Authored Article By Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd

As end-consumers increasingly make their presence on digital channels and platforms, companies and brands are reimagining their customer connect strategies. At the same time, they are also reworking their product development and supply chains. And like most sectors and categories, FMCG companies have not been impervious to this trend. So, even as new-age digital technologies have offered new ways for FMCG businesses to manage their supply chain network and processes; they have also opened up new avenues for the latter to cultivate customer relationships.

What are some of the ways in which FMCG companies can build a customer-centric supply chain and thereby make their customer connect stronger?

Harness the power of consumer data

First, the fast-digitalizing consumer universe affords a mindboggling amount of data on a wide range of metrics today. From demographics such as age, income groups and location etc., to cultural data,to lifestyle and product-based data related to consumer interest, sentiments and preferences, to life events and actual engagement and conversion rates, to previous purchase history, there is a lot that is available today. FMCG companies should also make use of AI to select relevant data, carry out micro-segmentation of customers (and products) and conduct required analysis based on their end-goals.

Link consumer demand with supply chain flow

Second, while collection and analysis of data is the first step, FMCG companies would need to go beyond. This means that they would need to forge a connection between chosen customer data and foreseeable demand and the entire supply chain flow including sourcing of raw materials and inputs, logistics, distribution, sale and delivery right up till the end-consumer’s doorstep. Given that by definition, since FMCG products have a low shelf-life with a high turnover rate and are purchased frequently and consumed rapidly, they typically follow the traditional continuous flow supply chain model wherein a continuous flow of goods is ensured. However, now that FMCG companies are armed with precious consumer data on a more granular basis than ever before, their supply chain managers can finetune and work out flexible supply chain models, usually employed by companies which make products susceptible to seasonal ebb and flow of demand.

Curate and customize products through the supply chain

Third, FMCG companies should no longer limit themselves to customizing products at final sales stage in the supply chain. In fact, using advanced digital analytics, they should be able to gauge the nature of demand signals based on how their regular products are being received and commented on by the end-consumer. And the customer need for a differentiated product as opposed to the company’s standard offering must be taken into consideration at the early product development stage itself. At the same time, FMCG companies should also move from addressing merely cost and speed issues in the supply chain to those related to actually catering to the need and desire for a particular product customized in a particular way irrespective of cost and other issues. Companies would do well to remember that customers today are willing to pay more as long as a product is perfectly customized according to their wishes and desires. In other words, brands should prioritize personalizing the customer experience right through the supply chain.

Invest in modern supply chain technologies

Fourth, FMCG companies could also consider investment in latest supply chain technologies such as AI and machine learning, the Internet of Things (IoT), blockchain, robotics and automation and even 3-D printing for a selected few FMCG products.

Treat supply chain as a single entity

Fifth, instead of reckoning supply chain as a network of different and disparate processes and personnel, FMCG companies should treat the whole chain as a single entity. This requires having shared objectives with their partners. Working out shared business objectives with vendors and suppliers, and logistics, distribution and retail partners, they would not only achieve cost and operational efficiencies but also prove to be more agile and precise in terms of responding to market shifts and vagaries of consumer demand leading to over-all improved decision-making in the end.

Therefore, these are some of the ways in which FMCG companies can build a customer-centric supply chain away from the traditional product-centric supply chain. This wouldalso drive profitability as well as improve customer experience.

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