The coronavirus outbreak has put many industries in a state of flux, and the consumer packaged goods sector is hardly an exception. Shortage of essential supplies and empty shelves of supermarkets are some of the visible impacts of the global supply chain disruptions caused by the Covid-19 pandemic in the CPG industry. Consumer packaged goods companies that are dependent on global sourcing are severely impacted as major countries such as China and the US have temporarily stopped global exports. If the same situation continues, it could create severe impacts on the global economy and lead to an unforeseen disruption of business operations. As such, consumers packaged companies should take actions to mitigate supply chain disruptions and build a resilient supply chain for the future.
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Business Challenge
The client is a leading player in the Canadian CPG market. Leveraging over 20 years of experience, the client operates over 150+ retail outlets in and around Canada.
As the consumer packaged goods manufacturer solely depended on China for its raw materials, the rapid spread of the covid-19 pandemic compelled the client to bring operations to a complete stop. This subsequently resulted in a palpable short-term impact on the company. Even the client was unable to serve their customers’ demands due to warehouse discrepancies and inventory shortages. In an attempt to cover up for the losses and reassure customer trust, the client was looking to understand the demand impact specific to the business and devise short-term demand-supply synchronization strategy. However, considering the complexities involved owing to the rapid spread of the covid-19 pandemic, this seemed to be an uphill task that required understanding changing customer buying behavior and activating alternative sources of supply. This is when the client sought to collaborate with Infiniti Research to leverage their expertise in offering demand and supply mapping.
By leveraging Infiniti’s demand and supply mapping solution, the client also wanted to:
- Conduct scenario planning to assess the impact of the covid-19 pandemic on their business operations
- Determine required supplies and manage demand and supply requirements
- Identify the company’s direct suppliers and understand their ability to meet supply requirements and potential risks
- Understand the flexibility of key suppliers to shift production and purchase order fulfilment to other locations
- Activate secondary supplier relationship to secure additional inventory and capacity
- Improve visibility to supply chain risks
- Focus on production scheduling agility
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Our Integrated Approach
As a part of the demand and supply mapping engagement, the experts at Infiniti Research followed a four-phased approach.
#1: The initial phase of the demand and supply mapping engagement involved creating transparency on the multitier supply chain. This involved working closely with production teams to identify materials sourced from high-risk prone areas due to the coronavirus outbreak. This phase of the demand and supply mapping engagement also involved establishing a recovery plan for critical suppliers.
#2: The next phase of the demand and supply mapping engagement involved optimizing production and distribution capacity. Also, aligning IT system and support to ensure employee safety and support work requirements was done. Besides, the experts at Infiniti Research focused on conducting scenario planning to understand the impact of the covid-19 pandemic on the client’s operations.
#3: The third phase of the demand and supply mapping engagement involved managing cash flow. The experts recommended the client to focus on freeing up cash locked in other parts of the value chain and negotiating with suppliers.
#4: The final phase of the demand and supply mapping engagement involved focusing on Tier 1 supplier risks. This was done by gaining visibility into Tier 1 supplier inventory, warehouse, and order fulfilment status.
Results Obtained
With Infiniti’s demand and supply mapping solution, the client was able to create transparency on multitier supply chains by establishing a list of critical components, determining the origin of supply, and identifying alternative sources. Also, the experts helped the client to estimate available inventory along the value chain and manage demand and supply requirements. Besides, the client was able to optimize production and distribution capacity to ensure employee safety.
Also, the client was able to understand the demand impact specific to their business and subsequently devise a short-term demand-supply synchronization strategy. Moreover, by evaluating alternative inbound logistics options, they were able to maintain productivity and maximize profitability.
The experts recommended the client to develop a treasury plan for focusing on cash flow. Besides, the experts helped the client to identify their key direct suppliers and understand their ability to meet supply requirements and potential risks. This further helped them to efficiently manage inventory and capacity shortages.
The experts also helped the client to identify alternative suppliers in non-impacted regions of the world and improve visibility to supply chain risk. As a result, the client was able to build a resilient supply chain for the future and manage warehouse discrepancies and inventory shortages.
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