Capgemini-在消費品和零售業(yè)建立彈性和高效的供應鏈

Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

BUILDINGRESILIENTANDEFFICIENTSUPPLYCHAINSINTHECONSUMERPRODUCTSANDRETAILINDUSTRY

RESEARCHINSTI

TUTE

#GetTheFutureYouWant

Executive

Summary

:

Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Agreement(USMCA).TheUSisalsobeginningtotalkaboutfriend-shoringwithcountriessuchasIndia.

COSTEFFICIENCIESMATTERAGAIN.

Aswellasboostingresiliencethroughstrategicsourcing,

organizationsarelookingintocostefficienciesagain.Cost

optimizationwastheprioritypre-pandemicbuttookabackseatascompetingprioritiesemergedin2020.Itisbackon

theagendainresponsetotoday’sturbulentmacro-economicconditionsandconsequentmarketandsupplychainvolatility.Aseconomicrecoverybegins,organizationsareprioritizing

bothvolumeandvaluegrowthintwoways:newcustomeracquisitionandincreasingrealizationperconsumer.

TECHNOLOGYANDDATAAREPROVIDINGNEW

SOLUTIONS.

Similarly,althoughdigitalizationwasnotatopconsiderationforthepastcoupleofyears,ourresearchshowsthatalmostallorganizationsappreciatetheroletechnologyanddata

canplayinsupplychaintransformation.Aroundhalfof

thosesurveyedhavealreadydeployedautomationandcloudinitiativesaswellasdigitalizationofcoresystems.Theyare

Supplychainsneedtochangetomeettoday’schallenges.

Thiswastheviewofover80%ofthe300consumerproducts

andretail(CPR)organizationswesurveyedduringour

research.Organizationsarecurrentlyre-examiningsupply

chainstrategytoincreasebothresilienceandefficiency.

DIVERSIFICATIONOFSUPPLIERBASEISASTRONG

TREND.

Almost79%oforganizationswesurveyedtoldustheyare

activelydiversifyingtheirsupplierbase.Theyarenolonger

willingtokeepalltheireggsinonebasket.

“NEARSHORING”AND“FRIEND-SHORING”AREONTHE

INCREASE.

Offshoreprocurementisexpectedtodeclineby7%in

dollarvalueoverthenexttwoyearsasnearshoringgrowsin

popularity.Currently,83%oftheorganizationswesurveyed

areactivelyinvestinginfriend-shoring(thetradepractice

wheresupplychainnetworksarefocusedoncountries

regardedaspoliticalandeconomicallies).NorthAmericais

leadingthistrend,asstrongertradetiesemergebetweenthe

US,Canada,andMexicoinlinewiththeUS–Mexico–Canada

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Executive

Summary

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

alsoleveragingdatafromecosystempartnersforinformed

decision-making.

HOLIDAYSEASONPREPAREDNESSISVITAL.

Wehavelookedintothepreparednessoforganizations

fortheupcoming2023holidayseason.CPRorganizations

anticipatestockoutsorproductshortages(42%),late

deliveriesthatarecausedbyimportdelays(38%),andalso

laborshortages(35%)duringtheseason.Theproblemis

moreacutefortheretailindustry,withnearlyoneintwo

retailorganizationsanticipatingstockouts.

SUSTAINABILITYISINCREASINGLYIMPORTANT.

However,thereremainsalotofgroundtocovertoensure

supplychainsustainability.In2023,industry’sinvestmentin

supplychainsustainabilityasapercentageoforganization’s

revenuehasslightlydecreasedwhencomparedto2020,

andfewerthanhalfhavedeployedlarge-scalesustainability

initiativesacrossthevaluechain.

THEWAYFORWARD.

Thegoalofprofitablegrowthcanbeachievedbybalancing

costefficiencieswiththeneedtoincreaseresilienceanddrive

sustainability.

?Organizationsareusingdataandanalyticstoenhance

supplychainprocessesbyimprovingplanning,fulfillment,andcustomerexperiences.Thiscanbefurtheraidedby

increasedcollaboration,bothwithinandoutsidetheorganization.

?Simultaneously,organizationsshouldfocusondecreasingnon-coreproductsandprocessesthroughportfolio

optimizationandautomation.

?Sourcingshouldcontinuetobeastrategicprioritytoboostresilienceaswellassustainability.

