The Future of Supply Chain
B.C. — “Before Covid.”
A time when consumer packaged goods manufacturing and distribution was not the subject of dinner table conversation (mine excluded). A time when “essential” was not so loaded with meaning. A time when consumers and policymakers weren’t asking questions about resiliency, national competitiveness, overseas over reliance and the future of supply chains.
The COVID-19 pandemic put supply chains front and center, elevating their everyday importance and highlighting both challenges and opportunities for the consumer packaged goods industry. For the first time in the lives of many Americans, the U.S. supply chain started to break down. This raises two important questions — what should be the role of government in ensuring resiliency and responsiveness, especially during a crisis? And, what can CPG companies do to prevent disruption and guarantee product availability, affordability and accessibility going forward?
Just under two weeks ago, the Consumer Brands Association, the Council of Supply Chain Management Professionals (CSCMP) and Iowa State University answered the first question in a new report. Now, together with the CPG industry’s supply chain partners, Coyote Logistics and Accenture, we’re tackling the second, by breaking what almost broke during COVID-19. Supply networks, not chains, will power the future, according to our latest research released today.
At risk of sounding too clever by half, such a change is not just semantic. Chains are more linear; they are more prone to disruption at the link level. Networks are more resilient, with built in replication, workarounds and the complexity to adapt and withstand the unexpected. This mindset shift cannot be underestimated, nor can a pervading view of supply chains not just as eking out efficiency, but as the basis for market differentiation and growth.
Truthfully, this shift was already underway before COVID-19. As part of research for today’s report, Consumer Brands, Coyote and Accenture conducted a series of in-depth interviews and surveys with CPG supply chain executives to assess the future of CPG supply chains and the technologies and trends shaping that future. The report paints a clear picture of how these technology enablers, macro forces and consumer demands are radically reshaping how CPG will do business in the years to come. The pandemic accelerated conversations that at the time were much more forward-thinking — how do you build resiliency? How do you adapt to e-commerce grocery growth in every iteration of it? How do you leverage Big Data, end-to-end visibility tools, autonomy and other technologies to source, make and deliver low-margin products that consumers actually want in a hypercompetitive environment, with growing sustainability and responsibility expectations, while accounting for shrinking transportation capacity, evolving workforce dynamics and the challenges of retailer-manufacturer collaboration?
These aren’t easy questions (clearly), but the verdict from CPG leaders is decisive. The future of supply chain is no chain at all — it’s a network.
Ultimately, this evolution will look different for every CPG company. If the pandemic has proven anything, it’s the determination and ability of manufacturers to adapt and seize momentum even in the most demanding of circumstances.
To learn more about the path forward and how CPGs will adapt to consumer demand and emerging trends, download the full report, “The Future of Supply Chain.”
Published on March 19, 2021
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