FMCG industry is the 4th largest sector in india. This sector is also popularly known as consumer packaged goods and consists of consumables (other than grocery and pulses) that people buy at regular intervals. Food Products, Personal Care and Fabric Care are top three components of this sector by market share.

Growing awareness, higher disposable incomes, easier access and changing lifestyles are the key growth drivers. Rural demand continues to contribute to double digit growth in this sector. There are several medium and large domestic and multinational players in this space. All of them have multi entity and multi location presence across the country with complex operations and hence complex compliance environment.

Our Client

The client is one of the leading FMCG and Ayurvedic manufacturing companies in India. It has over 36 locations including its factories and offices. The company employs over 5,500 people including contract staff. The company is one of the leading and fastest growing personal and healthcare businesses in India, with an enviable portfolio of household brand names. The company deals in providing various categories of products, such as, chyawanprash, hair oil, face creams, health care products including several ayurvedic products as well.

The company sells through a strong national network of over 45 lakh retail outlets via a network of 3,200 distributors in India. They have 8 plants, 4 regional offices, 1 international unit, 11 overseas subsidiaries, 31 distribution centres across India.

Our client had a very complex compliance environment lead by its business and operational complexity. As a result, they were facing multiple challenges, such as meeting strict safety and compliance requirements related to the raw materials, processes adopted in manufacturing and packaging among others. Some of the key challenges are as given below:

  • Highly distributed compliance environment with no central visibility and control
  • Lack of confidence in the list of applicable Acts and Compliances. No baseline review and gap analysis had been done for years
  • Highly manual and spreadsheet system for tracking the status of various compliances
  • Penalties on account of delayed Filings due to human errors
  • Lack of clarity on compliance obligations under various industry specific acts including Drugs and Cosmetics Act, Schedule M of Good Manufacturing Practices and Requirements of Premises, Plants and Equipments for Pharmaceuticals Products, Explosives Act, 1884, Legal Metrology Act, 2009; and various other related acts and standards laid down under FSSAI
  • Highly manual and time intensive search for applicable Legal Updates
  • Several statutory notices on on account of missed compliances
  • Lack of clarity on State Rules and State Wise applicable Compliances
  • Business risks arising out of missed license renewals

Our client needed a compliance automation solution that could help them bring greater control in their risk and compliance program. They needed more accountability at lower levels, better transparency, centralised reporting, greater assurance and lower costs. They were looking for a solution that could be implemented in a few weeks and did not require any new technology spend. The solution needed to be accessible and available to all their office locations with ease.

Avantis Engagement

Avantis engaged with the client in June 2018 and took 8 weeks to complete the entire implementation. A team of 3 SMEs was constituted to work with the Compliance Officer and General Counsel for planning the implementation

AVACOM went live in August, 2018

Phase 1 - Business Discovery

This phase of the project focussed on understanding their business, markets, raw materials and machines / equipment used. This enabled the team of experts in understanding the applicability of various acts, notifications and circulars issued by the govt. in this regard to establish. Comprehensive information was collected via in-person interviews / meetings / discussions with the Board & Management, individual department heads, regional heads and other representatives in the company. The following items were collated:

  • Business Set up (Group, Entities, Locations, clients, number and nature of establishments, Industry, export)
  • Products (Healthcare, Household products, Cosmetics etc)
  • Equipment, Machines and Raw Materials
  • Mandatory repeatable items driven by ISO and other standards
  • Statutory Compliances (Drugs and Cosmetics Act, Legal Metrology Act, Explosives Acts and other specified rules), meeting regulatory compliances of FSSAI

Phase 2 - Compliance Applicability Assessment

Avantis identified several diesel generators, Pressure Vessels, Hoists and Lifts, Lifting tools and tackles, Gas Cylinders, Chemical tanks, among others. These equipment were located in various plants based in all the manufacturing units spread across 30+ locations in the country leading to applicability of different Acts, guidelines and Compliances.

Our Client also dealt in exporting its products to various other countries too, therefore it also has to comply with global standards of protection. The client has to comply Product Safety, Environment Friendly, Safe to Use. Moreover, the client has to meet regulatory compliance of FSSAI, on the basis of, Design and Facilities of Products, Control of operation; Maintenance and Solution, Personal Hygiene, and Training and Complaint Handling.

Phase 3 - Implementation

Avantis assigned an 8 member team to work with the client and their various offices located across the company in their respective manufacturing plants. This phase was the most critical as the team after doing in depth analysis of all the offices of the client, discovered major areas which required attention, such as:

  • Review of identified applicable Acts and Compliances with various key stakeholders
  • Discussion on identified gaps with CXOs, Regional Heads and Compliance Head
  • Creation of the Group and all the entities based on establishment types and locations
  • Mapping of Compliances to specific users along with their roles
  • Hands on training sessions with user groups based on their locations and roles
  • Dashboards were created and provided to the users, having automated reminders, alerts

The team identified 158 Applicable Acts, over 6,700 compliances across 36 locations. A total of 156 users including 18 Management users were mapped and trained. Mobile Apps were downloaded on their IOS / Android devices and configured for use.

In Conclusion

Avantis completed end to end implementation of such a complex business group in 12 weeks. In less than 4 weeks, Compliance officer has much greater control over their organisation’s compliance. He is able to identify risks and issues in real time and plan necessary interventions. His ability to provide assurance to his management has shot up significantly. There is greater visibility, transparency and accountability in the system. The cost of poor compliances arising out of delays and missed compliances is likely to reduce by 80% in the first year.

Project Highlights