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What should FMCG leaders do to succeed in E-Com channel?
Most leading FMCG companies struggle in the E-Com channel. Their current planning process results in low fulfilment rates in this channel. At the same time, their new age, digital native, competitors do exceedingly well in the same channel.
Do the industry leaders really need a large scale, high investment, supply chain transformation project to correct this situation?
I don’t think so. The root cause is their planning legacy, deeply rooted in monthly demand planning. The frequency of their demand and supply planning is in clear conflict with the E-Com channels, which have already moved to weekly planning. Some leading channels do it even twice a week.
The only action required by FMCG companies is to match their planning frequency with the E-Com channels. Weekly demand planning, powered by a Demand Sensing engine. Weekly reset of inventory norms in their entire supply chain. Weekly refresh of production schedule. Weekly refresh of procurement plans.
This simple change in their planning process doesn’t require high investment. It doesn’t need a mega transformation project either.
A quiet change. Huge payoffs.