FORECASTING REMAINS A CHALLENGE FOR COOLING APPLIANCES

Micro and macro trends may lead to a higher inventory cost cautions Manish Sharma, Chairman, Panasonic Life Solutions India & South Asia in this conversation with BW Businessworld’s Arjun Yadav

- Arjun Yadav

What was your strategy towards adding fresh inventory this summer?

When it comes to cooling products, production typically peaks around September or October, and inventory accumulates in the warehouses. From this time till about February-March, the stocking with distributors begins to happen.

Earlier, it used to be from December to February. In the last few years, it has shifted slightly and the reason is that the supply chain efficiencies have improved significantly. The filling starts to happen from January and February in case March starts to peak in summer.

In terms of channel filling compared to other emerging economies or including the developed ones, we are very well balanced. About 30-35 per cent of sales in our country come from organised retail and another 35-40 per cent through conventional distribution. The remaining can be attributed to exclusive or ecommerce channels.

Being a country with lower penetration rates for air conditioners and distribution contributing 35-40 per cent of the overall demand, it takes time for the entire value chain to streamline inventories. That is why channel filling starts early, which would be our case too.

What was the experience this year given the fluctuations in the weather as summer had just set in?

January and February were good months to deal with. There was significant growth over last year, but March witnessed unseasonal rains, which continued in April. Forecasting is a challenge when it comes to cooling products. And this is not when you are getting into summer but when you are coming out of the season because that is when you have to ensure that inventory control is optimally managed.