This week, IGD published its keynote piece of supply chain research for 2018, Supply Chains for Growth
. It’s a fantastic insight into the future characteristics of our industry’s supply chains and an analysis of the response needed. Kudos to my colleagues Alistair and Chris for a sterling job.
Supply Chains for Growth outlines the elevated impact that a supply chain team can deliver across an entire organisation. From a cost centre to the strategic hub of a business, supply chain are shaping strategy and driving breakthrough thinking.
With real growth constrained in many developed markets, looking internally to unlock competitive advantage will be an increasingly common strategy. Agility and responsiveness may be the new battleground for manufacturers and retailers alike, with supply chain playing a pivotal role in achieving this.
Addressing three vital questions
- How can supply chain innovation unlock growth?
- What are the implications for retailers and manufacturers?
- How can you capitalise on the opportunities?
How prepared are you?
Respondents answers to our survey were aggregated to give us a view of the industry’s preparedness. We found a great foundation, with 60% respondents making progress and 13% saying they were future ready. But the bar will continue to rise and being ready today will not be enough in a year’s time. The benchmark for preparedness will keep moving forward.
For early adopters, an opportunity exists to lead the way and potentially influence the future direction of important supply chain issues. However, investing heavily in an industry in a state of transformation can be risky!
Source: Supply Chains for Growth, IGD, 2018
Blazing a trail: 10 ways you can get prepared
We’ve grouped the ways in which businesses can prepare for the future in line with the four key foundations of successful supply chains. In the remainder of this blog, I’ll explore four of my favourites
Source: Supply Chains for Growth, IGD, 2018
Customer Centricity: Commit to trust
Trust remains the number one factor in preventing deeper, more strategic collaborative partnerships across the FMCG industry. In our “Building Trusted Partnerships” research, 61% of suppliers and 59% of manufacturers identified this as the biggest barrier in their existing networks.
Source: Chris Tyas, Nestlé SA Senior Vice President, Supply Chain
Trust can take a long time to build and can reap great rewards. Personally, I view trust as the number one enabler of success in my time working with Tesco and United Biscuits (now pladis).
ECR UK’s Reducing Wasted Miles work is a great example of what can be achieved at an industry level when businesses have this mindset. Earlier in 2018, a group of leading retailers and manufacturers agreed to share information on vehicle flows across their networks. Transporeon, a cloud-based platform provider, was able to process this information and roll out a pilot to identify potential routes to share transport capacity, drive cost savings and reduce pollution across Europe. Through tackling issues around trust early on, and developing a portal, compliant with data protection rules, these potentially competing businesses were able to collaborate in a way that benefits the entire industry. A rare example of a true strategic multi-lateral partnership.
Source: IGD research
Powered by people: Be self-disruptive
In my experience of working in several supply chain teams across different industries, questioning the status quo and disrupting the “we’ve always done it this way” mentality is often a tricky hurdle to clear. Working with third parties or incubator partners to test new ideas can be a great way to bring disruptive thinking into an organisation.
Sobeys and Ocado’s recent partnership saw Sobeys capitalising on Ocado’s expertise in managing a successful ecommerce business. The two businesses are partnering to create an ecommerce facility in Canada, using Ocado’s tried and tested technology and robotics platform. This has allowed Sobey’s to potentially position itself as a leader in this highly competitive area, a position that would have been much more difficult to attain without bringing a disruptive partner on board.
Resilient and Responsive: Lead on sustainability and transparency
As shoppers continue to shop based on ethical considerations, businesses are increasingly looking to differentiate themselves through transparent and sustainable ways of working. This can take many forms, from reducing the use of plastics in secondary packaging or providing a transparent end-to-end view of a product’s supply chain. Carrefour has recently announced that it’s using blockchain technology across its organisation to increase food traceability and build trust with shoppers.
A first across Europe, this innovative technology allows a shopper to scan the packaging of an Auvergne chicken in store and displaying details relating to the hatchery of origin and producer of the product. This represents a great leap forward for Carrefour in achieving its Corporate Social Responsibility (CSR) mission and firmly placing Carrefour as a leader in this increasingly critical area.
Transformed by technology: Creating a data-driven culture
One of the biggest challenges that the Internet of Things (IoT) will bring is the amount of time and effort it will take to draw insight from the terabytes of big data produced. Through adopting a data-driven culture early, supported with intelligent systems, businesses will be able to stay ahead of the curve.
Marks and Spencer’s recent collaboration with Decoded has seen it launch a data academy across the business. In the first 18 months, the academy will see 1,000 M&S employees from a cross-section of departments and seniority levels complete the programme. If this initiative is successful, it will see M&S become a truly data-driven organisation. To reap the benefits of this approach, businesses will not only have to upskill individuals, they must also empower them to be change leaders within their organisations.
We don’t just do research
I hope my blog has inspired you to understand more about how other organisations are helping to get ahead of the curve in increasingly challenging times. If you want to build a future fit business, develop a new strategy or just looking for more information, get in touch to understand how we can bring Supply Chains for Growth to life in your organisation.
Supply Chain Insight Manager