Synchronized and Resilient Supply Chains as a Competitive Advantage

In the wake of the pandemic, mid-size companies in the consumer-packaged goods (CPG) industry have emerged as a rapidly growing segment. These companies have displayed resilience and adaptability during challenging times. However, their growth has also highlighted a significant vulnerability. To capitalize on their growth and thrive in the post-pandemic landscape, mid-size CPG companies must prioritize developing and implementing comprehensive operational systems and supply chain redesign. The supply chain has the potential to become a competitive advantage, enabling these companies to achieve breakthrough growth in both top and bottom-line performance.

The Need for Synchronized and Resilient Supply Chains:

To be competitive, future supply chains must align with the business’s commercial strategy and adapt to market dynamics. They should be agile enough to meet the demands of fast-growing segments, trial strategies, customer dynamics, and product and packaging differentiation. This requires a diversified and dispersed footprint, allowing companies to be closer to consumers and growth opportunities. Mid-size CPG companies can enhance their operational efficiency and responsiveness by synchronizing their supply chains with their business strategies.

Building Resilient Supply Chains:

Resilience is a crucial attribute for supply chains in today’s volatile marketplace. Mid-size CPG companies should move away from single sourcing and adopt a diversified footprint close to business growth opportunities. This reduces dependence on a single supplier and provides cost optimization opportunities. Third-party services can allow companies to explore new-to-world ideas without making massive capital investments or experiencing high depreciation. Implementing business continuity plans (BCP) for critical materials and establishing protection nodes, such as intermediate consignment storage, helps overcome vulnerabilities and ensures operational continuity during disruptions.

Competitive Elements Checkpoints:

To ensure the effectiveness of their supply chains, mid-size CPG companies should consider the following checkpoints:

1. Strategic Alignment:
   • Ensure end-to-end operating strategies are aligned with overall business strategies.

2. Tailored Replenishment Strategies:

   • Develop specialized tactics for different supply replenishment streams, including core replenishment, promotional strategies, new product introductions, sales incentive initiatives, online retail, and direct-to-customer operations.

3. Effective Sales and Operations Planning (S&OP):

   • Implement a best-in-class S&OP process to align demand and supply, enabling efficient decision-making.

4. Capacity Planning:

   • Maintain an appropriate capacity-to-demand ratio to support varying demand scenarios effectively.
   • Make robust capacity planning and long-term investment choices to ensure scalability and flexibility.

5. Supply Chain Resilience:

   • Diversify sourcing to reduce reliance on single suppliers, mitigating potential disruptions.
   • Establish a diversified footprint close to business growth opportunities for increased agility and reduced vulnerability.
   • Develop business continuity plans for critical materials to minimize disruption impact.
   • Establish protection nodes within the supply chain to overcome vulnerabilities during disruptions and maintain uninterrupted operations.

Conclusion

The new era of supply chain management presents mid-size CPG companies with opportunities and challenges. By recognizing the supply chain as a competitive advantage and focusing on synchronized and resilient operations, these companies can position themselves for breakthrough growth. Embracing these strategies will enable mid-size CPG companies to navigate the post-pandemic landscape successfully and unlock their full potential in the evolving consumer market.

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