Supply Chain Digitalization: Fills the Cracks in the CPG Industry
Tom, a friendly neighbour, decides to replace bland healthy porridge with crunchy cereals for his breakfasts. He walks into the nearest retail supermarket, finds his way to the cereal section. Various flavours of muesli, barn flakes, granola and rice crisps are staked on stands. He settles with granola & dry fruits. But he is stuck; he has to choose from fifteen different brands of granola. After a quick skim of online reviews on his smartphone, he picks up a brand and leaves the store in excitement.
Fifteen brands of granola cereal, on a single retail shelf, are contesting for the mindshare of one consumer- that is the kind of market in which the CPG industry operates today. Consumer brands have to innovate continually, adopt the latest technologies, invest in R& D, bring out new products to beat the intense competition and score high on consumer satisfaction.
Demands from Digital Prosumers
Today, consumers actively participate in bringing out innovative products to the market. Their voices are even heard in the remote, isolated corners of R&D floors. Mobile technology, connected devices, and the rise of online buying and burgeoning omnichannel commerce have put consumers right at the CPG business centre. In this consumer-driven market, these prosumers are the unassuming brand advocates who determine any products’ success. But, gaining attention from this fast-paced, mobile-savvy prosumer is not easy. CPG brands have to make sure their presence is felt across all sales touchpoints — round-the-clock product availability is critical to sustaining growth. CPG companies can achieve this with a robust supply chain operation.
Broken Supply Chain Links
Everything seemed fine at the beginning of 2020. The CPG industry was doing well with its manual dependent, minimal technology supply chain machinery. Then the COVID catastrophe happened and disrupted the global supply chain altogether. CPG was one of the worst-hit industries. The sudden closing of physical stores and fear of pandemic has pushed up e-commerce sales. In the US, the use of online grocery services went up from 13% to 30% in March 2020, according to Brick Meets Click.
Further analysis by the Boston Consulting Group, revealed 40% of those were new to online grocery. The purchase shift was relatively similar across all global countries. The sudden spike in e-commerce, uncertainty in regular retail formats and disruption in movement of goods stumped the CPG players. The pandemic revealed the fragile nature of existing supply chain systems. It was a wakeup call to upgrade supply chain networks with digital technologies.
Secure Future with Digitalized Supply Chain
In the wake of COVID disruption, many CPG companies are now working to build a resilient supply chain system — the one that can withstand all sorts of brutal forces. The conventional CPG supply chain KPI ‘cost-efficiency’ is now being replaced with ‘speed and agility’, says a recent report published by Bain & Company and Microsoft. They reached out to 90 CPG companies in the US to understand post-COVID business sentiments. Interestingly, 40% of companies are planning to increase their supply chain investment. It includes using technology to build a high degree of transparency across the multi-layered supply chain network, from tier 1 supplier to last-mile delivery.
An intelligent supply chain platform that can seamlessly connect multiple logistics stakeholders in a unified platform is the kind solution that will help the CPG supply chain leaders. A unified digital platform should be able to deepen network visibility, assist in real-time shipment tracking & delivery, and provide critical insights to make smart business decisions. The future success of CPG lies at the digitalization of supply chain network — a strategic move to delight the digital prosumers
