Retail and Consumer goods industry findings: Global Supply Chain Survey 2013

Supply chain performance

Supply chain performance

Supply chain performance:

The leading Retail and Consumer goods companies achieve average EBIT margins (14.2%) with the highest number of inventory turns (18.2) and a better delivery performance than companies in any other industry (<97.5%). The supply chain performance gap between the Leaders and Laggards is about average, but Laggards have a major opportunity to improve their inventory turns and delivery performance.

Organisational set-up:

Retail and Consumer goods companies typically manage their planning, manufacturing, operational procurement and delivery functions regionally and their enabling and strategic procurement functions. They outsource about 7% of their planning, sourcing and enabling activities; only 30% of their manufacturing activities; and 10%-55% of their delivery activities.

The key attributes of Retail and Consumer Goods companies

Organisational set-up

Leading practices

Leading practices

Leading practices:

The most important value drivers for Retail and Consumer goods companies are minimised costs (95%), maximum delivery performance (90%), maximum volume flexibility and responsiveness (79%) and complexity management (70%). The Leaders focus on collaboration with key suppliers and vendor-managed inventory and continue to place great importance on continuous improvements in production efficiency and inventory management.

Top differentiating practices

  • Collaborative planning with key suppliers
  • End-to-end supply chain planning and visibility
  • Vendor-managed-inventory direct-replenishment model
  • Decreased overhead costs through increased labour productiveness
  • Decreased manufacturing costs through reduction of wastes
  • Inventory reduction
  • Internal capacity flexibility 80%-120%
  • End-to-end supply chain planning and visibility
  • Flexible shift models/payment structure
  • Automation of processes in order to cope with complexity
  • Development of multiskilled employees in order to cope with complexity
  • Assortment/Inventory policies distinguished by product family and storing location
  • Visibility and regular monitoring of main suppliers’ operational indicators
  • Multiplication of sources and sole-sourcing avoidance
  • Regular review of suppliers’ financial risk and mitigation through risk-sharing partnerships
  • Transfer pricing
  • Import/export optimisation (e.g., bonded warehouse)
  • Manufacturing and assembly optimisation (toll manufacturing)
  • Agreement of supply chain partners to adhere to highest ethical standards
  • Internal carbon footprint optimisation and improvement
  • Effective track-and-trace capabilities to ensure sustainable supply chain