B2B Sales

Financial Decision Making

High Variability Operations

Leadership Paradigms

Manufacturing & Supply Chain

Sales & Distribution

Thinking Process

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In this episode we will talk about our latest whitepaper - From Threads to Trends. This white paper sheds light on the persistent challenges in the apparel retail supply chain and presents forward-thinking strategies to drive efficiency and profitability. 
It reveals how prolonged lead times – often extending from 6-9 months – continue to disrupt supply chain efficiency in apparel retail. Drawing from extensive research and industry insights, it highlights key inefficiencies caused by outdated supply chain practices, forecasting errors, and the reactive nature of inventory management. 
The findings show that up to 40% of inventory is sold at discounted prices due to supply chain mismatches, undermining both profitability and brand positioning. It proposes a differentiated product lifecycle approach. By categoriSing merchandise into Perennials (core items), short life cycle items (semi-Perennials), and very short life cycle items (True Fashion), brands can streamline supply chains, reduce markdowns, and better adapt to evolving consumer demand for success.

What's eating into apparel brands profitability?

In this episode we will talk about our latest whitepaper - From Threads to Trends. This white paper sheds light on the persistent challenges in the apparel retail supply chain and presents forward-thinking strategies to drive efficiency and profitability.

The auto industry thrives on momentum, but what happens when dealerships are stuck with unsold cars? As it has happened in the recent months. Excess inventory can choke cash flow, force heavy discounts, and disrupt the entire supply chain.In this episode, we take a closer look at why inventory levels at dealerships have soared, and the challenges this creates.

Dealership inventory crisis: What's causing the surplus?

In this podcast episode, hosted by Shubham Agarwal and featuring Chandrachur Datta, Partner at Vector Consulting Group, we dive into the essence of managing operations.​
​
Explore how to handle fluctuating demand, manage capacity challenges, and eliminate inefficiencies using strategic buffers. Gain actionable insights and hear real-world examples that can transform your operations.​

How do businesses tackle fluctuating demand, capacity challenges, and operational inefficiencies?

In this podcast episode, hosted by Shubham Agarwal and featuring Chandrachur Datta, Partner at Vector Consulting Group, we dive into the essence of managing operations.​  Explore how to handle fluctuating demand, manage capacity challenges, and eliminate inefficiencies using strategic buffers. Gain actionable insights and hear real-world examples that can transform your operations.​
​

Explore strategies for managing operations, tackling fluctuating demand and capacity challenges in this insightful podcast by Vector Consulting Group. Listen to the episode here!

Managing Operations: Tackling Demand Fluctuations & Challenges | Podcast by Vector Consulting Group

