2. Connected systems and processes
It can be exceedingly difficult for a consumer goods company to manage risk and respond to rapidly shifting market signals and supply chain conditions when the data it needs to uncover insights is scattered across spreadsheets, disparate systems, and disconnected processes.
When critical sourcing, supply chain, planning, manufacturing, warehousing, and logistics systems and processes are connected and integrated, however, information and insight can flow unimpeded in real time, giving people — and the intelligent analytics and modeling tools that support them — the timely information they need to make better decisions in the moment.
How can transportation be scheduled if it’s not clear what’s in the warehouse? How can you make informed sourcing adjustments without timely signals about warehouse inventory? What if a key shipping route is blocked? Companies that identify and respond fastest to these kinds of disruptions can turn them into a competitive advantage.
Gaining that kind of edge in the 70 countries and regions it serves is why China’s fast-expanding Songmics Home has spent the past couple of years connecting previously siloed and manual processes and systems to overcome critical supply chain challenges that included unpredictable and exorbitantly high transportation and storage costs, sagging forecast accuracy, inefficient planning, excessive safety stock, slow inventory turnover, and delayed market responsiveness.
Realizing that its reliance on spreadsheet-based processes was limiting end-to-end data visibility, the company integrated its systems and processes within a single digital landscape that, in turn, enabled it to employ capabilities such as automated demand planning, intelligent forecasting, and streamlined purchasing and inventory management.
The impact has been substantial: An improvement in demand forecast accuracy from 60% to more than 90%; planning cycles cut from seven to two days; a 36% reduction in inventory turnover days; a 9% increase in order fulfillment rate to 96%; and a 22% reduction in logistics costs.
3. Connected business ecosystems to build resiliency and flexibility
Amid volatile supply chain conditions, consumer goods companies must have real-time insight across multiple tiers of suppliers — how much of a certain item will be available, when and at what cost — so that if a disruptive event like a tsunami or a tariff hits, making sourcing from a certain region or country difficult or prohibitively expensive, a company can read the signals, weigh the alternatives and quickly pivot from one supplier to another.
Pivots like this become a much more straightforward proposition when a company is connected to its suppliers within a network that enables them to share information and insights in real time, and collaboratively work to resolve supply issues.
This applies not only to suppliers but to logistics providers. Instead of relying on a point-to-point approach, companies can source services through a network of logistics providers, identifying which to use based on the specific criteria and constraints that apply in a specific situation. BSH is using this networked approach with its trading partners to manage logistics transactions, exchange documents and increase transparency across the value chain.
4. AI to enhance human decision-making
A myriad of data inputs and moving parts make efficiently managing fulfillment, logistics and other aspects of a supply chain next to impossible without the help of intelligent capabilities to collect, digest and analyze vast amounts of information.
Enter artificial intelligence. Using agentic AI, for example, a company can automate approval of a fulfillment plan based on rules and priorities (time, cost, etc.) AI agents can even be connected across the business. Imagine a fulfillment AI agent talking to an invoicing AI agent, talking to an AI customer service agent and talking to another AI agent if there’s a claim. All this is predicated on having high-quality, current and comprehensive data, along with connected systems and processes.
With a solid foundation of connected data, systems, processes and suppliers in place, and powerful AI capabilities to help your human-powered teams make sense of it all, tariffs, trade wars and other disruptive events look much less like existential threats and much more like opportunities to gain an edge over the competition.
Shady Ghattas is global vice president and head of the consumer products business unit at SAP. He leverages his extensive experience in the technology and consumer products sectors to lead initiatives across various segments, including fast-moving consumer goods, durable goods, personal care and beauty, and fashion and apparel.
