CPG Supply Chains are adapting to disruption, new research finds

0Online shopping, new digital technologies, and increasing channel fragmentation are intensifying the pressures on US consumer packaged goods (CPG) supply chains.

There are clear steps CPG companies must take in order to prepare, according to a new report authored by The Boston Consulting Group (BCG) and commissioned by the Grocery Manufacturers Association (GMA).

The report, ‘How CPG Supply Chains Are Preparing for Seismic Change’, highlights the top trends affecting CPG supply chains and the effect on CPG companies’ performance.

Among the issues addressed in the report: e-commerce sales growth, service-level performance, channel proliferation, network design, and cash management trends.

The report is based on the 2017 Supply Chain Benchmarking Study, a study of the US units of more than 30 leading CPG companies conducted jointly by BCG and GMA.

“It’s been a turbulent couple of years for the grocery industry, with major disruption and dislocation in the retail landscape,” commented Daniel Triot, senior director of the Trading Partner Alliance of GMA and the Food Marketing Institute.

“Despite the important performance gains in the supply chain in the past two years, CPG companies cannot be complacent. This report aims to provide guidance for CPG companies looking to harness new digital technologies and trends to support continued growth.”

Over the next two years, half the growth in North American grocery sales will come from e-commerce. But only 6% of CPG companies have a dedicated e-commerce supply chain team, and only 3% are able to fully track sales by channel.

Read more at CPG Supply Chains are adapting to disruption, new research finds

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Helping Procurement Professionals Build Resilience in Their Own Supply Chains

The Chartered Institute of Procurement & Supply (CIPS) has launched a free online tool to support procurement and supply management professionals and those with an interest in buying to develop resilience in their own supply chains.

A CIPS survey in 2016 of 900 professionals revealed a growing awareness that unmitigated risk can have disastrous consequences for companies in terms of revenue and impact on margins.

Of those surveyed, 46% ‘sometimes’ have mitigation strategies in place and yet 52% expected the same level of service from their suppliers in the event of a disruption.

The Risk and Resilience Online Assessment Tool helps procurement professionals to identify where specific risk exists in their supply chains in seven key areas:

  1. Geographical. Restrictions on commodities or trade tariffs can have devastating effects on supply chains along with environmental concerns and reputational damage.
  2. Functional. Poorly conceived strategies and poor systems controls can make critical parts of the supply chain high risk.
  3. Performance. Suppliers may be engaging in bad working practices or failing to provide the right product, at the right time, to the right place.
  4. Technical. An inadequate level of internal security surrounding IT systems could lead to cyber risk and loss of customer, or partner data and loss of revenue.
  5. Governmental. Actions from governments could influence the movement of goods, with sanctions and embargoes and could affect reputation if found to be supportive of human rights abuses.
  6. Ethical. Dents in customer confidence will affect revenue streams and reputation, disaffected workforces can produced delayed, poor-quality goods.
  7. Legal. Breach of laws and statutes will cause delays and issues in supply chains. Diligence is required to ensure suppliers and contractors are also compliant.

Read more at Helping Procurement Professionals Build Resilience in Their Own Supply Chains

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Google and Wal-Mart team up to combat Amazon in retail supply chain shake-up

Google has teamed up with Wal-Mart in its biggest even retail partnership to challenge Amazon in the online shopping marketplace and combat the proliferation of its Alexa-powered Echo device as a means of facilitating voice shopping.

The move is expected to have a significant impact on the retail supply chain within the United States as well offering customers a whole new way of purchasing goods.

As Forbes analyst Kevin O’Marah puts it: “It signals an acceleration in the shift from store-based retail supply chains to a hyper-personalised, smart consumer supply chain.

“The dynamics of this new supply chain will be brutal for consumer brands accustomed to shelf-centric demand.”

The new partnership marks the first time that world’s largest retailer is offering products outwith its own website in the US. It announced this week that it’s going to offer a huge array of items through Google’s online shopping platform, Google Express, and eventually through its virtual assistant, Google Home.

Wal-Mart is hoping that it can integrate its large network of stores with its digital business thanks to the new partnership.

Read more at Google and Wal-Mart team up to combat Amazon in retail supply chain shake-up

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All in with online, can J.C. Penney get up to digital speed?

I had a few occasions chatting with the IT people of the company in the past few years. They were reluctant to adapt to the on-line trend of the retail market. One year, they wanted to expand their on-line catalog business; the next year, they closed the on-line catalog business and moves the majority of their IT people overseas in the following years. This time, it appears that the new SVP, Mike Amend, hired from Home Depot, is ready to face the on-line retail business challenges.

This article highlights a lot of positive actions for the company to transition itself from a traditional retail business to an on-line one.