Shubham Agarwal - Welcome to this episode of Counterpoint Podcast, where we delve deep into the dynamic world of supply chain management. I'm excited to introduce our guest, Abhishek Sharma, Vice President of Supply Chain and BlackBerry's menswear division. Abhishek joins us to share insights on the complex challenges his team faces in navigating the intricacies of the supply chain.So let's get started with him. Hi Abhishek, welcome to the counterpoint podcast.Shubham Agarwal - Blackberry is a very well-known menswear brand in India. Can you briefly discuss what kind of retail footprint and supply chain partnerships the brand has?Abhishek Sharma - We work with close to 1400 DOS pan India, which covers almost 300 exclusive business outlets of which 200 are company owned company operated, and 100 are franchisee owned franchisee operated. In addition, we have 800, multi business outlets, and 200 plus large format treaties like Shopper Stop, Pantaloon and Lifestyle.And we are also expanding internationally though we have opened up two stores in Nepal, recently. So, this is our retail presence talking about our strengthening with the partners are so we have 20 plus factories and in their garment factories and also 30 Plus Mills, which exist in India, as well as in China, Turkey, Japan, and so on.Shubham Agarwal - Can you give us some idea about how this industry works?Abhishek Sharma - Industry follows a seasonal paradigm over here. And pretty much in retail booking happens in the trade shows for that is that is a for the entire season.So, this is something where a brand represents its range to the entire retail world in terms of the channel partners, or in our own Coco's our franchise partners, they come it's a 10 to 12 days event where we display the entire range which will be coming in the upcoming season.So, there we you know, support our partners and display the trends and giving them confidence. And then the book is all my multiple outlets all my last one at retails franchise partners, including our own buying and merchandising team, which buys for our exclusive business outlets.&nbsp;Shubham Agarwal - What were the issues with this way of working?Abhishek Sharma - It's a long time scenario because season gets planned anywhere six to nine months before what we will put on store. So today we are planning for Autumn-Winter ‘23, supposedly, and the merchandise will start getting on the shelves anywhere from July until the month of November or December. So planning months before is never easy. The biggest disadvantage is you are exposing yourself in terms of huge risk you may create a more merchandise which eventually will block your working capital. It creates a huge damage it will go on discounting it will get exposed to end of season sale, which eventually reduces our gross margins. It impacts our EBITDA as an organisation. So, while an inventory can be in excess, and it can go short as well.And you also end up having stock-outs in some areas we were having more opportunity to sellso, our channel partners were disappointed in terms of availability, because as I said, no there was only one an ordering mechanism in the season. So in some SKUs, they were really finding good stocks in some SKUs on consistent unavailability which was not giving them the right sell through.This is one biggest challenge that we had at a SKU level, not giving them a stock out situation also not making them sit on the excess inventory situation.Shubham Agarwal - Your newly revamped supply chain is set up uniquely. Can you describe the rationale?Abhishek Sharma - So we have two category of business and one is a fashion category business, which is more seasonal, where we buy seasonal products focus on seasonal colour palettes, seasonal designs, and there are Core category of products which we call it as rock we named that programme as rock which is called around the clock.So, Core is the product which has bare minimum of two season life, it lives and has a possibility and probability to go more further, we were treating those core products as a seasonal product only and buying only once a season, which was not the right approach. Because end of the day, it was leading to either higher stocks or leading to the stock unavailability. We wanted to enhance or strengthen our position so that we have a better margins, better sales throughs, as well as better stock turns, though, we were only operating at 8% in the terms of the contribution and our endeavour was to take it up to 20% to 25%.Shubham Agarwal - How did you identify something as Core in your portfolio?Abhishek Sharma - So, getting a range and the data from last two to three seasons or four seasons in some areas, how are my colours, how my patterns, silhouettes designs are getting sold. And in what sizes we went to that depth and basis that repeatability in terms of any product which is having a survivor of more than two seasons, and having the highest sell through first price sell through of more than 70% those criteria we adopted and put them under Core.Shubham Agarwal - What steps were taken to improve the availability of the Core products?Abhishek Sharma - First we adopt a very basic step, where we deep dive identified, what is my demand pattern, how the sell through is coming, how gross margins are getting generated, and in terms of the viability of those products.So basis that we went into every SKU as an option, we created that and relooked at all those number of options. Out of those 150 which are selling more so they are only realised that almost 60 to 70 are contributing to 85% of my business. So, keeping them into more focus and taking that 100% that's the approach we take.Shubham Agarwal - Rationalizing the portfolio would have helped ease the supply chain. What next?Abhishek Sharma - We were working on a push-based model which was once a season and providing the inventory which we are giving it to our either our outlets or to our retailers, we changed to a pull-based mechanism which was a more real time based sale base scenario.Shubham Agarwal - How does this pull-based system work really?Abhishek Sharma - I will describe this pool into four different stages. So, let me start with the front end piece of it, where the actual consumer demand just gets generated. So, we got into a non-calibration process where