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News26 June 2019

FMCG Supply Chain Study: finding new solutions for a shifting business

Despite the media hype, the implementation of new technologies, like Artificial Intelligence, Robotics and Blockchain is rarely successful for FMCG companies in the short-term. Instead, traditional concepts like sales and operations planning and track & trace are becoming more relevant due to their high rate of successful implementation. However, Big Data has proven added value, but most companies still exploit only a fraction of the potential of data-driven support tools. These are findings from the global FMCG study with more than 360 global participants conducted by Miebach Consulting in collaboration with GS1 Germany in the first quarter of 2019. Solutions for 2020 in an ever-changing business context With new logistics and supply chain innovations surfacing almost daily, the study tries to filter the noise and detect which innovations are developing into the standards of 2020. The results indicate that successful early adopters are pushing innovators and supply chain managers of consumer goods companies to challenge the status quo by shifting boundaries to stay ahead of competition. There is a general feeling among FMCG companies that the business context is shifting: 55 percent of the companies surveyed experience strong to very strong triggers for change. The majority of companies see customer centricity as the key factor for their supply chain management success over the next two years. Collaboration is another very important lever for the future, 60 percent consider collaboration as the relevant trigger with a strong or very strong leverage towards digitization. "The majority of future technologies require a certain degree of willingness to collaborate. Thus, the willingness to share information, especially in value chain networks, will be a central challenge in the upcoming years" - says Dirk Freda, Head of Competence Center Supply Chain Management, GS1 Germany. Fuelling logistic performances with KPIs as trigger points for change With Key Performance Indicators (KPIs) being a leading instrument to steer the performance and development of a company, the survey compared the current and the targeted short-term supply chain performance. The responses clearly indicate that companies expect to considerably improve their KPIs by 2020, with more than half (51 percent) of them expecting to make at least a one-step improvement within the next 2 years. "FMCG companies are striving to drastically increase their KPIs in order to secure their competitiveness in the age of digital change. It becomes clear that neither traditional supply chain automation nor innovative solutions alone are enough. The combination of both approaches is necessary" - says Pank Bedaux, Global Lead Industry Practice Consumer Goods, Miebach Consulting Responding to competitive pressure with high customer service levels and increasing Automation According to the study participants, customer service levels tend to standardize at the range of 96 to 99 percent OTIF. However, only about 25 percent of companies already achieve this level of service while 10 percent of companies must make a significant leap from currently 90-93 percent to reach their targeted KPI by 2020. The results also show a tendency towards increasing automation - with hardly any company reversing towards more manual solutions. Alex Waterinckx, Lead of the Industry Practice Consumer Goods Germany, Miebach Consulting states: "We see a growing interest for automated case picking in the market which is confirmed by the survey. Layer picking, especially, is a technology with increasing interest, as retail customers demand less full pallets and therefore require more picking." The shift towards multi-and omnichannel solutions Traditional roles in the end-to-end consumer goods supply chain have been blurring over the last years. E-delivery, supply chain orchestration, supply chain segmentation and adapting the footprint to an E-com network are gaining relevance and have already been successfully implemented in 78-100 percent of all projects. "Multi- and omnichannel warehouse solutions are becoming more common than dedicated channel warehouses, allowing operational synergies on staff as well as on shared use of working capital invested" - says Alex Waterinckx. The complete study can be requested by Ralf Hoffmann at hoffmann@miebach.com or at GS1 Germany Michaela Freynhagen at michaela.freynhagen@gs1.de.

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Plan. Design. Implement.

Our services span the complete supply chain. We develop concepts that define the integration of all relevant services. Upon these concepts our consultants and engineers plan, design and implement network structures, effective processes and sustainable installations.  Companies dependent upon the seamless operation and successful performance of their supply chains need prospective solutions. Therefore, our service model is built on three main pillars that offer the integration of different capacities: Supply Chain Transformation, Engineering & Implementation and Operational Excellence. Our services are centered on a holistic approach. We consider our client’s strategy, business process and logistics as equally important parts of a prospective supply chain concept.

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Miebach Consulting GmbH

Phone +49 69 273992-0

Email frankfurt@miebach.com

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