The need to reset
Consumer goods enterprises face unprecedented challenges. Change is happening at a faster rate than ever before. In response, organizations need to reset their processes for greater speed and agility. This is the only way to realize full commercial potential into the future.
Retailers' demands are growing. They place orders more often and in smaller quantities. Between 2013 and 2018, demand volatility increased by 17% to 45%. For manufacturers, this means accurate forecasting, right-time right-place inventory, and quick time-to-market innovations are vital.
Consumers' demands are growing. They're looking for personalized shopping experiences, and if they find them, are 110% more likely to add items to their baskets and 40% more likely to spend more than planned.
Supply chain innovation is harder but more necessary than ever before. Many consumer goods organizations are working to innovate their supply chains but aren't seeing significant ROI. In fact, almost half of digital pilots have little or no impact, and 34% have had only incremental impact according to a survey by BCG. Participants cited inadequate change management, functional silos, and a lack of technical abilities as the main factors leading to failure.
Internal silos eat time. Currently, functions such as sales forecasting, business planning, sales and operations, and promotional planning have data-driven analytics in place. However, mechanisms are often disconnected. This means that 75% of key account managers' time is focused on past performance versus just 25% on growth or closing gaps. Meanwhile, they spend 65% of their time on internal interactions, losing valuable hours they could spend focusing on customers.
Forecasting is increasingly complex. "Generating account-level forecasts down to the case and making changes to a customer forecast very late in the cycle add complexity," says Thomas McGuire, analytics lead in Genpact's sales and commercial business. "A managing director for a global CPG major recently shared that their organization has become 'very good at being precisely wrong.'"