Supply Chain Innovation within the FMCG sector

May 4th, 2017 | Supply Chain | By James Absalom

Supply Chain is ever evolving and having spoken and met with a number of senior leaders across the fast
moving consumer goods sector over the last quarter I am fascinated around some of the feedback and
strategic initiatives being put in place from one company to the next.

First of all let’s look at some of the limitations and issues:

Unpredictable or intermittent demand

Unreliable forecasts

Multichannel demand VS single solution

High inventory levels

Long lead time

Poor customer service levels

Functions working in silos

Natural disasters and geopolitical volatility

Seasonal demand

What are the effects of this limited performance?

Loss of sales

Loss of customers or suppliers

Increased warehousing costs

Increased time to market

Production bottlenecks

Overworked staff

Poor staff morale

High rate of attrition

So what innovative concepts are companies within the FMCG sector implementing to improve upon this?

End to End supply chain visibility

Real time data analytics

Modern infrastructure and fully automated systems

Web based and e-commerce CRM solutions

Supply chain segmentation

Inventory optimisation

So what is End to End supply chain visibility?

Visibility from customer through to supplier

Most organisations information exists in silos

Sales department = projections and budget, production = production schedules, buyers have supplier cost
and delivery schedule

The focus of this fragmentation of data is designed to serve the purposes of the individual departments in
the organisation instead of that of the entire supply chain

Control Towers Risk Mitigation

Walter James were recently working with a client in Turkey and the MEA region on providing executive
level talent cross the planning and distribution function for a newly created SC Control Tower in Istanbul

Each country within the region was operating in silos and relationships, forecasts and demand management
were not working in real time and not communicating

The client devised a plan in which the control tower makes key data available to the partners in a supply
chain facilitating coordination of customer demand with supplier response. For a supply chain control
tower to transform available data into usable information, our client identified development was required
in three areas:

Processes – Processes need to become more collaborative, with data sharing and planning being done
across departments as well as between organisations. Coordination of sales projections and the supply
chain can assist in helping suppliers to anticipate future demand. Organisations need to develop specific
data requirements that can be shared between partners in the supply chain to make demand planning
possible

Relationships – Information must be shared across processes not only within the organisation, but within
the functional silos such as planning, sourcing, production, and delivery. It also requires information sharing
between business functions and outside the enterprise, providing a real end-to-end process view to all
supply chain partners

Technology – A major challenge in the sharing of information between tiers is the problem of passing data
between information systems. How do you connect a company with an enterprise-wide ERP system with a
supplier who manages their business on a spreadsheet? Innovations such as cloud computing and data
collection and analysis software are now making supply chain control towers possible.
The real time end-to-end data that the supply chain control tower will now provide will enable our client to
manage demand signals more accurately to reduce inventory levels, answer customers’ requests faster and
more accurately, and smooth the effects of demand variation.

Planning Excellence?

Walter James are currently working with a client in providing talent for the planning excellence team across
a large scale SAP APO implementation. Our client are truly aware they are “behind their competitors” when
it comes to best in class consumer supply chain and are looking to significantly increase their talent in this
area

We are working with them across a number of different innovative and newly created positions across: Real
time data analytics, Global master data, Product launch (NPI), lifecycle management and planning
excellence

As they are going from a regional set up to a centralised location breaking up silos is important and
although they have technically skilled and system orientated employees they have identified that the level
of strategic planning and execution is far higher than any employee could implement. Due to large amount
of SKUs and customers in emerging markets they are implementing a supply chain segmentation strategy
dedicated across both products and region which ultimately is enabling them to increase customer service
levels and importantly improve planning and demand forecasts, reduce inventory which in turn requires
less storage and finally will increase revenue and margins

Conclusion

Supply Chain Planning is an ever evolving function which is constantly pushing the boundaries of
innovation. It requires:

Strong relationships and communication amongst stakeholders across different functions

Cutting edge systems and data technology which provides real time information and analytics from
customer through to supplier

Flexible and dynamic segmentation methods dependent on region or product

Innovative risk mitigation strategies that enable a business to react quickly and minimise damage when
something does go wrong

Best in class talent that possess the ability to implement all of the above in an agile and dynamic manner

Supply Chain is a people function built on relationships and alliances. Walter James believe that our
competitive edge on the market is not only our dynamic and agile approach to modern executive search
but understanding and identifying who and where these game changers are. Our entire business model and
strategy evolves around the implementation of innovative concepts within change and transformation
programs across the global supply chain function.