Saturday 19th Aug 2017 - Logistics & Supply Chain

Traditional value chains can’t keep pace

Traditional value chains are no longer sufficient to keep pace with the demands on the consumer goods market, according to a report by the Consumer Goods Forum and Capgemini.

The report “Rethinking the Value Chain: New Realities in Collaborative Business” recommends the adoption of a “value network” approach to doing business that to secure long-term growth.

The report highlights three priorities:

  1. Consumer engagement. Taking part in a true dialogue with consumers, justifying their trust in our industry. The industry needs to be consistently responsible with consumers’ data so it can add value in serving them and engaging with them. This will require companies to adopt common and clear principles for consumer engagement.
  2. Transparency. Keeping consumers informed about the nature and traceability of products’ ingredients, nutrients and provenance – to inform consumers of the contents, safety, environmental and societal impact of products, while improving efficiency within the industry. This will require a step-change in collaboration on product global data definitions, data quality and data sharing, going beyond simple track-and-trace and audits.
  3. The last mile of distribution. Reconsidering the assumption that distribution to stores and consumers is an area where companies operate independently of each other, and exploring opportunities to collaborate, under certain circumstances, to improve speed, efficiency and consumer satisfaction while minimizing environmental impact. The new model would involve a new form of ‘network’ partnerships. To fully grasp these opportunities, the industry will need to invest in flexible technologies, interoperability of new processes and more open corporate cultures.

The report was unveiled during the CGF’s board of directors meeting in Amsterdam, with special recognition going to Muhtar Kent, chairman & CEO of The Coca-Cola Company, and Motoya Okada, president and group CEO of AEON, who initiated the project at the board level.

Muhtar Kent said: “Today’s consumer is empowered like never before. Consumers now have the power and the means to share their opinions and concerns with a larger audience than ever, through a growing array of social and digital channels. In this era of rising consumer expectations and a rapidly changing business environment, there is one crucial question we need to ask ourselves: How do we strengthen our industry and benefit consumers through the unprecedented challenges that lie ahead?”

And Motoya Okada said: “This Future Value Network report highlights additional opportunities, due to the many changes impacting our industry, for all of us to become even more effective in making lives better for consumers while delivering on our responsibility of value and trust. We can achieve these goals by collaborating much more effectively than in the past. The world is changing profoundly and so must we.”

Click here to download the report.

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