By E.J. Kenney, Senior Vice President and Global Head of Consumer Products and Life Sciences, SAP
After weathering one disruptive event after another in the last few years, midsize consumer products companies look to close a gaping hole in their supply chain optimization strategies, according to a recent IDC Info Snapshot.
Nearly half (44%) of survey respondents plan to increase the use of technology for supply chain management. More surprisingly, this strategy ranked higher than traditional tactics, such as supplier diversification (41%), financial hedging for price stability (38%), and locking in long-term contracts (38%).
This shift underscores growing recognition of technology’s pivotal role in enhancing supply chain resiliency and visibility in highly volatile market landscapes. Notably, almost 40% of midsize consumer product companies are concerned that a lack of digital competencies limited their ability to adapt to and adopt new business models.
Overcoming barriers with a digital-first mindset
Although most midsize brands have been quite successful at wrangling wallet share away from larger competitors, they have yet to mainstream their goods beyond narrow or niche markets. This challenge can be attributed to the significant drag on supply chain operations introduced by economic and inflationary pressures, rising costs, material shortages, and production capacity limitations.
However, according to the IDC paper, the most significant obstacles to overcoming this barrier to expansion are found internally – namely, a lack of collaboration, speed, and visibility. Recognizing that these impediments cannot be overcome by increasing efficiency and reducing costs alone, growth-focused companies are embracing a new paradigm for collaboration underpinned by data sharing, fueled by advanced analytics, and shaped by AI.
Explore strategies that midsize consumer products companies use to improve supply chain resiliency and attract new customers. Read the IDC Info Snapshot, sponsored by SAP, “Scaling a Profitable Consumer Products Company”
This transformative approach not only enhances efficiency but also fosters resiliency and visibility – a crucial competitive edge in today’s fiercely competitive market landscape. Midsize brands can then be compelled to reimagine their entire supply chain processes, fundamentally reconsidering their engagement with their broader ecosystem of vendors through an integrated business network solution.
German eyewear maker MYKITA GmbH is one of many midsize consumer products companies fostering a more resilient and transparent supply chain ecosystem. From design to manufacturing, picking, packing, and logistics, its just-in-time supply chain cycle spans four to six months, delivering more than 1,000 frames each day to be sold in 98 countries through opticians, e-commerce, and retailers.
To manage its operations effectively, MYKITA needed more-specific part codes to clearly see product levels at the various manufacturing stages and estimate delivery times. Stock also had to be shelved alphabetically to avoid picking errors, and access to sales demand data must be improved to make faster, more-strategic planning decisions.
For MYKITA, the answer to this challenge was implementing an extended warehouse management application and analytics tool that leverage AI capabilities and complement its ERP system – all in the cloud. In return, the eyewear maker has a clear view of stock and materials along the supply chain, making steering, booking, order processing, and planning more straightforward and precise. The result is that delivery times are now calculated correctly.
Moving supply chains forward with a focus on value
Adopting a digital-first mindset presents a compelling pathway for midsize consumer product companies to unlock new levels of supply chain visibility and resilience. By prioritizing the use of modern technology such as AI, advanced analytics, and cloud solutions, these businesses can not only navigate the complexities of today’s market landscape but also expand their reach with agility and foresight.
Explore strategies that midsize consumer products companies use to improve supply chain resiliency and attract new customers. Read the IDC Info Snapshot, sponsored by SAP, “Scaling a Profitable Consumer Products Company” (IDC #US50220323, February 2023).
Read the full article here
