Teaching case. This case is a composite based on typical Nepali businesses. Names are withheld and the figures are illustrative, chosen to make the calculations realistic.

Overview

Fragmented ordering across regions led to stockouts and expired stock. The firm launched a private industrial network (PIN) with distributor and retailer portals + APIs.

flowchart TD
    HQ[FMCG Company HQ] --> DIST1[Distributor Region 1]
    HQ --> DIST2[Distributor Region 2]
    DIST1 --> RET1[Retailer Portal]
    DIST1 --> RET2[Retailer Portal]
    DIST2 --> RET3[Retailer Portal]
    HQ <-->|EDI and API| DIST1
    HQ <-->|EDI and API| DIST2

Figure 1: FMCG Private Industrial Network Structure

Background

The company made noodles, biscuits, and snacks and sold them through about 40 distributors, who supplied thousands of retail shops. Distributors ordered by phone and email, often in a rush at month end. Head office could not see how much stock distributors and shops held, so popular items ran out in some districts while other items expired in warehouses.

Key Moves

  • Standard product/catalog IDs; EDI/API for orders, ASN, and invoices.
  • Demand visibility: sell‑in vs. sell‑through dashboards; expiry alerts.
  • Promotion engine with tiered discounts; retailer app for self‑ordering.
  • Logistics integration for shipment tracking; proof‑of‑delivery capture.

Outcomes

  • Improved fill rate; reduced expiries; faster rollout of promotions.
  • Better cash cycle with e‑invoices and credit controls.

Lessons (Unit 8 lens)

  • PINs create shared truth across partners; start with core docs, expand gradually.
  • Retailer self‑service reduces sales rep load and improves order accuracy.

The Numbers

  • Fill rate (share of retailer orders delivered in full) rose from 82% to 94%.
  • Expired stock written off fell from 2.5% to 1% of sales.
  • On annual sales of Rs. 200 crore, that is Rs. 3 crore less expired stock a year.

Case Questions

  1. Why is this a private industrial network rather than a public B2B marketplace?
  2. What is the difference between sell-in and sell-through data, and why does head office need both?
  3. How does the PIN reduce the bullwhip effect described in the supply chain chapter?
  4. What resistance might distributors show to sharing their data, and how can the company win their cooperation?
  5. Which documents (orders, ASNs, invoices) would you digitise first, and why?

Chapters covered

Use the unit notes below to review the theory this case applies in practice.