EY Re-engineering the supply chain for the omni-channel of tomorrow

Cracking the omni-channel supply chain code

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Omni-channel is the path to growth. With the explosion of new consumer choices in both online and offline shopping, many retail and consumer products companies are evolving their supply chain strategies to deliver against the demands that omni-channel (any time, any place) requires of the consumer value chain. Executing the right strategic choices is critical.

EY has partnered with The Consumer Goods Forum's (CGF) Supply Chain Committee to understand the impact of omni-channel on the supply chain in the retail and consumer goods sector, and recommend how companies can deliver on the opportunity that omni-channel presents.

 

Case for change

Omni-channel is the critical driver for growth. It represents the biggest growth opportunity for the consumer goods and retail industry.

EY and the Consumer Goods Forum Supply Chain Committee carried out a survey of 42 senior supply chain executives from the world’s largest consumer goods and retail companies. The key findings from the survey revealed:

EY - Case for change

 

Embracing omni-channel and embedding it in strategy

Executing an omni-channel strategy is highly challenging. Companies can no longer afford to manage their channel strategies in silos or bolt on new channels without integrating them.

To succeed, companies must embrace omni-channel and ensure that it is fully embedded in their overall corporate strategy and organizational culture.

Key takeaways


  • Omni-channel is critical, but only 40% of respondents think their current execution is effective.
  • A consumer-centric end-to-end approach to omni-channel is vital.
  • Strong leadership is required to manage the transition, but many companies consider this to be lacking.
EY Strategy

Questions for management

  • What does the consumer really want (products/service/channels)?
  • Is omni-channel a strategic imperative rather than a ‘me too’ strategy?
  • Are we really thinking end-to-end with one view of the consumer?
 
 

Creating the agile and responsive omni-channel supply chain

In recent years, many companies have sought to maximize their supply chain efficiency by stripping out redundancy and reducing costs where they can. However, the transition to omni-channel challenges this single-minded focus on efficiency and requires a new level of responsiveness.

Key takeaways


  • A segmented supply chain and inventory model helps to strike the balance between agility and efficiency.
  • Compete for the requirements of tomorrow, not today.
  • Careful analysis of the assortment by channel is critical to success.
 
EY - Agility

Questions for management

  • Which customers should be served with which product?
  • Where must we provide supply chain efficiency vs. agility?
  • How will the supply chain network design need to adapt with increasing omni-channel fulfillment?
 

Providing seamless data visibility and actionable insight

Effective omni-channel cannot be achieved by either retailers or manufacturers alone. It requires close collaboration between the two, and the constant sharing of information. At the moment, this seamless visibility is missing.

Key takeaways


  • Close collaboration between manufacturers and retailers is critical.
  • Exploit big data to make a step change in forecasting and demand-sensing outcomes.
  • Integrate IT to provide a single view of the customer and to provide seamless fulfillment.
 
EY - Visibility

Questions for management

  • Are you collaborating with key suppliers and customers to share forecast and sales data?
  • Is the data available being properly exploited to provide real consumer insights and purchasing preferences and to enhance forecasts?
  • Is the data and IT being combined to provide a single view of the consumer and provide seamless fulfillment?