How a renowned FMCG company was able to reduce logistics cost by 3-5% in their operations
Background and Challenge
Client’s Background:
- A leading snack company which primarily deals into sell primarily snacks, including biscuits chocolate, gum & candy as well as various cheese & grocery and powdered beverage products and operating in more than 80 countries and employ around 80,000 in our factories, offices, R&D facilities and distribution activities around the world.
Challenges Faced by Client:
- Barriers in reducing the logistics cost: The Client recognized the difficulties in minimizing Logistics cost for Road Freight and Warehousing services. Hence, they contacted Ken Research and Strategy Advisory to identify all stakeholders for the collaboration in their logistics operations.
- Difficulties in evaluating the market opportunity : In addition, the client was interested in understanding the road freight, warehousing and co-packing market opportunities that exists in India, hence they outsourced this activity to Ken Research.
Logistics Industry at Glance:
- India's logistics sector is estimated to account for about 14.4% of GDP by 2022. The unorganized sector amounts to over 90% of the logistics sector.
- The initiatives taken by the government will lead to the progress of the logistics sector. The integration in the form of a multi modal network of transport and warehousing will lead to increased efficiency in the transportation and storage of goods throughout the country
Approach and Recommendations
Phase 1: Provided the study on Pricing, Routes and location for road freight services
- Ken collaborated with its client to share the industry insights captured on prices by each companies on multiple routes and location for road freight services, to understand the price points which they are paying to the current vendors and how can they rationalize better
- In-depth and detailed discussions were carried out with the top decision making authorities.
- The market assessment also included the value chain analysis and impact of axle norms in the market.
- These discussions gave the client possible indication to get a know-how of the Logistics market in India positioned.
Phase 2: Key Analysis of each segment and competition framework
- The second phase of work focused on building an understanding on each segment, by understanding the potential, competition framework, major companies and positioning that these companies have.
- Deep Dive Benchmarking was done on various parameters like competition framework, Market share and positioning of multiple companies, Warehousing Prices at Different Locations and others.
- The client was able to get clarity to identify potential markets for the concerned products in India with eminent and noteworthy Primary Research by Ken Research in short span of time duration.
Phase 3: Quality Recommendations and advisory for the client
- After identifying and analyzing the pricing and overall market, Ken provided quantitative intelligence on target market of container trucks and end user analysis.
- Ken Research also offered recommendations and client was able to understand the ecosystem of companies that they can collaborate with.
- Ken has been successful in assisting client with the industry information delivered a detailed market research report and helped the client to identify potential segment where the client can develop their synergies in the current operations.
Result and Conclusion
Prospective partnerships for reducing the logistics cost
- Ken Research's team has aided the client by providing competition Framework and assisted client with the companies that they can collaborate with in the near future.
Ability to Identify the right opportunities in the Industry
- The client was able to identify the areas of improvements and potential segment where the client can develop their synergies,thanks to a detailed benchmarking of companies, provided by Ken Research.
Valuable Insights on overall Industry
- The competition specific market assessment will enable the Client to substantially develop their understanding about Logistics market in India.
Business Impact
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3-5%
Reduction in Logistics Cost achieved