PANDEMIC-induced disruption has profoundly impacted the future of Consumer Packaged Goods (CPG) supply chains. Customers are at the heart of this transformation. Having adapted to new ways of shopping, they now expect a personal, frictionless and consistent experience across all purchases.
To meet these heightened expectations, CPG companies are being called upon to rise above their rigid supply chains and become agile, flexible and responsive, but it’s not easy. To get there, they’ll need to rethink their core processes, identify alternative distribution mechanisms, and embed new technologies to mitigate risk.
By putting the customer first, using digital platforms and data effectively, and understanding the importance of sustainability, CPG leaders can take steps towards a customer-centric and future-ready supply chain.
There are three keys to supply chain transformation and these are the following:
Put the customer first
- Embed a customer-focused supply chain mindset across your organization;
- Develop an omnichannel supply chain experience to support, inform and connect customers to products;
- Explore new platforms and business models such as same-day-delivery; and,
- Identify new routes to market, embed micro supply chains, and consider new processes, suppliers, and technology.
Use digital platforms effectively
- Explore diverse digital platforms to innovate future supply chain pathways;
- Look for collaboration between platforms for sharing data, resources and strategies;
- Leverage interconnected platforms to act and respond quickly to customer demand and introduce new products faster; and,
- Purchase parts of the supply chain from third parties including load sharing, network optimization and R&D as a service.
The importance of sustainability
- Work towards cross-supply chain transparency and visibility;
- Educate and work with third parties towards shared sustainability goals;
- Understand the true flow of materials, making it easier to decarbonize, reduce energy and plastic and implement other sustainable practices; and,
- Use transparency to empower consumers so they can make informed decisions.
Supply chain transformation roadmap—your path to success
- Clarify your strategy. Consider how to develop organizational capabilities around your supply chain—build, borrow or buy? How will you define your Target Operating Model across people, processes, structure, technology, data, and governance?
- Choose to diversify or streamline. While some CPG companies will find success in diversification, others will need to streamline product portfolios—identifying top priority SKUs by analyzing consumer purchase data, among other criteria.
- Leverage data. From a customer perspective, the precision marketing model which CPG companies rely on is all about combining data and context to understand who and where the consumers are on their individual customer journeys.
The excerpt was taken from the KPMG Thought Leadership publication: “Transforming supply chains for agility, sustainability and customer-centric outcomes.” (https://home.kpmg/au/en/home/insights/2022/07/consumer-packaged-goods-supply-chain-transformation.html)
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