as per my real time sale at a SKU level norms were getting calculated. From there we defined the store level norms and to fulfil that store level the second stage came into was a central warehouse. We also define central warehouse norms, so that keeping a surety that our availability at 90% at all pivotal across the stores, then to make that to make sure our central warehouse is full we had to partner our garment vendors as well as fabric mills there also we defined our norms clearly that in what form they will keep the finished goods as well as the raw materials.So, this is from an ordering process rather it became an auto replenishment process. As in like the sales are happening, it is getting auto replenish across all the doors. Auto replenishment at the central warehouse.Shubham Agarwal - How did you retail partners and your supply chain partners react to this new way of working?Abhishek Sharma - This was a huge paradigm shift, huge issue in terms of you know, getting them understand about this model and taking them away of regular ordering rather it is a sale based we will calculate what to be required at your shelf, and how much pieces in what size so that yes, they took time to get enrolled, but they saw the results of it. And now they're very happy how it is being adopted across pan India 500 plus stores. Similarly, our partners were also very likely more stringent in terms of you know, following the long process, keeping some inventory in the warehouse, as well as you know, keeping the WIP with them. But now they understand it is a regular product, which will be getting asked you know, in terms of the entire year, as well as they also work to capture their capacities separately from the same. Earlier,&nbsp; it used to be an overall capacity, which included fashion and core and at times fashion was getting prioritised because of the launches. But now core has a separate availability, separate capacity and separate focus.&nbsp;Shubham Agarwal - How was the solution implemented in fashion products different from the core products?Abhishek Sharma - See fashion as a category contributes to 80% of our business, which is like a bread and butter for the organisation. And for that on time delivery and on time, performance is the key. If we place our merchandise on time on the shelf, and giving them a window of 16 to 18 weeks of fresh sell through that's the game we play as a retailer.Shubham Agarwal - What changes did you make to the supply chain to make this possible?Abhishek Sharma - There is a model that used to exist also in the organisation about two slot model where we used to order pretty much at 80%-85% of the season in one go and remaining keeping it open 10% to 15% for the second go. The biggest disadvantage for that was planning seven to nine months before is you are exposing yourself in terms of huge risk ..So moving away from that and looking at like you know every season we go for a four phase ordering, which helps you know, minimising our risk optimising our an opportunity to the front end so that within the season we react to what is getting sold well in what sizes.Shubham Agarwal - Can you explain this further? How do you ensure that the supply chain is seamless?Abhishek Sharma - So we created our process and divided it into seven critical steps in terms of the time and action. And those seven steps are divided amongst what are my pre ordered delays, areas. How do we address that? And what are my post order challenges? How do we come across? So talking about pre order challenges? critical ones were about how do we effectively plan our capacity equal real capacity management? How do we create entire menu what is what is getting offered in the trade show with the partners what can be bought when and then accordingly it will be fulfilled on time. So that setting became a critical piece. So to address that, we created a supply planning team, we put it into a structure which never existed earlier. And similarly addressing the post order delays about how are we effectively now utilising the capacities? How are there are no peaks and troughs within the season? How are we you know giving consistent closures to our partners and regularly review. We also adopted digital platform where the entire time and action getting managed through that platform giving visibility to across stakeholders and cross functional teams. So from there post order delays are getting addressed with clear two forms. One is called the daily flow meeting. And the second structure was weekly war room, where we used to pin down our issues, solve them and take accountability.Shubham Agarwal - That’s really awesome. What were the major benefits you channel partners got?Abhishek Sharma - They were enjoying high sales because not just not getting stock out. And they were also enjoying in terms of their working capital not blocked in case something is you know having an excess inventory out there.Shubham Agarwal - What about vendors?Abhishek Sharma - Vendors are very happy because also they have certain secured capacity lines which is a secured business to them month on monthShubham Agarwal - The implementation in core products has been rolled out already? What about the results you have seen so far?Abhishek Sharma - We made that availability at the front end from 40% to 80%, as well as while we were you know, reviewing our sales on a day to day basis, that helped us to keep the right inventory at the right SKU. So we saw as an overall growth, we actually saw it at each channel level, not just at our own exclusive business outlets. The sales jump was around 60% year-on-year. Sell through was 60%, our inventory turns got improved from two to four, our overall raw contribution increased from 8% to 20%Shubham Agarwal -&nbsp; Nice. Lovely. Thank you so much, Abhishek. That wraps up our insightful conversation with Abhishek Sharma from BlackBerry's menswear division. We've uncovered the complexities of modern supply chain management and how Vector has played a pivotal role in reshaping the whole approach.We hope you found this episode as enlightening as we did. For more discussions on industry challenges and breakthrough steps, stay tuned to Counterpoint Podcast. Until next time, keep pushing the boundaries of innovation and efficiency. This is Shubham signing off. Bye-bye.

