Operations Strategy 2020 Agenda 2016 So Far Distributjon - - PowerPoint PPT Presentation

Strategy 2020

Operations

Agenda

Emerging Trends & Competjtjon Analysis 2016 So Far Distributjon Planning CEX Numbers

Many companies stop at satisfaction without going the extra mile for loyalty

LOYALTY SATISFACTION

Differentiators: “creating the wow-factor” The basics: “eliminating defects”

 Ordinary services delivered exceptionally  Exceptional services/features delivered well  Problems are resolved as expected  Services meets client needs  Services delivered as expected

Digitalization

Salary Video Conferencing Shopping Bollywood Movies

Education : 5th Grade Salary- Rs.: 9000 per month Recently invested Rs. 7500 which changed her life……… Name : Uma Village : Somewhere in west Bengal village with no bank!

Digital Life

• f a Consultant

Registration User Authentication Mobile Apps OBD QR SPO Google Locator Digital Payment Track Distributjon Chat Self Service

Digital Life of a Consultant

OTP

Supply Chain in South Asia

India Sri Lanka Pakistan

Customer Experience Distribution Strategy Perceived Product Availability

Powered by Digitalization

World Class Supply Chain T eams

India Distribution

setup 2016

Jammu Ludhiana Jaipur Ahmedabad Mumbai RDC West

RDC South

Bangalore Hyderabad Bhubaneswar Pune RDC East Aizwal Dimapur Itanagar RDC NE Siliguri Guwahati Shillong Janpath Jasola Lucknow Indore Ranchi

Regional distribution center - 5 Oriflame branch - 8 Third party - 4 Service Center - 11

( 1 new SCs – Nagpur 1 branch conversion – Chennai)

Stock locatjons

13

Kolkata

SPO’s - 1000 Branch replaced by SC

Chennai SC – Q3

New Service Centers

Nagpur – Q4 Nagpur Chennai

Sub-contractors - 7 Factories : 2

OHI in Roorkea and OPI in Noida

Noida

OPI

Roorkee

OPI

India Distribution

setup 2017

Jammu Ludhiana Jaipur RDC West

RDC South

Chennai Hyderabad Bhubaneswar Pune RDC East Aizwal Dimapur Itanagar RDC NE Siliguri Shillong Janpath Jasola Lucknow Indore Nagpur Ranchi

Regional distribution center - 5 Oriflame branch - 4 Third party Service Center - 17

Kolkata

Branch replaced by SC

Mumbai SC- Q3

Branch replaced by SC

Guwahati SC - Q3 RDC North

Stock locatjons

09

SPO’s - 1150

Ahmedabad SC-Q3 Branch replaced by SC Bangalore SC- Q3

Branch replaced by SC

Dehradun- Q3

New Service Centers

Imphal- Q4

New Service Centers

Mumbai Guwahati Ahmedabad Bangalore Dehradun Imphal

Sub-contractors - 7 Factories : 2

OHI in Roorkea and OPI in Noida

Noida

OPI

Roorkee

OPI

India Distribution

setup 2018

Jammu Jaipur Ahmedabad Mumbai RDC West Bangalore Chennai Hyderabad Bhubaneswar Pune RDC East Aizwal Dimapur Itanagar RDC NE Siliguri Guwahati Shillong Jasola Lucknow Nagpur Ranchi

Regional distribution center - 4 No branches offering IS, only SC’s Third party Service Center - 22

Dehradun RDC North

Stock locatjons

04

SPO’s - 1300

Imphal

Branch replaced by SC

Ludhiana– Q4

Branch replaced by SC

Janpath– Q4 Indore– Q4

Branch replaced by SC

Kolkata– Q4

Branch replaced by SC

Patna– Q4

New Service Centers

Patna Indore Janpath Kolkata Ludhiana

Sub-contractors - 7 Factories : 2

OHI in Roorkea and OPI in Noida

Noida

OPI

Roorkee

OPI

India Distribution

setup 2019

Ludhiana Jaipur Ahmedabad Mumbai RDC West Bangalore Chennai Hyderabad Bhubaneswar Pune RDC East Aizwal Dimapur Itanagar RDC NE Siliguri Guwahati Shillong Janpath Jasola Lucknow Indore Nagpur Ranchi

Regional Distribution Centers/ Asia Hub – 3 North, East & West No branches offering IS, only SC’s Third party Service Center - 25

Kolkata Dehradun RDC North

Stock locatjons

03

SPO’s - 1450

( 2 new SCs – Chhattjsgarh & Surat Jammu TPL conversion to SC )

Imphal

TPL replaced by SC

Jammu

New Service Centers

Chhattisgarh – Q3 Surat – Q3

New Service Centers

Patna Jammu Chhattisgarh Surat

Sub-contractors - 7 Factories : 2

OHI in Roorkea and OPI in Noida

Noida

OPI

Roorkee

OPI

INDIA

Distributjon & Geographical Footprint

India Distribution

setup 2020

Jammu Ludhiana Jaipur Ahmedabad Mumbai RDC West Bangalore Chennai Hyderabad Bhubaneswar Pune RDC East Itanagar Siliguri Guwahati Shillong Janpath Jasola Lucknow Indore Nagpur Ranchi

