The consumer goods industry is being rapidly transformed by multiple, irresistible forces. External market realities driven by Covid-19 and supply chain disruptions have led to full ships and empty shelves for many categories in this sector. Consumer consumption habits and buying behaviors are changing and brand-driven direct-to-consumer programs are taking off. These major shifts are forcing consumer goods companies to focus on three pressing needs.
Digital supply networks
Building increased resiliency and agility in supply chain planning and execution has become the No. 1 priority of many consumer goods companies. Disruption of global supplies due to Covid shutdowns and labor shortages have forced them to look at sourcing and transportation in a new light. Realtime data about supply availability, transportation capacity and expected delivery dates has become essential to dealing with disruption and shortages. Creating real resiliency and agility requires ongoing investment in real-time data, advanced analytics and improved use of AI and machine learning (ML) to identify critical problems and possible alternatives early.
To achieve this, CPG companies require a modern cloud platform that helps manage the full data lifecycle, from information capture and exchange to integration and governance. A digital supply network can provide these capabilities to companies both large and small and can deliver significant advantages. Organizations focused on implementing ethical sourcing programs, supply chain control towers and digital twins will find that a digital supply network can rapidly accelerate these kinds of data-driven programs.
Consumer goods companies are prioritizing supply chain investments for resiliency and growth, changing the legacy view of supply chain as a cost center. Gaining end-to-end supply chain visibility and diversifying suppliers and manufactures can improve performance. Creating deep integrations with partners helps create resiliency and agility in planning and execution, transforming supply chains into digital supply networks. This focus allows improved supply chain performance overall and is especially important as companies accelerate direct-to-consumer operations.
Autonomous supply chains (IoT/AI)
Data delivers deeper insights into the critical performance of supply chains. Companies are leveraging exponential growth in supply chain data to obtain more meaningful insights that help optimize processes and drive greater efficiencies. One of the major advantages of a digital supply network is the depth of integration and data exchange that is possible with trusted trading partners. Exchange of data on supply, demand and logistics scheduling increases insight, accuracy and automation in operations. Enabling control towers to monitor performance and dashboards to deal with disruptions improves overall performance, product availability and customer satisfaction.
The increase in available data from the end-to-end supply chain will provide rich training sets for the application of AI and ML to the increasingly demand-sensitive and customer-centric supply chains in consumer goods. Realtime data enables the use of digital twins to better understand critical issues including inventory optimization, transportation planning and bottleneck detection. This provides a better understanding of the organization’s supply chain dynamics, behavior and performance. Improvements in automation and augmented decision making will continue to increase as labor shortages and inflationary pressures grow.
Direct to consumer
Integrating customer data, communications, media and messaging to create great personal journeys that engage customers is a challenge for this industry. In response, companies are launching direct-to-consumer (DTC) programs at a rapid rate, and omnichannel, data-driven engagement will only continue to grow in the years ahead. New DTC-only brands have disrupted whole categories with strong online services and social influencer-based engagement. Building a strong brand experience for customers is a priority for every consumer goods company. Successful DTC programs are dependent upon great customer experiences fueled by personal brand journeys. Brands that can personalize messaging and engage customers drive increased loyalty at the store and open the door to direct purchases and even subscription opportunities.
Consumer goods companies adopting a hybrid DTC-wholesale model will need to strike a balance between the two retail strategies. It is becoming clear that companies need to consider both paths to market to support improved growth and profitability.
Addressing these three priorities requires connecting people, systems and things in agile, extended ecosystems that allow companies to gain insight and optimize processes. This is driving the adoption of digital supply networks and autonomous supply chains as companies take advantage of the opportunity to easily connect with partners more deeply in a managed cloud community. Improved supply-chain performance also improves the customer experience leading to better loyalty and sales.
Not every integration partner can provide the scale, visibility and optimization to sufficiently address these priorities. Learn more about how OpenText solutions can help consumer goods companies achieve their goals.