Explore the intricacies of supply chain management in the latest Counterpoint Podcast episode. Join Shubham Agarwal as he interviews Abhishek Sharma, VP - Supply Chain, BlackBerry's Menswear division, revealing how innovative strategies are transforming supply chain operations for better efficiency and growth.

Conversations with Business Leaders: Abhishek Sharma, VP - Supply Chain, Blackberrys Menswear

Shubham Agarwal - Welcome to this episode of Counterpoint Podcast, where we delve deep into the dynamic world of supply chain management. I'm excited to introduce our guest, Abhishek Sharma, Vice President of Supply Chain and BlackBerry's menswear division. Abhishek joins us to share insights on the complex challenges his team faces in navigating the intricacies of the supply chain.So let's get started with him. Hi Abhishek, welcome to the counterpoint podcast.Shubham Agarwal - Blackberry is a very well-known menswear brand in India. Can you briefly discuss what kind of retail footprint and supply chain partnerships the brand has?Abhishek Sharma - We work with close to 1400 DOS pan India, which covers almost 300 exclusive business outlets of which 200 are company owned company operated, and 100 are franchisee owned franchisee operated. In addition, we have 800, multi business outlets, and 200 plus large format treaties like Shopper Stop, Pantaloon and Lifestyle.And we are also expanding internationally though we have opened up two stores in Nepal, recently. So, this is our retail presence talking about our strengthening with the partners are so we have 20 plus factories and in their garment factories and also 30 Plus Mills, which exist in India, as well as in China, Turkey, Japan, and so on.Shubham Agarwal - Can you give us some idea about how this industry works?Abhishek Sharma - Industry follows a seasonal paradigm over here. And pretty much in retail booking happens in the trade shows for that is that is a for the entire season.So, this is something where a brand represents its range to the entire retail world in terms of the channel partners, or in our own Coco's our franchise partners, they come it's a 10 to 12 days event where we display the entire range which will be coming in the upcoming season.So, there we you know, support our partners and display the trends and giving them confidence. And then the book is all my multiple outlets all my last one at retails franchise partners, including our own buying and merchandising team, which buys for our exclusive business outlets.&nbsp;Shubham Agarwal - What were the issues with this way of working?Abhishek Sharma - It's a long time scenario because season gets planned anywhere six to nine months before what we will put on store. So today we are planning for Autumn-Winter ‘23, supposedly, and the merchandise will start getting on the shelves anywhere from July until the month of November or December. So planning months before is never easy. The biggest disadvantage is you are exposing yourself in terms of huge risk you may create a more merchandise which eventually will block your working capital. It creates a huge damage it will go on discounting it will get exposed to end of season sale, which eventually reduces our gross margins. It impacts our EBITDA as an organisation. So, while an inventory can be in excess, and it can go short as well.And you also end up having stock-outs in some areas we were having more opportunity to sellso, our channel partners were disappointed in terms of availability, because as I said, no there was only one an ordering mechanism in the season. So in some SKUs, they were really finding good stocks in some SKUs on consistent unavailability which was not giving them the right sell through.This is one biggest challenge that we had at a SKU level, not giving them a stock out situation also not making them sit on the excess inventory situation.Shubham Agarwal - Your newly revamped supply chain is set up uniquely. Can you describe the rationale?Abhishek Sharma - So we have two category of business and one is a fashion category business, which is more seasonal, where we buy seasonal products focus on seasonal colour palettes, seasonal designs, and there are Core category of products which we call it as rock we named that programme as rock which is called around the clock.So, Core is the product which has bare minimum of two season life, it lives and has a possibility and probability to go more further, we were treating those core products as a seasonal product only and buying only once a season, which was not the right approach. Because end of the day, it was leading to either higher stocks or leading to the stock unavailability. We wanted to enhance or strengthen our position so that we have a better margins, better sales throughs, as well as better stock turns, though, we were only operating at 8% in the terms of the contribution and our endeavour was to take it up to 20% to 25%.Shubham Agarwal - How did you identify something as Core in your portfolio?Abhishek Sharma - So, getting a range and the data from last two to three seasons or four seasons in some areas, how are my colours, how my patterns, silhouettes designs are getting sold. And in what sizes we went to that depth and basis that repeatability in terms of any product which is having a survivor of more than two seasons, and having the highest sell through first price sell through of more than 70% those criteria we adopted and put them under Core.Shubham Agarwal - What steps were taken to improve the availability of the Core products?Abhishek Sharma - First we adopt a very basic step, where we deep dive identified, what is my demand pattern, how the sell through is coming, how gross margins are getting generated, and in terms of the viability of those products.So basis that we went into every SKU as an option, we created that and relooked at all those number of options. Out of those 150 which are selling more so they are only realised that almost 60 to 70 are contributing to 85% of my business. So, keeping them into more focus and taking that 100% that's the approach we take.Shubham Agarwal - Rationalizing the portfolio would have helped ease the supply chain. What next?Abhishek Sharma - We were working on a push-based model which was once a season and providing the inventory which we are giving it to our either our outlets or to our retailers, we changed to a pull-based mechanism which was a more real time based sale base scenario.Shubham Agarwal - How does this pull-based system work really?Abhishek Sharma - I will