Our relationship with the value-chain partners are founded on mutual and inclusive growth. These norms have set the precedent for us, as a responsible company, even as we continue to positively influence and impact the growth story of our business partners.
Our stated purpose to ‘make a difference’ has enabled us to create shared value for all stakeholders across the value chain.
Extending sustainability to our value-chain partners
Marico has distinguished itself by integrating sustainability into all categories of sourcing, whether materials or services.
Of critical value-chain
partners certified on level 1
of responsible sourcing
RESPONSIBLE SOURCING – POLICY STATEMENT
‘Source material and services for Marico products through sustainable and responsible suppliers or business associates, who share our sustainability vision.’
We have made a steady headway on the ‘responsible sourcing’ initiative that was launched in the year 2018. Today, the programme has evolved into a larger initiative as ‘SAMYUT’, to enable a shared value approach. Under it, we follow a three-stage, progressive approach: Educate – Evaluate – Evolve, to engage with our critical value-chain partners. We believe that extending sustainability to our business associates will help foster innovation and meet evolving consumer preferences, besides realising our goal of delivering inclusive growth.
With regard to our commitment to have 20% of our overall critical value-chain partners certified on Educate (level 1) of responsible sourcing, we are happy to share that we have completed certification of 22% critical value-chain partners* in FY20. We are on course to progress further on this journey.
* This covers critical raw material and packaging material suppliers. Other value-chain partners will be covered going forward.
Procurement is a strategic function at Marico. It is crucial for our suppliers to realise our objective of long-term sustainable growth as well as our efforts to drive the growth of the local economy. Hence, the Supplier Relationship Management (SRM) strategy at Marico operates with the philosophy of creating win-win relationships.
Vendor development and supply assurance
The sourcing team at Marico constantly strives to develop new vendors to ensure supply assurance. We have suppliers across various regions, who are able to consistently provide us with the required ingredients and packaging materials. The sourcing team explores and on-boards newer vendors from local as well as unexplored geographies. In the process, we have done pioneering work in sourcing the commodities from new vendors, thereby contributing to the overall business and category growth at large.
Encouraging local procurement
We encourage and take efforts to source materials locally. We have over 700+ suppliers, and 95% of the procurement by spend during 2020, was on local suppliers (for the India business). We believe that the focus on local procurement will help reduce the carbon footprint of our products and also encourage local economic development.
Of procurement by spend in India during 2020, was on local suppliers
Quality within supply chain
The procurement and central quality assurance team at Marico jointly drives the Supplier Quality Assurance (SQE) programme, which aims at identifying specific training and development needs at our suppliers’ end. Improvement projects are then identified and executed by ascertaining the right degree of ‘responsibility’ and ‘accountability’, both at Marico and the supplier’s end.
SQE: Overseas Food Supplier
During 2020, the SQE team addressed chronic issues with one of the overseas food supplier in areas covering process management, infrastructure upgrades and handling international logistics. Persistent efforts helped the rejection percentage to reach zero level.
Rewards and recognitions
As part of our SRM strategy, we reward suppliers with appropriate business share for those who bring value in terms of service level performance, quality systems and cost competitiveness. Further, suppliers exhibiting exemplary performance, in line with the Marico values of excellence, bias for action, boundarylessness, innovation, transparency and openness, are recognised across various fora like Supplier Quality Excellence (SQE), SAMYUT, and vendor meets, among others.
(Third party manufacturers)
Convertors or third party manufacturers are the business associates for Marico, crucial in transforming our products into packaged finished goods to be delivered to the consumers. It is Marico’s shared vision to co-work with our convertors towards upgrading to best in class facilities to make products that consumers can trust. We constantly collaborate with our convertors with respect to technology, quality systems, process efficiency, operational excellence and environment initiatives. Our endeavour is to establish better synergies leading to long-term mutual benefits.
As part of our continuous quality systems improvement journey, we are determined to accomplish acclaimed food safety certifications and recognitions for our convertors to establish them as best-in-class facilities. We constantly work together and support our convertors in areas like system and process changes, capability building of internal teams and also modifying infrastructure requirements. These interventions demonstrate our focus on delivering the right quality and safe products to our consumers.
Our coconut oil cluster convertors achieved ‘Food Safety System Certification 22000 (FSSC 22000)’ and also advanced with no major or critical observations during the surprise audit conducted in 2020.
Depots and warehouses
Ensuring best-in-class depot and warehousing capabilities by consistently improving their performance standards, has always been a key area of focus at Marico.
Our depot quality journey
‘Kaun Banega Champion’ (KBC), the depot certification programme by Marico, aims to pursue and instil world-class standards. The programme has evolved over the years, and has now become a strong benchmarking standard in the industry.
IMPACT CREATED 2020
Major incident reported
Reduction in Leakage and Damage (L&D)
First-time-right product across depots
Compliance to regulatory norms
KBC programme objective
Depot audits are carried out annually by the Corporate Audit team across India. The audits have raised the expectation levels and the excellence bar, in terms of compliance to KBC modules. The best performing depots are recognised at the annual Marico Business Associate (MBA) conference.
Depot audits were conducted in FY20
Ramakrishna Bajaj National Quality Award: Certificate of Merit (S.M. Logistics, Marico Sonipat C&FA)
CII Food Safety Award: Certificate for Strong Commitment to Good Warehousing Practices (Kamal sons, Marico Lucknow C&FA)
Automation in warehouse
We have implemented ‘Warehouse Management System’ (WMS), a software application used to monitor and control warehouse operations and materials. WMS has helped us automate the basic functions of warehousing: goods receipt, storage, warehouse control, picking, retrieval and goods issue.
The available resources are very efficiently managed with the WMS system, which has helped us improve productivity and stocks accuracy.
Logistics & transportation
Our aspiration is to create a supply chain system that is agile, cost competitive and sustainable, thereby leading to customer delight. Our logistics team drives various initiatives at each node to ensure that our distribution network is constantly evolving across – service, cost and sustainability.
Transporter Excellence Awards
During FY20, we instituted half-yearly transporter excellence awards to reward the top performing transport partners. The performance is evaluated on multiple aspects such as placement performance, transit performance, innovation focus, commercial compliance as well as cost and efficiency enhancement. The best performers will be recognised with an award on a half-yearly basis.
START-UP TRANSPORT PARTNERS
Marico has constantly provided opportunity to start-up transport partners such as Blackbuck, Rivigo and Delhivery. Our business share with these partners has increased from 9% in FY16 to 63% in FY20.