As fast-moving consumer goods (FMCG) companies and their external supply chain partners continue to operate in a competitive, ever-shifting market, it is more important than ever for them to drive two-way visibility and high-fidelity collaboration across their complex, multi-tier networks.
To this end, it is critical for FMCG companies and their external manufacturing partners to leverage modern supply chain planning technologies as well as multi-enterprise collaboration to drive performance and responsiveness across their networks. Just as the consumer buying journey from product discovery to delivery expectation has evolved rapidly, companies must be technologically prepared to meet those expectations.
To shed light on this topic, I recently joined Supply Chain Now webinar hosts, Scott Luton and Mary Kate Love, along with fellow industry partner Philip Vervloesem, Senior VP at OMP, to chat about how leading technologies in the realms of supply chain planning and multi-enterprise collaboration can deliver value for FMCG enterprises and their networks of external supply chain partners such as co-packers and contract manufacturers.
Here were the three main topics from our discussion:
Data Management for Business Leaders: Traditional vs. Progressive Approaches
Evolving From ERP
What data management strategies are hindering or creating pain points for your organization? One trend Philip often sees is what he refers to as the “tunnel vision viewpoint,” which occurs when a company’s enterprise resource planning (ERP) system is the only reference system for success. He found that not only does such a strategy encourage reactivity, but it also only offers a limited data viewpoint—namely, only the data within the enterprise’s four walls. As a result, these companies are unable to gain a comprehensive view of their data flow for true business optimization.
I agreed whole-heartedly with Philip’s sentiments and, building on them, offered that leaders tend to see their ERP resource as the “everything” resource – and that can be a very counterproductive way to think as FMCG networks increasingly rely on their external partners (and by extension, the data that lies beyond their internal teams). Case in point: Contract manufacturers manage 32% of the average brand owner’s total production, and as such, collaboration between internal teams and their external network of partners is more important than ever before.
Responding to Industry Disruptions with Synchronization
Building on the previous point: One of the most significant barriers to operational excellence is the tendency to silo the planning layers within an enterprise. When communication is lacking between both internal departments and external partners, it’s difficult to plan long term and take a proactive approach to industry disruptions. As Philip explained, one disruptor that illustrates this challenge is the recent flooding crisis in Brazil. Extreme weather events are more common than we realize, and no matter where in the world they occur, its impacts can touch every corner of the globe.
Synchronization resulting from shared data flow can help companies get on the same page faster and collectively respond to delays, disruptions, and other challenges more quickly and effectively, resulting in an external supply chain that is more resilient to disruption through their enhanced responsiveness.
EDI: A Relic of the Past?
Are you a business leader holding fast to EDI? I can understand why: EDI has been around since the 1960s and has historically been an invaluable tool for electronically transferring business data—but the truth is that it has its limitations. Just as email can’t be considered true collaboration, neither can EDI. I predict that there will be a greater industry shift from this traditional point-to-point communication system to digital platforms that connect partners more holistically and encourage more data sharing and collaboration from their users for mutual success and growth.
“EDI is like using an ACE bandage when you need orthoscopic surgery.”
Jake Barr, CEO, BlueWorld supply chain Consulting
Empowering Teams to Achieve New Levels of Success
Companies that are empowering their teams for new levels of success are embracing collaborative digital ecosystems. Why? Because they are asking the question, “How do I get the best out of my supply ecosystem and ‘hydrate’ my planning solutions to get high fidelity information for better planning?”
Just as a rising tide lifts all boats, these enterprises are driving data mutuality to enable suppliers, co-packers, and their various vendors and suppliers to operate more effectively and easily. Enterprises that work from outside and inside viewpoints, versus working in silos, will find value in looking at multi-tiered, holistic approaches for overall improvement across the board.
Philip also added that transitioning from a siloed approach to end-to-end value stream integration is possible – but it takes time. The journey from one to the other should be implemented as a gradual, step-by-step process that moves from crawling, to walking, to running.
Leveraging technology to supplement efforts for improvement is also imperative. Scott mentioned an interesting fact: in 60% of all supply chain roles, 30% of what they do can be automated, creating the space for supply chain innovators to focus their expertise in new areas. This is an important piece of the puzzle for achieving success.
Three Outcomes of Digitalized Supply Chain Planning and Synchronization
Greater Collaboration
Philip explained that when organizations embrace supply chain planning and synchronization technologies, one of the first and most measurable outcomes is an improvement in collaborative planning. These solutions empower long-term, proactive planning within the enterprise walls while supporting cross-functionality between commercial, marketing, manufacturing, supply chain, and more. Breaking down communication silos is the key to working together strategically and in unison.
The Black Hole Problem, Solved
Further, I believe solving the ”black hole problem” in data visibility across an external network can have monumental effects on an enterprise’s business outcomes. Once an organization finds a way to acquire, leverage, and synchronize their high-fidelity data, it eliminates the black hole of information between multiple nodes across the network so that all partners are working on a common data model. Those shared metrics are vital to measuring outcomes in a collaborative nature. This transition from me to we fosters a community that encourages leaders to ask, “What can I do with you instead of to you?” I believe it is a paradigm shift that can and will enable visibility for greater supply chain success.
Improved Focus on Customer Centricity
A third powerful outcome is the fact that synchronization drives customer centricity: a mindset that focuses on creating positive experiences for our consumers. Customer centricity is improved through better product delivery and agile, adaptive responsiveness. I encourage you to check out the full webinar for an infographic depicting how true agile planning can be achieved.
I very much enjoyed my time on last month’s webinar and want to thank Scott and Mary Kate for having me on the show, and to Philip for taking the time to chat with me. I invite you to watch the replay on YouTube and continue learning and growing with Nulogy’s complimentary ebook, “The Ultimate Guide for Surviving Economic Uncertainty & Supply Chain Disruption.”