  1. Recognizing its market strength: Research from comScore tells Penney that its customers have household incomes of $60,000 to $90,000, and they tend to be hardworking, two-income families living both in rural and urban settings. They don’t have the discretionary income to commit to membership fees.
  2. Last month, Penney added the ability to ship from all its stores, which immediately made about $1 billion of store inventory available to online customers and cut the distance between customer and delivery.
  3. About 80 percent of a store’s existing inventory is eligible for free same-day pickup.
    Last week, it offered free shipping to stores with no minimum purchase. Large items like refrigerators and trampolines are excluded.
  4. JCPenney.com now stocks four times the assortment found in its largest store by partnering with other brands and manufacturers.
  5. More than 50 percent of its online assortment is drop-shipped by suppliers and doesn’t go through Penney’s distribution. Categories added range from bathroom and kitchen hardware to sporting goods, pets and toys
  6. JCPenney.com now has one Web experience regardless of the screen: phone, tablet or desktop.
  7. Its new mobile app and wallet include Penney’s new upgraded Rewards program. Customers can book salon appointments on it. The in-store mode has a price-check scanner.
  8. Penney set out to “democratize access to the data,” so that not only the technical staff could understand it, now dashboards and heat maps allow the artful side of the business — the merchants — to measure such things as sales to in-stock levels or pricing to customer behavior.

Read more at All in with online, can J.C. Penney get up to digital speed?

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Data Lake vs Data Warehouse: Key Differences

Some of us have been hearing more about the data lake, especially during the last six months. There are those that tell us the data lake is just a reincarnation of the data warehouse—in the spirit of “been there, done that.” Others have focused on how much better this “shiny, new” data lake is, while others are standing on the shoreline screaming, “Don’t go in! It’s not a lake—it’s a swamp!”

All kidding aside, the commonality I see between the two is that they are both data storage repositories. That’s it. But I’m getting ahead of myself. Let’s first define data lake to make sure we’re all on the same page. James Dixon, the founder and CTO of Pentaho, has been credited with coming up with the term. This is how he describes a data lake:

“If you think of a datamart as a store of bottled water – cleansed and packaged and structured for easy consumption – the data lake is a large body of water in a more natural state. The contents of the data lake stream in from a source to fill the lake, and various users of the lake can come to examine, dive in, or take samples.”

And earlier this year, my colleague, Anne Buff, and I participated in an online debate about the data lake. My rally cry was #GOdatalakeGO, while Anne insisted on #NOdatalakeNO. Here’s the definition we used during our debate:

“A data lake is a storage repository that holds a vast amount of raw data in its native format, including structured, semi-structured, and unstructured data. The data structure and requirements are not defined until the data is needed.”

Read more Data Lake vs Data Warehouse: Key Differences

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Walmart and Target are refusing to surrender to Amazon

While many public companies focus their attention on embellishing their quarterly results, Amazon has always taken the long view.

The online retailer leader has invested heavily in infrastructure including a nationwide network of warehouses, robots which help ship orders, and even predictive technology that helps the company know what a customer plans to buy before he or she orders it.

Amazon even has a pioneering deal with the United States Postal Service which allows for Sunday delivery in some markets.

All of this has not come cheap, and it has hurt Amazon’s short-term profitability in some quarters, but it has helped the company build a strong competitive advantage over its chief rivals Wal-Mart and Target.

Those two physical retailers are struggling to change their supply chains to meet the needs of individual digital customers rather than stores. That’s a radical switch that requires major changes to how both brick-and-mortar chains operate.

But if either Wal-Mart or Target can hope to compete with Amazon, they have to recreate the digital leader’s ability to ship millions of products in a two-day window efficiently. Both companies seem to at least understand the problem and are taking steps to catch up.

Read more at Walmart and Target are refusing to surrender to Amazon

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Cloud Solutions for Logistics and Supply Chain Management Software

Logen Solutions, a software company that specializes in logistics efficiency software, released CubeMaster Online, a comprehensive cloud solution for logistics and software for supply chain management.

CubeMaster Online is a load plan and optimization software, and palletizing and packaging design software that calculates the optimal loads for pallets, trucks, trailers, and sea and air containers. Companies can help reduce 5 to 20 percent of the trucks or container loads used. This can result in significant time and cost savings for many companies.

CubeMaster Online helps facilitate collaboration with teams working together in distribution areas. This collaboration feature presents logistics, engineering, marketing, management and distribution centers with an easy, efficient way to share and control load planning and execution across various geographical areas.

CubeMaster Mobile provides mobile pages built on HTML 5, which enables connection to any service with any mobile devices. This mobile version is designed to run on mobile devices such as iOS and Android tablets and smartphones.

CubeMaster Web Service is the most recent technology to enable the integration of CubeMaster Online with customer applications, such as enterprise resource planning (ERP), warehouse management systems (WMS) and transportation management systems (TMS) at the application level. It allows the remote applications written by ASP, APS.NET, Java, PHP and SAP to call remotely the application program interfaces (APIs) served by the CubeMaster Online server.

Read more at Cloud Solutions for Logistics and Supply Chain Management Software

Have you used the cloud solution for logistics and software for supply chain management mentioned in the article? Share your thoughts with us in the comment box. Subscribe to get updates in your inbox.

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