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Improving the Fill Rate Performance of FMCG Products in Modern Trade: An Indian Scenario

Swati Premchandani, Silky Khurana, Arpan Khurdelia, Mohit Assudani

This study tries to unfold the problems causing low fill-rates for the FMCG products in Modern Trade (MT) in India. Low-Fill rates in MT are a big concern for most FMCGs not only because they contribute to lost sales but also because it allows consumers to switch to competitor‟s products. The research is primarily exploratory in nature. Secondary research involved a review of the existing literature on Indian retail and the challenges faced. Short product life cycles, frequent introduction of new SKUs, trade promotions, demand latency & seasonal variability which distort the forecast in Modern Trade are some of the key issues recognised in the extant literature. Various root causes of low fill-rates identified in this research were issues pertaining to Order management (data synchronization), inaccurate demand planning, logistics & network constraints, high uncertainty in system, and rejection of products because of freshness issues. The paper then focusses on overcoming these challenges. Different frameworks for streamlining order management process, Collaborative planning, Forecast & Replenishment, redesigning distribution and transportation strategies are suggested to tackle the issue. The results of this study will have managerial and practical implications which are discussed.