Fast moving consumer goods (FMCG) has always been a unique and challenging line of business. That's why I decided to work in this space, dealing with manufacturing and distribution across wholesale, retail, and online channels. Over 20 years I've experienced how this complexity has evolved, I've become evangelical about the impact of digital transformation on business in general, and especially on supply chain management. Through the digital transformation of your business, you can turn your SCM to being a solution provider, rather than a problem holder.
Those of you working in FMCG supply chain probably know the feeling well, when you think you have everything under control; only to have new challenges emerge suddenly. Supply chain disruptions occur unexpectedly due to a variety of factors, including global pandemics, natural disasters, and unforeseen global crises.
So, how are supply chain practitioners the problem holders?
For many years, supply chain has been seen as the 'problem holders', be that in cost management, too much or too little stock, or lacking flexibility in meeting the ever-evolving customer needs. Furthermore, supply chain in FMCG companies need to navigate an increasingly wider range of challenges. They are reliant on an extended network of suppliers and vendors that are providing raw materials, packaging components, and semi-finished goods for products that are made and distributed through additional networks that are a mix of owned and outsourced assets that are geographically spread out to give a labyrinth of relationships that need to be managed.
Exhale… I know. It's a lot, isn't it?
All of this to ensure top quality and delivery performance whilst trying to understand and grapple with the future impacts of strategic decision making from management.
Don’t let this overwhelm you. The long promised digital transformation in supply chain has finally arrived. The amount of data available has grown exponentially, whether it’s through your own operations or with third party partners and customers. The gap between planning and execution continues to shrink and the boundaries between the two are becoming blurred.
It does not matter if you are in production, global transportation, warehousing, or delivering to customers; real-time data, or near real-time data, can now be used to track containers or vehicles, as well as to get an overview of the status of your manufacturing purchase orders and material requirements, goods in transit, stock, and customer demand on a SKU-by-SKU basis.
How to become a solution provider
Successful FMCG Supply Chains can become solutions providers by implementing connected planning solutions that enable Integrated Business Planning. By connecting your financial processes (FP&A) with your supply chain and sales and operations processes (S&OP) and integrating them horizontally across the organization and vertically in your complex supply chains; you can enable a more proactive approach to supplier and customer management.
Being able to consume and organise the growing mountain of data, leverage analytics to provide (near) real-time insights into market trends, consumer behaviour, and supply chain requirements and performance; and link this to sales, marketing and finance goals with scenario planning is a must have for FMCG companies. No exceptions.
The goal is to minimise surprises and create sufficient flexibility to allow swift responses to changing conditions. If the pandemic taught us anything, it’s that when you need to respond to the unforeseen; rapid change can drive rapid response.
Achieving this is often a transformational process across the entire organisation. FMCG companies of all sizes need an IT solution that can be implemented and effective in short time frames to provide quick ROI and is powerful enough to address the increasing complexities whilst aligning the business and business partners. Supply Chain practitioners can move from the problem holder to the solution provider.
If digital transformation within SCM and connected planning is a topic you are engaged in, I’d like to hear your thoughts! Feel free to reach out to me via LinkedIn or by email.