Unlock trapped value and sustain growth in CPG
September 6, 2021
X MINUTE READ
In brief
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:
Reimage the operating model to deliver E2E value
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.
Reshape core systems and processes
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.
Reconfigure how work gets done (and by whom)
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.
Adjust the approach to costs
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.
Equip leaders to manage through the transition
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.
Future-ready CPGs do things differently—and do different things
Move to intelligent operations in consumer packaged goods. Find out how.
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