?Additionally,whileinitiativessuchasdevelopingend-to-endtraceabilitycanhelpinmonitoringandcontrollingscope3emissions,organizationsmustalsoreducescope2emissionsthroughtheuseofrenewableenergyand

recycling.

?Finally,organizationscanfocusoninventoryoptimization.Thisisachievedthroughdemand-sensinganddata-

sharing,localizedsupplynetworks(particularlyfortheholidayseason),andalternativefulfillmentoptions,suchasmicro-fulfilmentcenters.

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Whoshouldreadthisreportandwhy?

WHO?

Thisreportiswrittenforleadersacrosssupplychain

functionsincludingstrategy,planningfunctions,logistics,sourcing,procurement,S&OP,and

correspondingITfunctionsandbusinesspartners.Itsinsightswillalsobeofinteresttosupplychainexecutivesandbusinessleadersfromgeneral

management,strategy,product,manufacturing,andsustainability.

WHY?

ThereportcoverskeysupplychainissuesintheCPRindustryglobally.Weexaminecurrentpriorities

forsupplychainexecutivesandprovideactionable

recommendationsforcreatingresilient,responsive,

efficient,andsustainablesupplychains.

Thisreportisbasedon:

?in-depthinterviewswithindustryexecutivesand

?thefindingsofacomprehensiveindustrysurveyof300seniorexecutivesfromleadingCPGfirmsandretailersglobally.

Alltheorganizationssurveyedhaveannualrevenuesover$1billion.Morethan80%ofsurveyedexecutivesarefromsupplychainfunctions,therestfromgeneralmanagement.

SeetheResearchMethodologyattheendofthereportformoredetailsontheorganizationssurveyed.

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Introduction

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Globalinflationisforecastedtobe5.8%in2024,lower

thanthe8.7%in2022butstillhigherthanthepastdecade.

Higherinflationmeansconsumershavetospendmoreto

purchasethesameproductorservice.Forinstance,in2022,

USconsumersareestimatedtohavespentanadditional$1.1

trillionbecauseofincreasedprices($468millionongoods

andtherestonservices1).

WhiletheUSsawanimprovementininflationoverthecourse

of2022,Europeaninflationratescontinuedtorise.2Europe

alsosawaspikeinenergyratesfollowingRussia’sinvasionof

Ukraine.Post-COVID,theUSeconomyhashadthestrongest

recovery.3

Theglobaleconomymayberecovering,butsupplychain

executiveshavearangeofissuestodealwith,including

geopoliticaltensionsfurtherexacerbatedbytheIsrael–

Palestineconflict,alackofend-to-endvisibility,stricter

regulationsoncarbonemissions,andlegislationsuchasthe

GermanSupplyChainDueDiligenceAct.

CPRcompanieshavetodealwithlast-miledelivery

challenges,quickcommerceaspirations,ensuringseamless

omnichannelcapabilitiesandlossofsalesduetoout-of-stock

orout-of-shelfissues.Thesechallengescomeintosharp

focusduringtheholidayseason,andconsumerresearchhashighlightedthat84%ofconsumersgloballyarepreparingtospendlessorthesameasinpreviousyears–ornothing–onholidaygatheringsandcelebrationsin2023.4

Inthiscontext,weconductedanonlinesurveyof300

organizationsintheCPRindustryinAugustandSeptember2023.Wealsoconductedin-depthinterviewswithseniorindustryexecutives.Thisresearchreportfocusesonthe

followingthemes:

01Thediversificationandregionalizationofsupplychains

Therenewedroleofdigitalizationtorealizecostand

03revenueobjectives

05efficiencywithsupplychainresilienceandsustainability

04Howsustainabilityisplayingoutinthesupplychain

02Whycostefficienciesonceagainmatter

Recommendations:Howtobalancethedriveforcost

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

01

THEDIVERSIFICATIONAND

REGIONALIZATIONOFSUPPLY

CHAINS

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

TheCOVID-19pandemicdisruptedsupplychainslikenever

before.Inresponse,organizationsshiftedfrom“justintime”to“justincase”strategies,leadingtoamassiveincreasein

inventorystocksandthemoneytiedupinthem.Organizationsholding30–45daysofadditionalstockbecamethenorm.

