Digital Supply Chains Change the Game in Consumer Goods, Part 2
In a series of blog articles, the Product/Solutions Marketing team explores new business challenges and innovation solutions to change the game and manage disruptions. The following are the insights gained from my discussion with Shri Hariharan, who leads Blue Yonder’s Consumer Manufacturing Industry Strategy, during a recent Blue Yonder Live and webinars that we prepared for jointly.
In this Part 2 blog post, we will continue to explore how consumer packaged goods manufacturers can improve supply chain competitiveness, profitability, and sustainability. In the Part 1 blog post last week, we addressed key trends, business needs, and much needed capabilities.
Terence: Let’s continue with the topics of operational total shareholder returns and customer service. We discussed the urgency to enable a unified plan with the Manufacturing Industry Cloud (MIC) for Consumer Industries. Can you share how we help CXOs think about digital transformation and leverage MIC to accomplish end-to-end improvements in a relatively short timeframe?
Shri:Recently, I have interacted with several companies –some in packaged goods and some in the durables industry – who are coming to us with more specific problems and even use cases. In addition, such companies are really performing due diligence on whether we have a massive transformational advisory team to assist them.
Terence:What is the top-of-mind topic? What does the conversation involve?
Shri:Supply chain obviously is top-of-mind. With a 4-to-6-hour interview process and with data, we are able to benchmark the company using a self-reported maturity assessment, interviews, data, and peer analysis. As a result, we are able to come up with a hypothesis on where the value leakage areas are and where there might be opportunities for improvement.
Throughout this process, we and our network of partners are helping CFOs to determine value leakages and prioritize the many competing improvement initiatives. We help CFOs and other CXOs determine the strategic needs, value opportunities, costs, and benefits so they can sequence possible initiatives with clear Return on Investment (ROI).
For example, in a world where inflation and uncertainty continue to plague our customers, what can they do to reduce cost and cash to serve while improve customer service and grow? They may need to further optimize inventory across the supply chain. What enablers may be needed? For example, multi-echelon inventory optimization to enhance responsive and cost and cash-to-serve across supply chain nodes. This is a highly valuable opportunity to address inflation and other chronic problems head-on, as well as to improve operational total shareholder returns (OTSR, as discussed in the Part 1 blog post).
Terence: Can you go deeper into other needs and the enablers?
Shri:Of course. The consumer good companies are looking at how to carry out digital transformation in a way to minimize risk and learning curve. They would like to leverage proven solutions for their industries and best practice to ensure successful outcomes. They do not want to have failures and significant roadblocks in this transformational journey. As discussed, MIC has over 40 pre-configured use cases by persona for end-to-end supply, demand, and inventory planning in the cloud to minimize learning curves for planning and IT resources. These pre-configurations are in the mold of their industries. In addition, MIC has advanced analytical apps to support data driven decision-making.
These companies do not want to wait for a long time to see an ROI. The fast delivery toolkit and extensible connectivity to other supply chain processes are enabling quicker deployments and reducing the resources needed to design and implement. Some services can be enabled as fast as in eight weeks!
Terence: Can you give us some insights on success factors in supply chain planning and execution too?
Shri:It’s important to discuss a unified plan with customers, so execution of logistics and order management is all part of it. A unified, integrated supply chain plan can be accomplished by bringing cross-functional teams together; a plan is then developed from month six to month 48. The solution has to be capable to enable the teams to review risks, opportunities, and common assumptions, as well as to conduct scenario planning.
In supply chain execution, we enable customers to connect first-to-last-mile fulfillment, and order management lifecycle processes and systems across the network together. This is continuing to be an important opportunity area to further improve the customer experience.
There is also an opportunity to digitalize within the four walls of a distribution center. To counter labor shortage, companies need to provide more flexible work schedules and task optimization. The digitalization of the warehouse is a very hot topic, with warehouse automation with robotics, cobots and warehouse execution systems in the mix. These are significant areas of opportunity that are getting considerable corporate investment.
Terence:With these aspirations, are companies still investing in sustainability?
Shri:Very good question.I had the privilege of representing Blue Yonder recently at a panel on sustainability, tied to the MIT State of Supply Chain Sustainability Report. Companies are overwhelmingly driving sustainability into core supply chain decisions and are really leveraging the supply chain for growth while keeping sustainability initiative as central to their strategy. Consumers value sustainability. Our customers are specifying sustainability, especially carbon emissions, as part of their set of optimization goals.
For example, we discussed with our customer, Driscoll’s. I would like to take this opportunity to give another shout out to them for some of the work they are doing in the sustainability space. The work is really inspiring. We have had several webinars and conversations with their VP of Application, Shankar Chinnathambi, who speaks with a lot of passion about what they are doing. As a result, I see Sustainability being central to the growth paradigm within consumer industries going forward.