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CastaCPG

An Enterprise-wide Solution for CPG businesses on SAP S/4HANA

Consumer Packaged Goods Industry: An Overview

Consumer Packaged Goods industry stands 4th among the sectors that contribute to Indian economy. Consumer Products are produced, distributed, marketed and consumed within a short span of time.

Though this sector includes a wide range of products that includes detergents, toiletries, tooth cleaning products, cosmetics, consumer electronics, soft drinks, diary products, farm products, packaged food products, consumer electronics etc., some analysts group them in to three segments:

Household and personal care (almost 50% of sector)

Healthcare (31% of sector)

Food and beverages (19% of sector)

Revenue in Indian FMCG industry has been growing @ 21.4% in the last 10 years. Analysts estimate that revenues of CPG sector may reach around US$103 billion from US$ 52.75 billion in 2017-18.

In India, urban areas account for 55% of CPG revenue and rural areas, which are growing faster, contribute 45% of the revenue. More than 65% of people, who stay in rural areas spend approximately 50% of their total expenditure on CPG. Rural FMCG market is projected to reach US$220 billion by 2025.

Number of online buyers is projected to reach 850 million by 2025.

Also, the GOI has recently approved 100% FDI in “Cash & Carry” segment and 51% FDI in multi-brand retail.

Recent trends & Challenges in CPG businesses

CPG companies have a wide range of products and product variants with most of them being sold in high volumes with low margins.

In India, the CPG industry is highly fragmented with large number of companies offering similar products, unlike in US where it is dominated by few large CPG companies. So, it is a major challenge for Indian CPG companies to increase their market share. Launch of new products or launching products in new regions is expensive.

12.2% of the world’s population lives in rural India, so CPG companies need a supply chain which is deep, wide, agile and cost efficient.

Also, the pandemic has impacted retailers in different ways. Several retailers have filed bankruptcy across the world, selling out or reduced their operations. On the other hand, e-commerce business saw a rise due to a significant shift in buying habits of people.

Consumers have reduced buying from their neighborhood shops, supermarkets, and shopping malls and started to buy from e-commerce portals. People have increasingly started buying groceries, packed foods, fruits & vegetables, branded clothes and electronic goods like TVs, Mobiles, Laptops etc. or even furniture from e-commerce portals.

This shift is causing several changes in the approach of CPG businesses. For instance, some CPGs are rethinking their assortment strategies to cater to their online buyers. Some of them are redesigning their packaging to reduce packaging and shipping costs.

Another challenge for CPG companies is to meet the sudden spikes in demands, especially during festivals or holidays. The spikes have become significant in e-commerce businesses.

Also, demand for consumer products is generally elastic i.e. a change in price causes a bigger percentage change in demand.

Keeping in view of the above factors, brands should build and manage a highly agile supply chain which is e-commerce ready and powered by accurate demand forecasting and inventory planning capabilities.

A CPG company needs a solution that can help it in inventory optimization and assortment optimization taking demand and supply volatility into consideration.

Keeping these challenges and opportunities in perspective, we have designed and developed a solution on SAP ERP – CastaCPG specifically for Pharma manufacturers, which is being used by several organizations in India.

Our Solution

Main features of our solution for Consumer Packaged Goods businesses

An enterprise application for CPG Manufacturing and Distribution should enable organizations to produce and deliver high quality products to its customers quickly and at competitive prices, while following CGMP practices.

Our solution ‘CastaCPG is specifically designed to do this!

Our team of business experts with vast experience in Consumer Packaged Goods Manufacturing & Supply Chain, Discrete Manufacturing, Batch & Continuous Production have identified major requirements and developed this pre-configured solution used by various industries.

Our solution enhances the capabilities of SAP S/4HANA and helps you in managing your sales, production, quality & logistic processes specific to CPG businesses apart from supporting back office functions like accounting and human resources. We constantly update our solution with improved planning & scheduling processes along with latest compliance requirements and release them in the form of service packs.

Baseline Solution

Preconfigured Cross Industry processes on SAP ECC or S/4HANA

CPG Add-on

Add-on Solution for CPG Manufacturing & Distribution Processes

Other SAP Apps

SAP Analytics Cloud, Concur Travel & Expenses, SuccessFactors, Fiori, Solution Manager etc.

