Retail Executive

NOV/DEC 2017

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The Agility Imperative For Consumer Goods Supply Chains Supply chain agility can be achieved by driving purposeful changes in the strategy, the operations, the technology infrastructure, and the organizational culture. H A R S H A D K A N V I N D E Principal, Slalom Consulting is segmentation. Leaders in agility employ supply chain strategies that are optimized at a very granular level to address specific needs of different channels, custom- ers, and products. They apply the segmented view to all the pillars of the supply chain including planning, sourcing, manufacturing, logistics, and returns. They understand that it's not enough to segment their sup- ply chains just by customers or products. They use rigorous, data-based mechanisms to segment the sup- ply chain using a variety of attributes such as product velocity, margin, and demand volatility, to name a few, into hundreds of distinct supply chain requirements, which then allow them to optimize the supply chain strategy and design to meet the tailored product and service demands of the end consumer. End-to-end synchronization Another equally important characteristic of an agile supply chain is synchronization of activities across all trading partners — suppliers and customers. Agile sup- ply chains are connected, and provide visibility to all members for effective collaboration. A connected and transparent supply chain has two important enablers for agility — real-time infor- mation sharing among trading partners: hat all this means for consumer companies is that they need to carry more products than before that re- main relevant only for a short while. They need to constantly innovate to meet the changing definition of consumer convenience. This is a tall order which cannot be accomplished if their supply chain is not designed for agility (i.e., speed, flexibility, respon- siveness, and nimbleness). Traditionally, supply chain executives have focused on driving down the cost of operations without heeding the needs of agility, which has resulted in supply chains that, at best, are cost-efficient in serving their biggest customers and channels, but are ineffective in adapting to the changing customer, channel, and competitive landscape, which is increasingly becoming dynamic and fragmented. The core reason for the lack of agility in supply chains is not the lack of appreciation for the need. The chal- lenge is the lack of a good blueprint to start from and how to achieve it without breaking the bank. WHAT DOES AN AGILE SUPPLY CHAIN LOOK LIKE? Segmented supply chain The most visible characteristic of an agile supply chain W The modern consumer has an abundance of options available to fulfill her every want and need. Increasingly sophisticated products are available at ever more affordable prices. She has choices for not only what to buy, but also where and how to buy those products and services. More personalization, larger selection, faster service, and cheaper prices are part of her default expectations, and they are no longer differentiators. AGILITY Technology By H. Kanvinde THE AGILITY IMPERATIVE FOR CONSUMER GOODS SUPPLY CHAINS RETAILEXECUTIVE.COM NOVEMBER/DECEMBER 2017 28

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