Application of IT labelling solutions in the FMCG industry to optimize supply chain operations

Páll Balázs Péter (2021) Application of IT labelling solutions in the FMCG industry to optimize supply chain operations. Külkereskedelmi Kar.

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Absztrakt (kivonat)

Executive Summary   As being a global FMCG giant, P&G is dealing with hundreds of countries. In Central Europe it manages ten countries under one business unit. The region is lingually heterogenic, which means all countries have different native languages. FMCG product labeling is strictly regulated by the European Union. On small-sized product categories like cosmetics, it is impossible to include the compulsory language translations on each item when produced. To serve all market needs, the company has invented the solution called legal stickering and adjusted the supply chain to it. The solutions themselves are error-prone and malfunctioning to the point, therefore the study is commissioned to find alternative solutions for the current process. The study explores both situationally and theoretically the business issue. Using different models, the core problem area could be identified to be at the development chain artwork design phase. With further research, the exact negative impacts of legal stickering could be highlighted. To conclude, the current solution of the company results in higher costs both on-site and back-office level. On top of that, it generates ultimately high complexity for Master Data processes. Complexity adds a place for human errors and increases work efforts for every production participant. The final result is the deterioration of service level and customer satisfaction due to the incompetency to ship occasionally. Two solution alternatives are evaluated. One, reacting to the territorial division of the Central European business unit. It is considered to further divide Central Europe into Central Europe South and Central Europe North. Upon analyzing the idea, it has turned out that it would bring no added value for the company as it does not eliminate legal stickering and its disadvantages. Besides, the implementation is time-consuming and costly. The second solution was the application of QR codes instead of lengthy text descriptions. It was measured, and the approximate time needed for the change is two years and it is not a costly process. Furthermore, it would completely make legal stickering disappear from the company’s operations. To test the validity of the assumed solution, both semi- and structured waves of interviews were conducted with production participants and a legal expert. Results are quite promising. It has turned out that the new solution would simplify every supply chain-related role in the company. It would optimize the overcomplicated Master Data flows at forecasting and several other fields. It is proven that the company’s supply chain is fully capable to change and it requires a medium time span (2 years). The greatest challenge of switching to QR codes would be to recommunicate the product portfolio to our customers, however, compared to the turnover it would bring it is a small risk. Neither has the company boundaries financially. In future reference, the solution is also useful for global supply chain optimization. In conclusion, the company is capable to change, European legislation not yet allows it. However, the results draw attention to the fact that P&G could have an enormous effect on these regulations by targeting sustainability and digitalization. As outlined, European legislation is subjected to consumer preferences and sustainability. It is also retrievable that the EU is moving towards constituting QR codes by introducing energy-efficient labels and the COSMILE initiative. To change the status quo, the recommendations given to the company can be described as a three-step process:   1.    Prove the negative effects of legal stickering by showing the waste generated. Support initiatives like COSMILE.   2.    Concentrate firstly to consolidate the supply chain on the business unit (Central European) level.   3.    Moving to optimize the global supply chain with shared safety stocks, global production, and universal marketing strategy   As a final remark, the study has some limitations. Customer side investigation was not possible due to the role of the researcher. To retrieve how the exact cost-benefit returns would look like wasn’t feasible due to lack of authority and enormous scope.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Konzulens(ek)

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	Central Europe, fast moving consumer goods, IT solutions, production, supply chain, support system
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2021. Okt. 11. 09:21
Utolsó módosítás:	2021. Okt. 11. 09:21

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