Fleetguard Filters Pvt Ltd

We have been on an exciting journey for about six years to make the transition from forecast based push to a pull system. The paradigm changes were significant in production to move away from batch production to variety based production, which was assumed to lead to inefficiencies but we have actually generated excess capacity by not producing what is not immediately required. The changes in sales were even more fundamental – we had to move away from a system where we used to push material to distributors at month end, to now, a system where goods are invoiced daily as per consumption. This called for changes in the way we measured sales. Sales teams do not have a primary sales target – they have targets for generating real demand in the market and increasing range and reach of our products.

We overhauled all our trade schemes, which were based on meeting short-term targets. Such schemes created an artificial wave of peaks and troughs because of demand pre-ponement and did not help anyone in the chain. We have now stopped all such schemes and shifted the budget to long-term loyalty programs with our key customers and influencers – the mechanics in our case.

We actually have the best scheme for our channel partners. Due to the low inventory, our distributors earn an ROI of close to 80 per cent in my business. They have zero stock outs with only15 days of inventory at the most for each product. In return, they work extensively in the market for increasing range and reach. They cover the nook and corner of their territory to cater to every retailer, while continuously expanding the range – that is the win for me. At the retail point, almost every retailer appreciates our system of small stock and frequent supply. They are seeing how this is impacting their business and most of them are realising that this way of operations is helping them rather than buying in large lots.

We started in 2008, partnering with Vector Consulting Group. We implemented the daily pull based system of theory of constraints with all our suppliers, manufacturing plants and distributors. Our sales team is in weekly touch with over 30,000 retailers and 40,000 mechanics. We also manufacture and supply to OEMs based on pull-based consumption. We commit 100 per cent availability at a daily level to OEMs.

We operate with finished goods inventory of 11 days, while our distributers enjoy 20 turns. We do not have a month end sales skew. At the same time, our credit policy is very strict in the chain. We take advance payment from our distributors, while they give credit of 15 days to the retailers. It is win-win-win model for everyone in the chain.