Regional Distribution Centers/ Asia Hub – 3 North, East & West No branches offering IS, only SC’s Third party Service Center - 28

Kolkata Dehradun RDC North

Stock locatjons

03

SPO’s - 1600

( 2 new SCs – Chhattjsgarh & Surat Jammu TPL conversion to SC )

Imphal Itanagar– Q3 Dimapur– Q3 Aizwal– Q3 Patna Surat Chhattisgarh Itanagar Dimapur Aizwal

Sub-contractors - 7 Factories : 2

OHI in Roorkea and OPI in Noida

Noida

OPI

Roorkee

OPI

• 1. Stock consolidation leveraged by GST’
• 2. Penetration through SPOs and Service Centers, targeting Tier 2&3

cities’ 3. Internal Factory to be Halal Certified

• 4. Asia Hub supporting PPA

OHI

DISTRIBUTION VARIABLES

Saving Logistic Admin

6

2016 2017 2018 2019 2020 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1.99% 1.96% 1.80% 1.66% 1.53% 2.23% 2.18% 2.00% 1.84% 1.70% 5.69% 5.42% 5.36% 5.16% 5.12% Admin Infra Logistjcs

9.91% 9.56% 9.16% 8.66% 8.35%

2011 2016 2017 2018 2019 2020

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

UFR - All

2011 2016 2017 2018 2019 2020

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

UFR - Core

U F R & S

• l

d O u t

 Branch conversion and reduction in RDC would lead to lesser sold outs  Consolidation of stock  PPA Project to improve UFR  Lead time reduction  Safety stock

7

2011 2016 2017 2018 2019 2020 95

Sold Out ( No of Units)

25 23 20 18 15 Better Availability

I n v e n t

• r

y

 GST will enable us to minimize Warehouses and conversion of branches to service centres  Less stock movement  Lesser handling of products, hence less damages  Increased inventory accuracy leading to reduction in stock variance which in turn will lead to accurate distribution leading to higher UFR  WMS  Regional Hub 2011 2016 2017 2018 2019 2020 22 19 17 15 13 10 2011 2016 2017 2018 2019 2020 258 145 140 130 120 120

Inventory Days

Inventory Days

8

2016 2017 2018 2019 2020 5 4 3 2 1

Damage/Expiry

Damage/Expiry ( Cr )

Inventory Variance (lacs)

22 19 17 15 13 10

INDIA

CEX

Accessibility Trustworthy Progressive

Vision: To be Globally admired as the Most Customer Centric Company

Customer Experience

Shopping Experience

Easy to order

Makeup Wizard

Smart Makeup Wizard suggestions based on Customer Skin Type, Tone & Age.

Consumer Analytics

Proactive Mobile Notifications based on the shopping history. Automated offers Pop-Up based on spending power trend. Suggestions based on Customer’s Demographics

QR Code

All you have to do is SCAN

Touch Screen Vending Machine

At the click of your finger

Business Development Revenue Generation VIP Customer Care Complex Problem Solving

Relatjonship Hub

Easy to Connect

SUPER-AGENTS MORE THAN A VIDEO CALL OVER & ABOVE VOICE BIOMETRICS…

Easy to Pay

Payment Methods Cash On Delivery Card On Delivery E-Wallet NET Banking

Easy to Track

Logistjcs Outlook

Removal of Trade Barriers Entry Taxes, Local Body Taxes, Octroi etc. would decrease fleet downtime Procurement of higher tonnage trucks due to the new efficiencies GST will lead to a more organized logistics and transport segment

Mobile tracking with real tjme notjfjcatjon

Drone Deliveries Cloud Logistjcs

Interactions through Augmented reality Face time Voice Biometrics QR Code Self Service ORIBOT CS empowerment Pick To Light ERP System OTP Live Chat Easy to Pay SPO Locator Smart Box Order Tracking PPA The Basics : India Contact Centre, RDC, Strong S&OP, ABC Safety stock setting, setting

Accessibility Satisfaction

2020 2019 2018 2017 2016

Asia hub Service centers replaced by beauty zones Progressive: creating the WOW factor - loyalty Exceptional services/features offered Service programs Ordinary services delivered exceptionally Consumer Analytics : Taking it to the Next Level

2015

South Asia Relationship hub

What offers should you make to your customer if they if they are within proximity of your store right now?

ENHANCING CONNECTED CUSTOMER EXPERIENCE THROUGH :

EMERGING TRENDS

Picking Optimization Cloud Logistics Makeup Genius Mobile Virtual Queuing

E M E R G I N G T R E N D S

Reliance Jio Infocomm Limited, doing business as Jio, is a LTE mobile network operator in India. It is a wholly owned subsidiary

• f Reliance Industries headquartered in Mumbai, that provides

wireless 4G LTE service network (without 2G/3G based services) and is the only 100% Vo LTE operator in the country, with coverage across all 22 telecom circles in India.[3][4] The services were first beta-launched to Jio's partners and employees on 27 December 2015 on the eve of 83rd birth anniversary of late Dhirubhai Ambani, founder of Reliance Industries,[5][6] and later services were commercially launched

• n 5 September 2016.

