Create consumer-driven supply chain networks, report claims

02-Feb-2016 - Last updated on 02-Feb-2016 at 10:28 GMT

Report: the consumer is increasingly in charge, making decisions that impact the supply chain

Food industry manufacturers, suppliers and retailers should no longer think of their supply chains as linear, and instead organise themselves in a series of networks around consumers, a joint report by consultancy firm Capgemini and The Consumer Goods Forum (CGF) has claimed.

The Rethinking the Value Chain: New Realities in Collaborative Business report identified future trends in the consumer products and retail (CPR) sector and concluded that traditional value chains are no longer sufficient to keep pace.

To secure long-term growth, it recommended the adoption of a “value network” approach to doing business.

Direct impact

According to the report, the consumer is increasingly in charge, making decisions that have a direct impact across the supply chain. The industry then has to respond – rather than the other way around.

By organising itself as networks around consumers, the food industry would be better placed to offer a “multiplicity of channels and interfaces across all value-add processes and business entities” , the report suggested.

It highlighted three priorities in which the industry could collaborate and deliver a positive return on investment – consumer engagement, transparency, and the last mile of distribution.

‘Plug-and-play approach’

Ted Levine, global sector leader for consumer products and retail at Capgemini, said: “As an industry, we need to agree to adopt modular technology, which offers a plug-and-play approach to business applications and big data services – to speed up time to market and create a culture of innovation.

“At Capgemini, we see the opportunity for consumer goods and retail companies to move toward a consumer-driven supply chain that builds end-to-end value networks with greater localisation across all channels, visibility and insights to drive speed and innovation to meet the demands of the digitally-enabled consumer.”

The CGF is a global industry network set up to encourage the global adoption of practices and standards. It brings together the bosses of around 400 manufacturers, retailers and service providers.

Click here for more information and to download the report.

Three priorities

Consumer engagement

Take part in a true dialogue with consumers, justifying their trust in the industry, and be consistently responsible with consumers’ data so it can add value in serving and engaging with them. This will require companies to adopt common and clear principles.

Transparency

Keep consumers informed about the nature and traceability of products’ ingredients, nutrients and provenance. This will require a step-change in collaboration on product global data definitions, data quality and data sharing, going beyond simple track-and-trace and audits.

The last mile of distribution

Reconsider the assumption that distribution to stores and consumers is an area where companies operate independently of each other, and explore opportunities to collaborate, under certain circumstances, in ‘network’ partnerships to improve speed, efficiency and consumer satisfaction while minimising environmental impact.