Illustratingthisphenomenon:

?AvneetSinghMarwah,CEO,SuperPlastronicsPvt.Ltd(SPPL),abrandlicenseeofThomson,Kodak,Blaupunkt,Westinghouse,andWhite-WestinghouseinIndia,says:

“Althoughwearemostlycoveredincomingmonths,weareincreasingourminimumstocklevel1.5timestobereadyforsupplychainchallenges.”5

?RichardGalanti,CFOandEVPforUSretailerCostco

Wholesale(duringtheMay2023earningscall),states:“If

youhadaskedmesixmonthsago,year-over-yearinventorieswereup26%,aswereourcompetitorsandeverybodyelse.”6

However,thisisnotviableinthelongrun,andorganizations

beganexploringotherstrategicchangestotheirsupply

chainnetworktoinsulatethemagainstglobalrisksaswell

ashelpthemthriveinthelongerterm.Initiativesaround

diversificationandregionalizationoftheproductionand

supplierbasehavesincegainedsignificantmomentum.As

showninFigure1,almost8outof10CPRorganizationstodayareinvestinginshiftingfromsingletomulti-sourcing,while7in10organizationsareregionalizingandlocalizingtheirsupplierbase.

FIGURE1.

Almosteightoutoftenorganizationstodayareinvestingindiversifyingtheirsupplierbase

%OFORGANIZATIONSWHOSAID,"WEAREACTIVELYINVESTINGIN..."

Diversifyingoursupplierbase(i.e.,shiftingfromsingle-to

multi-sourcingwhereverpossible)

Regionalizingandlocalizingoursupplierbase

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=300organizations.

79%

71%

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Thismeansorganizationsneedtospendconsiderableeffortstoidentifynewlocationsandsuppliers,inadditiontomakingsomesacrificesontheupfrontcostadvantagesofoffshoring.

Whythemovetomorelocalsourcingand

production?

Globalizedsupplychainsareatriskfromgeopoliticaltensions,overrelianceoncertaincountriesforelectroniccomponents,fluctuatingfreightrates,andportcongestions.Diversifyingandregionalizingsupplychainsoffersthefollowingbenefits:

?Resilience:Nearshoringandfriend-shoringprovideacushionagainsttheimpactofglobalevents.Logisticaldisruptionslikethe2021SuezCanalobstructionor

supplydisruptionslikethosearisingfromtheCOVID-19pandemiccanbemoreeasilymanagedvianearshoredsupplychains.

?Agility:Nearshoringproductionandsupplyenablesan

agileresponsetochangingcustomerdemandandreducestimetomarket.

?Costefficiency:Upfrontcostsofsupplierbaseredesignandrelocationmaybehigher,buttheoverallcosts

associatedwithoffshoring(includingtransportation,riskmanagement,opportunitycostoflostsales,tripsmade

byexecutives)meanthatnearshoringandfriend-shoringcouldbefinanciallybeneficialinthelongrun.Nearshoringcanalsoreducetheneedforworkingcapitalbyreducingin-transitinventory.Duringtheholidayseasoninrecent

years,manyretailerslikeIkeaandWalmartwenttogreatlengthstocombatsupplyissues–evenhiringprivate

cargoships.7Withnearshoring,suchextrememeasureswouldnotbeneeded.

?Sustainability:Reducedtransportationdirectlyimpactsanorganization’scarbonfootprintwhilealsoallowing

forgreaterscrutinyofsuppliersandensuringethical

manufacturingpracticesandworkingconditionsare

followed.Organizationscanbenefitfrommorefrequentphysicalinteractions,resultingingreatertrustand

collaboration,betterprojectmanagement,andincreasedoversight.

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Nearshoringanddomesticsourcingareexpectedtoincrease

Asoffshoringwoescontinue,nearshoringanddomestic

sourcingarepickingupasorganizationstrytostrikeabalancebetweenreducingcostsandbuildingresilience.Ourresearchshowsthat,by2025,procurement(byvalue)fromoffshore

locationsisexpectedtodropby7%,whilenearshoringis

expectedtoincreaseby4%anddomesticsourcingby3%(seeFigure2).

7%

Expecteddeclineinglobaloffshore

procurementoverthenexttwoyears,

byvalue

FIGURE2.

