CGT:What is driving consumer goods companies to increase supply chain resilience and agility now?
Lindsey Peters: The shift towards greater resilience and agility, isn’t new, but it has recently become much more urgent. Consumer goods companies have been working to increase resilience in their supply chain for years, but the pandemic highlighted inefficiencies in all organizations —specifically in their supply chain operations. And that was just one of the many uncontrollable, unpredictable external influences we’ve experienced recently.
The uncontrollable will continue to affect CPG companies’ supply chains. From supplier delays, to orders at risk of stockouts, to fluctuating inventory demands. The brand that wins is the one that knows how disruptions affect their customers, and how to mitigate the impact and reset customer expectations when needed.
One of our CG customers, when the pandemic hit, stood up a control tower to understand where they would not be able to meet customer demand. They were then able to re-prioritize their customers and reset customer expectations as needed. Having visibility and being able to be agile in the face of extreme macro-economic trends is imperative for our CPG customers.
CGT:Though the situation is less fraught than this time last year, supply chains continue to face a broad set of challenges. What should CG leaders be doing to not only sustain their position in the market, but to expand it as well?
Peters: It’s all about staying proactive and competitive. CPG leaders are using both time-tested and new strategies for this. Many CPG companies have invested — or continue to invest — in their digital transformations, and if done right, will leapfrog the competition.
In addition to investing in digital capabilities, CPG companies should continue to drive operational efficiency to improve customer satisfaction. To do this, consumer goods companies need end-to-end visibility of how their business is operating. This, in turn, gives them the ability to move the needle with their most strategic business objectives.
Lastly, we are seeing CPG companies evaluate their portfolio strategy and rationalize their products through either M&A activity or discontinuing SKUs to help streamline their operations. This helps to ensure the business is focused on the products that are driving the most value to their business.
CGT:What are some of the ways CG leaders can leverage data to drive decision-making around supply chain planning?
Peters: Many of the top consumer goods companies are leveraging data and insights to remove inefficiencies from their supply chain to win and retain customers. Balancing costs and service levels right now for our customers is incredibly challenging but data-driven decision making will ensure CG companies can meet their core business objectives such as delivering On Time In Full or improving upon their customers’ NPS.
Being able to see how their processes run helps our customers reveal and fix the inefficiencies silently killing their performance, enabling them to perform at levels they never thought possible. As an example: L’Oréal increased touchless orders by 8X by tackling order and credit blocks across their order to cash process.
And in a recent customer engagement, the director of supply chain planning said it’s “nice to see the emotion be validated,” meaning, for the first time, leveraging our data proved that their supplier that felt most challenging, was in fact their most challenging supplier.
And with this insight they were — for the first time — able to take the appropriate action against that supplier. Data shines a light on blind spots and enables companies to take action that they may not have been able to previously.
CGT: Looking around the corner, what are some of the greatest areas of opportunity for CG companies, and how can technology help them to leverage these opportunities?
Peters:With all the volatility in the market and endless options for consumers, the greatest opportunity for consumer goods companies is to continue to improve their customers' experience and ultimately their end consumers' experience in a consistent and meaningful way. Consumers are not as brand loyal as they once were, so the key competitive advantage for CG companies is the quality of their operations.
As an example: traditionally you may have a static or outdated view of orders and have to manually identify alternative inventory sources in an effort to try to save customer orders. Tomorrow, you could leverage a real-time view of order status and inventory to immediately identify which stock can be rerouted or proactively notify customers of order delays. Traditionally, you may combat inflation by raising the price of products to the consumer at the same pace as your competitors. Tomorrow, you can mitigate inflation by reducing unnecessary costs across processes, enabling you to delay price hikes to your consumer or even avoid them entirely.
Even with all the volatility, it’s not all doom and gloom for businesses. I’m seeing foundational shifts to the way businesses operate and companies are reimagining "business as usual." With the right technology in the right hands, now could be a time of great opportunity and transformation.