As part of Solutions Review’s Premium Content Series—a collection of contributed articles written by industry experts in enterprise software categories—Jason Tham, the co-founder and CEO of Nulogy, outlines five reasons companies should embrace a networked supply chain.
Today’s volatile and ever-changing consumer goods landscape has unearthed a critical need for fast-moving consumer goods (FMCG) manufacturers to adapt and transform their supply chains. In modern times, traditionally linear supply chains are evolving to supply chain networks powered by cloud-based, collaborative technology solutions.
To succeed today and in the future, FMCG organizations must invest in supply chain collaboration technology and embrace a truly networked supply chain approach. Here are the top five reasons why.
1) Enhanced Visibility and Transparency
One key advantage of enabling a networked supply chain is its heightened data visibility and transparency. By adopting a networked approach promoted by real-time data flow, FMCG companies can break down information silos between customers and suppliers and gain real-time insights into the entire supply chain ecosystem. With this new level of visibility, businesses can proactively address bottlenecks, anticipate disruptions, and make data-driven decisions that improve planning efficiency and customer satisfaction.
2) Increased Agility and Responsiveness
Today’s consumer goods landscape demands agility and responsiveness to meet rapidly changing market dynamics. Research from Deloitte indicates that 79 percent of companies with high-performing supply chains achieve above-average revenue growth. Networked supply chains empower organizations to collaborate seamlessly with suppliers, partners, and customers to respond more quickly to disruptions and sudden demand changes. By harnessing real-time data sharing and leveraging advanced analytics, companies can respond with agility to market shifts, optimize inventory levels, and accelerate product time-to-market—gaining a competitive edge.
3) Optimal Resource Utilization
Efficient resource utilization is a critical driver of profitability in the competitive consumer goods market. Networked supply chains facilitate better coordination among partners and suppliers, enabling FMCGs to minimize waste, reduce excess inventory, and maximize production and fulfillment capacity.
In addition, by gaining visibility into quantity and lot codes of raw materials and finished goods, these organizations can improve the movement and usage of materials throughout their supply chain to reduce potential shortages and write-offs, helping achieve waste reduction goals. Streamlining operations and eliminating inefficiencies allow companies to achieve significant cost savings while maximizing their resource utilization.
4) Risk Mitigation and Resilience
In an era marked by global disruptions, risk mitigation and resilience have emerged as significant concerns for supply chain leaders. In a recent survey by McKinsey, the risk remains a priority for most respondents, with 83 percent saying they have experienced at least some raw materials shortages over the past year. Networked supply chains offer built-in resilience by diversifying supplier choice through interoperable supplier networks, enabling real-time risk monitoring, and fostering collaborative order planning.
By embracing a networked approach, businesses can mitigate the impact of disruptions, identify alternative sourcing options, and proactively manage risks to ensure continuity and customer satisfaction.
5) Driving Innovation and Collaboration
Innovation and collaboration have become critical drivers of product success in today’s consumer-driven landscape. Networked supply chains promote closer cooperation between brands and their suppliers and partners, leading to innovative product delivery. In its 2020 Global Supply Chain Disruption and Future Strategies Survey Report, Foley & Lardner reported that 42 percent of manufacturing executives said they were implementing or planning to implement initiatives to strengthen supplier relationships and increase transparency with suppliers or buyers. Research also shows that companies that foster collaboration across their supply chain ecosystem achieve higher revenue growth and profitability.
On a single, multi-party network, synchronization can be achieved, creating an open and collaborative environment that eliminates the Bullwhip Effect and allows businesses to tap into the collective expertise of their partners, drive innovation, and identify new opportunities to enhance customer value.
The paradigm shift towards networked supply chains transforms how FMCG brands and their networks operate, collaborate, and compete. By embracing this approach, organizations can gain a competitive advantage by unlocking enhanced visibility, agility, resource utilization, risk mitigation, and innovation. Today’s businesses need to recognize the immense value of a networked supply chain. They can immediately reap the benefits from a networked supply chain, no matter how mature their supply management is—and those benefits are just too powerful for companies to ignore.
- Five Reasons to Embrace a Networked Supply Chain - June 22, 2023