Procurementfromoffshorelocationsislikelytofallby7%inthenexttwoyears

DISTRIBUTIONOFPROCUREMENT,INTERMSOFDOLLARVALUE

33.5

36.4

-7%

30.1

Today2025

O?shoringNearshoringDomesticmarkets

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=256organizations.

32.5

35.2

32.3

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

NorthAmericaisleadingthenearshoringtrend,withapredicted9%increaseinnearshoreprocurementbydollarvalue(seeFigure3).

FIGURE3.

NorthAmericaisexpectedtoreduceoffshoringby15%whileincreasingnearshoringby9%

EXPECTED%CHANGEINPROCUREMENTLOCATION(BYDOLLARVALUE),2025COMPAREDTO2023

9%

4%

3%

O?shoring

Domesticsourcing

-2%

-6%

-7%

-15%

EUandUKAsia–Paci?cNorthAmericaGlobal

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=256organizations.

Nearshoring

4%

0%

3%

3%

1%

WhyisNorthAmericaleadingthenearshoringtrend?

Inadditiontogeopoliticaltensions,otherreasonsforwhichNorthAmericanorganizationsspecificallyfindnearshoringattractive

includethefollowing:

?USMCAagreement:Nearshoringperfectlyalignswiththe

collectivespiritfosteredbytheUSMCAagreement,effective

fromJuly2020.Theagreementaimstocreatebalanced

reciprocaltradeintheregion.ThenewrulesoforiginandoriginproceduresincreaseincentivestosourcegoodsandmaterialswithintheUSandNorthAmerica.8

?Mexicoasaneasyandattractivenearshoringlocation:

Mexico’sproximitytotheUSmitigateslogisticsandsupply

chainrisks.Mexicoalsooffersadvantagessuchasanavailabilityofskilledlaborandattractivegovernmentprogramslikethe

MexicanManufacturing,MaquilaandExportServicesIndustry

(IMMEX)Program,9whichmakeimportofgoodsusedinan

industrialprocessorserviceextremelycosteffective.Further,

USMCAallowsUSorganizationstoproducegoodsinMexicoandexportthemduty-freetotheUS.USgoodsimportsfromMexicototaled$454.8billionin2022,up18.9%($72.2billion)from2021,and64percentfrom2012.10

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

?StrainedrelationshipswithtraditionalpartnerslikeChina:DiscordbetweenChinaandUShasbeengrowingonvariousfronts,includingtradetariffs,technology,

humanrightsissues,andChina’songoingbusiness

cooperationwithRussia.11Further,thepandemic

exposedthevulnerabilityofoverrelianceonone

location.Asaresult,tradebetweenChinaandUShas

beensignificantlyimpacted.In2023,MexicoandCanadasupplantedChinaasthetopUStradingpartners.12

?Logisticsdisruptions:Logisticsdisruptions,for

climatechangeandotherreasons,haveresultedin

bottlenecksfortheNorthAmericansupplychain.

Theseincreasetransportationcosts,impactingthe

bottomline,increasingend-productprices,andraisingoverallinflation.AccordingtotheIMF,adoubling

ofshippingcostscausesinflationtoincreaseby0.7percentagepoints.13Whilefreightcostshavefallen

fromanunprecedentedhighatthebeginningof2022,14maritimeissuesremain.ThePanamaCanal,theroutefor40%ofUScontainertraffic,15hasbeeninthenewsfor

itsfallingwaterlevelsandresultingtrafficdelays.AsofSeptember2023,thePanamaCanalAuthorityreducedthemaximumnumberofshipspassingthroughthe

canalfrom36–38to31perday.16ThisseverelyimpactsthemovementofgoodstoandoutofUSandother

AsiancountriessuchasChina,Japan,andSouthKorea.

Whatis“friend-shoring”?

“Friend-shoring”isagrowingtradepracticewheresupplychainnetworksarefocusedoncountriesregardedas

politicalandeconomicallies.Ourresearchshowsthat83%oforganizationsareactivelyinvestinginfriend-shoring.17

Withgrowinggeopoliticalinstability,manycountries,

includingtheUS,areconsideringshiftingsupplierbaseto

alliesasameansofmitigatingriskstothesupplychain.Aheadofthe2023G20Summit,USSecretaryoftheTreasuryJanetYellenstated:“De-riskingandfriend-shoringareimportant

prioritiesfortheUnitedStates,anditissomethingthatwearepromotinghereinIndia.”18OrganizationssuchasApple

andGooglehave,likewise,startedshiftingaportionoftheirproductionfromChinatoIndia.