describe this pool into four different stages. So, let me start with the front end piece of it, where the actual consumer demand just gets generated. So, we got into a non-calibration process where as per my real time sale at a SKU level norms were getting calculated. From there we defined the store level norms and to fulfil that store level the second stage came into was a central warehouse. We also define central warehouse norms, so that keeping a surety that our availability at 90% at all pivotal across the stores, then to make that to make sure our central warehouse is full we had to partner our garment vendors as well as fabric mills there also we defined our norms clearly that in what form they will keep the finished goods as well as the raw materials.So, this is from an ordering process rather it became an auto replenishment process. As in like the sales are happening, it is getting auto replenish across all the doors. Auto replenishment at the central warehouse.Shubham Agarwal - How did you retail partners and your supply chain partners react to this new way of working?Abhishek Sharma - This was a huge paradigm shift, huge issue in terms of you know, getting them understand about this model and taking them away of regular ordering rather it is a sale based we will calculate what to be required at your shelf, and how much pieces in what size so that yes, they took time to get enrolled, but they saw the results of it. And now they're very happy how it is being adopted across pan India 500 plus stores. Similarly, our partners were also very likely more stringent in terms of you know, following the long process, keeping some inventory in the warehouse, as well as you know, keeping the WIP with them. But now they understand it is a regular product, which will be getting asked you know, in terms of the entire year, as well as they also work to capture their capacities separately from the same. Earlier,&nbsp; it used to be an overall capacity, which included fashion and core and at times fashion was getting prioritised because of the launches. But now core has a separate availability, separate capacity and separate focus.&nbsp;Shubham Agarwal - How was the solution implemented in fashion products different from the core products?Abhishek Sharma - See fashion as a category contributes to 80% of our business, which is like a bread and butter for the organisation. And for that on time delivery and on time, performance is the key. If we place our merchandise on time on the shelf, and giving them a window of 16 to 18 weeks of fresh sell through that's the game we play as a retailer.Shubham Agarwal - What changes did you make to the supply chain to make this possible?Abhishek Sharma - There is a model that used to exist also in the organisation about two slot model where we used to order pretty much at 80%-85% of the season in one go and remaining keeping it open 10% to 15% for the second go. The biggest disadvantage for that was planning seven to nine months before is you are exposing yourself in terms of huge risk ..So moving away from that and looking at like you know every season we go for a four phase ordering, which helps you know, minimising our risk optimising our an opportunity to the front end so that within the season we react to what is getting sold well in what sizes.Shubham Agarwal - Can you explain this further? How do you ensure that the supply chain is seamless?Abhishek Sharma - So we created our process and divided it into seven critical steps in terms of the time and action. And those seven steps are divided amongst what are my pre ordered delays, areas. How do we address that? And what are my post order challenges? How do we come across? So talking about pre order challenges? critical ones were about how do we effectively plan our capacity equal real capacity management? How do we create entire menu what is what is getting offered in the trade show with the partners what can be bought when and then accordingly it will be fulfilled on time. So that setting became a critical piece. So to address that, we created a supply planning team, we put it into a structure which never existed earlier. And similarly addressing the post order delays about how are we effectively now utilising the capacities? How are there are no peaks and troughs within the season? How are we you know giving consistent closures to our partners and regularly review. We also adopted digital platform where the entire time and action getting managed through that platform giving visibility to across stakeholders and cross functional teams. So from there post order delays are getting addressed with clear two forms. One is called the daily flow meeting. And the second structure was weekly war room, where we used to pin down our issues, solve them and take accountability.Shubham Agarwal - That’s really awesome. What were the major benefits you channel partners got?Abhishek Sharma - They were enjoying high sales because not just not getting stock out. And they were also enjoying in terms of their working capital not blocked in case something is you know having an excess inventory out there.Shubham Agarwal - What about vendors?Abhishek Sharma - Vendors are very happy because also they have certain secured capacity lines which is a secured business to them month on monthShubham Agarwal - The implementation in core products has been rolled out already? What about the results you have seen so far?Abhishek Sharma - We made that availability at the front end from 40% to 80%, as well as while we were you know, reviewing our sales on a day to day basis, that helped us to keep the right inventory at the right SKU. So we saw as an overall growth, we actually saw it at each channel level, not just at our own exclusive business outlets. The sales jump was around 60% year-on-year. Sell through was 60%, our inventory turns got improved from two to four, our overall raw contribution increased from 8% to 20%Shubham Agarwal -&nbsp; Nice. Lovely. Thank you so much, Abhishek. That wraps up our insightful conversation with Abhishek Sharma from BlackBerry's menswear division. We've uncovered the complexities of modern supply chain management and how Vector has played a pivotal role in reshaping the whole approach.We hope you found this episode as enlightening as we did. For more discussions on industry challenges and breakthrough steps, stay tuned to Counterpoint Podcast. Until next time, keep pushing the boundaries of innovation and efficiency. This is Shubham signing off. Bye-bye.&nbsp;&nbsp;

