Note case study reflects client‑reported outcomes and focuses on process and control improvements rather than attributing intent to any individual. It is suitable for external sharing with prospects and auditors.

Executive Summary

  • Company: Modicare Ltd (FMCG), India
  • Footprint at start (2008): 65 Distribution Centers (DCs) and 4 Central Warehouses (CWHs) nationwide
  • Business context: A 30‐day money‑back guarantee for consumers created high volumes of returns alongside regular replenishment flows.
  • Challenge: Elevated inventory variance (~20%) driven by process gaps during storage, inter‑site transfers, and returns handling. Returned/damaged items sometimes re‑entered saleable stock due to insufficient gating, creating loss exposure.
  • Solution: Rollout of Myflowsoft WMS + Inventory Control, integrated with ERP and audit workflows: ASN→GRN→Directed Putaway, mandatory scan confirmations, risk‑weighted cycle counts, maker‑checker controls, quarantined returns & damage disposition, and complete audit trails.
  • Results: Within the first year of rollout, system vs. physical variance dropped from ~20% to 1–2%; returns/damaged stock were fully quarantined and disposed through auditable workflows; loopholes enabling leakage were closed across all sites.

Financial Context (public info)

  • Estimated valuation: ~₹819 crore (Grant Thornton valuation, 2023), roughly $97–$100 million USD depending on INR↔USD rates.
  • Group context: Modicare is part of Modi Enterprises, publicly described as $1.5B+ in size.

Starting Point (2008)

Policies: 30‑day, no‑questions‑asked money‑back guarantee driving reverse logistics volume.

Operations: Multi‑node network with inter‑DC and DC↔CWH transfers, batch/expiry‑sensitive SKUs, and mixed unit handling (case/piece).

  • Shrinkage/pilferage risk during putaway, intrawarehouse moves, and transfers.
  • Returns commingling: Returned or damaged goods could inadvertently re‑enter good stock without sufficient gating.
  • Audit friction: Full counts were disruptive; cycle counts were irregular; investigation trails were incomplete.

Objectives

  • Reduce inventory variance from ~20% to ≤2% network‑wide.
  • Seal returns leakage: ensure returned/damaged goods never re‑enter saleable inventory.
  • Strengthen governance: provide independent audit evidence (internal/external) with full user/device/location trails.
  • Sustainability: embed cycle counting and exception management into daily work, so accuracy persists without disruption.

Inbound & Storage

  • ASN‑driven receiving from ERP POs; tolerance thresholds and supplier compliance scoring.
  • GRN on handhelds with lot/expiry/serial capture optional QC gating with photo evidence.
  • Directed putaway to FEFO, capacity, and velocity‑based bins; mandatory scans for item+bin; mis‑slot prevention and exceptional reasons.

Inter‑site Transfers

  • Scan‑out/scan‑in control at DC↔CWH/DC; seal & weight verification; variance alerts on receipt.
  • Staging‑lane audit and bin‑lock for suspicious movements.

Returns & Damaged Goods (RMA)

  • RMA number tied to customer return; reason codes, photos, and quarantine location assignment.
  • Maker‑checker approvals for any status change from quarantine.
  • Disposition workflows: Scrap / Salvage / RTV with mandatory evidence and GL‑mapped reason codes.
  • Hard blocks prevent quarantined stock from being picked/allocated as saleable.

Counting & Audit Trail

  • Risk‑weighted cycle counts (ABC) scheduled in low‑demand windows; blind dual‑count option.
  • Variance workbench with last‑movement trace (user, time, device); instant bin‑lock and task to recount.
  • Audit packs: Signed PDFs with count sheets, variance approvals, photos, and system trail for internal/external audits.

ERP Integration & Procure‑to‑Pay Links

  • Real‑time GRN/QC updates to ERP; 3‑way match (PO ↔ GRN ↔ Invoice) with auto‑block for variance/QC fails.
  • Vendor scorecards: ASN adherence, QC pass rate, dock‑to‑stock SLA; inform procurement decisions.

Implementation (2008 — Phased Rollout)

  • Phase 1 — Assessment & Design: Network diagnostic, baseline variance measurement, process & role redesign; site blueprinting.
  • Phase 2 — Pilot (select DCs & 1 CWH): Configure WMS, integrations, labels, QC & RMA flows; train superusers; validate audit packs.
  • Phase 3 — National Rollout: Wave‑by‑wave enablement across the 65 DCs + 4 CWHs with hypercare.
  • Change management: Role‑based access, segregation of duties, KPI scorecards, and incentive alignment.

Results & Impact

  • Accuracy: Variance reduced from ~20% to 1–2% network‑wide within the first year.
  • Returns integrity: Returned/damaged items no longer re‑entered saleable inventory; all disposals audited and evidenced.
  • Shrinkage control: Loopholes that previously permitted leakage were closed with scan mandates, bin‑locks, and maker‑checker approvals.
  • Audit readiness: External and internal audits simplified via one‑click audit packs and complete traceability.
  • Operational cadence: Cycle counts embedded in daily work; variance investigation time markedly reduced.

Illustrative secondary effects (client‑reported): higher OTIF, fewer emergency shipments, improved vendor discipline via scorecards.

Control Highlights (What prevented re‑entry & leakage)

  • Quarantine hard‑blocks on RMAs and damages—items cannot be allocated/picked until disposition.
  • Dual approvals (maker‑checker) for adjustments, transfers from quarantine, and high‑risk variances.
  • Photo & reason codes mandatory for QC failures, damages, and scrapping.
  • Seal/weight verification on inter‑site transfers with exception alerts.
  • Blind dual‑count policy on A‑class locations/SKUs with variance thresholds and auto‑recount tasks.
  • Complete audit trail: user, time, device, location, before/after quantities, and attachments.

KPI Snapshot (post‑stabilization)

  • Inventory variance: ~20% → 1–2%
  • Cycle count compliance: Embedded daily/weekly by class (A/B/C)
  • Quarantine leakage: 0 incidents recorded post‑policy enforcement
  • Audit exceptions: Materially reduced; faster closure on queries

Implementation Date

Year of initial implementation: 2008 (India‑wide, phased)

Disclaimer

This case study is prepared from client‑provided information and focuses on process and control outcomes. It does not assert wrongdoing by any individual or entity and should be used for illustrative, educational, and marketing purposes.