Friend-shoringisnotlimitedtotheUS.TheEuropeanUnion’srecentEconomicSecurityStrategypromotesgreatertrade

collaborationwithalliesfromNATOandtheG7,andmentionscooperationwiththe“broadestpossiblerangeofpartners.”19Europeancountries,especiallytheWesternBalkans,are

potentialfriend-shorecandidates,giventheirthree-fold

benefitsofproximity,amity,andcosteffectiveness.The

StabilizationandAssociationAgreements(SAAs)inplace

withthesecountriessupportfreetradelinks.OtherpossibleEUfriend-shoresupplychainlocationsincludetheASEAN

countries.20TheEUhasfreetradeagreementswithSingaporeandVietnam,andisindiscussionswithothers,includingthePhilippines,Indonesia,andThailand.21

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

02

WHYCOSTEFFICIENCIESARE

BACKONTHEAGENDA

13

Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

%

Organizationsbelievingsupplychainswill

needtochangesignificantlytomeetthe

challengestheyface.

TheCPRindustry,likemanyothers,hasfaced

unprecedentedchallengesinrecentyears,includingrawmaterialsupplyproblems,highfreightcosts,andchangingconsumerdemandsandbehavior.Organizationsstruggledtoaddresstheuncertaintyintheirsupplychainsand

thusfocusedonensuringcontinuity.Buildingresiliencetrumpedcostoptimization,andmanyorganizations

witnessedafallinmarginsoverthisperioddueto

decliningsalesvolumesandrisinginputandlaborcosts–orboth.

Therearesignsofrecoveryin2023.Consumerconfidenceispickingup,commodityandfreightcostsarecoming

down,andinflationisslowing.However,theeconomy

isstillacauseforconcern.AspertheJune2023World

EconomicForumreport,over85%ofchiefriskofficers

expectsomelevelofcontinuedvolatilityineconomicandfinancialconditionswithinandacrossmajoreconomies.Inflationtoo,thoughslowing,isunlikelytogobelow

pre-pandemiclevels,atleastnotin2024.AstheCEOofWalmartstates:“Inflationandhigherpricesarekindofwithus.We’llseedisinflation,butnotallthewaybacktodeflation...certainlynotintheshortterm.”22

Amidthisstateofcautiousoptimism,organizationsare

focusingonthefollowingkeyprioritiestoaddressmarginpressures:

?gearinguptoprofitablyaddresstherecoveryinconsumerdemand

?preparingtodealwithsupplychainuncertaintiesandchallenges,albeitinacost-efficientway

Ourresearchshowsthat82%ofCPRorganizationsbelievesupplychainswillneedtochangesignificantlytomeet

thechallengestheyface.Thereisrenewedfocuson

shapingconsumerdemandandbuildingcostefficiencyinthesupplychainthroughbetterplanning,process

improvement,andautomation.

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Macro-economic

uncertaintyandsupply

chainvolatilityincreasedcostsandreducedmargins

Macro-economicconditionshaveimpactedsalesandcostsasfollows:

?Impactonsales:Mostcountriesrecordedhigh

inflationin2023,23andmanygovernmentstightened

fiscalmeasures,puttingpressureonconsumersand

organizationsalike.Whileconsumerssawadecline

inspendingpower,24manyorganizations,especially

consumerpackagedgoods(CPG)companies,passed

ontheriseininputcoststoconsumers.25Therewere

instanceswhereretailersandCPGcompanieswereat

loggerheadsoverpricing,withretailersrefusingtocarrythestockofhigher-priceditemsinsomeinstances.26

Overall,organizationshadtofacemuteddemand,whichimpactedsalesvolumesformany.27

?Impactoncosts:Macro-economicconditionshada

directbearingonsupplychaincosts.Alreadydealingwithincreasedcostsforrawmaterials,energy,logistics,and

labor,organizationsalsoincurredsignificantexpensesinattemptingtofuture-proofsupplynetworksinthefaceofuncertainty.Forexample,theyinvestedin

increasingsafetystocksofrawmaterialsandfinishedgoods,boostingproduction,makingalternatelogistics

arrangements,rampingupe-commerce,anddiversifyingthesupplierbase.Asaresult,supplychaincostsroseas

marginscamedown.Infact,asshowninFigure4,around8in10respondentsbelievethatinflationandgeopoliticalissuesareimpactingthecostsandefficiencyoftheir

supplychains.