Competition Analysis

 1 Manufacturing Facility  Over 250 Sales outlets pan India.  Plans to set up its 1st Manufacturing facility in India.  5 Pick Up Center and 7 Quick response Centers across India.  Net sales 850 Cr.  11 beauty stores across India  Manufacturing facility in Dehardun supporting 85% of total India sales.  Plans to setup a new manufacturing unit down south @ 50 Cr.  Diversifies into cookware (for healthy cooking) & energy drinks.  1st manufacturing facility in India (T.N)@ 550cr.  India to be export hub for its operations in Middle East & South Asian countries.  143 pick up Centers across India.

2016

48% 50%

52%

53%

2017 2018

55%

2019 2020

SPO Growth

60% 50% 40% 30% 20% 10% 0%

1000 1150 1300 1450 1600

SPO Share Presence

SPO Future

2020

Oriflame Sucess Plan Height poster Wellness 4 cornerstones Brand sunboard Products in the display Water tank with cold and hot water Omron HBF-375 Beauty Business Health & well being

+

Enhance

Customer experience

Exclusive

Live Trainings

& Catalogue launches through link in SPO’s

• rder

SPO Online optjon for order placing

 New Delivery Boxes  Brand Statement included  Special packaging for Key Launches  Element of CEX “customer centric messages”

Innovative Packaging Trends Innovative Packaging Trends

Warehouse Automation Optimize & Improve

Light directed picking to ensure speed and accuracy Conveyor system for

• rder profiling, routing

and consolidation Dynamic system for scanning, dimensioning and weighing

Accelerated order fulfillment time

Beauty Zone

Infrastructure

 Commercial Space in Malls or main markets around 800 -1000 Sq. ft area.  Beauty zone in front wherein all products will be available in display for test & trial.  White glass walls for shiny look  Equipped with LED lights  Branding

Scope of work

 Skin Testing Device  On-going makeup tutorials on LED screen  Product visibility

One Oriflame employee On request

 Nutrition expert  Skin Care Expert  Beauty Expert  Hair specialist  Makeup expert

Proposed Future of Orifmame India 2020

Order taking

2016 2017 2018 2019 2020

Online Phone Immediate

 Future strategy is conversion of Immediate and phone orders to online by 2018  Conversion of all branches to SC’s by 2018

96.00% 95.00% 94.00% 98.00% 97.00% 100.00% 99.00%

1

2011 2016 2017 2018 2019 2020 0% 20% 40% 60% 80% 100% 120%

 Distribution Box & Card on Delivery will be added as a new Distribution Channel in 2017  COD and Immediate share will shift to Distribution Box from 5% to 20% from year 2017 to 2020  Immediate share will shift to Immediate SC  Movement of order share will happen from Cash on Delivery to Card on Delivery from 2017 to 2020

Order Distribution Split

Distributjon box Immediate SC Immediate Courier Cash on delivery Card on delivery SPO 2

New

DV Projection

3

 CO increase – Movement State to Regional, Yearly Rate Escalation , SC Immediate  IS will reduce due to more consolidation and regional movement of Stock  Post April'17, OCTROI AND LBT will be removed due to GST implementation  Post 2017 , TPL will be declined  Due to the SCs Conversion shift to Distribution Box.  Sale take post GST impact  IS - Primary Movement from Supplier to RDC to Branches  co - Secondary movement (RDC/Branches/SC to Consultant and SPO delivery)  SC: Service Centre  TPL - Third Party Logistics / Outsourcing  SPO - Service Point Oriflame  SC - Octroi Tax  Postage - Mailing

Y2011 Y2016 Y2017 Y2018 Y2019 Y2020 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%

Sale-690 DV-5.69% Sale-745 Sale-857 Sale-985 Sale-1133 DV-5.42% DV-5.36% DV-5.16% DV-5.12% Sale-329 DV-7.12%

Infrastructure Exp. Vs Sales Projection

4

 MFD Implementation in branches & RDCs.  Branch conversions into service centres –Less area with less rental  Providing New & Advance equipment's in RDCs to increase productivity. 2016 AC 2017 BU 2018 BU 2019 BU 2020 BU

• 20,000,000

40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 180,000,000 200,000,000

INFRA VARIABLES

13,73,13,656 14,56,81,039 15,41,61,300 16,34,85,204 17,34,08,603

Admin Exp. Vs Sales Projection

 Fixed cab removal  Centralized stationary vendor with negotiated rates  Electricity saving initiative  Travel - Induction of three vendor strategy.  Travel – Hotel Tie-ups for pan India locations in negotiated rates.

5

2016 AC 2017 BU 2018 BU 2019 BU 2020 BU

• 50,000,000

100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000

ADMIN VARIABLES

Amount

28,06,58,128 25,86,64,377 30,38,37,303 32,82,67,175 23,77,94,261