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Top 3 Reasons FMCG Supply Chains Will Embrace Multi-enterprise Solutions in 2024
By Jason Tham, Founder and CEO, Nulogy
Day by day, we are increasingly living in a digitally connected era. As consumers we expect instantaneous data, news, and updates; with organizations in supply chain it is no different. In order to consistently deliver products to market on time, every supplier in every stage of supply chain demands connectivity. In fact, the Association for Supply Chain Management (ASCM) recently identified digital connectivity as a top supply chain trend for 2024.
Thus, as we approach the new year, it is only fitting that the concept of multi-enterprise continues to gain momentum. I believe the concept of “multi-enterprise collaboration” in supply chain management, as well as the digital solutions that enable this approach, will only continue to grow in adoption, particularly amongst companies in the fast moving consumer goods (FMCG) industry.
Let’s explore this a bit further. Traditional supply chain models are often structured as a linear sequence of individual enterprises, which often leads to siloed processes and limited visibility across a manufacturer’s supply chain ecosystem. Lack of data visibility and connectivity in this space can lead to organizational risks such late deliveries, higher operating costs, and increased material waste.
In an era where the speed of global markets demands seamless connectivity and collaboration, a strategic shift is vital to surviving and thriving. But many large organizations are not simply focused on survival: opportunities await those in the FMCG market who choose to adopt a more integrated and interconnected approach to supply chain management to enable true network visibility and democratize data flow for all parties to collaborate together more freely.
Here are the top reasons why multi-enterprise collaboration will be embraced by external manufacturing supply chains in the coming year.
1. The Need for Enhanced Visibility and Collaboration:
At the core of the multi-enterprise approach – and the solutions that enable multi-enterprise collaboration – is the need for true data visibility throughout the end-to-end supply chain, addressing the black boxes in the network. This data visibility is imperative for fast moving consumer goods sectors such as food and beverage, where collaboration between suppliers and manufacturers is vital to fulfilling orders while maintaining high levels of quality and service. Breaking down silos and establishing a unified platform allows for real-time order collaboration, improving decision-making processes and fostering more agile and resilient supply chains.
For brand manufacturers and other companies managing supplier networks, the near real-time network visibility enabled by a multi-enterprise collaboration solution extends to planning functions such as materials visibility, capacity management, and materials management. Through a multi-enterprise solution, the partners in an external supply chain network can work together to identify bottlenecks, allocate capacity, and optimize overall network performance.
By working together from a single source of truth, external supply chains can truly synchronize and pull in the same direction to achieve their shared goals.
2. The Potential of Data Automation
Multi-enterprise solutions often incorporate capabilities leveraging advanced technology such as data automation and analytics, empowering organizations to make informed decisions, optimize processes, and identify areas for improvement, ultimately driving efficiency and reducing costs.
In the FMCG industry, where meeting order deadlines and timely decision-making are crucial, data automation can offer a significant value add to supply chain planning operations.
When a digital solution can manage the heavy lifting of order updates, real-time order and inventory tracking, as well as flagging of potential delays, staff are free to spend their time on more value-added projects instead of being weighed down by day-to-day, manual tasks.
Data automation in multi-enterprise solutions boosts efficiency, allowing human resources to focus on strategic decision-making and relationship management, further boosting their capability for collaboration across organizations.
3. The Ability to Minimize Waste in the External Supply Chain
As supply chain professionals, we are all familiar with the “bullwhip effect”. As suppliers respond to demand changes, delays in visibility and information add inaccuracy to the responses, which cascade and magnify through each level of the supply chain. This magnifying effect means that greater demand volatility causes greater waste.
Because multi-enterprise solutions enable data visibility across the entire network, it is the critical foundation for driving down emissions and waste in the supply chain. improved visibility is the keystone to reducing the impact of the bullwhip effect.
These solutions enable not only real-time visibility into what is happening with inventory, equipment, labor, and production; they also provide a platform to drive decisions so that adjustments can be made early-and even predictively with the use of artificial intelligence-to avoid delays that necessitate wasteful expediting, to avoid material obsolescence, and to avoid the most expensive waste of all: human capital spent redoing work or toiling with manual processes rather than finding ways to reduce waste in the first place.
By adopting a multi-enterprise approach, supply chains can become more responsive and agile to reduce waste and improve sustainability, while at the same time improving the bottom line for supply chain partners.
Begin the Journey to a Multi-Enterprise Strategy Today
As we enter a new year, the theme of multi-enterprise collaboration will only grow in relevance and need, particularly in the FMCG industry. Organizations that choose to embark on the journey to a multi-enterprise supply chain strategy enabled by true data visibility have a number of opportunities available to them, such as improved efficiency, responsiveness, and ultimately profitability. Those that do not choose to adapt risk potential damage to their performance and brand image, as well as risk being left behind by the competition.
For many, the journey towards more integrated, visible, and resilient supply chains has begun, and those on this path today will be the trailblazers of tomorrow’s supply chain excellence.
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ABOUT THE AUTHOR
Jason is a co-founder, CEO and brand ambassador for Nulogy. He is focused on corporate development, executive leadership, and understanding the evolving landscape of Nulogy’s clients. He is also on Nulogy’s board. For more than a decade, Jason has led industry thought leadership with speaking engagements for the Contract Packaging Association, the Gartner Supply Chain Symposium, the Council of Supply Chain Management Professionals (CSCMP), among many others.
Jason draws from his experience in continuous improvement and packaging at Kellogg’s highly automated production facility, and in R&D, manufacturing, and quality at Magna International. He graduated with a BSc (Hons) with a Management Sciences option from the University of Waterloo.
