By investing in solutions that improve communication and collaboration and provide end-to-end visibility across the supply chain, CPGs and suppliers will have the insight necessary to make informed decisions that will push their businesses forward.
By Jason Tham
kamonrat- Global Network
For years, supply chain planners have relied on forecasting to ensure the supply chain is able to react to market and industry fluctuations, and in the consumer packaged goods (CPG) industry especially, shifting consumer demands. As 2020 showed us, however, there are certain things that even the most comprehensive forecast cannot account for. Without the ability to accurately forecast, how can supply chain leaders ensure their supply chain is able to respond to changes in real time?
By investing in operational agility, which prioritizes communication, collaboration and visibility over demand sensing and scenario planning, supply chain planners have the capabilities to respond quickly to demand and supply variability, maximizing their ability to deliver on-time and in-full despite marketplace volatility.
So, how can supply chain planners put this into practice?
Digitize the extended network
CPG supply chains are complex, largely due to the broad network of external supply chain partners they rely upon to fulfill orders. While CPGs can adopt new solutions to digitize their internal supply chains, the benefits of these solutions will be limited if there is no visibility into external partners’ activity. For years, these relationships have been managed via phone calls, Excel spreadsheets and emails. Not only does this leave the door open for miscommunications and mistakes, but it also makes it impossible for those in the supply chain to react quickly when speed matters most.
To overcome these challenges, CPGs must digitally transform their end-to-end supply chain, including their external partner network. Not only do CPGs need to be digitally connected to their external partners, but they also need to ensure that those partners have the digital capabilities themselves to capture and share real-time information from the shop floor.
By digitizing, CPGs and their partners unlock real-time data in the late-stage supply chain, which allows them to make smart and quick decisions to ensure products arrive at their final destination on-time and in-full. Most importantly though is improved collaboration. With a cloud-based solution that can digitally track all aspects of the shop floor – from production to inventory levels – CPGs and suppliers see every detail of the supply chain in real time via a centralized platform, improving efficiency for all.
Streamline collaboration with visibility
One of the most important benefits of a digitized supply chain is the improved relationship between suppliers and CPGs. While many of these organizations have done business together for years, much of the relationship has been transactional or sometimes even adversarial. However, by digitizing operations, both parties can provide the other with unprecedented visibility into each other’s operations and pave the path towards more streamlined collaboration.
Not only does this deepen trust and mutuality between the two partners, it also allows for the relationship to become more strategic, as those involved have more time to focus on big picture initiatives to improve performance or grow the business vs. spending countless hours manually gathering, tracking, analyzing and sharing data.
For consumer brands, having visibility into the performance and capacity of their entire network helps them quickly and easily assess attainment against commitments made and available capacity to make future commitments. This ultimately leads to CPGs more consistently meeting or exceeding customer demands, a win/win for all.
Improve communication with access to network capacity
Disruption is a constant in today’s connected world. While 2020 has caused most to consider “disruption” as something significant – like a global pandemic – in the CPG space it can be something as routine as a rush order being placed. With today’s manual processes, any unexpected change causes stress and cascading downstream impacts on the CPG and the supplier. Oftentimes, CPGs have no way to understand if their network is able to absorb the changes, and suppliers must scramble to determine if they have the capacity to make the change on their production floor.
With a digitized supply chain that extends throughout the entire partner network, CPGs and suppliers alike have access to data that allows them to make smarter business decisions. By leveraging data gathered by these solutions, decision makers can be sure they are making an informed choice by reviewing things like the availability of raw material, labor and manufacturing capacity.
They also have access to a dedicated communication channel, helping to reduce the amount of back-and-forth between the CPG and supplier when making these decisions and ensuring all parties are working off the most up-to-date information. With access to real-time information and a centralized communication platform, agility becomes easy, even in the face of disruption.
While the world works toward “normal” following the upheaval of 2020, the ability to streamline and optimize processes is critical. By investing in solutions that improve communication and collaboration and provide end-to-end visibility across the supply chain, CPGs and suppliers will have the insight necessary to make informed decisions that will push their businesses forward.