There is little disagreement that 2020 brought with it a fair share of challenges to the supply chain. You can read more about some of the trials and tribulations of the last year in our previous article. The consumer goods and staples industry persevered and is ready to focus forward on the supply chain opportunities 2021 affords. Whilst it may emerge looking a little differently than it did before, the transformation is part of the changes necessary to regain footing and advance forward.
Food grocers, retailers, and wholesale distributors will find themselves diving headlong into technology, green supply chain initiatives, and supply chain cybersecurity as we advance into 2021. Herein lies the best opportunity for growth and future sustainability. Let’s take a deeper dive into five of the most promising prospects for the industry in 2021.
Multi-tier supply chain management
What is multi-tier supply chain management and why is it important for the consumer goods and staples industry? The global pandemic exposed many weak leaks in the supply chain. A breakdown along the way in the supply chain was one of the biggest challenges the industry faced in 2020. This prompted the move toward real-time visibility into suppliers at every tier, known as multi-tier supply chain management.
Multi-tier supply chain management enables businesses to appease discerning consumers. Nowadays, consumers are demanding more information about where products are sourced, how they were manufactured, and through which countries they passed on their way down the supply chain. Using a multi-tier supply chain management system provides ready access to those details and more. They can also make the supply chain more resilient and efficient, eliminating high-risk behaviours that can lead to supply chain backlogs that impact your bottom line.
Grocers, retailers, and wholesale distributors can establish themselves as industry leaders when they prioritise supply chain transparency through multi-tier supply chain management.
Industry 4.0’s influence on the supply chain
Industry 4.0 (4.0IR) – the Fourth Industrial Revolution – focuses heavily on automation, interconnectivity, machine learning, and real-time data. It can be a struggle for some companies and even government entities to keep up with the fast pace of 4.0IR. In 2019, the World Economic Forum recognised 4.0IR as a fundamental change to the way we live and work, prioritising it on the world stage that year. Amongst the 4.0IR influencers the forum placed on its watch list are:
- 5G is being touted as the solution to real-time, end-to-end supply chain monitoring. With 100 per cent more capacity than 4G and its ability to operate mainly in the cloud, 5G offers quicker response times and a reduced latency rate. Wholesale distributors will find 5G especially useful in enabling faster turnaround times and the real-time tracking of shipments. They can provide live status updates to customers, including advance notice of potential delays during shipping. Leveraging the power of 5G can boost consumer confidence, giving businesses in the consumer goods and staples sector an edge over their competition.
- Artificial Intelligence (AI) has slowly worked its way into supply chain management. Thus far, it is producing some promising results. A McKinsey report found that 61 per cent of executives reported decreased costs after incorporating AI into their supply chain management practices. Another 53 per cent revealed increased revenues thanks to AI. Most notably, more than a third stated they achieved a revenue bounce that exceeded 5 per cent. Retailers may find AI particularly useful since many of them rely on international supply chains. Retailers can leverage AI to reduce costs, drive increased productivity, and increase revenue.
- Blockchain is not a new concept in supply chain management. However, it was not until 2019 that it began gaining traction. How blockchain works is quite simple. It ensures all parties within a supply chain have access to the same information. The goal is to reduce communication and data transfer errors. Blockchain is effective in reducing time spent validating data and redirecting it toward delivering goods.
Green supply chain
With more businesses becoming eco-conscious, green supply chain management practises are gaining popularity. Consumers demand the brands with which they do business prioritise the integration of sustainable environmental processes into their traditional supply chain. For retailers, grocers, and wholesale distributors, this can mean a direct, indirect, global, or collective approach. Green supply chain management considers sustainability for each step of the supply chain process, from product development and materials sourcing to manufacturing and shipping. Committing to a green supply chain management strategy can help the consumer goods and staples industry thrive.
Supply chain cybersecurity
Supply chains contain large volumes of data, making them a prime target for cyber hackers. No matter how secure your system is, you can never guarantee the countless suppliers you use take cybersecurity measures as seriously. If a supplier suffers a cyberattack or other data breach, it can affect every step of the supply chain. Customer data can be lost or compromised, and sensitive proprietary information can be exploited.
Cybersecurity is a prerequisite for sustainability in the industry. Investing in Industry 4.0 tools and technology can help secure the supply chain. Your business must commit to the following:
- Define an appropriate level of cybersecurity that is shared and agreed on by all members of the supply chain.
- Create a robust plan and enact policies for dealing with a cyberattack. This includes a protocol for informing others in the supply chain when a breach has occurred.
There are commercial benefits when businesses follow these guidelines. The biggest advantage is the opportunity to build consumer confidence. Your customers are more likely to share their information with you if they know you have a forceful supply chain cybersecurity plan in place.
Seizing the best 2021 supply chain opportunities
Embracing new supply chain opportunities in 2021 can help grocers, retailers, and wholesale distributors stay ahead of the curve. Strategic Specialists Group works with businesses in the consumer goods and staples industry to identify and seize the most beneficial prospects to help build sustainable growth. Reach out today to learn how our tier-one specialists can work with your business to seize the moment and break through to a better business.