https://jaydeepmitra.com/

Fast moving goods, faster pace of change: Reinventing supply chains for profitability


The clear shift in consumer behaviour over the past few years coupled with pandemic-induced operational disruptions and growing complexities in consumer outreach channels have acted as a clarion call for change in the consumer-packaged goods (CPG) industry. The message is loud and clear – traditional supply chains are not equipped to cater to the macroeconomic disruptions, geopolitical upheaval, and the evolving needs of macroeconomic digital-native consumers.

Research by Accenture found that a $10 billion company that develops an intelligent supply chain could see increased revenues of up to 3% due to better availability of products, improved customer service and lower lost sales. Cost reductions could also increase profitability by up to 4%, while working capital could grow by 2%. Add to this the benefits for sustainability through reduced energy consumption and carbon emissions, and we get a clearer picture of the impact that supply chain transformation can have.

Essentially, to keep up with the demands of today, CPG companies should now be asking three key questions – Firstly, how can our supply chain be reimagined to deliver personalized consumer experiences? Secondly, how can we create a resilient supply chain that responds quickly to changing demands? And lastly, how can it be optimized for environmental sustainability? The short answer to these questions is digitalization.

From ‘enabling sales’ to ‘driving sales’

Today, CPG companies are under tremendous pressure to grow profitably while not losing out to new, digital-native brands.The emergence of new business-to-business (B2B) and business-to-consumer (B2C), instant delivery services is disrupting the traditional distributor structure that has long dominated the Indian consumer goods market.This has led to a shift in the consumer behaviour from being cost-conscious to demanding seamless and personalised experience. Traditional, static supply chains are unable to meet these evolving needs due to the lack of relevant and timely consumer insights that can make a significant impact in decision-making.

Technology and data can help reimagine supply chain to become more intelligent, dynamic, and sustainable.

An insight-generating, digital supply chain network

An intelligent supply chain powered by digital technologies can greatly improve collaboration, agility, and innovation within an enterprise. By integrating end-to-end points from factories to distributors and from sales to operations, companies can move away from geographical or functional silos and use insights, gathered across the ‘make-plan-buy’ spectrum, to make informed decisions.

A seamless assimilation of external and internal datasets can help enterprises put data-driven insights into action at speed and scale. This would require a modern technology architecture with a digital core that can connect the entire enterprise. Adopting an intelligent execution control tower can also help in end-to-end visibility and autonomous execution, enabled by cross-functional capabilities across people, processes, systems, and data. Furthermore, artificial intelligence (AI) and machine learning are today bringing together consumer, shopper, competitor, retailer, and channel data, along with cloud-based analytics which is then infused into commercial planning.


Make supply chain transformation a C-Suite priority


Today, almost every CPG company is undergoing some form of supply chain transformation.
By making it a C-suite priority, CPGs will benefit greatly from speed and scale, and can reap manifold returns on their investments.

While each CPG company will have different value propositions and outcomes to deliver, leaders need to focus on three key areas to create a customer-focused, competitive supply chain:

Data and analytics– As mentioned above, leverage data as an insight generation engine for new products and services designed around evolving customer needs. Day-to-day operations should be optimised using analytics, performance monitoring and continuous innovation.

Agility- Our global research found that 35% of CPGs say that their supply chain and manufacturing capabilities are not flexible enough to provide differentiated offerings and experiences. Companies need to configure their supply chain into an asset-light ecosystem that delivers customer experiences in unique microsegments.

Connected by design- Companies should work closely with ecosystem partners to combine real-time local data with consumer insights in a single, integrated platform. The need of the hour is a cohesive end-to-end architecture that can enable data collection, management, and response to target the right consumer at the right time.

Seize the opportunity

As the consumer-packaged goods industry reimagines itself, it is crucial to build a future-ready supply chain. While organisations are investing in supply chain, one must stay focussed on generating value. The aim of efficient supply chains should be to meet demand profitably. To accomplish this successfully, CPG companies need to rethink what they sell, through whom, how and where, while dramatically accelerating the pace of innovation, capturing real-time consumer data, and responding to the dynamic needs of the market. This is clearly a tall task, and needs re-alignment of both technology and people, driven by the C-suite.

Ahuja is Managing Director and Lead – Consumer, Sales and Service, Accenture in India, and Kohli is Managing Director – Consumer Goods and Services, Accenture in India.



Source link

Spread the word!

Leave a Comment

Your email address will not be published. Required fields are marked *

back to top