Listen to Mr. Abhishek Sharma, VP-Supply Chain, Blackberrys Menswear, discusses innovative supply chain solution deployed. Listen to this episode here!

Innovative Supply Chain Strategies | Podcast by Vector Consulting Group

Discover how Royal Enfield revolutionized its supply chain management with a dynamic Replenishment Model. CEO B. Govindarajan shares insights on overcoming spare parts challenges, boosting efficiency, and bringing customers back to service centers, thanks to improved service and parts availability.

Conversations with Business Leaders: Mr. B Govindarajan, CEO, Royal Enfield

Listen to Mr. B. Govindarajan, CEO, Royal Enfield, share insights on for auto industry and the challenges faced in managing inventory of spares. Listen to this episode here!

Auto Industry Insights with Royal Enfield CEO | Podcast by Vector Consulting Group

Dive into the fusion of data and storytelling, uncovering how numbers and narratives intertwine to drive innovation and change. Join us at the forefront of this exploration, shaping the future of how stories are told and understood in a data-driven world.

What drives effectiveness in communication: Data-first or Narrative-first approach?

Discover what drives effective communication: a data-first or narrative-first approach. Insights on storytelling by Vector Consulting Group. Listen to our podcast here.

Data v/s Narrative: Storytelling in Effective Communication | Podcast by Vector Consulting Group

