools, consumer goods manufacturers never quite get it right. The solution lies in a different direction—questioning the need for forecasting itself. Vector’s Consumer Goods &amp; Retail consulting practice offers strategic consulting services for retail companies and consumer goods companies to help them achieve 100% availability at less than half the inventory in the end-to-end supply chain. For more information on how consumer goods and retail companies can prevent sales loss by ensuring availability.

Internal Operations and Distribution

availability at internal warehouses

Near

reduction in lead time

Upto

increase in plant efficiency

Reduction in overall inventories

Improve success rate of new introductions

Eliminated or reduced need for Inventory liquidation sales

Most consumer goods companies are unable to reach all retailers directly, especially small mom-and-pop stores and stores that are geographically spread out. To improve reach, such companies usually rely on distributors. However, most distributors tend to cherry-pick retailers in their areas, basing their choice on the cost of servicing the retailers. They leave out many retailers, unwittingly creating large reach gaps in many of the companies’ territories. To plug the gap, consumer goods companies then turn to wholesalers. However, wholesalers exacerbate the problem rather than provide real reach. At a loss for ways to strengthen their presence in hard-to-reach territories, consumer goods companies often accept the longstanding woe of inadequate reach as ‘unsolvable’.&nbsp;Vector can help retail and consumer goods companies to identify cost-effective ways of servicing every retail point. Deploying this strategy, retail/consumer goods companies can strengthen their reach with a single-tier distribution network.&nbsp; Know more about Vector’s Consumer Goods &amp; Retail consulting practice Go-To-Market strategy that has helped several companies in the consumer-packaged goods (CPG) industry reach out to all potential retailers.

External Distribution

Exponentially increase number of retailers covered by direct distribution

increase in product availability

More than

Sales growth higher than the industry average

availability of relevant range at all billing/retail points

Distributor ROI of close to 60%-80% compared to industry benchmarks of only 25%-30%

Once the internal and external distribution of products for consumer-packaged goods (CPG) companies is revamped, inventory movement operates on autopilot. In this new scenario, the sales team's primary focus for increasing sales shifts to retail points. However, then the load on the sales team goes up many folds. The only way to deal with this emergent constraint is to release the capacity of the sales team and use new methods, structures and processes to effectively identify and resolve issues impacting demand at retail points.&nbsp; To learn more about how Vector’s Consumer Goods &amp; Retail consulting practice can help optimize sales team capacity and how consumer goods companies can reach all potential retailers profitably, visit:

Sales Bandwidth

Increase in sales capacity

Maximize retail penetration

Consumer goods companies that have their own retail business are typically constrained by shelf space (or working capital). The speed of inventory rotation on shelf space limits a retail business's ability to make more money. The shelf space of retail stores is, in many cases, occupied by a significant quantity of slow-moving stock. At the same time, there is stock-out of popular products. Together, the impact is sales loss, and poor inventory turns for retail outlets. We offer consulting services to help our clients in the retail business significantly increase their rate of sales and simultaneously release capital for store expansion.&nbsp; Companies in the consumer-packaged goods (CPG) industry have used Vector’s Consumer Goods &amp; Retail consulting practice to achieve rapid pull replenishment and rapid replacement to solve the problem of stock-outs and slow-moving stocks (without hurting their bottom line).

Retail Operations

growth in same store sales

Around

improvement in inventory turns

Increased gross contribution per unit of retail shelf space

Improved display and freshness of stocks on retail shelf space

After a consumer goods company acquires a lean and agile distribution and supply chain that is capable of delivering high ROI for trade partners, it can experience the next level of constraint in its ability to launch new products. Companies in the consumer-packaged goods (CPG) industry that make new products are often cluttered with far too many projects; their environments suffer a host of issues such as frequent priority conflicts, rework, delays in production stabilisation, and, eventually, delays in launch.&nbsp; Vector’s Consumer Goods &amp; Retail consulting practice uses Flow Principles to help consumer goods companies increase the speed of projects and simultaneously release substantial capacity. Learn more about how we can help new product development (NPD) organisations permanently resolve chronic delays and low output.

New Product Development

reduced project lead time

increased output from existing resource base

Reduced rework & improved quality of output

Rapid production stabilization

Improved rate of success of launches

Reduced stress on people and other resources

Many fashion retailers struggle with supply chain issues despite investing in off-the-shelf software. Standard solutions don't work because fashion's design and demand paradox lead to stockouts and slow-moving inventory. Styles sell well in some regions but fail in others, further complicating inventory management. Challenges like the above need proper analysis and definition of the solution given the complexity of the supply chain/vendor network and the product design approach of a specific client. The cookie-cutter with standard algos and features does not work.&nbsp;&nbsp;Vector’s Consumer Goods &amp; Retail consulting practice combines client-specific solution design with its custom-built software, VectorFLOW. This end-to-end supply chain management platform allows tailored features to streamline fashion retailers' supply chain and inventory management. VectorFLOW supports pull-based replenishment, dynamic drops, growth estimation, and range planning across Merchandising Grid points. It automates stock allocation, manages slow-moving items, and identifies underperforming products for early pullbacks and discounting, improving inventory management and profitability.

Technology Solutions

industries

Vector Consulting Group provides consumer good and retail consulting services to help increase sales by exponentially improving availability of products across the country.

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