FIGURE4.

Avastmajoritybelievethatinflationandgeopoliticalissuesareimpactingsupplychaincostsandefficiency

PERCENTAGEOFRESPONDENTSAGREEINGTHATTHEFOLLOWINGISACHALLENGETOTHEIRORGANIZATION

In?ationdrivinghighersupplychaincosts

Geopoliticalissues(suchasthewarinUkraine)impacting

supplychaincostsande?ciency

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=300organizations.

82%

77%

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Thegrowthincommerceputfurtherpressureon

alreadystrainedsupplychains.Wefoundthat7outof

10respondentsbelieveincreasesine-commerceledto

increasedsupplychaincosts,causingsignificantpressureonmargins.Withalmost20%ofglobalretailsalesnow

comingfrome-commerce,28thischannel’sprofitability

cannotbeignored.Infact,WalmartCEOJohnDavidRaineyacknowledgedintheAugust2023earningscallthatoneofWalmart’sstrategicprioritiesistoimprovedigitalmarginswithaneyeone-commerceprofitability.29

Supplychainsare

renewingtheirfocusoncostoptimization

Asperourresearch,costefficiencyisbecomingatoppriorityagain,alongsidebuildingresilience.AsshowninFigure5,

42%oftheorganizationswesurveyedstatedthattheywillincreasefocusonimprovingsupplychaincostefficiencyinthenext12–18months.

FIGURE5.

Costefficiencyishighestontheagendaforthenext1to1.5years

WHICHOFTHEFOLLOWINGSUPPLYCHAINAREASAREYOULIKELYTOINCREASEFOCUSONINTHENEXT12–18MONTHS?

Supplychaincoste?ciency

Supplychainsustainability

Supplychaindigitalization

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=300organizations.

42%

40%

39%

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

However,whenwelookatthepreviousyears,asshowninthefigure6below,theextenttowhichorganizationshaveoptimized

theirsupplychaincostshasreducedinthepastcoupleofyears.

FIGURE6.

Focusoncostoptimizationhasagainincreasedin2023acrosscategories

%OFORGANIZATIONSTHATHAVEOPTIMIZEDTHEFOLLOWINGSUPPLYCHAINCOSTS

65%

62%

60%

59%

62%

58%59%

58%

57%

56%57%57%

58%

55%

54%

55%55%

50%

53%

42%

44%

39%

41%

38%

39%

36%

26%

Rawmaterialcosts

Plantmaintenancecosts

Laborcosts

Reverselogisticscosts

Inbound

Warehousingcosts

Outbound

transportationcosts

InventorycostsProductioncosts

transportationcosts

2020

2022

2023

Source:CapgeminiResearchInstitute,SupplychaininCPRsurvey,August–September2023,N=300organizations;Supplychainresiliencesurvey,August–September2020,N=400CPRorganizations;Intelligentsupplychainsurvey,August–September2022,N=531CPRorganizations.

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Illuminatingthepath:Buildingresilientandefficientsupplychainsintheconsumerproductsandretailindustry

Costoptimizationstrategies

Organizationsareonceagaintakingstepstooptimizecostsacrossthesupplychain.Theseincludeautomation,processimprovement,better

fulfilment,andimprovedforecastingandplanningtoimprovefulfilmentandreducetheassociatedcosts.Forexample:

?Targethassetuplocalconsolidationcentersthatpullinventoryfromlocalstoresandpackthemon-site,reducingthenumberoforders

thatshipinseparateboxesandgroupingdeliveriesbyarea.30

?Levi’shasdevelopedanAI/machinelearning-basedsolutionthat

enablesadaptivepricingandchoosesthefulfilmentoptionthatbothsatisfiesthecustomerandismargin-friendlytoLevi’s.31

?ColgatePalmolivehasmovedfrompreventivetopredictive

maintenance,usingadvancedanalyticstoimproveoutp