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FMCG supply chains – Top 3 strategies to drive sustainable productivity
“ Productivity isn ’ t everything , but in the long run , it ’ s almost everything .”
– Paul Krugman , American economist
This quote sums it up well . If you want to be successful in the long run , you must be productive to be competitive . To be productive you must be focused and have a culture of continuous improvement .
The year 2023 presents us with some interesting challenges . In the face of a tight labour market , inflationary cost pressures , the desire for digital transformation and the importance of tangible ESG commitments , many organisations are grappling with how to drive sustainable productivity in their operations .
The last few years have proven that businesses that have focused on their people , strategically invested in technology advancements , and targeted sustainable operations have been more competitive and won market share .
There are some common themes , or strategies , that are being deployed by these successful organisations . Let ’ s explore the Top 3 we are seeing drive sustainable productivity in FMCG operations .
Operational excellence As mentioned above , to be productive you must be focused and have a culture of continuous improvement . This culture is all about your people and your leadership . Driving sustainable operational productivity requires an understanding of the support and training your leaders and your team need to get to best practice levels of performance . You then need to take them with you , coach , train and develop the required standards to remove waste and embed sustained practices that consistently deliver the performance efficiencies . Top-performing organisations use lean methodologies to unlock and sustain operational excellence .
Automation of tasks Technology is both a disruptor and an enabler . Digital transformation done well creates significant advantages , but do it poorly and you can go backwards . It is important to recognise that it is not easy to understand and identify what technologies to invest in and when to do so – spending time up front on a digital roadmap for operations is critical to ensure alignment and engagement for the journey ahead . Again , taking your people with you is fundamental , as adoption of new ways of working is the foundation to sustained change . Automation of tasks – process , data , systems , or robotics – will boost your productivity , build resilience and focus your people on more value-add customerfacing activity .
The pursuit of sustainable success Operations is where the rubber hits the road for an organisation ’ s sustainability agenda . Being more productive means more efficient use of resources and results in less waste – this is a positive impact on sustainability that must be managed , measured , celebrated and continuously improved . But it is more than this – operations is also where goods and services are transformed and moved through physical networks and infrastructure , from suppliers to customers . To make real change , you need to ‘ operationalise ’ sustainability . Deciding where to start requires deep operational expertise to identify how to make effective interventions , measure performance , set targets and deliver improvements through your supply chain from supplier to customer . To truly drive sustainable success , you need to measure the whole picture , prioritise levers and recognise that reducing impact is all about operations .
The best time to start the journey is now , the gains can be significant and in the face of sustained challenges , driving sustainable productivity is fundamental to remaining competitive . �
By Chris Foord , Associate Partner , Argon & Co New Zealand