How Britannia Kept Customers Happy by Optimizing Inventory During COVID

Best known for its biscuits, Britannia is one of India’s oldest and most revered companies. For the 130-year-old organization, maintaining its hard-earned market position was critical during the frequent COVID-related lockdowns. Britannia engaged NTT DATA’s Integrated Demand and Supply practice to strengthen inventory numbers without compromising customer trust and loyalty.

The Challenge: Optimizing Inventory Amid Uncertainty

The Indian baked goods market is worth about Rs. 37,000 crore (4.8 bn USD). With a complicated manufacturing and distribution network spread across a large and varied landscape, uncertainties can be difficult to plan for. Britannia reached out to NTT DATA to help build the capability to reduce inventory levels with no room for compromise on customer satisfaction. The solution also needed to be flexible and scalable — with no IT intervention necessary.

During the pandemic, Britannia saw a significant downturn in sales followed by an abrupt recovery, causing extreme fluctuations in historical inventory numbers. An ideal market state needed to be identified, isolated, and benchmarked.

“The inventory optimization project with NTT DATA helped us take a segmented approach that looked at multi-dimensional levels of variability, gross margin and our core and non-core portfolio. This helped us simultaneously optimize inventory and improve service levels.” — Abhishek Gaurav, Head of Planning, Britannia

The Solution: Quantifying Ideal Performance from Odd Numbers

A garden-variety project begins with collecting data and assessing current performance, but this situation wasn’t straightforward. Anomalous historical data — a secondary effect of COVID-19 — drastically complicated the assessment process. Delivering a usable assessment required specific qualitative input from relevant managers to understand common demand patterns and define actionable trends.

A Segmented View of the Product Portfolio

The assessment uncovered high variations in inventory performance across SKUs, causing many overstock and stock-out situations. NTT DATA leveraged proven inventory planning methodologies and its product segmentation framework. Britannia arrived at optimized inventory targets across different product segments and channels — meeting its customers’ needs and identifying recoverable value. The company can now identify segments of the portfolio with high velocity and profitability, allowing it to focus investment and maintain lower overall inventory levels.

Determining and Evaluating Interrelated Inventory Targets

NTT DATA’s inventory optimization tool determined target stock, including cycle stock (stock levels needed to fulfill demand), safety stock (stock that buffers against uncertainties), and reorder point (stock levels that trigger an upstream reorder). These capabilities allow Britannia to maintain strict inventory norms at all its warehouses.

Visibility into Scenario Building and Performance

The solution provided a scenario-by-scenario comparison of how inventory targets perform when maintaining differently targeted levels of service. This gave Britannia insights into the level of inventory investment required to improve and maintain ideal customer delivery performance.

A Continuously Updated Agile Solution

This tool continually refreshes information such as network changes and demand and supply transactions. It can dynamically calculate, revise, and confirm inventory allocations to maintain desired customer service levels. By developing the ability to maintain determined optimized inventory levels, no matter how demand fluctuates, Britannia is more prepared than ever to contend with demand uncertainties within its supply chain.

Outcomes: Driving Inventory Performance Improvements

• Focuses investment on segments with high velocity and profitability
• Reduces need for excessive levels of working capital
• Enables lower overall inventory levels
• Establishes strict inventory norms at all warehouses
• Improves inventory performance