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The New Intelligent Supply Chain: The consumer goods and retail landscape

Updated: Dec 28, 2022

Microsoft Partner

The consumer goods and retail landscape is changing faster than ever before

Rapidly evolving consumer preferences. A changing and disruptive retail landscape. The dramatic rise of e-commerce. Supply chain shortages and the unprecedented consumer demand for sustainably produced products.

These changes are largely driven by the three Cs: consumers, customers, and capabilities.

  • Consumers: Consumers’ purchasing preferences are rapidly evolving. Sustainability and convenience are now high on all consumers’ agendas. Also, opportunities are increasing as purchasers are progressively joining the global consuming class.

  • Customers: The changing retail landscape is impacting the industry. Large retail chains, put under pressure by online and discount retailers, are pushing consumer goods companies to offer deeper discounts on products while prioritizing their own private-label products to increase margins.

  • Capabilities: Given these shifts in behavior among consumers and customers, companies need to adapt their historic operating models. This means rethinking marketing investments, enabling better communication across their enterprise ecosystems, and aggregating data sources to enable them to make faster and more accurate business decisions.

In this changing retail landscape, companies have begun to build an agile, connected, and resilient supply chain to maximize operational efficiency, product quality, and profitability.

The way we work, live, and the shop has changed

Companies today face unprecedented challenges as they respond to the new ways we work, live, and shop. Contactless shopping. New e-commerce channels with authentic, personalized brand experiences that are secure, measurable, and scalable. The rise of hyperlocal retailing. New retail formats such as pop-up stores. Consumers are increasingly shifting away from in-person shopping and exploring the many online options available.

Disruption is the new reality—where the edges are no longer the boundaries, and retailers and brands are increasingly adapting to an environment of constant change.

Part of adapting to these changes means building a supply chain that has the agility needed to rapidly respond, as well as the resilience needed to manage unexpected disruptions.

Historically speaking, supply chains have been push-based, reactive systems. Consumers came into a store and asked for a product, and if the store didn’t have it, they could order it and pick it up in a week.

The traditional supply chain needs to evolve

In today’s environment, consumers often expect every conceivable product to be perpetually in stock and shipments to be delivered to their homes within hours. In this marketplace, consumers don’t want to wait—and often, they don’t need to. The consumer experience now belongs entirely to the consumer. And as this experience changes, organizations are adapting and developing new capabilities, including:

  • Detecting and understanding consumer changes as soon as they occur.

  • Predicting consumer demands and expectations.

  • Building the agility needed to accommodate rapid change, along with previously unheard-of levels of resiliency to weather unpredictable, mass-disruption events.

What’s needed is an approach that evolves from a traditional, reactive supply chain to one that can use data and advanced analytics to detect, predict, shape, and service demand peaks before they happen.

A customer experience powered by insights

Organizations can reimagine their consumer experience by using or developing tools that provide real-time insights into what consumers want and then using predictive analytics to understand what consumers will want.

Perhaps most importantly, organizations can use these insights in a way that delivers an authentic and personalized consumer experience across all channels and all devices.

Today’s consumer goods players, retailers, and transporters face unprecedented complexity, as multiple parties must cooperate to move goods around the globe

They face new challenges in maintaining visibility into origin, authenticity, and asset handling as they cross geographic boundaries. Their ability to deliver and market a more sustainable product depends heavily on supply chain processes.

Acting sustainably and responsibly has become a mandate—not just by consumers, but from governments, with Paris Agreement obligations that are pushing countries to lower greenhouse emissions. These obligations can, in many regions, translate into new regulations on companies.

Sustainability really matters

What’s good for the planet is continually proving to be good for business, with 66 percent of consumers now willing to pay more for sustainable goods.

Manufacturing sustainably produced goods is becoming more complex. Take the relatively simple but important matter of carbon emissions. Scientists account for carbon emissions by classifying them into three categories, or “scopes.”

Tracking these emissions across these scopes can be challenging, as Scope 1 and 2 are operational data that companies may own, such as electricity and corporate fleets, but Scope 3 covers the full end-to-end supply chain. As companies take a more sophisticated, data-driven view of carbon management, they are discovering that much of their impact is embedded in their supply chains, where they have less direct control over driving reductions.

As you can see in the diagram to the right, even an essential sustainability practice like measuring carbon emissions requires a company to have a deep level of supply chain visibility and traceability. Knowing the data across your full supply chain and how to use it will give you the insights you need to fully measure and understand your business’s true impact.

Increase resilience with better traceability, productivity, and predictability

Beyond monitoring sustainability metrics like carbon emissions, better supply chain visibility also helps your other business goals, such as more accurately responding to fluctuating demand or developing a more resilient operating model. Consumer goods companies should look at their end-to-end manufacturing and product life cycle processes, along with their suppliers and consumers, and use the data to optimize operations and improve overall sustainability, as well as:

  • Drive improvements in manufacturing and operations to automate processes, enhance quality and safety, and create sustainability.

  • Provide intelligent solutions using data, artificial intelligence, machine learning, and the Internet of Things (IoT) to optimize forecasting and inventory management and improve transparency.

  • Drive toward next-generation manufacturing by focusing on smart buildings, process optimization, and digital twins.

One big step toward a smaller carbon footprint

Microsoft’s most important contribution to carbon reduction will come not from our own work alone, but from helping our customers around the world reduce their carbon footprints. With the power of data science, artificial intelligence, and digital technology, we can take the tools we’ve developed and the lessons we’ve learned and empower our customers to do more.

Sustainability is already a core part of many customers’ businesses, while other businesses are just beginning. But wherever your organization is on its journey to sustainability, we can help.

We’ve developed tools such as the Microsoft Sustainability Calculator and can share learnings from our own initiatives. Microsoft has made significant investments in sustainability, and we are committed to becoming water-positive and carbon-negative by 2030.

A better supply chain depends on better data

Supply chains were built to follow materials, products, and people. And while the traditional supply chain approach may have worked well in the past, the expectations of today’s consumers—along with the explosion of data and the proliferation of competitors, products, and sales channels—often mean that this approach results in too much inventory, not enough, or, worst of all, the wrong kind.

In other words, yesterday’s supply chain cannot deliver against the expectations of today’s consumers. Nor can it adapt quickly enough to unforeseen disruptions to ensure business continuity even in times of distress.

Get the full picture of your supply chain

Today’s consumer goods and retail industries require circular supply chains, powered by core, cloud-based, central platforms that integrate, orchestrate, and execute actions in real time. This means monitoring every data point within the value chain and responding to the information it contains, as it happens.

This gives companies a full picture of what’s happening inside their organizations, enabling new levels of agility, responsiveness, and risk mitigation.

Technologies such as artificial intelligence, blockchain, and IoT can give organizations the end-to-end visibility, insight, and capabilities they need to reimagine operations and processes in new and unexpected ways.

Accelerate your intelligent future

Today’s retailers and brands face unprecedented challenges from a wide range of forces. By building resilience and agility into your supply chain, your company can rapidly respond to changing conditions and better manage unexpected disruptions.

PT Wahana Cipta Sinatria with Microsoft products can help you strengthen the resilience across your people, teams, and organization to thrive in an ever-changing world. With our end-to-end, integrated portfolio of cloud solutions across Microsoft 365, Dynamics 365, and Azure—together with the Microsoft Power Platform—all built on a foundation of security and privacy, we are uniquely suited to partner with you.


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