10 minute read
Over the past 18 months, fast-moving consumer goods (FMCG) supply chains have significantly shifted the way they operate and collaborate. Not only have brands and their external partners reconfigured the way they work together, but the pressures imposed upon their external supply chains have also driven a new need for innovation to manage disruptions with greater ease and speed.
For Nulogy’s 2021 xChange conference, I had the privilege of moderating an insightful panel discussion with several industry leaders on the current state of FMCG supply chains, and their imperatives for a resilient and profitable future. For this session, I was joined by:
- Karin Bursa, CEO of NIRAKIO, and host of the TekTok Podcast
- Kim Faulkner, VP Global Demand, Systems & eCommerce Supply Chain at Colgate-Palmolive
- Charles Liu, COO at Away Travel
- David Warrick, General Manager, Global Supply Chain at Microsoft and Supply Chain Technology Officer
The panel session focused on three major factors necessary to enable long-term growth in FMCG supply chains: the ability to leverage actionable data visibility; the need to shift strategically to external partner collaboration; and the innovation and enablement of new supply chain strategies in order to adapt to today’s mounting challenges.
However, a critical distinction was made by the panelists: data visibility alone cannot deliver results, just as oil alone cannot fuel transportation. Concrete actions need to be taken to turn the wealth of incoming data into supply chain efficiencies and improvements.
Kim Faulkner at Colgate-Palmolive stressed the need to harness data visibility to properly allocate supplier capacity and materials movement:
"Network visibility is a competitive advantage for us. When we ensure visibility into where we source our materials, which informs how we invest in the right suppliers, we help meet our consumers' expectations." Kim Faulkner
Delving deeper into the topic, David Warrick at Microsoft highlighted the importance of data visibility in helping enable more comprehensive demand sensing and planning throughout Microsoft’s supply network. Leveraging the data from the network enabled the ability to predict and understand patterns (such as from weather patterns and seasonal purchasing trends) to create richer demand sensing opportunities.
"Everyone wants visibility, but isn’t sure why. It’s what you do with data visibility that will get you improved revenue and reduced costs. Visibility has to be actionable in order to achieve the results you want." David Warrick
Data enablement alone can cause analysis paralysis, and is not an end unto itself. For supply chain professionals, data needs to be harnessed and directed toward strategic goals in order to bear fruit.
Shift to External Partner Collaboration
While it is no secret that brands are increasingly outsourcing their manufacturing needs to contract suppliers, many are doing so for cost optimization, and are not leveraging the full potential that external partner collaboration offers.
"The key to success for collaboration between you and your partners is how you can become transparent to each other—but you need the right tool and infrastructure to enable that transparency." Charles Liu
For example, Karin Bursa of NIRAKIO emphasized that contract manufacturers and co-packers offer a wealth of specialized experience unavailable internally to brands, including fresh ideas from an outside perspective. Thus, contract suppliers can become valuable partners in product innovation, especially as the industry emerges from the pandemic.
"There is a pent-up need to design and unleash new products in the market. Collaborating with trading partners offers new opportunities to innovate, as well as collaborate on new efficiencies for processes such as packaging." Karin Bursa
Innovate and Enable New Supply Chain Strategies
The world has awoken to the fact that the traditional structure and management of supply chains are inadequate for the complexities now facing them. To that end, and due to the mounting pressures upon brands and their supply chains, there is now a hastened need for new strategies, as well as new technological infrastructures to support forward-thinking supply chains.
For David Warrick at Microsoft, this disconnect between awareness and action is one that needs to be urgently addressed.
"Today’s complexities are forcing supply chains to look at the world in a different way. And, you can’t look at the world in a different way without doing something about it." David Warrick
Between the session panelists, many are seeing companies breaking the mold of the status quo by looking into new technologies that can implement efficiencies by doing things differently. With the wide range of third-party service providers and software vendors currently available, there exists the means to approach supply chains differently, and the tools to make these moves successful.
Begin reinventing your supply chain today
The consumer landscape has undergone seismic shifts within the last 18 months. Although supply chains have adapted, and the need for greater technological sophistication has been voiced, these adaptations are just small steps toward what is truly needed to adopt technologically-enabled collaborative multi-enterprise supply chains.
Now that there is the need, now is the time to execute.
Download our Nulogy white paper to learn more about future-proofing your external supply chain.