Shubham Agarwal - Hello and a very warm welcome to the Counterpoint Podcast by Vector Consulting Group. I am Shubham Agarwal, and we have a very eminent personality with us today.Mr. Niranjan Kirloskar Management Director of Fleetguard Filters Private Limited, one of the leading organizations in the auto component industry. He is here to speak about their pioneering initiatives in the aftermarket which went on to set new industry benchmarks. So, let's welcome him and talk to him more about this.Hello, Niranjan sir. Welcome to the Counterpoint Podcast. It's a pleasure to have you here. Let's begin our discussion then.Shubham Agarwal - Can you please describe Fleetguard and its operations for us?Mr. Niranjan Kirloskar - We are basically automotive part manufacturers which is specifically its filters and the filtration systems that are required for the engine. And we have a distribution system. We have around 220 odd distributors around 40 to 50,000 retail outlets and our products are distributed all over India.Shubham Agarwal - Well, Fleetguard is known to have disrupted the aftermarket with some of its initiatives. Can you please describe these for us?Mr. Niranjan Kirloskar - Mechanical Loyalty Program, ROI for the distributors. According to me in India 36%-50% of ROI is good enough. We are giving something in excess of 150% and Retailer Loyalty Program. So, these are the three things which we did for the market, which no one has done.Shubham Agarwal - I think, most companies woo their channel partners with better margins. Why did you focus on ROI or Return on Investment?Mr. Niranjan Kirloskar - If you ask the distributor or the retailer, what do you want? You are not talking about profitability. The distribution system everywhere in the world works on the distributors are not bothered about return on sales. They are bothered about return on investment. They are bothered about the turnaround time of their money. So, if you ask a retailer, "Acha boss, why are you in business? I want profit." Okay. If you are in profit, then why are you asking for a volume discount. Are you going to keep that discount which I give it to you or are you going to pass it to the market? So, the answer has been, you are going to pass it to the market. Then you are not talking about profit as your goal. You are talking about turning around of the money with least investment in that particular business. So why do you want volume discounts? I will give you a better turnaround time, better ROI on your investments.Shubham Agarwal - So how do you make sure that the distributors get a good ROI?Mr. Niranjan Kirloskar - We tell our distributors, do not invest in our products. Invest in our range. So, on your sales counter, just keep one, one, one, one filters. And rest you do not have to do anything. We will deliver it to you when you want it. Somewhere it is 2 hours, somewhere it is 24 hours, somewhere it is 48 hours depending on the demographic. The distributor in Pune based takes delivery from us four times a day from our warehouse. It does not have to keep any inventory.Shubham Agarwal - Great, but how did you convince the distributors and retailers? Why should they trust your offer to whole inventory for them?Mr. Niranjan Kirloskar - Initially, we had that problem. Obviously, they were still ordering what they wanted because reliability was a big factor for them. If I do not get the product, Fleetguard is saying all this, but what if I do not get it, then what do I do? So, there were slip ups. But now we have our full-fledged IT system in place where he does not have to-- of course, again, it was a trust issue. I won't say trust issue, but they are saying that I will get the filter on time when I want it, but how are they going to manage it? It went on for two, three years. But after that, once the systems were in place, now they are absolutely not bothered.Shubham Agarwal - Can you describe the mechanic loyalty program and the thought behind it?Mr. Niranjan Kirloskar - See, the thought was very simple. It came from the airline thing. What is it for the mechanic here? Because mechanic is just fitting the filter, and he's paid by whoever the transporter is. Other than that, he's not getting anything. So, we said we should do something for the mechanic. We thought of various things like insurance, school for his kids, education. On religious days, give them some gifts. I said, but at the end of the day, we thought, or we came to a conclusion that it doesn't make any sense, because anybody can do this. Giving a gift or doing an insurance, he will get it. What? Insurance, God knows when he'll get it. So, for me or for anybody, what is my short-term gain? Unfortunately, that is what people think of. But for a mechanic whose daily stuff is on whatever is happening or whatever is earning every day is what it depends on. So, we said, let us have something like an airline. We give him points on fitment. And our scheme is open-ended. So, he can spend his miles or retrieve his miles or redeem. Redeem is the right word. He can redeem the miles whenever he wants. So, there is no end to our MLP, number one. Like in blackout days or whatever in the airline they call, or they expire after a few days, we do not have anything of that. It's open-ended. It will go on for lifelong till free regard is in existence. So, that is what we did with MLP.Shubham Agarwal - What about the usual discounts and schemes that most companies tend to offer?Mr. Niranjan Kirloskar - No discounts. No schemes, no discounts, nothing, nothing, nothing, nothing. No Diwali bonus, no Christmas bonus, no whatever religious functions that we have in India, no schemes, nothing. Everything is gone.Shubham Agarwal - But were the channel partners okay with this? Was it difficult for them to accept it?Mr. Niranjan Kirloskar - It took us at least three to four years. Obviously it is difficult because it was a completely new thing for them, revolutionary thing. The company is not going to give you volume discounts, the company is not going to give you schemes, the company is not going to have distributor conferences. It was completely unheard of. Now they are used to it. Now they are so much used to it that they try to tell other companies why don't you start working like this.Shubham Agarwal – So, did the competition respond to your initiatives in the market in any way?Mr. Niranjan Kirloskar - Competition did and even today they are trying to copy our MLP. As I earlier said, people only see what they see and they think, they thought or anybody would think he is doing it, I will also do MLP. But they do not understand that there is a lot of back-end things that you need to do. Number one, people will start some schemes, will try to give something but when the mechanic actually goes to the retailer, the product is not available. He goes second time, product is not available. He loses interest. So, first we ensured that our product is available on the counter, at the retail counter, whenever a mechanic goes to buy it. That was the key. Your product availability is the key for any scheme. Otherwise, you are dead. Number two, you need to change your policies that inventory is not a cost, inventory is an asset. Transportation of one filter is not a cost, it is an investment because if I deliver one filter, I still am selling it. Yes, my transportation has gone up, definitely it has gone up. If I was making delta 10 because of just one filter dispatch, I am doing delta 8 but still I am earning money. Now if I take a decision, nothing doing my minimum order quantities full load a container, then you have a problem. You have put that inventory on somebody else. He cannot sell it because there is no demand for it and he stuck with the inventory. After a few months, he will come back to you and say, I cannot sell it, I need volume discount and then you are stuck and this cycle goes on and on and on. So, for any company to decide or make a policy that inventory is not a cost or transportation is not a cost, it is very difficult, very difficult. So, just by copying MLP, you are not going to go there. Just by copying our product, you are not going to get there. I know there is nothing in the product, if I can manufacture it, anybody can manufacture it. It is not that only I can do it. No, everybody can do the product. But this particular thing of taking a decision to send even one filter doesn't matter, not to lose the sale has been the thing.Shubham Agarwal - Well, I think you are a rare company that has removed primary sales targets. Why did you do that?Mr. Niranjan Kirloskar - Let me talk about the win for the salespeople first. They are my warriors in the field. If they are under pressure or if they start feeling pressure of this target and he is going to do anything. I don't want that person to be under any pressure because if you have no pressure, you will perform better. Yes, there are a few people who perform very well under pressure. They want pressure. But that is a very small percentage. If you have to give a person to think creatively, be creative, you should have to ensure that there is no pressure on that person for anything. Now when I say that there is no pressure means there are no deadlines, of course there are deadlines. But those deadlines are driven by processes. So, if I have been given a certain activity, I will follow up on what is the progress on that activity daily. When you are working on one thing, don't work on something else unless you finish this. That is the process. So, it is very easy for him or her, whoever, to follow or focus on just one thing, then it is faster. Obviously win for lead guard was the results in the aftermarket. So, it is a complete win-win.Shubham Agarwal - I believe your entire system right from mechanic loyalty program to operations is seamlessly integrated to run almost an autopilot with end-to-end digitization. Would you please give us some examples of how are you leveraging this?Mr. Niranjan Kirloskar - This is online information that we have at 12 o'clock or at 1 o'clock we are getting online information which is live information as to what exactly is happening in the market. Suddenly we can also realize that some mechanic is not fitting the filter at all. Why is that mechanic not doing it? Now how do we get that obviously because of the MLP scanning and all that stuff. So, we know exactly what is happening in the market. We exactly know which distributor has sold what to whom. We exactly know which product has been sold to which mechanic and in which area. Of course, now where was that filter fitted, we don't know. Today we don't know. But we are working on it. If a particular distributor orders more than it will give a signal. Order will that dispatch will stop and automatically from the war room that we have for the aftermarket you'll pick up a phone and say why do you want more filters.Shubham Agarwal - So what has been the outcome of this amazing journey that you have had?Mr. Niranjan Kirloskar - Nobody has asked me a question in the last 10 years about the financials or where the company is heading because they can see it. It's very very clear. I will always say my balance sheet my profit and loss will speak for myself. I don't have to go out and say how good I am or how bad I am.Shubham Agarwal - Thank you so much for the discussion today, sir. But we're not done yet. We'll come back with another episode in the same series.And for all the listeners we'll keep coming back with more such episodes. Bye Bye.