Baseline Functions

Cross-Industry Functions & Features on SAP ECC or SAP S/4HANA

Standard processes across functions such as Finance, Sourcing & Procurement, Sales, Supply Chain, Quality Management, Production etc. are pre-configured and available for use readily. All processes are available with local tax compliance and reporting requirements.

For example, processes such as procurement of raw material, assets, services etc. are already configured with various release strategies and Purchase Order layouts with the required tax procedures. Processes supporting Domestic Sales, Exports, Online Sales etc. along with invoice layouts are already pre-configured and available to use. Chart of Accounts that supports local and international reporting requirements are available along with the Legal & Statutory reporting templates.

Ready-made tools are available to migrate your Master data and open items. Analytical reports across various functions are readily available.

You can adapt to these pre-configured processes or customize where required and start using the solution quickly. The Baseline functions included in this solution are listed below.

SAP S/4HANA
Finance

for managing receivables, payables, finance closing & reporting

SAP S/4HANA
Sourcing & Procurement

for managing suppliers, buying material and sources

SAP S/4HANA
Supply Chain

for managing Inventory, Delivery, Transportation and Warehousing

SAP S/4HANA
Sales

for managing customers, pricing, orders, and contracts

SAP S/4HANA
Manufacturing

for production planning, scheduling & operations, managing quality

SAP S/4HANA
Asset Management

for equipment maintenance planning and operations

SAP S/4HANA
Service

for managing customer support & complaints

SAP S/4HANA
R&D / Engineering

for new Product Research & Development

SAP S/4HANA
Embedded Analytics

for using built-in analytics across sales, finance, purchasing etc.

SAP S/4HANA
Digital Compliance platform

for taxes, legal & regulatory reporting specific to India

CPG Add-On

An add-on solution for Consumer Packaged Goods on SAP ECC or S/4HANA

Apart from the baselines functions, we have included below processes and features that are specific to Consumer Packaged Goods businesses:

Manufacturing Processes

Batch Production

Continuous Production

Repetitive Manufacturing

MTS w / wo Variant Configuration

Manufacturing with Kanban Supply in Production

Constraint-based Capacity Planning

Production Control

Production Subcontracting

R&D / Engineering

Portfolio Management

Project Management

Retail functions

Assortment Strategies

Merchandise Planning

Store Management

Omni-channel Retailing

Tertiary & Secondary Sales

Secondary Sales - Planning, Recording Actuals, Plan Vs Actual

Tertiary Sales - Planning, Recording Actuals, Plan Vs Actual

Quality Management

Quality Planning

Quality Inspection

Supply Chain

Sales & Operations Planning

Primary Sales - Planning & Analytics

Transportation Management

Transportation Resource Planning

Mobile Inventory Management

Inbound & Outbound Goods movements

Warehouse Management

Inventory Optimization

Other SAP Applications

Add more capability to your CPG Solution on SAP ERP

In addition to the Baseline solution & CPG Add-on, you can implement additional SAP Applications listed below which are customized for CPG Manufacturing & Distribution scenarios.

SAP Success Factors

for managing core HR functions, Payroll, Talent, Learning along with Workforce planning and Analytics

SAP Fiori

for enabling several transactions, reports & analytics on IOS devices

SAP Concur

for planning, requests, approvals and analysis of business & travel expenses incurred by your personnel

SAP Solution Manager

for Document Management, Test Management, Incident Management & Integrative Change Management

SAP Analytics Cloud

for Descriptive, Diagnostic, Predictive & Prescriptive Analytics of your business

Industries

Industries that can use our Solution

Appliances & Devices

(Refrigerators, Air-conditioners & coolers, TVs, Laptops, Mobiles, Tabs etc.)

Furniture & Home Furnishings

(Beds, Tables, Chairs, Cushions, Mattresses, Quilts, Beddings, Sofas etc.)

Packaged food & beverages

(baked goods, noodles, biscuits, cheese, ice creams, non-alcoholic beverages, ready-to-eat meals, cereals etc.)

Fashion

(Apparels, Sportswear, Footwear, Jewelry, Cosmetics, Watches, etc.)

Toiletries

(body care, face care, hair care, hand care, oral care)

Others

(Sports Equipment, Fitness equipment, Bags, Toys)

Connect with our CPG experts to implement our solution on SAP ERP - whether ECC or S4/HANA.