Reducing Exposure to Supply Chain Disruption and Rising Inflation

I recently sat down with eleven executives from some of the leading CPG and retail companies to talk about inflation and the continued pressure that supply chains have been facing.?

Inflation is expected to rise to 11% and supply chain shortages are only getting worse. The CPG and retail industry is facing some serious challenges, both in terms of consumer spending reductions and tighter margins based on supply of raw materials.?

In our conversation hosted by Financial Times, we explored strategies for preparing and reducing exposure to the challenges of supply chain disruption and inflation. Here are my top three takeaways.?

1. Planning for the unknown?

Retail and CPG organizations need to build agility and flexibility, into their end-to-end supply chains to account for evolving geo-political and economic factors which previous scenario building models are not equipped to handle given the depth and breadth of change.??

Agile supply chains, real time visibility and speed to decision will help organizations deal with such changes as they arise.??

2. Transparency in supply chain networks?

Organizations need visibility across more than just tier one supply chains. To follow the journey from farm to table, understand gaps and challenges, and make better decisions, CPGs and retailers need visibility into tier two, three, and four suppliers. Not to mention the reliability of supply chains is being assessed and questioned.??

When organizations build this type of transparency into their supply chain networks, it also has an impact on sustainable sourcing and their carbon footprint. Transparency enables better sourcing decisions to take place, which will help organizations achieve sustainability targets.?

3. People – a key priority as one navigates through the current environment?

The instability that supply chains have experienced in the last three years is having a major impact on the people and teams in organizations. There has been a lot of stress on supply chain teams, burn out, and friction due to constant change.??

But it is more important than ever to focus on employee well-being right now since many organizations purport that they don't have the talent or skills to be able to deal with the supply chain requirements of the future.??

So, what can organizations do to solve some of these challenges? Data, AI, and advanced analytics are the biggest problem-solvers. CPGs and retailers need better insights to predict and react, in real time, to an often volatile supply chain.? Supply chain pressure is an on-going issue that businesses are being forced to address. I look forward to hearing your points of view on the topic and what your company is doing to build agility and transparency into its supply chain.??

For more information about how Genpact is supporting its clients in this transformation journey, visit our supply chain management page .