Join our Counterpoint Podcast as we discuss with Fleetguard Filters how they're redefining the auto components industry with unmatched ROI, loyalty initiatives, and a bold strategy that eliminates traditional sales tactics. Discover the innovation behind their success.

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Shubham Agarwal - Hello and a very warm welcome to the Counterpoint Podcast. I am Shubham Agarwal and we are going to speak about Arvind Fashions today.Arvind Fashions markets 27+ international and national brands in India. In this episode, we have with us Mr. Shailesh Chaturvedi, MD and CEO, Arvind Fashions. He talks about how they are transforming their end-to-end supply chain from fabric to store with the help of Vector Consulting Group to improve their gross margins and stock turns. So, let’s talk to him.Hello Sir, welcome to the Counterpoint Podcast Sir, pleasure to have you here. So let’s begin our discussion.&nbsp;&nbsp;Shubham Agarwal - You have a very enviable portfolio of market leading brands like US Polo, Arrow, Flying Machine, Tommy Hilfiger, Calvin Klein, etc,. Can you tell us something about the operations of the company?Mr. Shailesh Chaturvedi - So we have multiple channels, almost 1200 stores, largely franchisee, and a couple of our own CoCo stores also. And we do very large business with our key partners be it department stores, be it online partners, lot of key retailers in cities. Typically we sell from our central warehouse to all the channels. And the way our industry works is that we book orders in advance through roadshows, collect the orders, then send it to the manufacturers through the sourcing team, produce them, and then launch the season in February for spring, summer and then August for Fall holiday.Shubham Agarwal - The company is currently in the process of transitioning to Supply Chain 2.0. What has been the thinking behind it?Mr. Shailesh Chaturvedi - See, let me start with two big broad philosophies that we really believe in and are trying to execute; one is on capital constraint theory; we believe for any company, capital should be treated as a scarce commodity. And we should always believe in good and bad times that capital is under constraint and it's a scarce commodity. So, that's one philosophy we work on. Second philosophy is the return on capital employed that anything we do must deliver a certain return for our shareholders. Now, if I take the sum total of these two philosophies, one on the capital constraint model and the other is on ROCE, then a big part of our life becomes how to manage inventory because inventory is where or let me say, unsold inventory, unsold inventory is where a large part in our industry the capital gets blocked, or the profitability of the business gets affected, and ROCE gets affected.Shubham Agarwal - How did the way in which the company manage inventory change in line with this thought process?Mr. Shailesh Chaturvedi - So you know, again, if you look at the problems are always the good style gets stocked out, and, you know, poor selling or poor sell-through garments, we always have excess, so it's a between stockout and excess. So, what we did is that with the help of Vector, we looked at our inventory into different stream, fashion at one end and the Core at the other end, or what we call NOSS, Never-Out-Of-Stock styles. And we are making sure that it is available and making sure that it is a service without human intervention through the machine learnings. And Fashion is a different business where we've focused on improving the full price sell through designing a line closer to the market conditions will limbal adapt quickly responsiveness. So you know, the two buckets of the inventory behave differently. And our treatment should be different for each of these two buckets.Shubham Agarwal - Can you elaborate on how Supply Chain 2.0 aligned with this approach?Mr. Shailesh Chaturvedi - What Vector does, they have a software VectorFLOW, and there's a very detailed working from stores to central warehouses to the garmenteers to the mills. And all the four pillars are very important from the store, what should be stocked there and where and how the visual merchandising and tracking of Core should be to the central warehouse should be the what should be the stock norms at the central warehouse. Where should the bin be in the warehouse for these Core products, the alignment of the warehouse, we work with DHL for their alignment on this, then going back to the garment makers, the factories which produce garments, alignment with them, how much stock will they keep, what kind of capacity they will dedicate it for us. And then the fourth pillar of the mill itself. Now here, we are moving away from holding inventory in the store and the warehouse back to the vendor. The vendor is going to hold capacity and inventory for us. So alignment is important; it takes time to get everybody aligned. So all four pillars, from store to warehouse, to garmenteers to mills, are all aligned; it's taken us six months of a lot of hard work for the Vector team and our team. But together, we have sort of created that alignment. And we have seen green shoots have benefited from this alignment.Shubham Agarwal - Can you elaborate of these benefits in the Core category, so far?Mr. Shailesh Chaturvedi - We've seen good progress, and there's a lot expected, even more, but what I've seen is that the contribute the availability has been more than 90%, which is good, which is a very good standard to work with. We have also seen because of this increase in availability, the sale of Core products have gone up now, seeing 17-18% contribution coming from Core, in some cases going even beyond 20%.&nbsp;And there is a portion to even increase the share of Core through Vector project, we want to take it to a higher level. And the beauty is that the turns in this business tend to be higher than the company's stock turn. &nbsp;And also, the GP tends to be higher because these are perennial; they shouldn't be discounted. And if we are able to increase the share of the Core NOSS items, and get higher GP, then it really impacts the overall company's profitability and the stock turns. And today we are moved from three plus stock turns to four plus in the last two years.Shubham Agarwal - What is the difference between this approach of Vector and the Automatic Replenishment System or ARS implementation that was earlier carried out?Mr. Shailesh Chaturvedi - Everybody has a good demand planning software, and VectorFLOW is a good software. Also, what I really liked is how the Vector team connected with our IT team to connect with our SAP system and our point of sale system, a lot of bottlenecks got cleared, and they did a better job than it was happening earlier. And there was a good working with our IT team to solve those problems. And we now have automatic linkages between our POS and our ERP system along with the VectorFlow. So, you know, Vector is a specialist so they use their specialists you know specialities to sort of solve for some of the problems.Shubham Agarwal - What are the plans for revitalizing the fashion segment?Mr. Shailesh Chaturvedi - See Fashion is the bigger piece than Core, and that's where the unsold inventory is a bigger problem. So there, the objective would be to reduce discounting improve full price sell through, design the line closer to the market and be a little more adaptable to compress the lead times. And that's a completely different piece altogether. And they're making sure you know we are ready for the season. So, when we go to the roadshow, a lot of times time is spent by the Vector team on preparing well, so that everything is prepared well. And when we go to the roadshow, the level of our preparedness is much higher than what it used to be earlier. And hopefully, that will lead to getting the goods on time in the right quantity, not access, not short. And we will hopefully work in a method where the discounting comes down by increasing full price sell-through.Shubham Agarwal - What has been the implementation experience with Vector?Mr. Shailesh Chaturvedi - See, when we appointed Vector, we had looked at two good options, and both were very, very good. One was Vector, another company. And both were really good. I mean, we could have selected either one. But we chose in favour of Vector because we felt that the senior management of Vector was a little more hands-on, and we sort of somewhere mentally aligned a little better with them. So based on the strength of Vector on the people side, we chose Vector. And they've been very, very hands-on; we work with a lot of other consultants, management consultants who come give us very intelligent theories, but they don't participate in execution. But here, we are very clear that we needed somebody to roll their sleeves and work with us, and make sure you know they deliver the promise and also participate in some gains. So it's a very sort of win-win approach where both of us are working together. And their team is sitting in our office all the time. Very hands-on, very aligned. So that's good. Also, conceptually, very, very clear that all parts be stored in a central warehouse, garment makers, as well as the fabric mills, everybody's looked in aligned in this, and it's a, I would say, once it's done, well it should change the fortune of our organisation.Thank you so much Shailesh sir for this wonderful discussion. It is wonderful to speak to you. For all our listeners we will keep coming back with more such episodes. Until then, Bye.

Join us on a journey through the transformative world of retail with Arvind Fashions on the Counterpoint Podcast. Host Shubham Agarwal sits down with MD &amp; CEO Shailesh Chaturvedi to explore their leap towards a more efficient, profitable supply chain. Learn about their strategy for optimizing inventory and enhancing gross margins. Listen now!

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Vector Consulting Group primarily focuses on implementing pull-based systems across sectors in operations, sales, distribution, engineering and project domains. In essence, it implies that the creation and movement of inventory of physical goods or knowledge across work centres or warehouses are based on immediate demand pull rather than predefined forecasts, project plans or targets.&nbsp;The management styles which support push-based operations are not conducive to supporting pull-based operations. Pull-based operations require different leadership and people management paradigms to sustain the process. Very few organizations run on pull systems, while a vast majority have push systems. Hence, the conventional experiential know-how of most managers is from the traditional world of push systems.&nbsp;Counterpoint is a series of animated videos explaining management leadership paradigms essential to supporting and sustaining pull-based operations. They are common sense but are contrarian to the standard practices in organizations. Each video provides a unique insight and can be viewed in isolation. However, the insights across videos are dependent on each other. It provides a viable alternative to a typical top-down pyramidal organization, prone to chronic conflicts across departments and hierarchy.&nbsp;Three chapters have been released, and the subsequent ones will be realized soon. Watch this space for updates.&nbsp;

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