A Summary On FMCG Company

Problem / Analysis

1) Decrease in sales

Fast moving consumer goods (FMCG) company, Johnson Pte Ltd., operates in seven product segments: noodles, bakery, consumer flour, further processed meat products, cooking oil, retail, food and beverage operations, and bakery raw ingredients. The company has reported a decrease in sales but an increase in operating costs on their products. According to Appendix D Sales Analysis by Segment as of December 31, 2008, the company’s overall sales show an increase from year 2005 to 2006, and a decline from year 2006 to 2008. Looking deeper into the segments, it can be seen that noodles’ sales was constant for the four years period with sales amount of RM 25,000,000. On the other hand, based on the segmental reporting as of December 31, 2008, only noodles and bakery made a profit, while the rest of the segments made a huge millions of loss.

Today’s highly competitive environment is increasingly challenging for FMCG companies. The consumers today are endowed with a wide range of options to choose in FMCG products. They make decisions by taking into consideration the image or brand of the company, the uniqueness of the products, the price offered, and also in terms of convenience. The decline in sales faced by JPL is probably due to the decline in demand by the consumers for the company’s products, where the products offered are not up to the consumers’ preferences and expectations.

With increasing options and the rise of private labels due to low entry of barriers, competition is fierce in FMCG industry. Private label products have become increasingly popular due to the appeal of goods with lower price during difficult economic times. Nevertheless, some of FMCG products still have a brand advantage,...

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...pricing information.

e) Targeted Marketing

With ERP, it gives the company the ability to pull out a list of good clients that have not bought for six months of the company’s products for example, so in order to make them come back and purchase, the company can send them an email through the ERP system offering a discount.

To conclude, a sophisticated accounting system like ERP plays an important role within a company like JPL. The system facilitates a company-wide integrated Information Systems covering all functional areas such as manufacturing, sales and distribution, accounts, payables, receivables, inventory, and so on. ERP provides complete integration of the system not only across departments but also across the entire company. Not only that, ERP also provides an opportunity for improvement and refinement in the business processes on a continuous process.