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Digital Optimization for FMCG Supply Chains

Supply chains have become substantially more complicated as a result of globalization, involving multiple competitors from all over the world and a great deal of coordination. Companies optimizing digital technologies will have a huge impact on the whole supply chain process from the supplier to end customer. The fast moving consumer goods (FMCG) sector is often the early adopters of new technology in order to stay ahead of the competition. This article discusses how supply chains can be optimized with digital technologies.

Data Analytics

Analyzing useful data can provide better understanding and management of customer needs and demands. There are basically four types of analytics, and businesses can gain a deeper insight into their customers’ requirements and the dynamic market trend. Descriptive analytics review past sales, inventory, customers, and stakeholders to provide insight into the past: what has happened to the change in customer buying behavior? Diagnostics analytics dive into data to understand: why did it happen? Predictive analytics uses the findings from descriptive and diagnostic analytics with statistical models to forecast: what will happen? Prescriptive analytics generate solutions based on algorithms on how to avoid a potential problem or optimizing on a promising trend. FMCG companies could input information into forecasting software on a routine basis to accurately anticipate customers behavior. As a result, optimal amount of stocks are keep on hand based on statistical forecast and there is low risk of inventory level running low.

Robotic Process Automation (RPA)

RPA automates business process by configuring software or “robot” to interpret applications for processing a transaction, data, response, and communication. The three main types of RPA are “probots” for processing data and information, “knowbots” for data collection and storage, and “chatbots” that acts as virtual agents answering customer queries online. The key benefits of using RPA in FMCG retail are useful sales analytics, new product Introductions, in-store planning, as well as order and returns processing. Automated analytics allows for quick access to reports that provide real-time information, which aids in the study of sales opportunities. RPA connects relevant stakeholders by automating processes and monitoring customers interest in real-time. Retailers can construct extensive and fact-based analyses of goods choices on a store-by-store basis using the data to anticipate customer expectations. RPA automates orders and returns, reducing delays in the processing of these activities, resulting in greater time for retails to manage exceptions.

Blockchain Technology

There are multiple layers, stages, and geographic locations in FMCG supply chain which relies on a decentralized database. Blockchain provides end-to-end traceability, from the raw material origin to the finished good. In addition, product manufacturing date, where is it produce, and nutritional content are stored in the blockchain, giving stakeholders greater visibility across all supply chain activities. Companies are also tapping on blockchain for sustainable materials traceability. This means that supplier’s claims of being using sustainable materials and reducing their environmental impacts can be counter-checked and verified. Customers can get latest information from the blockchain simply by scanning the QR code. In the event of product recall, customers or retailers will receive notification and actions can be taken promptly. Counterfeit products pose potential health threats to customer and loss of revenue to businesses. Blockchain provides a tamperproof chain of custody information, giving customers the transparency and authentication they need. Information is recorded and shared by numerous entities, therefore in the event of equipment failure, information remains intact, posing limited or no disruption to FMCG supply chain.


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Yoong Shu Xin, GDPSCM
Yoong Shu Xin has substantive years of experiences working in the field of supply chain management, and specifically for fast-moving consumer goods (FMCG). She holds a degree in Hotel Management from University of Las Vegas and she is a member of Singapore Institute of Purchasing and Materials Management (SIPMM). Shu Xinis completing the Graduate Diploma in Procurement and Supply Chain Management (GDPSCM) on January 2022 at SIPMM Institute.
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