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Intelligent Operations

Unlock trapped value and sustain growth in CPG

September 6, 2021

3-MINUTE READ

In brief

  • To compete, CPGs need to quickly pivot to find new areas of growth, manage increasing complexity and digitally enable their enterprises.
  • They are losing out to new agile and digitally-focused competitors that easily adapt their operations in response to ever-changing market forces.
  • Large, global CPGs must change their operating models and core technologies. Also, leaders need skills to drive change and new ways of working.
  • Transformation can embed data-led insights across the entire organization and reallocate resources to scale up and down with market opportunities.

CPGs need to change how they operate. Now.

CPGs that will thrive in the future must have responsive, cross-functional processes that are laser-focused on fulfilling consumer, customer and employee expectations—at every touchpoint and across every channel—and at speed and scale.

For companies that fail to act, operational issues will morph from merely challenging to urgent. Accenture research shows companies with greater operational agility reported higher growth than non-agile companies.

16%

EBITA growth for agile organizations over 10 years compared with 6% for non-agile organizations

94%

of survey respondents said that their operating model puts their organization’s growth and performance at risk

Five changes for CPGs to become future ready

The journey to the high-performing CPG of the future will involve five changes:

Many companies have tried to change their operating models in pockets but haven’t been able to sustain or scale the approach. The new operating model brings humans to the center of the equation. It focuses on outcomes versus on functionally defined roles. And, it empowers data-driven decision-making at the front line.

To understand—and then organize around—priority outcomes, CPGs must be data-led, with real-time insights shared across the organization. This requires an intelligent platform architecture, usually including the combination of an upgraded ERP system and full migration to the cloud, the latter accelerating agility and the ability to analyze the vast amounts of data now available.

Intelligent Business Services (IBS) offer tremendous potential and need to be radically re-thought. That includes location. IBS of the future is digitally-enabled with data-led insights and always-on services. CPGs should also evaluate their ecosystem to determine which partners can help fill capability gaps and increase their speed to market.

CPGs’ efforts over the past decade to control costs, i.e., through ZBB initiatives, were often not sustained. Today, leading companies are taking a more holistic approach to cost management. It reframes management and decision-making to drive reallocation against the new areas of value. Advanced analytics enable organizations to monitor, measure and adjust on an ongoing, comprehensive basis.

Leading effectively through transformational times requires different skills than in the past. The new leader is human and authentic, continually builds skills in new areas, and fully embraces the dynamic market opportunities, as well as the data and technology-powered capabilities, that define the future.

Many companies have tried to change their operating models in pockets but haven’t been able to sustain or scale the approach. The new operating model brings humans to the center of the equation. It focuses on outcomes versus on functionally defined roles. And, it empowers data-driven decision-making at the front line.

To understand—and then organize around—priority outcomes, CPGs must be data-led, with real-time insights shared across the organization. This requires an intelligent platform architecture, usually including the combination of an upgraded ERP system and full migration to the cloud, the latter accelerating agility and the ability to analyze the vast amounts of data now available.

Paul Prendergast

Managing Director – Strategy & Consulting, CFO & Enterprise Value Europe Lead

Paul is Managing Director & Lead - experienced in CG&S, LS and Industrial business segments focusing on Supply Chain, Digital & Finance Transformation.

Oliver Wright

Senior Managing Director – Consumer Goods & Services, Global Lead

Oliver helps clients become more agile and innovative and reshape their businesses for a new future.

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